PhD in Saving

So yesterday we found out that DH is being reimbursed by his company for both the classes he took last semester! We were afraid one wouldn't be covered because he received a B-, but they still covered it. Man I love his job! That money will be coming in the next paycheck and going into the home down payment fund. With the extra money, we will be able to finish the home down payment and the student loan savings by May 2013. I make a point of never counting this sort of money until it is on the way to the bank so that I can revel in the progress it makes towards our goals!

So I began playing Saveup.com when it was mentioned on the forums last week, and I just won $50! You add your savings accounts to the website, and they give you credits for every dollar you save. Then you can play up to 3 times per day on their various prizes. I figured out the odds of winning cash by the amount of cash earned were best on the $50,000 prizes and today I won $50! I will update after I actually get the prize money, but for now, here is a link so others can sign up:

saveup.com/r/jp8

So I calculated my cost of working if I started over Summer versus if I started in January, and I came to the conclusion that tuition and day care are ridiculously expensive! DH and I agreed that if I don't get the Possible Job then I will wait to send any more applications until after the baby is born aiming for a January start date. That means though that I have until the baby comes to attend career panels, network, and figure out how much I am worth in the job market. I have made a deal with myself that I will be prepared to negotiate my salary. I'm also taking my time now to try to finish as much as I can before the baby gets here so I can enjoy as much time with her as possible.

Other upcoming things. I realized that our Roth IRA is reading the point where I'm going to have to move our investments around. We are currently in a Composite Index with a minimum of $2500, but I would rather be invested in the indexes that make it up to lower our expenses. The problem is that the index funds have a minimum of $10,000. I should have this money by May so my plan is to check the account then and if I have $13,000 I will move $10,000 into the S&P index and leave the rest in the Composite. Then I will continue to contribute to the Composite until it is back up to $13,000. I realize we could be putting our money into ETF's for now, but I am wary of trading fees more than expense ratios.

I made a pact with DH that after I finish my dissertation, we are both going to learn about investing in stocks and bonds. At that point, we will take a bit of money and open a Roth IRA for a little tax sheltered trading. That will probably also be around the right time for us to invest some of our car and other savings into bonds and other income generating assests.

I was hoping with the baby coming that we would be able to increase DH's allowances on his W4. I ran the calculator on the IRS website and it actually pushed us to decrease his allowances and increase mine, which would make very little difference. I was really hoping that with DH putting around $3K into his FSA we could make up the difference with an increase in his W4 allowances. Guess we will just sit on our hands until 2011 taxes give us a better estimate, I get a job, DH gets a raise, and the baby is born.

It seems like every year we struggle for the first 6 months of the year, panic over Summer, then sail smoothly through the last 3 months. Guess that is the life of educators. Hopefully the only panic this Summer is OMG raising a baby!

I submitted my resume to the possible job through a colleague who works there. Within a day, I heard back from the woman doing the hiring asking me about my availability for full time work. I'm pretty sure she was just trying to quickly categorize me. I told her that I can start before I finish my dissertation, but that since I am currently pregnant, I would not be available for full time until July. I thought that this might not come up until after I had interviewed, but I think my reply was professional. My husband has had some great advice for me, "If they don't respect your need for time after the baby is born, then you don't want to work there." I keep sticking with that.

So I just found out that the company I've been working with, the designers of the software I am writing my dissertation on, are hiring an Educational Assessment Specialist, a perfect position for me! I discussed this with my adviser and he supported me in applying. I emailed a couple of contacts in the company, and one replied back asking me to send her my resume and dissertation so that she can personally forward them to the person hiring for the position!! If I were to get this position, it would mean not having to move which means DH could keep his current job which he loves. Additionally I wouldn't have to travel to meet with my adviser and committee. Even better, I would be working on my dissertation as part of my job!! Oh man I really really hope this works out. The biggest snag is I wouldn't be able to start full time until July 1.

So I was reading a couple of different Personal Finance blogs out there on the web, and I noticed that many of them tout their "plans" which are basically how they will achieve a given goal. I was kinda unsatisfied with the plans since they didn't actually involve exact dollar amounts. My Plan of Attack is an spreadsheet that outlines every savings goal we have for the rest of our lives. It states in dollars how much we want to save for that goal, when we want to achieve that goal, and how much we have to put away every month (if we did not earn any interest) to achieve it. The goals are ranked in order of importance to us and I track the goals we are currently working on.

From this I know for a fact how much I need per month to achieve all of our goals on time ($3,702) and how much I need per month to achieve all of our goals before our current projected retirement age ($1870). I have calculated when I will achieve the goals we are currently working toward (August 2013, early) and when we will achieve some future goals (November 2015, late). I have a plan for what we will work on during certain years of our life which can get changed as we finish items early or late.

This may not be a plan that I would publish for all to see, but it is a plan that is useful to my family and achieving our goals.

So after a full year of saving, we met all of our 2011 financial goals and in fact finished several set out for 2012. Our liquid net worth increased from $37K to $65K so we saved over $28K this year. Our multiplier (assets/expenses) increased from 0.79 to 1.58 so we not only have more assets than expenses, but we have more than half again as much. Still much of this money will be disappearing over the next 2 years as we purchase a car (with cash) and a house (with close to a 20% down payment).

This year will represent huge changes for our family. I will propose my dissertation. We will be having a baby. I will get a new job. We might be moving for this job. We are already starting to dream about all the things we will do and purchase when we are in our own home. The home purchase will probably be put off until I have worked in my job for 6 months and possibly until after I finish my dissertation.

Right now our goals are focused on continuing our retirement savings, continuing to save for a down payment, and starting to save for my student loans coming due.

So we finished our car fund 4 months before I actually needed the money to replace my car!! Woot! We are now working to save to pay off my 6.8% student loans when they come due in about 2 years. According to my calculations we should be able to finish our Home Down Payment and my Student Loans while contributing to both my IRA and making monthly payments on DH's student loans (starting in August 2012) by July 2013. I'm pretty happy about that.

Now here's hoping for DH's bonus, a raise for each of us, and DH getting summer school. All of our medical bills should be covered by DH's FSA witholdings for 2012 so no worries about delivering the baby.

So DH's loan forgiveness payment came in back in November. I hadn't checked in a couple weeks and when I checked today it was in there. Sadly they applied it to his two low interest loans, which his parents are paying, instead of the one high interest loan, which we are paying. He is calling them on his way home to get the money transferred over to the correct loan. Still I'm happy that we finally got the money after only 4 months of poking and then 1 month of processing. Sigh. I'm so tired of bureaucracy.

Still this just leaves DH finishing his exit interview, and we are done with our 2011 goals!

So now after the overpayment department told us thy couldn't do anything to help us, the HR department is feeling really bad about screwing up DH's audit twice that they want to try to get our overpayment resolved without us paying them money. We will see how that turns out.

DH finished his Master's Thesis. Now he just has to complete the loan exit interview and he is officially finished. I double checked my paperwork, and it is officially in. I'm going to count my Master's as finished, but wait for DH to complete his exit interview before checking that goal off.

The offers of baby stuff have started to come in and at least one of my showers has been scheduled. It looks like I will have 3-4 total showers. After we get some hand-me-downs and find out the baby's sex, I will go register. I'm not really sure where I want to go, probably Target.

On Monday with DH on break, we will start cleaning out the house to make room for baby stuff. I'm hoping to get a few more things we can sell or put up on swap.com. I got an invite to the new Swap Market so I'm hoping to put some stuff up there. A decent amount will probably get thrown away or donated. I do have permission from my parents to store a bit at their place so that will take care of the stemware and extra set of dishes.

So DH resolved his overpayment with his old district. We still owe them money, but thankfully we can pay it back over the next 4 years with no interest. The money is already set aside in a savings account, but now I can reallocate the extra money I had set aside in case they decided we owed them even more.

Total in Account - $5922
Owe LAUSD - $3264
Leftover - $2658

DH also has one of the cars in to be fixed after his accident a couple months ago. That one is fully paid for my the insurance. The other car (because he was in an accident in both within a week) will go into the shop in January to take advantage of next year's deductible. About $500 of the extra money will go to this.

Car Repair - $500
Leftover - $2158

We also have some outstanding medical bills that I will need to take care of over the next couple weeks. I can't wait until the New Year and our new FSA elections. Until then I need to pay about $200 in bills still.

Medical Bills - $200
Leftover - $1958

With some of the extra money, we were hoping to take a small weekend trip to celebrate and pamper a bit before the baby comes. This shouldn't be too expensive.

Babymoon - $700
Leftover - $1258

DH and I have already resolved to just hoard money until next August so I'm not really worried about moving the money into our savings goals. I am thinking about dividing the rest of the money between our Down Payment and our Frivolous funds.

Down Payment - $1000
Frivolous - $258

First I want to get more exact estimates of the other items on this list.

So our savings plans are changing yet again. Over Thanksgiving, we found out my in-laws can't help with DH's student loans when they come due in January thanks to cash flow problems. This set off a flurry of activity which resulted in us finding out 1) that DH qualifies for the APLE loan forgiveness again this year and 2) DH can easily forbear his undergrad loans until August when his grad school loans are due. So now we are in no hurry to pay off his student loans. So here is the new plan:

- December 2011 - Finish car fund
- Jan - Aug 2012 - Use car fund to hold all additional savings. At some point, buy a car. Have our baby. I start applying to jobs. Financial flexibility will be key.
- August 2012 - Begin paying minimums on DH's grad school loans. In-laws pay their portion.
- Sept 2012 - June 2013 - I get a job then finish my PhD. Allocate any unused savings to either my $11k high interest student loans or a down payment on a house.
- After June 2013 - Pay off my high interest student loans. Raise retirement contributions to $10k/year. Pay minimums on my low interest student loans. All extra money goes toward expanding our down payment.

Our timeline will shift based on 1) when I get a job, 2) when I finish my PhD and then when my loans start, 3) whether we have to move for me to get a job, 4) everything being fine with our little one, 5) my need for a car, and 6) DH's job prospects wherever my job is. So I'm expecting that while we are hoarding money over the next 8 months, our plans will change a few times.

So I had a pleasant surprise yesterday when I finally got DH to show me his student loan account. The loans I was so worried about paying off are not due in January, they are due in August! This means I don't have to worry about choosing between paying off the loans immediately or paying cash for a car. By August, we should have both the APLE payment and the district overpayment resolved. We will also have DH's bonus, his summer school paychecks, and our little bundle of joy in hand. August is exactly when I will be ready to pay off his student loans.

In other news, we are getting our life insurance exams today. We switched to a new agent and the process is progressing much, much quicker than with the previous agent. I'm a little bit nervous, but I'm not really sure why. I guess because unlike all my OB exams, this one is like a test rather than for my health.

So I think I know what I want to do about paying off DH's student loans (vs buying a car with cash). I realized that much of the money is tied up in CD's which mature in February and March. So my current plan is to payoff one of DH's student loans in January to the tune of $8500. After this I have to get a couple questions answered.

1) Will APLE pay his undergraduate loans or only his graduate loans? If they will pay the undergrad loans then we can pay off without worry.
2) When will APLE send the check in?
3) When will our situation with the district overpayment be resolved?
4) How much will be owe the district?

I have about $6K set aside to deal with the district overpayment that I would love to have free. If I can resolve these two bureaucratic nightmares then I will free up $5K-8K which I can later use to buy a car. Plus if DH can get summer school then we can use that extra income to buy a car.

I realized one main reason to pay off the student loans is to keep from having a monthly payment right now when our budget is already tight. The debt payment would come out of our Savings budget anyway.

For those of you who don't read the forums, DH and I are are pregnant. We finished our Baby addition to our EF and immediately after got pregnant! The baby is due late May/Early June.

DH is on track to get his Masters finished in the next month. The whole thing is due December 9, and we will be thankful when it is over. The experience was amazing for him, but it was also trying. I'm currently working on my Dissertation proposal. The first draft should be complete soon at which point I will choose a committee and start getting it vetted. I'm hoping to defend in January.

We finally heard back from APLE. They have finished his paperwork, but now they have to wait for the state budget to release the money. That part might take a while. In the meantime, DH's loan payment start back up in January. We are debating paying them off with the car fund.

Speaking of the car fund, we are about 2 payments away from finishing that. As I have probably said before, the plan is to continue to add to that savings account and use the money to pay off the student loans when they come due. I just thought all along that we would have a 6 month grace period. Turns out you only get one of those and DH used it after undergrad. If I pay off all but the $2000 in loan debt that we expect with APLE and wait until August to buy a car, I will have over $8K in the car fund. I'm still debating this.

We are still working to resolve DH's overpayment issues with his old district. I'm hoping we can finish resolving his pay before the year ends. Otherwise we are likely going to have to file either an extension on our tax return or amend our tax return after the issues are settled. Either way I'm really peeved. Turns out the person he thought he was supposed to talk to had changed positions long ago and was ignoring his messages. Also before she left her old position, she marked his case as resolved so the new people didn't know to contact him. Bureaucratic inefficiency at it's best. If we can resolve this without him owing any money, I have $6K set aside to deal with this that will be freed up.

Finally, DH applied for an advancement at his job. He didn't get the position because he is too new, but the principal highly encouraged him to apply in May during their annual reviews (with a bit of a wink-wink, nudge-nudge). That will mean a much needed 5-10% pay raise next year. Additionally as soon as I defend my dissertation, I will get a $100-$200 pay raise. This will help out so much with leveling out our budget and with the baby.

DH finally got the student loan company to send the paperwork to the correct APLE office. They should be receiving it today. He is going to call APLE tomorrow to see if they received the paperwork and will process the loan forgiveness. That will get us $2000 off our loans.

So I joined Credit Karma today. I really want to keep an eye on our credit score, and though I know Credit Karma isn't a FICO, I'm glad to have someone grading me.

I also started our new Home Down Payment CD. Got 1.25% on an 18 month CD. Not bad, but not great. I'm hoping these early experiences with crappy APYs will bias me to not take for granted a little extra money.

So a couple months ago I added a neat little guage to our Plan of Attack spreadsheet. I have one cell that calculates the percent we are through our working lives from when I graduated college until our potential retirement date. I have another that calculates how much we have saved in comparison to our savings goals. From these two I have created a Lump Over/Under cell that tells me how much money we have now over what we should be based on our percent working life. I also have another that calculates when this Lump Over/Under will run out.

Currently our surplus will last another 7 months. Once I add in our unallocated money, it will be closer to 24 months. Now this does not mean that we will make all of our goals on time (such as paying off DH's student loans in entirety in 9 months), but it is a hopeful sign.

So I was looking over our Plan of Attack, the spreadsheet that lists our life-long savings goals, and I realized that I had miscalculated our E-Fund needs. It turned out we needed $1000 less than I had calculated. After the change we only needed $77 more dollars. Since we are still recovering from DH's unemployment and haven't resolved his overpayment by his last job, I have an savings account of unallocated money that I was able to pull from to finish our E-Fund! It's now been expanded to cover our expenses once we have a baby! **Savings Dance**

So now we are focusing on saving for a car, which is only $1245.46 away from our goal, and then we can start setting aside money to pay DH's student loans when they come due in June. Woot! Still I'm not entirely looking forward to starting that phase of our monetary lives. We have $33,001 in student loans to pay off. That should be reduced any day now by $2000 thanks to loan forgiveness programs, but that's still a lot of money. We will just have to be patient and work hard!

So DH found out that 2nd job probably won't work out. This totally screws my budget, but does give me a good motivation to work hard on my dissertation. I want to defend my proposal by December 9 so that I can get a pay raise. So here are the basic goals:

September - Read to saturation in the two main theories I'm using
October - Write at least 1 page a day until finished
November - Revise my paper
November 23 - Email my paper to my committee
December 9 - Defend my proposal

I'm hoping I'll work hard enough and write fast enough to push up the final 2 deadlines so I'm not doing everything at the very last minute. Still I'm really pumped now to work hard. All right enough reflection, time to read some more Vygotsky!

So a day after getting a new job, DH also got a 2nd job! He will teach in one school and then run an after school club at another school! It will be an extra $90 a week! Plus they were so disappointed in not hiring him this year that they already said they want to hire him next year! I'm so incredibly proud of him and just generally ebullient. This is our month!

So DH has an brand new job! After three years of district bulls*** DH is now working for an online charter school. And instead of driving 45-90 minutes a day, DH will work only 20-30 minutes away. Did I mention the school is online which goes perfectly with DH's Education Technology Masters!!

He will be taking a $3000 paycut, but between the decreased gas (about $200/month), no union dues, lower car insurance, and his overall mental health gain I think we come out ahead! **Employment Dance** Plus I always under-budgeted our income so I could trick us into putting more into savings. So here is the new budget:

Total: $4650
Savings: $1627.50
Billed Needs: $1900.44
Discretionary Needs: $424.56
Billed Wants: $145.29
Discretionary Wants: $552.21

This pushes back our savings goals slightly, but not too much. We also will be putting less away for retirement, but DH will still be contributing to the pension.

DH is yet again unemployed for the Summer. The only problem is that this time around, his principal isn't trying to hold his spot at the school. So this means he is applying for everything under the sun for Fall. Thankfully, he got 2 bonuses at the end of the year (one from a grant and another from extra work from his school). These should get us through September and allow us to continue making our savings goals.

In other news, we are still waiting for APLE to give Keenan his student loan payment. They are totally held up on the paperwork. Total bureaucratic failure.

My dissertation got pushed back by some complications. I need to rethink what I'm doing for it. Ugh.

I don't think DH will be getting a scholarship this year.

Finally, we have been struggling with when we should start trying to conceive. We will start really soon, but it has been stressful.

So though the new budget is most likely going to pass, it doesn't look like DH will be included in the recission. According to an HR person everyone through 2007 is being hired back and DH started in 2008. So this means there are only a few people ahead of DH in seniority for the rehire process. This probably also means DH won't get to teach summer school.

Still I'm hopeful. After the budget passes, each school gets to rehire specific positions. If enough schools choose social science positions or out of classroom positions with social science credentialed people (like librarians) then we have a chance.

They really came down to the wire this year. Here is hoping the economy gets better and the legislatures stop filibustering their way to a budget. It really is not appreciated.

So after preparing our budget for June, I realized that this is a Can't Spend Month. Our Wants budget is already almost spent out and the month has barely begun. Out of our $529.96 in discretionary wants,

Rollover from May - $157.85
Buying DH a Cell Phone - $188.49
Taekwondo Belt Tests - $140

Leaving us with a whopping $43.62 for buying a Father's Day present and buying supplies for our camping trip. We have some difficult decisions to make this month, but the easiest is that we will not, cannot go out for food. Also no shopping or craft projects this month. Hopefully that will be enough.

Additionally, DH got some troubling and confusing news about his job on Friday night. It looks like he is not on the list of rescinded people. This might mean we will go back on unemployment for July and August.

I'm feeling a little ill about our whole situation.

Okay this was a bad month for us and financially ended on a mixed note.

1) DH's phone broke finally. We have been saying we would get him a smartphone if his phone broke or he got an admin job. Too bad it had to break this month.

2) On vacation this weekend everyone decided to go out for sushi. This was a tad out of our budget range right now, but we were able to buy my mom's dinner and pay her for a shower gift this next month.

3) The union and district came to an agreement over the weekend. Hopefully the union will vote it in and the other 2 smaller unions will agree to it. If all the stars align, DH has a good chance of being rescinded. This would mean paychecks, health insurance, and extra work over summer.

June will hopefully be a good month and thankfully most of our Wants expenses are already covered.

1) As previously mentioned I'm going to a baby shower. I already paid my mom for my portion of the gift. (Btw, Babies R Us is ridiculously expensive!)

2) We are going to a concert for my birthday. We bought the tickets in April. We will probably get dinner near the concert, but I don't have expensive tastes.

3) We are camping at the end of the month. We purchased a blow up mattress, but we are borrowing almost everything else. I figure food won't cost that much extra.

4) We are going to the zoo on one of the days, but other than buying food, we bought an annual membership months ago.

5) I'm leaving for a business trip tomorrow, but I will submit the reimbursements as soon as I return.

So we will be very busy, but most of the activities are already paid for.

So the district has been flirting with rescinding almost all of the pink slips they sent out. If the union and the district can quit bickering, we can all get our lives back on track. So here is our status if the rescintion comes in.

1) DH continues getting normal paycheck August & September
2) DH keeps his health insurance over summer
3) DH was offered and will be able to take a part time summer school job

With this, we will be getting enough money to finish off our car savings and our expanded emergency fund by August. Then we can start saving to pay back our student loans as they come due. DH will have $13,000 due June 2012, but through APLE we can get $11,000 paid off. So for his we will make the minimum payment until we pay them off, or DH gets a job at a school that does not qualify. I have $19,125 due ~December 2013 so we will also be setting money aside for this.

Currently my big dilemma is what to prioritize. We can either prioritize starting our second Roth IRA or saving enough to pay down my loans when they come due. My current plan is to save enough to pay cash on DH's loans (in case of job change) then start the Roth and if there is extra money put more into student loan savings. If DH keeps getting APLE we can use the extra money on my loans.

So LAUSD is talking about rescinding their pink slips to thousands of teachers and support staff. This would be double wonderful news for our household. DH was offered a summer school position at another school, but he can't take it if he is fired. So if he gets rescinded then we get 1) normal pay over summer, 2) health insurance over summer, and 3) extra money from summer school! I'm really hopeful that this year will be our year.

In other news, I made progress on one of my goals. I passed my qualifying exam (only took 9 months for the entire review process **grumble**) so I'm able to apply for my Masters. Sadly, I missed the Spring deadline and since I don't want to pay the steep summer tuition, I have to wait until Fall for my application to be processed. This means that I should be getting my Masters in December. Still on time for my 2011 goals.

Additionally, DH sent in his paperwork for the APLE scholarship so $2000 of his student loans will be paid off by the government. This is a great program for teachers in low income schools.

DH also just finished his second semester for his Masters. He still has the summer and next Fall to go and then he is done. He has started to think about what he wants to write for a thesis. So I count that goal on track.

As for scholarships, I'm not really hopeful. He had every intention of applying for lots of scholarships, but he only completed 2 applications. It looks like we will be taking on another $4500 in student loans. This will put a big damper on meeting our reach goal of starting DH's Roth IRA, but otherwise I'm proud of our progress.

So let me start off by saying, I don't think of buying a house or having kids as really increasing our standard of living. With that, here are my prerequisites for increasing our standard of living:

1) Always increase budget with inflation as of January
2) All savings goals will be met (we are saving enough to all of our life-long savings goals to make them)
3) Retirement savings goals are met (we are saving enough into retirement to meet our current standard of living as of 60 years old)
4) Pre-retirement savings goals are met (we are saving enough for DH's teaching retirement at 54 years old)

At this point I would raise my standard of living according to how much I am still able to save in retirement. If I up my retirement savings such that I can retire with another $200 a month, then if there is more money I can spend $200 more a month now.

Watching my parents, I've seen how hard it is to deflate their lifestyle and how quickly it reflates. After 2 years of unemployment, my parents are getting ahead of themselves with his current employment. Thankfully they sat down and made a budget and a wishlist, but their wishlist is huge and still growing. I figure if we can limit our lifestyle for as long as possible, we can avoid getting ahead of ourselves.

Here's hoping.

My husbands Prom (he's a teacher) is coming up next weekend. I ran out to get a dress today. I checked our consignment store and then went to Marshalls without luck. I found a nice dress at Leohmann's for $60. I put it on hold and went to try Nordstrom's Rack. After striking out there, I sat down to think.

I had a short black dress at home, but I didn't want to freeze at the dance. I paused and checked the weather for that night. The low was only 58F. I reentered Nordstroms and purchased a $10 wrap. So that was $50 saved by a moment of reflection, my smart phone, and my frugal skills