Adeline's Fiscal Fitness Journal

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adeline
Posts: 5
Joined: Sun Dec 02, 2012 9:04 am
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Adeline's Fiscal Fitness Journal

Postby adeline » Sat Dec 08, 2012 10:33 pm

I want to start this journal to (hopefully) achieve our ultimate dream of achieving financial independence by the time my husband and I are in our mid-50s.

Background: We are military members in our late 20s + 1 child. Both of us are enlisted; I'm active duty and he's in the Reserves. A couple of years ago, I was given this amazing opportunity to attend an accelerated grad school program full-time while still getting basic pay with housing/food allowances. In order to do this, my husband had to quit his job to be a SAHD. The past couple of years has been a bit of a struggle as a single-income family, but I think we're still doing okay as we don't have to worry about student loans when I graduate in a year so.

Debts:
Mortgage - $318,000 recently refinanced at 30 year fixed 3.25%
Car Loan 1 - $18,000 1.99%
Car Loan 2 - $5,000 2.49%
CC - $1000, 0%

Assets
House - $290,000
Car 1 - 20,135 (trade-in value)
Car 2 - 13,750 (trade-in value)
Roth IRA - $59,000
TSP/401K - $20,000
E FUND - $2,000

TAKE HOME PAY
[minus: taxes, healthcare, dental, term life insurance, (rental income minus mortgage + property management fees/routine expenses)]
$4,000

NEW BUDGET
Savings 500
Rent/Utilities 1146
Part time childcare 158.25
Car Payment 1 256.39
Car Payment 2 340
Car Insurance 120
Cable 49.48
Internet 43
Phone 210
Car SVC Pymt Plan 84.10
CC payment 91
Groceries/Household 350
Personal 100
Entertainment/Dining out 100
Education/Books 50
Car (Gas/Maint) 200
Misc/Gifts 100
Mom's allowance 100

TOTAL $3998.22

Short-term goal: Re-build the EFund back to $15K by stopping ROTH/TSP contributions. We had to take out a fair amount for down payment on the nused cars (we used to drive 15+ yo cars and both of them broke down/died last year). The $2K on the E Fund scares me just because our house is currently a rental and *any* major repair can be disastrous to our finances. We're not really concerned about it being underwater as we plan to move back when my service obligation ends (7-10 yrs from now) and make it our retirement home.

The phone bill looks outrageous but we have 4 people in our plan including my mom & older brother. He is in a tight financial situation (long story), and I told him that's the only way I can help him out without creating a strain on our own budget. My mom is another story, but in a nut shell she will probably rely on me as her primary caregiver (She's 63, immigrated in the US 9 yrs ago, with 0 retirement savings & only relying on SS).

The groceries/household budget is $350. This used to be so much more. My husband LOVES cooking from scratch and my daughter enjoys baking so it's sort of our favorite bonding activity. We spend a lot of time in the kitchen. We love food way too much, and I have to admit we tend to go overboard sometimes with our gourmet meals at home.

So I only set aside $100 for entertainment/dining out. I think this is going to be the real challenge as we also like to get out once a week to try a different place to eat. This city is a mecca for foodies. We do Groupon regularly so it's just a matter of self-discipline and sticking to our budget. We shall see.

The book/education fund. I set aside $50 every month because I am trying to build my personal library for my practice. I know I can always borrow from the library, but I really need to have my own especially when I'm always highlighting pages/making notes every day I'm in my clinical rotations. Granted, there's only a few essential books I need to buy, so some months I may not even need it.

So a lot going on here and I want to write down everything to keep me in check. But I want to focus on the savings first & rebuilding that E fund even if it pains me not being able to contribute to our TSP or Roth this time around. But this is just a minor setback, as a year from now we are hoping will be in a much better financial situation when I commission as an officer. There are lots of good things going for us, such as excellent health care coverage & a good military pension when I hit early 40s. For now, it's just a matter of being more disciplined w/ our spending habits.

fiddlefaddle
Posts: 257
Joined: Fri Jul 29, 2011 8:38 am
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Re: Adeline's Fiscal Fitness Journal

Postby fiddlefaddle » Mon Dec 10, 2012 6:02 pm

Welcome, Adeline! It sounds like building up the emergency fund is a great choice since it's a rental right now. Will be watching your progress and cheering you on...
Fiddlefaddle's experiments in time management:
<a href=http://www.productivityguineapig.com/>Productivity Guinea Pig</a>

chasingthegoodlife
Posts: 50
Joined: Fri Nov 25, 2011 1:06 am
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Re: Adeline's Fiscal Fitness Journal

Postby chasingthegoodlife » Tue Dec 11, 2012 1:15 pm

Hi Adeline, good to have you join us!

Not that I'm an expert, but I think building up your cash reserves is a great idea. With a rental property and a child, it's good to have a big cushion.

You and your husband might want to agree on a target amount (for example. $10k) and then break it up into smaller milestones and celebrate each time you reach one. Like, when you reach 4k you celebrate with a Groupon meal, when you reach 6k you take a day trip to the beach etc. The reward doesn't have to be expensive either, you might get just as much out of indulging yourself with a decadent/fattening dessert you usually avoid or taking a day off from study/housework and just chilling out on the couch.

Marking them off on a paper chart or spreadsheet can be great motivation too. I look at my mortgage pay-off spreadsheet several times a week and geek-out over my increasing orange-shaded cells. Whatever keeps it 'fun'!


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