Even on a small scale, it is possible to see your money working for you. I love getting my 1099-INT's from our banks and looking at how much we earn in interest. Even with interest rates so low, this is tangible proof that my money is working for me. This is way better than working for my money, or even worse paying money for money (debt). I've also realized as we are about to get our yearly credit card bonus that this is another example of getting my money to work for me. I don't believe in chump change or rounding errors. Sure there are opportunity costs to be weighed (like driving farther for pennies worth of savings), but that doesn't mean it's not worth weighing these costs. The only way for us to be financially independent is to get our money to work for us, one dollar at a time.
Archive for January, 2012
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:
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.