Home > Archive: February, 2020

Archive for February, 2020

Juicing Update

February 27th, 2020 at 03:42 pm

I think I will be able to continue my new juicing habit without needing to increase the grocery budget. This is good news because I predicted that the budget would increase by $50/month. That increase would be realistic if I weren’t flexible about the veggies used. But I have discovered that Sam’s typically has 5-pound bags of organic carrots for only $3.50 and that carrots are a good base for most juices. My juice is usually mostly carrots with apples, celery, and/or raw ginger. Cucumbers are good with apples, but organic ones have been especially expensive. Perhaps in the summer when they’re in season the organic ones will be cheaper.

I’m not having any problem getting in 3 glasses each week – I usually have more. And while I’m at it I make extra and offer a ‘shot of health’ to another member of the family. I’ve gotten used to cleaning the new juicer too. It’s still not fun, but it’s not hard to do.

Thinking about wills and last days

February 24th, 2020 at 09:02 pm

Maybe this is a morbid topic but FIL’s recent death along with our ages too I guess is prompting some discussions about our wishes for a time that we might not be capable of expressing them. I never have created a living will because I want to live! I figured that that is what doctors are supposed to do by default. But I didn’t think of more detailed aspects for a time when I could be bedridden and not able to either think clearly or communicate clearly. I decided that I am going to document how I want to be treated if I am ever bedridden. From getting fresh air, to music, nourishment, being at home, etc. I am going to write it down, tell my family, and show them where the file is kept.

We wrote wills almost 20 years ago. At that time we didn’t have much in the way of assets but we were concerned about our children (only two of them then) being cared for in the event that something happened to us. So we had relatively simple wills drawn up to name a guardian and to provide him with all assets and life insurance proceeds to use for providing for our children in the event that we both died. Otherwise we each left everything to the other.

Not only have we added children, but most of those children are 18+ so considered adults now, and we’ve moved to a different state. Watching both of our dads remarry after our moms died opened our eyes on how assets pass around. For example, if I died it would be fine with me for DH to remarry. But would I want my mom’s jewelry to go to his newer wife when he died later? No! I would not. So I’d like to have some possessions included in my will that would not go to DH in the event of my death if he outlives me. Also we’re seeing how very important it is that you appoint an executor that will carry out your wishes even if he doesn’t agree with them. I want to change mine now.

And on top of those things, we now live in one of the six states that has inheritance taxes for estates, even on assets (IRAs for example) that are not included in the will. The tax doesn’t apply to items inherited by spouses but it does apply to items inherited by children.

So actions for us now: (1) Rethink our second phase of retirement when we plan to downsize to a cottage. Let’s consider neighboring states that have similar climate and terrain but are more tax friendly for our family. And if one of us dies soon, God forbid, the surviving one should move. (2) Rewrite the wills this year. Plan to revisit them every 5 years – could be on all my milestone birthdays.

I’m curious to hear of your experiences with wills – creating your own or unintended consequences of others that you’ve witnessed. Anyone have a story to share?

Student Loans

February 21st, 2020 at 05:22 pm

College funding is a priority for our family. I hate student loans so much – it seems like they hold young adults back right at a time in their lives that they should be future-focused and optimistic. We communicated to the boys early that we would do everything possible to pay for college so they didn’t need to start their adult lives fighting debt. In order to do that, there are things we sacrifice but we’re okay with it because our priorities are in line with our values. So we don’t have cable, car notes, cleaning services, or annual vacations for example, and we don’t routinely eat out beyond celebrations. (though if you read an earlier post, you know we don’t execute this flawlessly) We don’t buy cars or cell phones for kids and we don’t intend to help pay for weddings or houses.

With that stated though, there is a requirement for the boy. He must provide a return on investment for the college spending in order for us to continue funding college. DS1 didn’t do that and I cut him off after his second year of college. This was a serious ‘tough love’ move on my part. So you don’t think I’m heartless, I should say that DS1 is an extremely capable intelligent kid. He could make straight As if he busted his rump to do it. Had he been putting forth his best effort and come up short, I’d have been more compassionate – I promise. Instead it was his social life that he unfortunately prioritized. He’s an extrovert (my opposite!) and he enjoyed parties and didn’t regularly attend all his classes. Of course he didn’t volunteer this info, but I figured it out. I told him that I hoped he finished up his degree but that he’d be doing it on his own nickel. And I told him that if he succeeded, no one would be prouder than me because I’d understand what it took for him to do it.

To his credit, DS1 didn’t debate and he didn’t play the victim. He knew he’d messed up. So for a year or so, he sat out while he worked full-time. He discovered then that the jobs available to him without a college degree were limited and didn’t pay well. Then he re-enrolled at the college and he got student loans. He hit an issue at that point. Even though he was no longer a dependent for our taxes, applications for loans beyond $7500 (I think that was the amount.) required that a parent either co-sign or take them out. So he came to me. I’ll be damned before I co-sign a student loan! But because I did support DS1’s effort to finish school, I offered to be the lender instead. Today he owes me $14k. One of the stipulations of my loans was that they have to be repaid in 3 years – not 10 or more like the government allows. I want him to bite the bullet and get the debt behind him.

DS1 graduated in December and just accepted a job offer. He has two roommates in a similar position that he’s known for years. Both have entry-level jobs and are paying off student loans. (They jointly celebrated sometime last year when one of them got his balance below $100k!) So now I’m reminding him about his payment obligations and offering to help him budget his new pay. Because of the precedent I set with DS2 on splitting scholarship money, I am giving a credit to DS1 for the small athletic scholarship he received one semester.

The payments I receive from DS1 will go to house debt.

I am very proud of DS1. He finished two years of college while working full-time to support himself. In my mind, his super expensive lesson had a happy ending.

Now you know why I’ll never state that all my boys graduated without student loan debt despite it being important to me.

Tackling the Expiring 0% CC

February 20th, 2020 at 03:37 pm

My 2020 goal #4 is “Pay no CC interest or fees”.

Since I have a balance on a 0% card that expires in May, I’ve decided to do a combination of paying it off and transferring to another 0% card with no fee involved. I applied for a Bank of America card (I mentioned it on Amber’s blog earlier.) that has a 0% rate with no fees for balance transfers before mid-March. It was approved and they just completed the balance transfer.

The original total amount parked on the 0% CC was $19k. I transferred $10 of that, leaving me to pay $9 right away. I used the federal refund toward the balance; I will use the smaller state refund toward it; I used a portion of my quarterly bonus; Now I am diverting amounts from regular pay between now and May. I should get ‘er done.

I will likely just pay the minimums to BoA each month while I focus on other goals. My next focus is the EF. Then later in the year I’ll make a plan for what’s remaining on the BoA card. Its 0% special expires in April 2021.

Refund Approved

February 18th, 2020 at 10:18 pm

I can see that our federal tax refund is expected to be direct-deposited in two days. We’re getting $2606 back this year which means I had too much withheld, but next year we’ll lose $3500 in child/dependent tax credits so I’ll need to adjust withholding to prevent owing a thousand bucks, assuming all other things are equal this year. I’ll take a closer look at that during the summer after I know whether there is any increase in income and after I take some time to research any tax code changes that could impact us.

Of course the $2606 is allocated. I budgeted $900 for our annual CSA membership and the rest to the 0% CC. I over-budgeted slightly for the CSA and I also got a discount for paying it early and in full instead of using a payment plan. It was $815. That’s a ‘full share’ size box of organic veggies every week from April 22nd week to the week before Christmas.

The local delivery site is easily walkable from my house so on veggie day I block an hour in my work schedule to leave my desk and go pick them up. I like having the commitment because it insures that I get exercise and fresh air that day. I bought a used stroller at a garage sale last year just for this purpose because the bag of veggies gets heavy in the middle of the summer.

Now that I have the juicer, I may try juicing some things this year. And by the way, I’m loving the juicer! My favorite so far is carrot-apple with a little raw ginger.

Financial Progress on the College Front

February 15th, 2020 at 03:11 pm

This week included payment of my quarterly bonus from the company. I used it to pay the remainder of DS2’s apartment rent for the 1-year lease period. The only remaining college costs for him now are food and electricity – about a thousand total, and I have most of that set aside. So DS2’s college costs are essentially done.

His apartment lease is an odd one to me because it is one contract for all the boys and requires every parent to be a cosigner. Apparently housing is scarce enough around this major campus that the property management companies can make these unreasonable requirements. That was not the case at DS1’s college where each roommate had his own contract with the property management company. DS2’s roommates are good kids from our town that he had already befriended before college. It’s been an education for him though to see how differently they approach money. One waits until he sees the rent is past-due before paying it. The notice is his reminder. And there is a charge – something like $5/day for each day it’s late. Because we pay ahead that’s actually helped him avoid late payments but he has told DS2 that he wishes we wouldn’t do that because it messes him up not to get the late notice.

Also this week DS3 signed his NLI (National Letter of Intent) for his college that included some scholarship money. It feels so nice to have the college decision official and behind us.

Not Money-related, but Health

February 12th, 2020 at 08:57 pm

The only thing financial about this post is that it’s something for FREE.

Chris Wark from the Chris Beat Cancer website has the first of ten modules of his Square One program (which costs around $100 I think) available for 24 hours for free. So if you’re interested, the link to the video is here: He only does this a couple of times a year.

My mom died of cancer at age 61 so I am all about prevention.

Our Debt Culture

February 12th, 2020 at 02:23 pm

I know the media makes more money when they sensationalize, but I still get concerned when I see articles like this one posted yesterday on Yahoo Finance: U.S. Household Debt Exceeds $14 Trillion for the First Time

This chart of household debt from the article is interesting. It looks like CC debt is actually declining but student loan debt is multiplying. And auto loans haven’t wavered in popularity.

Link to article:

Maybe the Lesson is Learned By Now

February 10th, 2020 at 12:59 pm

This week I purchased dog food and entered it as part of our grocery expenses. It was a first – up until this point I’ve transferred money from DS3’s account to mine to cover the cost any time I purchased dog food.

About a year and a half ago DS3 had a GF and the two decided to get a puppy together. Well, it was not vetted with us and I was more than a little annoyed when the dog arrived. I love dogs (but not as much as cats!). And DH really loves dogs. I think DS3 knew that once we saw the puppy that we wouldn’t have the heart to tell him to get rid of it. He was right.

As typical of kids, even older ones, after the first week or so, DS3 was not the one tending to the puppy. DH did and still does the brunt of the work to take care of her and she’s high maintenance. We don’t have a fenced yard so she has to be walked and it gets COLD here on winter mornings. I was determined though that DS3 would take on the entire cost for this unplanned pet and I stuck to that. He didn’t debate it at first. He paid hundreds of dollars (some with help from the GF) for vet visits and vaccinations and then either bought himself or refunded me for dog food. I insisted that she be spayed, and that cost him over $600. He told me I should have shopped around. I told him HE should have shopped around.

Unsurprisingly, the relationship with the dog outlived the relationship with the girl. There wasn’t a custody battle – the dog became ours and stayed here. And to be honest, there’s no way DH would allow that dog to live anywhere else. The two have bonded.

So now DS3 no longer receives an allowance and he’s preparing to leave for college. My original intent was to make him take financial responsibility of the dog forever – even expecting him to find a place to live that accepts dogs after he graduates. Now, I’m rethinking because for one thing – DH considers the dog his now, and for another - I don’t want DS3 to feel pressured to get a job while he’s in college to support the dog. So after I grabbed that big bag of food this week, I didn’t transfer any money. I also haven’t said anything yet so I could change my mind. But perhaps this is a point we can agree that the dog changed owners. Now that my anger has subsided and she’s become part of the family.

Our Real Tax Rate

February 8th, 2020 at 04:15 pm

I’ve just completed our 2019 taxes. I use an online service called TaxAct to create the returns and file them electronically. It cost $72 for the federal and state filings this year. Then I did the local taxes myself on their website. Those are easy because there are no credits or deductions. I used to do our taxes manually because I didn’t trust a forms-based wizard to care as much about my numbers as me, but after TaxAct found deductions/credits that I didn’t know about resulting in hundreds of dollars for us the first time I used it, I was hooked. It also stores all our data – personal and employment – so it’s defaulted for the next year’s tax form. That saves time and reduces the risk for inaccuracy for sure.

For several years now I’ve been running a couple of calculations after the income tax forms are submitted to see how much those taxes impact our finances. I calculate our real tax rate – the actual percentage of our gross income that went toward income taxes instead of the LB household. This year our total income tax burden – federal + state +local – was 10.9% of our gross income. Last year it was 11.2% so I did improve on reducing our tax liability because our income was slightly higher this year. The best we’ve ever done was in 2015 when it was only 8.1%, and it’s impressive because that was a time when our income was lower. But the boys were younger so we probably had more exemptions and credits. I may have been maxing the 401k then too. I couldn’t keep that up once I had to begin cash-flowing some college expenses.

Another way I look at it is to calculate the percentage based on net worth instead of gross income. My thinking is that if the annual income tax burden became a fraction of a percentage point of net worth, it would be insignificant. So in 2015 – our best year for reducing taxes – our total tax burden was 2.2% of our net worth at that time. In 2018, it was 2.1%. Now, for 2019, it’s 1.8%. That’s our best result yet for the ‘how much does it hurt us’ evaluation.

Next year may be a doozy for taxes as we’ll lose the child tax credit x2 since the twins turn 17 this year. And DS2 will no longer be a dependent. I’ll need to change withholding to prevent owing money but that will wait for another time, maybe in the summer.

February Health Habit

February 7th, 2020 at 01:53 pm

My 2020 goal #2 is to adopt a permanent health-enhancing habit each month. I’ve decided that my new health habit for February will be to consume fresh organic juice at least 3 times each week.
We used to have a Jack Lalanne juicer but it bit the dust a few years ago. I’ve just purchased a juicer that’s a step up and recommended by some of the health gurus that I follow – the Champion juicer. It’s pricey so it’s only going to be a smart purchase if I really do make frequent use of it.

Consume fresh organic juice at least 3 times a week

Easily boosts absorption of vitamins, minerals, & antioxidants to provide energy and detoxification. Hydrates the body, improves digestion, keeps body in an alkaline state, promotes longevity.

Upfront – $350
Ongoing – $50/month

The ongoing cost is a guess. I already buy organic fruits & veggies but I do recall being surprised before at how much produce it takes to make a glass of juice. But on the other hand the juice will be a replacement for calories I’m currently getting elsewhere. I’ll update this number once I see the actual change in our grocery bill.

This new habit is an expensive one, probably the most expensive one I’ll acquire this year because it has both an upfront cost and an ongoing cost that are substantial. I was going to wait until later in the year to pull the trigger on this one since I have financial goals too, but I want the health benefits now. Expensive, but still cheaper than medical bills!

2020 health habits so far:
(1) Fast one day per month
(2) Consume fresh organic juice at least 3 times a week

Staying the Course to Eliminate House Debt

February 6th, 2020 at 06:15 pm

Mostly out of fear for our upcoming college expenses over the next half dozen years, I made a plan over a year ago to get our house debt paid. Our house debt is a combination of a mortgage and a HELOC. The mortgage interest rate is 3.49%. The HELOC rate, which can change, is 5.64%. So every extra principal payment I make goes to the HELOC.

In order to make it doable when I started, and also to use a method where one bad month couldn’t blow it for me, I created a schedule with defined percentages instead of dollar amounts. The percentages increase over the course of time as I should be able to find additional money to throw at the debt. As you can see (I have to get the photos to work for this post!), I need to come up with $1779 worth of principal payments this month including my regular scheduled payment. That shouldn’t be a problem. But next month, I have another percentage increase.

Only people on sites like this would understand these games that motivate me to do the right thing!

DS4 Got the Job

February 4th, 2020 at 02:24 pm

As I said earlier, I was proud of him no matter what because he took initiative and prepared himself for this opportunity. I’m glad it paid off. He’s going to be a lifeguard at a local fancy-pants hotel.

The vet bill finally cleared on the Ally CC, so I redeemed my last rewards – 80 bucks to the Ally savings account. Ka-ching.

A Closer Look at 2019 Restaurant Expenses

February 3rd, 2020 at 01:07 pm

CB's recent blog entry (January Recap) made me think about restaurant expenses.

Sometimes we eat out because it's convenient or because I didn't plan well. For those occasions of course I'd like to minimize our restaurant spending. But as CB points out in her blog entry, sometimes restaurant meals are important times spent with those close to us. We wouldn’t want to stop or reduce the frequency of those occasions. Or replace them with the dollar menu at a fast food place. But the two situations are both captured in that one budget category - at least for us. Since I keep a spreadsheet of our actual spending, I went back to 2019 to see how much of our restaurant spending was quality time spent with family.

So last year we spent a total of $3172 for meals out. [It’s okay to gasp if you need to…it is indeed a lot of money.] Of that total, $1300 (even) was spent on family celebrations at restaurants. We have a tradition of eating out on each boy’s birthday and the birthday boy gets to select the place. [The twins have to agree though because we only do one meal out in their honor.] In 2019 we also went out for Father’s Day. The most expensive meal out was in honor of DS1’s college graduation and it included 3 people beyond our immediate family. It was the nicest restaurant our kids have ever experienced. So no regrets on the $1300 total spent here.

DS3 is a competitive athlete and we travel to tournaments for him. Sometimes the tournaments are close enough to drive back and forth but usually they aren’t. So it involves a hotel and meals out when we go. It’s just the two of us and I do select hotels that have breakfast included and a kitchen with the room so we can do minor cooking. In 2019, we spent $682 on restaurant food during tournaments. I include the hotel expenses in my ‘kids activities’ budget category, so this amount is just the food. This is a grey area. On one hand I don’t want to overspend on meals out when we travel, but I do want to support DS3’s talent and passion. Maybe $682 is okay.

That leaves $1190 worth of meals that were not family celebrations or travel-related. A grand of that is probably Subway – we keep that place in business. This is where it’d be best to scrutinize. In addition to just planning better maybe I could choose a couple of healthy and inexpensive go-to meals in the Instapot cookbook that the boys like and keep the ingredients on-hand. Then the meal would be just as quick to make as a trip to the too-nearby Subway.