PoP Balance Sheet – December 2014

Welcome to our December 2014 Balance Sheet!

We use the structure of a monthly income statement and balance sheet in tandem to make sure we are keeping our expenses low and planting our pennies wisely. If you’re not already tracking your finances using these two methods, go to mint.com and get started today! If you have any questions about how we do this just post a comment and we’ll be sure to help!

Markets were pretty flat this month in our accounts, so most of the changes on the balance sheet from this month were from direct savings from our paychecks.  But below the December assets and liabilities, scroll down to find a quick look back on the change in our balance sheet in 2014.

So for the month of December:

  • Our total assets went up by $10.1
  • Our total liabilities went down by $1.5K 
  • Net worth rose by $11.6K 
  • Total net worth as of the end of December is $826.6K, which represents a 1.42% increase this month.

And for the details…

Continue reading PoP Balance Sheet – December 2014

PoP Income Statement – December 2014

Welcome to our December 2014 Income Statement!

I've never wanted to graffiti in my life, but every time I ride past this freshly cut limb on my bike commute I want to stop and carve our initials in the cool heart that was naturally made.  =)

I’ve never wanted to graffiti in my life, but every time I ride past this freshly cut limb on my bike commute I want to stop and carve our initials in the cool heart that was naturally made. =)

Mr. PoP and I put these income statements together for two reasons. First, we want to be transparent about our finances because we’re trying to be role models for other people who are trying to plant their own pennies (and end up with dollars someday!). Second, we do this to make sure we’re on track to meet our own long-term goals. If you’re not tracking your income statement and balance sheet, we highly recommend you start using a program like Mint to keep track of it all.

We’ll post a wrap up all the 2014 spending numbers sometime next week, but for now let’s talk about just the month of December.

We went into the month knowing that we needed to spend $3,206 or less to meet our $50K annual goal, so I had that in the back of my mind as a goal that would require a stretch to get to. But at the same time, it was also the holidays and I didn’t want to skimp on giving to people or organizations that we typically do just for the purpose of meeting that goal. And if we hadn’t had that rather audacious goal of $3,206 for the month (which would have been our lowest spending month in over 2 years if we had met it), I’d be pretty darned pleased with how the December spending went, since it was still our second lowest spend month of the year.

Our spending was actually $495 over that goal (which puts us at spending 1% more than our goal for the year). And the majority of that extra 1% can be accounted for with two unfortunate occurrences.

1 – Mr PoP got sick – a really terrible cold for almost 3 weeks. It was so bad that at one point when I heard him coughing across the house I was convinced that Kitty PoP was choking and dying and I ran out to somehow perform the kitty Heimlich maneuver. But nope, Kitty PoP was happily munching on his kitty kibble and the racket was just my husband choking on mucus membrane in his sleep. (Are you disgusted? I was!) Whenever Mr PoP gets sick, whatever natural predilection he has towards frugality goes completely out the window as he is fully ready to swipe his credit card at any nearby terminal if he thinks it will make him feel better. He knows about this weakness, and I make fun of him for it (but only after he is feeling better). This bout of illness cost us $91 in OTC purchases at Walgreens and CSV, $106 in prescription drugs, and a good $40 or more in impulse purchases made at his company cafeteria beyond what is normally budgeted since it being Q4 he obviously had to go into work sick. So that’s $236. There will also be a bill from our GP for probably $80 or so, but it hasn’t arrived in the mail yet and will be counted on 2015 spending.

2 – Our car hit 100K miles a month earlier than I thought it would and ended up needing some maintenance. Fixing some corroding wires was $22 the first time the car wouldn’t start for Mr PoP, but the 2nd time the battery died, he bought a new one for $143. Hitting 100K miles meant an oil change and while there Mr PoP got new wipers for the car too… $77 total. So the car was another $241 that we hadn’t quite thought we’d need until next year. And there will be more car expenses in 2015, so we’re accounting for that in next year’s budget plan.

Mr PoP would also like it pointed out that I spent more on charity and gifts than he did on being sick, so the overage could also be attributed to that.  Lest you all think he’s a complete grinch, he is still feeling a little cough-y, so is still in grumpy mode a little.  =)

The Bottom Line

  • Earnings before principal paydowns and savings allocations of $8,189.

And here are the details…

Continue reading PoP Income Statement – December 2014

It’s Not Beginning To Look A Lot Like Christmas

Last year's tree... nothing like this around here this year!

Last year’s tree… nothing like this around here this year!

… and that’s OKAY!

It’s December 18th as I write this, aka t-7 days before Christmas and to stand inside the PoP home, you wouldn’t really know it.

For me, this is weird. You see, I LOVE a good Christmas tree (largely because I had pretty sucky Christmas decorations/trees growing up). I love sitting next to it and basking in the glow of the white lights as they reflect off of all the shiny ornaments that we’ve both inherited from our families and have collected together during our marriage, and inhaling the scent of the fir tree that I insist Mr PoP help me pick out and drag home from Home Depot during the first week of December each year.

It’s so nice, and calming.

But this year it’s not happening. Yes, I did get our outdoor lights on the house as part of my solitary Thanksgiving, but we’ve got enough chaos going on in the house at the moment that the idea of decorating beyond that felt not like a treat, but rather as an imposition – as a chore.

Continue reading It’s Not Beginning To Look A Lot Like Christmas

Prepaying For A High ROI

It has gotten cold down here this winter... folks are building sand men!

It has gotten cold down here this winter… folks are building sand men!

In November, we paid in full three different bills totaling close to $3,000 that weren’t due (or due in full) for 5 or 6 months.

Why did we do this? Quite simply, the pay in full or pay in advance discounts amount to some of the best ROIs around. How so? Let’s look at some examples.

Property Taxes

We get our property tax bills in November every year, but technically we don’t need to pay them until March of the following year. That’s 4 months that we could hold on to the cash instead of handing it over to our local government for them to hold on to. Four months when we could be earning interest on our money instead of letting our local government put it to use immediately (or earn interest on it themselves).

To induce us to hand over our hard-earned cash as early as possible our government gives us a nice little discount to pay in advance. For each month we pay in advance of March, we get a little more than 1% off of the total bill. So if we pay as early as possible (in November), we get 4.17% off the total bill. 4.17% might not sound like much, but let’s annualize it.

4.17% for 4 months becomes…

(1+0.0417)^(12/4)-1 = 13.03% annualized.

Unless your savings account is getting a better return (CAGR) than that, or you are using your funds to pay down credit card or other debt that’s at a higher rate than 13%, I really can’t see any downside to not prepaying this bill. And if you’re using an escrow account through your mortgage holder, make sure they’re paying it early to get the maximum discount, too!

Car Insurance

Continue reading Prepaying For A High ROI

Our Latest Insurance Dance

We go through a dance with our homeowner’s insurance company nearly every year.

Two years ago it was figuring out if it was worth it to self-insure our pool and lanai. Spoiler alert – since at that point it would have cost us an additional $2K/year to insure it for $10K, self-insuring was the better bet.

Last year, it was deciding if we were comfortable with the takeout of our policy from Citizens to a smaller insurer. We went with it and regained coverage on our pool and lanai for a nominal increase (just $20) in our premium.

This year, we ended up raising the deductible on our policy in order to decrease our premium. The way the math worked out, we have a seven year break-even on the risk for the hurricane portion of the policy (which now has the highest deductible we are able to take on according to our mortgage contract).

Why Did We Do This?

Continue reading Our Latest Insurance Dance