Vision Insurance

DH's work provides vision coverage for $120/year per couple. However it only covers up to $115 for contact and $100/year for glasses. In our family I am the only one who needs contacts, and yes I'm looking into Lasik corrective surgery. Unfortunately my vision has been deteriorating still and with pregnancy I'm not sure if I should even get it now. But that's another discussion.

Well the point is that our medical plan covers one eye visit a year with copay so I did that last year, because DH forgot to sign up for vision. Turns out it's not worth the money. It's a hoax and only worth it if two people need coverage. If not we're better off getting the prescription, filling it at Costco, and using a FSA for the tax break. Which is exactly what I did this year. So my contacts will cost us about $80 overall and we don't have to pay for vision.

Sometimes insurance can be such a crock. Tomorrow I'll probably discuss our medical coverage, which is really good coverage for a great price and cover amazing amounts of stuff for pregnancy.

full or partial car insurance?

Well for the past 3 years we've been carrying only liability on our cars. Our cars are a 99 toyota corolla and a 00 ford focus. The savings were substantial because we were under 25 for a chunk of those years, and our rates have been dropping.

However since we've moved to NE it's gone up. When we got here unfortunately we decided to go with liability again. Also unfortunately my DH had three car accidents within a span of 3 months (yeah probably why I don't buy a new car). But seriously I wonder what is the break even point of coverage and should we have been carrying full coverage?

Well where we live it cost approximately $1k more for full coverage and that's with a $1k deductible. In CA it was the same thing, so we dropped it. The cost of either of our cars $4k would be made back in 4 years right? Actually sooner if you consider we'd have to fork over a $1k deductible.

But on another message board someone said they paid for full insurance because they couldn't afford to replace their car. However the difference in full coverage versus liability was a lot less. Mine's high because it's a state run insurance program, so bad drivers like my DH is paid for by good drivers. Thank god he had all his accidents here, not in CA.

I thought about it and decided, I would still wouldn't cover my car if I couldn't afford to replace it, and save the few bucks. Why? Because of that stupid high deductible. If you have to fork over $1k anyway, you could set aside the difference every month into a car fund and buy a cheap used car for $2k probably by the time your car was totalled if not more.

Of course this is all based on the premise that you'll save the difference. I know I'm not saving the difference, but I like not having a deductible. Of course if DH has another accident I'm not fixing his car he can drive it all beat up, if it drives and if not, then he's getting a $1k car period.

10 years fast fowarded

Where do I see myself in 10 years? That's an interesting question, I'll be 37 and DH 39...I hope that we'll both be done with our schooling obviously. And I hope to have at least 2 kids, ideally 4. But financially where do I see us?

I see us living back on the West Coast in a lower cost of living area. Between southern cali and NE, I can't imagine living somewhere else so expensive. I expect to own a single family home finally and two rental properties. Why two? Because we'll probably buy two homes/condos for our parents and they will rent it back from us. Already our parents are trying to get us to hurry and settle in our final location so they can buy something nearby. As an only/youngest and DH the eldest and only married, I guess we're considered extremely responsible young adults.

I also see our income minimally doubling in 10 year probably closer to 3x what we make now. I'll be done with graduate school and DH done with an MBA, so it's not unlikely that our incomes will go up.

I hope to hit a NW of $1 million by 34 (projected), and by 37 and 39 amassing $1.5 million dollars. These projections are based on our current saving rate and funneling all raises into savings. Not sure if that will happen, but it's a good goal. Ambitiously I see us hitting $1 million by 32 and 34.

I also forsee us having college fully funded by then because another mini-goal is $10k in a 529 by the time our children are 1 year old. We've already got $1k set aside for kid #1. Now I've got to get serious about saving.

And since we're day-dreaming...at 37 I'll probably be driving an SUV and minivan, and live in a 3000 sq ft single family home with a yard and a garage, and be materialistic and consumer driven...maybe even a stage mom???

Do you need life insurance?

I'm going to write a few posts about insurance, life, car, home, and umbrella policies. But to start I'll discuss whether I think we need life insurance as DINKS in their 20s with some assets.

I'm constantly fighting internally over my internal desire for life insurance and the fact I don't need it. DH says no way, not until we're pregnant are we getting life insurance. His logic is that he gets 2x his salary from work, and as the breadwinner that amount will more than adequately take care of me. With our assets and his insurance I could live in our house if I choose for at least 5 years. If I die, he can manage the mortgage note solo and our current assets will more than take care of burying me. So his position is that we don't need insurance. My position, it's a really cheap rate and I feel nervous.

Right now we're both below 30, and rate are exceptionally cheap. However, I do acknowledge not having dependents makes it somewhat difficult to justify paying for life insurance. Also I am constantly wavering between 20 and 30 year term life insurance. Experts say long enough for your youngest to be done with high school. But we don't even have kids and we're not sure when they'll come or how many we'll have. So how do I know we'll have enough? But do we really need 30 years? I think we'll be self-insured probably by 20 years from now, so is it necessary to buy the longer term?

Another major issue that prevents me from buying life insurance is that I make very little money, and DH is starting his career (1 year) and the growth potential for both of us is huge. So if we were to buy 10-20x my income it'd be 300-600k. But I'll outstrip that when I graduate, and if we bought 10x DH's income it'd be minimally 1 million. But this really are our lowest earning years so if we buy now will be underinsured in say 5 years? What do we do if our income doubles or triples when we finish school? Suddenly will 500k policy be enough if we make $250k/year?

I guess this is part of the reason I am not currently pushing for life insurance. I feel as though we don't have enough information about our future. We're not sure when we're having kids, we're not sure how much we'll be making, we're not sure how long we'll need it for. I wonder if this is a problem other 20-somethings face when you feel as though your starting out and getting prepared, yet not all the information is in front of you...

Roth IRA...one contribution or many?

People always ask should they contribute one $4k deposit to a Roth IRA or should they contribute $333/monthly? The answer is...you should deposit $4k on January 2nd of the year to get the longest possible time of tax free investing. Because you deposit every year and leave it alone, that will be a form of dollar cost averaging. The idea is that the capital gains are not taxed, unlike leaving the $4k in a Money Market earning income and transferring $333/month. Every month you'd dollar cost average, but you'd also be paying short term capital gains on the interest.

However the reason why investing $333/month is popular is not many people are able to stash aside $4k for a lump sum contribution. Therefore it's better to invest what you can when you, than to not invest at all. I'd rather see someone putting away $500/month into a Roth IRA then trying to save up $4k and never doing it.

Personally I do a lump sum investing in a Roth IRA. However, I just made 2006 contribution in Jan 2007, why? Because of our strange circumstances with bonuses and income, we are on the cusp of being phased out of the Roth IRA income limits. Thus I am not fond of the idea of withdrawing my contribution in March 2007, and paying taxes on any income if we're over the $150k married filing joint limit.

The problem is that the only deduction eligible for deciding what you modified adjusted gross income will be is a 401k contribution. We already max that out last year so I wasn't sure if what our income would be. Last year our income was getting close and this year too. Especially since my DH's annual bonus, raise, and promotion is in February. His signing bonus occurs every december so you can understand how we're never sure what our income looks like until the end.

But I personally like the lump sum contribution, plus by saving it during the year, it acts like an extra cash EF for emergencies. Which I think is great because it gives me more flexibility without having to pull it out of our stocks.

Carnival of Personal Finance #82

This week the carnival of personal finance #82 is hosted by get rich slowly. It's theme is superheros of finance. Check out my post on "Is life passing me by?" It's my meditation on whether it's worth it not being in debt or am I saving for a future that may not happen?

Expensive hobbies

I think as DINKS we have a few expensive hobbies. My DH loves to snowboard and the warm winter is killing him out here in the NE. We bought snowboards last year, at a great price, yet it was pretty expensive $400 a board/boots/bindings package for each of us. Then there is the price of lift tickets, which is pretty expensive as well. So he's researching a weekend trip to go ski somewhere else, maybe home in Canada while I'm wanting to stay home and veg.

Another expensive hobby of his love of video games. Can you believe how much the PS3 costs, or even the Wii? We have one and I'm wondering how parents afford these things? At $250 for the system and $50 a game, I question what sort of money parents make to afford these games? Personally I see these things as targeted to young single men in their 20s and 30s with money to blow. I think the other thing he loves is any electronics he can get his hands on.

My "hobby" is probably watching movies. I enjoy going to watch movies, but right now at $10 I can't justify going to the theaters except if it's something we can't wait to see. Last year we watched I think 3 movies in the theater, Talladega Nights, Borat, and Pirates of the Caribbean.

My other hobby is eating out. I think this probably adds up to his ski trips and video games because if I had more money I'd probably eat out more. As it is, we don't because I'm trying to lose weight. Yep, yet another year where I'm losing weight. Last year I lost 25 lbs and gained it back, so I'm back on the treadmill (literally and metaphorically).

Do you have any expensive hobbies? Is there something cheaper we should pick up? Our together hobby is dogs, but pets, well they are ridiculously expensive. Our older dog has to go again to the Vet Opthamologist for eye surgery this week so I"m guessing about $200 at a minimum. Yeah our dogs run us a nice vacation every year.

quarterly estimated tax payment time

Okay Jan 15th is the last day to make a quarterly estimated tax payment for 2006 without a penalty. Last year I ran our numbers off the cuff, and determined we would owe about $5k to everyone, so what I did was I paid Federal, MA, and CA about $1500 each and hope we'd come in close. We did, we got a small $200 refund from CA and MA, and we owed another $1400 to the Federal. What we probably should have done was estimated payments through the year, but it was too difficult to follow.

This year, I've already run our numbers and because I'm stupid, we'll get a huge refund of I think $4k or more back. Yeah, I know, what the heck? Well the issue came with DH's bonus in December, they didn't tell us they would withhold way more than our bracket of 28%, they held back 40%. So we budgeted to pay the right amount but they overheld. We should have been paying less all year.

Hopefully this coming year we'll be more spot on. These past two years have been hard with the move, buying/selling homes, learning about bonuses, etc. The beauty of having the estimated payment is you can calculate roughly what you think you owe now and pay if you need and you don't have to worry about it the rest of the year. Of course this doesn't work if you don't have the money.

Shopping Sabbatical?

A group of people in SF decided to try go a year without shopping. Jan 3, 2007 marked a year and it was reported here. The group found it very liberating to be anti-consumerism that they are discussing repeating the trial again for 2007. They did however exempt food, toiletries, and other essentials. This new crazy has caught on in other cities around the world, where people have taken it to extremes by dumper diving and sleeping homeless.

Could you do it? I'm pretty sure I could probably do it. We rarely shop and I can count the number of times I've been to a mall this year on one hand (1 at Christmas). I've never gone into a Pier 1, haven't shopped Pottery Barn, and pretty despise shopping. If I go it's usually for a specific purpose, like a birthday gift, something broke, or the one time I went to the mall was for Christmas shopping.

I am perusing my CC statements actually to see what stores I frequented this year. None. I have gone to Walmart and Target on average once every two months, I go more often to Petco/Petsmart. And I do go to Costco every other week. But other than that, I think my greatest consumption is Border's Bookstore, but I rarely buy books, I just sit there and have a coffee because I feel so cheap sitting there reading all day.

I haven't shopped for clothes this past year, although we did buy new laptops because ours broke. However I did go 5 months without one till I found the one I wanted at the right price. All in all, I think I could do the challenge, but I won't. Why?

Because my one luxury was my vacation this year to Asia. I couldn't give up taking a vacation, which buys into consumerism. I didn't over spend and paid cash, but it still would have to go. Plus not eating out once for a whole year would be a challenge. I would lose what little social contact we have out here.

Could you do it? Could you spend absolutely no money this year?

Is life passing me by?

Sometimes I am seriously tempted by something I really want and don't have the money for. I've never charged on a CC and not been able to pay in full, so I haven't had the rush ever of getting something I can't afford. Recently there are moments of weakness where I say, I wish I could go on an expensive ski vacation or trip to Europe. I never went after college to tour Europe as so many people seem to have done. I didn't have the money. Neither did DH. I always wonder how did these people make it?

I've actually asked a lot of my friends who would go for 3 months to 1 year, how did they cover the expenses? Many said parents, some said savings, and more than a few said they just threw it on the CC and worried about it later.

I wonder if I am missing out by not going to Europe now when I'm still young and active? Should I chuck responsibility and throw caution to the wind? I mean I am somewhat borderline compulsive about being prepared financially for everything, so it's tough for me to justify a trip to Europe or even an expensive weekend getaway. And yet at the same time I know I'll only live once.

So I wonder if I'll sit here on this blog 10 years from now regretting not taking the chance to go and experience life; or if I'll instead appreciate the sacrifice of delayed gratification? Instead I'll be happy with a large retirement account, possible early retirement, money in bank, college funded, and lots of home equity?

I already know I chose a home in my early 20s over travelling and having fun. Turned into a good investment, but I think I do regret giving up some of the fun. I also know that by keeping my car instead of trading up saves me a lot of money. But will I regret my ways later? Am I over the line stingy? Should I be experiencing life more? What if there is no later?

Do people in CC debt regret it? Or do you have great memories to recall and experiences you treasure? Did you enjoy life to the fullest? Am I planning for a future I may not have?

Budgeting Systems Review

Okay so I'm about to discuss my experience with Quicken, Microsoft Money, and Excel. So last month right before Christmas holidays I attempted to use Quicken and Microsoft Money. I hated both systems. I couldn't reconcile anything, pretty much everything attempted to get downloaded off of website, but they wouldn't reconcile.

How so? Well the BofA checking would only go back to May, and I just had to pretend it started off with a budget after a set date. Then when I attempted to put in categories for each entry, it worked mostly, until it came to CC payments. Then when I called it a CC payment it wouldn't reconcile with the CC statement. I downloaded the statement, but it would instead show 2 payments instead of reconciling the two accounts. This occurred in both Quicken and Money.

Then I also tried to track our portfolio, however it wouldn't go back far enough to track the buy dates for some stocks. It also wouldn't track all the entries for the 401k purchases.

Another thing is I couldn't reconcile the paychecks breakdown. It was impossible to setup the paychecks because it was variable at the end of the year. So again I found myself stuck using the computer program. I guess I'm not very computer adept.

As far as excel, I have a simple spreadsheet showing due dates of bills and costs. It isn't fancy, and when I pay the bill, I input the confirmation code. Simple? Yes, does it help budgeting? No, but it makes sure I pay all my bills on time.

I may try youneedabudget or an excel spreadsheet. I'll post when I figure it out. What are other's experiences with Quicken/Money.

Net Worth 2006 Wrap-Up

Okay, I'm going to simply wrap up our net worth for the year of 2006. We started 2006 at $147,936 and we ended it at $196,732. We increased our net worth by $48796 or 33%. That sounds pretty impressive for me. I didn't expect to do so well. Plus not all 401k contributions were added by the end of the year by the company so it would be higher if not.

Overall we had a wonderful year. We saved money, went to Japan/Hong Kong, my mom had a successful eye surgery over this Christmas holiday (I went home to help), and we managed to pay cash for most of DH's school tuition.

Carnival of Personal Finance #81

This week at mighty bargain hunter's site is the Carnival of Personal Finances #81. See my post on Living without a Budget. I hope you enjoy this week's carnival.

I'd like to add, I can't believe people are coming and reading my blog.

Happy New Year

Been jet lagged getting home, but this is a short post of Happy New Year to one and all. May your year be healthy, happy, and prosperous for your families!

Festival Under 30 Finances

This time Festival under 30 Finances is hosted by Beachgirl regarding resolutions for 2007. My post about my 2007 resolutions is included

Giving money...

Okay I'm probably the one blogger who didn't yet discuss giving. I'm not much of a giver, at least not religiously. I giver sporadically to things, mostly whatever fundraiser a friend/neighbor is asking for. But I do not tithe. I wonder if instead of tithing, I shouldn't give to a set charity every month?

What do others do who are not religious? Do you have a set charity you donate to? Do you feel compelled to giver say 10%? Under what circumstances do you give to religious organizations? I have donated to the church mainly when I go in there to light candles for my family's health and well-being. This year I really need to go and light some candles.

Since it is the season of giving, I have given a small amount to charity. I do a lot of random giving, I have no idea why, but I enjoy it a lot. I also love tossing money into the salvation army bell ringers. It's a very strange thing. But all in all, I feel very guilty for not being a regular giver.

Is there some way around this for atheists/agnostics? Should we give back more? Less? And to whom?

Saving Saran Wrap?

Okay so I'm home, and I realized that the thirfty nature is inbreed in my genes. My grandparents were really poor which drove my mom and aunts/uncles to be super frugal.

So my grandmother used to wash saran wrap and place it on the refrigerator to dry. She would also wash and reuse ziploc bags. Pretty much everything she would recycle if possible including using rice bags and potato bags for clothes.

I know that a lot of this had to do with the choices they made with their lives. But it really shapes and changes your family to be forced to be so frugal. Are you frugal by nature, by choice, or because you learned it? I think I'm frugal because it was a learned habit, but slowly I'm losing it.

I won't wash and dry my saran wrap, I enjoy eating out, I want to live in a nice home and I'd like to drive a new car. But will this loss of frugalness cause me to raise my kids spendthrift?

Carnival of Personal Finance #80

Here's the newly posted Carnival of Personal Finances #80. My post about chasing returns on mutual funds was featured.

Merry Christmas

Merry christmas and I wish everyone a healthy and happy new year. May this year be fruitful and blessed for all.

I am so glad I am at home for reasons that cannot be held to a monetary price.

Christmas Budget

I guess I never really posted my Christmas spending. I know most people blow quite a bit on Christmas, but I cringe at the idea of what my Christmas budget really is. Since I'm a non-budgeter, I sort of buy what I like for people. Looking at my credit card statement, I've spent thus far $500/year.

That includes gifts for people, going out to eat with family and paying, cards and postage, and other stuff. Now if you include our airline tickets home, kenneling the dogs, gifts I have to bring back from home for the neighbors, and just overall more eating out the weekend before we left, then I believe we're sitting easily at $3k/year. Okay I really want to shoot myself.

Last year we ran away on our honeymoon to Switzerland which cost us about $2500 for a week including airline tickets, hotels, food, skiing, everything. However I ended up mailing Harry and David to everyone so it cost me another $500 in gifts. So I can't say that it was any cheaper. However I did have a nice time in Switzerland.

Why do people spend so much at Christmas? Why can't we all get over and not buy presents for each other? Why do we even need to send cards? I feel this terrible guilt over cards and gifts, and this obligation to give people stuff because they are giving me something. I really just wish we could do nothing. I expect no presents and I hate shopping.

What would happen if I had the nerve to tell my family no more gifts? Would I be scrooge? I save a ton because I stopped exchanging with friends for about 3 years now. But my rather lareg and extended family is causing me heartache. I don't even have to do my in-laws. So why all this materialism?

How much do you spend on Christmas? Why can't you spend less? Do you want to spend less or would you rather be able to spend more?