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 Post subject: Michele's Fiscal Fitness Journal
PostPosted: Thu Apr 09, 2009 12:20 pm 

Joined: Tue Mar 10, 2009 11:31 am
Posts: 102
I am 41, married and have 3 children – ages 7 1/2, almost 4, and almost 2. We are saving for retirement and to fully fund public college for all of the children (we are in Virginia and have some good state schools here). Here is where we stood at the end of March:

Assets:
Checking: $6,500 (this may have been before our mortgage came out for the month. We usually have between $2K and $4K in here)

EE Bonds: $25,000 (this is our emergency fund. These are old bonds that have matured but are still earning interest. As they stop earning interest, I will probably put them in laddered CDs or something similar.

Mutual Fund: $19,000 (this account was opened ~18 years ago. I used to send a couple hundred to it per month. Haven’t in at least 10 years). This is for any future big expense – a car, a new deck, backup emergency. Not really sure.

My Roth IRA: $55,000 (I put in $5,000 per year)

My 401(k): $101,000 (I am currently not working so this won’t change much other than earnings or losses until I go back to work – hopefully in 1 ½ years)

Husband’s Roth IRA: $32,000 (puts in $5,000 per year)

Husbands 401(k) - $150,000 (he will be putting in the max per year $16,500)

Home: Our home is worth about $550,000 according to our latest assessment in January. (It’s a very modest 1950’s ranch. Home prices are still crazy here in Northern Virginia). We paid $290,000 in 2000.

Condo: We own a 1-br. condo in South Florida. Mother-in-law uses it for the winter. She covers expenses. It’s worth about $20,000. We paid $34,000 in 2003

Cars: Our cars are worth only about $10,000 between them. They are 2001 and 2002. We will probably need to replace one of them within 2-3 years. The other has relatively low mileage, but is small – so it’s a good commuter car.

Child 1: Education Savings Account (ESA): $16,000 (we add $2,000 each year)

Child 2: ESA: $6,500 (we add $2,000 each year)

Child 3: ESA: $4,100 (we add $2,000 each year)


Liabilities:

Mortgage for our Home: We owe $141,000. We have a 15-year mortgage at 4.75%. It will be paid off in 8 ½ years (November 2017)

Home Equity Loan: We owe $8,500. This is our “mortgage” on our condo. Because it was a fairly small amount, it was cheaper and easier to do a home equity loan than a mortgage. Rate fluctuates. Now at 3 ½% or thereabouts.

Short-Term Goals: I want to have the home equity loan paid off by December 2010. We’ve been putting about $400-$500 per month toward it. We can go lower or higher as needed. Minimum payment is under $200. I know it’s a low percentage rate and it’s tax deductible, but I just want to be done with it. It’s a psychological thing.

Intermediate Goals: We don’t do any savings per year other than retirement and the ESAs for our children since we are living on just my husband’s income for the time being. I know we will have some big expenses coming up in the next few years as our children get older such as braces, religious school and membership fees, new car(s), childcare fees for child #3 a couple of years for when I go back to work, and who knows what else.

I am hopeful that my income will be able to cover all new expenses. I hope to work 24 hours per week with my old company. This is questionable right now as my boss told me they are currently laying off people, but expect to have work by next year. But who knows? I worked for them full-time from 1998 until 2001 and then part-time from 2002-2007 when my last child was born. I’m still technically employed there on an hourly basis but they have no hours to give me which is fine for now.

Long-Term Goals: When our mortgage is paid off, I want to put that money toward college as $2,000 per year won’t cut it to cover college. When our mortgage is done, it will free up about $1700 per month and we will be done about 3 years before our oldest goes off to school.

I’d like for us to retire when the last one is finished with college – so in about 20 years. At that point, there is a good chance we’d move away from the high-priced DC area where we live. We’d probably keep a house somewhere up North (probably between Pennsylvania and North Carolina) and spend the winters in Florida (hopefully in a nicer condo than what we have, but it will do). We’d also like to travel.

I will probably track our financial progress quarterly as that is what I usually do on an Excel spreadsheet. This is the first time I have written everything out though with my ideas and thoughts and it was helpful to put into words some of our goals, expenses, etc. I am sure I will come up with more expenses.

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Michele
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PostPosted: Thu Apr 09, 2009 3:37 pm 

Joined: Mon Feb 04, 2008 7:35 am
Posts: 1140
Location: Maryland
You're doing great.
Yes, it is nice to have everything written down so you can remember your goals and such. Keep up the good work. I think the plan for the kids is a good one, and they will be so happy you are helping them out. :)


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PostPosted: Thu Apr 09, 2009 3:53 pm 

Joined: Tue Mar 24, 2009 6:12 pm
Posts: 27
Location: Seattle, WA
I agree with peachy. You are doing great. Adding all your numbers numbers up, even if most of it isn't liquid, results in a very nice number. You should be proud of yourselves and keep up the good fight.

Otherwise, a one-bedroom condo in South Florida is only worth $20,000? Wow. I knew prices down there were down, but I had no idea prices like that were available anywhere. If I wasn't fifteen years away from retirement, I'd go shopping.

Good luck and hope you check back next quarter to let us know how you're doing! :)


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PostPosted: Thu Apr 09, 2009 5:31 pm 

Joined: Tue Mar 10, 2009 11:31 am
Posts: 102
Hendrake,

I should have added that the condo is in a 55 and over community. It is in one of those huge developments built for retirees in the 1970's. While the prices are very cheap, the condo fees are $300 per month. It is about 15 minutes from the beach. Trust me when I say nothing fancy. My sister calls them Army Barracks. That's what they look like from the outside. But they really aren't that bad. At one point it was worth probably about $70K but like most other real estate in Florida, it has gone down dramatically. I'm just glad we didn't buy when it was at its peak. My mother-in-law is enjoying living there so it has worked out well and hopefully it will go back up.

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Michele
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PostPosted: Sat Apr 11, 2009 2:13 pm 

Joined: Tue Mar 24, 2009 6:12 pm
Posts: 27
Location: Seattle, WA
Thanks for the additonal info on the condo. That's a set of circumstances completely outside of my own experience / knowledge-base, so I found it interesting.

Since it's a 55 and over community, does that mean that you can't even stay there for a vacation - or is that more of a guideline? Just curious, not a big deal.

$300 does sound like a lot, fees-wise, though I imagine there are more facilities than at a regular condominiums? Just a guess. No real idea.

Anyway, I'm looking at your goals and I congratulate you on them. You seem to have all your ducks in a row. It thinks it's fantastic that you can set aside $32,500 a year on one income too. Kudos.


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PostPosted: Sat Apr 11, 2009 3:38 pm 

Joined: Tue Mar 10, 2009 11:31 am
Posts: 102
Guests of any age are allowed to stay there for two weeks at a time up to 30 days per year, I believe. And a couple where one partner is 55 but not the other can live there. A person of any age can own there, but you cannot reside there until you are 55. That is how we were able to buy the place.

For $300 per month there are a ton of activities - 5 outdoor pools, one indoor pool, tennis courts, bus service, a theatre, clubhouse with hundreds of clubs, workout room, and bus service. It also includes cable and building insurance. The place is immense - about 8,000 units, I think.

It's not a bad place to retire if you don't have a lot of money. There are many people who live there year round who probably could not afford somewhere else. It's a pretty nice class of people - almost entirely Northerners from the East Coast. And there's no state income tax in Florida. However, insurance is high and difficult to come by. And it gets very hot in the summer.

Thanks for the kudos. I guess we live pretty cheaply and my husband's salary is pretty decent. I don't require much. This will be our first year putting the whole $16,500 into a 401(k) so we'll see how it goes. I do make a small income selling on eBay which helps with some of the kids' activities and things.

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Michele
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PostPosted: Thu Jul 02, 2009 6:37 pm 

Joined: Tue Mar 10, 2009 11:31 am
Posts: 102
Well, I haven't been visiting this board very much lately, but I just did my mid-year review and thought I'd post it here. First, we've had a lot happen in the last three months. I mentioned that my dh's job got taken over as of April 1. Our medical expenses have been higher because of that change. My husband's work has been busier which is good because they have business but bad because it's very stressful for him. My husband was in what should have been a minor fender bender but the woman he hit is claiming injuries and has had a rental car for over a month for her Mercedes. She has a lawyer and seems to be milking this minor hit for all she can get. So we had a deductible for that. More stress. We've had every possible small appliance break - our bread machine, our rice cooker, and the hard drive on computer crashed. Luckily, we had a bit of warning on that one so we were able to back things up. But all of the replacements have cost money. Lastly, we just needed a muffler and some brakes work done on our other car to the tune of $700. So we have really dug into our emergency fund in the past three months.

Having said all of that, here is where we are financially:

--We have put $2000 into each of our children's Education Savings Accounts for a total of $6,000. This was our goal for the year, so this is complete.
--We have contributed $0 of our goal of $10,000 of our Roth IRA. We are a bit behind on this goal. I still hope to put it in before year end, but I know we have until April 2010 to do so.
--My husband has contributed about $8500 of our goal of $16,500 to his 401(k) for the year. He will reach the $16,500 earlier than year-end because of the takeover, so he will have a few larger paychecks at the end of the year.
--Our investments have all increased in value since the last review on March 31, so that is good news. Our net worth has increased about 5% since 3 months ago. So all in all, we are doing okay. Hopefully, we will have fewer things break down and less car excitement in the next quarter!

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Michele
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PostPosted: Thu Jul 02, 2009 6:47 pm 

Joined: Tue Mar 10, 2009 11:31 am
Posts: 102
I just reread my initial post and didn't realize I had put out all of our financial figures. Our house value has probably gone down but it's hard to estimate because Zillow and other big sites still have the old square footage on our house when in fact we increased it last year with an addition, so those estimates are inaccurate. Our county estimated $550,000 at the beginning of the year, but I'm guessing we wouldn't get more than $525K for it today.

We have paid down our mortgage to $138K with our regular payments.

And our home equity loan is down to $7200 - still hope to get that paid off by year-end 2010. This is our "mortgage" on our condo as it was a small amount and easier to do a home equity than a true mortgage.

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Michele
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PostPosted: Fri Oct 02, 2009 5:05 pm 

Joined: Tue Mar 10, 2009 11:31 am
Posts: 102
I haven't visited this site in quite awhile, but I figured I'd continue doing quarterly updates to our financial picture.

Our goals from the beginning of the year:

--Put $2,000 into each of our 3 children's ESA account - done
--Put $5,000 into each of our Roth IRA Accounty - have only contributed $2,000 to date. My husband will be getting an extra paycheck in October (he's paid every two weeks so there are 26 per year). That paycheck is going to the IRA. In addition my husband's last 3 paychecks should be higher than the ones he is currently getting because he will reach the $16,500 threshold for his 401(k) before year-end. Hopefully, that extra money will also go to the Roth IRA. I am not confident that we will meet this goal of a $10,000 contribution by year end, but we will definitely do it by April 15, 2010.
--Put $16,500 into 401(k). To date my husband has contributed about $14,000. He will be on target before year end. And hopefully the extra money will go to the IRA noted above.
--Most of our investments have increased since June. Our total net worth has gone up about 6% since then.
--I now believe our house is worth at least $550K which is what it was valued at at the beginning of the year. I questioned it early on but our neighbors behind us just sold and got $575K. It's a different style house with different pros and cons to it. Their house, however, was assessed even less than ours so I'm pretty confident in this number. This may have a bearing on our financial picture since my husband's job got taken over, we now believe there is a chance we could be relocated somewhere else on the East Coast. Probably would not be for another year, though.
--Our condo in Florida is probably only worth $15K now. There are a lot on the market. We are covering our expenses so the value shouldn't matter too much. We're not selling.
--We now owe $134K on our mortgage. It should be paid off in 8 years.
--We owe $6K on our home equity loan. I hope to have this paid off by year end 2010. We are on target for that, throwing $500 at it each month.
--Last big thing, which is partially why our net worth went up so much is I got a $25K deposit from an employee stock ownership plan because I haven't worked at the company in two years, they paid my distribution out. Up to this point I hadn't been counting it as part of my assets - not sure why other than I sort of forgot about it. That was a nice surprise.

That's it. I will check in at year-end.

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Michele
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PostPosted: Sat Jan 09, 2010 6:53 am 

Joined: Tue Mar 10, 2009 11:31 am
Posts: 102
Well, here are our year-end numbers.

Our goals from the beginning of the year:
--Put $2,000 into each of our 3 children's ESA account - done
--Put $5,000 into each of our Roth IRA Account - only contributed $5,000. We will definitely contribute the remaining $5K by April 15. $2K-$3K is going in this week because we paid our January mortgage early - in December to get the write off on the interest in 2009. So the $2300 that normally goes to our mortgage is going to our last year's IRA. I'm hoping we will get a bit of a refund from our taxes to pay for the rest. In the past we have gotten huge refunds - about $8K from the government at tax time, so I increased our withholdings this year to change that so we get a smaller refund. Not sure what it will be, though. Eventually, I'd like to get no refund or a very small one, but it's hard to predict each year. So we didn't quite make this goal but because we increased our 401(K) contribution for 2009 by about $3K, I am not too disappointed.
--Put $16,500 into 401(k) - done

--Most of our investments have increased slightly since September. Our total net worth has gone up about 2.5% since then.
--I am keeping the value of our house at $550K for now but it will be assessed very soon so I will adjust that number for the next year. It is possible that a move is in the near future.
--Our condo in Florida is valued at $18K which is pretty realistic, so I have adjusted the figure on that. We are covering our expenses on the fees associated with this place. We are not selling.
--We now owe $130K on our mortgage. It should be paid off in less than 8 years. Woohoo! I love seeing the amount we owe go down. When we bought it we owed $220,000 on it.
--We owe $4.9K on our home equity loan. I hope to have this paid off by year end 2010. We are on target for that, throwing about $500 at it each month. I'll be glad when that thing is gone. This was the loan we used to buy the condo in Florida.

Our goals for 2010 are the same as 2009 as far as savings go - $2K in each of our kids' education funds. $5K in each of our Roth IRAs, and $16,5000 in my husband's 401(k). Also, we should receive my husband's 401(k) employer match in April which should be about $6K.
Here's to a good 2010!

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Michele
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PostPosted: Sat Jan 16, 2010 6:44 pm 

Joined: Tue Mar 24, 2009 6:12 pm
Posts: 27
Location: Seattle, WA
Congrats on what appears to be a pretty successful year, michgc. Do I interpret it correctly that you are planning to contribute $16,500 to your husband's 401(k) and his company will add an additional $6,000 in April? That's alright, right there.

So why are you thinking that you'll be moving?


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 Post subject: Re: Michele's Fiscal Fitness Journal
PostPosted: Fri Jan 29, 2010 5:43 pm 

Joined: Tue Mar 10, 2009 11:31 am
Posts: 102
My husband's company got bought out one year ago. We think there's a chance that they might close his office - potentially moving us somewhere else. If that does not happen, my husband might search elsewhere anyway. He is not thrilled with his job. But of course a job is nothing to sneeze at these days, so he's not going anywhere yet. The one nice benefit of the new company that bought him out is the 401(k) match. They match 50 cents on the dollar for ALL contributions to the 401(k). He put in the full $16.5K last year, but because they didn't get bought out until April 1, he will only be matched from his contributions from then until the end of the year. The match comes out in April of the following year. He is contributing the full $16.5 this year, too.

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Michele
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 Post subject: Re: Michele's Fiscal Fitness Journal
PostPosted: Wed May 04, 2011 10:29 pm 

Joined: Tue Mar 10, 2009 11:31 am
Posts: 102
Just remembered about this board that I posted to a few times and decided to check in again. Interesting to see where we were financially exactly two years ago and where we are now.

First, we still haven't moved but definitely see it coming. My husband's company offered him a job in NY but he turned it down. We may learn more next month. As far as our financials, our goals are steady - $2K per child per year for college, $5K per year for me and my husband each in a Roth IRA and $16.5K towards my husband's 401(k) with his company still giving him (surprisingly) a 50% match on the whole thing! I still haven't gone back to work like I would have liked to. My boss just says there is nothing there. My youngest is almost 4, so at this point, I'm just going to wait until he's in Kindergarten and then look for a job, especially if a move is in our future.

And now our numbers:

ASSETS
My retirement (both 401K and IRAs) - $250K
Husband's retirement - $300K
Other savings (CDs, bonds, cash, etc.) - $60K
Child 1's college fund (ESA) - $23K
Child 2's college fund (ESA) - $12K
Child 3's college fund (ESA) - $9K
Other money in children's name not earmarked for college - $12K
Our home has dropped in value according to the latest assessment - $504K
Condo in Florida has also dropped - $12K

LIABILITIES
Mortgage on House - $113K (love seeing this number drop!)
Home Equity Loan - $0!! (we finally paid this off by June 2010 - our goal was Dec. 2010 so I'm happy about this).

Looking back at what I wrote two years ago, our net worth has gone up about 25% since then. We stilll have a lot of expenses in our future, though, that we don't have now. Still expecting to do braces very soon. And we definitely need to buy a car within a year or two, and we haven't started saving a penny for that yet. Hopefully, we can put both of those expenses off until I start working. We also have a lot of work around the house that needs to be done such as siding and some drywall in the basement. Of course, a job transfer might change a lot of our plans - hopefully, it will be to a place with a cheaper cost of living than DC. Even if they lower my husband's salary, we still have so much equity in our house, that we'd likely have a lot left over if real estate is cheap. With our luck, the move will be to San Francisco!

That's it for now.

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