Nothing Like Free or Almost!

My local grocery store offers points, redeemable towards cents off of gas, based on the amount one spends at the grocery store over the course of two months. One can also earn additional points. Sometimes I get a coupon in the monthly mailer worth 400 bonus points if I spend at least $40 in one transaction, or they might be running a promo, buy $20 worth of a certain brand and earn additional points (Usually between 300-500). For October/November I had managed to a number of bonus points. I had not one, but two 400 bonus coupons that I used a week apart, and I had bought 5 cleaning products of a certain brand and had earned another 350 points. When I had gone to check out at one foray to the grocery store I mentioned to the cashier how I loved watching the dollars roll off my bill (Coupons and bonus buys) and the gas points add up, and she so thoughtfully gave me yet another coupon to help me on my way to FREE gas. Yup, when I filled up this past Sunday I had 2000 points, worth $2.00 off a gallon of gas. Gas was $1.99 a gallon, My car holds about 15.5 gallons, and I waited until the fuel light was on, ended up getting 14.8 gallons for Free!

A few Months back I managed to pay only .25 cents per gallon, paying a total of $3.46 for 13.354 gallons and I thought that was good!

Open Season on Open Enrollment

Ah, my favorite time of year (Yes, I am being sarcastic). The time of year I have to think about which medical plan to choose for husband and I, as well as a few other benefits my company makes available, for a fee. No surprise, most of the insurance plans are going up in price.

For years I had a regular medical insurance plan that was easy to understand. I had a co-pay for doctors visits, and an deductible plan for hospital visits. Then a few years ago my company switched to a HRA or a HSA. Didn't understand either one even though my company offered meetings to explain. All I knew I would be paying more money and got less. The first year I went with the HRA, even though it was the most expensive, because I wanted the best coverage I could get. My husband was pushing 60, and has a number of health issues, and I was terrified of being underinsured. I assumed if the most expensive it had to be the best. But last year, after finally understanding HRA & HSA much better, I realized the HSA provided me with tax savings the HRA didn't. By this time we had two plans to choose from; HSA Gold & HSA Silver. Naturally the Gold was more expensive.

My company provided an online tool we could use to determine which plan was best for our needs, and to my surprise, the cheapest in premiums, the Silver was considered best. I didn't think that could be possible, not when the cost for one 24-hour hospital stay for my husband, when he was having an additional lead put in his pacemaker, cost $124,000+ Thank God insurance covered all but $1700, but there was no way the lowest cost insurance premium would work for us, so I went with Gold.

This year I tried the tool again, and once again Silver is supposedly the best plan. I would save about $2400 in premiums, but in worst case I would be $800 out of pocket more than on the Gold plan if I max out. I have decided to roll the dice and take the gamble. I am saving about $95 a paycheck or $2470 a year. That is money that can pay down debt or go to savings. Since I have a savings plan for 2017 these savings will go towards the debt. And I am not worried about not having enough funds to pay the medical bills that will appear because I have about $2000 in my HSA from last year that will roll over, and with money that I can earn (Health & Wellness dollars) and tax free payroll deductions, I should have a well funded medical fund by the end of January, middle of February. Now if my husband can just stay healthy for the first few months of the year.

Coffee, My Cup of Tea

Once you start looking for it, there is no shortage of advice from financial experts about the importance of saving, and ways to do it.  The problem with advice from the "experts" is they have probably never truly started from scratch, or they suggest giving up stuff that I think of as a simple pleasure. Like lattes. It seems everyone suggests giving up Starbucks. What is so wrong with a cup of Joe?

Its the math for starters, it always comes down to the math. Lets say you drink a Starbucks drink on average, 4 times a week. In my case we will use a Grande Chile Mocha Frappuccino (Because that is what I am currently drinking-All in the interest of research of course). The price was $5.41, including tax. Four of these drinks a week would set me back $21.64. Subtracting vacations and times I am sick or housebound by snow, lets multiply $21.64 by 48 weeks. That is $1038.72, and that doesn't include tips or gas to make that special trip. Even if I dropped to just one drink a week for 48 weeks that's still $259.68! Need more incentive to give up a fancy coffee drink? A Grande Chile Mocha has 360 calories. One drink a week for 48 weeks comes to 17,280 calories or FIVE additional pounds. Four drinks a week, for 48 weeks comes to 69,120 calories or just under 20 pounds. Suddenly that Starbucks doesn't seem all that appealing. For the sake of my wallet and waistline, Starbucks has got to go.

I still enjoy a hot beverage, but I think I'll try tea. As long as I can stay away from fancy tea houses both my wallet and girlish figure will benefit.


Coffee leads men to trifle away their time, scald their chops, and spend their money, all for a little base, black, thick, nasty, bitter, stinking nauseous puddle water- The Women’s Petition Against Coffee, London (1674)

The Chicken or the Egg?

According to the survey I had seen that I mentioned in my post from yesterday, the main reason so many American's had so little saved was they were carrying a heavy debt load. Student loans, more house then what they could really afford, or the biggest culprit, credit card debt. My student loads were paid off years ago, and my house payments are very manageable (And the house will be paid in full in just under 4-years). However, I am 100% guilty of too much credit card debt. So as I set my financial goals for 2017 what comes first; the chicken (Debt), or the egg (Savings)?

"Experts" will tell you to feed that chicken first. It is sound advice, after all the faster you pay off the debt, the less interest you will pay, and you will be saving money in the long run, and probably make for a larger nest egg.

But no eggs in my basket (Or too few) will make it march harder for me to sleep well at night. While I do have more saved than average, I do not have the 6-months worth of living expenses suggested by the experts.

So I have decided to make saving in 2017 my #1 priority, with paying down debt important as well. I have come up with a savings plan. I made up a spreadsheet in which I listed my savings goals, my ultimate goal for each account, and my goal for 2017. Each of these columns are followed by 3 more columns;  my beginning balance for each account as of January 1, 2017, the ending balance as of December 31, 2017, and finally was the goal met. Finally, for each type of savings account I put how I thought I might accomplish my goals. Mine and my spouses 401K are easy enough, payroll deductions at work, and for me, matching funds from my employer. Several other accounts; the major expense and living expense will be funded with weekly deposits from our paychecks (I took my annual goal, divided by 52, and came up with what I have to put in each account weekly to make my goal). The Travel Fund will be financed by monetary gifts from my father for birthdays and Christmas, as well as any bonus money. And I have decided to start up one more savings account-a home improvement fund. Goodness knows my 1883 cottage could use some updating, and if I want something out of the pages of HGTV I will need some major bucks. This will be a hard account to fund. I am salary, so no opportunity for overtime, and I just can't see fitting in a permanent part-time job into my life right now. So I am going to look into maybe part-time seasonal work, or maybe even something like Uber (It may not be legal in my state though).

I feel that my goals are ambitious, daunting even, but not unattainable. I may tweak my plan a bit in the next weeks, but I will be ready to go, New Years Day  2017.

A Sobering Statistic

I recently read a survey sponsored by GOBankingRates.com, in which 62% of American's had less than $1000 in savings, and in fact a whopping 28% had no savings at all. That mean almost 2/3 of the people in this country are just one large car repair bill or some other unexpected expense from disaster. That is a scary thought, and it should make everyone determined to set aside at least $1000 for an emergency fund.

I remember when I was first starting out on my own. I worked, rented a small apartment, and had no credit card debt. However, after paying the rent, car payment, utilities, and groceries there was almost nothing left over. I decided that I had to put at least $500 in savings (This was the late 80's and early 90's). It was hard, I had to make cuts wherever I could. That meant not always joining my friends for dinners in restaurants, going to movies, or having a closet full of clothes. Now that I am older, I realize I could have gotten a weekend job, or brown bagged it to work more, but eventually I had $500 saved up. Naturally, the moment I reached $500 I had a car repair bill that cost almost $500. Sigh! I started over. Managed to reach my magic goal of $500, only to do my taxes, and much to my surprise, found I owed the IRS, you guessed it, $500. Once again I was starting from scratch. I was so discouraged. I had worked so hard and gave up almost all of my social life to try to save, only to watch my savings evaporate. Frustrated, one night, I vented to my father. He pointed out to me at least I had the savings to fall back on. That did give me a better perspective that my efforts hadn't been entirely in vain.

That is the mindset I must keep front and center. I don't want to be one of the 62% that have less than $1000 saved, and I WILL NOT be one of the 28% with no savings.

Setting a Course a.k.a. Making a Plan

If I am going to make saving a priority I guess the first step is to decide just what am I saving for? Does age dictate your savings goals? I mean at age 55, being able to retire in 12 years or so is one of my top priorities. If I was a twenty something I would probably have a different goal. Anyway, retirement, hopefully one day in the foreseeable future, is my first goal, followed by paying for healthcare. These two are fairly easy; I signed up for the 401K plan at work, and an HSA for health insurance. As these two items are deducted before taxes I never see the money and don't have to think too much about it.

For several years I have divided any funds for regular savings into one of three accounts. First, I had an emergency fund. This is suppose to have $2500 in it and its for Unplanned, Unexpected expenses like a car repair bill, needing a new washing machine, or a visit from my wealthy plumber. It is NOT for new tires for the car that I have known for months must be replaced before winter, or a new washing machine because I want one.

Next comes my Major Expense account. The goal is $25,000. This is for major expenses like a new roof, or to replace the septic system. I have never even gotten close to the $25,000 goal. This is an area that will need focus 2017.

Then there is my favorite savings account, the Travel Fund. The plan was that I would save money for travel, and when it came time for vacations, rather than picking a spot and using this account to pay for what it could, and the rest be paid by credit cards, the amount in the fund would actually dictate where we went. $5,000 to$7,000? We could go to Europe. $500-$700? Maybe a weekend to a B&B near vineyards (Love the Finger Lake region of New York). $50-$70? A movie at a local theater. At first I was using the account as planned, but as funds dwindled, I found myself relying on credit cards to pay an ever increasing portion of our vacation expenses. In 2017 I need to focus building this account up, and stay away from the credit cards-Sigh! That's a whole other issue!

Last year I started a new account. It doesn't have a name, or even a real purpose as of yet, but I am saving $100 a week. I started the first Friday in 2016, and so far I am on track. In fact after tomorrow I will have $4400 in it. Currently I have this vague idea I will keep doing this until I retire, and add it to my retirement savings. I also think maybe its for those times when money falls a little short (Husband earns straight commission-pay checks have a tendency to be feast or famine). However, I like to think I already plan for that, so maybe this could be for a retirement home, or something special I don't even know what for yet. Anyway, it feels good to see the savings add up each week, and to know this is one goal I haven't faltered on.

So what is my plan? I don't have a clue. I'm making this up as I go along. Retirement and health are biggies and I do need to think more about those, but I am putting them on the back burner for now. My weekly savings is just fine, working perfectly, see no reason to change. My emergency fund is close to being fully funded. I am currently short by $500. My plan is on each of my husband's next four pay checks to divert $125.00 to the fund until its whole.

The Travel Fund is tricky, its my favorite, and gives me the closes thing to instant gratification. I have always used bonus money, Christmas & Birthday money from Dad, and proceeds from yard sales and the like to fund it. but I may need to get a little more creative on my funding sources.

It's the Major Expense Fund that I am most concerned about. I am going to need a new roof within 5 years, the house needs additional updates and repairs, and I am always running scared when it comes to my well and septic. I do need a good plan to cut costs, and funnel more into this account. By New Years Day 2017 I need a plan, and it needs to be in place and active. Two months, just two months.......

.....To be Continued.

Pay Yourself First

What does the term "Pay Yourself First" mean to you? I was probably in my 20's the first time I heard that phrase and of course I thought that meant treat yourself to a mani & a pedi or buy a new pair of earrings before you did something boring with your paycheck, like paying bills. What it actually means, according to most personal financing experts, is that you automatically put part of your paycheck into savings before you ever touch your paycheck, so you won't be tempted to buy those earrings.

The most common way to automatically save is a 401K plan. I am fortunate that my company still offers a dollar for dollar match up to the first 6% of your income saved. And that's exactly what I save-6%. However, according to a web tool that my company offers that allows one to calculate how much is needed to save in order to retire, I find I am very short. Even if I saved 15%, which there is no way I can afford at this time, I will have not nearly enough to retire in 17-20 years. Its a sobering thought.

There are so many demands on ones paycheck. Long before I see a penny I have 401K deductions, Health, dental, and vision insurance premiums, $231 from each check goes to an HSA (Health Savings Account), and that's all pre tax deductions. Then of course Federal and State Income Taxes, FICA (Social Security), and Medicaid. Then comes Long Term Disability insurance, Accidental Death insurance, and a loan re payment from my 401K plan. Its a wonder I have any take home pay! And then come the bills; mortgage, car payment, utilities, and credit cards, as well as money for gas and groceries. And finally I need to put some aside for emergencies, major expenses, and having some fun. I have to admit, writing it all down is depressing.

But writing it down is what I need to do if I am going to cut expenses, and make saving a priority I need to keep this subject at the forefront of my brain.