Sense to Save

Charity: We have been giving 10% of our gross income to our church for several years (after bumping it up from 5%) and it has been nothing but a blessing. We don’t miss the cash, and it has helped our mindset on money. We believe it all belongs to God, anyway!

Debt: Mortgage. Balance March 2012: $131,035. We’re putting $25/month extra toward principal right now, since even small amounts can have a big impact.

Savings: 6+ months of living expenses saved

Retirement: Contributing 15% gross to retirement accounts plus company match. We’re contributing enough at Shane’s 401k to get the full match, and the rest is going to each of our Roth IRAs. We aren’t maxing out both IRAs, and we’re nowhere near maxing out the 401k.

We’d like to max out both IRAs, and in doing so, we’d be putting way more than 15% toward retirement. We think we’re on track for the retirement we want, but if we can increase our contributions now, we’ll give ourselves an even greater chance of hitting our mark.

Current goal: Max out both IRAs for the 2012 tax year. Deadline: April 2013. It’s a lofty one for us but I think we can do it. Gotta have a target, right?

College savings: We have a 529 account for each child, with $50/month going into each. We also opened a 529 account for my husband because he is going back to school later this year. His employer will reimburse us, but we’ll need the money upfront.

Update: It isn’t clear if his employer will pay anything for his education now, so we’re waiting in the wings to figure out what will come of that.

Income: Our household income is now higher than our state average, but it was still low enough for us to qualify for a great tax credit, the Mortgage Credit Certificate.

We are nothing but blessed by our income and if Shane never got another pay raise beyond the inflation raises, I still think we’d meet all of our goals.

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Our expenses:

• Mortgage: $846.49 (Principal, Interest, Taxes, Insurance)
• Cell phones: $55-65/month. Family plan, 22% discount, dumb phones with no data or texting plan. We use a MagicJackPlus at home to enable us to have a lower-minutes cell plan. Technically that’s like $3/month.
• Internet: $55/month. My promo rate went up to $70. I did an online chat with the company and they offered to lower my speed to lower my cost. I then called the company, and they offered to lower my price and keep my services as-is. It’s valid until September. Arg. This expense covers basic cable, too, which is required to get the discounted rate. I’d ditch cable if it would save me money.
• Gas (furnace, water heater, fireplace) $25-$150+/month. Still waiting to see what this can be, as we’ve only been in our house a few months.
• Electric $86-110 so far
• Water/Sewer $63-94 It’s high here.
• Trash & recycles: $18/month
• Term Life insurances: $597/year
• Disability insurance: $350/year (I need to double-check the exact amount)
• Car insurance: $380/6 months for our two vehicles (a car and a van)
• HOA: $240/year

Our variable expenses really do vary. Lately, we’ve been spending $50-150/week on groceries, depending on what we already have in our pantry. It’s usually over $100/week.

Other expenses include clothes, diapers, house maintenance stuff, gas, car maintenance, entertainment, … and goes on and on.

We’re automating our bill-pay and savings because it’s just plain easier that way. It sounds sort of complicated to set it up, but it’s running smoothly now and I know we’ll be money ahead because of it.

More on my story

We’re in a good place right now. Our expenses are manageable and we don’t feel terribly pinched, though we can’t just run out and buy whatever we want whenever we want.

It took a bit to get us to this point, though.

Shane and I graduated from college in May 2007. We got married that month, went on our honeymoon, moved 400 miles from family to Pittsburgh, PA, and started new jobs. It was a busy month.

We started out our marriage with roughly $20k in consumer debt (about $9-10k in credit cards and $11k on our car loan).

We got motivated and felt freedom with each dollar added in savings.  We completed our emergency fund in August 2008, and kept on building savings until our son Jonathan was born (December 2008). Then, we got to work paying off our car loan and became debt-free in May 2009. We chose to build up our full 6-months of savings before going after the car loan (but after we paid off our credit cards) because we were living on one income and I was pregnant with Jonathan.

Money-wise, we kinda just sat tight and did our thing for awhile. My daughter Vivienne was born in December 2010.

In April 2011, we were in what I called a holding pattern. We felt helpless in our situation, and felt stuck. We tried to move within Shane’s company, and were so frustrated that Shane’s employer wouldn’t approve an inter-company transfer so we could be closer to our extended family. It was a door closed. God opens windows though, and he sure did for us when only two weeks later, we learned we would be packing up and moving back to Indiana. I still get chills thinking about how that worked out.

Moving to an apartment sight-unseen was a bit crazy, but it was an adventure. I’m so glad we rented an apartment month-to-month while we were looking for a house. Sure, it was a hassle to move twice in a short period of time, but it was worth it because we didn’t buy the first house that caught our eye. That would have been a big, expensive mistake.

Not long after rolling into Indianapolis, we bought our van outright, and put 20% down on our mortgage. 2011 proved to be an expensive year, but it was worth it. There was a time to save, and a time to spend.

Now, we’re just living it. We’re enjoying the fruits of our hard work and sacrifices, and we’re keeping our eyes ahead. We want to be good examples for our children. We want to be good with the resources God has given us. Here’s to a good 2012.