2012 End of Year Financial Review

Here is my 2012  financial review!  We are debt free except for our mortgage so we are focusing on retirement and college savings.  I do have 6 months in the emergency fund but my security gland is large.  I follow Dave Ramsey plan of advice so we are currently doing steps 4  Retirement (I need to step this up) and Step 5 college at the same time. 

While not a goal our Net worth did increase $22,000 this year in saving, retirements, college funds, and mutual funds!  This doesn't include our house. 

Here are the goals that I set-up for ourselves!

1. Continue funding DH 401k at 12%

We did this-I really need to make sure we increase that this for the upcoming year. 

2. Continue to deposit $400 a month into a Roth IRA for me.

 This is done through automatic deduction

$4,800 funded

3. Save $5,000 outside of retirement and college saving plans. 

I really wish we had we only had $3k saved this year.  

My son who has some learning disabilities we have him in some extra programs that can be quite pricey to the turn of $300-$500  a month.  That is one reason we were not able to save  $5000 but is well worth it. 

4.  Save $100 a month for college for our 3 boys 

Two of my sons have a 529. My 3rd has learning disabilities  and I am not sure if he will go to college. I have money in a balanced fund for him. 

5. Excess tax return money (and money saved via self employment) will go towards our drive way

We used the excess tax return money towards a down payment on my oldest son braces and in our emergency fund plus doing some of my son's autism services.  We didn’t do our driveway that will be our home maintenance goal in 2013 

My husband and I will be setting down for a budget meeting for the upcoming year.  I think I need to work a little bit more in jobs especially as college is now 4 years away. Yikes. 

Don't Buy Stuff you can not afford -simple enough advice

Saturday night live skit with Amy Pohler and Steve Martin.   Funny but very true!

Don't buy stuff you can not afford

If you do not have any money, you should not buy anything

Buying expensive stuff  with SAVED money

Frugal Five Meet Melissa from Arizona

Melissa   is a wife, mom   of one and works at home living in Arizona. 

What is your financial life?
I am married  for 2 years  with a one year old girl. I stay home full time but also work at home doing call center work. My husband is a painting contractor right now and picks up odd jobs.  We have a bit of credit card  debt that we are trying to pay off with some really high interest rates. My work at home job is primarily to pay off the credit cards 

What is your budget buster?

The credit card debt is hurting us-we have over 15k of debt that I am trying to pay off. I am trying to use Dave Rasmey baby steps. We have 1k as our baby emergency fund and are currently on step 2 right now.

What is your favorite money saving tip?

My   most important money saving strategy is to buy secondhand. When I  need something, first I check to see if we can get it secondhand, and if we can't, then we get it new. I shop at a large consignment  store and also at several thrift stores. In my opinion, privately owned stores tend to be too expensive on many items, charging almost as much for used things as they would be new on sale. I get almost all of our clothes used, the only thing I won't buy used is underwear or socks .  My daughter has brand names at really good prices and I hope to be able to “sell them them back.

If you had an extra $1000 what would you do with it?

I would take $1000 and put it towards the credit card debt. I have one debt that I can completely wipe out.

What is your best resource for frugal living? 
When I decided to quit my job to stay home with my daughter   I started searching the internet for tips and websites like thefrugalmom.net and savingadvice.com  were a big help to me.

Your not poor if you earn $100,000 a year

There was a recent article on Yahoo finance How to Earn $100,000 and Still Feel Poor.    My husband and I have never made 100k a year we have been close-our highest before takes was 95k. Certainly we didn't feel poor then and don't feel poor now even when our annual earnings are down. .  I think they need to reevaluate what "the basics" are and what "poor" means.  I think she could have rephrased poor with the word tight...but that really would be as good as poor and not have over 10k comments. 

They really said : "Is six figures the new minimum wage?"  


No.   It is not.   Making $100,000 is nothing at all like making minimum wage in any way.  There is really absolutely  no comparison   Minimum wage is $7.25 an hour in this country with some states a bit more.   That works out to $15,080 per year if you assume 40 hours a week for 52 weeks.    Making less than $300 a week is  not the same as $1900 a week.  


Here is their monthly expense breakdown 


$ 350 a month for utilities-  Not unreasonable 
$ 300 for car insurance,  -Seems high we have  $120 a month for 2 cars 
$ 175 for Internet, cable and phone.   High-Comcast or many other places have triple play deals for $100 or are they including cell phones 
$1222 a month on our mortgage  Actually not too bad 
$ 250 a month extra on the mortgage
$ 300 on a car loan.    Hmm they claimed no  debt  highly recomnmed that they look at Dave Ramsy drive free plan. 
$ 500 a month on gasoline  higher but they maybe driving alot could look at way to save on gas 
$ 800 on retirement  way too low they should be saving double to even hit 10% of their income 
$1250 for college ($15,000 a year for tuition and books)  Kids need to pay for this and for community college it seems very high.  $4k annually for community college. 
$1000 a month on food.  way to high for a family of 4 even with growing boys- I have 3 and we spend $600 the most a month




I am seeing alot of missing categories  clothes, vacation entertainment.   I don't live in their shoes but their cost of living area is lower than mine and we are  making less than they.   I don't feel poor.    

So what are you thoughts.... 

Why should they get a free pass?

"President George W. Bush will outline on Thursday a plan to freeze mortgage rates for five years for many homeowners facing sharp interest-rate resets, an industry source said on Wednesday.

The source, who is familiar with details of the plan, said it would cover subprime loans originated between January 1, 2005, and July 31, 2007, with rates that are due to reset between January 1 of next year and June or July of 2010.

The plan is primarily aimed at borrowers who can afford their existing rates and who are current on their payments, but who would face default when the rate resets higher.

Among those borrowers, homeowners whose credit scores have risen since they took out their loan would qualify for "fast-tracked" loan modification that would hold their interest rate steady for five years.

Borrowers whose credits scores had not improved could still qualify for a five-year rate freeze, but would face more scrutiny before receiving any modification.

http://news.yahoo.com/s/nm/20071205/...wVrUMv kE1vAI



I really have mixed feelings about this. While I've been saddened by this housing bubble and the pain it is causing those who got stuck with really nasty ARM's I also know of a ton of people that leveraged their homes like crazy to live a life full of extravagant extra's. I know several people in town who have bragged about refinanancing their houses and takign the extra money out.

We drive cars for 10+ years or until they cost more to maintain then it's worth. We carry no credit card debt and live beneath our means, and have a modest lifestyle. Maybe I should have done the ARM at a crazy low interest rate too.

I just don't get some people. They say "Oh, I didn't understand what I was getting into," or "The bank loaned me the money so they must have thought I could pay it back," etc. . HELLO!! WAKE-UP PEOPLE! A home is most people's single biggest purchase and if you're too lazy to do the research and educate yourself and figure out exactly what you can afford, what all the terms being tossed around really mean, and exactly what you're committing to before you sign that dotted line, I have no sympathy.

I don't even understand those who say "this was the only way we could qualify for a house." Don't buy a house at this point in your life. Know what? That's the way it's always been. Homeownership has never been something that everyone qualifies for. You've always had to save up the downpayment, prove you could pay the loan, and have good credit. If you couldn't do that, then, unfortunately, you couldn't get into a house. I don't know when people started thinking that buying a house was as easy. I know the banks have some responsibility here as wel but people need be their own best resource.

Flashback budget now vs then

I was born in 1970s I only can't really relate too much moneywise except the oil crisis and waiting long lines at the pump.

Liz Pullman gives an idea of what typical families expenses were in the 1970 in her flashback budget.

Smaller homes The average new home in 1970 took up less than 1,500 square feet. Today, new homes average more than 2,400 square feet.

Smaller cars 1 per household The 1973-74 oil crisis led to lines at the gas pumps and a new interest in fuel-efficient vehicles. But most households didn't have multiple tanks to fill. At the start of the 1970s, only 31% of households had more than one car, according to the U.S. Census Bureau; more than a quarter had no vehicles at all.

Less eating out Eating out used to be a fairly rare treat. Eating out just one less night a week could save a whopping $1,560 a year

Driving or train vacations I think my parents were an exception to this because my Dad is from Ireland but we made several trips back Ireland in the 1970s. However most families drove to the campground (we did plenty of that as well)

Families had 1 phone number And it wasn't a cell phone!

TV was free Cable really didn't start getting big until the early 80s! I remember fiddling around with the antenna many times trying to get the local channel to come on in.

Fake Wedding cakes?

Yes, there is a new company called Fun Cakes out in Michigan that is making a fake wedding cakes that you can rent for $100 vs paying several hundred more for real wedding cake.

The inside of a faux wedding cake crafted by Fun Cakes contains mostly plastic foam, with a secret spot reserved for a slice of real cake to be shared by the bride and groom.



My sister who is getting married in September is paying about $500 for her cake. So while it may but a cheaper option, I know for sure she wouldn't do it.

Cake guest still get a piece of cake from a sheet cake provided.

Is it tacky? Maybe, but it is one way to cut down on the expenses on the brides big day.