HisHersMoney

As a result of our upcoming housing costs savings I spend a little time on the budget.   Currently between Him and Hers we get four paychecks a month. Usually our rent comes out of His paycheck in the amount of $1175 out of each check to make up our $2350 rent payment. (Rent is very high here!) Rather then split our rent payment in half each month we will just take it out of the last paycheck of the month in its entirety $1350. This will obviously fee up some additional money each month.

Our first priority is to replenish our savings since we raided them a couple months ago to buy the ski condo. We figure that we really need about $30k in savings as an emergency account as well as to have some cash on hand to do things we want to do. Another priority is our Roth IRAs. We are eligible to contribute the entire amount to a Roth IRA this year so we need to take advantage while we can, I’m afraid we will be phased out of our eligibility in the upcoming years.

Currently we only have $1300 put in to Hers Roth so far this year so that leaves another $8700 to go in order for both of us to max out at $5k each.

Our savings account is currently at about $3,000 so we still have another $27,000 to go there!

Our new budget calls for us to put around $1000 a month aside for out Roth IRAs with the final contribution to hit our max coming from Hers year end bonus

Well, we have officially scrubbed our budget as much as we can for the upcoming 2009 year. Our goal is to bulk up our cash savings account as much as possible. In order to do this we have decided to go to a cash system for our weekly grocery, incidentals and entertainment portion of the budget. We will take $150 out each week and that will be it, if we spend it all in one days then it will be 6 very dry days until next payday rolls around!

When reviewing our spending from 2008 we really didn’t over spend on any one thing, but it was the $12 here, $20 there etc that really just added up. By going to cash we are really going to have to make an actual decision every time we spend. It was so much easier to pull our the debit card knowing that there was money in the account to cover it.

We both get an allowance of $300 a month to do with what we want so if we really want to do something and our budgeted money is gone we can easily dip into our personal funds if we choose to but what we aren’t going to do is get more money out of the joint account!

Currently it looks like we should be able to save $1900 a month. I have gone into our ING account and set up automatic recurring deposits for these funds which are spread out between various sub-accounts.  This will give us $22,800 for the year.

What is our plan for this money?

1. Money for Christmas next year

2. Emergency Account

3. Vacation Account

4. New Car Account

5. House Down Payment Account

As we get ready for 2009 it is time to look ahead and establish our 2009 goals. The first thing I did was determine how much money we would need to live for a year and just pay our bills. No vacations, no spending, just food, rent, car, phone, etc. I was astonished when I realized that the amount was $3973 a month, $47,676 a year! This is getting rid of cable, dropping down to minimums and getting rid of all extras on cell phones, no going out, cheap food. All I can say is HOLY COW!

We really need to attack our Emergency Savings account goal this year! Our goal is to save $12k towards this number in 2009. We already have about $5k saved so this will bring us to a total of $17k which is about 60% of our total goal. That’s $1000/month. Can we do it? Really, there’s no reason why we can’t.

On a monthly basis here’s our savings plan:

1. $100 Savings towards car purchase, pay cash in about 3 years
2. $250 Vacation account, where ever, when ever
3. $50 Next year’s xmas savings
4. $1000 Emergency savings
5. $350 towards down payment fund

That’s a total of $1750 a month and $21,000 for the year. On paper it looks like January will be about $400 short of that goal. We are going on an unplanned vacation over New Years with a group of friends that we really didn’t plan or save for.

In addition to this savings we have $417/person going towards maxing out our Roth IRAs and $16,000/person going into our 401k accounts which adds another $42k towards our retirement!

We will track and post our progress through the year.

Everyone knows that automating your savings is definitely the way to go. Right now I feel like I have my savings so disjointed because I have accounts all over the place. I took advantage of the Suze – TD Ameritrade offer where you deposit at least $50 a month for 12 months into a savings type account and they will deposit an extra $100 in at the end of the 12 months. I don’t remember what the rate is but it’s better than I’m getting at ING right now. The promotion code was 701 so you might try it and see if it still works.

I also have an ING account that I send $200 a month to and a savings account with my credit union that gets another $200 a month. So that’s $450 a month in savings. My goal is to have $15,000 in emergency funds . I was aiming towards $10,000 but my financial advisor bumped that up to $15,000 during my yearly financial check up.

I also have some retirement based investments. I fund my Roth IRA in full every year ($5000 for 2008) and my 401k in full every year ($15,500). This all adds up to a whopping $25,500 in deposits in a single year!

Today was an important day in the start of my becoming more secure financially. I opened a savings account with ING Direct. I was able to get the free $25 they offer for new accounts as well as get Hers a $10 bonus.

I’ve been needing to start an emergency fund for a while now and of course starting this blog provided a much-needed incentive. ING Direct offers good rates of course but a bigger reason for choosing them was that they are NOT my bank! That was a problem in the past when I would try to put money into savings on a regular basis. Access to it was far too easy and I would end up just transferring it right back into my checking when I wanted to buy something.

So I’m starting out with $275 ($250 + $25 bonus). Automatic deposits are set up for the 15th and end of the month so if I can stay the course and not touch the account, it should end up with $1775 by the end of the year. That’s not quite the 3 months of expenses that I would like it to be but I plan on being VERY aggressive in paying down my credit card debt.