April Side Gigs

This month's extra $$$ from side jobs.

Tutoring $330
Online Surveys $9
eBay sales $2.10
Lawn mowing $360

Total for the month $701.10

$201.10 added to the emergency fund.
$500 added to retirement accounts.

March Savings and Net Worth

Normal monthly savings:
401k (includes match) $867

Roth IRA (Hers) $300

Roth IRA (His) $300

HSA account $500

Taxable Mutual Fund $210

Emergency Fund $300

Extra monthly savings:

Extra EF from side-gigs $292
Extra EF from money squeezed out of budget $140.25
Extra saved from Tax Refund (went in various accounts) $5,000

Total saved for the month $7,909.25
An unusually high amount due to tax refund hitting our accounts in March.
Due to a lousy stock-market in March, the net worth didn't go up by much.

Net Worth as of 3/31/14 $569,215
Increase year-to-date $20,544  

I Was Featured on One of my Favorite Financial Sites

Recently I was asked to do a guest post on one of my favorite financial sites, Mad Fientist

At the risk of sounding very self-promoting, check it out Here

Everyone was very kind with their comments and it was a great experience

Staying Balanced

Keeping the balance between saving for tomorrow and enjoying life today is a challenge for me at times. I am much more inclined to save money for the future than to spend it now. I realize that it's better to be a compulsive saver than a compulsive spender. But how does one reach a balance?

Unless you have $10 million in the bank or are deep in debt, this applies to you. If you are incredibly wealthy you can spend today and tomorrow and way into the future and you don't need to worry about balance as much. Likewise if you are in debt than you should be doing everything you can to get out of  debt and start saving like crazy. Actually if you are in debt why are you even reading this? You should be working 2 or 3 jobs to get out of debt. Then you can come back and browse all the time-wasting websites you want.

I have to mentally stop myself from trying to save every dollar I make that doesn't get spent on necessities. I need to remind myself it's OK to let down what little hair I have left and spend a few dollars every now and again. Especially while I am not a geezer and can actually enjoy it.

I could save even more if I wanted to. But since we are on track to retire in 13 years, I feel comfortable with the balance we currently have. Besides we have too much fun going to the beach each year, letting the kids participate in a reasonable amount of sports and other activities, having a summer pool membership (well the wife and kids enjoy that, going in some skanky water with 200 sweaty obese people doesn't hold much appeal to me, the wife and I go out for lunch on the 20th of each month to celebrate our wedding anniversary. 

I have no problem keeping the thermostat on 60 during the winter if it helps pay for beach house during the summer. Or reusing ziplock baggies if that means we can grill some steaks every now and again.

Listen I'm not gonna go nuts with the spending though. You aren't gonna catch me in a Starsux, ever. And I won't be paying to go to a yoga class and have someone teach me how to pose (you people ever heard of YouTube or borrowing DVD's from a library?). And my wardrobe will still consist of hand-me-downs and thrift store bargains.


So let's all lighten up and enjoy life a bit. Go on vacation once in awhile, send your wife to Victoria Secrets, let your kid have peanut-butter and jelly.

PS-don't tell my wife and kids I said it was ok to spend money on occasion.

The Rule of 752

Like Area 51, the Rule of 752 is all about hidden power!!!Take a weekly expense and multiply it by 752. The result is the real cost of that expense over 10 years had you invested the money instead. Can you feel the Power?

Spend $20 on picking up coffee on the way to work each week instead of drinking the free stuff at the office? If invested that would be $15,040.

Eating $25 worth of lard at McFat's for lunch every week? That equals $18,800.

Sucking down $30 worth of suds weekly? $22,560.

Blowing $35 a week on smokes? Well that could buy you a nice car after 10 years. $26,320.

Trim $100 a week from you budget through a combination of things and you will have $75,200 after 10 years. Enough to get all the plastic surgery your heart desires.

You get the idea. Just another way to think of real costs of those little "harmless" purchases.

No I didn't make up the Rule of 752, just passing it on. I believe that Triple M came up with it.

Go Ahead and Splurge

No really, I'm serious. Splurging once in a while can help you get out of debt faster and save more in the long run.

If you are constantly paying down debt and/or stashing money into savings and doing nothing fun, you may soon become frustrated. Especially if the results are slow in coming. And then you might go out and blow a ton of money on something silly instead of just blowing a little bit.

Living like a desert monk is good for the finances but all that scrimping and saving can get to you. Instead set aside a bit of money each payday for fun. Call it your Blow money. Once you have it, go Blow it on something. Dinner out, new shoes, a box of Lucky Charms cereal, disco-ball, whatever meets your fancy.

Just don't go bonkers and spend tons of money each payday doing this, make it a reasonable amount for your current financial situation. 

Want to splurge on a larger purchase? Then save your monthly splurge money until you have enough and then go for it. Buy that leopard-print couch or that autographed collection of Kim Kardashian bikini pictures*.

*this blog does not endorse the buying of this product, nor accept any responsibility for what happens to your eyes if you look at this product

February Savings and Net Worth

Monies put away in savings during February:

401k (includes match) $867

Roth IRA (Hers) $300

Roth IRA (His) $300

HSA account $500

Taxable Mutual Fund $210

Emergency Fund $300

Extra EF from side-gigs/found money $305

Total saved for the month $2,782

We may have to trim the amount going into savings in the spring/summer since the kids have more activities (sports and such). But we won't let it go below $2k per month. In late spring thru early fall, I have regular side-gig work of $500-$700 per month (cutting lawns 1 or 2 evenings per week after work. I've been doing that since 1992). So I am hopeful we can stay in the $2,500 per month range.

The grass cutting money is normally used to max-out the HIS and HERS IRA's. We will retire before we are old. We also use some of the money for our vacation at the beach.

Net worth as of 2/28/14 $562,301.00
Increase year to date $ 13,631.00

February Side Gigs

My stay at home bride makes extra $$$ now and again by watching others kids a few hours at the time or by tutoring them. She home-schools our kids, so mixing in another one isn't too much stress...I think...

This month's extra $$$

02/06/14 - childcare $40
6 days this month - tutoring $150
02/20/14 - childcare $40
02/27/14 - childcare $25

Total for the month $255

Plus $50 bill found on side of the road while running.

Grand total $305

$305 extra dollars added to the emergency fund.

Running Pays

I've been a life-long runner. Well since I was 12. I run daily, as in everyday. About once a month I find loose change on the road, usually nickels and dimes. 5 years ago I found a $20 bill one morning.

Today that was topped. Found this on the side of the road. Mushed into some gravel and leftover road-salt. I'd like to put it into one of our retirement accounts. My bride wants me to take her out to dinner.

Getting a Tax Refund?

Getting a chunk of money back from the Feds and/or State? What to do with that money? Here is the strategy we use each year. I will use a refund of $5,000 to make the example easier.

10% - $500 to Charity
10% - $500 hers
10% - $500 his (which really means hers)
70% - $3,500 to savings (retirement, emergency fund, regular savings)

So 20% will probably be going for wicker furniture or upgrading a bathroom or new drapes or some other exhilarating project. Sadly it probably won't be going towards a shopping spree at Victoria Secrets. 

If we had any outstanding debt I would use at least half of the 70% for debt repayment.

Don't forget to consider adjusting your withholding with your payroll department so you get more money each paycheck instead of a large refund. The only reason we get a tax refund is because of the EIC (earned income credit) we get because of all the yard-apes. Yeah I know the EIC is basically a commie program to keep crack-heads happy, but as long as the morons in D.C. are giving it out, I'll take it.

Now all I have to do is finish gathering all my 2013 tax docs so I can get my refund. Lame I know. I should have done that by now.

Here is an article from Money Talk News with other suggestions on how to use your refund.

Here are the highlights from the article:

4 smart uses for a tax refund

1. Create an emergency fund

2. Save on insurance

3. Start a business

4. Save for retirement or college

10 dumb things to do with your tax refund

1. Spending it rather than investing it

2. Spending it rather than paying down debt

3. Spending it on something that won’t lower next year’s taxes

4. Failing to create a memory

5. Loaning it to someone

6. Not doing something to improve yourself

7. Using it to create more debt

8. Failing to prevent future big refunds

9. Going to the mall

10. Using it to sustain an unsustainable lifestyle

A Short Post About 2013

Been awhile. Been busy. Life and Stuff.

Here are a few stats from our 2013 budget/expenditures. The good and the not so good.

Groceries:

This is for a family of 14. At any given time 1 or 2 kids could be out of the house but we also have friends, acquaintances and those we can hardly tolerate over for meals a lot.

Food and Drink Expenditures for 2013 (includes eating out).
Year - $15,120 ($1,080 per person per year)
Monthly - $1,260 ($90 per person per month)
Daily - $41.54

Average cost per meal per person = $1.15. I used 12 family members since sometimes kids are out of the house. But really it's more like 99 cents per person per meal.

We used to spend $1,600 per month a few years ago. But when Aldis opened our monthly bill dropped dramatically.

Granted some of the kids are young. But 7 of them are age 12 and older. Plus my wife eats like she is going to the chair.

And no we aren't eating junk all day long. Plenty of fruits, veggies and meats. Everyone is fairly healthy...well Sam is coughing like she's gonna hack up a spleen, but she'll live.

I could save even more if I could break the gallon-a-day milk habit my kids have.

The Feds need to take cost efficiency advice from us.

Utilities:

Average Monthly Expenditures

Electric - $250

Natural Gas - $115

Water - $100

Average per month for all 3: $465

Before 2013 we were spending well over $500 per month. So it's improved but is still too high. This older rambling house that has been added on to many a time is very inefficient to heat and cool. And 5 loads of laundry and 2 loads in the dishwasher daily adds up. Plus thankfully the kids bathe/shower daily...for the most part.

Retirement Savings:

Without going into specific dollar amounts. I was able to funnel 30% of my salary into retirement investments. A major improvement over years past when it was usually in the 10-15% range. The main reason for this was the paying off of our mortgage in the fall of 2012.

Medical Expenses:

$225 per month. I could reimburse myself for these costs from my Health Savings Account (HSA) but choose to pay for them out of pocket and let the HSA buildup tax-free.

Gasoline:

$150 per month (no work commute and no excessive hauling the kids around)

Kids Activities/Sports/Piano/Trips/Fun etc:

$200 per month

Homeschool Expenses:

K-8th grade (5 kids) -$1,000 for the year. That is mostly for an at-home tutor/teacher helper. Less than $100 was for books and supplies.

Tutor Fees for 2 high-schoolers - $5,050. Plus a few hundred dollars  for books.

Windfall Advice

Use Your Windfalls Wisely

There are probably a few times in your life when you are gonna get a financial windfall; really large bonus at work, inheritance, insurance settlement, proceeds from a real estate sale. I'm talking 1000's of dollars not 100's.

So when this happens, what are you gonna do with it?

1) Buy a new pickup, some jet-skis, new wardrobe, take a cruise, platinum-plated golf clubs.

2) Pay down your highest-interest outstanding loan, pay down your mortgage, invest it in your retirement account, invest in a rental property?

Number 2's are gonna achieve their financial freedom a lot sooner than number 1's (if the 1's ever actually achieve it). You have to make the choice of immediate gratification now or long-term financial stability.

If/when you get a windfall, splurge and go to Chipotle and get a burrito, chips, salsa...heck you can even splurge on guacamole and a soda. Then invest/save the rest.

Investing 101

Keeping it Simple Stupid. My brain likes simple things; like watching ALF reruns and eating ice-cream right out of the container. I don't need to add any complexity to my busy life. Being able to set my investment choices and ignore them is a great thing.

I use no-load stock index funds in my 401k, HSA and Roth IRA's for the bulk of my investing. Plus a few select managed funds.

Advantages of Index Funds:

• The yearly costs are dirt cheap compared to managed funds.
• Very few managed funds beat indexed funds.
• They simplify your life. Setup a few funds and just check on them once or twice a year to re-balance your asset allocation.
• They stop you from chasing returns. And buying and selling at the wrong times.
• Index funds are tax-efficient. If you do own stocks in taxable accounts index funds will prevent you from giving Uncle Obama more money than you have to.
• All the major investment companies offer them; Fidelity, Vangaurd, Schwab etc...

You can use just 3 funds and create a portfolio you can pretty much ignore. Here is an example for informational purposes only.

• A Total US Stock Market Index Fund
• A Total International Stock Index Fund
• A Total Bond Market Fund 

So, a basic "three-fund portfolio" might consist of 60% Total Stock Market Index, 20% Total International Stock Index, and 20% Total Bond Market fund.

If your company 401k doesn't offer index funds, talk to your HR department about getting some added. My plan has some but we are switching to a new plan on October 1st that has lousy choices as far as I can tell. I will  have to figure out what are the best of the mediocre choices I will now have.

I have a few specialty funds that I have added to the mix over time, for diversity sake, but they aren't necessary.

Every 6 months I re-balance my portfolio to make sure I am still investing the way I want. Using the word "portfolio" makes it sound like I have lots of money to invest, I don't, but I like using the word anyways.

Important-the above is how I do things. Everyone's situation is different. Please do your own research and decide what is best for you.

Frugality and Happiness

Living a Frugal Lifestyle does not equal misery. People are under the impression that being careful with your spending and saving for retirement, means we are living a deprived life. People think we have a lifestyle like a third world country. That we eat only rice 3 times a day. Wear old sacks for clothes. Recycle toilet paper. Reuse our dental floss, ok I have done that. And live in a mobile home with no a/c. Not true. (well we do eat a lot of rice)

Everyone needs to find their own balance between frugal living now and having enough to live on in the future. You could live like a monk now and save every dollar you can for the future. Or you could spend everything you make now, plus take on debt, and live like a pauper later in live. Or you could find a balance between the two that works for you.

Spend money on what makes you truly happy and on what you enjoy. Did buying another purse when you have 30 in your closet really make you happy? How about that new golf putter you just bought when you have 6 of them getting dusty in your garage? Do your boys really need to go to the barbershop to get their haircut when you could buy a $20 hair-clipper set from Amazon or StuffMart?

Mrs Sardonic and I are working on balancing the two extremes. We enjoy live and do plenty of activities. We just choose carefully and spend wisely. But the choices are ours to make, we are not being dictated to by our finances, we are dictating to our finances. We are in charge and make the decisions.

The thing that people need to understand is that we don’t feel deprived or poor. We still spend money, on ourselves, on our kids, on others. We pick and choose carefully. And when we buy something we take our time and research the purchase. Sure at times we make fast, rash choices, we learn and move on. I’m still mulling over purchasing a new iPod Shuffle ($46 at Amazon) to replace the old one that died a week ago (I sweated it to death while running).

We go on vacations. One week at the beach every summer with the whole Fam. Our kids play sports, one in the Fall and one in the Spring. We take the summer and winters off, to save money, to de-emphasize sports a bit, for more family time and less running all over the damn place being chauffeur to our kids.

Growing up we didn’t: play every sport there was, take horseback riding lessons, take archery, participate in plays, do gymnastics, take ballet, go to a different camp every week of the summer. No, we did a few things and spent a ton of time playing outside with our friends (pickup sports, spud, kickball, tag, bb-gun wars, riding bikes). And somehow we survived. I like to think we enjoyed childhood, looking back it seems like it was great. Maybe I'm mis-remembering it, but I don't think so.

Remember when kids used to ride their bikes to places? Now parents drive them to sports practice, drive them to the 7-11, drive them to “play dates”. What in the heck is a play date anyway? What a bunch of dorks people have become, I blame the yuppies.

I hear that nowadays parents even let their kids decide where they want to go to high school. If their kids choose a private high school, mom or dad gets a second job. When I was a kid I was told where I was going to school, at least through high school. And that's another reason why our kids are home-schooled, it's almost free. It actually costs less than the 'free' public schools (with their fees, new clothes, peer pressure purchases). We spend under $200 a year to school a bunch of kids.

Letting our kid’s do all and every activity is hardly a great way to prepare them for the future. We wouldn’t be doing them any favors if we gave into their every whim. I wasn’t put on earth to give them everything they want, I was put here to help get them to heaven (which is crazy hard sometimes).

And believe it or not you don’t have to spend money to have fun. But that’s a good subject for a future post.

Dave Ramsey sums it all up pretty well, “If you will live like no one else, later you can live like no one else.”