Lot of extra expenses -- insert sad face and a whimper.
I missed the whole month of April for blogging... my goal is to blog AT LEAST once a month. Oy!!
But I'm here!!
This is a tough time to be the breadwinner and Chief Financial Officer (CFO) at my house. Is there anyone out there that would like to step in and take over for me? Ha ha!!
In April the extra expense was my son's vision exam. No vision insurance. $200 total (with contacts). Also I paid off the credit card bill for the new stove ($550).
The month of May so far, has included 3 graduation cash gifts (niece, nephew, family friend), a $300 dental bill and 2 traffic tickets to pay (10 miles over speed limit. What?!). Happy Mother's Day to me!!
(Question: Does anyone have any decent dental insurance? I need a plan for my young adult child son who is currently unable to keep a job due to his brain disorder. All dental insurance I've researched seems expensive and not to cover much... just asking...)
The Freedom Account/Working account is working, but I can't seem to get it 'super-funded'. My plan was to have a year's worth of car insurance premiums set aside as well as the $800 for my spouse's 'ankle/foot orthotic' shoes/braces by June. Also, I wanted the car repair sub-account and additional medical/dental sub-account to have a decent amount. Can't seem to get ahead with all the 'activity'. It ain't looking good.
I'll have to change my expectations... or run away from home.
I'm also disappointed that I wasn't able to pay extra on the mortgage in April or May (boo hoo!). But I'll get there. I'll take a deep breath and go over the budget again(!)...
Anyhoo, even though I'm almost (almost!) ready to wave the white flag of surrender, I'm hanging in there like the rest of you. It's great to vent and find my humor in blogging, lighten the stress. What a comfort you saving advice friends are!! Happy saving!!
Viewing the 'Freedom Account' Category
Lot of extra expenses -- insert sad face and a whimper.
Happy new year. I'm budget tweaking. Trying to stay excited about it, but excitement wanes.
I was able to add up all my recorded expenses for 2013 to see what I can do better.
The good news is I kept pretty good track for 2013. The bad news is it wasn't what I was hoping.
Net income for 2013: 43,874.05 (after all deductions including retirement savings)
Regular Household expenses: 24,230.27
Savings from net income: 2,160
Cash withdrawn/spent: 7,130
Irregular Household expenses: 11,874.64 (!)
Total expenses for 2013: 45,394.91
Net loss/profit: -$1,520.86 (boo!)
After I re-figured the numbers about 5 times and consoled myself with a bag of chips and some butter pecan ice cream, I realized I have a lot of additional savings and retirement savings that come out of my gross pay as automatic deductions so overall I'm still to the positive.
I also realized that it was the Freedom Account that absorbed that loss of net pay vs net expenses. So hooray for the Freedom Account!! That's the account I use to cover my irregular (non-monthly) expenses. (from author Mary Hunt, Debt-Proof Living)
The irregular expenses kicked my butt!
House repair: 1,342.33
Car Insurance: 2,331.63
Car repair/maintenance: 3,663.21
Medical/dental: 4,537.47 (oh, WHY didn't I become a dentist???)
But the regular deposits to the Freedom Account, plus the cushion I had in the account from the previous year, saved the day! I know it works, but... it really works!
I spent 3,575 on groceries which was from the cash withdrawn. I felt I did good in that area, but will still tweak it if I can. A few other things to look at as well.
Will work on staying motivated. I'm managing my fatigue and job burnout the best I can. My spouse is still not any help in the finance area, but he cooks dinner everyday. Even trade?????
At least a girl can check in with her saving advice friends to try to stay the course. Happy saving in 2014!
It's been a long time since I've blogged. Since August, my goodness!!
Now that the end of the year is here, I'm getting a little motivated. I've been on auto-pilot for several months due to general fatigue, but I seem to be getting my savings mojo back.
Idea #1: We finally got back to the $25,000 mark in the wealth account after the car purchase in May. It took longer than I thought to get back to that point, but finally, this month we hit the mark. Now that the account level is back where I want, I'm using that savings allotment ($130 per pay period or $260 per month) to beef up the Freedom Account (the account I use for irreqular non-monthly expenses). I want to fund at least three of the subcategories a year in advance: car insurance, my spouses medical leg braces, and dental. The Freedom Account has been great for managing the finances but it gets a serious workout. Getting a little bit ahead, should help.
Idea #2: Once the Freedom Account is 'super-funded', I will use that same allotment to 'super-fund' the house repair account. The current allotment is $25 per pay period and the account has remained at the same $1,000 level for the past year, because of the workout that account gets. (Old house, lots of $200 to $500 repairs.)
Idea #3: Continue the $200 allotment to the wealth account to save for the next car purchase. Once the Freedom Account and House repair account are 'super-funded', will use that allotment for the car savings.
That's it for now. Still fine-tuning a few other ideas. Happpy saving everyone!!
It has taken well over 2 years for me to get my Freedom Account to a level where it almost maintains itself. But I believe I'm there!! I looked at the balance and realize that it's been MONTHS since I've struggled with reconciling and worrying about the usual big outlays and little deposits in this account. I'm amazed.
The sub-accounts are still the same: miscellaneous (I call it a cushion), car insurance, car repairs, home warranty premium/home escrow, medical/dental, and travel. I've noticed this year that between that and the cushion I try to keep in my checking account, somehow, almost like an 'awakening' the current balances have created a lot of ease in paying the irregular and unexpected expenses. (A lot less stress.)
Current balances of subaccounts June 09- Cushion 1: $1500
Cushion 2: $400
Car Insurance: $1004
Car Maintenance: $465
Home Escrow/Warranty: $260
Replace Car: $650
Total in account: $5,386
Major expenses are coming up but I'm prepared or still preparing. My regular paycheck deposit is still steady at $110 every pay period.
I've spent the better part of this year trying to convince my brother to begin a Freedom Account. (Started working on him on New Year's.) He has shown some interest in it, but not a lot. He says it's too much math and not worth the effort. Maybe it is. I like it, though. I guess everyone has their own method. He manages his money fairly well, so this isn't the magic key for everyone. I'm just glad I stuck this one out. It's been great for me.
The plan for the Freedom Account continues. It's been a great thing for me. I expect a lot of activity this year, just like last year...
Total projected automatic deposits: $2600 (100 per pay period)
Total extra deposits planned: $700
Spent from Freedom account in Jan 09:
From Car Maintenance: $132
From Travel and Cushion: $470 (Trip to visit parents)
Current balances of subaccounts on 26 Jan--
Cushion 1: $1500
Cushion 2: $101
Car Insurance: $1004
Car Maintenance: $184
Home Escrow/Warranty: $200
Replace Car: $200
Yes, I'm a Freedom Account addict!!
If memory serves correctly, I've had my Freedom Account going for about 2 years or less and it was rough (rough!) in the beginning, but lately I've noticed that things have smoothed out nicely.
The plan is still to deposit an automatic $90 from every paycheck I receive, which I do faithfully (even when it seemed like all I did was take it out again). (I've previously added extra money like tax refunds also.) I also faithfully balance the subaccounts which are: cushion, car insurance, car repair, escrow/home warranty, medical expenses, and travel.
This year I expected to pay about $550 or so in home mortgage escrow. That was how much I'd set aside in my Freedom Account. (The bill has been between $400 and $700 every year except one year, when we got a refund.)
However, when I received the statement from the mortgage company, we only owed $15 in escrow!! A far cry from the $550 I was expecting to pay! That means I can carry over the $550 into next year's escrow if needed. I'm excited about that. (Of course, I wrote the check for $15 escrow and mailed it quickly so they wouldn't change their minds!!)
As usual in the life I'm living, there have been several large expenses throughout the year like car repairs and dental work which I've used the Freedom Account for. But it's working, working, working, and I love it, love it, love it!
One of my favorite money books is The Complete Cheapskate by Mary Hart, especially the chapter about the Freedom Account. (I recently read another article or blog about the Freedom Account on savingadvice.com. LOVE it!!) Anyway that thing has saved my finances!
I manage one of my savings accounts (the one connected to our household checking account) as our Freedom Account by having 7 subaccounts: (1) minimum balance (emergency fund) $1500 to avoid the service fee; (2) cushion account of $500 to avoid withdrawing below the minimum that avoids the service fee; (3) car insurance account, (4) car repair account (5) home escrow account; (6) medical/dental account (in addition to this I have a Flexible Spending Account for health care through my job), and (7) a travel account.
I didn't open a separate checking account as the author advised. I should have. Maybe I will eventually, I just went with what I had. Keeping up with transfers has been...interesting. I do keep a notebook just like the author describes for each sub-account. I balance the total amount against my monthly bank statement. I don't yet have it fully funded because 'the kid' has had thousands of dollars worth of dental work done in the past 2 years (impacted wisdom teeth, 3 root canals, 3 crowns, several fillings) so I've been borrowing from other accounts to pay these expenses to avoid debt. A root canal on my dental insurance has been $700 or more. A crown, $600. (Or $595 as the dental assistant was so cheerful to point out.) I'll give you a minute to do the math to add up how much the kid's mouth is worth.
I've also struggled with our auto insurance which has doubled to $1360 for 6 months after adding the kid and the third automobile. (I hear the advice of many...I need to make the kid more responsible...what to do, what to do, what to do...)
Anyway, we have never had a lot of debt, our only debt is our mortgage (under $70,000). Whenever I listen to Dave Ramsey and all those people (who I'm really excited for) who yell 'we're debt free'--people who are sometimes making the same money I'm making--I can't figure out what I'm doing wrong. If they can get debt free from a MOUNTAIN of debt, why can't I save more? Same concept, right?
Turns out that unexpected and irregular bills were beating me down to the ground! My son's dental work, car repairs, IRS payments (the year I under-estimated my withholding was a PAINFUL year), escrow, leaky plumbing, airfare for a funeral. It seemed like no matter how many steps I took forward, I'd take twice that many backwards.
I started out the Freedom Account with a payday deposit that was too high for me to maintain ($200 per paycheck). I almost gave up, but decided to lower the payday deposit to $50 each paycheck. I was discouraged, but found that any amount is better than adding $0 to $0. (Who knew?)
I also deposited other income like part of my tax refunds and overtime and gift money. It's still taking a lot of patience (my son needs another crown), but my patience is improving. I increased the allotment from $50 to $70 to $90 over the past 18 months or so. It's helping a great deal and I feel more organized and in control. I've made quite a bit of progress in 18 months, but looks like I'll need another year to get a good footing, and then each of the sub-accounts will be more easily funded and ready to work...to do what I'm paying them for!
I love the nerd-iness that comes out of me in managing this account. Nerds rule!!