December 3, 2014

NOT Included In Our Net Worth...Darn It!

We have been blessed with good incomes for the past 8 years, breaking the $100K mark in household income in 2008 and working our way up to ~$250K in 2014. Our net worth has grown considerably as well. From $23K at the end of 2008 to nearly $300K at the end of 2014.

With that being said, I feel like we should have made better progress on our net worth, considering our incomes. I looked back at the last couple of years and determined that a considerable amount of money has been “invested” into our new home, but are not accounted for it in our net worth calculation. Some of the larger ticket items are:

$7,000 new HVAC
$1,200 new pool pump
$1,700 pool fence
$1,600 white picket fence in front yard
$1,800 security camera system
$1,500 refrigerator
$2,500 wash and dryer
$600 dishwasher

I use the purchase price of our home ($489K) for its value when calculating our net worth. If I included home appreciation, that would add another ~$150K based on comps in the area.  

I have no plans to begin accounting for improvements to the property or home appreciation but it does make me feel good to know that we bought at a great time and have invested in our home to make it safer, nicer, and if we sell one day, maybe more valuable.

How do you account for your home as an asset?

December 1, 2014

November 2014 Income Statement

November a very good income month and a larger than budgeted expense month (see spreadsheet below).

Our total income in November was $14,923.69. In addition to my wife’s paycheck, she received an $800 auto allowance and a $130 company reimbursement for internet service and FasTrak pass. The big news was that she also earned a quarterly bonus of $12,490 gross ($7,664.17 net). Such a blessing! We received a $96.79 home owner's insurance refund for removing our jewelry rider (another post, another time) and earned $5.60 in interest income from our online savings account. 

In November, we spent a total of $9,201.88. Some of our larger non-standard expenses were $597 for airline tickets, $373 urgent care bill for our son, and $1,100 in extra mortgage principal payments. If you subtract out our extra mortgage principal payments, our expenses were a slightly more reasonable $8,101.88.  Better than last month.

Next month should be a pretty typical income month. Obviously Christmas will bring additional expenses in the form of gifts and holiday travel, but hopefully not too much.

November 30, 2014

College Savings For Our Kids

We opened 529 Plans for both of our kids within a couple of months of their births.  We selected the Vanguard 529 Nevada Plan and invested in the Vanguard 500 Index Fund.  We choose Vanguard because we have Traditional IRA's and Roth IRA's with them and their expenses and fees are among the lowest in the industry.

The minimum initial investment was $3,000 and the minimum for additional contributions is $50.  Our son is 3 years old (Sept birthday) and has $11,020.92 in his account, while our daughter is 6 months old (May birthday) and has $3,457.07 in her account.  We encourage our families to contribute in lieu of birthday and Christmas presents, but have only been mildly successful at convincing them. 

In addition to the 529 Plans, we have a Upromise account that allows us to earn cash back for college on eligible purchases.   This is achieved by shopping shop online through or registering credit/debit cards to your Upromise account and making purchases at participating restaurant, stores, gas stations, etc. You can register credit/debit cards of family and friends as well.

We haven't taken advantage of Upromise as much as we should, but have accrued $410.41 so far, of which $396.94 has already been automatically transferred into our son's Vanguard 529 Plan that we linked to Upromise.  Free college money is good!

November 29, 2014

Nanny Costs...$20,800/year

We have a nanny that watches our 3-years-old son and 6-month-old daughter during the day.  We pay her $80/day or $400/week.  That's $1,600/month for typical months and $2,000/month for longer, 5 week months.  Annually, we're paying $20,800 to our nanny.  Not a large income, but it's a huge sum of money for us.

I've seen a number of articles stating that daycare costs more than college.  I'm not sure about that, but it's pricey indeed.  We have reduced our nanny's schedule to three work days a week, for $240/week, while I am not working.  This arrangement gives me three days a week to focus on my job search, while saving us $640/month for typical months and $800/month for longer, 5 week months.

We choose to go with a nanny over daycare for a few reasons:
  • We love the personal attention that our kids receive
  • We can come home anytime to see our kids
  • Using our home security camera system, we can check on thing remotely
I dream of the day our kids begin public school.  The boost to our cash flow will be awesome.  Sure, there will be other expenses, but they will be small by comparison.  Technically, our son is already in school, but it is preschool and costs $297/month.  LOL!  Kids are expensive, but worth every penny.

November 28, 2014

Never Blacker November

I'm not a big "Black Friday" shopper, but I enjoy watching the news to see all of the craziness.

This year, Black Friday seemed to start more than a week early, based on all of the pre-Black Friday deals that I saw. On the news this morning a reporter commented on the lack of crowds at a local mall and how a large number of consumers are purchasing online. I think that is probably true, but I also think Black Friday is being watered down by "Grey Thursday", "Small Business Saturday", and "Cyber Monday". By the way, why isn't there a cleaver name for Sunday? Something like, "Super Black Sunday" or "Jet Black Sunday".

Anyways, as Black Friday spills over into the days around it, it seems likely that retailers will stretch this opportunity to sell over a longer and longer timeframe in the years to come. I could see the entire month of November becoming one big SALE. We could call it "Never Blacker November" and have discounts available the whole month. It's the perfect time to get deals for the upcoming Christmas holiday, purchase model year end vehicles, update your wardrobe for the New Year, etc.

I could also see some out of the box thinker taking it the other direction. Short "flash" sales that offer huge discounts but last just an hour, maybe even minutes. With smart phone technology, the time seems ripe for this type of thing. "Ultra Black Hour" could create a buying frenzy like non other.

November 27, 2014

November 2014 Net Worth Update (+7,220.55)

Happy Thanksgiving! November was a good month for our net worth. It increased $7,220.55 over last month, to a total of $293,750.08 (see table below).

What Worked
My wife earned a $12,490 gross ($7,664.17 net) quarterly bonus. We used this money to pay some of our 0% credit card balance down, deposited a bit into savings, and paid an additional $1,100 to our home mortgage. We contributed $617.20 to our retirement accounts in November and the total balance increased $4,577.35 to $138,021.77. I also moved my old company 401(k) balance ($68,291.73) to traditional IRA with Vanguard.

What Didn’t Work
We purchased a new (used) vehicle adding $26,000 in debt to our liabilities. Thankfully, they gave us $5,000 trade-in for our 2006 Honda Accord (120Kmiles) that was pretty beat up and needed ~$1,200 is work.

Next Month
December should be a pretty typical month. We plan to keep the Christmas presents affordable, but thoughtful.

Assets Oct-14 Nov-14 Change % Change
401(k) Accts       76,840.58         8,548.85     (68,291.73) -798.84%
Roth IRAs       10,891.89       11,322.39            430.50 3.80%
Traditional IRAs       45,711.95     118,150.53       72,438.58 61.31%
Taxable Brokerage Accts         1,148.00            898.53          (249.47) -27.76%
Cash & Savings Accts         7,814.70         9,152.70         1,338.00 14.62%
Son's 529 Plan / Upromise       10,576.31       11,034.39            458.08 4.15%
Daughter's 529 Plan / Upromise         3,313.44         3,457.07            143.63 4.15%
Home     489,000.00     489,000.00                    -   0.00%
Car 1                    -         30,000.00       30,000.00 100.00%
Car 2         8,610.33                    -         (8,610.33) 100.00%
Car 3       13,859.24       13,720.65          (138.59) -1.01%
Total Assets     667,766.44     695,285.11       27,518.67 3.96%
Liabilities Oct-14 Nov-14 Change % Change
Credit Card Balances         9,834.11         5,883.31       (3,950.80) -67.15%
Home Mortgage     371,402.80     369,651.72       (1,751.08) -0.47%
Car 1 Loan                    -         26,000.00       26,000.00 100.00%
Car 2 Loan                    -                      -                      -   0.00%
Car 3 Loan                    -                      -                      -   0.00%
Total Liabilities     381,236.91     401,535.03       20,298.12 5.06%
Net Worth     286,529.53     293,750.08         7,220.55 2.46%

November 26, 2014

Pedicure for a Man? Best $30 I've Spent.

I am confident enough in my masculinity to admit that I had my first pedicure today and it was AWESOME!   Easily the best $30 that I've spent in quite some time.

I walk around barefoot constantly and over the years have developed very callused feet.  A couple of years ago they started cracking and looking pretty bad.  My heels eventually developed deep, painful fissures.

I thought I could fix the problem myself.  I spent a good amount of money on countless PedEggs ($10 each), pumice stones ($5 each), foot files ($5-$10 each), lotions ($10-20 each), etc.  My wife even gave me a hydro-therapy foot massager.  None of it worked.

On multiple occasions, my wife suggested that I visit a nail salon to have the calluses removed.  Honestly, I was too embarrassed to go.  It's weird enough for a guy to go to a nail salon, let alone asking them to scrub your nasty feet.

Well, today I manned up and went to the local nail salon.  Initially, it was awkward.  I had a room full of women staring at me as I explained that my feet are gross and need attention.  One of the lady's receiving a pedicure shouted, "Your feet can't be any worse than mine were and look at them now".  I glanced down at her pink, soft feet and told the nail technician, "I want that."

I paid $30 ($25 + $5 tip) for a pedicure with callus remover and a sea salt scrub.  Not only did it feel great, but I had a blast hanging with the women in the salon.  I've always heard that women talk about some crazy stuff at nail salons and found out today that they weren't kidding.  Best of all, I am now the owner of two adorable, soft feet.

Guys, if you have nasty feet, do yourself a favor and visit a nail salon.  I wish I would have years ago.  I would have saved money and had better feet.  It's now going to be a monthly routine and the wife is coming with me next time.  Maybe we will get a mani/pedi...