ElysianConfusion

May 25, 2012

College Savings… Really?

Ok, so I’m totally not there yet. And I know everyone says save for your retirement, not your kids college. And I definitely understand that. But in the long slog to debt-free, I’ve found it useful to consider where else I *could* be spending (or saving) my money. So I naturally went in search of an online calculator: http://www.savingforcollege.com/college-savings-calculator/index.php (aka World’s Simplest College Cost Calculator).

So – taking the defaults (for a child who has 9 years until college, will attend full time for four years, wish to pay 100% of costs, wish to meet goal by time child ends college, expect costs to increase 6% each year, expect to earn 7% after tax each year in your college savings fund) – plus adding in the little bit we have saved (mainly that my mom saved for them), and selecting the HALF-PRICE* rate of 25,000$ annually – 100% of the total college costs will be $184,771. I will need to make monthly contributions of $885 to meet this cost. For my second son, 100% of my total college costs will be $220,065. I will need to make monthly contributions of $751 to meet this cost. That’s a total of $1,636 per MONTH. Who has that much PER MONTH to save – just for college? Seriously?

Obviously that’s assuming a lot. I have no idea whether they’ll actually choose to go to college. I sincerely hope and expect that they will contribute, and that we will do our best to get whatever scholarships we can. I don’t know how to tell whether they’ll go to public or private, and both the cost increases and the percentage of earnings after tax seem like they’d be a little hard to reliably predict. Still, I’ll tell you this. Those numbers of what I need to save? They seem crazy (885 x 9 years of school x 12 months per year = $95,580 – which is a ton but seriously shy of $185k – $108,144 in deposits for the other child). Holy crap. Those two numbers added together are more than (we are still paying for) our house. And the total costs for both kids for college – that’s two houses! How do people do this? We are not what I’d qualify as poor. Stupid at money management (but getting better), but not poor. If this looks well nigh impossible to us, how does it look to everyone else?

For now, that makes me think seriously about AP classes, Community College courses, living at home during college, and encouraging my kids to save as much as possible. All of which we should do anyway. But seriously? Yikes!

*For 2010-11

Public 4-Year (in-state tuition)
Tuition = $7,605
Room & board = $8,535
Books & supplies = $1,137
Transportation = $1,073
Other expenses = $1,989
Total = $20,339

Private 4-Year
Tuition = $27,293
Room & board = $9,700
Books & supplies = $1,181
Transportation = $862
Other expenses = $1,440
Total = $40,476

November 18, 2010

Giving Thanks for Every Day

Ok, first of all, today’s grand total is… no drum roll, I think … $352,211.05. Down by $2,274.39.

And what have I accomplished? Feels like nothing much. I did decide to charge $40/hour for copy writing and editing. My husband said $50, another friend suggested $75. The range out there was huge. At the end of the day, I felt like it was my first free lance job and I don’t know how I’m going to do, and it’s my brother in law. So. There you have it.

I’m really wishing I could consolidate my mortgage and home equity loans, but you know what? I really can’t. I don’t have enough equity to be allowed to do it. And because my loans are through my credit union and have no affiliation with Fannie Mae or Freddie Mac, I can’t do anything like the Making Home Affordable plan. What annoys me even more is that I don’t even want to reduce my payments or increase my terms! I just want to fix the buggers at a low rate so I’m not worried about future adjustments. Seems like I’m totally out of luck on that front. (Can you hear the huge sigh?)

I haven’t yet figured out new 529 plans. I haven’t figured out whether my 401k dollars are going in the right place. I hate trying to figure it out. I’ve read that Index Funds are the way to go but that the ING Retirement Plans have index funds with high associated costs. I also gathered that I shouldn’t look at MorningStar ratings, which is included in my ING account and apparently partly what the people who choose available funds for my account are using. Great.

Anyone want to help me out here?

1164 ING Index Solution 2055 Port Adv:

Operations

Gross Prosp Exp Ratio 1.06% of fund assets

Net Prosp Exp Ratio 1.06% of fund assets

Management Fee 0.10%

12b-1 Fee 0.50%

Other Fee .

Miscellaneous Fee(s) 0.46%

Fund Inception Date 03-08-10

They all seem similar.

Still, with all of this, I’m thankful for my family and my life, and I know we are so fortunate in so many ways.

Happy Thanksgiving, Everyone!

October 18, 2010

October Falls

Filed under: birthday,budgets,children,debt,money — by elysianconfusion @ 1:36 pm
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I keep looking at my chart of how much our debt costs us. It’s Painful! My plus is this: though I haven’t had much to snowball lately, I can still see an increase in the amount of principal I pay in relation to the interest. And I think it’s largely due to my mortgage.

I keep paying the same amount, so now I actually am paying more in principal on the mortgage than in interest (monthly). I *wish* I could fix this rate.

October has been tough again. I think I need to save $100 per month just for birthdays. This seems insane, and I don’t know how it’s possibly true — perhaps I just haven’t really dissected what we spent for my youngest son’s 5th birthday. But if I saved it, it would be there, just in case. I like just in case.

Besides the birthday, we have to pay our town taxes (ouch) and our home owner’s insurance (annual) and for wood. Next month, next month, next month. I feel like that’s all I say. But next month, I think it will all be a lot easier and I will have some money to snowball and we will kick this stupid debt.

Right now, our grand total of debt is $354,485.44. Mortgages, cars, student loans, credit cards. Boom. It’s all there.

Here are my puzzles, chime in with advice, if you please.

#1 — We have 529 plans for the kids but my sense is they’re not the right ones. Help me pick! I’m in Massachusetts, if that makes any difference. The financial advisor appears to be useless and only recommends those related to MFS, without analyzing fees and such. (So maddening, what is she FOR?) Also, for those thinking we’re batty for contributing to college when we should be paying off debt, we’re not. That’s where money goes that people give us for the kids. For right now, for the rest, kids will need scholarships.

#2 My brother-in-law called this weekend to say he wants to hire me to do copy editing and copy writing (free lance). What do I charge?

If anyone has suggestions, I truly hope you will provide them in the comments.

 

July 23, 2010

It’s Just Not FAST Enough!

Filed under: birthday,budgets,children,debt,family,money — by elysianconfusion @ 10:36 am

Patience, patience, patience! I don’t have it. I’ve never been good at it (perhaps this explains our debts? I don’t know!)

The new number for this month is 360,968.68. That means we’ll get under 360k next month, which is a good thing. I know people who owe more than that on their houses! In August we also have to pay for all of preschool for next year, $4,000. I’ve mentioned before, this will be a weight off my mind once it’s been paid. I still have to do the paying.

Meanwhile, my budget doesn’t seem to be great. I’ve definitely underestimated the real costs of vacation. I’m having trouble balancing a realistic budget we can stick to and an aggressive enough payment plan.

I did successfully hold down costs for my oldest son’s 7th birthday party. Instead of having a pinata with candy no parent wants, or a goody bag full of stuff the kids will break or throw away immediately. Instead, we had a low-key party in the yard with tents and a campfire, and we all tie dyed shirts that the kids got to take home. I thought it was a lovely party!

Next week we’re on vacation. I keep asking friends how they plan a budget for vacation. You know, they all look at me like I’m nuts. A budget for vacation? They think it’s crazy. But I don’t know how to relax about the money I’m spending on vacation unless I planned for it.

Am I crazy?

June 16, 2010

Writing and paying

Filed under: budgets,children,family,money — by elysianconfusion @ 7:53 am

I know, I’ve been terrible at writing lately. I’ve felt stalled and it’s depressing. Plus life is busy for a working mom :-).
Today is the last day of school for my six year old son (almost seven! I need to write and send out birthday party invitations FAST). My four year old is sleeping shockingly late, so I’m grabbing a minute to write an update.
Current total debt (including mortgage) is $363,036.04. That’s down $2215.82 from last month. I was looking back and thought GAH! Why is it 200$ less than last month? I don’t know, maybe I used numbers before new interest expenses were applied? But in April it was only ~1800, so I guess I’ll take comfort where I can. And on the PLUS side — that’s $40,402.10 down from last year when we started! So that’s something. $40k has to be some kind of milestone, right?
I have managed a few things… I paid for all of summer camp and I’m on track to pay for all of preschool next year by August, freeing up an enormous (to me) amount of money to throw at debt. I also paid all of next year’s auto insurance (saved money that way and reduces monthly expenses). We still have money in our targeted savings account for stuff, including our vacation (camping in Maine), which has GOT to be a first.
I’ll try to post more to keep myself on track if nothing else. The little one is up and needs breakfast!

April 15, 2010

After a year…

Filed under: budgets,children,debt,money — by elysianconfusion @ 12:14 pm
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We started this journey in April 2009, so it’s now been a year.

April 20, 2009: 403,438.14
April 15, 2010:  $367,664.68

So, we’ve paid down $35,773.46 in a year, which is not bad, I guess. It’s down only $1,814.63 from last month, and honestly, I’m feeling pretty discouraged.

We’ve had a lot going on lately and haven’t been able to sell anything on Craigslist. I haven’t even gotten my donations together.

The real problem here is that after a year of budgeting and planning and working it all out, I’m faced with the unexpected. Summer camp requires you to pay 100% of the cost before the child even starts camp, and I wasn’t aware of or prepared for that. Maybe I should have been, I don’t know. So despite saving aggressively for preschool (so I could pay the entire amount in August, thereby eliminating the interest (10%!!!!!) they charge to make monthly payments, I still am screwed. This month I have to pay $1,800 for extended day at preschool (necessary in order to work) for next year. I also have to pay $300 for two weeks of camp so that my younger child will be in “school” until the same date as my older son. I have one week with no plan for either of them, then the following week they both go for 1/2 day for the week.

After that they start camp at the YMCA (116 acres and a pond and lots of activities, I think they’ll enjoy it). We already had to pay a $772 deposit for this last month, and this month $1,496 is due, and next month $1,072 is due. This month I also have to pay my town taxes, about $1,630. This is just overwhelming for me.

I have been saving and saving and SAVING! I am insanely frustrated.

As I see it, I have 3 options.

1) Charge camp. I *think* I will be able to pay that back within the grace period (current balance = 0 so no interest).

2) Take the $1,000 out of my emergency fund, leaving me with nothing in there, so I’d have to charge emergencies anyway.

3) Borrow money from my mom.

I really don’t want to borrow money from my mom, even if I can pay it back within a month or so. I just don’t want to.

The other two options seem more psychological than anything else. Both feel defeating.

The other issue is that making sure I have money for camp and for preschool means I pretty much have nothing extra. No snowflake or snowball at all. I hate that. I wasn’t able to snowball this month, and I don’t think I can start again until August. Unless, you know, we have some kind of windfall. On the other hand, by August I can successfully drop savings for camp and preschool and full-day kindergarten to $440 per month, down from a high of  $1,850 this June. That will significantly improve the snowball at least. Or at last.

So here I am, praying for windfalls and snowflakes!

February 24, 2010

Summer Camp Costs

Filed under: budgets,children,debt,family,money — by elysianconfusion @ 5:22 pm
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Ahh childcare. I want my kids to have a good summer. I want them to do and learn fun things, and I think they’ll be happy at camp. Last year we had a babysitter for the summer, and that was great but…

I don’t like having people in my house every day. I didn’t like having to tell her what to do to keep the kids out of my hair (one of the burdens of working at home I suppose). I didn’t like not knowing what they did when they weren’t here (how much tv did they watch? I have no idea).  And they got almost no playtime with other kids. So this year we’re thinking camp. Unfortunately for me, this really kills our budget.

1) Camp costs at least 200$ per week per child.

2) Many camps don’t have full programs for 4 year olds.

3) Camps seem to require payment before the program begins, which means I need at least 3k by June 1 for summer costs.

4) I have to figure it out now to make sure we have a spot.

5) The sessions seem to be typically for two weeks, and you pay for both even if you don’t go to both. So either I keep them home for a week and go on vacation for a week, or I pay for two weeks and only use one (I don’t want to do that).

6) It’s really hard to find comprehensive summer camp information for the area, and it’s impossible to search on things I want to know (price, minimum age, hours). I don’t even want to look at the camp unless they take both kids. Otherwise I’ll spend all my time driving them to and from and won’t get any work done.

So although of course I knew I’d have summer childcare costs, I somehow didn’t realize that I had to pay for them before sending the kids for a single day. I’ve been redoing my budget to try figure out how to get everything paid in cash and on time. The worst thing about that, really, is that I can’t think of any way to do it without (temporarily) cutting back on my snowball. I’m really disappointed about that.

I think I can get it all worked out and make sure I have enough to prepay preschool (saving 400$ in interest I’d pay taking the monthly payment plan) in August. So it’s basically six months of lowered snowball payments (I think they’ll be 379$ extra going to debt a month, but I’d sorta been planning on 719, which would have paid off a credit card in the next twelve months. (Can you hear the big sigh??) And I’d just calculated a new emergency fund goal of $6,000 and started my own little snowflake spreadsheet to keep track of everything and hopefully ramp this stuff up a bit!

Well, I guess I’ll see what I can do with what I’ve got… maybe I can find more corners to cut in our budget and push a little hard on the EF and snowball. (Although my husband was just complaining about how tight the budget was last night — and I think we waste lots of money! I guess we need to sit down and look at everything we spend — I do this all the time and he pretty much never does. Two posts at Get Rich Slowly made me think we need to work on this: What Marriage Has Taught Me About Money and Money Without Matrimony (even though we’re married and heterosexual, sounds like a good book!))

February 15, 2010

Spreadsheets RULE

Filed under: budgets,children,debt,family,insurance,money — by elysianconfusion @ 5:26 pm
Tags: , ,

Where would I be without spreadsheets? I use them for my budget, for my debt snowball, to plan how much I need in my emergency fund, and to track my escrowed savings. I’ve gotten a lot more adept at calculations in Excel. My latest addition to this is a new checking account at ING Direct.

Partly this is because I had savings there already (at 1.2% a much better rate than my credit union) and they said if I opened a checking account I’d get .25% interest and a $50 bonus if I made three signed purchases (not debit) in the first 45 days. I have two savings account, one for items I escrow and another for my emergency fund. It’s nice to have this separate from my other accounts, it makes it harder to spend the money.

My escrowed funds include money for:

  • Preschool tuition/deposits ($1500 deposit!)
  • Oil and wood for home heating and propane for hot water
  • Real-estate taxes
  • Christmas fund
  • Vacation fund
  • Home insurance

That’s been going pretty well. And it makes me feel a lot better. As I play it out, I always have enough to pay what’s necessary, with a little cushion.

Now that I have a checking account too, though, I am also trying to take control of some of the budget line items that are hard to plan for with precision. I hope this makes it easier.

  • Household (includes minor home repairs, paint, shelves)
  • Car repairs (includes inspections, maintenance)
  • Clothing
  • Medical (I get flex spending back for this, but it’s nice to have money planned to pay for it)
  • Father’s insurance (I pay once every three months or so)
  • Gifts (hopefully this will help with months that require more gifts — why does everyone have their birthday at the same time?)

This is experimental, but the checking account has already helped me — I paid my propane bill directly instead of having to transfer money back and forth. I’m hopeful! I wonder if I can get a spreadsheet to make me better at snowflaking?

January 20, 2010

Finance for Women

Robert Brokamp of The Motley Fool contributed a new post to Get Rich Slowly about women and retirement this morning.

This should be a compelling topic not only for women but for couples. We need to understand how our earnings differ and how that can impact retirement, and how divorce can impact our retirement plans.

I’ve probably spent too much time worrying about divorce and retirement because my own parents split up when I was 27. I can’t really comment about the divorce itself — I think there’s probably a lot in that relationship that I will never know or understand. However, my parents’ financial situation was a disaster when they divorced and I can’t imagine that that didn’t contribute to the split. When their house finally sold, my mother paid off over $60,000 in credit card debt for both of them. She got the rest of the proceeds from the house and he got whatever was in his retirement account. Because my father didn’t cooperate with any of the divorce proceedings, my mother basically had to go on an old copy of his retirement benefits statement. I know she tried to be as fair as possible given the information she had.

My mother paid off every debt she was aware of and put the rest of the money into a retirement account. That money doesn’t begin to make up for what she lost in social security contributions and any possible retirement contributions she could have made if she’d worked full time instead of taking care of her children and home. (She wasn’t exclusively a homemaker like the woman in this NY Times article, but part time work in spite of getting a Masters in Social Work doesn’t add up to much).

My father, meanwhile, has pretty much spent all of his retirement income and lives on social security. I do not know what it’s been spent on, but I know he has nothing left.

I don’t even consider social security when I look at our retirement — I assume it won’t be there (so I hear — if it materializes, it’s a bonus). But my husband does have a lot more in his retirement fund than I do. I hope that we will continue to share our lives, and I hope that we fully fund our retirement accounts and pay off all our debts. It’s going to take work, but it’s work we’re willing to do, and we’re doing it together. I hope that journey will make us that much stronger as a couple.

Still I sleep easier knowing that I’m contributing to my own 401(k) and that I will have put money into social security if it turns out to still be there in 25-30 years, and I won’t be left with no clue how to handle finances. I’m in the workforce already, so I don’t need to worry about how to get a job after years at home. I have plenty of friends who stay home with their kids. I don’t know what the right path is for them, but the costs of childcare and dealing with commuting and job stress certainly can make both parents working a stressful balance. I believe for my family this is the right choice.

November 24, 2009

What to do…

Filed under: children,family,parents — by elysianconfusion @ 7:30 pm
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My four year old doesn’t have school this week (at all) but I still have to work. I know it’s wrong to just let him watch tv and play the Wii… but he will not just play cars or trains or build things quietly. He needs attention. I want to give him attention, but I need to work.

What *do* people do? I work at home… I have no childcare here. Yesterday he had a playdate, that was great. (Except he wanted to come home and play Wii Sports Resort.) We can’t have a playdate every day. My oldest doesn’t come home for another hour, and it’s not like they play *so* well together. They’re more likely to fight, really.

But outside it’s cold and damp, he doesn’t want to play there. We have a million games and toys and puzzles, blocks, train sets, Lincoln Logs, Legos, books… you name it! How do you get your child to engage in indoor independent play?

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