Cranky's attempt at a budget/introduction

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Bolt Crank
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Re: Cranky's attempt at a budget/introduction

Postby Bolt Crank » Fri Mar 08, 2013 1:40 pm

Okay guys; Been doing this for a while now, time to toss everything back out into the ether web for advice: Here is our current financial status...

Technically, we are Debt free! (we still have monthly payments, just... technically out of debt on the balance sheet)

Debts:

Mortgage: $89,000 @ 3.25%
Car Balance: $8,000 @ 0%

Assets:
Retirement Account: $90,500
EM Fund: $10,500 (3 Months)

Here is our monthly budget:

Core Costs:

Medical $150.00
Gas: $300.00
Property Taxes: $300.00
Kids Allowance: $22.00
Ford: $366.00
Association: $328.00
Comed $150.00
Netflix $8.00
LA Fitness $40.00
American Family $114.00
Trader Joes $530.00
Gymnastics $42.00
Wifes Phone $84.00
My Phone $10.00
Comcast $75.00
Mortgage $670.00
Union Dues $100.00
Misc Target & Clothes $150.00
$3,439.00

Here is my Misc:

Entertainment $650.00 (going out to eat, drinks, etc)
Gencon $112.50
Birthdays $100.00
Christmas $83.33
Anivs & Holidays $70.83
Total $1,016.67

Our Take home Income is: $5,434.00
This leaves us with $978.33 for savings.

Currently, we are building up a "1 year ahead" property tax saving account of $228.67 per month, and we are prepaying our mortgage by $582.00. Somewhere, we eat or lose, or random stuff happens that wash away the remaining $167.66


We, at the moment, don't have any Roth IRA's, relying on an Annuity which I pay into, and a Pension Plan. My wife just went back to work in starting up her own business, which means she makes $0 for a while. We own 1 car which is 13 years old, that for the past 2 years I've dumped another $700 into repairs for.

Is there anything that sends up red flags and alarms that I should reverse course on now, or cut out entirely. (Gym membership, btw, we all use for that amount and lift weights and go 3 times a week.... so... please don't suggest that).

There is a calculated scenario where I could pay off my condo by 2018 which would allow us to rent it out and earn something off it. ::shrug:: At this point, I'm kinda picking and looking down a few different paths... Do I shore up EM fund? Do I keep prepaying? I hate having more than 3 months in a 0% savings account.... Do I start saving for a new used car? Should I start looking at investing? Should I just tackle the current car payment even though it's 0% to free up monthly budget? Should I try and squeeze a few of my bills down?

What suggestions does everyone here suggest?

peachy
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Re: Cranky's attempt at a budget/introduction

Postby peachy » Fri Mar 08, 2013 3:33 pm

Record scratch....you owe $8k on a 1999 Ford? How did that happen?

What is American Family?

Seems to me that you could sell your Ford, buy a newer car to you, and cut back that 360 dollar payment if you're looking for a way to save money.
Your emergency fund is not supposed to be a moneymaker. It's supposed to sit and be handy when and if you need it. I would leave it where it is, and not think about it. We're all in the same boat, but when those interest rates rise, what a happy day it will be for us all!

There are a lot of things you could do with your extra money, but you just have to decide for yourself. Is prepaying your mortgage/property tax bonus making you happier than having more in your retirement? That is only for you to decide.

bpgui
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Re: Cranky's attempt at a budget/introduction

Postby bpgui » Sat Mar 09, 2013 6:45 am

Bolt Crank wrote:Technically, we are Debt free! (we still have monthly payments, just... technically out of debt on the balance sheet)

No. Technically, you have a positive net worth. You are not debt free.

Bolt Crank wrote:Car Balance: $8,000 @ 0%
..........................................................
We own 1 car which is 13 years old

This baffles me. How did you end up still owing $8,000 on a car that old.

brad
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Re: Cranky's attempt at a budget/introduction

Postby brad » Mon Mar 11, 2013 5:55 am

peachy wrote:We're all in the same boat, but when those interest rates rise, what a happy day it will be for us all!


Not necessarily, because interest rates usually rise in response to inflation, so rising interest rates will probably be accompanied by increases in the prices of most things you buy (food, clothing, gasoline, etc.). Back when banks were paying 5% for a regular savings account and 10% for a five-year CD, inflation was running in the double digits. We're actually a little better off at today's low interest rates.

As for areas to target for budget-cutting, you might look at the $650 entertainment budget to see if that could be trimmed even by $100 or so. Our take-home income is close to twice yours but our entertainment budget is only $200/month and we usually don't spend that much. That doesn't mean we never go out or have fun, but most of our entertainment doesn't require spending money. Cooking good meals at home is entertaining for me, playing music with friends, taking a walk outside to look at the stars at night, reading a book from the library, etc. ... I count all that stuff as entertainment.

Bichon Frise
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Re: Cranky's attempt at a budget/introduction

Postby Bichon Frise » Mon Mar 11, 2013 7:06 am

brad wrote:
peachy wrote:We're all in the same boat, but when those interest rates rise, what a happy day it will be for us all!


Not necessarily, because interest rates usually rise in response to inflation, so rising interest rates will probably be accompanied by increases in the prices of most things you buy (food, clothing, gasoline, etc.). Back when banks were paying 5% for a regular savings account and 10% for a five-year CD, inflation was running in the double digits. We're actually a little better off at today's low interest rates.


I disagree that interest rates are a major indication of inflation. Interest rates are a mechanism in which the Government can manipulate the economy. So, you can have high interest rates and low inflation, or the opposite - low interest rates and high inflation. Or, as Brad suggests, low interest rates and low inflation (also high interest/high inflation). The % change in CPI-U in 2006 was 1.66%, compared to 2012 being 1.29%. And the interest rate at my bank was much higher in 2006. Another one...2005 2.41%, 2011 2.14%. I'm not asserting this is the correlation, just that there are weakly connected, despite the fed's hope to control anything and everything monetary.
Bichon Frise

"If you only have 1 year to live, move to Penn...as it will seem like an eternity."

avocado wrote:Good to see you back, I was starting to miss your incisive commentary!

Bolt Crank
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Re: Cranky's attempt at a budget/introduction

Postby Bolt Crank » Mon Mar 11, 2013 7:12 am

Sorry guys!

The Car we own is a 1999 car... the car with the payment is a 2009 car.

Kinda off by a decade there :)

brad
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Re: Cranky's attempt at a budget/introduction

Postby brad » Mon Mar 11, 2013 8:11 am

Bichon Frise wrote:I'm not asserting this is the correlation, just that there are weakly connected, despite the fed's hope to control anything and everything monetary.


Clearly it's not a tight or perfect relationship, but I think the general principle holds that the Fed increases interest rates when it wants to try to control inflation, and reduces them to try to encourage more spending/borrowing. See http://www.investopedia.com/ask/answers ... z2NAt1luef

I think it's unlikely we'd see regular savings account giving 5% interest again without a pretty significant increase in inflation.

Bolt Crank
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Re: Cranky's attempt at a budget/introduction

Postby Bolt Crank » Thu Jan 09, 2014 12:42 pm

W00t! 2014 Year review. Hard to believe my first post was in 2007....

Last year felt like a stalemate year, emergency after emergency has drained us and we are glad to see the 2013 year of suck go away. Since our update last year, here is where we stand:

Debts:

Mortgage: $89,000 @ 3.25% Now $83,000
Car Balance: $8,000 @ 0% Now $4015

Assets:
Retirement Account: $90,500 Now $103,500
EM Fund: $10,500 (3 Months) Now $9,000

Here is our monthly budget:

Core Costs:

Gas: $240.00
Property Taxes: $260.00
Ford: $366.00
Association: $335.00
Comed $120.00
Netflix $8.00
American Family $105.00
Trader Joes & Target $600.00
Wifes Phone $85.00
My Phone $10.00
Comcast $51.00
Mortgage $668.00
$2,848.00


Here is my Misc:

Medical $450.00 (Is our max yearly deductible for the entire family per month)
Union Dues $100.00
Gymnastics $100.00
Gym Membership $40.00
Gencon $130.00
Savings $650.00 (Still trying to get EM fund back up)
Mortgage Prepay $82.00
Large Object Savings $44.00
Vacation & Holiday $90.00
Trent's Allowance $30.00
Ricks Car Emergency $365.00 (Most of my emergency last year were car problems, this year I'm planning for it. Fyi, we have 2 cars, this is the old junker, now 15 years old)


Our Take home Income is: $5,434.00 Now $5,6333
This leaves us with $704.33 for monthly entertainment and random expenses. Which we basically burn through each month. It's 100% always some social calender issue still with us, and we eat out probably 2-3 times a week honestly. We know this portion here is fat.

The plan for 1 year ahead build up of Taxes basically was scrapped with all the problems.


The big choice I have this year is I have an offer for a $17,000 a year raise if I take a buy out, but I freeze my pension plan at 10 years. ($600 a month when I retire). Then switch over to the corporate plan. Only catch is they have vastly worse health insurance. Anyone have a thought on that?

And the last bit of yearly review, I've squeezed and realigned finances I think over the past few years. At what point should I stop funding my EM fund's emergency cash portion, and start putting that $650 I have set aside for savings to other uses.

Bolt Crank
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Re: Cranky's attempt at a budget/introduction

Postby Bolt Crank » Thu Jan 09, 2014 12:47 pm

Ha! Just realized in 2007 I had a goal to get to $20k for an EM fund.... man, that's why you have journals I guess... I still haven't hit that goal or come near it! $14k was the highest I ever made it.

fantasma
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Re: Cranky's attempt at a budget/introduction

Postby fantasma » Sat Feb 01, 2014 8:22 am

What was your decision on this? Does your spouse have a better retirement plan? What about a Roth IRA? If you stick with this plan how much are you guaranteed at retirement?

"The big choice I have this year is I have an offer for a $17,000 a year raise if I take a buy out, but I freeze my pension plan at 10 years. ($600 a month when I retire). Then switch over to the corporate plan. Only catch is they have vastly worse health insurance. Anyone have a thought on that?"
Be what you want to attract.

Bolt Crank
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Re: Cranky's attempt at a budget/introduction

Postby Bolt Crank » Wed Feb 05, 2014 11:42 am

I still haven't made a choice to it yet. My spouse is self employed. She has no retirement plans or, even better health insurance. Not for a few years anyway.

The raise I'm getting basically might just go entirely to cover all that I'm losing from switching plans. Since I still have some time to think about it, and I'm still hoping for some feedback. I'm just waiting and letting it stew. I basically have until April or a little beyond that.


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