Around OakMeadows

 

 

Much of last week was taken up by Aunt Liz's death and funeral.  But life has a way of just keeping on going. 

My missing MistyKitty was not eaten by the coyotes. She is home-- thin, dehydrated and weak but alive. Each day she is eating a bit more and getting a bit stronger. I was just stunned because she had been gone for 7 days and I was certain the coyotes had eaten her. So nice to have her back!

I did get the baby quilt cut out and I have begun the piecing. I think it will go together well. 

No birding last week. But the Louisiana trip is back on for next week. Still haven't made it out to Brazos Bend State Park.  

Exercise and Weight Watchers were a non-event too. Ack!

The one project that I have made some progress on is spiffing up the guest bedroom.  The blinds came in and JMM installed them. That certainly brightened up the room. And I left the 2 antique map prints to be framed. I found a frame for one with a 40% off coupon. The other one had to be custom framed but it just happened that Hobby Lobby was having a 50% off sale on custom framing. I was sure happy about that because custom framing can be $$$. 

We got the auto insurance renewal policy.  We have had USAA for auto and home insurance for the past 40 years. I called and got a policy review. Since Joe's Ford Ranger has 200K miles and has a blue book value of $2000, we kept liability and dropped collision on it. No changes on my van. We are taking the AARP Safe Driver online course which will save us another $70 a year.  All in all, I was able to save $178 on the 6 month policy.  

I am jumping through insurance company hoops to get my Lunesta refilled. I know they don't want to cover it because there is no generic and the brand name is expensive even though I pay a $85 co-pay for it. Anyway, I won this round and got it refilled. 

We seem to have a resident possum who loves the peanuts & oranges that I put out for the bluejays. The usual raccoons but no armadillos so far this year. Lots of birds at the seed feeders and at least 2 hummingbirds at the sugar water feeder. The wildflowers are so lovely this time of year. Joe has planted a flat of Butterfly Weed and I want to plant another flat of it next week. 

I'm still plodding through Hot: Living through the Next 50 Years on Earth by Mark Hertsgaard and Mr. Churchill's Secretary by Susan MacNeal.  I am enjoying Mr. Churchill's Secretary but not so much Hot.  I just started Washington: The Indispensable Man by James Flexner. 

Next week: On to Louisiana. 

Complainypants -- MMM

Complainypants -- Mr. Money Mustache 

Back in 1987 the Houston oil economy went bust and along with the economy, my husband lost his job and we could no longer afford the house/pool/neighborhood we were living in. We sold the house for exactly what was owed on it, losing 15 years worth of equity, and moved into a smaller house. We lived on savings and some part time work while I finished Pharmacy School. My husband knew that to continue in the oil industry was going to be very iffy. So during my last year of Pharmacy School, he started In Pharmacy. That meant that he didn't work for 3 years. 

I decided then and there that this was not going to happen to me again.  I made the startling discovery that the best way to get out of debt was to stop spending money.  I decided to pay off one bill/credit card at a time and I made a chart of when bills such as auto insurance, flood insurance, and homeowners association fees would be due so that I would have the money to pay them. Christmas was bound to come around so I started a Christmas savings account. It was difficult but with perseverance we got out of debt and even paid off the house once we were pulling in two incomes. We did this before I ever heard about Dave Ramsey and his baby steps. I absolutely agree with him on his program for getting out of debt. 

The new guy on the financial scene is Mr. Money Mustache and I love him too. What I especially like about him is when he calls whiners Complainypants. It isn't easy to get out of debt and build an emergency fund and save and invest so that you have money to take care of yourself. It is much easier to make excuses and sit around and complain.

 I see this in so many areas of life today -- so many people whine and complain instead of finding ways to make their situation better in ways other than financial. We become obese and diabetic because we won't exercise and go to Weight Watchers (or something similar). We don't maintain our homes or vehicles and then gripe because things fall apart. I see people buying cigarettes and lottery tickets and wonder why they are broke.  They think they have bad luck but what they have is bad habits.  I think it was Thomas Edison who said that the harder he worked, the luckier he got.

I will now step down from my soap box...and onto the exercise bike...

Retirement Finances

Retirement Finances

It is all coming together:

     FM Social Security--received my letter from SS today approving my full SS to begin when I turn 66 in December. 

     FM 403b--done. I rolled it into an IRA, spiffied up my asset allocations, and arranged for my monthly withdrawals. 

    JMM Social Security --done. He began receiving his full Social Security when he turned 66 last January. 

   JMM 403b--this still to be done when he retires in February, 2014. He will roll it all into an IRA, make his asset allocations, and set up his monthly withdrawals. 

I still have to sign us up for Medicare Part B and the Humana Medicare Advantage plan.  But the hard part is done (deciding what Medicare Supplemental or Advantage plan) and I have all the paperwork. 

Fourth Quarter Financials

This was a really good quarter for us. We increased our Emergency Fund by $3500 and our total retirement funds went up by $44,500.  We continue to have no debt. 

We are thankful that we are in good health and that JMM is fully employed.

BHAG for 2012

We have decided to double our giving this year from what we gave last year.   Since I retired last year, our income was cut almost in half.  It will be a stretch but looking at the numbers, it looks doable.  Living debt free makes it possible.  We have already doubled our January giving so only 11 more months to go.

(BTW, a BHAG is a Big Hairy Audacious Goal. )

3rd Quarter Financials

I finished the Quarterly Financial Statement this morning and while the market is down, we still have $815,000 in our retirement accounts.  Since we aren't planning to take any withdrawals until we have to at age 70 1/2, I try to focus on how we are buying while the market is down and hoping that the market will have recovered in 5 1/2 years.  Total Net Worth is down correspondingly to $1,352,678.

We need to set up a new Excel Spreadsheet and graph.  I have been tracking on the current StarOffice spreadsheet since 1996 and so much of our investments, properties, and savings has changed.  It is fun to look back and see how the graph has risen but I think it would be cleaner and easier to do on a nice fresh Excel Spreadsheet.

Ben Bernanke tells it like it is...via The Onion

The Onion nails it again:

http://www.theonion.com/articles/drunken-ben-bernanke-tells-everyone-at-neighborhoo,21059/

The Budget

I like to be in control of my finances and the only way that I have found to have that control is to have a plan...better known as a budget.  People say that they try to budget but something always comes up.  It is understandable that it takes some time and practice to get the hang of making a written budget but it is also important to have an emergency fund so that when a true emergency happens, there is money to take care of it.  It is also important that if you are married that your budgeting includes your spouse so that neither feels their priorities are not being taken into account. 

The basic idea is to take the money that comes in (take home pay) and spend it all on paper--just write down all your expenses for the coming month.  It surprises many people that they will have money left over after writing down expenses.  Use that money to build the emergency fund or save for something special; I have a category for "mad money" for each of us to have some pocket money.

Being in control of our finances has allowed us to live debt free, in a paid for home, driving paid for vehicles, and have a good emergency fund.  I know that at the end of the year when property taxes, home owner's insurance, and Property Owner's Association fees come due, the money will be there to pay them because I've been saving $500 per paycheck all year long. 

There's less stress with no money fights because all is agreed on in advance.  There's less stress because expenses are planned and saved for in advance.

Wouldn't it be nice if Congress would sit down with a pad of paper and pencil, list what expected income is, budget anticipated necessary expenses, and put the remainder in a rainy day fund.  Then we wouldn't be having this national nervous breakdown over raising the debt ceiling and paying down the debt.

Quarterly Financial Update

I did the financials for the second quarter.  Retirement savings are $898K, Emergency Fund, $60K, and Net Worth $1.45M.  I am retired but JMM continues with his job for income and health insurance.  No one who knows us would have any idea that we have this much money.  Our house is paid for, our cars each have over 135,000 miles, we dress casually and inexpensively, church and home are our activity centers.

We realize that we are among the more fortunate in this country and certainly among the most fortunate on earth.  It is a responsibility to use the resources that we have been given in a wise and compassionate manner.

Finances 2010

Financially, 2010 was a really good year for us. I know that many people are really struggling with their finances whether it is from debt or job loss or health problems and my heart goes out to them. We are fortunate because we both have jobs that pay well and provide medical insurance. Another major factor is that we have no debt--no car payments, the house is paid off, and the credit card is paid off every 2 weeks. We are both frugal and have lived well below our means all 42 years of our marriage.

Our net worth has increased by about 10% to $1.2 million; of that about half is in our combined 401Ks, the house is worth and property is worth about $415,000, and $56,000 is in savings (Emergency fund, New vehicle savings, Household Savings).

The key for me is planning--saving $500 per paycheck for the taxes, homeowners insurance, and homeowners association fees; saving in advance for a new vehicle (my van has 131,000 miles on it and JMM's truck has even more miles) so it is likely that we will need a new vehicle soon, and finally having an Emergency fund so that if one of us loses their job or a hurricane blows off the roof, the money is there to pick up the pieces.

My financial goal for next year is to continue on the same path--work, save, give, enjoy.

Expenses! Savings!

The last quarter of the year is always very expensive:

Homeowners Insurance: $3250
Property Taxes: $5700
Homeowners Association: $1200
Auto Insurance: $636
Propane fill-up: $300

I have a separate savings account where I save $450 from each paycheck so that when these things come due, the money is there. This account is not my emergency fund because these are not emergencies, I know they are coming and know I'd better get ready for them. I also I have savings account for a new vehicle; my van has 127,000+ miles and JMM's truck has more miles on it. It shouldn't come as a shock that eventually one of us will need a new vehicle and I want to have the cash so it won't be an emergency. Like the Boy Scout motto: Be prepared!!

Why I continue to work

I have been asked on numerous occasions when I am going to retire; other times people are surprised that I work after all I am 62 and I use an electric scooter because I can't walk. I am married and my husband works and brings in a good salary. Why not retire?

Back in 1987 my husband lost his job. We had to sell our beautiful home with a pool and spa for exactly what we owed on it losing every penny of equity we had built up over the previous 12 years. We lived on severance and savings for the following year while I finished my Pharmacy degree and my husband began his training for a new career. I supported us for the following 2 years while he finished. He was without work for 3 years total. Now fast forward to 2007--husband is able to keep his job only by transferring to a totally new department. I have watched several mass downsizings at my own place of employment. So if there is one thing I have learned for sure over the years is that no job is secure and that has never been so true as it is today. So why do I work? So that if one of us loses their job, we still have an income and health insurance.

I can stretch a dollar as far as anyone but frankly there is a level of income below which it is exceedingly difficult to live even a modest life. Then there is the whole health insurance debacle; I have health problems and need to see doctors. I cannot imagine how much stress it is to be sick and not know how your are going to pay for health care.

The new financial reality is no joke and it is not optional. If you have a job, keep it, upgrade your skills, and (you know what I am going to say next, don't you) pay off all debts and get an emergency fund in place yesterday.

Finally, the last reason I keep working is that I want to die like Daniel Schorr--fully engaged with the world and doing work that I think is important until the end of my days.

Habits that keep you broke

These were on Yahoo today:
1. Paying only the minimum on your credit card. (Surely this cannot come as a surprise to anyone.)
2. Buying a brand new car. While I theoretically agree with this, we buy new and drive them forever; my husband's previous vehicle lasted 14 years.
3. Smoking. Well, duh!
4. Keeping a drafty attic. Insulation is good. The most energy saving thing we have added to this house is the solar screens. They really do help keep the rooms cooler so the a/c runs less.
5. Ignoring your student debt. If you want to really go suicidal, figure out how much money you have paid out in interest on those loans. Same principal as #1.

http://finance.yahoo.com/news/5-Common-Habits-That-Cost-You-usnews-2188228706.html?x=0

I would add one more:
6. Short-term thinking. Not planning past the next paycheck. Set goals--what do you want to have accomplished in 10 years, 5 years, 1 year? What are steps are you taking to get there today?

Savings

I am a big believer in staying out of debt. But, IMHO, it is impossible to stay out of debt without savings accounts. Why? Because stuff happens. If you've got a car, it is going to need repairs, general maintenance, and something is going to leak, squeek, fall off, or break and this means money. Same goes for houses, pets, and children. That's even when the big stuff like illness, job loss, or divorce doesn't happen. Everyone needs an emergency fund. Since I am a bit hyper about being in control of my finances, I have 4 savings accounts. The first one is my General Emergency fund--I used to keep $5,000 in it but with the jobs situation & the economy being what they are, I have increased that to $10,000. The second is my new vehicle fund--my van has 120,000+ miles on it and while it still runs perfectly, eventually it will have to be replaced and along with it, I will need a new lift for my scooter installed in the new vehicle. I want to have $25,000 in that fund to be available when needed; I am at $11,000 now. The third savings account is my HIP fund (Homeowner's Association fees, Insurance, & Property taxes). Since our house is mortgage free, we have to have the money to pay our homeowner's insurance and property taxes when they come due. These come to $11,000 per year; so I put $450 per paycheck into that fund and ouila, when I need to pay it, the money is already there. The fourth area of saving is our combined retirement accounts. I am perfectly able to work now but this is not always going to be the case so my goal is to have $1 million in retirement funds; we currently have $730,000.
If you spend everything that comes in, life becomes a series of emergencies and no sooner than you get one emergency paid off than another crops up. This is no way to enjoy life. Even a small emergency fund is better than no emergency fund at all. As Dave Ramsey says, Christmas is not an emergency, it comes every year. My point is that the more things you can be prepared for, the fewer real emergencies you will have. And this preparation can only be done by living below your means.

Over the $1 Million Dollar Mark

I finally got around to doing the 3rd quarter numbers and things were considerably improved in the retirement accounts and in the mortgage categories. We have gone over the $1 million mark in net worth which is nice but it doesn't really change anything. My plans and budget stay just where they are for the next 3 months until the house is paid off; then we will adjust the budget for saving for vehicles, working my way down my To Do List, and increasing our charitable giving. Who knows, maybe we'll hit 1.5 million before we retire??
People who know us in real life would have no idea of our net worth and that is just the way I want it.

Numbers

467,000 people lost their jobs in the single month of June. The unemployment rate is 9.5% which means that almost 1 out of every 10 workers in America is unemployed. I keep hearing that the economy is getting better but how can that be if more and more people are unemployed and lose their ability to purchase goods and services??

$38,211 left to pay on the mortgage. I won't relax until the mortgage is paid off, a year of expenses is in the bank, and the new vehicle fund is complete. Let's just pray we all stay well and fully employed.

100+ The temperature this week has been 100 degrees or more all week and more heat is expected. It was like this in 1980 when the heat started the first of June and never let up all summer. The grass is parched and brown with only the areas around the trees and beds aroun the house green wherre JMM has faithfully watered. I keep the thermostat up at 80 and fans going to keep reasonably cool but I am certainly not looking forward to the electricity bill.

Thought for the Day:

The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.

Ernest Hemingway (1898-1961) American Writer.

Busted

by Edward Andrews.
A NYT financial writer loses his mind, leaves his wife, buys a house he cannot afford, moves his new soulmate in, racks credit card debt up the gazoo, and tries to borrow his way out of debt. (I told you he had lost his mind.) Actually, he writes the most clear and understandable explanation of the mortgage fraud/crisis that I have come across. It is only when he writes about his and soulmate's personal financial disaster that I just find it hard to believe that someone could be so stupid.
It's a good read but I came away shaking my head at the unbelievable mess he and soulmate made of their finances. I also came away wondering Did he and soulmate ever get their finances straightened out? Did he and soulmate stay together or did the financial strain break them apart?

Thought for the Day:

Many people lose the small joys in the hope for the big happiness. Pearl Buck

Budgeting

JMM and I just celebrated our 41st wedding anniversary and a lot of why we were able to do this is because we have always lived under our means. I am the family bill payer and budgeter but JMM is always part of the planning. We always have a plan because the fact of the matter is that if you don't tell your money how to behave, it will rule you, make a shambles of your marriage, and ruin your life.
I don't mind paying for goods or services; I'm not out to get something for nothing. The thing I really don't like paying is interest. We pay our credit card off every 2 weeks. JMM's truck and my van were paid off withing 6 months of purchase. Our previous house was paid off and this house will be paid off less than 6 years after building. I keep an emergency fund of $6000; the thing about emergencies is that you know that they will happen, you just don't know when or what.
This year's goal is to finish paying off the house and get the emergency fund up to $7000. Next year's goal will be to save up the money for a new vehicle and raise the emergency fund to $8000.

Thought for the Day:

“Debt, n. An ingenious substitute for the chain and whip of the slavedriver.”
Ambrose Bierce quotes

Goal 2009 Update #8

I just finished doing the mid-month finances and it looks like we will be able to make the extra principal payment with the April 1 house payment that will allow us to stay on track for getting the house paid off by December 31. Lord willing and the creek don't rise as the old saying goes.

Down, down, down Dow

Well, the Dow went down another 300 points today bringing it to a close at 6763. I sure am glad that 2/3 of my retirement funds ($200,000) are not in the stock market!! My plan is to continue working 32 hours per week until age 66 (5 more years) and then drop to 24 hours per week until 70. Unless there's a total economic collapse and rioting in the streets, my finances should be just fine. Good health, full employment, and the Good Lord willing, that is.

Thought for the day:

Joy is not in things, it is in us." ~ C. Wagner