Wednesday, January 30, 2013

Operation Having Twins: Phase One underway

Just a quick update today.  S and I are thick in the process of merging our finances in preparation for the babies’ arrival this summer.   I’m viewing this year in terms of phases.   Phase One is the months preceding the babies arrival or me going on bed rest, i.e. both salaries coming in.  Phase Two is me potentially on bed rest, the babies’ arrival, maternity/ paternity leaves, and S potentially transitioning to a new job.   Phase Three is me going back to work and S potentially working part-time evenings and weekends.

Right now we’re in Phase One, which will hopefully be until mid-June when the babies will be considered full term.  Obviously we can’t predict when they might arrive or if I’ll end up on bed rest at some point and ultimately we don’t have much control over that so the best we can do is continue shoveling money into savings.  We’ve already set up our joint accounts and come up with a pretty stringent budget for the next four months or so (until the babies come) that cuts back to the bare essentials/ minimum debt payments and allows us to stockpile as much into savings as possible.  During the coming months we’ll be:

  • Selling our second car (which is a whole story in itself that I’ll have to write about another day)
  • Going through the house room by room and selling as much of our “extra” stuff as possible
  • Taking on more side jobs (I’ve already got two sewing jobs lined up)
  • Researching and getting life insurance by mid-May
  • Researching our health insurance options (a complicated issue that I’ll have to write about another day)
  • Examining our student loans (another complicated issue that needs more space for explaining)
  • Exploring all options for acquiring free or cheap baby items.  I’ve joined a couple local twin mom groups and people frequently list free stuff.  Also, keeping our eyes open on Craigslist, at yard sales, and for curbside pickup items.
  • Get our taxes done (crossing fingers for a refund)
  • Getting a plan together for Phase Two and Three!

We’ve got a lot to do but right now I’m just feeling relieved that our plans are starting to come together.  Even more than that, S and I have really pulled together and are communicating about finances in a way I never thought possible.  This is going to be a bumpy year but I’m feeling hopeful that we can get through it without accruing any new debt.

Tuesday, January 22, 2013

Reluctant Costco members

First let me say that I’ve never liked stockpiling.  I can’t stand clutter and hate having to work around excess stuff even if it is stuff that we’re going to use in the near future that I got for a deeply discounted price.  It’s because of this mentality that I’d never seen the point of joining a discount warehouse type club.  Of course as a single person it didn’t make very much sense at all to buy in bulk.  Even when S and I joined households I couldn’t convince myself that it was worth it.  After all we had a very small urban house and we ate out a lot.  We didn’t have a place to store bulk items and bulk food just went to waste.

Slowly I’ve been warming up to the idea of having some “extra” items in stock that we use regularly.  By paying attention to sales and using coupons I’ve been able to dramatically reduce the amount we spend on everyday items we need.  We have a bigger place now that has plenty of storage so our extra stuff has a place to hide out of the way until we need it.  I still wasn’t convinced that the warehouse club was for me though.

And then I started calculating baby costs.  Just in diapers alone the discounted price more than covered the membership fee.  Once I looked at pet supplies and realized we could almost halve our pet costs each month by buying at Costco I was convinced that maybe a warehouse membership would be a good thing after all.  So S and I went and joined this weekend.  We got the months’ worth of pet supplies at half price… go us!  But we also got sucked into some other cheap stuff we “needed” once we had seen it… not good at all.  Add in the awful crowd and the inconvenience of the location and I’m not sure how I feel about going there frequently or if I really will save in the end.

For now I’m thinking that, like all the other cost reducing methods I’ve learned over the last year and a half, Costco will just take some practice to master.  Just have to remember the old DARE saying… “Just say no”… to the 6 pack of frozen pizzas and the 2 gallons of peanut butter that is! 

Thursday, January 17, 2013

Financial pow-wow

S and I are sitting down this weekend to have a major financial discussion.  As I’ve mentioned before, he and I have always kept very independent financial lives.  This has worked for us for many reasons but times they are a changin’ and so must we.  I don’t mind saying that I’m really not looking forward to the idea of hashing out budgets together or coming up with a savings plan or how to handle family insurance or really anything that involves the two of us having to sit down and openly and honestly talk about the financial situation we are about to find ourselves in with twin infants. 

We have trouble communicating about finances.  In part this is due to the horribly crappy financial messes we were individually in when we started dating (me and my debt mountain/ him with his job loss and foreclosure).  Even though out situations are better now, we have the residual feelings of shame that keep us from wanting to open up about finances.  Also, we have completely different outlooks on money and how to handle finances which has led to some heated moments in the past.  Lastly, we are both stupidly independent sometimes to the point of stubbornness.  All of these things have led us to the comfortable arrangement we now have of just staying out of each other’s financial business.

It’s long overdue that we confront these issues and start working together but it’s taken the pregnancy for both of us to be ready to tackle this uncomfortable aspect of our relationship.  I’m writing this because I need a little accountability to make this sit-down happen.  We’ve actually “planned” on talking the last two weekends but really haven’t done anything but skim over the surface level  issues that we need to figure out.  During our last discussion we at least agreed to spend this week coming up with hard budget numbers so that this weekend we could sit down and make some real decisions.  To that end I’ve got a baby stuff list and budget, my own personal budget, my major expenses for 2013, some tentative childcare costs, and my company’s family health insurance cost.  I feel like I’m coming to the table prepared and ready to work with him to get a plan together for 2013… I’ll let you know how it goes!

Monday, January 7, 2013

Working on a 2013 budget

I don't have a financial plan for 2013 in place yet which makes me nervous for so many reasons.  I've spent the last year and a half on a mission that involved creating and sticking to real budgets, and I was rewarded by seeing my debt fall consistently.  But with the prospect of having two babies arriving mid-year I'm really flustered as to what I can even expect financially for the year.  I would love to be able to post a 2013 plan complete with specific financial goals and a solid budget but so far all I've got for the year is a list of budget items that need to be researched.  In addition to the regular monthly expenses I had in 2012 the following is the list of additional expenses I need to plan for:

  • Professional expenses: My professional license will expire this November so I will need to pay for continuing education classes and the renewal fees.
  • Travel expenses: We will be traveling at least twice to visit my family this year
  • Maternity leave: My company doesn't have any paid leave above my vacation/ sick hours so I'll need money set aside to cover my salary while I'm out of work.
  • Medical expenses: I do have great insurance but there will still be out of pocket expenses for the babies' arrival and care after, also need an eye check-up and contacts.  May need to cover a greater portion of the insurance costs during my maternity leave but will work with my job on that.
  • Baby stuff: I am clueless about what the babies will need and what those things cost.  I've started to pull together a list of recommended stuff so I can begin to price these items.
  • Childcare: This one is the biggest unknown on my list.  None of the centers list prices on their websites so it will take some real legwork to get an understanding of the costs.  I do know that in the Boston area I can expect some of the highest childcare costs in the country and that a coworker of mine pays the equivalent of my whole salary for childcare for his two small children.  There is the possibility of one of us being stay at home or both of us going to part time to avoid the added expense of childcare. 
Basically, I have a lot of work to do just coming up with a financial plan for this year.  Right now my goal is to have researched all of the above items and have a solid budget in place by the end of January.  

Friday, January 4, 2013

2012 Year End Review

What a year! 

At the beginning of the year I set out some pretty hefty goals for myself to reduce expenses, raise extra cash, build an emergency savings, pay off my parents, and pay off all of my credit card debt (a little over $10,500).  Let’s see how I did:

1. I paid off the $300 I owed to my parents.
2. I set aside $1,000 in an emergency fund.
3. I paid off $5,885 (or 57%) of the $10,263 I owed in credit card debt.  Not exactly what I was shooting for but I’m still happy with the amount of progress I made this year. 

Besides not really having a great understanding of budgeting and forecasting expenses when I wrote my 2012 goals, there are a number of other reasons I didn’t get the entire amount paid off.

Firstly, I became eligible for and started participating in my company’s 401(k).  I wasn’t originally planning on participating until I had paid off the credit card debt and the car loan but after a lot of research and soul searching I felt like passing up the company match of 4% plus potentially not saving for retirement for who knows how much longer when I haven’t been saving for a few years now was just plain dumb on my part.  It will take longer to pay off the debt but the extra 4% plus whatever that money earns makes up for the interest payments in leaps and bounds in the long run.

Secondly, I got engaged!  S popped the question which besides being a personal milestone also set into motion the need to have a much bigger savings account for a wedding than the little emergency fund I had set up.  I started funneling some extra money into savings instead of paying towards debt for our upcoming 2013 joint wedding expenses.

And speaking of joint expenses for 2013, we found out we were preggo in late October and then found out we were expecting twins in mid-December!  This really wasn’t  in the plan for the coming year (see above for engagement and wedding planning) and it certainly wasn’t in the plan to ever get a 2 for 1 deal but sometimes nature has its way over reason and planning!  We haven’t really gotten too far into figuring out what this means as far as other life plans go but we do know that we’re going to need some hefty money set aside.  Since we found out, I pulled back on the debt reduction and starting beefing up the savings instead.

All in all 2013 is going to be a wild ride and I am currently working out the plan for handling all the financial and personal changes going on.  I’m still very motivated to pay off the debt, just need to figure out what is going to be possible with all the new expenses and changes coming our way! 

Here’s where the 2012 numbers came in:

Student Loan: $36,284
Car Loan: $8,605
Credit Card 1: $0
Credit Card 2: $4,261
Credit Card 3: $117
Parents: $0

Total: $49,267

Here’s my starting point back in October 2011:
Student Loan: $38,339
Car Loan: $11,684
Credit Card 1: $10,577
Credit Card 2: $3,635
Credit Card 3: $0
Parents: $600

Total: $64,835

Paid off to date:
4th Q 2011: $5,051 + $0 in savings
1st Q 2012: $1,298 + $150 in savings
2nd Q 2012: $2,771 + $506 in savings
3rd Q 2012: $3,195 + $344 in savings
4th Q 2012: $3,253 + $1381 in savings

Total: $15,568 paid off + $2,381 in savings

Wednesday, January 2, 2013

Double Whammy

I’ve been absent from blogging for a month because I’ve been holding onto a huge secret and can finally get it out there.  Back in early October S and I took a little romantic getaway.  In addition to the surprise engagement proposal, that weekend yielded another even more shocking surprise!   We confirmed at the end of October that we were expecting!  Then, as if that wasn’t big enough news on its own, we found out at our 12 week ultrasound that we were expecting twins!

Since we were not planning on having kids for at least another year and never expected that when we did there might be the possibility of having two at once, the whole experience so far has been a little bewildering!   Even though we are now into the second trimester and have shared our news with our friends and families over the holidays, we are still reeling from the news.  I have about a zillion questions bouncing around in my head and a mental to-do list that gets longer by the minute… I’ve been reassured by family and friends that all soon-to-be parents feel this way, even the ones that were prepared to be expecting but going through the experience myself is eye-opening.  How are we going to manage it all?! 

Obviously, S and I have a lot of work ahead of us and this impacts every aspect of our lives but one thing I am so grateful for right now is that I am in a much better financial place than I have ever been.  Taking control of my finances and debt has been more life changing than I ever expected it to be.  In some ways I feel like discovering that I could manage my finances and make positive changes in that aspect of my life has shown me that I can do that in all other the other areas of my life too.  I’m not really sure how S and I are going to handle everything with the pregnancy and babies yet, but I do feel pretty confident that we can handle everything… and I don’t think I would have felt that way a year and a half ago!