Financial goals
- Fully fund the Roth $13,000
- Once in a lifetime family vacation $12,000
- College Fund $12,000
- College and Show Choir Road Trips $ 1,500
- Home Upgrades $ 9,000 $47,500
Cash Savings Increase $ 961
Total Savings achieved $ 961
Goal Balance $33,539
Anyone that is or has done any remodeling on their homes might be completely laughing at our home improvement budget. Our priority was the upstairs bathroom, then the kitchen and entry floors, then counter tops, and finally, bedroom carpets. After just one estimate on the bathroom, of over $11,000 and that did not even include a new stool, vanity, and mirror, We didn't even both to get another. We are going to have to be DIY people. Now before you laugh even harder and hurt something, this the same couple that bought a ramshackle cottage in 1987, completely updated it, and through blood, sweat, and tears, sold the house a little over three years later for 20 % more than we paid. We saw a $2 to $1 return on the money we put into the fixes and updates. We know how to do this-we just need to actually execute. Oh, will our home improvement journey create a lot of good blog material.
January did not start out with a financial bang, but we are early. We are going in the right direction.
Sam, I wonder if some time you could explain what a 401K is? I had assumed it was something to do $401,000 in it but I realise that is wrong. Also, what's a Roth?
ReplyDeleteBoth 401 K and Roths are retirment savings accounts. 401K, no clue why its called that is usually the pretax set aside form your paycheck, sometimes with a sizeable match from your employer. Roth is a personally set up savings, ours is after tax so any interest earned is not taxed when we start drawing down on it, unlike the 401K which will be taxable earnings (not the capital)
DeleteWe have a very poor pensions system in the US, and I fear our social security will barely be there. We have tried to use all retirement savings tools available to us, which is why our cash savings sometimes is low compared to our income. (well that and three kids, three college tuition etc. etc.)
DeleteYour 401K sounds like our workplace pensions which are also contributed to by the employer and it's pre-tax income which goes in. Again the income from it is taxable.
DeleteThere are considerable fears about the long term future of the state pension here. I have pensions from employment as well. I'd hate to try and live on just the state pension. Those who would otherwise have just the state jobby get further help though,
The government here is "encouraging" everyone to make their own pension provision now. An aging population makes that very important.
Ok, from someone who worked in the retirement industry(Hubs).....It's called a 401K b/c it's part of the IRS tax code section 401.
DeleteThe personally set up savings plan is an IRA(aka Individula Retirement Account)-either reg. IRA or ROTH IRA. A ROTH 401K is an employer plan. 401Ks are always through an employer.
401K contributions are pre-tax meaning you pay the tax on the contributions upon withdrawal. These are popular b/c usually when you put money into them you are in a higher tax bracket when you are working/employed but when you start withdrawing(in retirement)you are in a lower tax bracket, thus less tax is due on the contributions when withdrawn. In a ROTH 401K all contributions are taxed before it's put into the savings instrument so when you withdraw $ in retirement no tax is due again.
Many employers also offer a PESP too, a Personal Employees Savings Plan in addition to 401K plans.
Very few corporations offer Pensions anymore so if you wish to have a pension type stream of income in retirement you can set up a PESP with your employer and make systematic contributions(just like into a 401K). Upon leaving employment you can use your PESP funds to buy an annuity(like a pension in that it gives you a set amount payout each month but you fund it, not an employer).
Thank you both.
DeleteThanks, Sluggy. this is why hubs follows the retirement planning.
DeleteStart on a small DIY project so you feel like you accomplished something, break it all down into tiny jobs as you are way too busy to have your house completely torn apart :) Any month you end in black is a victory
ReplyDeleteI've been thinking in thebsathroom if I can get the show sand blasted or something to get the odd coloring and the limescale gone, learn how to change the shower and faucet, calk and seal the tub and sink, buy a simple, but good quality floor remnant, a new medicine chest and mirror, a good paint job, and nice storage tower and shower curtain, my bathroom could look as good as what the virtual pictures looked like-for a $9,000 savings. My first free weekend is the 17th and 18th and I will see what can be accomplished. Yes, I'll start in small but impactful changes and see what we can get done this year. The quote was enough of a sticker shick to get me on track.
DeleteWow is all I can say. You work very hard and I think you are well on your way to a great financial future. I agree with Cheapchick. Small things every week or month?
ReplyDeleteI need to lay out a schedule for the three of us to get things done. The never ending purging is a great start, and can do a little each night, but perhaps one large, and a couple small things a month is doable.
DeleteI'm looking forward to seeing the DIY. I admire people who can do that and on a budget too. Anna
ReplyDeleteIt is out of necessity. I' hoping I can barter and trade some skills, but sadly, I have little to exchange.
DeleteGood luck with the bathroom refurb/revamp. I am always astonished by the amount that professionals charge as we always DIY. What were they going to do for that amount of money?
ReplyDeleteThe funny thing is, just about everything I stated I liked, or would want, they quoted another product. I don't really know how they could justify the quote.
DeleteI'm sure you can do it - I've done a fair bit around my condo - mostly superficial decorative type stuff but the billions of you tube DIY videos are amazing! We will require, however, before and after photos :p
ReplyDeleteIt's plumbing stuff that makes me nervous, and what we might find. I can paint thought, and I can rip things out!
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