Friday, May 25, 2018

Planning Our Summer Staycation

Now that the Kiddo is a week away from wrapping up the school year, I'm finally planning out summertime activities and tallying related expenses. Most of my mom friends organized their summer activities, like, three months ago, so I feel behind. But let's get real: since we're not really going anywhere, it probably doesn't matter. How much preparation can a low-frills staycation require?

Summertime = berry picking time!
First, the kid-related expenses: Our son will be participating in the county's summertime soccer league, which carries a registration fee of $85. (I remembered to sign him up the day before the deadline. THE DAY BEFORE! Look at me go!) He's also an avid recreational swimmer who likes to suit up at least five days a week over break, so we'll be buying a two-month pool pass for $150. Lastly, I'm thinking about sending him to day camp for a week. He went last summer and seemed to enjoy it, but that's another $150, so I'll have to see how interested and invested he actually is. (Update: The Kiddo has informed me that day camp is for little kids, not mature and worldly people going into sixth grade, and he would rather stay home and play video games thank you very much, so... maybe that takes care of that.)

Next up, camping and running expenses: Although we're not embarking on any grand cross-country or international travel, we intend to camp fairly regularly. We're all set with tent, sleeping bags, and sleeping pads, but because we don't have a car that can handle the roads leading to free campsites on BLM land, we'll probably have to pony up for campsite fees. These usually range from $10 to $40 a night, depending on how popular the campground is. I'm anticipating a monthly camping cost of approximately $150.

We have great camping options near us.
As for running, I'd like to sign up for at least one area race this season, possibly two. My goal is to use them as stepping stones to a longer ultra run in the early fall. If I aim for small events close to home, I can probably limit registration expenses to less than $100.

Lastly, going-out expenses: I'll be working from home all summer. Fortysomething will be side hustling from home all summer. All three of us, plus cat, will be spending an awwwwwful lot of time in close proximity... all summer. To stay sane, we're going to need to get out of the house on a fairly regular basis. Again, being realistic, some of that going out will be to restaurants, breweries, and the bowling alley, because we enjoy all of those things as a family. We may ramp up our miscellaneous fund by $25/month to accommodate.

Fortysomething will be making some extra cash this summer, and we can use a small portion of it to cover these costs. Obviously we want most of it to go towards credit card debt. That's the ultimate goal - to knock out as much of that debt as possible, as fast as possible. But getting along and not going stir crazy are also crucial.

I like local craft beer. I like it very much.
Free stuff: We're close to several national parks and monuments, and we'll use our national parks pass to visit them for no additional cost as the weather and crowds allow. Our town also hosts a free outdoor movie series every week so we'll try that out. And of course we have plenty of opportunities to hike (though due to drought, huge swaths of the forest are closed to the public for the foreseeable future).

National parks and monuments are the best.
Being realistic: I've done staycations before, and to be honest, they make me a little stir crazy. I like going places! I like getting out of town! The likelihood that we'll go the entire summer without some sort of special, short excursion is low. If Fortysomething ends up getting a rumored bonus, we'll probably budget in a few hundred dollars for a two- or three-night trip somewhere within a day's drive. We'll have to see if that pans out.

What about you? What are your summer plans, frugal or otherwise? What are you most looking forward to?

Wednesday, May 23, 2018

We're Still In Debt, But I Don't Worry About Money All The Time Anymore

Looking at my Yoga Cats wall calendar the other day, I was struck by two things: (1) disbelief that it's already the end of May (how?) and (2) the realization that I've been blogging here at The $76K Project for nearly a year. (Sidenote: come June, there will be a couple of celebratory giveaways in the works, so stick around!)

I started to run through the list of the changes we've made and the accomplishments we've achieved since this blog was born in June of 2017:

We've created and honed a budget.

We have an emergency fund.

We've started to invest (we had some meager investments a year ago, but now we're actively cultivating our retirement accounts).

We've increased our household income.

We've weathered some financial emergencies, including an expensive hospital stay.

We've paid off over $18,000 in credit card and student loan debt, and we no longer have a car payment.

I'm proud of all of that. Every one of those wins was hard earned. Personally, though, perhaps my biggest financial accomplishment is in the realm of the mental/emotional: I don't worry about money all the time anymore.

A few years ago, we were living paycheck to paycheck, always one large bill away from disaster. Not that anyone knew. By appearances, we had it together: We owned (well, held a mortgage on) a well-kept house. We had two cars. We took vacations every year, some of them to rather expensive locales.

But like an iceberg, there was so much going on beneath the surface that other people had no way of seeing. I had a chronic aversion to checking our ever-paltry bank account, which meant we went into overdraft on a regular basis. Bills would sit unopened on the kitchen counter for weeks. I'd make impulsive purchases without calculating whether we could actually afford them. Our monthly credit card and student loan payments rarely exceeded the bare minimum. Emergency fund? Ha. We didn't even have a savings account.

Not surprisingly, despite our efforts to ignore them, financial worries hovered in our lives like a specter. 

Nowadays, we don't own a house (perhaps more accurately, we don't have a mortgage). We're down to one clunker of a car that gets us around town. And vacations - for the foreseeable future, anyway - consist of camping out within a couple hours of home.

We still have a long, long way to go to get to where we want to be. Debt-wise, we're on the hook for almost $60K, including nearly $10K in credit card debt, and we have some major ground to make up with respect to retirement savings. Our net worth is very much in the red. We still feel the pinch when it comes to saving up for pricier one-time items like wedding presents, new running shoes, race entries, or household furniture. Sometimes I see my friends doing things that I know we can't afford to do, and I feel jealous (yes, I'll admit it).

So yes, we're getting our act together, but don't be fooled - this is no quick fix.

And yet, now I know exactly how much money we have, where it's going, and when it's going to go there. Our finances have started to run like clockwork, especially given that many of our bills are set up on auto-pay. It's true that sometimes our bank account runs low - we're currently at $150 for the next four days - but because our budget is dialed in, I don't worry about that, either. We have enough money in our emergency fund that we can cover at least one large-ish unexpected expense.

In other words, we have some safeguards in place now, and I sleep easier because of it.

So the major win after year one isn't being debt free, or being well on our way to early retirement, or having an emergency fund that would cover us for a year in the event of a job loss. None of that has happened (yet). We need another few years to reach those big goals.

But the major win right now is more peace of mind, and that's pretty much priceless.

Friday, May 11, 2018

Winning, May 2018 Edition

I just realized that for the past FOUR MONTHS I have neglected WINNING, a (supposedly) monthly series in which I identify at least three concrete ways we're succeeding and thriving while on this long debt repayment journey. I started this series in part to stay motivated: it's easy to get bogged down by how far we still need to go, so we need to celebrate our small but mighty victories. I also do it because it reminds me to be appreciative of the process instead of getting consumed by the overall goal.

Anyway, Winning is back! And boy do I need to focus on some wins given that our debt repayment has slowed to a crawl and our office is being inundated by explanations of benefits and associated medical bills. They just... keep showing up: surgeon. Emergency room doctor. Anesthetist. Nurse anesthetist. Ultrasound tech. Hospital stay. And let's not forget the mysterious $6000 bill for "supplies."

Actual footage of our stack of bills
But I digress. As my friend in college used to say, Hey whiner, call the waaaaaaaaaahhhhmbulance. Also, this is WINNING, not WHINING.

So. Moving on to the positive stuff:

(1) We're almost 2/3 of the way to meeting our emergency fund goal. Prior to the Great Appendectomy Adventure of 2018, we kept $1000 in reserve just in case. Now we'd like to have $3000 set aside for emergencies. By moving $600 into savings this month and another $600 into savings next month, we'll meet the goal by the end of June.


As a bit of a side note on this topic, there have been some lively conversation on personal finance Twitter recently regarding emergency funds and how much to stash away. Some folks have tens of thousands of dollars in their EFs; others stick to more of a bare-bones plan but have alternative safeguards set in place in case they need to access cash quickly. From a purely mathematical standpoint, we'd probably be better off sticking to small, Dave Ramsey-style fund and sending the rest of the money straight to our credit card company. But from an emotional security standpoint, I feel strongly that we need more than that. I'll sleep better at night.

(2) Including employer contributions, we're putting ~$900 into investments and our HSA every month. Somehow I hadn't fully done the math on this one, and when I finally got around to doing so earlier this week, I was kind of bowled over. If we can manage to do that even during slimmer times when we're not making much progress on debt repayment, well, I'd say we're still kicking some financial butt. It's a different kind of progress than chipping away at our loans, but it is progress. We weren't doing this a year ago. And because these are automatic paycheck deductions, we don't have to think about it or second-guess our decision to deploy our money in this way. Boom.


(3) And back to those medical bills... On the bright side, we've met our deductible and we're close to our out-of-pocket maximum. Thus, even if some doctor does decide to send us a $10K bill half a year after surgery, it's not going to knock us back much further than we've already been knocked back. So... yay?

In all seriousness, I'm incredibly grateful for HAVING health insurance. Yes, this situation has been stressful, and yes, I've had to call the insurance company three times in the last 24 hours to address billing errors, but our medical emergency would have been far more stressful had we not been covered. I've seen the pre-insurance totals. One night hospital stay, no surgery, $19K? No thank you please.

(4) Bonus win, for which we can take no credit but which we enormously enjoy for free: It's spring, and it's warm, and when we're not dealing with forest fires, the weather is absolutely glorious here. Perfect running and hiking weather.

Especially for those of us paying off debt, it's important to recognize and celebrate our victories. So what are your recent wins, financial or otherwise? 

Disease Called Debt

Wednesday, May 9, 2018

May 2018 Budget: Ramping Up Our Emergency Savings

I'm about 10 days behind schedule in posting the May budget, but late is better than never!

This month is shaping up to be pretty standard (aka boring) from a budgeting standpoint. Most of our line items reflect recurring fixed and variable expenses. The only real one-off here is the kitchen table, which we've already purchased, assembled, and started to use. The card table was working okay for meals, but it wasn't particularly comfortable for doing homework or just hanging out. The new one is much sturdier and more user-friendly.

One note about the table: Although it was somewhat expensive, I'm willing to make that work because I'm tired of buying crappy furniture. I'd rather pay more for something that will last than spend very little on something that will fall apart next year.

Another item of note: for the next couple of months, we've limited debt repayment to just over the minimums and will be dumping more into savings. Medical expenses explain part of this. Although I hope to cover most of the bills through our HSA, there's a chance we'll need to dip into savings. I don't want to put any of these payments on our credit cards (well, unless it's for the travel points, but in that case we'd want to pay it off immediately).

But aside from that, I'd feel more secure if we had $3000 in our emergency savings fund. I don't want us to get derailed by the unexpected. (Can you tell that our recent medical emergency has left me feeling skittish? It has!) We're about 2/3 of the way there. Once we've hit that benchmark, we'll return to larger payments on the credit card, which we're still hoping to pay off by the end of the year at the latest.

Lastly, I've increased my HSA contributions by $100 a month. Not only will this help us pay off those hospital bills, it'll be beneficial from a tax standpoint.

May 2018 Budget:

Recurring Fixed Expenses:
  • Rent: $2100
  • Health Insurance: $207
  • HSA Contribution*: $260
  • Retirement*: $282
  • Student loan and credit card payments: $1000 
  • Phone bill: $78
  • Internet: $65
  • Auto and renter's insurance: $73
  • Thousand Trails: $108
  • Netflix: $13
  • Fortysomething classroom budget: $40 (money for classroom supplies)
Recurring Variable Expenses: 
  • Utilities: $165
  • Groceries: $775
  • Gas in car: $50
  • Very Expensive Feline: $125 (higher this month due to upcoming checkup with vet)
  • Savings: $500
  • Miscellaneous: $350
One-Time Expenses:
  • Table: $480
Total budget for May 2018: $6,671

*Not including employer contribution

Friday, May 4, 2018

Doing More Of What I Love

Lately it's begun to dawn on me that I've spent most of my life believing in an employment fairy tale: that for each one of us, there's a job so well-aligned with our interests, knowledge, and experience that it feels more like a passion project than work.

My new job is miles - miiiiiiiles - better than my previous gig. There are many things I appreciate about it, perhaps the most important one being that it doesn't leave me crying in the bathroom during my lunch hour. Then there's the decent pay, the flexibility, not having to deal with back-to-back face-to-face meetings, the lack of commute, my hilarious boss, and the fact that I can take conference calls while cozied up in my favorite (but highly unprofessional) craft beer hoodie. Indeed, there's a lot to like about it.

But I've discovered that this job, like pretty much every other gig I've worked over the past 10 years, is... just a job.  It utilizes my experience and covers the rent, and every now and then I'll receive an email or phone call that inches what I do into the realm of rewarding. But it's not a calling. I know most employers want their employees to be personally invested in the organization, consumed by the mission. I want that, too, because again, I've bought into the employment fairy tale - but the truth is, I've never felt that way about any job where I'm working for someone else.

So lately I've been thinking that I need to spend less time worrying about finding passion in my work and more time doing the things I love outside of work - cultivating those interests, investing in them, enjoying them. Taking some of the brain space currently occupied by work and giving it to my hobbies. Making those interests more significant in my life than my job. Seeing where they take me.

There are two main areas where I want to invest more of my time and passion:

(1) Running: Anyone who's been following for a while knows I am an ardent runner. Fast? No, but damn, do I have heart! I'm particularly interested in ultra running: running distances greater than that of a marathon (26.2 miles). After a year of IT band issues, I'm finally back on the trails and have started to build up my running base. My hope is to run a 50K this year, and I'm in the process of looking for one that is affordable and not too far away.

But besides running for myself, I also want to share it with others. I've been a runner for 20 years, and what the sport has given to me in that time is manifold: it keeps me healthy, allows me to explore the outdoors, and bolsters my confidence. It's also a crucial fixed point for me because I have a mental health condition that sometimes blurs the lines of my self-identity. On days when I don't know exactly who I am because my brain has muddied the waters, I always have an anchor: I am a runner.

Not everyone wants to run or benefits from running, but it can be a life-changer for some people, and so I want to help share it. To that end, I've signed up as a volunteer for a Couch-to-5K program that my running club puts on during early summer for folks who are new to the sport. Every Thursday evening, I'll buddy up with a few of the participants, walk/run beside them, and basically let them know how amazing they are for being out there.

Volunteering with this group is a first step. After that, I'd like to help out with races organized by my running club and get involved with Girls on the Run. In short, I don't just want to be a person who runs in my community. Rather, I want to play a role in supporting and strengthening the local running community.

*Side note, just to illustrate how much I love running:

This is me under normal circumstances:


Like, were it not for the poodle, I could be convinced that that's me as a child.

This is me when I'm running:


2) Etsy-ing: My ultimate pie-in-the-sky career goal is to be gainfully self-employed. It's something I've been pondering for the last three years. The possibility of it excites and energizes me. Although I do have a Big Idea in mind (opening a "base camp" to host runners, hikers, and scientists who visit our area), I don't know how or when that would pan out. I figure now is a good time to assess my interests, build upon my strengths, and curate a toolkit of skills and resources that I can use later on if I manage to transform this nebulous dream into a solid reality.

As a (very) small stepping stone, last week I started an Etsy store to sell plastic-alternative cloth beeswax wraps. Just getting to the point of signing up for an account took months of deliberation. First of all, between work, parenting, running, and blogging, I don't have a ton of extra time. And second, as you can tell from the decidedly un-snazzy nature of this blog, I'm not really into building websites or taking Instagram-worthy photographs. That sort of thing stresses me out, which is why I hemmed and hawed for months about what it would take to build a space on Etsy. Finally I decided to just go for it, even if it looks clunky and even if my product pictures are a little poorly lit. I figure I'll improve it as I go along.

The store's been open a week. Much to my surprise, I've made four sales to the tune of $72. I've spent several gloriously meditative hours scouring the fabric store for remnants, cutting out the fabric pieces, ironing in the wax, and thinking about how much I appreciate each person who placed an order and how cool it is that they're going to use less plastic because of a thing I made. Woot! Worth it? So far, yes.

Don't get me wrong - I don't think my Etsy store is going to pay the rent anytime soon! But it's a good playground for me to explore entrepreneurship at a small scale. Plus, it's one business I can actually afford to take on right now. And it's fun.

What I hope to achieve by doing more of what I love is to stop treating work as the centerpiece of my daily life. If I can re-allocate some of the massive amounts of mental space that I currently devote to my job to the things I love, I think I'll feel more rooted in my own life, and less frustrated by the sense that work is stealing my time.

Disease Called Debt

Saturday, April 28, 2018

Emergency Funds and Medical Bills and Teacher Strikes... Oh My!

My current thoughts on April:


And also


With a little bit of this thrown in:


Thanks for empathizing, rocker panda.

Yes, I'm being a little dramatic - just part of my charm! - but April 2018 shall henceforth be known as The Month That Our Debt Repayment Plan Hit A Wall. Part of it can be blamed on our medical bills from The Infamous Appendectomy of March 2018. We're still in the process of tallying up the total, but the bills have started to trickle in, and looks like we'll owe several thousands of dollars when all is said and done (I'm hoping I can finagle a payment plan that will allow me to cover it all via my HSA).

Part of it has to do with the teachers' strike here in Arizona. As a teacher in Arizona, Fortysomething is currently on strike. Teachers don't get paid if they walk out. We completely, wholeheartedly support the strike, but it's made us realize we want to tuck away more money into our emergency fund - if not for now, for potential future interruptions in pay. We plan to set aside $3000 before returning to a more aggressive debt repayment plan. ($3000 isn't really enough, either, but it would get us through a full month if one of us wasn't getting paid.)

It's fine. We're fine. It could have been a lot worse. We're meeting all of our financial obligations. Between the emergency fund and our investments, we're even managing to sock away some cash. But it's hard to have to slow down on the debt repayment. I feel so impatient to be done with it, especially the credit card.

Wednesday, April 25, 2018

The $76K Guide To Making A Simple Budget

You may have noticed that unlike many other personal finance and investment blogs, this blog doesn't offer much in the way of advice. Frankly, that's in large part because I feel unqualified. "You have student loans and a credit card balance," says the little voice in my head. "Nobody wants advice from you." 

So I usually stick to telling our story, figuring that we can start doling out suggestions and strategies once we ditch our debts.

But the other day, someone on Twitter asked me for advice on making a budget. Taken aback, I burst forth with an array of word vomit that boiled down to, "We didn't know what we were doing so we sort of just tried a bunch of different things and finally after like half a year our budget magically worked. Voila! Good luck!"

Later, when I gave it more thought, I realized that there's more method to our budget madness than I'm giving us credit for. Yes, it took us a long time to iron out the wrinkles, but our general approach was solid. And now that we do have a workable budget, I feel at least somewhat justified in sharing our approach in the hopes that it might demystify the process for others, particularly those who - like us - are trying to claw their way out of debt and need a budget to help keep them on track.

So here it is (drumroll):

The $76K Guide To Making A Simple Budget 

Step 1: Before you make a budget, track your expenses for a month.

This may sound like a drag, especially if you're raring to go, but you can streamline the entire budget-making process by keeping a month-long record of how you're spending your money. Either in a notebook or in a spreadsheet (or with software like Mint that tracks your spending for you, though I personally find that this puts too much mental space between me and my spending habits), write down every single thing that you pay for - bills, rent, mortgage, insurance, random fun stuff, going out to eat, etc. - including the date and the cost down to the penny.

At the end of the month, group your expenses into categories and calculate the total for each category. These categories might include the following:

  • Rent/Mortgage
  • Utilities
  • Groceries
  • Phone
  • Insurance
  • Internet
  • Pet Needs
  • Household Items
  • Miscellaneous/Fun 
And so on. 

As you'll see below, having this record on hand will take some of the guesswork out of your budget. It will also help keep you honest about what you're actually spending (and when it comes to budgets, being honest with yourself and how much you're likely to spend on various items is crucial to your success).

Step 2: Commit to being flexible.

Don't feel like you have to come up with something that you're going to use indefinitely. Especially at first, budgeting is an iterative process. There's a very good chance it's going to change, and you're going to want to be okay with that. Don't get too attached.

Step 3: Figure out how much take-home income you're bringing in every month. 

You might know this number like the back of your hand, but when we were getting started, I did not. If you earn a regular salary, use your paycheck stubs to tally your take-home income. If you work as a contract employee and your income varies each month - which was initially the case for us - you'll have to estimate your expected income based on your past experience and current contracts. Be conservative when making those estimates. (I'd be happy to talk more about budgeting with contract income if anyone's interested.)

Then record your total projected income. We use a spreadsheet in Excel for this purpose (see example at the end of the post).

Step 4: Identify your recurring fixed expenses.

Fixed expenses are those that recur every month in the same amount, and their predictable nature warms my little Type A heart. Our fixed expenses include our rent, phone bill, insurance, Netflix subscription, and debt repayment. (Calculating the amount you can devote to debt repayment is a topic for another post; for the purpose of brevity, I'm going to assume that if you are making payments, you've already figured out what you'll pay each month.) You can include savings here, too, if you're committed to saving a specific amount.

Use your bank statements, bills, and/or your spending record from Step 1 to determine which expenses are fixed and how much they cost each month. Write them down. (Again, see example below.)

Step 5: Identify your recurring variable expenses.

Recurring variable expenses are those that appear every month but that are not the same every month. Ours include electricity, groceries, gas, and pet needs. Our "miscellaneous fund," the money we use for fun stuff like going out to eat or getting random home supplies, is also included in this category. (Other people have a different approach to this, but for us, we learned we were more successful when we gave ourselves some leeway in this area and didn't try to break it down too much.)

For me, this was the most challenging part of budgeting when we first started: recurring variable expenses have a nebulous quality to them. With experience and careful record-keeping, though, dialing them in has become easier.

You can use your spending record to identify what these variable expenses are and ballpark how much you need to allocate for them. Again, be honest with yourself: if you spent $500 on groceries last month, allocate $500. Don't try to convince yourself that you're suddenly going to make do with $300. In future months, you can fine-tune the numbers and try to cut costs a bit. For now, though, set yourself up for success by being realistic.

The good news about recurring variable expenses is that it's here that you'll have some wiggle room to cut costs if you want to - like finding ways to save on the energy bill or slice the fat from your grocery budget.

Step 6: Add in your one-time expenses.

Every month is different. Sometimes your cat is due for her yearly checkup or the car needs an oil change. Sometimes you'll need to buy new clothes. Sometimes you'll need to purchase school supplies. Sometimes you'll be hankering for a sleek new haircut. Again, be realistic about what your needs (or wants) are in a given month, and accommodate them in your budget.

Step 7: Calculate the total and make adjustments

Time to tally it all up and make sure the numbers work. Compare your budget total to your income. If your sum exceeds your income, you're going to have to make cuts somewhere. Your variable recurring expenses - particularly your miscellaneous or fun fund - would be a good place to start. Other folks have found ways to reduce their grocery bills by tens of dollars every month. You can also take a look at your one-time expenses: perhaps some of those can be put off for now.

If your income exceeds your budget, you get to decide how to deploy the extra moolah! For us, any surplus goes towards debt, but if you're debt free, consider socking it away into savings or an emergency fund. Don't create random frivolous line items because you feel flush with cash.

Step 8: Continue to track your spending.

It may seem like a pain, but keep recording your expenses down to the penny. As you pay your bills and make purchases, compare the reality of your spending with your budget. I handle this by creating two columns in our budgeting spreadsheet: one for projected expenses, and one for what we actually spent. Then I compare the two at the end of the month. If I find that we spent more on a certain category than we'd planned, we take note of that and adjust accordingly in the following month.

Here's an example of what the budget looks like:

So that's how we budget. And although the tracking process may seem arcane to some, it really helps us stick with it.

One last thing: for me, budgeting felt completely overwhelming at first, but the longer we've done it, the easier it's become. In our first few months, we had to make repeated big adjustments to the budget. Now the adjustments we make a relatively minor, and mainly for one-time expenses. The moral of the story: it's a messy process at first, but don't give up. Refine, refine, refine.

What about you? What's your budget strategy? What tips would you share with newbie budgeters?

Planning Our Summer Staycation

Now that the Kiddo is a week away from wrapping up the school year, I'm finally planning out summertime activities and tallying related...