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 Post subject: The year of increasing the emergency fund
PostPosted: Tue Jan 12, 2010 10:36 am 

Joined: Wed Mar 26, 2008 1:35 pm
Posts: 457
Location: USA
This will be my first fiscal fitness journal, to keep me honest about contributing to our emergency fund. I am generally a financially responsible person, with the exception of not keeping an emergency fund of 3-6 months. Last year I was going to increase the e-fund, but was only able to increase it from 2K to 4K (in part, this was due to 4K in unexpected medical expenses (further underlining why an efund is a good idea!)
My goal this year is to fund the account 400-500 every month so that at the end of the year we will have 9K in savings.

Did the worksheets in All Your Worth. Our needs (minimum fixed expenses) are around 45% (should be 50% or less). However our "wants" last year were 41% (should be 30% or less). Unfortunately, my husband and I have already agreed that this is the year we fix up our bedroom, and renovate our main bathroom. We have already started on the bedroom, (should be an additional $500). However the bathroom remodel will be more, very rough estimate of (3-4K). Have already decided I shouldn't buy new bed for new bedroom : (. This will be hard for me (our current bed is a metal bed frame with a full size headboard not connected to bed, want to throw these out.

Where we can cut. Last year spent an average of grocery 722, restaurant 266 month. Husband (the cook) will try to cut $100 month here. We also spent a large amount in "miscellaneous" every month (1400). Weaknesses for me are internet purchases and gift giving, and both of us vacations. Will cut $300 a month from miscellaneous category.

Jan 2010: balance 4066. Transferring 200. Will try to transfer $300 at end of month.


Last edited by partgypsy on Wed Feb 24, 2010 10:17 am, edited 1 time in total.

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 Post subject:
PostPosted: Tue Jan 12, 2010 10:48 am 

Joined: Wed Oct 07, 2009 4:16 pm
Posts: 961
miscellaneous 1400 i think you need to break that down some more to see where you can do some more fat cuts.
groceries are 722 a month, i take it. are there more than the two of you, that's alot for two people.

_________________
Be what you want to attract.


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 Post subject:
PostPosted: Tue Jan 12, 2010 11:31 am 

Joined: Wed Mar 26, 2008 1:35 pm
Posts: 457
Location: USA
There are 4 of us (plus dog, cat, fish : ))

The only things I have in categories are: fixed recurring, grocery, restaurant, car (gas and repairs) and health (medicines and copays)
Everything else goes into miscellaneous. So that includes all other purchases (clothes, personal care, any purchases for house, gifts, vacations, stamps, etc). I have the actual numbers at home. Probably the only thing in there that is not discretionary is maybe expenses for house, but would be a pain at this point to separate that out.


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 Post subject: opening salvo
PostPosted: Wed Jan 13, 2010 7:56 am 

Joined: Wed Mar 26, 2008 1:35 pm
Posts: 457
Location: USA
To try to make this a better year, got onto consumerchoice.org and got off the mailing list of about 8 catalogs. As I get them in the mail I will enter them in my list so I do not get catalogs. I've been meaning to do this for awhile. Even though I enjoy looking through catalogs, it encourages me to spend and is environmentally wasteful. A number of these catalogs I know my sister and brother in law and also parents in law get, so if I go into withdrawal I can always borrow theirs.

I am on the fence about getting off email lists as well. I like hearing about sales and feel am pretty good at deleting when not interested. For companies I'm completely not interested in I typically request them to remove me immediately.


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 Post subject: like 144 mph in one respect
PostPosted: Wed Jan 13, 2010 8:11 am 

Joined: Wed Mar 26, 2008 1:35 pm
Posts: 457
Location: USA
Looking over the past couple years summaries and reading 144 mph fiscal fitness journal made me realize that we are similar in one respect. No, not in making loads of money, but that restrained in day to day purchases (brown bag it, only buy clothes a couple times a year), except I'll get obsessed with something and will until I buy it. Previously it's been jewelry, gemstones. Past 10 years making home improvements. Lately, since basically all of our furniture hand me downs or thrifted, been wanting to buy real furniture.
So, do not know whether it will be a consistent $300 a month I will save, but that over the year I want to put an additional 5K in savings, however I do it. I am just going to focus on increasing that number.


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 Post subject: Re: The year of increasing the emergency fund
PostPosted: Tue Jan 19, 2010 8:36 am 

Joined: Wed Mar 26, 2008 1:35 pm
Posts: 457
Location: USA
Because of when I receive my primary bank statement my monthly reviews do not fall at first of month but more around the 18-20th of the month. So while I say Jan, really Dec 19-Jan 19 (or roundabouts).

In Dec took $260 from efund to pay off credit card- (I know, not supposed to do that). So far this Jan put $200 to efund, hope to put another $300 with 2nd paycheck (which will fall in Feb accounting).

Dec: ingo 3871, outgo 4308.79, efund 4038 (-260), net=3600.21
Jan ingo 4025.65, outgo 3700.65, efund 4298.48 (+200), net=4623.48


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 Post subject: Re: The year of increasing the emergency fund - bad news.
PostPosted: Fri Jan 22, 2010 2:56 pm 

Joined: Wed Mar 26, 2008 1:35 pm
Posts: 457
Location: USA
Bed news. My lower right molar had been bothering me for a week, scheduled yesterday to go to dentist. My hunch was that the filling had loosened, or that it had chipped and would need a cap. Luckily after experiencing the financial pain of a crown about 2 years ago I have been paying for dental insurance to cover such catastrophic dental situations.

The verdict? The dentist sees that I had cracked 1/4 of the tooth, in fact the crack extends to below the gumline. She does not think the tooth can be saved. Due to the fact the rest of the teeth are healthy says the standard of care for my situation is an implant. The cost? 5K. I was also informed most dental insurances do not pay for this (due to the cost). I looked it up, and yes, other than some nominal fee to pull the tooth none of this will be covered. Suffice to say I am upset. 5K is all I had carefully planned to save for the emergency fund this year.

I'm still assessing the situation. I am definitely going to get a second opinion, first whether the tooth can be saved in any way, and second for another quote for the procedure if it does turn out to be the only medically appropriate course of action. The way I feel right now I would rather have a hole in my mouth than to pay 5K for a single tooth.

The other thing, is that our plans to renovate the bathroom is put on hold until this is figured out. This is very disappointing, as we had already found someone who is professional and reasonable in cost to assist us with this project. If we put it off we do not know if this person will be available when it gets warmer (works as a contractor).


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 Post subject: Re: The year of increasing the emergency fund
PostPosted: Fri Jan 22, 2010 3:10 pm 

Joined: Thu Jan 14, 2010 10:20 am
Posts: 49
sorry about your dental problem. I just got some bad dental news yesterday myself. I've been wondering if its a viable option to go to mexico and have it done on the cheap. :mrgreen:


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 Post subject: Re: The year of increasing the emergency fund
PostPosted: Fri Jan 22, 2010 3:16 pm 

Joined: Thu Jan 14, 2010 10:20 am
Posts: 49
just thought I'd share this: http://www.dayodental.com/page.php?p=19


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 Post subject: Re: The year of increasing the emergency fund
PostPosted: Fri Jan 22, 2010 7:32 pm 

Joined: Wed Mar 26, 2008 1:35 pm
Posts: 457
Location: USA
Thanks goinggreen, I actually know someone who went to Mexico to get all his wisdom teeth out, combo honeymoon/wisdom teeth extraction vacation. I could imagine doing that. When I got my wisdom teeth out I went to a teaching hospital and got a significant discount. But going to Mexico for a dental implant procedure, a little out of my comfort zone. I know I should consider all my options, but with the way my tooth feels, I will probably need to make a decision in the next week :cry: .


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 Post subject: Re: The year of increasing the emergency fund
PostPosted: Tue Jan 26, 2010 8:28 am 

Joined: Wed Mar 26, 2008 1:35 pm
Posts: 457
Location: USA
Update. I called a number of dentist, oral surgeon offices on Monday, and essentially was given the same quotes for the procedure. Decided that implant is kind of like a honda: more up front costs, but less expensive over the long term. Cost saving measures is that not getting general anesthesia (unnecessary). Also they give a 3% discount if pay bill same day of procedure, so I will do that, putting it on my cc which also gives me 1% rewards, and then pay the cc bill from emergency fund. The procedures are spaced out over 6, 7 months so the bills will be too. Other than putting off the bathroom remodel, will continue plan of contributing $500 to emergency fund each month.


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 Post subject: Re: The year of increasing the emergency fund
PostPosted: Sat Jan 30, 2010 1:24 pm 

Joined: Wed Mar 26, 2008 1:35 pm
Posts: 457
Location: USA
Got my tooth pulled to ready it for implantation 3 months from now. Charged 740 to credit card for consult and pull. Dental will reimburse about 100 for tooth pull.

Did taxes and when put state and Federal together will have about 2500 refund. This is usually our "fun" money, that we wait every year for to allow us to buy something for ourselves/house. There is definitely a bunch of stuff on that list (better tv antenna, upgrade to computer,furniture, rug for bedroom, bathroom upgrade). Since we normally spend all of this, I'm going to allow us each 100-200 of funds that we can use as we please, but rest will go into fund. What I'm hoping (but not totally confident considering our luck lately) that if we are consistent with saving 500/month outside this windfall, it will still be in fund once my tooth stuff is all done, which means we will have an extra 2k for either increasing the efund, or doing bathroom. Cross that bridge when I come to it.


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 Post subject: Re: The year of increasing the emergency fund
PostPosted: Tue Feb 02, 2010 8:28 pm 

Joined: Wed Mar 26, 2008 1:35 pm
Posts: 457
Location: USA
Got a letter from our mortgage holder. In 2009, because of a big increase in property taxes in 2008, our escrow account was underfunded so in 2009 in addition to paying regular escrow, were paying an additional $57 a month to pay off the escrow shortage. For this year we get a letter saying that our escrow is still underfunded, and they will both have to increase our permanent escrow withholding by that $57 amount (not a surprise) and that our shortage is now 1300. (We can pay as lump sum, or mortgage increased by an additional 110 a month). It's frustrating that they can't get the math right. Regardless how we pay it, will have another 110 in expenses each month to account for. I am tempted to to simply pay for the shortage so they can't keep changing the number on us.

I would love to get rid of the escrow account and handle this myself. However looked it up and maintaining an escrow account was part of the original mortgage. Any way of getting rid of the escrow account short of redoing the mortgage?


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 Post subject: Re: The year of increasing the emergency fund
PostPosted: Fri Feb 05, 2010 8:38 am 

Joined: Wed Mar 26, 2008 1:35 pm
Posts: 457
Location: USA
Trying to figure out the big picture. Because last year wanted to increase the e-fund so bad, from Jun to Dec decreased my withholding for retirement from 10 to 7%. So I got an extra $100 in paycheck, but - where did it go? As was not disciplined to put that towards retirement OR savings, feel it was borrowed money. Decided at end of last year to change it back to 10% withholding. My raise kicked in, but the increase in withholding exactly cancels it out (actually, paycheck will be $10 less than used to be). Not a big difference, but bit of a psychological blow.
The good news: if I keep it this way all year by the end of the year I will have (together with work contribution) put more than 10K this year towards retirement, which I never have done before.

New yearly goals:
Pay for tooth expenses (5700).
save for retirement
Save 2K into emergency fund.
Dissolve escrow account, handle hazard and property taxes on own. I have written letter to mortgage holder to dissolve account. This way we will have better control over our money, and possibly make a small amount of interest in that money.

This raises the bar from my original stated goals by quite a bit. This means saving about 3K more than original goal, with no increase in paycheck and at least $110 a month more in monthly expenses.

Am I thinking about this wrong? Should I push down retirement again? But I feel the last time I did that that money just got spent, and neither saved for retirement nor increased savings accounts. I guess I will try it, and see how it goes...


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 Post subject: Re: The year of increasing the emergency fund
PostPosted: Fri Feb 05, 2010 9:33 am 

Joined: Tue Aug 05, 2008 3:22 pm
Posts: 548
Location: Northern CA
partgypsy wrote:
Am I thinking about this wrong? Should I push down retirement again? But I feel the last time I did that that money just got spent, and neither saved for retirement nor increased savings accounts. I guess I will try it, and see how it goes...


PG, this was exactly my experience as well. Even though the conventional wisdom is pay down debt, then invest, I found my "ordinary" spending was slushier when i had a larger paycheck.

As a result, I've invested a lot over the past few years, while I carried a $2-$3K credit card balance at 3.9% interest. For me, it was better to pay chunks of the CCd off (and then have it float upwards again) than to try and eliminate it entirely with no savings. When the CCD got to $3K, I'd tend to buckle down and get focused. When it got paid down or off, I'd start unloosening the belt again. That was a frustrating pattern when coupled with no retirement savings on the "good" side of the ledger.

So, for my personal circumstances, savings for retirement always came first, and debt repayment was part of the written budget. The interest I've paid has been so insignificant that it's been worth it, to me. YMMV.

Sandi


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