$28K Savings Challenge......June 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 June report.....

I have posted my May 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 June with a smaller amount of leftover cash.
The extra amount we ended the month of June with?.......$1,369.37

Income

We had $1,143.02 left over from our income after our monthly expenses were deducted.
 

Other monies received in June totaled $226.35.  This included interest made on non-retirement accounts, 2 dividend checks and a per diem from Hub's work.

This brought us to our gain of $1,369.37
Since we have no debt, this goes into savings.

Outgo

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

HERE are the GOOD THINGS

 

*  Phone charges, internet and  electricity were approximately the same as last month.
*  Cash withdrawals went down a crazy $936.52 from May's total.  Vacation $ mostly.

 

HERE are the BAD THINGS
.
*  The credit card bill was $2,445.89 higher(May's trip expenses).
*  We had a car repair of $441.61 on College Boy's vehicle.
*  Water bill went up by $7.16
*  Gas card bill went up by $87.27(May's trip).

 

The Food Budget costs for June are in another post, which is located HERE .
 

The 2015 TOTAL.....
With 6 months accounted for, our Savings Challenge Grand Total for 2015 is $18,797.36.
That averages $3,132.89 a month put into savings so far. 
We have left $9,202.64 to put away this year to reach our $28K Goal.

With $18797.36 saved already we only need to put away $1,533.77 each of the next 6 months to reach the $28K goal for the year and that's highly doable for us.  ;-)

THOUGHTS going forward into July----

No irregular bills coming in July, which is good.
The only trip planned this month is a 2 day apartment hunting excursion to VA so a few extra bills(hotel, gas, food out) for that.
There are eye surgery co-pays and prescription co-pays which I will pay for OOP instead of the HSA in July which should amount to about $300+/-.  Hubs also has some eye issues and co-pays this month which I don't have a handle on the amount yet.

We are having a cook-out picnic for July 4th, then the eldest son will be home for a bit later in the month, so there will be extra food/drink spending in July(but I am stocked up on many items for this so I don't anticipate going over my food budget this month).

With 6 months behind us we have $18,797.36 down and $9202.64 left to save in 2015. 

 

So how was your June financially?
  

Did you spend less than the income you had in June?
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!

Sluggy

How Ready Are You For Retirement? Part 2

                    photo by Joe Belanger
Ok, so having a financial cushion is only one part of being ready for retirement.....albeit, a MASSIVE Part of it!

If you go into your retirement years without money(or for a rare few these days, a company funded pension)your Golden Years won't be so golden.
After all, it takes money to sustain even the most modest of lifestyles.
And let's face it, living on ONLY your Social Security check just won't cut it.

That Social Security check, once you hit the major age(depending on what year you were born in)is a help but unless you had a very high paying job for many years while working that check probably won't cover all your costs of living ANY sort of life.  A married couple has a better change of eeking out a modest lifestyle on only Social Security but really, if you don't have to, don't plan on SS being your own source of funds.
Again, there are exceptions, but for most people, you need other assets to draw upon in retirement.

And then, if you retire early there are those years of not working you need to bridge with cash until you can access your own directed retirement funds, your pension(if you get one)and/or your Social Security check.

And if you are in the US and retire early there is also that small worry about paying for your healthcare(unless your ex-employer funds something for you to draw to pay for these expenses)until you hit the golden Medicare years.

There are two other big components, besides how much cash you bring into retirement, that will have a large affect on you and what kind of retirement you have......

One--Your financial position at retirement in regard to debt.
Two--How much it will cost you to maintain any lifestyle.

So it pretty much goes without saying that you need to be DEBT-FREE once you decide to retire.
Retiring with personal or mortgage debt is not a good thing and not the optimal state to be in when you retire.
As commenter SAK noted in my last post on retirement, "The reality is that the biggest driver of what you need in retirement is driven by where you start your retirement. No debt, own home, savings, good health AND good health insurance.....".

The best position to begin retirement in is to carry no debt.
Period.
Get your house paid off(if you own one).
While it's possible to retire with a mortgage, if at all possible, it's not something you want going in.  A mortgage is just another bill(usually one of your larger ones)that will have to be paid until you get that sucker paid off.
Now it IS possible to retire with a small mortgage(that is going away soon once you retire)but most people and financial experts will tell you it's not an optimal state to be in.

And depending on the owning versus renting options, in your chosen area it may be cheaper to rent.
The real estate markets as you all know have been crazy since the early 2000's.  Some parts of the country it just makes no sense to buy a house.  The prices are just so high it would tie up all your assets and leave you with little to live off of.(Of course, when you die and your heirs sell the house they will be rolling in dough.)

 Many people go into the retirement years without a paid for house.  Just remember that the real estate market can change at any time, even if renting is cheaper now.  Rents will most certainly increase as the years go on so if you don't plan on retiring in a paid for house, adjust your living expense sheet to cover rental increases.....or be prepared to move(which will incur it's own set of new expenses and may not be something you are physically up to doing as you age).
Have a housing plan if you rent, but it's pretty smart to also have a back-up plan if markets and prices change drastically.

Again, as you look to your retirement years don't do anything stupid with debt.
Pay off your house, your car(s), any unsecured debt(credit cards), loans on lifestyle toys like boats, trailers, ATVs, etc.

And if you still have student loans going into retirement?....wow!  You need to get those paid off asap.
If you cosigned on any loans for your kids or others you need to make sure those are paid off as well......and on second thought, you really shouldn't have co-signed in the first place, especially if you are too close to retirement to get them paid off. ;-)

We all want to help our kids and family but really, is it a wise choice to put yourself into more debt for them?  The government will give your kids loans to go to school, but they are not going to loan you money to fund your retirement.
If you only have so much money and it's a choice better funding their college education and your retirement, pick your retirement.  After all, if you don't have enough to live on in retirement that means your kids may be obliged to support you when you can no longer work.  Don't plan on being a burden to your kids.  Between paying off student loans, their own mortgage, car payments and paying the expenses their own kids will cost to raise them, your adult children have their own hands full!

Besides, your kids will have a long working life to pay back their student loans while you may only have 10 years or so left to fund your retirement. 

Not that I am suggesting your kids wait for 30 years to get student loans paid back.....they should be doing whatever they can to pay those back asap!  Deferment interest really adds up on non-subsidized student loans.  Even though my husband had both undergrad and graduate school federal loans, bringing both into our marriage, that was a top priority early on in our marriage-to pay those loans off!  The sooner you pay off student loans the less interest you will pay and the sooner you get to decide what to spend your money on next.

Don't fund your kids' lifestyles by carrying debts for them into retirement.  If you feel compelled to loan money to your adult children then at least make sure it doesn't impact you too much financially and for gosh sakes, get something in writing that can be enforced spelling out the terms of the loan, in case they decide on down the road to just not pay that money back.

The other component that can have a big impact on your retirement is how much you will need to cover your lifestyle once you stop working.
You need to take a good hard look at  your expenses, both the every month regular ones as well as the irregular expenses that only come up so often in your year/life.

Hopefully you will not be supporting kids(grandkids too) or parents when you retire.  Optimally it will just be yourself(and your spouse if you are married).

Do you know approximately what it will cost you each month to live the life you want to?
If you are on the downslide into retirement(over 50 usually)but not retired yet, it's never too early to sit down and go over the numbers.

Find a good calculator online to project how much money you can/will draw each month from your savings(and how much your Social Security will be once that kicks in).
Then write down all the expenses you will have in your golden years and see if your savings/retirement funds/SS projections are enough to cover your projected living costs.
I know it won't be totally accurate but just having some idea of where you stand with your savings rate NOW can let you know if you are on target or need to beef up what you put away/invest.

Since your expenses will change as you age(you will spend more on lifestyle during the early part of retirement, while the later years will see that spending shift to being more heavily involved with medical expenses, even after you hit Medicare age)it might be wise to figure what you need when you are "young" retired(in your 50's, 60's and some folks into their 70's)as opposed to your last years(70's-90's and beyond).
You will most probably travel a lot more as a newly retired(if you are given to travel as a way to fill your time).
You may also want to volunteer your time in causes you believe in or work part time as you ease into retirement.  While a part time job will give you a little cash injection it won't fund your lifestyle and both non-paid work as well as paid work will mean more expenses incurred on your retirement budget.

A good thing to try when figuring out your retirement expenses is to see how little you can live on BEFORE you retire.
Try it for a month or two to see what level of lifestyle you are comfortable living.
Of course there will be things you can't do while working(like not using your car or public transport).
but you could go without eating out, or cable or cell phone plans, electronic toys, traveling.
All I saying is to find your basic living NUT.
The bare minimum you will need to spend in retirement to sustain you(and your spouse if applicable).
How much you need to spend each month for the bare necessities you are comfortable living with(or without).
If you can cover your NUT each month with your retirement fund withdrawals/pensions/social security you are doing aok.

Of course, if you will have more money than that amount each month, good for you, and you won't have to live a monk's life if you don't want to in retirement.
You can always add in more expenses to cover the extras in your budget as your money holds out.
Hopefully you will have enough to cover the needs of your life and can easily add back in some of your wants.

Now don't just sit there........get cracking on a Plan for your Retirement!
It's never too early. ;-)

Sluggy

The "New" Plan

As some of you may know, Hubs and I are going on a road trip this month, with the destination point being the town where my daughter now lives.
I haven't seen her since she moved there last May, so it's been almost a year since she's been gone and we've seen her.

I miss her.
I can bet you that after 2 days being around her, I'll take that statement back. lol

Anyway, we are looking forward to visiting her and seeing a part of the country that, at least my Hubs, has never been to before.

The daughter's living situation is tenuous at this point.  She's been living with her boyfriend and his parents since May.
That situation has been "going downhill" for months now.  Nothing dangerous or bad but she and the BF want to move out as soon as they are able.  They are in their 20's now and want to get out on their own.

So here comes another one of my hair brained ideas....uh oh.....!LOLZ

Hubs and I are still up in the air in terms of what part of the country we are going to retire to, but he IS retiring in 4 years and Hubs wants to move away from the "snow belt" and I want to be near wherever my kids end up living, so we have come up with an idea.

I have contacted a realtor and while we are down in Louisiana we are going to be looking at property there.

The plan now is to find something inexpensive, a foreclosure, etc., we can buy soon,  that the daughter and BF can live in for the next few years, until Hubs retires.  At that point they can make arrangements to buy the house from us or they can move out and we'll move in and renovate or have a new home built on the property.

The housing market down there is still quite depressed and there are many many foreclosures and folks desperate to sell.
I want to find something we can pay cash for(since we won't be selling our house up in PA yet)and the kids can do any fix-up work to get it livable(on our dime).  In exchange for free rent, they take care of the place.  They will be responsible for the taxes and utilities.

We are thinking about properties with at least 2 acres outside of the cities there.  Most of these would be mobile home situations.  As long as the trailer is in good enough condition, these would be the cheapest option and the most attractive for our needs.
Once Hubs retires and we move down there, we'd move the trailer(or haul it off depending on condition)and have a new house built on the property for us(after selling the house in PA since we'd use those funds to pay for the new house).

I figure, Hubs will enjoy the weather there(thank goodness for A/C for me!lol), we will enjoy the laidback lifestyle down there, plus we'll be close by to where my daughter lives.  She plans on having kids so this is important that we be close by.  My oldest is also planning on relocating to the South at some point so we'll also be closer to him and his GF.  It's too soon to guess where #2 Son will end up as an adult so we can't even make a plan taking him into consideration.

So we'll see what develops from this trip.

Sluggy