Saturday, June 27, 2009

Financial Goals for Upcoming 18 Months

Since we're over with the credit card and home equity line of credit debt and only have another month's worth of misc medical bills, I'm looking at the next phase of our financial journey. Previously I had thought about holding off any projects on the house so that we could have the money to invest in a business, but after making some improvements on our house, I want to continue doing so. Here is the summary of what I'm looking at us reaching in the coming 18 months:

$6K Emergency Fund
$15K Home Improvements
$9K Mortgage Reduction
$2K Debts
$3K Pay My Dad Back

With how slow work has been recently, we are going to need the emergency fund. If we can get the house full of roommates soon and I was laid off, we could live off the $6K for 6 months with me not working any of that time. I would though find another job that pays minimal while I looked for work, as well as I would hope I would get unemployment.

The home improvement list is pretty huge, but my hope is that we spend the money and it will either convince us to stay here longer or will help when we try to sell the house. The projects include hardwood flooring in 3 rooms on the first floor, tiles in our kitchen, replace the tub in 1 of our bathrooms, replace the driveway, repair the fences, replace exterior doors, install an AC unit, replace our dishwasher, and removing the drop-ceilings in our living & dining rooms.

The mortgage reduction is so that we can stop paying $70 in PMI a month. When we bought our house we put 5% down due to that is what we could afford at the time. Once we get the mortgage down to the 80% LTV level, we won't be paying it down more except through our normal monthly payments.

The $2K is going towards the medical debts we have outstanding. They haven't been calling or writing us, but I consider them our responsibility to pay. We're not going to rush to pay them though, since I would rather have some money in our emergency fund instead.

The $2K in the SIMPLE IRA will be done through normal additions from my paycheck. We won't be adding more than the 3% in order to get the potential matching.

The $3K of my father's is a story I don't want to discuss much, but he has asked us to keep the money for him until May. We'll have the money ready for him then.

Overall it comes out to about $2K/month, which is feasible if we get some roommates in the house and I hopefully get a raise in the coming 18 months. Our priority will be paying back my dad, emergency fund, and home improvements. Once the emergency fund is built up, we'll work on the debts and the mortgage payback.

Investment Review

Through my work I have a SIMPLE IRA that I have been contributing 3% of my paycheck, in the hopes that my employer at the end of the year will match the money. So far, it's looking like my co-workers will be lucky to keep their jobs, so we're probably not going to have the 3% match. The IRA is managed by Edward Jones and I decided to have them purchase C shares of funds. The fees I don't feel are worth the advice that I receive. Every month he calls me with what he recommends and so far I have gone along for the ride.This past week I met with my account manager and here's what we discussed:

- When we started, I told him I am aggressive on my investing due to not needing the money for 30+ years.

- He has me on his idea of aggressive, which basically is a balanced portfolio of 26% income, 29% growth & income, 18% of growth, and 27% of aggressive. The title of the report he gave me says "Growth Focus"

- The report does not have a year % increase, it only displays the percent change from amount invested, which is 5.22% when they started investing for me on 2/18. Since Tuesday, the portfolio has gone up even more and the % is now 7.45%.

Items I learned:

1. I am going to ask him to e-mail me his recommendations instead of calling me at work. The past few months when he has called and made his recommendation, I have been too busy to just stop what I was doing, research his recommendations and make a decision. Because of that, I got a balanced portfolio that I do not want.

2. I am going to ask him to not recommend income options. This account will not be my only investment vehicle. For example, we plan on building an emergency fund of $6K and the income options are basically bonds earning the rate of inflation. If you count the fees as well, I'll probably be losing money on them. Their recommendations for the "Growth Focus" is 10-20% in income and I'm currently at 26%.

3. I'm glad to be learning these items with "small" potatoes of under $700 instead of a $100K portfolio.

My daughter's college account has been growing steadily due to my father adding $50/month to it and presents received for her birthday. For the next 18 months, we have shorter-term goals to work on instead of her college fund, so we won't be putting much into it ourselves.

Wednesday, June 24, 2009


Our garden is doing great! With the rain we have been having every couple of days and the cool days (until recently), my cool-weather vegetables have been performing well. We're now averaging about 10 hours a week in the garden, with about 1/2 of that time harvesting and the other 1/2 weeding. We have some wild garden plants that we are waiting on results from, they include tomatoes, cilantro, dill, and possibly pumpkins or cucumbers.

Coming into the house this week:

1/2 lb sugar snap peas/day
3/4 lb lettuce/day
1 cup regular peas/day
1 head of brocolli/day
last of the spinach
Cilantro as needed
Tops of Lemon Basil
Couple of cherry tomatoes
Grape Leaves
2 Kohlrabi/week
Various Radishes (did not do well this year, I suspect the seeds I got do not like our region).

Will be coming in soon:

Zucchini (we have 5 plants and they are taking over, each has 1-2 zucchini)
Cucumbers (plenty of flowers, haven't had ones form yet)
Green Beans (plenty of flowers, haven't had ones form yet)
Jalapeno Peppers (got 1 about an inch long)
Parsley (as needed)
Oregano (as needed)

We have had a lot of stir-fry the past week working through some of what has been coming in. The lettuce we have been giving away to friends in need. My wife pickled some of the sugar snap peas and froze a fair amount as well for future stir-fries. She also canned some grape leaves and I'll be needing her to do some more soon.

In mid-July, I'll be starting indoors some Brussels sprouts so that we can have a nice fall crop of them. I planted 20 Endive the past couple of weeks that we will harvest in the fall.

Thursday, June 18, 2009

Money is so tight...

Money is so tight for us this month. I had committed us to making a final settlement payment this month and knew it would be tight if we did not have new roommates. We're here in the middle of June and still having only 1 roommate. The main reason for the lack of roommates was the broken front bay window for a month. We brought down our rent to $300/month all utilities included this week to see if that will help us get some people in the room.

The other big item that I decided to do this month was replace our back porch boards. We have had plywood as our porch deck since we moved into this house 3 & 1/2 yrs ago and the steps were not installed properly, so they were starting to rot and sway when you walked on them. I went with cedar, which is more expensive than pine but I feel will last longer. The costs for the project went much higher than I expected due to additional support structure needed for the stairs and placing boards over the stair openings so our children would not fall through them.

Here's what we have left to take care of this month that we can't push until next month:

$78 Car Sticker for the license plate
$10 Dr. Co-pay for my wife and the baby to come
$15 My life insurance policy
$40 Water bill
$69 My student loan
$40 Car gas to & from work
Total: $252

We're holding off paying for my daughter's health insurance ($40) until the 1st, electric bill ($70), and my wife's life insurance (and my old policy of $95). We're still a bit short on cash with $228 in the banks and cash on hand. I'm planning on taking 1 extra board back to Menards ($8), my dad owes me $30 for Cubs tickets I will be going to tomorrow, plus I have a $20 rebate check from Menards that I may use to buy an item I purchased for the porch with cash and then return it to get the cash back.

On the positive side, we have plenty of food in the house and our garden is producing a fair amount of food. The settlement payment is the last of our over $1K payment we will need to make to a debt, the rest of our misc debts are $400-600 range medical bills. Next month's goals is to just build up a cash reserve. I will be doing some patching of our basement walls next month, but that should only cost $5 a bag and I'll probably be using around 10 bags.

Wednesday, June 3, 2009

P2P Lending Status

I've been ignoring my P2P lending accounts at Prosper and Kiva this year and decided to finally look at them. Here is what I found:

Prosper: One of the reasons I have been ignoring Prosper is because they are in their "Quiet Period", which means basically no new loans. The other reason I had been ignoring them was because 1 of my 2 loans on there had defaulted and not paid. That loan has now been paying consistently since December and my other loan has been paying pretty much like clockwork (there was one failed payment, but resolved 2 weeks afterwards). Those 2 loans from almost 2 years ago have taught me lots. I am pulling my money out of Prosper until they get out of the "Quiet Period" and currently have $71.21 outstanding.

Kiva: I have 1 loan that is delinquent by a couple of weeks, but my other one is not. I decided to use the money I had sitting in Prosper & Kiva to purchase 3 more loans on Kiva, bringing my total amount invested to $100. I know that I don't make interest on these loans, but the benefit of knowing I am helping others with their dreams is worth it.

Next month I may look into lending on Lending Club...Maybe I should change the name of my blog to "Goodbye MY Debt!".

Tuesday, June 2, 2009

Garden Update

Our expenses and time this year for the garden have gone down dramatically. My schedule now consists of spending a 1/2 hour in the garden in the morning, picking what is ready to be brought into the house, and picking weeds out as I am harvesting. I utilize a tray with compartments in it to make the cleaning process go quicker. Once they are brought in, they are washed and put into their appropriate containers in the fridge or made into a salad for lunch. I also spend an hour or 2 on the weekends doing an overall scan for weeds and removing them with a hoe.

Harvesting Currently: Snap peas, lettuce, brocolli raab, radishes, spinach, strawberries, chives, green onions

Finished Already: Asparagus & arugula (have just a couple plants left to remove)

Surprises: We have wild tomato, cucumber, and pumpkin plants growing in and around our compost pile. We also started tomatoes in 4.5" containers this year on Valentine's Day and have tomatoes forming in the garden already. I will be doing the same next year for our tomatoes, eggplants, and peppers.

Problems: We have still 3 & 1/2 trays of plants under lights since we were going to help a home for single mothers-to-be, but the spring has been really wet and when it has been good, we have not had the equipment to till the soil. We will be looking for homes for them later this week. Our green beans are having a late start this year due to having to redo our back yard garden, but are coming up nice now.

June Budget & April/May Net Worth +$2891

June Budget:

$1074 Mortgage
$200 Food
$200 Car Gas
$43 Natural Gas
$53 House Phone
$40 Dr Visits
$50 Dining Out
$79 Car Registration
$2192 WaMu HELOC
$40 Water
$70 Electric
$40 Daughter's Health Ins
$203 Mrs Student Loans
$69 Mr Student Loans
$15 Mr Life Insurance
$45 Mrs Life

We finally got my life insurance plan changed to a cheaper policy. We were unable to get my wife's changed due to her being pregnant. At the end of the year we can reapply and get her brought down to $15-20/month.

We also are making the final payment on the HELOC from our previous home. Once that is done, the only items we have left for this year are some misc medical bills from 3+ years ago. We'll be taking a short break from tackling debts in July so that we can get a couple important items done (eg: dress pants & glasses for me, some house repairs).

The other items in the budget include $50 dining out, which we will be reimbursed for since they are mystery shops we are doing. We currently have 2 dinner shops setup and 1 movie theater shop scheduled and am trying for a third dinner shop. My wife's car is needing new stickers, so we're taking care of that this month.

April/May Net Worth: +$2891

I did not do an update on our April net worth, so this month is a mix of the 2 months. It has been a bit slow increasing since we only have 1 roommate currently, as well as the drama we had in March with a roommate taking both of our cars. Our bay window is damaged right now and we believe it is causing people to not be interested in moving in, so we are holding off renting the rooms until that is resolved. June we should see a better increase if we can get at least 1 more room filled.

Monday, June 1, 2009

May Housing Drama

I am so glad the month of May is over with. We have had a lot of drama occur this past month and I am hoping we are over it:

- Beginning of the month some kids threw a large piece of marble through our bay window. The glass was supposed to be "unbreakable", so Home Depot Home Services is going to replace it for free. This is a feature I would recommend to anyone in a bad neighborhood with a large bay window. It has been on order for 3 weeks now, supposed to be installed this week we pray.

- We suspect the ex-roommate that caused problems in March has come back around and stolen a few things out of our house. The items include jewelry of my wife's, our video camera, and 1 of our laptops. These occurred at 2 separate times and the second time my wife was in the house upstairs and did not hear them come in or out. We now are locking the doors and windows like crazy and considering moving in 2010.

- We had a roommate move in and then inform us that her family did not want her moving to Joliet, so she had to move out. We gave her the money back so she could get a truck to move her stuff out. She left several items and we have not heard from her since Wednesday. I will be putting the items on the back porch tonight and taking out to the trash on Friday.

Financially, we'll survive through these problems.