Can we live on one income?

When I started this blog I wanted to get a handle on our finances. I wanted us to be able to do whatever we chose when we had kids. I wanted to not worry about debt.

Since starting the blog I:

• know how much we spend each month
• have annualized our irregular bills
• learned how to cut spending (in certain areas)
• have started a starter Efund
• have met some of our savings/debt goals

Along the way I've challenged our financial set up. A few weeks ago I decided it was time for another shake up. Starting in August we're going to use his checks to pay for everything. I should say pay for everything first. At the end of the month I'll track how much of my check was necessary.

This will do a few things. First, knowing how close (or how far short) his salary comes across time will give us a better idea of what we can afford to do when it's time to make changes. I also think seeing how far his salary goes will give my (commission based) husband a boost despite some other work issues. Finally, it's more reassuring to know how close we are, not just thinking it should work out.

So the latest revision of our money plan goes as follows:

• His take home household money* goes to pay the bills first
• My take home household money will hang out in our brick and mortar (b/m) savings for the rest of the month
• Funds will be transferred from savings to checking where his check falls short
• At the end of the month whatever is left in the b/m savings will head to ING to increase our Efund
• Anything left in b/m checking will go to another ING account to balance out his low months. (I'm still thinking through the details)

Our debt snowball (my prior car payment + his current car payment) will continue. I've written the extra $325 into our monthly spending. But instead of sending any extra money to the car, it will be headed to our Efund. We've decided that even though we have some debt, we'd feel more secure with a larger Efund. Strictly looking at numbers (getting charged 4.15% vs earning 1.3%) this is not a great choice. Emotionally, it's a different story. So we're going to do what will make us feel secure.

The only other thing we have outstanding is the Lowes card. I paid half of what we owed last month in advance of the July due date. In the next few weeks it will be knocked out, so I didn't work it into the overall plan.

*this is 80% of his take home check

Helping a Parent With Finances

Gamedad lived with us for a few months after a split from his new wife. Without going into too many details she made off with a lot of his modest pension.

During the 8 months he lived with us he paid us a couple hundred dollars in rent each month. This helped with our increased bills, but our main reasoning was for him to stay in the habit of paying bills. My husband worked out a savings plan for him so that he could accrue a bit of an emergency fund. Then he moved out.

We helped him get set up in the new place, shopping for furniture and housewares. My husband sat down with him and talked about his finances. He told him that he could take a couple hundred each month to spend, but after bills he should save the rest. His rent is about 1/3 of his pension and the rest of his bills aren't too much more. At this point he had somewhere between $4,000 to $5,000 in the bank.

Fast forward to last month. My husband finds out that their shared account is overdrawn. We go to his house to talk, which became yelling when my husband found out that he only had a few hundred left. It was a lesson in how not to spend. Lot's of cash withdrawn, infomercial products galore, and more money than anyone needs to spend at a casino. There were a few other charges made us think someone was taking advantage of him.

That night my husband took his cards. He gave him a reasonable amount of cash for the next week. In the time since we've been taking him grocery shopping (the offer had always been on the table) and giving him a bit of spending money each week.

Last week he and I sat down to draw up an official budget. We went over his income (pension), his annual expenses, and what a reasonable amount of spending money would be. I let him know that the infomercial shopping has to stop. We agreed that each month we'd deposit that amount into a new account at the bank across the street for his spending money.

We think there are some other changes that need to be made to his financial system. Currently his pension is deposited in a bank with no local branches. He also needs to get in the habit of regularly reviewing his finances. Eventually we'll also need to get him set up with an online checking account to increase the interest he earns on his savings.

Here's hoping that my financial talk will sink in.

Theaters that Don't Feel Like Igloo's

Last night, for the second Saturday in a row, a good friend and I went to see a movie*. Both times I put on pants, sneakers, and a t-shirt. I also carried a fleece/sweater with me to deal with the inevitable chill. But guess what? I didn't need a layer of warmth to sit through the movie.

To properly understand how crazy this is you need to know that I am ALWAYS cold. I blame my Carribean/African ancestry. I keep a few sweaters in my car, one in his car, and can't remember the last time we went to a party or out to dinner where I didn't need one.

During both movies I felt comfortable. Even a little warm during one, ruining my friends attempt to escape her no AC apartment and cool down a bit. One theater was a big multi-plex that has IMAX screens and the other was a little artsy place that also serves adult beverages. I guess it's just another sign of the weak economy.

*Breaking my annual movie streak.

Mystery Shopping's End

I can't remember the last time I did a mystery shop. At first it wasn't a conscious decision. Mystery shops aren't as convenient from the new house. The closest ones I've seen are more than 8 miles away. The new job has (somewhat) set hours. It also keeps me in 2-3 set locations, not running all over town.

All of those factors, along with general new house crazy, caused a severe cutoff in mystery shopping last fall. When I laid out which tax documents we should be looking for I officially decided to cut mystery shopping. Outside of babysitting I decided that if I don't get a 1099 or a W-2 I don't want to deal with it.

Why?

Well doing our taxes has been a pain. I fall into the claim all income camp, not the claim my main job but side jobs don't count. By nature I'm a worrier and I'd rather not have to deal with the IRS over something stupid. Last year between the two of us it was something like 3 W-2's, 3 1099's, and 2 self maintained records that were additional Schedule C's. The amount I was making mystery shopping, when balanced with the record keeping and extra rigmarole at the end of the year didn't add up.

Currently I don't have as many earning opportunities. On the flip side I make more per hour with my current opportunities, largely babysitting and working at the museum. The money is almost equaling out and I have time to do the thing I enjoy.

Fiscal year 09 complete

The fiscal year has ended and I spent the two budgets I was closing out down to the penny. Our money guy called my boss, shocked, to let her know I'd spent it all. We weren't sure why he was surprised. I'd given him my spend down plan in advance and as time ticked away sent him many emails outlining things.

I'm taking most of this week to recover from the experience, mainly unpacking the boxes of materials that I purchased and tackling the things my predecessor left in the cabinets. It feels so good to organize and deconstruct the cubicle wall of boxes that has piled up. Though I had thousands to spend I put in extra hours to ensure that each penny was used wisely. At one point my boss told me to relax and just spend*, but I couldn't handle it. When I knew I wasn't getting the best deal I thought of the money taken out of my check and the checks we've had to write the IRS over the years.

I've promised myself that the end of next fiscal year will not be as crazy, at least on the 3.5** budgets I manage. We're meeting with the money guy in the coming weeks to work on the issues he created. I also understand what I need to do to get budget change approvals from the state level. Most of all, I will have a full year to spend according to our plan (vs 9 months) and less money to spend.

My June month end info will be up in the next few days. I ended up putting some of the work stuff on my personal cards. So instead of doing our finances this weekend I spend a bit of time working out reimbursements and getting money to the appropriate accounts.

*she wasn't encouraging being excessive, just not being quite as frugal.
**ARRA funds fit into one of my budgets and require separate tracking.

In the Black

I'm in the black and I've decided this is where I need to stay. Forever.

My net worth has gone from $1,211 to $4,081.

Last month I wondered if the funds we had saved for landscaping was giving the savings line a false bump. The key to this month's success- reigned in spending. Peeling away all of the work charges* showed a rather slim household credit card. The monthly necessities came in 300-400 below normal. My personal card was more than it should have been, but less than the past few months.

We've decided on yet another change to our money plan that I'll write about later this week but I'm confident (barring anything crazy) that I'll be able to stay in the black.

*I also peeled away the reimbursement check I received this week.

End of the fiscal year

At work, which is all grant based, we've hit the end of the fiscal year. I've been a spending champion. I still have a couple thousand to get through. Then I'll be back to (somewhat) regular posting.

I should have been a plumber

I could have also called this, good thing we have an emergency fund.

Yesterday, while cleaning up for a get together tonight my husband broke out kitchen faucet. Or maybe I should say the faucet broke while in his hands. It's a model where a single lever goes up down for on/off and left or right for hot or cold. There was a pop, no water when pulling the lever up, then the lever came off in his hands.

He visited our second home, a big box home imporvement store, and came home with a mission. They didn't sell the parts, but a local plumming supply place does. "It's a pretty easy fix if you get tool X they told him."

So this morning he heads to the plumbing store, where again they say "Yeah, it's pretty easy to do." At this point I should mention that my guy is not handy. He can make the computers work, and when I need help (usually in the form of strength) on a project he's there. But not someone you could call handy. The fact that he even volunteered to try and fix it amazed me.

Fast forward 2 hours. I get a call at work letting me know despite turning off the water, water is flying everywhere and he is now bleeding. I take a minute and call a plumber.

I called a national service that we have all seen plumbers for and told them to head over, largely because the lack of a call fee (btw plumbers, why do I have to pay $35-70 for you to just show up???). The guy gets there, gives us quotes, and (after the husband calls) we both fall on the floor. I give a quick call to 4 competitors from the phone book, asking how much it would be to get the problem fixed, using plumber language. Their quotes were all within $20-30 of the quote from the guy standing in our kitchen so we decided to just go for it.

Depending on where in the cycle our credit card bill is and what his comission check looks like 3 weeks from now we may be able to swing it. If not, we have money put aside for time like these.

This is our first house related emergency so far so I'm not going to complain too much. I'm also going to use this as impetus to get off my behind and do something I've been planning to do since we moved in- develop a contractor list. I'd much rather contact someone based on personal reccomendations than call a national service. Come July it's at the top of the list.

No Refi for Me

When I finally convinced my husband that we should refinance the house rates were around 4.75. The plan was to reduce our monthly payment but keep paying the same amount, cutting years off of our mortgage.

The problem is the declining home values in our neighborhood. When we bought we knew that prices would continue to fall, possibly for a year or two. Based on our 5-15 year timeline we were ok with that. What we didn't anticipate was the dramatic drop in interest rates this year. We put down 10% when we purchased and have since paid $1,000-2,000 in principal (10 mortgage payments).

When we started refinancing all of the banks we looked into required 10% equity. The Making Home Affordable Act reduces the equity requirement, allowing up to 105% equity. I started calling about this option in late April. A plan wasn't in place until 1.5 weeks ago when the rates had crept into the upper 5's.

I called in and had a loan guy run the numbers last week. The estimated savings were under $100 a month. So for now we've decided that the expense of refinancing isn't worth what it will cost us to do so.

We'll be keeping an eye on rates in case they go back down but we're not holding our breath.

The Place to Be

It seems that in my neighborhood the place to be on a Saturday night is Redbox. Saturday at around 7 we decided to go get a movie at the newest neighborhood Redbox-there are 4 within 2 miles. The line was 7 people long when we arrived and while we waited 3-4 more showed up.

Our wait was around 10 minutes, but we had no place to be and it was a beautiful evening. We also had a code that would only work at that Redbox ;)

Almost free health care

Today there was a meeting at work about open enrollment. We're a little crazy right now so I asked the HR lady what I needed to do if I am fine with my current level of benefits. Everything will be the same price, with the exception of our health insurance.

Currently I pay $5/month for my well known HMO. Overall I'm happy with my coverage. The only things I'd change are: an allergy center closer to me and phone appointment booking during the after hours.

The new plan is $25/month for the same level of coverage. Unless you fill out a health survey. You can choose to have the information added to your chart (or not). The only information my job receives is that I took the assessment. It's the kind of thing I'd do on my own because the numbers that signal good health are not on my side right now.

With the assessment on record my monthly cost drops to $0. That is $300 assuming I work with the same company for the next year. The only reason this post is called 'almost free health care' is it took me 30-40 minutes to fill it out.

The Great Return

My pre trip organization goes something like this:

• Lay out (or list) clothes I plan to pack
• Decide I hate all of my clothing
• Decide which essential items will keep me from being a fashion disaster
• Shop like crazy

Generally during the 'shop like crazy' period I'm also trying to finish things up at work, get the house in order, and spend some quality time with loved ones. So I run in, sometimes trying things on, other times just pulling things off of the rack. What I end up with are a few key pieces that I like and a lot of crazy.

Because I know this about me I'm very careful with my receipts & bags. Until I know I love something the tags stay on. Sometimes there are mini fashion shows. And then I decide what I actually like and what looks rediculous.

Once I'm back from my trip I neatly fold things back into their bags and begin the great return. Today I returned two dresses, a shirt and a pair of jeans. That totaled $173. Tomorrow I'll do round two, a few shirts from one store and a few pieces from another. This includes the trench that my loving husband said would keep him from leaving the house with me. That will be around $140.

The key is to get everything back to the stores in the same billing cycle. Usually if you check online or call in you balance due will be reduced. Even more important is asking about the return policy before you purchase, so you know the dress that you loved but may hate can actually be returned.

Taking Security too Far

After Chase bought WaMu my husband decided he no longer liked his personal credit card. This was in the time period just after buying a card and when we were considering refinancing. We bought the house just using my info to avoid the self employed hassle that made most of his employment history at the time. With the tightened credit market we weren't sure if we would be able to swing the refi with just my income.

Instead of having even more credit pulls while looking for a new card I shopped from my credit report. We added him as a joint user to a card with a longish history & healthy limit that I was worried would get closed. Since then it's been his primary personal card.

Though he's the person who set the username and password he got locked out this morning. Because he's just a joint user (not joint owner) I had to make the calls to get it unlocked and the passwords reset. I hid my copy of the card when I got it, so I couldn't have the card numbers.

So I call. Put in my social security (which for once actually made something pop up on the other side and they didn't ask again in 2 minutes). Get a guy on the phone. He takes me through verification questions that require knowing where the card was used, last amount paid, or the information on the card. The one thing I could answer (if my wallet weren't missing) was my driver's license number. I ask if that will get me through later.

I find my wallet, go to work, come home and try again. I do the social. Confirm the credit limit. Give my driver's license number. Confirm the names of people on the account. Offer to give the social for someone else on the account. I explain that I don't actually use the card. That my husband is the primary, but because of their security system he can't make the call. I also confirm the address on the account. All this and the girl will not reset my password.

While I appreciate them trying to protect me from identity theft the call was pretty ridiculous. After a brief conversation with the manager she agreed. But why make a girl get salty on the phone?

E-fund tax and life

Where did the week go?

In the near future (ie after I discuss with the other half) I plan on enacting a new rule for our efund. I am super hesitant to ever touch the efund, even when it makes sense. He is always ready to use it. The solution- the efund usage tax. Every time we take money from the efund we have to replenish what was taken (normal) and add additional funds. For instance amount taken plus and additional $1,000. When I talk to him we'll work out the exact details-how much the tax is, how quickly the money needs to be replenished, and if there are any exceptions.

The actuall discussion will probably have to wait a week because this week will be a bit more stressful than most. At work I'm nearing the end of our fiscal year. Due to my late start date (3 months into our fiscal year) and other things just not working out I have a lot of money to spend. Since I'm working with tax dollars and on the behalf of the kids in my community, though I have thousands to spend I want to use to be responsible in my use of the funds. His job just moved teams around so he is starting with a new boss and hopefully will be interviewing for a promotion.