Author Topic: What's on YOUR 2018 FI to-do list?  (Read 1120 times)

Fi365

  • 5 O'Clock Shadow
  • *
  • Posts: 34
  • Age: 32
  • Location: 50 miles outside of Washington, DC
    • Fi365
What's on YOUR 2018 FI to-do list?
« on: January 08, 2018, 09:17:32 AM »
There are so many ways to make more money, save more money, and get more strategic with your money on your journey towards FI! What are YOU doing during 2018??? What's on your FI to-do list???

Here's how the Fi365 family is optimizing our $$$ during 2018:

- Get life insurance. I think one of the primary psychological reasons that I hoarded $112,000 in our boring old savings account last year was because I wanted my husband and daughter to be fine if something happened to me or if my self-employment miracle went down the toilet. That's what life insurance is for! Most of that hoarded money belongs in investment accounts, not in the regular bank accounts. Mr. Fi365 has a small plan available through his Federal government job and we plan to increase his (from 1x his salary to 5-10x his salary). I plan to purchase a $1,000,000 of life insurance (5x my salary) for a 10-year term. Most families with small children purchase 20 or 25 year terms--to cover their children until they go off to college--but we're not most families. We should hit FI within 10 years, if not sooner, and we'll be self-insured after that (i.e., if one of us dies after that 10-year period, the other spouse will be totally fine financially because we'll be living off 4% of our investments and our rental condo's income).

- Get a will. Our daughter is 2. Why didn't we do this 2 years ago. Parenting fail! Not a cost-savings, but a necessity.

- Continue transferring/rolling over all of our assorted 401ks and IRAs into Vanguard's VTSAX for time-savings and cost-savings. We drank the VTSAX kool-aid after reading JL Collins' Simple Path to Wealth in December 2017 and it takes a while for all the transfer and rollover paperwork to go through.

- Transfer the daughter's 529 plan from USAA to Vanguard. Lower fees. Ease of having everything in one place.

- Cancel personal property insurance on my engagement ring. Mr. Fi365 bought insurance on my ring--valued at a whopping $2,000--12ish years ago when we got engaged. We pretty much forgot that we were paying ~$20/year for the insurance and cancelled it. If I lose my ring, then we probably wouldn't replace it anyway. Or, we could replace it with the money from our boring old savings account.

- Cancel our rental condo's PMI. Our understanding is that private mortgage insurance is supposed to go away once you've paid down the mortgage to the point that only 80% of the loan is remaining. We've tried calling the mortgage company a few times in the past and finally sent in a letter. We have to keep following up until the ~$100/month goes away. Yes, we're planning to pay off our rental condo this year anyway. But we might as well save a little along the way.

- Let my LLC's Dropbox Pro subscription expire. I pay $99/year for a huge amount of storage on the cloud. I'm going to transfer my business files to Microsoft 365, which I need to purchase in order to get Excel, Word, PowerPoint, etc. anyway.

- Let our Amazon Prime membership expire. I read an interview with Jeff Bezos where he mentioned that families with Amazon Prime memberships purchase about a million times more stuff than families without Amazon Prime--around $1,500 per family per year if I'm remembering the article correctly. Sure, free shipping and tv shows are nice, but if we really "need" an item, we can drive to the store to get it. When buying becomes inconvenient, we'll probably avoid buying a few items altogether.

- Let our cable tv package expire. I think we have a 2-year package that should expire in Fall 2018. We plan to keep the internet portion of the package but drop the cable tv. Over the course of our 11+ year marriage, we've had cable tv for ~3 of those years, and our lives were better without binge-watching.

- Open a solo 401k plan for my LLC to begin using in 2019. I currently have a SEP IRA and can contribute ~$30,000/year. With a solo 401k, I could contribute as both the employer and the employee, bringing my max contribution up to ~$50,000/year--an additional $20,000/year invested.

- Finally figure out what this Roth conversion ladder is all about and DO IT.

- Find ways to maximize tax savings. For example, should both Mr. Fi365 and Mrs. Fi365 be contributing to our daughter's 529 plan in order to deduct the full $4,000 x 2 accounts = $8,000 from our Virginia state taxes?

- Bring lunches 4 out of 5 days of the week. Mr. Fi365 often feels like he "has" to go out with coworkers so that he's not left out of the social circle. We're going to cook double batches of all our dinners and eat leftovers Monday through Thursday. He thinks that socializing on Fridays will be the "right" amount and I'm all for it.

- Continue building passive income streams for my LLC. This is my fourth year of self-employment and each year I get a little better with passive income. During 2017, passive income--YouTube ads, affiliate links, etc. for my company's totally separate blog--brought in $1,866, which only came out to $155/month, and was only ~1% of my $209,962 gross income. BUT that $1,866 will still make a dent in our FI journey and brings me one step closer to having the option to retire altogether. I'm going to consider ad placement for my company's blog and will continue ramping up the affiliate links.

- Paint our (town)house ourselves. A painting company said it would take $3,000 to paint the upstairs bedrooms and stairwells in our townhouse. (We already painted the main level ourselves and we're not worried about painting the basement playroom because it takes so much abuse.) I make $575/day from my LLC--$209,962 divided by 365 days of the year--so it hardly makes financial sense for me to spend time painting instead of doing my regular old consulting. We put painting on hold during 2017 while we thought about this decision. Obviously I wasn't going to turn down paid work to spend valuable time painting. But then, voila!, a glimmer of down-time in my consulting business over the Christmas/New Year's holiday season. I knocked out the home office in early January 2018 and will knock out the remaining upstairs bedrooms as more natural down-time appears through 2018.

How are you going to be optimizing your earnings and reducing your spending during 2018? Weigh in!!!

If you want to read more, we wrote about these 2018 plans at https://fi365.wordpress.com/2018/01/08/2018-fi-to-do-list/ and shared our 2018 family budget at https://fi365.wordpress.com/2017/12/31/2017-report/.

« Last Edit: January 08, 2018, 09:20:44 AM by Fi365 »
The steps we're taking 365 days a year to reach financial independence by… 45? 40? https://fi365.wordpress.com/

soccerluvof4

  • Magnum Stache
  • ******
  • Posts: 3313
  • Location: Artic Midwest
  • Retired at 50
    • My Journal
Re: What's on YOUR 2018 FI to-do list?
« Reply #1 on: January 09, 2018, 03:08:56 AM »
Welcome! and you have quite a list :-p

For me since I have been here awhile mine is a bit shorter-

Churn 1 or 2 credit cards

Remodel Bathroom

Put 100% of my wifes income 401k, HSA etc..

Get a will done

" In life you don't get what you deserve you get what you negotiate"

Trifele

  • Handlebar Stache
  • *****
  • Posts: 1249
  • Location: US
Re: What's on YOUR 2018 FI to-do list?
« Reply #2 on: January 10, 2018, 03:17:01 AM »
Great list, Fi365!

I am hoping for a big year, as I am planning to FIRE next year.  My 2018 to-do list:

- Achieve our FIRE savings number
- Pay off mortgage
- Hopefully finish super major house remodel
- Re-do our wills
- Rehab my shoulder injury
- Get fitter in general.  Make it to the end of 2018 in good health.

EmFrugal

  • Stubble
  • **
  • Posts: 141
  • Age: 35
  • Location: DC Metro
Re: What's on YOUR 2018 FI to-do list?
« Reply #3 on: January 10, 2018, 01:45:26 PM »
As of right now, I only have one thing I want to focus on for 2018 (I feel like we are doing pretty well everywhere else).

Groceries: I want our weekly spend to average out to about $150 per week for this DC metro family of five. Thus far it has come out to $144 the past two weeks, so we are on track! Before I paid attention it was at $250 with too much spoilage/waste. Over the past few months it came down to about $180, but I think there is more wiggle room. So $150 or less is the weekly goal.

JSMustachian

  • 5 O'Clock Shadow
  • *
  • Posts: 51
Re: What's on YOUR 2018 FI to-do list?
« Reply #4 on: January 10, 2018, 02:00:01 PM »
My goal for 2018 is to not buy any "stuff" for the entire year and save every available dollar that comes in to achieve a 70% savings rate.

One budget area I want to reduce is food. We've been spending $350 a month for my wife and I. I looked up some low cost meal plans and started calculating the costs of each meal. Hopefully we can get it down to $200-250 a month and pocket another $1200-1800 in savings from that.

We also have our first baby coming in April 2018 which will make saving this year more of a challenge but we are determined to make it work.

newgirl

  • Stubble
  • **
  • Posts: 151
Re: What's on YOUR 2018 FI to-do list?
« Reply #5 on: January 10, 2018, 02:19:32 PM »
Focus on groceries from a "no food waste" perspective - scale recipes down so that they serve 2 instead of 4 or 6 (we're not big leftover people), serve the toddler smaller portions of meals and milk that she will actually finish so I'm not constantly throwing out half of what I give her. Make commonly purchased pre-made things (hummus, spaghetti sauce, salsa, etc) from scratch and portion out what we will actually eat. Eat meat for only 1 meal per day instead of 2-3 meals.

Optimize phone bill - I'm on Sprint Unlimited now, but will at LEAST switch down to the 2GB plan to save $25/month, and will check into the costs associated with switching to Xfinity Mobile which should save an additional $20/month

Get wills and estate planning documents done - partner and I have a budget line item for the attorney's fees, we should have this saved up in another 2 months.

Sell unneeded crap - so far have made about $600 doing this, have much more to go. Anything that isn't worth the time of selling will go straight to Goodwill. We have too much stuff, particularly baby stuff. Along with this, I'm instituting a "if you want to buy something, you have to sell something" for unnecessary purchases. There's a few things that I have a weakness for acquiring, I'm not opposed to letting myself have a little fun but I've decided this cannot be funded from our budget - if I want to buy that one perfect dinner plate to complete my set, I have to sell enough things to fund it.

Work on getting partner to increase savings - we have separate finances (unmarried), and he likes to see his money in his paycheck. I'm going to try and get him to increase his 401k contributions by 1% every quarter this year.

Very interested to see what other people will be focusing on this year :)


honeyfill

  • Stubble
  • **
  • Posts: 173
  • Age: 61
  • Location: Tucson
Re: What's on YOUR 2018 FI to-do list?
« Reply #6 on: January 10, 2018, 03:52:25 PM »
My big thing is to figure out Health Care for the remainder of 2018.  My plan is to retire in April and we will already be over the max income for ACA subsidies by then. 
any body got a link to a simple step by step for reducing income to to meet the limits?
I've heard  that you can front load your 401/IRA/HSA to max out for the year in the first 4 months, for a married couple over 55 that means 92k of tax free income.
48k 401k     + 13k  IRA + 24k Income tax deduction  + 7500 HSA = 92.5k Tas Free
 
Then you can earn up to 80k for a family of 3 and still get some ACA subsidies?
 
 172k of earnings and still get subsidies cannot be right can it?!!!




honeyfill

  • Stubble
  • **
  • Posts: 173
  • Age: 61
  • Location: Tucson
Re: What's on YOUR 2018 FI to-do list?
« Reply #7 on: January 10, 2018, 05:02:14 PM »
I did some more research. It looks like the 24 k deductions is not counted  for MAGI. that brings your total tax free income down to 68k.  Then your sweet spot for subsidies seems to be around twice the poverty level. For 3 people in 2018 that is about 40k.  that adds up to 108k instead of 192k.

So it seems like  we should work until we can fill up our 401k, ira and HSA to 68k.  (fortunately we can put  large portion of our income into those accounts.)
Back of the envelope calculations show we can work through April or May and show no income or very little. We withdraw about 100k from taxable accounts but keep the MAGI low by taking out cash and selling high basis mutual funds and equities. 
I'll run this by  a accountant  but meanwhile I need to start maximizing my 402k, ira and HSA today!! We will have to live on 100k for the year but with really low insurance costs that is doable. 
Let me know if you see any flaws with my plan.



WootWoot

  • Bristles
  • ***
  • Posts: 363
Re: What's on YOUR 2018 FI to-do list?
« Reply #8 on: January 11, 2018, 08:51:36 AM »
One thing I am doing is changing the allocation of my 403(b). I've had it on autopilot for more years than I'd like to say. I am learning about investing and ready to take more risks.

Also, I think my spouse will be eligible to collect Social Security in late 2018 so we're hoping some of that can be put in the bank.

I know this happened in '17, but I increased what I'm putting in my 403(b). I'm already past what my employer will match.