Wednesday, December 25, 2013

My financial goals for the next few years

I was thinking a bit about what I'd like to accomplish in terms for money over the next few years. I'm impatient and would love to accomplish them all in the next few months, but like when you're paying off debt, it might be best to put them in order so I can stay focused and motivated. I feel like I've lost a bit of my money motivation lately. Luckily my husband got a pretty nice raise last year, so the month to month expenses are pretty much now covered by his income alone. But we still could be doing a lot better so I need to use my money wisely.

Here are some of my current financial goals to accomplish in the next few years.

  1. Pay for new windows and siding with cash ($20,000 to $30,000?). This really isn't my goal, but my husband wants to do it. I'll do it, but I don't want to take out a loan to do so.  I'll have to get some quotes this spring because $20-$30K is a large range and it would be nice to know how much this will actually cost!
  2. Pay for a replacement vehicle for our aging 2001 Ford Ranger ($20,000 - $25,000) Ideally I don't want to buy brand new, but one that is about 2 years old probably is still over $20K)
  3. Increase our emergency fund from $4,000 to $12,000 (about a month's worth of expenses to about 3 to 4 months of expenses).
  4. Pay down the mortgage as fast as possible. I'm currently paying an extra $150 a month, but I want to save for that truck first so why pay down the low-interest/tax deductible mortgage if doing so means I'll have to get a car loan? Once goals 1 and 2 are done, I'd like to pay at least an extra $500 to $600 a month. 
  5. Fully fund my IRA every year. That is unless I ever get a job with a 401(k). I recently applied and interviewed for one, but it doesn't look like I got in this time, but I hear there may be another round of hirings in 2014. 
  6. Vacations - I hate winter and need to escape!
So right now I have about $30,000 in cash not including the $4,000 EF or cash that is being saved for bills. So I pretty much have enough to pay off number 1, and if it's not too expensive, I have a good start on goal number 2. It's tough when the goals are so big and sometimes it takes a year just to accomplish just one. 


Saturday, October 26, 2013

Extra Cash Challenge - September results

Here are my results for September's extra cash challenge:

Advertising: $93.45
ING/Capital One 360: $17.08
Lending Club: $0.83
Part-time job: $72.15

Total: $183.51

Difference from last month: -$23.99

I'm not sure why the Lending Club was consistently getting about $1.03 or so and now it dropped to $.83. It says all my notes are current, so I don't think one the loans went bad. Oh well, it's not that much money to worry about now.

Sunday, October 13, 2013

What are my financial goals now?

I used to write a lot more in this blog back when I was paying down our second mortgage and aggressively contributing to my IRA.

I thought I should write a bit about what my current financial goals are. I'd love to be aggressively paying down our mortgage and saving for retirement. But my first and most important financial goal is to stay out of debt. We have two "big ticket" items to pay for in the next couple years. Our house, which was built in 1987, still has what we believe to be the original windows and siding. We did replace the windows in the basement about a year ago, but the upstairs windows and siding still needs to be replaced. I have not got any bids on this yet, but I'm budgeting about $25,000 to $30,000 and crossing my fingers that it's less!

We also have a 2001 Ford Ranger. It still works, but since it is now about 13 years old, we know it'll come time to replace it soon. I am hoping to get a used vehicle when we do replace it (maybe about 2 years old). When the time comes to replace the truck, my husband wants to get another truck. I'm estimating it'll cost about $20,000 to $25,000 to get a new used truck.

So right now I need to save about $45,000 to $55,000 in cash to pay for this stuff.

As you can see in my last net worth update, I had nearly $34,000 in cash already saved. Some of that is my very tiny emergency fund of $6,000. (Because I am saving a ton of cash now, that money ear marked for these other goals can be reallocated to an emergency if I needed to.) So that leaves about $28,000 already saved towards the first goal (which looks like it'll be the windows and siding as of now). So I just need another $2,000 and I should have that one saved for. I'm slowing myself down a bit though because I just invested $1,000 in my Roth IRA. We won't be able to get the windows and siding anytime soon anyway because it's almost winter.

Throughout this year, I have contributed $2,500 towards my regular IRA (I'm more motivated to put money into that one since I don't have to pay taxes now). So between the two, I will have invested $3,500 for 2013. I can still invest another $2,000, but I haven't decided if I want to do so yet because I want to get these two big purchases saved for ASAP.

Sunday, October 6, 2013

Net Worth Update - End of Third Quarter 2013

Here is the update on my net worth!

Assets:
Approximate value of our house: $215,015 (+$13,863 since last quarter) (Estimation from Zillow)
Roth IRA: $31,475 (+$2,771 since last quarter)
Simple IRA: $6,482 (+845 since last quarter)
Regular IRA: $3,920 (+$1,264 since last quarter - invested $1,000 since)
Lending Club: $214 (+$3 since last quarter)
Savings (including emergency fund): $33,967 (+$5,436 since last quarter)


Total assets: $291,073 (+$24,182 since last quarter)

Liabilities:
Mortgage: $173,369 (-$1,540 since last quarter)

Total net worth including our house: $117,704
Difference since last quarter: +$25,722


This is the net worth calculation not including the value of our house:
Assets:
Roth IRA: $28,704
Simple IRA: $5,637
Regular IRA: $2,656
Lending Club: $211
Savings (including emergency fund): $28,531

Total assets: $76,058 (+$10,319 since last quarter)

Liabilities:
Mortgage: $173,369 (-$1,540 since last quarter)

Total net worth not including the house: -$97,311
Difference of +$11,859

Either way you look at it, it was a good past three months. I am now in the "6-figures" for the net worth including the house and out of the "negative 6-figures" for my net worth not including the value of our house.

Saturday, October 5, 2013

Why paying off our second mortgage was a good thing

I was thinking today how grateful I am that we paid off that second mortgage over 2 years ago now. I thought I'd take a look at just how much that one financial move has made a difference in our financial life.
If we would have kept our original loan of $200,000 at 5.75% we would owe $182,390 on the main mortgage today.

Our monthly payment was $1,133.
Our second loan was $25,000 at 8.65%. If we still had that mortgage our principal balance would still be $23,644.
That monthly payment was $195.

So if we had not paid down that loan, we would still owe a total of $206,034 on the house and our monthly payments between both loans would be $1,328 (not including property taxes). Now our monthly required payment is only $1,018 - a difference of $310 a month.  We currently owe $173,369 on the house. If we sold our house today, we would make an extra $32,665 on it ($206,034 that we would have owed minus $173,369 that we actually owe).

Refinancing our main loan also helped, but I'm fairly confident our mortgage company wouldn't have offered to let us refinance that loan had we not paid off the smaller loan. If we still had both loans we would have been significantly underwater on our house at the time. Ever since we refinanced, we have paid an additional $150 in principal each month, so we are sending them a total $1,168 a month. But, even with that extra contribution we are still saving $160 a month.

So we are saving an extra $310 a month for the next twenty-something years, plus we have increased our net worth by over $32,000 - which will only get better since we are already 7 months ahead of schedule on our current mortgage just by paying an extra $150 per month. We probably won't be paying that extra money towards the mortgage had we not paid off that loan since our minimum payments would have been $310 more. Not bad for paying off a $23,000 loan early!

Thursday, September 26, 2013

Extra Cash Challenge - August results

Here are my results for August's extra cash challenge:

Advertising: $105.17
ING/Capital One 360: $17.51
Lending Club: $1.13
Part-time job: $83.69

Total: $207.50

Difference from last month: +$27.47

Sunday, August 4, 2013

Extra cash challenge - June and July results

Another month went by too fast and I never got around to posting my June results last month, so this month I'm posting 2 months in one post. Here are the figures...

June:
Advertising: $201.05
Amazon: $20.88
ING/Capital One 360: $15.48
Lending Club: $1.10
Part-time job: $14.43

Total: $252.94

Difference from last month: -$49.43

July:
Advertising: $118.24
Amazon: $0
ING/Capital One 360: $17.39
Lending Club: $1.10 (estimated since statement is not available yet)
Part-time job: $43.30

Total: $180.03

Difference from last month: -$72.91

First a quick update on the eBay earnings from selling my aunt's stuff. I finally had my aunt come and pick up the rest of the stuff that did not sell. Based off the 20% commission I would have made $55.29 over the past few months. She decided to just give me $100 for my trouble, so that works for me!

I'm a little bummed to see my numbers drop significantly 2 months in a row. You may notice that my Amazon earnings were $0 for the month of July. Unfortunately it looks like I have permanently lost that source of extra income due to circumstances beyond my control. It is a reminder to diversify your income streams because you never know when one could stop producing income. Here is the email that was sent to me explaining why I can no longer earn commissions.
We are writing from the Amazon Associates Program to notify you that your Associates account will be closed and your Amazon Services LLC Associates Program Operating Agreement will be terminated effective June 30, 2013. This is a direct result of the unconstitutional Minnesota state tax collection legislation passed by the state legislature and signed by Governor Dayton on May 23, 2013, with an effective date of July 1, 2013. As a result, we will no longer pay any advertising fees for customers referred to an Amazon Site after June 30 nor will we accept new applications for the Associates Program from Minnesota residents. 
Please be assured that all qualifying advertising fees earned prior to July 1, 2013, will be processed and paid in full in accordance with your regular advertising fee schedule. Based on your account closure date of June 30, 2013, any final payments will be paid by August 30, 2013. 
While we oppose this unconstitutional state legislation, we strongly support the federal Marketplace Fairness Act now pending before Congress. Congressional legislation is the only way to create a simplified, constitutional framework to resolve interstate sales tax issues and it would allow us to re-open our Associates program to Minnesota residents. 
We thank you for being part of the Amazon Associates Program, and look forward to re-opening our program when Congress passes the Marketplace Fairness Act. 
Sincerely,
The Amazon Associates Team

Blah politics!  So that's a bummer because I had earned nearly $700 from Amazon since I signed up about two and a half years ago. Not life changing amount a money, but every little bit helps! Amazon has also made nearly $11,000 in revenue off of my referrals as well, so it's a lose-lose situation.

Tuesday, July 2, 2013

Net Worth Update - End of Second Quarter 2013

Assets:
Approximate value of our house: $201,152*  (+$23,330 since last quarter)
Roth IRA: $28,704  (+$640 since last quarter)
Simple IRA: $5,637 (+141 since last quarter)
Regular IRA: $2,656 (+$1,071 since last quarter)
Lending Club: $211 (+$2 since last quarter)
Savings (including emergency fund): $28,531  (+$4,987 since last quarter)

*Estimation from Zillow
Total assets: $266,891 (+$30,171 since last quarter)

Liabilities:
Mortgage: $174,909 (-$1,524 since last quarter)

Total net worth including our house: $91,982
Difference since last quarter: $31,695

I have been debating whether or not to include the value of our house in these estimates, and while I am very happy to see our house supposedly increased in value by over $23,000 in just three short months, I just don't know if I can believe that. I'm thinking I may just need to start doing these updates without the house value to get a more accurate measurement of my net worth. I don't include other non-cash assets like our cars or TVs so I probably shouldn't include the house either... But the one difference is those things are paid off and we are in debt with the house, so if I don't include the value of the house, does that mean I also should not include our mortgage liability? I feel like if I don't include what we owe on the mortgage then that also is not a good representation of what my net worth is either. Maybe there is a part of me that doesn't like the see a negative net worth if I were to ignore the house value, but include the mortgage on this net worth update. I also have been leaving off my husband's 401(k) (which I think has close to $80K in it), so I guess technically that is not giving me a very accurate reading as well.

So here are the numbers ignoring the house. I think I'm going to look at that ugly negative net worth value and that will be motivation to try to get it to a positive number!

Assets:
Roth IRA: $28,704
Simple IRA: $5,637
Regular IRA: $2,656
Lending Club: $211
Savings (including emergency fund): $28,531

Total assets: $65,739

Liabilities:
Mortgage:  $174,909         

Total net worth not including the house:  -$109,170

Monday, June 24, 2013

Extra cash challenge - May results

Ooops, this is really late because I thought I had posted it already, but I just realized it was still in draft mode today!  

Here are my numbers for the extra cash challenge for May:

Advertising:  $251.74
Amazon: $9.24
ING/Capital One 360: $14.27
Lending Club: $1.15
Part-time job: 25.97

Total: $302.37

Difference from last month: - $2.09

It looks like another good and consistent month! I am not going to be working the whole month of June, so I'm hoping to be able to bring these numbers up even more!  I still have a lot of unsold stuff from my aunt that I have already listed on Ebay a few times.  I got permission to lower the prices a bit, so I'll give it one last shot to get the left over stuff sold. I've been listing these items on and off since the beginning of the year without much luck. I think we agreed on 20% commission for me to list these.  If I can't get anything else to sell, I will have made about $50 total since I first started listing her stuff. It probably wasn't worth my time with all the times I listed them and made multiple trips to the post office. So, I'll re-list the unsold junk a few more times this month and then I'll post my final profits on next month's extra cash challenge.

Sunday, May 12, 2013

Extra cash challenge - April results

Each month I total up any money I have made outside of my regular job. In this day and age it's good to have multiple streams of income. Here are April's results:

Advertising: $244.92
Amazon: $26.92
ING/Capital One 360: $14.10
Lending Club: $1.19
Part-time job: $17.33

Total: $304.46

Difference from last month: +$102.08

I'm pretty happy with my results this past month. Who couldn't use an extra $300?  Of course most of this is pre-tax money, so it's probably closer to $200.

After next Friday any "extra" cash will be my only income. I am a temporary worker and they have this weird agreement in their contracts that once a temp worker works three years at the same position, they have to take a mandatory 60 day unpaid leave of absence. Stupid rules. However, they have said I could apply for unemployment, so I will probably do that so I at least get some money coming in during that time. I am looking forward to some time away from the grind though. Hopefully I can motivate myself to try to come up with some ways to make some money while I wait out the 2 months.


Tuesday, April 30, 2013

Extra cash challenge - March results

Here are my results for my extra cash challenge for March.


Advertising: $135.39
Amazon: $34.62
ING/Capital One 360: $13.82
Lending Club: $1.23
Part-time job: $17.32

Total: $202.38

Difference from last month:  - $50.71

I don't know where the time has went - it's almost May already and I'm finally getting this post done.  Hopefully I will do better with my extra cash challenge next month because I'll need to.  I'll write up another post with the details why soon.



Sunday, April 7, 2013

Net Worth Update - Beginning of Second Quarter of 2013

Here is an update on my net worth since last quarter. I'm happy to report that my numbers have improved across the board in all my assets. Some of the improvement is a little artificial because I am using Zillow to estimate the value of our house. I haven't really done anything special over the last 3 months, so it's nice to see my money is doing well.

Assets:
Approximate value of our house: $177,822 (+ $8,298 since last quarter)
Roth IRA: $28,064 (+ $1,755 since last quarter)
Simple IRA: $5,496 (+ $267 since last quarter)
Regular IRA: $1,585 (+ $62 since last quarter)
Lending Club: $209 (+ $3 since last quarter)
Savings (including emergency fund): $23,544 (+ $3,819 since last quarter)

Total assets: $236,720 (+ $14,204 since last quarter)

Liabilities:
Mortgage: $176,433 (- $1,507 since last quarter)

Total net worth: $60,287
Difference since last quarter: + $15,711

Sunday, March 17, 2013

Extra Cash Challenge - February results


Wow, another month already half way done! Here are my results for my extra cash challenge for February.

Advertising: $173.16
Amazon: $55.66
ING/Capital One 360: $11.02
Lending Club: $1.12
Part-time job: $12.13

Total: $253.09

Difference from last month: -$22.75

I'm happy to see I still made a decent amount of extra money last month. This month isn't looking as good though, so I better step it up!  I just found out I might be taking a last minute vacation to Florida in a week - so it would be nice to make some extra money to help pay for it!


Saturday, February 16, 2013

Extra cash challenge - January results

Here are my results for my extra cash challenge for January.

Advertising: $242.04
Amazon: $4.13
ING/Capital One 360: $11.19
Lending Club: $1.51
Part-time job: $16.97

Total: $275.84

Difference from last month: +$148.58

Good news is I more than doubled December's numbers. Most of that was luck with the advertising, but sometimes finances are a little about luck!

Saturday, January 19, 2013

Net worth update - First quarter 2013

Every 3 months or so I like to take a look at my overall finances and see how I'm doing. The goal is to have a greater net worth every time I check on it.  Here are my numbers as of today.

Assets:
Approximate value of our house: $169,524* (Down $2,382)
Roth IRA: $26,309 (Up $1,051)
Simple IRA: $5,229  (Down $98)
Regular IRA: $1,523  (Up $549)
Lending Club: $206 (Up $104)
Savings (including emergency fund): $19,725 (Up $4,649)

Total assets: $222,516 (Up $3873)

Liabilities:
Mortgage: $177,940 (Down $1,490)

Total net worth:  $44,576
Difference since last quarter: +$5,363

*Estimation from Zillow

So, as you can see I did reach my goal of increasing my net worth since I last checked it in October. I'm a little disappointed to see that the house value continues to drop. It's disappointing to see that we still owe over $8,000 more than the house is "worth". However, that is just an internet estimate, so I try not to be too bummed out about it because it might not be accurate.

I'm happy to see that my savings are nearing the $20,000 mark again. As of now, I think our next big purchase will be to replace our 2001 Ford Ranger.  My husband says he can drive it for a few more years, but I have a feeling the moment a major repair is needed, he'll want to look for a new truck. As of now, I have about $11,000 of the savings ear marked for the truck replacement. I think trucks as usually a bit more expensive than cars, so I'm thinking I may want to have as much as $25,000 saved up. Hopefully we spend less. We are also thinking about where we would like to go on vacation this year, so I should start setting aside money for that as well.

Extra cash challenge - December results

Wow, 2013 is already going by too fast! It's already January 19 and I haven't even posted the results of my extra cash earnings from last month. Here are December's numbers:

Advertising: $91.65
Amazon: $14.64
ING: $10.07
Lending Club: $1.21
Part-time job: $9.69

Total: $127.26

Difference from last month: +$20.79

So a slight improvement over November, but I still could be doing better! I'm still working as a temp and after three years they make you take a mandatory 60 days off. Because business has slowed down, there is no guarantee that I will be going back after my 60 days are up. I realized the other day I only have a little over 6 months left until that time, so I really need to start thinking of how I can create more streams of income!