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Archive for March, 2008

Goal Review - March

March 28th, 2008 at 12:42 pm

Well every good plan hits some speed bumps. I am not saying that I went backwards or stopped, just slightly less process then I would have liked.

So, letís jump into things, shall we?
My goals for 2008 are:

1) Pay off debt (except mortgage) by October 1st
. a) Pay off CC by April 1st
. b) Pay off Car 1 by June 1st
. c) Pay off Car 2 by Aug 1st
. d) Pay off wifeís braces by June 1st
. e) Pay off sonís medical by October 1st
2) Invest $10,000 by year end
3) Invest $15,500 in 401(k)
4) Review and reallocate retirement funds by end of Q1
5) Will by end of Q2
6) Life Insurance by end of Q2

1) Pay off all debt but the mortgage by October 1st

$6,000 CC (0% until May 2008)
12/31/2007 - $6,000
01/31/2008 - $3,543 ($2,457 paid)
02/29/2008 - $1,388 ($2,155 paid)
03/31/2008 - $0 ($1,388 paid)

Car 1 (4% interest rate)
12/31/2007 - $5,726
01/31/2008 - $5,317 ($409 paid)
02/29/2008 - $4,761 ($556 paid)
03/31/2008 - $4,264 ($497 paid)

Car 2 (3.9% interest rate)
12/31/2007 - $17,064
01/31/2008 - $16,432 ($632 paid)
02/29/2008 - $15,800 ($632 paid)
03/31/2008 - $15,168 ($632 paid)

Wife's braces (0% interest rate)
12/31/2007 - $2,652
01/31/2008 - $2,496 ($156 paid)
02/29/2008 - $2,340 ($156 paid)
03/31/2008 - $2,184 ($156 paid)

Son's medical (0% interest rate)
12/31/2007 - $18,000
01/31/2008 - $17,500 ($500 paid)
02/29/2008 - $17,000 ($500 paid)
03/31/2008 - $16,500 ($500 paid)

This month I had some extra expenses: summer camp for my son was $350, CPA $400, baptism for other son with brunch $250, and hockey and swimming classes for my son $200.

Given these expenses, I am still pretty happy with my progress and am still on goal for all my consumer debt. I am also getting a $13k refund that Iíll use for car 1, wifeís braces, and start attacking car 2. I checked the IRS website and my refund was mailed on the 26th so should be here pretty soon.
Bottomline: I paid off the credit cards before the rate adjusted from 0% to who knows what.

2) Invest $10,000 by yearend

After the debt is paid, we will start tackling this. I am hoping to start this in September. When I first put this goal down, I was thinking there would be no way I would get to this. To me, itís all about having a roadmap with your goals prioritized and then focusing on the first one, accomplishing it, and moving on to the next.

3) Invest $15,500 in 401(k)

Invest $15,500 in 401(k)
01/31/2008 - $1,451 invested
02/29/2008 - $3,291 invested
03/31/2008 - $4,881 invested

I am very happy with this. I am still on schedule for the end of October and then Iíll roll the extra money into my holiday budget.

4) Review and reallocate retirement funds by end of Q1

I am putting in my trades today. I believe the market has bottomed and the volatility has decreased to a level I feel comfortable with.

5) Will by end of Q2
6) Life Insurance by end of Q2

These two steps are going a little slower then I thought they would. Iíll have to just clamp down and get through this. My cash flow is improving so l should be able to float the lawyer fees and insurance premiums. I just need to get on them.


All and all, Iím pretty happy. We had some extra expenses this month and yes some of it was discretionary. But, the good news was we were able to absorb it. The big accomplishments this month are I get to cross of 1a and 4 from the list.

Random Thoughts

March 18th, 2008 at 01:53 pm

So, my wife has started her new job and she will be working 5-10 hours a week. Truth be told, this will probably last until June when the weather gets nice and then sheíll start working again in October.

Well, after her first day on the job, she was feeling all empowered and made the statement ďNow that am working, you can stay home with the kids.Ē

I said ďOK, to bring home what I bring home you would need to work over 100 hours a week.Ē She quickly calculated in her head that would be about 20 hours a day. I said or 14 hours if you work 7 days a week.

She then said ďNever mind, you can continue to work.Ē I just kind of laughed to myself.

So my dream of staying home with the kids and watching ESPN will drinking beer and eating chips is still but a dream.

Shifting gears, I have been watching Dave Ramseyís TV show at night lately, mainly because nothing else in on and I like to see him slam some of the people that call him. My wife usually sits on the couch next to me reading a book or magazine.

Well last night, I was watching some coverage about a little tourney coming up.

My wife goes ďNo Dave Ramsey tonight?Ē I was really stunned. I didnít even know she listened to the show never mind enjoyed it.

Especially since she was complaining the other about needing more clothes the other week. Now for some perspective. We have a closet thatís 9x10 filled with some of her clothes and all of mine. Yes I do have about 5 feet of one wall. And she has a closet in the guest bedroom (not walk in but still big) and she has the entire coat closet. I think she may have boxes of clothes in the attic or basement but Iím not sure.

Since, watching Dave Ramsey, she hasnít asked for money for new clothes or in general money for anything discretionary. She also is asking more questions about the budget and participating in it.

In fact, I never bring my lunch to work and always buy lunch, she said Dave Ramsey wouldnít approve. Probably not, probably not.

My Rant

March 17th, 2008 at 05:08 pm

I so disgusted today with stories I see in the news about people not taking responsibility for their actions.

At lunch, I watched a video on about a couple in Las Vegas that were foreclosed on and moved from a house with huge kitchen and granite countertops on a mobile home. The basic story is that the moved into a house for $276k. For the first couple of years, the house went up into the $420k or $450k range. Then wife lost her job, they took equity out, and the ARM re adjusted.

So who do they blame? The lender and everyone else but them. These evil lenders took advantage of them.

Are you kidding me? Do you actually think a bank makes money on a foreclosure? You think banks want to be in real estate?

Then I was hearing some advise on credit cards. Basically to not pay for 120 days and then you can settle with the credit cards for half. Is this sound advise? This is the way we want to bring up the next generation?

Iím sorry but thatís not how I roll. If I borrow money or use credit cards or have medical bills, I pay what I owe. If I did something stupid that costs money, I take responsibility and pay what I owe. I donít try to screw someone out of something I owe.

You might be saying that you owe $90k in CC and only make $30k. I say pay it all off and donít weasel out of the bill. You owe the amount, you signed a contract, now pay it off up. Sure it may take 10 years but ďman upĒ.

Sorry about the rant but I am so pissed off about people not taking responsibility in this country.

Your word is the only thing you have in this life so man up and accept your fate.

Rough ride this week....

March 17th, 2008 at 02:46 am

In an emergency meeting today, the Fed cut the discount rate by a quarter to 3.25% and approved Chase's purchase of Bear Sterns.

The street is also looking at the Fed dropping the fed funds rate to 2% on March 18th (a full percent).

I personally believe this is the other shoe dropping and this deals directly with confidence in the market.

We moved from credit quality issues (sub prime, CDOs, SIVs, municipal bond insurers, and CDS where the counter party was Bear Sterns, to solvency issues (Countrywide, muni insurers which led to issues in ARS, Bear Sterns), to the fed now flooding the market with liquidity.

I still haven't rebalanced my portfolio as I have been waiting for the market to settle. I believe this is the last shoe to drop and will wait for the dust to settle.

Most of my rebalancing was selling international to invest in my US stock portfolio and my small REITs. I believe this week we will see downward pressure on stocks (especially financials) and downward pressure on the dollar.

Good luck all!!! And cash is king (just not US Big Grin ).


March Update and I feel fine

March 13th, 2008 at 01:28 pm

Itís a few days early, but I decided to go ahead with my mid month update. My February one, I was feeling like I might not be able to pay down the debt as quickly as I thought. At the end of the month everything worked out and I has a few hundred ahead of target.

Well, last week was one of those stressed week where Murphy puts you to the test. We had my sonís baptism and family had to stay over. This included a donation to the church ($100) and additional food and wine for dinner (people stayed over or house - $150) and party (small brunch party - $75). So, I had to borrow from some envelopes to scrap the cash together. And a very stressed wife. No new debt Ė Iíll take my wins where I can.

So we are closing in on the second week of March and I am actually feeling pretty good. With the paycheck I am getting tomorrow, I well have my envelopes funded where they need to be, a $1,000 in the CC envelope, and $416 in my 401(k).

This should put be on target to pay my minimums plus another $2,000 towards debt, eliminating my credit cards before they start charging interest and starting on paying down the first car.

I also sent in my taxes this week. Bad news Ė cost $400 for the CPA to do it, good news Ė weíre getting $13,400 back between state and local. This is mainly because when I switched jobs they screwed up my medicad withholdings and I paid double.

So, I hope that Iíll get my tax refund in April and most of that will go for debt. Iíll probably skim off about $1,200 for TruGreen to take care of my lawn this summer. The one that services my neighborhood really does a good job and it makes a huge difference. That still leaves $12,200 to go towards debt reduction then in May we get the tax credit. Iíll get $1,800, which will go towards debt.

I am basically hoping that by end of June Iíll have the CC, car 1, car 2, and the wifeís braces paid off. So, Iíll be able to snowball everything into my sonís medical.

So far, March is looking good. Looks like by end of June, Murphyís family will be gone. Murphy will still be at my house, but I told him that heíll have to find a new place by end of the year. But you never know with Murphy, heís a tricky guy and once heís in your house heís tough to get rid of.

What's your W:R?

March 12th, 2008 at 08:39 pm

There was an interesting article I came across that offered a different way to look at retirement planning.

The article discusses a years worked to years in retirement ratio. So, if I work from 25 Ė 65 and plan on living till 85, my ratio is 40:20 or 2:1. To live comfortably in retirement, I would have to save 15% a year. The article continues that a 15% savings rate over 40 years is extremely aggressive

I just thought it was an interesting and different view of retirement savings.


Working Retirement W:R Required
Savings Rate (%)
40 20 2:1 14
43 17 2.5:1 11
45 15 3:1 9.5
48 12 4:1 7
50 10 5:1 6


This Train is debt Free Bound ... All Aboard!!!

March 6th, 2008 at 06:35 pm

Well, I think the wifeís back on board.

I also think that she believes I was right. I think it was a couple of things just coming to a head. Our son is getting baptized this weekend. So I need extra money for the church and we're having family over for brunch. Also, both my sons seem to be eating a lot lately and it has really put a strain on the $100 per week grocery budget.

I think the furniture (one step up from parents basement) was the last straw and the wife went a little crazy. So, looking back, I think it was more a comment about the stress.

As I said before, since I didnít have to sleep in the guest room, I wasnít in the wrong. And thatís all am going to say on that Big Grin

So next week things should get back to normal for her Ö and that means me too.

So what does this all mean? Well, right now I have some extra expenses that are coming up putting a little strain on the cashflow at the moment. My monthly budget is fine, just a short-term blip. So, I am going to steal from Paul to pay Mary. Iíll take some money out of my water bill envelope to pay some of these bills do this week and replace the money later in the month.

Hey, not perfect but I donít have to take on new debt.

As an aside, Dave Ramsey actually said yesterday that in a certain case he would use a credit card. The only case he could see using a credit card was if the alternative was to borrow against your 401(k).

This article talks about a 401(k) debit card. Basically, you transfer the amount that you can get as a loan to a line of credit. You pay a set up fee plus 2.9% above prime. What a bargain.

Great idea Ö just great. So my stock portfolio is gone, my home equity is gone Ö Hey wait I got some money left in my 401(k). I need my ďbuy more expense stuff to jam in my house with an arm that will be foreclosed in 2 monthsĒ fix.

Crunch Time Again ... So Soon?

March 4th, 2008 at 01:07 pm

Well, itís that time of the month for me. The big bills come in Ė health insurance $1258, mortgage plus escrow for insurance and taxes $2800, Ĺ a car payment $316, and sons medical $500.

Am I worried?

Well, each month I worry about this time of the month less and less. Between the 10th and 15th is when all these bills seem to be due, and it is a lot of money shooting out. This month, Iíll actually have to have all the envelopes funded with my 3/7 paycheck, as the 3/14 will come too late. Itís a good feeling to know the amount you have due, when, and a plan to have that money there for the bills.

On a side note, the wife is having a hard time. Most of her luxuries have been cut out. I had started cutting the monthly clothing budget, entertainment budget, eating out budget, and vacation budget. She started complaining that she canít live like this. So a little fight broke out (ok maybe not little).

I think this is the time when the rubber meets the road. Either we move forward or fall back, and I ainít going back. The good news is she is going to get a part time job. Sheíll make about $500 a month and weíll just use this money for the discretionary items.

Anyway, itís stressful now in the household, but I think if I can make the transition a little easier on her, sheíll get on board. Deep down, she knows that we have to do this. I also think that once we start baby step three and she sees mad cash going into her money market account, sheíll be all right.

Right now itís just tough to keep the focus, if you donít see that light, very faint in the distance. It doesnít look like itís getting any brighter on a month to month basis. You need scientific tools to measure these small changes, but the changes are there and that light is getting brighter.