Budget for 2011

Starting in February, Hubby and I are going to switch to a new budget. So far we've just been splitting our "extra" money, using about half to pay down credit cards and the other half to stash in emergency savings.

With our new budget, we're going to set aside money for several short-term savings goals, as well as to regularly save for non-monthly bills (like car insurance). It means hitting pause on the emergency fund, but overall it should be a better system.

Here are our anticipated categories & savings amounts, per month:

Vacation - $200

Car insurance - $210

House (maintenance/repairs) - $300

Mortgage (principal reduction) - $800

It's great to have so much "discretionary" income in our budget, it really makes it so much less stressful to know that we have a bit of a cushion to absorb unexpected items. Our immediate goals are to finish paying off credit cards (currently around $7k) and then to pay off the second mortgage. However, it'll probably take about 3 years.

Fall Updates

I updated the progress bars on the right side again, it feels so good to see the credit cards decreasing so much!

As soon as some of the pending payments clear, we'll be under $10k in outstanding balance on the credit cards! And I know that seems like a lot, but it's nothing compared to the nearly $50k that we once owed a few years ago. We're lucky in that we never quite got to the point that we were desperate, we were always able to pay our bills and the minimum payments - but we also started paying off back when minimum payments were only 1-2% of the balance (so on $50k debt, we were only paying like $600/mo), and our interest rates were mostly fixed rate balance transfers of 0-3% APR. If we'd waited a couple years to start paying it off more aggressively (and stop buying more stuff on credit!), we would have been in a rough situation. It seems like those great balance transfer offers all but disappeared, and minimum payments increased to 5% of the balance - so our monthly payments with interest would have been easily $3000/mo! When all that hit, we still had to absorb payments of half that, which was tough but fortunately still possible for us.

One of the cars is completely paid off, so we're down to a single car loan! I wish we could make the paid-off car last a few more years, and use the would-be car payment to pay off more debts and to save up for a new car, but it's my husband's car and he wants to get a new one next year... so I'm just hoping the credit cards will be paid off completely before the new car (loan) comes.

House Renovations, 2nd Mortgage, or Emergency Fund?

Although DH still has quite a hefty chunk of credit card debt, all of mine is gone (and has stayed that way!). That has freed up $1200+ each month that can be put towards other expenses and goals.

While I'd love to see all of our credit cards paid off completely, I've learned that I should let DH pay his own debts off. Although he wants to be free of them, he is also still willing to splurge on purchases with the intent of paying them off quickly... but it doesn't seem to work out that way. Those purchases accumulate, and by the end of the month are often $1-2k! We've paid off some of these 'smaller' balance cards several times over!

So instead I'll be putting the extra money elsewhere. I've been debating whether to add it to our emergency fund (currently $5000), set aside money for future house renovations, or put it towards paying off our second mortgage. The debt-freak in me wants to pay off our second mortgage as aggressively as possible, but strategically, it would probably be better to have that money in a liquid account.

One of my options would be to set up a savings goal through SmartyPig, using it to set aside money for the sole purpose of paying off the second mortgage. It wouldn't make much sense to have 20k+ sitting there waiting to be sent off, but I could build up a few thousand dollars in there (sort of a dual purpose, secondary emergency fund & mortgage principal reduction), then start sending all the extra money to the mortgage company.

How do other people balance paying off large long-term debts (like mortgages) with emergency savings? Our emergency fund represents a bit more than 1 month, but if only one of us lost our job (and could collect unemployment), we could likely last 6+ months.

Cut in Pay

In the upcoming months, I'll likely be asked to start taking furlough days. In my case, the furlough days will be unpaid days, sort of like a temporary layoff, but will probably be structured as a day off every so many work days.

I don't yet know the details, but it'll most likely represent at least a 20% pay cut. And realistically, it'll be closer to 30%, because I'll lose overtime pay as well.

We're trying to watch our spending a bit more, cutting back on things we don't really need. On the home improvement front, we'll only be spending money to complete projects that we've already started, or critical maintenance items - but no new projects.

Paying in Cash?

Over the past few years, we've asked for a cash discount on a few larger purchases.

1. A local building supply store offered us a 4% discount on vinyl siding for paying in cash (which is probably pretty close to the amount they would have had to pay in credit card processing fees).
2. A well repair company gave us I think a 3% discount for paying in cash (paying by personal or certified check was the quoted price, cash was a 3% discount, credit was a 3% surcharge).
3. A gutter company gave us a 30% discount for paying in cash.
4. A landscape company did some tree trimming, and they gave us a 10% cash discount.

We're currently in the process of getting estimates for a major project, and I've been inquiring what sort of cash discount they each offer. I don't want to hire someone that's trying to get around paying insurance, taxes, workers comp, etc. - but I think a cash discount is a legitimate thing. It costs companies money to pay credit/debit card processing fees, they are accepting a risk for chargebacks/reversals on credit cards (for fraudulent use on stolen cards), on insufficient funds or stop-payments on personal checks, forged checks, etc. Paying in cash on completion gets the money in their hands, and eliminates the need to potentially send out invoices or spend time on collections.

But it's a risk for the homeowner, certainly. On the job where we hired the gutter company, we made sure that everything was on paper. We had an official estimate/quote, we didn't make payment until the work was completed to our satisfaction, we got a receipt and an unconditional waiver of lien. We didn't exchange funds in front of a notary or banker, and we didn't have the waiver of lien notarized, but we also weren't talking about a lot of money either.

Now that we're looking at some major work items, I'm not sure whether I want to pay in cash. Truthfully, I hate that the credit card companies make so much money off each time I swipe a card, and ultimately I'm paying for it with higher prices. I'm okay with paying taxes, because the money we pay in taxes means more money spent on public services that ultimately pay our salaries (education, public safety, infrastructure, etc).

I'll take a risk on small jobs, but I don't want a shady contractor to try and come back after us for more money down the road. I'm not hiring anyone that I don't trust, but you never really know either. I'm also not entirely sure what the legal ramifications of paying in cash are - cash is legal tender, but I don't know if I would need to get into issuing a 1099-MISC or various IRS forms once I exceed a certain dollar amount. I always get receipts, and once went so far as to get a signed waiver/release of lien, but I don't want to deal with finding a notary and having everything witnessed & notarized. I've also heard conflicting statements on whether paying by check is sufficient to get a cash discount (since they don't have to pay the card processing fees), or if it has to be greenbacks (since checks take longer to clear, and have a greater chance of being fraudulent). And certified checks are somewhere in the middle - but on at least two occasions, certified and personal checks were not accepted for the cash discount price. (At the time, both places told me that there was a cost of doing business for them to accept checks: recording relevant information, bank fees for handling/cashing checks, the time to clear, and the time for an employee to go physically deposit & then withdraw the money)

Does anyone have experience with cash discounts for home renovations or other projects? I'd love to hear about your experiences.

Wiping out Savings?

My credit cards are finally paid off, completely! Hubby owes about $14,000 on his, but he's making progress on 'em. I had hoped that his would be less than $5k by the new year, but I think a more realistic number will end up being $8k.

One of the first things I did when my card was paid off was to take care of some much-needed house/lawn maintenance. Cost so far is over $800, but I'm glad we did it. I took the money from our emergency savings to cover that, but will replenish it by the end of this month.

The problem is that we now would like to redo our driveway, as it's in poor shape and is a bit of an eyesore. When we bought the house, our home inspector told us a new driveway (asphalt) would be about $8000. We'd like concrete, which would be even more.

We've debated attempting the driveway as a DIY project, and enlisting the help of some friends/family. Removing our current driveway would be the most difficult part, we're still trying to figure out the best way to dispose of all that material. Neither of us has a CDL, so we'd have to hire a dump truck with driver for probably two full days. I think we could form and pour/finish the concrete without too much difficulty. We might hire out the removal, if we can find someone reputable to do it cheap enough.

I will only do the driveway if we can afford to do it cash, I will not go in debt for it. I'd rather not wipe out all of our cash savings, but it is really tempting to get it done so that our house will look nicer though. We can't decide if we should get estimates and just go for it, or if we should hold off (and if so, what's the minimum amount that we need to keep in the emergency fund immediately AFTER making a large purchase/expenditure?)

Anyone have experience with replacing a driveway, to know how much it costs? If not, what's your thought on the money side of it?

Almost There!

Although we currently owe a combined total of $16,950 on our credit cards, we're almost to a big milestone! By the end of this month, I will have paid off all of my credit card debt, leaving only Hubby's debt left!

My current credit card debt is $2858, while Hubby's is $14,092.

Of mine, $482 is for work-related expenses that I will be getting reimbursed for. I've already paid my regular bills this month (student loans, car loan, etc.), so I can use everything that's left in my bank account to pay towards this debt... and I can pay it off completely!!!

SmartyPig

I finally signed up for an account with SmartyPig. I heard about it when they first came into existence, but I didn't like some of their terms & conditions. Then they changed their policies, but I was actively in debt-reduction mode and didn't have any extra money to set aside towards savings goals or expenditures.

Now I'm nearing the point of being able to really start saving aggressively. My credit card will be paid off by July 1st, and Hubby's credit cards will be paid off within a year (hopefully sooner!). We delayed some home improvement projects that we had planned on doing this year, to give us more time and money to devote towards other things.

I'm sort of testing the waters with SmartyPig, so I only set up one goal initially. Once I get comfortable, and my last credit card is fully paid off, I'll set up a few other goals.

Here are our goals for this year:

1. Vacations/Travel: $3,000.
2. Home Improvement: $2,000.
3. Fun Money (for big-ticket items): $750
4. Car Insurance Renewal: $750
5. Savings/2nd Mortgage debt reduction: $7,000

So has anyone else tried out SmartyPig? Any opinions, reviews, likes/dislikes?

Updated Progress Bars

I updated all of our debts today, including the progress bars on the right side of the page.

Car Loans: $10,725

Credit Cards: $17,671

Student Loans: $49,575

Mortgage: $164,077

That means we paid off $2053 in debt principal (including $171 on the mortgage) during the month of April... which doesn't seem too bad.

It's hard to imagine having that much extra money in our bank account each month, if we didn't have to make nearly $800 in car payments, $300+ in student loan payments, etc.

Status Report, as of 4/30

We made a small dent in credit cards this month:

His: $13,634

Hers: $3,899

TOTAL: $17,533

We're waiting on a few refund checks to come - our state income taxes (just over $400), and a refund of overpayment to our mortgage escrow account ($1375). Those will be put straight towards credit cards, and we don't have any major expenses this month - so by early June, we will probably be able to knock out my credit card completely, and have Hubby's paid down to around $12,500!

I went on Kelly Blue Book this week to find out how much our cars are worth. One is worth about $6k, the other is around $9k. We currently owe $3k & $8k - so we actually have a tiny bit of equity in each car! We have absolutely no plans to sell either car anytime soon, but it's nice to know that we could get rid of either one and still come out ahead.

Slow Progress

Things have been pretty tight lately, and we're not making much headway. Last month I only paid the minimums on my credit cards, so that I could set aside the rest to put towards several upcoming expenses:

We thought we were going to owe $1300 in income taxes to the IRS, due to some errors with our employers withholding too little, but it looks like it'll come out closer to $600 (and we will be getting a refund of close to $500 from state). It will be close to a wash in the end, but we need to front the $600 payment. We still haven't filled out our tax returns, so I don't know the exact amount.

Our car insurance renewals are due, for both vehicles, just shy of $1000 for six months. It's predictable (every April & October), but this time our premiums went up. Nothing we did, but the insurance company said that they've had more claims than usual (with most makes/models), and when that happens it means they adjust premiums upward.

Hubby spent $700 (he has a $2000 annual budget for discretionary 'big-ticket' items, like a computer), and we've got about $500 in normal springtime house expenses (weed killer, pesticide, grass seed, new mulch & topsoil, minor maintenance items).

We also have several smaller expenses over the next few weeks: a new windshield ($300), traffic fines ($125), vet bills ($150), water/sewer ($90), quarterly student loan ($120), wedding gifts ($150), wedding apparel/accessories ($75).

Prepay Rent?

Earlier today I had a discussion with a friend who is planning to move later this spring. Her & her husband are going to try to negotiate a lower monthly rent amount, and are going to offer to prepay a significant amount (6-12 months) if the landlord or management company will agree to reduce the payment by about $100/mo (roughly 15%).

I think this is a really bad idea; it seems like they would be putting themselves at significant risk with little room for recourse if something bad happened. When I pointed that out, they didn't seem to think it was a problem (or even a real risk). Some specific scenarios that would concern me:

- The building catches fire and is damaged or destroyed. Renters insurance only covers the contents, so although the owner would likely have insurance to rebuild, they would need to find another place to stay (and it takes time for insurance claims to get processed). The insurance won't refund prepaid rent, so they would need to get that back from the landlord (possibly by filing suit, if things turn sour).

- The building has plumbing or mechanical problems (a pipe freezes then bursts, or the boiler/furnace goes out for several days, etc.) and the building or their apartment unit becomes uninhabitable, they have to trust that the landlord will take care of it expeditiously.

- If any repairs are necessary and the landlord isn't responsive, they have no real recourse to make sure the repairs get done. Typically, tenants are legally allowed to hire someone to make repairs (if the landlord doesn't take care of necessary repairs in a timely manner), and then deduct the cost of the repairs (with receipt) from their rent payment. Since they'll have already paid, there's nothing they can do except wait or pay out of pocket.

- The biggest concern, if the owner gets into financial trouble and can no longer afford to pay his mortgage. They will have prepaid the rent, but if the landlord stops paying and is foreclosed on or sells to someone else, all they have is a piece of paper saying that they've paid. The new owner may not want to honor that contract, and could make life very difficult and unpleasant for them (which could also go back to the repairs/maintenance thing too). I think, technically, the contract would still be valid, but they may have to go to court (which means attorney & court fees) to have it upheld. And if they tried to recover any of that prepaid rent from the owner, they would likely just be one of many lien holders (that would go away if he/she declared bankruptcy).

How much is too much?

Hubby & I have been talking through plans for the next year or two. Not surprisingly, we aren't really on the same page.

I want to pay off the credit card debt, then aggressively tackle our 2nd mortgage. While we're working on that, I'd also like to cashflow several home renovation projects.

He has his eyes on a brand-new $38,000 sports car (financed, not saving up for a few years to buy it with cash). In the meantime, he's planning to buy some new electronics and go on a few trips.

I'm not sure that there's any middle ground that we can both agree on. I think one or both of us will end up not getting what we want.

Swagbucks Update

I wanted to give an update on my Swagbucks earnings so far.

I'm still only using Swagbucks as a search engine, I haven't attempted to earn any extra bucks by completing offers or buying stuff. But in just over 3 weeks, I've earned 45 Swagbucks, which is equivalent to a $5 Amazon gift card. The cost for other prizes varies greatly, and there is a complete listing here - but the Amazon gift card seems like the most practical overall. Over an entire year, that would be $75-100 in free money just for using the search a handful of times each day.

I haven't had anyone else sign up using my referral link (anyone, please?!), but I think how it works is that I get extra Swagbucks whenever people I refer get them - so I could pretty easily double or triple my rewards. I guess in that regard, it's sort of a Ponzi-type setup.... but it's legit.

Property Tax Assessment

Our City property tax assessment for 2010 arrived in the mail yesterday, it was quite a surprise.

From 2006 (when we bought the house) to 2009, our "fair market" value dropped by about $24,000. From 2009 to 2010, the fair market value dropped another $34,000. In a little less than four year's time, we have lost nearly $60k in home value, plus the nearly $30k in improvements we made made since moving in.

And it's even more frustrating to see what we could buy now for the amount we paid only a few years ago...

2010 Budget

We have our normal monthly budget, but I also like to be able to project out major expenses for the upcoming year (and thereby I can figure out how much debt we can pay off during the year).

Here are the major anticipated expenses, with the amounts we have currently budgeted:

Car Insurance, $1600 (half in Mar/Apr, half in Oct)
Income Taxes, $800 net (April)
Sister's Wedding, $1000 (May)
Home Maintenance (repairs, lawn care, small projects), $3000 (May - Sept)
Kitchen Remodel, $7000 (late summer/ early fall)
Vacation/Travel, $3000 (now - Dec)
Misc Spending, $2000 (now - Dec)

I've Been Avoiding this Blog

It's been a rough few weeks, our spending has been pretty high and we also found out that our income tax bill will likely be even more than I'd previously thought.

We bought most of the supplies to finish out our current remodeling project, and that was $1300.

I found out that some professional expenses ($470) isn't going to get reimbursed by my employer. Unfortunately, I was already told by my supervisor that it would be covered, so we spent the money we had set aside for this (and a bit extra!) and used it to splurge on a big-screen TV. Had I known at the time that the company would take back their word, we would not have spent the money.

Another $265 in professional fees won't be reimbursed until late summer, but I had to front it last month. I'm slightly annoyed at having been told that other things will be reimbursed/taken care of, only to have someone at a higher level reverse that decision (unfortunately, it's happened a few times since I've been at the company), but at this point I'm still pretty sure that this will eventually get reimbursed (unless I get laid off first).

Because of these three things, the credit card that I use for regular monthly expenses/spending (and try to pay off each month) has a balance of around $2600 right now, FAR more than I'd like it to be. And I won't be able to pay off much over the next few months, because:

We will owe roughly $1300 to the IRS, as it appears that our tax withholdings were screwed up when the "Making Work Pay" tax credit went into effect last spring. We're still not quite sure how this happened, because I declare "0" exemptions on my W-2 & Hubby declares "1" on his, but somehow BOTH employers reduced withholdings by the full amount for a married couple. I think we'll end up getting $400-500 back from the State, but the net total is that we'll end up owing a lot of money. Have I mentioned before that situations like this are why I disagree with Dave Ramsey and think a $1000 baby emergency fund is not nearly enough?

Our semiannual car insurance payment is due in April, and will likely be $800-900. We actually have two separate policies that renew within a couple weeks of each other. We probably should set aside $150/mo so that we have the full amount when the bills come, but instead we've always just chosen to cash-flow it. Instead of paying extra to our credit cards, we just shift the money to the bills instead.

Income Taxes

Our W-2's, 1099's, 1098's, and all the other tax forms have been arriving in the mailbox. We've finally received all of the major items, I think, and are just waiting on smaller stuff (like 1099 from last year's state refund & bank interest statements).

The good news, we made $110k last year.

The bad news, not all of that was actual income. Some of it was taxable fringe benefits, like tuition reimbursements. Some of it was from self-employment, which means that we have to pay an additional 15.3% tax PLUS our normal tax bracket.

I ran though some very rough numbers, and I think we will end up owing money this year. The State of Michigan has some pretty hefty penalties and interest, so we always deliberately over-pay them... I think we will get around $400 back from them. We will almost certainly end up owing the IRS though. I've been doing our taxes for several years now, so I have a pretty good handle on what our expenses & deductions are, and I'm estimating we will owe around $700. So much for getting a few hundred dollars back.

In all my estimating, I also realized that our charitable contributions are way less than we should probably be giving. Last year we gave only $100 in cash donations (with receipts). That's less than 1/10th of 1%. We've never tithed, and neither of us grew up in households that tithed... so we've discussed it and both don't feel comfortable giving away 10% of our income. Especially not now, when we have so much in debt (and such a lengthy & expensive wish list for things we'd eventually like to do, like buy a larger house with a basement, travel, save for kids' college). But I think we need to try a little harder... maybe get it up to at least 0.5% or 1%.

The SwagBucks Bandwagon

I've finally jumped on the SwagBucks bandwagon.

Basically, you sign up with them (just name, email address, and mailing address) and then use their site as a search engine (instead of Google or wherever else). Every few searches, they award you a SwagBuck. Once you earn enough, you redeem the SwagBucks for gift cards (to Amazon, Target, restaurants, etc.). They have various redemption limits, but for a typical month you can earn anywhere from $10-25 dollars in rewards.

They have a variety of offers that will earn you additional SwagBucks (sign up for Netflix, open a credit card, buy stuff from their partners, etc.), but just using the search engine feature earns plenty and is the easiest.

Upside: It's free money. It's an easy way to make a little bit for doing what I already do.

Downside: The first few search hits are often sponsored links. Although they clearly say, "sponsored by..." next to the link, you do have to scroll past some of their paid advertisers. It doesn't bother me though.

For any readers who use SwagBucks, I'd love to hear more about your experiences (good or bad), and any suggestions you might have. And if any of you don't, consider checking it out. The link below has my referral (I get bonus bucks when someone signs up using the referral link).

Bad News from work

My boss called me into his office today, telling me that he had some bad news. He didn't shut the office door, so I knew it wasn't going to be too serious...

But he told me that the VP of the company has denied my reimbursement request for the $469 review course I'm taking. It was previously approved by my immediate supervisor (after he double-checked with our Human Resources director about company protocol), and two other supervisors (each with a slightly higher level of authority) - and then when it went to the VP it was denied.

I had been checking the mailbox daily for the $469 check, so now I need to redo our budget and figure out how to cover the shortage. Most likely, I will carry a balance on the credit card that the class was charged, and will hopefully pay it off in late February or March instead.

Saturday Shopping

Went out to dinner, $20.

Picked up snacks at the store, $26.

Bought stand for the new flat-panel TV, $320.

For dinner, we used a coupon to save $4. Unfortunately, we already had dinner thawing in the fridge at home, but Hubby had a craving for something else. I probably should have insisted on eating at home (my dinner didn't taste very good, and was rather unhealthy).

We went way overboard on snacks. In fact, we went out shopping to buy some, then we went BACK to the store to buy more. Popcorn, candy, brownies, cake, frosting, sodas. About the only thing we bought that we actually needed was cat food.

The TV stand was more than I had wanted to spend (my original limit was $250), and was something we didn't really need either. We already have one that is in good condition and is plenty big/sturdy, but it's a modern style with glass shelves and it's difficult to keep clean. I wanted something a bit more traditional, made of wood and with doors, and I wasn't able to find much that I liked.

Extra Money

Lately I've been inspired to try and earn a little extra money. Our side business (which only takes in a couple thousand each year) has been slow, and there haven't been any promising leads for the upcoming months. Hubby's contract jobs are also all over, and he's been wanting a break so that he can spend more time relaxing.

We don't have a lot of junk laying around, so I can't really do a garage sale or sell much on Craigslist... and I don't want to be tied down to a set schedule at another job making minimum wage... and I can't take on any freelance work myself... so I've spent hours pondering what I might like to do. I was originally thinking of making handmade goods and selling them on Etsy, but now I'm leaning towards resale.

I've been reading books and listening to podcasts about it, and there's definitely the opportunity to make some extra money picking up used things and reselling them. It's time-consuming, and there's a bit of a learning curve with figuring out what to buy that could be resold with a reasonable profit margin (especially after buying packaging materials and shipping), but it's completely flexible. I wouldn't be able to even come close to replacing my current income, but I could at least earn a little extra to pay for a vacation or something.

I'm thinking, best case, I might be able to net $5000 this year. Anyone else have experience with this sort of thing?

After Credit Cards

Lately I've been spending some time thinking about what we'll do with the "extra" money each month, once all of our credit cards are fully paid off. Assuming no major catastrophes (job loss, medical emergency, etc.), we will be able to pay off the remaining ~$20,000 in just over a year.

We'll definitely increase our discretionary spending, so that we can go out together (movies, dinners, concerts, weekend trips) and to lunch with coworkers a bit more often. We'll also spend more on clothing and sporting gear.

We'll have to start saving for auto repairs & a new vehicle, as the one that will be paid off at the end of 2010 will be five years old but will have well over 100k miles. It should last for at least a couple years, but it will likely need a couple thousand dollars in maintenance and repairs to stretch the life out longer. We will probably set aside the monthly payment amount ($442) to use for repairs and eventually a down payment on a new car.

The biggest thing that I'd like to tackle is paying off our second mortgage. If we can pay an additional $1000/month on it (which should be possible, with no credit cards), it'll take only two years to pay that off entirely.

Progress Tracking Bars

Made some changes to the blog this weekend, namely:

1.) Getting rid of ads. I was curious if I'd be able to make any money from ad-revenue, and it turns out the answer is pretty much no. Over six months, I've earned less than $20... not even enough to make it worth my time to jump through Google AdSense's paperwork (since they count it as income, they need your social security number, banking info, etc. so that they can verify identities and send paperwork for tax purposes). I might put them back at some point in the future, but they are gone for now.

2.) Added progress bars on the right-hand side. Although I'm tracking each individual debt separately (e.g., mine & Hubby), the bars just show the total by category. We also have our mortgage debt that isn't shown.

Goals for 2010

I've written two separate lists of financial goals for 2010, and I've been debating which list to post to this blog. One list contains goals that are realistic and attainable, and offer a substantial bit of wiggle room for any splurges and unexpected expenses. The other list would be a stretch, and would rely on strict budgeting throughout the year, and earning extra money to offset any unexpected expenses, vacations, etc.

We have a few major planned expenses for 2010, but we aren't sure of the cost. I have to buy a bridesmaid dress (plus alterations & accessories), buy a bridal shower gift, host a bachelorette party, and a nice wedding gift. We have a major renovation project planned (kitchen remodel). Hubby will be attending grad school during the summer and fall terms. There may also be some health-related expenses this year (there are a few specific items of concern, and it will be another month or two until we can find out more). So with that, I'll err on the conservative side for goals.

1. Pay off my credit card completely (currently $4k).
2. Pay down Hubby's credit cards to <$5000 (currently $15,300).
3. Pay off Hubby's Perkins student loan (currently $995).
4. Pay off Hubby's car (currently $4334, payoff scheduled Nov '10).
5. Pay down my car loan to <$6k (currently $9669, per payment plan).
6. Complete master bathroom & kitchen remodel, paying in cash (estimated $10k).
7. Splurge on a nice vacation, paying in cash (estimated $2-3k).
8. Maintain at least $5000 in emergency fund (currently $5025).

My "stretch" goal would be to set aside another $5000 by the end of the year, using it to either beef up our emergency fund, to pay off Hubby's credit cards completely, or to reduce my auto loan balance or our second mortgage balance.

New TV

Yesterday evening, while we were out for a nice New Years Eve dinner, I mentioned to my husband that I would be okay buying a new big-screen TV immediately if it were under $1000.

We've been talking about replacing our 42" flat-panel plasma TV (which is four years old, and doesn't have high-def), but the TVs that he'd been looking at were all 55" and with prices around $1700. I'm not quite ready to spend that much money yet, and I had wanted to be able to pay for it immediately (with cash).

Ideally I'd wait another couple years, until all of our credit cards are completely paid off - but Hubby doesn't quite share my enthusiasm & intensity towards becoming debt-free. I can convince him to delay major purchases, but have to carefully weigh that against the very-real possibility of him just going out and buying what he wants using "his" credit cards. Realistically, I could have postponed the purchase until the second half of 2010.

After dinner, we went out for a short shopping trip. He found an acceptable 46" LCD-TV (with decent reviews) for $899, so we decided to go ahead and buy it. Including an HDMI cable and sales tax, the total was just under my magical $1000 limit.

The entire purchase went on my daily-use credit card (which I typically pay off at the end of every month), and will be paid off sometime this month. My other credit card (currently with a balance of $4000) will be paid off a bit slower... perhaps in March now?

2009 Goals - In Review

I had set out five financial goals for 2009 back at the beginning of the year:

1. Contribute $200/month to emergency fund (Met, but only by averaging over the year)
2. Achieve balance of $5000 in emergency fund by end of 2009 (Met! Current balance = $5031)
3. Eliminate credit card debt by end of 2009 (Fell Short! Year-end balance = $4000)
4. Pay off Perkins student loan (Met! Current balance = $0!)
5. Pay down Stafford student loan to <$25k (Met! Year-end balance = $24,160)

I had really hoped to be out of credit card debt by the end of the year, but we've had a number of setbacks that I hadn't anticipated when I established the goals. A $1700 home repair back in January. Chase increased my husband's minimum credit card payments by over $500/mo in August (which means his credit card balances are going down quicker, but mine are decreasing slower). We had some unexpected income tax liability for employer-provided tuition assistance, which reduced my husband's take-home pay for the past 3 months. His salary was also frozen for this year, which meant about $600-750 less in take-home pay than originally projected.

We also made a few purchases that I hadn't really budgeted for when the goals were established. Although we've continued to make improvements to the house, it seems like we consistently run into a problem every time we start a project, increasing the total cost (often substantially!). We bought a new iPhone, went on a few mini-vacations, and bought a new big-screen TV.