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I’ve done the same analysis as Don on my ‘Long-term Bill Account’ that I fund for property taxes, garbage, home insurance, and car insurance. These are all bills that I pay once or twice per year, so I just fund this account with a fixed amount each paycheck. Then, when these bills arrive I just pay them out of this account. It’s sort of like Accounts Payable.
Anyway, I’m happy to note that this account hasn’t dipped below $1900 in the last year, which means I have $1900 just sitting there doing nothing in that account. So, for cleaner accounting, I’ll be transferring about $1500 of that ‘found’ money into my house down payment savings account (leaving a buffer of $400 just in case). Nothing like finding $1500 that you didn’t know you had!
Long Term Bill Account trend:
Notice that I don’t have the trend for March and April of last year, but I don’t receive any bills that I would pay out of this account in that time period, so it won’t be falling in balance at all between now and May.
Wow, looks like we did it again! With every paycheck, we put half a mortgage payment into our Chase checking account–this makes it very easy to make payments as Chase holds our mortgage. Well, getting paid every two weeks means that occasionally we get paid three times in one month, leaving an excess of almost $700 in this checking account.
The first time it happened was July, but we didn’t notice until September. Well, then it happened again in September and we didn’t notice again until now.
This is great for our Emergency fund, it’s been boosted by $1100 in just a couple of days. I should start projecting this, rather than just waiting for it to happen.
So among my savings accounts is one strictly for insurance. It’s an effort to smooth out payments that happen every 6 months or a year, and every paycheck we put $65.60 into it. Well I decided to check today and see if we have any excess, as I’d never really done the analysis to see how low it gets at different parts of the year, and lo and behold we have a $500 cushion!
We’re pulling that and putting it right in the Emergency fund where it belongs. The poor Emergency fund has suffered quite a bit this year, this infusion should help it out a bit.
Woe be unto those who attempt to build a Savings Laser; ours has been sputtering crazily for the last couple of pay periods. We were off to a good start there at the beginning, right in line with what we were projecting. However, when a car payment was paid by check and a credit card payment was made online, it left our checking account teetering on the edge of the $1000 threshold set by First Niagara for the privilege of No ATM Fees. So we pulled back $600 of the $700 for that pay period (lame!).
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It was almost six years ago, now. I was just starting my first grown-up, fo’ real job and I felt like I was rolling in the dough. With said dough, I rented a nice apartment than I’ll ever have again and signed up for a digital cable package so I could watch the bazillion channels of content. I had a home-made DVR (another long story) that worked pretty well and recorded all of the shows I was interested in.
It was incredible what a difference a DVR made–I no longer just watched TV and flipped channels, I picked out those few shows that I really cared about and only watched them. Not only that, but I could skip commercials (quite efficiently with MythTV which does it for you). This freed me up to live my life! I could devote my time to reading, watching movies, working out (which I actually did years ago) or drinking at my local pub.
Over time I found that I was recording less and less. By the end I was down to The Daily Show, News Radio and Battlestar Galactica. I was paying $60/month to watch a show I could watch for free (legally) on the Internet, one I had already watched all the way through in syndication (2 episodes/day every day and you can get through a series pretty quickly) and Battlestar Galactica.
So really, I was paying $720 /year to watch one show, which I could buy at the end of the season for $38. It didn’t make sense.
At the end of BSG Season 2–the dramatic discovery of New Caprica and the return of the Cylons–I pulled the plug.
I remember standing in line at the local Time Warner Cable office. Everyone else was there to pay a bill, or to beg to have their cable turned back on. I was feeling pretty proud standing there with my cable box and remote in hand, smiling about all of the money I was about to save–not to mention the fact that when you don’t have cable you can say to people, “oh, I didn’t see the latest Jersey Shore, I don’t have cable.” I handed the gear to the lady behind the counter and walked out of that office a free man, never to return.
It’s something else Anna and I have in common, she gave it up a few years ago as well, relying on DVDs and friends’ houses for precious screen-time entertainment.
So what do we do now? OTA HDTV, of course! We can get 16 channels of local content over the air courtesy of the antenna I made for less than $10 and a trip to Home Depot (this blog taught me how to build the antenna). And courtesy of my homemade DVR and a $100 upgrade I made to it, we can record anything over the air and watch it when we want to. That plus NetFlix streaming through our XBox 360 and we’re looking pretty good!
So how much is that costing us? This will be good to know as I’ve never actually done this analysis.
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| Service | Monthly | Yearly |
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| XBox Live | $5 | $60 |
| NetFlix Streaming | $7.99 | $96 |
| Schedules Direct* | $2.08 | $25 |
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| Total | $15 | $181 |
Well it’s more expensive than I’d like it to be, that’s for sure, but it definitely beats $720/year I was paying earlier for cable. We get most everything we want, though there are some notable exceptions like some of the HBO and Showtime series we watch. Those we either have to wait to come out on DVD or resort to more dubious methods.
* Schedules Direct is a service that provides TV listings for folks like myself who have homemade DVRs and want to know when TV shows come on. We take for granted that this information is freely available somewhere in the world, but it costs people money and time to put it together and make it available, so I’m happy to give those folks $25 a year.
Anna and I have been married for about 3 months now and we’re finally starting to get our financial ducks in a row. The first thing we did was combine our earning potential into a joint checking account. This in itself was a bit of a battle in that I have for years insisted on keeping an out-of-state bank because it offered free ATM fees–as I’m sure you know, precious few banks offer that perk, so I have been loathe to give it up. Anna was quick to point out the folly of not having a local branch for quick cash, and while I have a second checking account at a local bank for depositing checks, to get any money out of it involved a complicated transfer with an online bank in the middle, it’s just too much trouble.
The matter was settled when we saw an ad for First Niagara Bank offering free ATM fees. It’s a local bank, which Anna is happy about, and offers the one perk I care about–the perfect compromise. There’s a catch that you have to maintain a balance of $1000, but that’s not so bad: $1000 = $0. You may have read that Paul also went to First Niagara, but he got a $100 bonus for joining–that deal was expired by the time I got there.
I have to say, the very first payday we had together was amazing. POW!! Both paychecks dropped on that new checking account like a bomb! I felt like Scrooge McDuck, swimming in gold coins! What are we going to do with all of this DINK money? That’s what we sat down to evaluate this weekend, and what we came up with is The Savings Laser™.
Please don't sue me, Lucas Arts.
I talked a little bit about my savings strategy in an earlier post about saving for the wedding, a few bucks out of every paycheck into a variety of accounts ranging from our Emergency fund to a Motorcycle Accessory Fund. Instead of those little trickles into different areas, why not combine all of their force into “the ultimate power in the universe,” a mighty concentrated beam of savings! Instead of waiting 3 years for the Emergency fund to be fully funded, aim the Savings Laser at it and have it funded in 5 months! POW!!
So that’s what we’re doing currently. The original $600/month stream was bumped up to $700 (Emergency gets an extra C-note now) and we’ve added another $1,400/month as the laser–the first target? A deck and a hot tub. I know, I know–why not dive into the Emergency fund and get that shored up first? Well, marriage is compromise and this is what we’ve come up with. The Emergency Fund is on its way up on its own, and it will be the next thing we fire at.
| Account | Per Month | Total |
| Home Improvement | ($200) | $618.21 |
| Emergency | ($300) | $2,135.13 |
| Travel | ($150) | $626.08 |
| Don’s Toys | ($50) | $175.25 |
| Hot Tub / Deck | ($1,400) | $158.93 |
Current list of targets for the Savings Laser:
- Deck & Hot Tub
- Emergency Fund
- New Car for Don
- Down Payment for Next House
Look out Savings, here comes the Laser.
I plan to post updates to this every once in a while, so we can watch the progress of the laser… Exciting stuff.
I saw today that the pre-tax 401k contribution limit has been increased to $17,000 for 2012. Normally I would raise my contribution to take advantage, but I can’t. If I raise my contribution from 18% to 19% of my income, I’ll go above the limit. Maybe I’ll put it into my wife’s 401k.
Wow, in the last few week’s I’ve signed up for three new accounts for a total bonus of $750! First, I recently signed up for an e-Checking account at First Niagara for a $100 bonus.
Second, this week I signed up for a Chase Sapphire credit card that comes with a 50,000 point bonus, which can be redeemed for $500 cash, if you spend $3000 in the first 3 months. I doubt I’ll have any trouble spending that amount since nearly all of my bills will go on the card, including childcare. It has a large annual fee so I’ll probably cancel it once the 3 months are up. A hit on my credit score is a small concern, but I can afford to play with my score a bit right now since I don’t have any foreseeable future loans.
Third, as a complete surprise, when I was approved for the credit card they also offered me $150 cash bonus for opening a Chase checking account! All I have to do is set up a direct deposit to that account and I get the bonus. I will just have to deposit $1500 to that account to avoid any monthly fees.
Thanks to My Money Blog for the good info about the Chase Sapphire cash back bonus!
Well I’ve been making some progress on my goals, so I thought I would put out an update:
Goal #1: Life Insurance
OK, so when I said some progress, I didn’t actually mean on all of my goals. I totally slacked on this one. Truth be told, I’m a little daunted by this one because I don’t really know how to shop for insurance. I know I want term life insurance, and probably about how much I want, but who should I get it from? Are some policies cheaper than others? Are some policies better than others? Anyone? Anyone? Bueller?
Goal #2: Get Emergency Savings to $10,000
BAM! Done! I currently have almost $12,000 in my emergency fund. I’ll be siphoning off the extra above $10,000 and putting it in other accounts, like one for goal #3, and putting some of it towards student loan debt.
Goal #3: Begin Saving for Second Home
This one turned out to be two goals, the first of which was to actually open an account for house savings. But then I realized I had an unused ING savings account that I had opened just to get a bonus. I’m also taking $1,000 out of the emergency fund and putting it into this account. Over the next few months I should be able to define exactly how much of our paychecks will go into this account. Goal #3 Complete!
New Goals
Now that I’ve completed a few of my goals, I’m going to add a few more:
- Determine how much per pay period we want to save for our new house, and make it automatic via a direct deposit or a transfer.
- Start a periodic investment in a Lending Club account
- Start a periodic investment in my Scottrade account. We currently have $100 in that account, but it’s just sitting there, not invested, earning no interest.
Overall Progress
I’ve often struggled with the “bring vs. buy” debate because both strategies have their benefits. The buy crowd gets a great selection of food for lunch every day, and pretty much gets to eat what they want at that time. The bringers get the benefit of much cheaper lunches. If we’re just talking bringing a sandwich and an apple, well, you get what you pay for.
This debate always led me to do a back of the envelope calculation of how much money it costs per year to eat lunch out. On average a purchased lunch costs me about $8.00. Do that 5 days a week, 50 weeks per year, and I would end up spending $2000 per year. That’s quite a lot of money. A brought lunch is harder to quantify because I would have to figure out the cost of, say, two slices of bread, 4 slices of ham, a slice of cheese, etc…. Needless to say I’ve never bothered.
Telling myself that I would save $2000 by bringing every day has not been working. I bring most days a week for a month or two, then I buy most days a week for a month or two. I get sick of the meager lunches that I prepare and need some variety after a while. When I start buying lunch more regularly, the amount I’m spending never even comes into play. The money is there in the checking account. I go to a local restaurant or grocery store and swipe the debit card to buy some prepared food. Painless.
So I’ve come up with a new strategy that I’m going to try out for a bit. Every time I bring a lunch, I’m going to take that $8 I would have spent on lunch out of my checking account and put it into savings. Monetarily this is no different than before. However, now I will be able to keep track of exactly how much I’ve saved by bringing lunch, will be better able to make an informed decision when deciding to buy lunch, and won’t even have to quantify the cost of a brought lunch to save the money. I’ve artificially quantified the savings of a brought lunch to be $8 and dammit if I’m not going to save it. Effectively, when I buy lunch I’m paying others $8, but when I bring lunch I’m paying myself $8. Kind of a classic pay yourself first sort of thing.
I will be tracking this lunch savings in a separate account so I can easily see how much I’m saving. I’ll probably do the money transfers themselves once per week.
Donald
Age: 32
Assets: $401,669
Liabilities: ($129,290)
Net Worth: $272,379Memberships
Paul
Age: 31
Assets: 477,660
Liabilities: ($123,725)
Net Worth: $353,935
