The Transitioning Period--Adjustments Personal and Financial

* Just a post on my thoughts and ideas as we adjust to our new financial reality. *

So with Hubs retired and we are back from our grand road trip adventure, we have settled into our "new normal".
And so far, this new normal isn't too different from the old normal. 8-)

Especially until the 401K becomes available to us in October we needed to be seriously conscious of ALL our spending, especially the types that are discretionary to some degree.

Grocery spending and electricity and water usage have been scrutinized plus all "want" spending as well.  I've made a concerted effort to only run energy hog appliances during off-peak hours(after 5 pm to 7 am).  Not having to use heat or a/c has also gone a long way to keeping the energy bill down.

Hubs had a "light bulb" moment a week ago Friday.  When he worked, he use to get $ out of the bank every other Friday, $200 a pop of WAM(walking around money).  This is money he doesn't have to account for how and where it's spent.  I gave up a long time ago with trying to get him to save me receipts so we could track all his cash spending.

When we had our retirement budget meeting back in June we agreed on $100 per person per month of WAM.  Now that he doesn't need to buy coffee and/or lunch at work, plus he doesn't need to chip into office gifts, get as many haircuts and basically doesn't go anywhere, he really just needs a hundred a month for his wallet.  If he needs to buy gas or something for the house, etc. or I send him to the grocery store for something he is suppose to use his credit card.

So he was telling me that Thursday that he was going to the bank tomorrow I just looked at him and asked why.  Hubs said to get his WAM.  I just looked at him and said, "You've already got your WAM.  What? Are you out of money already??  I've still got my whole $100.".
He then went on to deny that he agreed to only getting $100 a month for WAM so I showed him the paper we wrote the retirement budget down on.  I guess he thought I wouldn't remember or something. hahaha
I guess he finally realizes that his financial day-to-day has been impacted by retiring.

One thing I did when we got back from our trip was take an inventory of our canned/jarred/boxed food/toiletries/HBA/paper goods. 
Here are the things we don't need to buy for the immediate future(I'd say we can safely hold off all this spending until 2018)---
* shampoo
* toothpaste
* tooth brushes
* mouthwash
* razors
* soap/body wash
* OTC meds
* hand soap
* dish soap
* dishwasher tabs
* laundry detergent
* bleach
* toilet paper
* facial tissues
* drinks
* cold cereal
* corn meal
* pasta
* canned tomatoes
* coffee
* olive oil
* peanut butter
* salad dressing
* croutons
And now includes tea bags after the Deal I gt on those on Friday.

Unless one of the items above is free, I am not buying them for the time being.

We've gotten quite a few projects completed or started around here since getting back from our trip.  Other than having to purchase supplies for some of these projects it has been a low expense month in some ways. (Not counting paying school taxes and the healthcare insurance premium.)  And speaking of premiums, we have also finally received 3 months of healthcare premium reimbursement.  Yay!!!  Going forward we will be submitting for reimbursement monthly so I don't have to use regular savings or monthly annuity income to cover this cost. 8-)

I am also staring a Sinking Fund for next year's irregular bills.  In the old days, back when Hubs was earning a nice paycheck I could just cash flow all these bills without having to dip into savings.  Now though we are living on half of what he use to bring home per month. In order to have enough saved up when each one comes due a Sinking Fund makes sense.  It's sort of like your mortgage company requiring you to pay more than your actual mortgage each month so they can also pay the real estate taxes for you too.

Here's my list of  irregular bills--

* home owner's insurance x 2(until the LA house sells)
* car insurance(semi-annual)
* garbage bill(quarterly)
* real estate taxes(annual)
* school taxes(annual)
* sewage(annual)

Presently this all accounts for $7654.77 worth of bills per year.  Break that down monthly and I need to put aside at least $637.90 per month to cover these costs.
Starting in October I'll be putting $650 of our annuity into this Sinking Fund.  I am figuring with deposits monthly and how our irregular bills flow month to month I'll be able to cash flow from this sinking fund through the end of 2018 if I start it in October which gives me a few extra months of putting cash aside(for a big bill due in March).

Here is how the Fund will play out(if no bills rise in 2018)......

October deposit $650-$84 irregular garbage bill=$566 carried forward to Nov.
November deposit $650+$566=$1216-car insurance $864.65=$351.35.
December deposit $650+$351.35=1001.35 with no irregular bills due.
January deposit $650+$1001.35=1651.35-garbage bill $84=$1567.35.
February deposit $650+$1567.35=$2217.35.
March deposit $650+$2217.35=$2867.35-$1371.85 real estate taxes + $430.68 sewage=$1064.82
April deposit $650+$1064.82=$1714.82-$84 garbage=$1630.82
May deposit $650+1630.82=$2280.82-$864.65 car insurance=$1416.17
June deposit $650+$1415.17=$2066.17-$1016.63 house insurance(if the house isn't sold yet)=$1049.54
July deposit $650+$1049.54=$1699.54-$84 garbage bill=$1615.54
August deposit $650+$1615.54=$2265.54-$668.00 house insurance=$1597.54
September deposit $650+$1597.54=$2247.54-$2102.31 school taxes=$145.23
October deposit $650+$145.23=$795.23-$84 garbage bill=$711.23
November deposit $650+$711.23=$1361.23-$864.65 car insurance=$496.58
December deposit $650+$496.58=$1146.58 with no irregular bills due.

I figure I'll be able to carry over $1146.58 of Sinking Funds into 2019 at which time we'll revisit paying the irregular bills that way.

February and December I have no irregular bills due.  Not having any bills taken out of the December and then the February deposit helps me get ready to pay the real estate taxes in March.
Once we sell the LA house June will also not have any irregular bills due that month(and this will help a bit with paying the school taxes in September from then on).

Financially things are going ok for now.  I suspect the electric bill will start it's inevitable climb in October once the heat goes on and won't let up until next April. Oh of the joys of living in the North East. ;-)  We shouldn't have a problem though covering the high electric months of Winter.

I am hoping I may be able to keep our monthly spending down within our monthly annuity payment for normal expenses long term.  This would mean just tapping the 401K monies for things like trips and the high deductible at the beginning of the year for the health insurance that we need to pay OOP before any benefits kick in.  Thus the 401K monies would last even longer than we thought they would.

That's about all I can think of now on this subject.  If other thoughts come up I'll address them.

Do you have Sinking Funds?  Have they helped you stay on track with your money and bills?
Was there something that happened that made you realize the finances are different now once you retired?
Are you adjusting to retirement?  What have been the challenges for you with it?  What have been the unexpected benefits?


Sluggy

$28K Savings Challenge.....December & Year End UPDATE

Every year I keep a close eye on our monthly expenses and our monthly income.

Our income is mainly the salary my Hubs draws from his job.  We have money taken off each paycheck from the top to put into savings, before we even get our hands on it.  This money that's taken goes into various pots....life insurance, health insurance premiums, long term care insurance premiums, investments and retirement savings.  It's automatic so we are never tempted to NOT put it into savings or these other categories.

Once the automatic savings amounts, plus taxes and medical/dental/vision premiums are taken out, it leaves what we get to "live on".  From this amount we budget for bills, both monthly and irregular bills(semi-annual, annual etc.) and our variable bills(like food, eating out, clothing  etc.)  Anything left over once our monthly expenses are paid, I put aside into an interest bearing Savings Challenge account.

For 2015 I am continuing my Yearly Savings Challenge.  I am raising the Goal amount slightly to $28,000 this year, $4K more than my goal for last year.

On to the December report.....

I have posted my December End of Month $28K $AVING$ CHALLENGE Totals.
Check out the Savings Challenge page tab at the top of the blog for the specific numbers HERE.

I have 2 goals each month.....
The 1st is to actually finish each month in the black and not the red.
The 2nd is to hit the targeted savings amount of $2,333.33.

I have to report that we finished up December with a goodly amount leftover.
The extra amount we ended the month of December with?.......$3,323.77

Income

We had $2860.71 left over from our income after our monthly expenses were deducted.

Other monies received in December totaled $463.06.  This included interest made on non-retirement accounts, quarterly dividend checks. a per diem and cashing out my SavingStar rebate for the year.

This brought us to our gain of $3323.77
Since we have no debt, this goes into savings.

Outgo

As for the expenses this December, here are the good and the bad side of things....

HERE are the GOOD THINGS

*  Phone charges and internet were approximately the same as last month.
*  The electric bill was only up $41.46 from last month.  With electric heat this is an amazing total for heat and lights, etc. for December in northern, mountainous PA. We have never had a December electric bill here under $200 before!  Between the record high temperatures and my diligence at turning down/off electrical drawing appliances take the credit for this win.
*  The credit card was down $38.19 from November's bill.

HERE are the BAD THINGS(and the not so bad)
.
*  The water bill was up $13.60 from last month.  The 5 days College Boy was home last month explain this easily. lolz
*  The gas card bill went up $32.58 from last month.  Not so bad as this means Hubs but more gas purchases on the credit card instead this month.  It has to come out of one or the other, right? ;-)
*  Medical payments were up $468.77 from November.  This was due to finally getting the invoice for the first cataract surgery charges.  The eye surgeries are all paid off now, rah!
*  The cash withdrawn was up $600 from November.  Having to take cash on our trip and a little more Holiday spending by Hubs can explain this one.  ;-)
*  There was a Kohl's bill to pay as well as birthday and Christmas monies we paid out to our kids.

The Food Budget costs for December are in another post, which is located HERE .  I stayed under my  December $350 budgeted amount(on this report grocery money comes out of "Cash")on that expense only due to cashing out on my Saving Star Rebates for the year.

December was a fairly expensive month for us, especially since we didn't have a large "regular" irregular bill to pay this month(insurances, taxes, sewer, etc.)  Just an increased electricity bill with having the heat on, a large medical bill total and some extra cash spending and traveling for the Holidays.

The 2015 TOTAL.....
With 12 months accounted for, our Savings Challenge Grand Total for 2015 is $41,775.56.
Except--Since we have our high medical deductible kicking in on Jan. 1st I will only be putting $1,548.21 of what was saved in December into the Savings Challenge.  This will give me an even $40K saved in 2015.
The other $1,775.56 is going to roll over and remain in our checking account to help offset medical charges for the beginning of the year before we satisfy a $3K deductible amount.  It doesn't cover the full deductible figure but it does go a little more than halfway to reaching the HMD.

That full year $40K savings amount averages to $3333.34 a month put into savings for 2015. Some months was much more than that and some months were much less.

We have well surpassed our $28K Savings Goal by $12K+ in 2015.  I am very happy with this final count.

Final thoughts on December---
Even with increased Holiday spending and such we saved a goodly amount this month.

THOUGHTS going forward into 2016----

Even though some of the invoiced medical charges I put money aside for in previous months of 2015 haven't arrived so they can be paid, I have still deducted those bills from our monthly income.  Once they come in(now in 2016)they won't affect our savings/spending monies set aside to be disbursed and we can start the new year with a clean spreadsheet as it were.  ;-)

I will of course continue to save part of our monthly income and bank it-part to spend on those large irregular bills that come in during the year and part to tuck away for additional funds to augment our retirement savings.
Still mulling over how much to make the Savings Goal for 2016.  Perhaps $35K......maybe less.  I need to get out my spreadsheets and study the last few years of spending, the potential income for 2016 vs. potential 2016 bills to see where the spending may land this year.

So how was your December financially?
  

Did you spend less than the income you had in December?
Did you stay within your budget or not?
What did you do with any money leftover at the end of the month?
Did you pay off any debts or put extra toward your mortgage principle or into savings, in an emergency fund or a retirement account?
Or did you blow it on a want?

If you posted your financial progress on your own blog, leave a link in the comments so we can go check out your progress too and celebrate or commiserate with you!

Are you happy with how you managed your money in 2015?  Or do you need to do a better job of juggling all the commitments to your income in 2016?

As we go forward into 2016 why not make this new year the one were you clean up your finances and pay off your debts.
Plan to set something aside if you don't already now or increase what you bank now for your future self.
Live below your means and keep some change for a rainy day....because no matter how sunny it is in your life now, dark clouds come along and you'll be glad you have that umbrella to keep you dry.

Sluggy