Saturday, August 1, 2009

Monthly Update - July

Annual Savings Goals
Towards the beginning of the year, Ninja Hubz and I sat down and discussed our financial goals for the year. I've been reviewing our progress at the end of each month, and decided to start doing monthly update posts.

First, a couple important points about our financial situation:
  • We have no non-mortgage debt: I know a lot of people reading "frugal" blogs like this are doing so with this goal in mind. I'd just like to tell you, it is an AWESOME place to be, keep working towards this goal. I don't need to explain why credit cards and car payments and student loan payments suck - you know this. I'm just going to say that it can be done, and its totally worth it!

  • We have a 6 month emergency fund: I consider 6 months of expenses to be adequate for our situtation. We both work full time, so a job loss would only decrease our income by half. If we were a single income family, I would probably want 9-12 months in an emergency fund. We also have a fair amount of money tucked away in retirement accounts. I wouldn't tap this money unless the situation was dire, but if there was some type of catastrophy, we've still got a lot of cushion before we're looking at being homeless or eating bugs.

  • Our basic retirement funding is in place: Ninja Hubz has been contributing enough to his 401k to get the full matching amount at work. (Unfortunately, his company had to stop matching with real money earlier this year and issue stock options instead, but in today's world, that's still better than a lot of the alternatives). I have a government job which includes a pretty good pension plan. I consider this a decent "basic" retirement plan, meaning if we both work until full retirement age, we probably won't end up homeless and eating bugs.
Since those important steps are out of the way, we have some choices on how to spend our money. Again, this is an awesome place to be. I could, if I chose, stop clipping coupons, reusing plastic baggies, and cooking at home all the time. We could go buy a bunch of shiny objects, start eating out regularly, and subscribe to a hundred premium cable channels. I could even run through the house like a mad woman leaving lights on in every room! But you know what? None of that will make me any happier. But paying off our mortgage and having enough money saved and invested so that I don't have to get up at 6am every day and go to work... now that very well could make me happier.

So, this year, our savings goals are:
  • Accumulate enough in savings for a new (or new to us) car. Neither of us need a new car at the moment, but we want to be prepared for when the need arises. We started off the year already having approximately half of our target amount and wanted to accumulate the other half by December.
  • Accumulate enough for max 2010 Roth IRA contributions. While not being homeless or having to eat bugs in retirement is a good start, I'm setting my sights just a wee bit higher. Also, the fact that Roth IRAs grow tax free makes me totally warm and fuzzy inside.
We've been making a lot of progress on these goals, and I expect we will probably be done in the next month! Yay! We're still discussing what our new plans will be. I'm leaning towards paying off the mortgage, Ninja Hubz is more in the "shiny objects and premium cable channel" camp, but I expect we'll find a compromise. Stay tuned for updates on that front.

July Spending
We had a few unplanned expenses arise during the month, but overall we were able to stay on track. The cable modem decided to die while we were out of town, so we had to replace that ($70), and we had an unscheduled trip to the vet when one of the Ninja Pups got attacked by another dog at the park (she is ok!), that was about $210. These types of expenses just pop up now and then, its just part of life. We're fortunate that we have a lot of wiggle room in our budget, so costs like these just decrease our savings contribution for the month. Otherwise, we'd be dipping in to the emergency fund, but that's what its there for, right?

I was able to keep the household spending well in check. Groceries were $184 and other household stuff was $23.

Around the House
I've been neglecting the yard work because its been just too darn hot. I've been focusing on decluttering inside and have made a lot of progress cleaning out my office. We took a truckload of old computer equipment to the electronics recycler. We also replaced the first of 3 ceiling fans in the house that have been having issues (and are totally ugly). We plan on doing one each month to spread out the cost. I've also started using Paperback Swap and have sent out 9 books so far - that means fewer books piled all over the house, and a cheap source of new books to read. The weather's finally cooling off a bit, so hopefully I can make some progress on the yard work in August.

See how others are doing on their financial goals over at Cents to Get Debt-Free and Money Saving Mom.


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