Author Topic: How can I (we) become more Mustachian?  (Read 8043 times)

KBecks2

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How can I (we) become more Mustachian?
« on: November 29, 2014, 02:46:50 PM »
Dear MMMers,

It is about time I posted a picture of our lifestyle and let you guys take a whack at it.  I am scared, but hopefully this will be a positive experience that can drive my family to better living.

Please forgive me if this rambles. 

I have been hanging around MMM for a while now… let's see, I started a journal around the beginning of the year.  It has been mostly great.  I have made some changes and we are starting to work on a budget, like a real budget.

Our income varies, as my husband's pay can swing a lot with bonuses.  One of my problems is that, despite using Mint for a while now, I'm still not 100% on top of what we are spending.

Basic Monthly expenses (approx.)
$1,590 -- mortgage w/ taxes
$   500 -- groceries
$   350 -- gasoline  (Note #1)
$   280 -- Tae Kwon Do (4 family members)
$   260 --  doctor / pharma / dentist out of pocket
$   200 -- "his money" (Note #2) 
$   200 -- "her money"
$   158 -- cell (Note #3)
$   150 -- Electric / Gas (Note #4)
$   150 -- College Savings Kid #1
$   125 -- College Savings Kid #2
$   120 -- church donations
$   100 -- College Savings Kid #3
$   100 -- Life insurance
$   100  -- Investing newsletter
$     70 -- restaurants
$     60 -- car insurance
$     50 -- Internet service
$     40 -- house supplies
$     35 -- brokerage trading fees
$     20 -- pet
$     15 -- Netflix / movies

Assets:
$690,000  (approx.)  Investments, including 401k, IRAs, taxable stuff (does not include kids' savings)

Stuff
$220,000 (approx.)  home value
$  13,000 (approx.)  two paid-for cars

Liabilities:
$120,800 -- mortgage at 3.5%

Income:
ranges from $4,000 (super-lean base-only pay month) - $7,000+ mo.  net of taxes and 401k contributions. 

Note #1 -- gasoline -- my husband has a job that requires driving and he is reimbursed for work miles.

Note #2 -- his and her money -- honestly, I don't think we are implementing this that well.  My husband wants $200/mo for things like lunches out and his "stuff".  I think it is important for him to feel that he still has some freedom.  I want to work with him so that he does feel he has something of his own too. I have not really been spending mine or tracking mine well (and he is not really tracking his either), but I have also gone for a few lunches in a month.  In reality, if we can afford to have pocket money, I would use mine for a little bit of clothing, buy it for life type "stuff" -- and investments.

Note #3 -- my husband's is reimbursed through work (about 1/2 of the bill).  Mine is on his plan but I might like to change to something cheaper.  I am almost one year into a 2 year contact and not sure if I can switch and save anything with the exit fees.  I want to look into Ting?

Note #4 -- may fluctuate, it's winter and the heat is on!

Note #5 -- these are just our regular expenses.  There are other things that come up during the month -- gifts, kids' field trips, school supplies, etc.etc. etc. that get handled on a  month-by-month basis. 

Thoughts:
-- I need to learn how to use Mint better.  It is confusing to me to look up some category totals, and sometimes I think it is in error. 
-- We are still working on tracking our budget and our spending.  Practice will get us closer to perfect.

I still don't know what our savings rate is.  I do not know how much we are saving.   

It's an interesting journey to work on living on less.  I feel like there is so much more work to do in terms of quality of life. 

I am so curious to get your perspective.  We are doing OK overall.  Our expenses are going up next year for health insurance, dental insurance and eye insurance, although we looked it al over and tried to make the best choices based on our real usage. 

I am still struggling over a few choices -- to pay down the mortgage or save/invest instead (right now I am leaning toward bulking up our brokerage account to where we can write a check for the balance of the mortgage at any time).  I am also debating over getting started in investment real estate and taking out a loan for that.

I did not put in a clothing number.  In November I spent $150 on boots and snow pants for the kids (I got a pair of clearance everyday shoes for me in that budget because the kids'  boots were on sale.)

Some things don't work well for this format.  For example I did sell some of our used winter boots, mittens and gloves and made a little but the new boots and snow pants cost more.  I am not getting that detailed with everything, but I am trying to be conscious and really only put money into the important things. 

Thanks for reading,
KBecks

ETA:  I just want to add that in practice, we are likely overspending some of our categories, by a little bit -- restaurants -- I need to get a tighter handle on all of it.

Also, I am SO EXCITED about going into Year 2 of flexing my frugality muscles.  I feel like I have made some very good progress last year --  things like canceling our cleaning service, trying to buy very few new clothes, shopping our car and life insurance, getting rid of credit cards, and getting more organized / switching banks.

What should our goals for this year be??? Hmmm.  Something to ponder.  I truly want to reduce our family's TV time.   We have a "free" vacation to Flagstaff coming up that is paid for by a relative (our rental car, meals and outings are our responsibility).  I would like to take the family for a weekend in Chicago.  I want my kids to learn about money, and I want to become a better, more knowledgeable investor and I want to be more organized, a better cook and a better housecleaner.  :) 
« Last Edit: November 29, 2014, 03:02:19 PM by KBecks2 »

NinetyFour

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Re: How can I (we) become more Mustachian?
« Reply #1 on: November 29, 2014, 03:14:58 PM »
Hi Karen--

First, I think tracking all of your spending (down to the penny, if possible) is really important.  It can be quite eye-opening.  If you are able to do this for 2 or 3 months and look at subtotals, you may have a couple of "Holy shit!  We're spending that much on that thing?!?!" moments.  I track mine on an Excel spreadsheet.

I would encourage you to get rid of Netflix.  (This is coming from someone who recently renewed her subscription to it--but only as a way to stay sane while recovering from a broken leg.  I will cancel it tomorrow!!)  If you have a decent library, there should be a ton of great entertainment (totally free!!) between it and stuff on the internet (PBS, for example).

I question the value of the Investing Newsletter.  I am new to investing seriously myself, but I feel like I have gotten great advice here on the forum.  I use low-cost index funds and don't think I have the skill to do much better with any other method of investing.  Between the investing newsletter and the trading fees, you are paying $1620 per year.

I would also wonder if you really need almost $500 per year of supplies for the house.

Glad to know you are considering Ting.  I switched to it about 2 years ago and love it.  My phone cost for 2014 has been an average of.....get ready for it....$4.58 per month.  That said, I do not use any data, and I just plain don't use the phone all that much period.  If you are interested in using a referral code, I can give you mine.

That's all I got right now--hope you get lots of good advice here.

KBecks2

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Re: How can I (we) become more Mustachian?
« Reply #2 on: November 29, 2014, 03:47:40 PM »
Thank you Ninety four.

-->  Tracking to the penny is important, and to be honest, Mint is just not working for me in this area.  I don't know why, but the numbers seem far off.  Maybe I should try another program or a manual accounting. 

-->  On the investing newsletter and trading fees -- I have been thinking about switching to a lower cost broker (I use Vanguard, and my trades are $7 each).  On the one hand, my fees as a percent of assets are low -- figure that I actively manage approx. $430k myself… let's see, $1620/$430000 = 0.37% of assets.  When I look at it that way, I say, oh that's not too bad. 

The investing has become a great hobby that I will continue to pursue for the rest of my life.  I enjoy it very much.  I'm honestly not willing to give it up right now.   One thing I need to check (and learn to do the math on) is whether I am beating the market, or matching the market with a lower degree of risk than an index fund.  My advisors are IMO, phenomenal.  I would expect I am succeeding in both of these benchmarks right now.  But it would be good to know for sure!

I'm going to count this one as my hobby in addition to my financial well-being.

One of my goals for 2015 should be to get a FIRM handle on all the numbers!  Math and tracking are not my favorites but they are important.

--> For house supplies, I don't really know what we are getting, however, I know we will spend money.  My husband needs "stuff" like oh I don't know, gas for the lawnmower and paintbrushes and whatever else at the home improvement stores.  I should set up a home improvement budget (and schedule, and task list).  We have some painting projects to finish and I will be buying several gallons of paint and supplies.

I am so glad to hear you love Ting!  I will need to juggle around my phone.  I have an iPhone 5 that I love, (I love the cameras and the convenience and quality of the pictures with them).  I would even love to get an iPhone 6 and use it like a mini-ipad.  So does it work on wifi most of the time and roaming when you are out?





KBecks2

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Re: How can I (we) become more Mustachian?
« Reply #3 on: November 29, 2014, 03:59:58 PM »
I have to think what our life would be like w/o Netflix.  We might be OK. :)

I have certain shows that I like to watch -- Project Runway (we buy on apple TV).  My husband is into Walking Dead.  We watched Orange is the New Black but I don't need to continue watching it.

The boys like to watch Youtube video game recordings that people make, in particular, a guy called Bereghost.

If we want to reduce TV, getting rid of Netflix would be in alignment with that goal.  Thank you for the suggestion.  :)

wwweb

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Re: How can I (we) become more Mustachian?
« Reply #4 on: November 29, 2014, 04:57:42 PM »
The investing has become a great hobby that I will continue to pursue for the rest of my life.  I enjoy it very much.  I'm honestly not willing to give it up right now.   One thing I need to check (and learn to do the math on) is whether I am beating the market, or matching the market with a lower degree of risk than an index fund.  My advisors are IMO, phenomenal.  I would expect I am succeeding in both of these benchmarks right now.  But it would be good to know for sure!

Many psychological studies have shown that almost everyone thinks they are better at investing than they actually are.  Unless you're actively tracking your returns, you have no idea if you've beating both benchmarks.  I would make tracking a top priority ahead of every other area for improvement.  With a 600k+ portfolio, you could be leaving tens of thousands of dollars on the table each year.

Here is how I would recommend tracking your investments.
1) Gather together the past 7 years of account statements (or as long as you have been investing)
2) Make a table with the date and amount of each deposit (or withdrawal)
3) Calculate the present value of the initial balance and every deposit / withdrawal using a table of S&P500 total returns (dividends included)
4) Sum the results compare the final value with your current account balance

This procedure only takes a few hours and you have no excuse for not giving it a try.  When I managed my own money, I did exactly this and it was an eyeopener.  Even though I was spending 10+hours a week studying investments, I was just barely matching the market.   After some soul searching I switched to an index approach and have been happy with the results.

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Re: How can I (we) become more Mustachian?
« Reply #5 on: November 29, 2014, 05:00:14 PM »
I have to think what our life would be like w/o Netflix.  We might be OK. :)

I have certain shows that I like to watch -- Project Runway (we buy on apple TV).  My husband is into Walking Dead.  We watched Orange is the New Black but I don't need to continue watching it.

The boys like to watch Youtube video game recordings that people make, in particular, a guy called Bereghost.

If we want to reduce TV, getting rid of Netflix would be in alignment with that goal.  Thank you for the suggestion.  :)

For only $15/month, I think I'd be tempted to keep the Netflix, especially since you don't have cable.

Mesmoiselle

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Re: How can I (we) become more Mustachian?
« Reply #6 on: November 29, 2014, 05:05:32 PM »
If you sold your house and bought a house with the equity in a low COL place, couldn't you be FI MMM style literally right now?

For a replacement for Mint, I recommend YNAB.

NinetyFour

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Re: How can I (we) become more Mustachian?
« Reply #7 on: November 29, 2014, 05:58:14 PM »
I have to think what our life would be like w/o Netflix.  We might be OK. :)

I have certain shows that I like to watch -- Project Runway (we buy on apple TV).  My husband is into Walking Dead.  We watched Orange is the New Black but I don't need to continue watching it.

The boys like to watch Youtube video game recordings that people make, in particular, a guy called Bereghost.

If we want to reduce TV, getting rid of Netflix would be in alignment with that goal.  Thank you for the suggestion.  :)

For only $15/month, I think I'd be tempted to keep the Netflix, especially since you don't have cable.

Do an experiment and go without Netflix for a month or two.  See what happens.  Worst case, you will save some money and get to know your library better.  If you can wait long enough (not sure how long Netflix requires) and are desperately missing Netflix, you could sign up again using their free one month trial.

For me, right now I have 4 DVDs checked out of the library plus 8 shows to watch on PBS before they expire.  I can't keep up with all that--why would I need Netflix?

I am enjoying some really good stuff--The Good Wife and The Americans, for example.  I am starting these series at the beginning right now--well behind lots of other people who paid money to watch them earlier.  They are just as good--maybe a bit better, since they are free.  ;-)

You stated that you wanted to be more Mustachian.  Using the library instead of paying for entertainment is quite badass, according to MMM.  Especially if you get to the library on your bike!

Chrissy

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Re: How can I (we) become more Mustachian?
« Reply #8 on: November 29, 2014, 06:16:48 PM »
Okay, some questions:

Why do you think the numbers aren't accurate on Mint?  I use it, and it's pretty accurate.  Are you withdrawing a lot in cash, or writing cheques a lot and then not categorizing them manually?  Mint will work a lot better for you if you use credit/debit cards almost exclusively.

I have your total expense at $4,573.  Your take-home pay varies between $4,000-$7,000 mo.  Do we think this is why you can't figure out what you're saving?  Some months, you've lost cash, some months you've gained a ton of cash.  I can see how your savings rate would be hard to predict from month to month!

Do the kids get allowances?  Do you ever pay for childcare?

Is the gasoline expense you listed AFTER the reimbursement or before?  This is your 3rd largest monthly expense, so it's important! 

Same question about your husband's cell... is that number after the reimbursement or before?  Is he allowed to switch carriers/plans?

How much is your homeowner's insurance?

What kind of life insurance do you have? Whole or term?

When you say you're "still not 100% on top of what we are spending," do you mean you don't know all you're spending, or you're not in control of what's being spent/how much is being spent?

Now, suggestions
:

Don't pay off the mortgage.  The money works harder for you as investments.

Given the nature of your husband's work, I'd take the income listed on your last tax return, divide by 12 months, subtract your monthly expenses of $4,573, and that should give you an approximation of what you're saving every month.

You and your husband should withdraw your allowances in cash every month:  $200 for you, $200 for him.  At the end of the month, if there's anything left over, put it back into the general funds for investment.  (If you're making purchases online with it, then you'll have to get creative:  buy a gift card with the money to use online, keep a note in your purse/wallet, or a post-it on your computer...)

School supplies can be anticipated and budgeted.  Gifts too.  Either look at the previous year's records to see what you typically spend, or look at your calendar for the next 12 months and estimate what you'll need.

You're spending $135/mo ON investing when you could be putting that TOWARD investing???  That's $1,620/yr!  FACEPUNCH.




KBecks2

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Re: How can I (we) become more Mustachian?
« Reply #9 on: November 29, 2014, 06:22:45 PM »
If you sold your house and bought a house with the equity in a low COL place, couldn't you be FI MMM style literally right now?

For a replacement for Mint, I recommend YNAB.

That is an interesting question, and it may be the point where we choose not to be as Mustachian.  I think that in retirement, moving may be an important option.  Our property taxes stink, they are $5k a year and increasing every year.  We've lived in our home for 15 years and had planned for it to be our forever house, but that is not with the goal of being financially optimal.  The location is nice, it's a great layout for our family right now, and for the kids to grow up in.

I am not sure that I could convince DH to make a big change and to have the confidence to leave work and make a move.  It would be exciting financially.  Would we pick a cheaper place but still be close to family and our current jobs?  Or would we go somewhere totally unknown?

MMM recently moved and it was like an upgrade too although he was downsizing.  He has such a great attitude.  We have not been thinking about selling our place and have in fact just did a little remodeling.  It would be very weird to sell.  Moving would need to be a real win for us in both lifestyle and finances to consider it.  How should I start exploring that?  I like our kids' school very much also.


KBecks2

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Re: How can I (we) become more Mustachian?
« Reply #10 on: November 29, 2014, 06:56:41 PM »
Many psychological studies have shown that almost everyone thinks they are better at investing than they actually are.  Unless you're actively tracking your returns, you have no idea if you've beating both benchmarks.  I would make tracking a top priority ahead of every other area for improvement.  With a 600k+ portfolio, you could be leaving tens of thousands of dollars on the table each year.


I do need to do this.  I have only been actively investing again for 1 year, and I have made some mistakes and learned a few things in the past year.  It is possible /likely that I am not matching the S&P.  My service is prepaid for 3 years, so the money is already spent (I guess I should not have included it, but it is something that I may want to renew.)  Tae Kwon Do is also paid and will renew in Feb. 

Anyway,  I don't think I am a great investor, but I think the service I am working with is great.  I also listen to a daily podcast that I think is great.  I will need to check the numbers and keep tracking them.  Thanks! 

I'm also interested in real estate investing, no one seems to knock that vs. S&P index investing.  But for now I prefer the stocks for sure.

KBecks2

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Re: How can I (we) become more Mustachian?
« Reply #11 on: November 29, 2014, 06:57:50 PM »
Ninety Four, the one thing I suck at with the library is returning materials on time -- fees!  Ack!  Videos are only 7 day loans. 

KBecks2

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Re: How can I (we) become more Mustachian?
« Reply #12 on: November 29, 2014, 07:08:50 PM »
Okay, some questions:

Why do you think the numbers aren't accurate on Mint?  I use it, and it's pretty accurate.  Are you withdrawing a lot in cash, or writing cheques a lot and then not categorizing them manually?  Mint will work a lot better for you if you use credit/debit cards almost exclusively.
Yes, we have been taking some money out to pay for remodeling, and I have been moving money around to different accounts, so there are some large numbers that have been messing things up.

I have your total expense at $4,573.  Your take-home pay varies between $4,000-$7,000 mo.  Do we think this is why you can't figure out what you're saving?  Some months, you've lost cash, some months you've gained a ton of cash.  I can see how your savings rate would be hard to predict from month to month!

We really have not ever had a base month, BUT in November / December for some reason they put all the bonus in Nov and none in December so it is a weird 2 months.  DH has pretty much always earned a bonus, although the amount is up for grabs.  I feel I should have a plan based on the base # so we can function if we ever get in that position.

Do the kids get allowances?  Do you ever pay for childcare?

Right now, no but they should.  I have been minimizing babysitters, so not much goes to that although sometimes in a year we will have a sitter.

Is the gasoline expense you listed AFTER the reimbursement or before?  This is your 3rd largest monthly expense, so it's important! 
Same question about your husband's cell... is that number after the reimbursement or before?  Is he allowed to switch carriers/plans?

Both are before reimbursement. I just asked him about reimbursement and he has 2 months of expenses to submit.  I believe he can choose his own cell plan but he needs to get good reception in a wide geographic area.

How much is your homeowner's insurance?

approx. $500/year

What kind of life insurance do you have? Whole or term?

2 Term policies, $500k each.  I just set these up through a new provider and the rate is guesstimated.
I also asked for a quote on disability, but perhaps if we get more Mustachian, we don't need disability -- maybe we don't need life???

When you say you're "still not 100% on top of what we are spending," do you mean you don't know all you're spending, or you're not in control of what's being spent/how much is being spent?

A little of both.  We are making progress in tracking and being careful with spending.  However we are not nailing down every penny yet.

My goal is to get to a zero--based budget where every month we have a meeting and decide exactly what we need in the next month and how much it is going to cost.  For example, we have decided on $600 total for Christmas. (I have purchased some gifts and have about $200 left to work with.)   I can pre-guess most things, but some little things come up like the $5 for a field trip or requests for new socks, a cavity that needs a co-pay or whatever.  But we should be able to get it pretty darn close.  :)

I like all of your suggestions and will take a serious look at the investment newsletter costs v. the benefit of the investment returns.  Thanks for the help! 
« Last Edit: November 29, 2014, 07:12:09 PM by KBecks2 »

wwweb

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Re: How can I (we) become more Mustachian?
« Reply #13 on: November 29, 2014, 07:33:22 PM »

I do need to do this.  I have only been actively investing again for 1 year, and I have made some mistakes and learned a few things in the past year.  It is possible /likely that I am not matching the S&P.  My service is prepaid for 3 years, so the money is already spent (I guess I should not have included it, but it is something that I may want to renew.) 

Fair enough.  You will probably need to accumulate a few more years of data to know if you are beating the market vs getting lucky.  One year is likely not enough, but after 3 or 6 you should have some idea how you are doing.  I gave myself 5 years to manage my own money before I made the decision to index.

Best of luck with your investing - I hope it is both fun and lucrative. 

KBecks2

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Re: How can I (we) become more Mustachian?
« Reply #14 on: November 29, 2014, 07:50:28 PM »
Thank you, wwweb.  I will keep an eye on the investing and see how it goes.  There is a lot to learn, and it's been fun.  I hope it is also rewarding.


To all,  one of the things I need to get going is the Mustaschian mindset….  right now we do not feel rich or liberated or free or anything that wonderful.  The budgeting has been tough.  We feel a little deprived.  I need to put more joy into our lives.

For DH, I would love to tell him to quit work, but it just doesn't seem like we are truly there yet.  And we like some things, we like a little vacation, a little driving, a little food, all those things that add up even if we are only spending a little here and there. 

I am not sure if we could describe ourselves as -- financially free.  His number is 1 million.  He probably thinks 1 million is too small.  I am guessing our expenses to be $3k/ month - $36,000/ year so $1m may very well be our number to hit.

I fear medical bills / expenses/ insurance, everything with that.  Our healthcare.gov estimate was $800/mo!  $800! with a 13k deductible!  Thank goodness we are still on employer health insurance.

We are not free yet.  I need to figure out how to get closer to it.  Perhaps I need to work more.  Thank you for all your suggestions and please keep them coming!  :)

pbkmaine

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Re: How can I (we) become more Mustachian?
« Reply #15 on: November 29, 2014, 08:28:34 PM »
Re: Investing and the service you like. Warren Buffett, arguably the best investor of the 20th Century, has directed that, after he dies, most of his wife's money be put into a stock index fund. Preferably Vanguard.

Chrissy

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Re: How can I (we) become more Mustachian?
« Reply #16 on: November 29, 2014, 08:50:35 PM »
Regarding life insurance:  How old are you and the husband?  How old are the kids?  I'm betting you need more coverage on him, and less on you.

Oops... add $42/mo to your budget for homeowner's insurance.

Do you AND your husband feel deprived, or just you?  As a couple, you have $400 in mad money, but you say you're not spending much of your part, so I could see how you might feel deprived.  You also have $70 for restaurants and $120 in tithing that could be tweaked for a month or two to put more cash in your pockets if you need a break.

Your mortgage is your largest expense, and maybe that's where you should focus your attention.  I've never owned, and I'm not sure what portion of your mortgage payment goes toward taxes, but wouldn't extending your mortgage to a 30-year improve your monthly cash flow by ~$600/mo?  Hopefully, someone with more knowledge in this area will weigh in...

When you have time, adjust the totals on the cellphone and the gas to reflect the reimbursement.  It doesn't matter when he gets reimbursed, just that he does. 

I think you're right about your goal number.  However, it looks to me like you are only $211,000 away from the $1M mark, adding the value of the house to your assets, subtracting the mortgage, and not counting the cars.  It won't be long now!

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Re: How can I (we) become more Mustachian?
« Reply #17 on: November 30, 2014, 04:57:53 AM »
I don't understand how you can be an investor without tracking your returns?  If you haven't been doing that, you've just been playing around with money rather than investing.   I also don't understand how you can say that your investing service is "great" if you don't know what financial returns you are getting from it?   You either need to treat your investing as seriously as you would if it were a paid job, or you need to stick nearly all your money into index funds and keep maybe $10,000 as a hobby to play around with.

Chrissy has pointed out that your list of expenses exceeds your base monthly income by more than $500.  And you keep spending money on top of that, such as on the kids' clothes.  That is partly why you and your husband are feeling deprived and strapped for cash - you are still spending at a rate at which you are not seeing the benefits of saving.     Also, because you don't understand your savings rate you are seeing the pain of "I can't buy this thing" but not seeing the benefit of "our savings rate was x% this month" and "our net worth went up by $x this year".

Chrissy was also right that you need to redo your budget showing gas and phone expenses after reimbursements - and make sure your husband is on top of getting the reimbursements fully and on time.

I don't understand how if you have just set up new term life insurance you have to guestimate how much it is costing.  Shouldn't you have seen the exact amounts before you signed the contracts?  Whether you need this insurance or disability insurance depends on how old your kids are and how well you or your husband would survive without the contribution of the other.

Your medical expenses are pretty high up in your monthly expenditures.  What can you do about that?  Fewer doctor/hospital visits? Fewer medicines? Cheaper medicines?

Your monthly house expenses are $1,590 mortgage and taxes, $150 electric, $50 internet, $42 insurance and $40 maintenance/improvements/supplies, total $1,872.   That is nearly half your basic income, so no wonder if you are feeling pinched on how you spend the rest.

Personal allowances are $400.  Savings for kids' college are $375. Your personal allowances are more than you are saving for kids' college each month.  Is that the right priority for you both?  (In other words, the savings for the kids look pretty good, but by comparison your personal allowances look pretty high.)

Investing costs are $135.  Tithing is $120.  Are you happy giving more money away on your investing hobby than you tithe?  (In other words, the tithing looks reasonable, the investing costs don't.)

Janie

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Re: How can I (we) become more Mustachian?
« Reply #18 on: November 30, 2014, 06:40:14 AM »
How are you estimating your retirement expenses at 36,000?

KBecks2

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Re: How can I (we) become more Mustachian?
« Reply #19 on: November 30, 2014, 06:57:09 AM »
My biggest problem seems to be that I am not exact on the numbers.  My husband has never really had a base month, but in Nov/December his  income was weighted to November and December will be base.  I also make part-time income but it fluctuates and it is not a whole lot… but I should count it more. My December income is estimated at $470.  I look at it and I think I suck and I should hustle more, but I like what I do.  (it is clear that I am too loose with the numbers, but getting my accounting tighter seems so challenging!)

I hope that I can learn to use Mint better so that it works better as a free tool for us.  I haven't been digging into the help files, just winging it.

You are right about investing and knowing returns and this is my weak spot.  Very much so.  The service that I subscribe to tracks its returns and is several points ahead of the S&P and it is also lower risk, it holds cash and hedges so the ride should be more steady than a S&P 500 account.  I follow that service for about 80% of the time, and then I also make some of my own trades.  I use an online tool that is also not perfect that tracks investment returns, but that a is only stock returns, does not included dividends or options income, so it is limited and not totally accurate.  That scorecard shows I am just about matching the S&P (but I am also getting dividends and options income, so I figure I am holding up OK.)   I need to get on top of record-keeping for the taxes. 

I am choosing something that is different than what MMM talks about but that does not mean it is bad or wrong, it depends on whether this is successful or not.  It's different.

I had hoped that investing in stocks and/or real estate could be my "job".  But I don't know if that is being fair and honest or not.

OK.

I have been working to spend less, although it is not super-calculated yet.  For example, I have started cutting our own hair at home and I have been shopping at Aldi and Dollar Store and really trying to keep it low cost.  We purchased our home when we were both working full time and when my husband makes consistent bonuses (which he does, if he doesn't maintain bonuses, he probably would not have the job at all) it seems like we can afford the place.  I am not seeing the benefit of we are saving X% this month because I have been unable to calculate what we are saving.  I can say things like, I threw $1,000 at the mortgage, that feels so much more tangible than when I throw it into an investment account. That is weird. 

Our life insurance is in underwriting and I did not take time to pull up the quotes for this message.  I am not sure they are on my computer vs. at home in a stack of paper somewhere.  Organization needs to be higher.

My son has ADHD an takes an expensive (generic) medication and he sees an expensive psychologist 1x a month.  Total for him is $225/mo.  We may add on speech therapy.  I think that spending on my child's health is justified. We could reduce the number of times he sees the psychologist, but I am not sure that we are ready for that yet.  In 2015 we will have an HSA, so the money will be pre-tax.

The insurance is included in our mortgage payment, so that $42 is not added in.  Are you suggesting that we move?  This would be the most difficult change for us.  Let me check our average monthly income in Mint.  Mint is showing $51,000 income over the past 6 months.  That averages $8,500 a month, but I don't know if that is solid enough to count on for the months ahead. 

For insurance, DH and I are both 44 and the kids are 10, 8 and 6.  I am getting a quote for long-term disability for $3k/month for like 10 years.  The life insurance final numbers will depend on our health tests and it takes a while before they are done.  I paid for temporary insurance to cover us until the underwriting comes through.  Our prior plan was coming in at about $1,000/year for less coverage. 

We need to track the personal allowances better, we need to track everything better.  I sort of like the idea to have the personal money in cash, sort of.  Or maybe have a special account for personal spending (with a debit card).  My husband really likes his own rewards card. I believe he is also under spending his allowance but he truly wants to have a little play money, and I think we should have it equally, even if I need or use it less.  (unless things get tight). 

Thanks for all the help!





« Last Edit: November 30, 2014, 07:00:03 AM by KBecks2 »

Janie

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Re: How can I (we) become more Mustachian?
« Reply #20 on: November 30, 2014, 08:04:58 AM »
If you want more awareness and better tracking, you might be better off entering/categorizing expense manually. You could do that yourself in excel or use a product like YNAB. They have a 30 day free trial if you want to check it out and run half price sales from time to time. It's not  a big deal to get in the habit of checking your credit card online every couple days to keep an eye on where the money goes. It can bring a lot clarity to the situation.

Regarding investment as your job (and sorry if this sounds harsh), would you hire someone who said knowing returns was a weak spot?


TerriM

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Re: How can I (we) become more Mustachian?
« Reply #21 on: November 30, 2014, 08:49:17 AM »
I want to third the suggestion to use YNAB.  I haven't used Mint, but I have used Quicken, and YNAB's approach to spending and budgeting is completely different.   When you earn money, you fill "Buckets" to know where you want to spend (or save) your money.  No money in a bucket?  You either transfer it from another bucket that needs it less or you can't buy something.  It's also great for people with variable income because you're not trying to guess how much income you have coming in and dividing it by 12 months.  When it comes in, you put it in the budget bucket you want it in.  If it doesn't come in, you can't budget it and therefore you can't spend it.  YNAB puts your budget before your spending, not as an afterthought that you compare to your spending.

As for the personal funds, I think they're a marriage saver.  My husband and I have implemented these by opening up separate bank accounts (fortunately at no cost) with debit card, and transferring money to them monthly (this can cost you depending on how its done--if you can, make sure that you can either deposit a check in your name or cash).  You can debate about how much you think each of you should get, but being able to save for something very special to you without having to argue with your spouse is really important.  If you want to spend yours on clothing, so be it. If he wants to spend it on lunches, so be it.   We did this primarily to cut down on eating out.  All eating out comes from someone's allowance except everyone gets a birthday dinner on the house.  So now there's not only a cap on how much we can spend eating out, there's also a personal disincentive to do so if you want to save up for something else.


Here's the sale link for YNAB BTW (the coupon is good for xmas season 2014 I think):  $60 gift card at $30 value:

https://secure.youneedabudget.com/checkout/singleLoad.do?r=1417362231114&merchantId=YNAB

TerriM

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Re: How can I (we) become more Mustachian?
« Reply #22 on: November 30, 2014, 08:58:07 AM »
PS:  We did Netflix for a while because we wanted the shows without the commercials.  This is a must to cut down on advertising for the kids.  Library is another option, but you can incur some pretty serious fees if you don't return the disks right away (as you noted).

Right now we're doing Amazon Prime TV.  It's $90/yr for Amazon prime, but since my husband works for Amazon, we've been buying a lot of stuff through them anyways.  This is  not necessarily the cheapest way to go if you're trying to be frugal--I've noticed that Amazon prices are often higher than big-Box stores, however, if you happen to be buying non-big Box items through Amazon anyways and you want to get TV through them it'd be cheaper than Netflix.  I don't know how the selection compares though as it's been a while since I've seen what Netflix's streaming selection is.
« Last Edit: November 30, 2014, 09:48:59 AM by TerriM »

KBecks2

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Re: How can I (we) become more Mustachian?
« Reply #23 on: November 30, 2014, 09:41:50 AM »
I don't mean my job, as in, hiring out to other people, sorry for the confusion there, but my job as in, managing investment for our family, esp if we get into real estate.  But, I do need to become more skilled!

Janie

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Re: How can I (we) become more Mustachian?
« Reply #24 on: November 30, 2014, 09:54:21 AM »
I understand that's what you meant, but I'd want to hold whoever handled my family's investments to the same standard (whether it was myself or someone I hired). Sorry to beat a dead horse, but over the long term very few beat the market and the expenses here seem high.

myrax

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Re: How can I (we) become more Mustachian?
« Reply #25 on: November 30, 2014, 10:26:44 AM »

My goal is to get to a zero--based budget where every month we have a meeting and decide exactly what we need in the next month and how much it is going to cost.  For example, we have decided on $600 total for Christmas. (I have purchased some gifts and have about $200 left to work with.)   I can pre-guess most things, but some little things come up like the $5 for a field trip or requests for new socks, a cavity that needs a co-pay or whatever.  But we should be able to get it pretty darn close.  :)

I like all of your suggestions and will take a serious look at the investment newsletter costs v. the benefit of the investment returns.  Thanks for the help!

This is what YNAB does well- helps you set up a monthly budget and then tweak it as unexpected expenses come along. They are having a half-off sale until tomorrow, if you are interested.

Check out A Random Walk Down Wall Street from your local library, and track your returns carefully. The research on beating the market, or not beating the market, is very interesting.

MrsK

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Re: How can I (we) become more Mustachian?
« Reply #26 on: November 30, 2014, 10:42:47 AM »
I have to think what our life would be like w/o Netflix.  We might be OK. :)

I have certain shows that I like to watch -- Project Runway (we buy on apple TV).  My husband is into Walking Dead.  We watched Orange is the New Black but I don't need to continue watching it.

The boys like to watch Youtube video game recordings that people make, in particular, a guy called Bereghost.

If we want to reduce TV, getting rid of Netflix would be in alignment with that goal.  Thank you for the suggestion.  :)

I actually feel Netflix saves money.  We have the online version only and for a family of 4 it is cheap entertainment.  Last night, DH and I watched Silver Linings Playbook in front of the fire, while our daughter and her date watched Love Actually on the back patio.  2 nice date nights!

KBecks2

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Re: How can I (we) become more Mustachian?
« Reply #27 on: November 30, 2014, 10:52:17 AM »
Ooh, thanks for the tip that ynab is on sale.  :)

I agree that Netflix has been good. I am so happy that we cut satellite tv (and we did this before arriving at MMM).  We don't watch much but it is not a big expense, either.   

daymare

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Re: How can I (we) become more Mustachian?
« Reply #28 on: November 30, 2014, 12:09:58 PM »
Quote
Tracking to the penny is important, and to be honest, Mint is just not working for me in this area.  I don't know why, but the numbers seem far off.  Maybe I should try another program or a manual accounting.

You know what - I have had exactly the same experience.  I love mint because all our CC and investment and account balances are in one place.  But I do find the overall numbers to be pretty inaccurate, what with all the CC payments, account transfers, and such, being counted twice.  What I have started doing (and found that I really enjoy), is making my own spreadsheet for every month.  I go into mint every couple of days (which I would do anyway just to look at things) and copy over the transactions into my spreadsheet (which is really simple - just categories by column, then sum up the totals).  This is actually not a lot of work once you get into the habit of not spending mindlessly, and is really illuminating -- I know exactly how much we spend, and tracking keeps me accountable too.  I would suggest trying that out before spending money on YNAB  - I find using a spreadsheet to be really straight-forward and enjoyable.

Quote
I have certain shows that I like to watch -- Project Runway (we buy on apple TV).
You can watch the latest episodes for free on mylifetime.com .