Thrift-o-rama and the quest for a Tiki Bar

Beanie is officially 6 weeks old. Boy has it been exhausting! He's still not sleeping through the night. But I digress...

Before I had him I had a lot of anxiety about how much having a baby was really going to cost us.

So far, the answer is $325 a month. Of course this will change, but it's the first concrete figure I have.

It is as follows:
$200 to 529 college savings act
$60 in extra insurance premiums
$15 pediatrician copay for monthly visit
$50 in diapers and misc., but that is estimating high.

It's not as bad as I had expected.

I suspect it is so low as well because he still eats 90 to 95 percent breast milk every day. we are supplementing with formula so I can get some sleep, but we received so many free samples that we could use the free stuff for months before having to buy any.

The diapers are hit or miss.I have reusable cloth diapers but we don't use them exclusively because in many situations, they leak. The last thing I need is to have him wake up too many times at night because his clothes are soaked through, so it's worth it to use some disposables. We pay probably $13 every 10 days or less for disposables. I also included odds and ends, like special baby laundry detergent in this total.

Not too shabby.

Wow. Mother's day. It's weird that this year I too am actually a mom. I'm so used to being the kid doing things for my mom on Mother's Day.

The bean is six weeks old. It certainly has been rough. I knew it would be hard but not this hard! I thought he might at least be sleeping through the night by now, but no...

I haven't had more than 2 hours of sleep in a stretch for 6 weeks now, and frankly, it's starting to wear on me.

Having a life and working? Pretty much feels impossible right now. I was excited today because the hubby watched the bean so I could go to the grocery store. It felt nice to have 2 hours alone!

Boy, funny how life changes, isn't it?

A while back, I read the Automatic Millionaire and it inspired me to put my savings on auto pilot. It is a simple idea, but it's been working out great for us.

I was worried that the checking account would dip or we somehow wouldn't be able to keep up with the aggressive saving strategy I had set up for us, but so far it is working well.

I originally earmarked:
$500 a month to online savings act.
$175 a month to 529 plan
$360 a month to brokerage act
$325 a month to hubby's Roth

I recently upped it to
$600 a month to online savings
$200 a month to 529 plan

and added an additional $100 a month to my student loan payment. (On top of the $293 I already pay).

I've also managed to put more into the savings account than I had originally intended each month, so it seems that $600 has become the minimum saved, rather than the total.

If you had told me 6 months ago that I'd be able to put this much away a month, I would have told you you were crazy. Especially since I gave up my full-time income for freelance and we have since become a one and a half income family.

It's amazing what you can do if you just take the plunge and stop talking yourself out of it.

The end result of all this is that we are more than halfway to meeting our 2008 savings goals, and it's only (almost) May.

We have put $10,685 into various savings and investments. Our goal for 2008 was to sock away $18,600. So less than $8,000 to go.

This really makes me wonder what we were spending all of our money on before!

I have socked away about $2700 into the baby bean's 529 plan.

My strategy is to build a diversified Vanguard portfolio, one fund at a time.
So far, the money is invested in:
-Vanguard Aggressive Growth Index Portfolio -Vanguard 500 Index
-Vanguard Developed Markets International Stock Index
I'll add more options once more money is in the account.

Also, I had a conversation with my MIL today. The in-laws want to contribute to his college, but they are retired. Every dollar they would contribute would come out of an IRA, and would thus increase their annual taxable income. They are trying to avoid this as they live in a very high tax state (Vermont).

This is a problem that hadn't even occurred to me. So, we tried to figure out what accounts would work best for them. I'm at a loss, so if any of you have any ideas on how to address this problem, I'd be interested to here them.

I was surprised to see that my tax rebate has arrived in my checking account already.

Of course, that spurred a heated debate about how to use the money, even though we think the whole rebate thing is a terrible idea.

We agreed that the hubby can buy a new video game, I can 'spend' an equivalent amount (I already put my $100 in the tiki fund), and then we'll figure out what to do with the rest.

We joke that since the gov't was upset that folks will use the money to pay off debt that we should put ours towards our one debt (my student loan) just to represent...

In reality, it will likely go to the bean's 529 plan or to savings because we are planning to get a new roof this summer. Not very exciting, I know.

In other news, the cost of giving birth to our bean was about $9500 for the delivery. Just got the bill. Insurance is covering all but about $336. That's much less than I thought we'd have to pay. Of course, we still need to get the bill for the two days in the hospital following birth. So we'll see. But I was bracing to pay thousands, just because you never know what insurance companies are going to foist on you, so this is a small relief.

I added $84 to the tiki fund. It's part of an $884 2005 tax refund we just got from the state of Louisiana, after a long and frustrating battle. The hubby took a small part of that and bought a new game for his Playstation, so I took my part of the "spending" money and spent it on the tiki fund.

I'm happy to report that it's put me just over the halfway mark for my year's goal.

No, I don't realistically think I can open a business on a meager $1500 a year in savings. This is just to get my toes in the water to see if I can in fact save something for this bigger goal without putting my family finances on the line.

So far so good!@

Wow. I'm not usually one to pay that much attention to gas prices. Hubby and I work from home a lot and live close to shopping, but even I had to take notice when it cost almost $30 to fill up my Honda Civic hatchback. The gas tank is barely 9 gallons!
I really don't know how folks with big commutes are doing it...

I don't want to jinx myself just yet but Beanie is approaching 3 weeks old. I just paid the bills and our spending has taken quite dip during that time. I guess all the late night feedings and changings, the need for 24 hour care, etc. is saving us money so far. No energy to go out, I suppose. Although, we are heading out to a rock show tonight. Just waiting for grandma to show up to take over. But this will be money well spent on a well-deserved night out!

My aunt Cam sent $20 in a card for Beanie's birth. I transferred it into the 529 plan. Every little but helps! Maybe in 18 years that $20 will be worth $25!

I also paid an extra $100 to the student loan this month. It's down to about $15,500. Considering I started with $40,000 in 2001, That's not too bad.

When I worked full time, I'd always used any extra freelance money I earned to pay down the loan. Some months, I put an extra $400 or more to it. My goal is to have it paid off in full in the next two to three years.

That's the news. Nothing exciting. We decided we are going to cash the Louisiana tax check and just hold the money in reserve in case it turns out to be a mistake. If it isn't I'll put some of it toward the student loan and some of it into the tiki fund.

Some of you may know I lived in New Orleans for 10 years, and was forced to move by Hurricane Katrina. (This was my house, which I miss..)

Well, we have been fighting the Louisiana dept of revenue for a good two years over our 2005 tax return. They just couldn't get straight that we moved in Sept. and earned income in another state. Of course, we paid Ohio tax on that income and Louisiana tax on what we earned in Louisiana.

For the past two years, Louisiana insisted that I owed Louisiana tax on all the income we earned, even what we earned in another state.

They wanted us to pay an additional $2,000 or so to them, and had issued a notice that they could start seizing assets. I was very steamed.

After multiple phone calls and multiple faxes of our 2005 state tax returns, I got a surprise in the mail today.

A refund check from Louisiana for a little more than $800. With no note.

I have no idea how they went from you owe us two grand to we owe you $800. I'm almost afraid to cash it, because it's probably yet another administrative error...

I loved New Orleans but general incompetence at every level of government and industry is why we chose to leave after the storm.

This whole tax nightmare has just been a constant reminder not to wax sentimental about going back!

Anyway, I don't know what to do now. Call about the refund or just cash the darn check?

I have posted about how worried I am about the cost of raising our new baby bean.

He's only bean alive 10 days, so it's too soon to tell, but I wanted to start a tally.

We've tried to be economical with everything.

The avg. new parents spends about $6,700 before the baby is born on thing like cribs, clothes and supplies. We spent $600. Everything was used except the crib. We also received many clothes and boxes of diapers as gifts. They have really come in handy!

Diapers: We spent about $200 on reusable cloth diapers, a brand called Happy Heiny's. They are one size fit all, so they should last. We bought some new and some lightly used through a diaper exchange.

Right now, we're using disposables, just because his belly button hasn't healed up yet and it's nigh impossible to fold down our reusable diapers to keep from irritating it.

Food: Right now, it's all about mama's milk. But the pump we borrowed wasn't getting the job done, so we rented one from the hospital for $60 a month. (about 2x was we expected, but still MUCH cheaper than formula.)

If we have to supplement for some reason, I have oodles of free Similac formula samples that the pediatrician and hospital gave me. I also received some free samples of it in the mail from Similac. It's all in the cupboard just in case.

College: Yes, I've been saving for Baby Bean's college since the first Ultra Sound. Right now, we're putting aside $175 a month into a 529 plan, which is enough to max out the $2,000 a year state tax deduction.

Still no word on the hospital bill. I have a 90/10 plan, and for some reason I'm under the impression that our out of pocket is capped at about $3,000. So we'll see. I am expecting to pay at least $3,000 for our birth plus 2 day stay at Chez Hospital.

Oh, and we did pay a $15 co pay at the pediatrician, and we'll have to do that again later this month.

Overall, I'd say so far so good. Beanie isn't totally breaking the bank.

Although, I am wondering how I am ever going to manage to go back to work....

Yay! I added another $15.71 to the tiki $20 challenge today, thanks to some sales on my Web site. That brings the total for the year up to $689.66. Not too shabby!

Well, we finally did it. The new baby Bean (Raymond, after my grandpa who died last March) arrived April 1 at 7 a.m. after only 25 hours of labor. Phew. There is a reason they call it labor and not tickle party.

We've been home from the hospital for 3 days. Everyone seems to be in good health so far. Although, mommy and daddy are exhausted. I knew it would be hard, but I didn't know it'd be quite this hard.

No sleep, constant feeding, crying. Seems like the little guy is either passed out asleep or if he is awake, screaming his lungs out. I'm hoping that's just a phase. He is after all, brand new and the world must seem a bit overwhelming.

He and I are both having a pretty bad week! (Until the week I get the hospital bill...)

Speaking of money...

Not that I can even give it much thought right now but I will have more to add to the tiki fund soon. Probably about $20 but I haven't done the math yet.

And I'll also have another $2,000 to put toward retirement savings, thanks to a check for a freelance project arriving while I was in the hospital. Since I haven't decided whether to do an IRA or a Solo 401k , I'm just going to stash the dough in savings until I have time to think about it.

So that's the news!

I managed to put a little more into the tiki fund this month:
$25 from ING for opening an account, a $10 referral from ING for my sister setting up an account ( a small miracle..), and another $41 in ad sales for one of my Web sites.

That brings my total up to $672.40 for the year.

The $20 challenge is such a great idea. It's really made me more aware of alternative income streams. And, it's made me pay more attention to little bits of income that otherwise we would have frittered away. Very cool.

My sister stayed over last night. We were talking about tax refunds and such. Somehow, the subject of savings accounts came up. I asked her if she had a high-interest savings account and she looked at me like I was crazy. She said "my bank doesn't pay interest on my savings account."

So I asked her if she'd considered opening an online account and she said "You know that stuff makes my head spin."

We've gone around and around on money. Last year, I had to help her refinance her house so she didn't lose it. She had refinanced a few years before to pay off her car and credit card debt. Do you know how she found the loan? she answered an add on television-- then didn't even read the terms. it was an adjustable rate mortgage with rates about 4 percent higher than what she could have gotten at the local bank-- and it was about to reset to about 15 percent. Ugh. Luckily, we avoided that mess.

That inspired her to ask me to help her develop a financial plan and a budget. So I went through all of her documents, bills, etc. and set up a relatively easy to follow and not too onerous saving and debt reduction plan. 2 years later, it's still gathering dust. And I just found out she cashed out her entire retirement plan to pay off credit card debt. (She's 38).

(This isn't even going into the times I've had to bail her out. I've paid her monthly mortgage twice-- due to no emergency fund when she lost her job. I've also moved in with her to help her save and get ahead on bills, only to have her immediately quit her job after I moved in, because she could now afford to...)

Ugh. It's like she doesn't want to deal with money at all, because she doesn't want to sacrifice or deal with her demons. But yet, the longer you let things go, the bigger the demons.

And here is the worst part-- she works in accounting. She loves her job, but yet she can't seem to translate that into her personal life.

Sorry for the rant. I just worry about her and sometimes it makes me mad.

I saw is article in the NY Times. I'm glad I'm not the only one getting ready to rip out a bunch of evergreens and plant fruit trees in their stead.

http://www.nytimes.com/2008/03/13/garden/13orchyarding.html?...

My hubby and I have been systematically turning all of the existing flower beds around our home into mini farms. Last year, we had literally 50 pounds or more of fresh veggies, just from our own little beds. We didn't buy one veggie all summer, and we just finished the last of the pasta sauce we made from the roma toamtoes. It's one answer to higher grocery costs...

Anyway, here is the article.

I am new to that site, but they just called and asked if I wanted to be a regular contributor. (I'm a financial journalist by trade.)

Just want to get your thoughts on their personal finance section.

A worthy question. I read a lot of personal finance books, so I was intrigued when I ran across this article by David Bach (of Rich Couples Finish Rich fame). He has written a new book about how going green can make you rich and this article is a rundown of the ways you can save or make money by being more environmentally aware.

It's interesting that such a high-profile writer is taking on this topic. Of course, some of the suggestions are things us eco-geeks have been doing for years, like freecycling and donating used goods, but it may be worth a read anyway.

http://finance.yahoo.com/expert/article/millionaire/72749;_y...

I just finished the first Rich Dad Poor Dad book and am halfway through the investing one, which is the third in the series. I'm not sure what I think of them. At first, I was interested because they were a little different than the standard p. finance books out there. But now, I don't know.

In the investing book, there is a lot of talk about generating assets. I think the idea is right on, but I'm not so sure the advice is as nitty gritty how to as I'd like it to be.

I'm wondering if there is another book out there that could give more concrete advice on how to create assets and generate passive income...

One day, I would like to not have to depend on work and jobs for money. And not just in a living off of dividends in retirement kind of way, you know?

Anyway, if you have any thoughts on this. Or any book recommendations, I'd love to hear them.

I just got an offer for a free $25 from ING if I open a savings act with them. Is it worth it to open an account and leave some money in it just long enough to get the cash bonus? (I think in this case it's 30 days...)

All these Fed rate cuts are killing me. I just keep watching the interest rate on my savings act. go down. It was 5 percent a couple of months ago. Now I'll be lucky if it stays above 3. Anyone have any ideas on a better place to stash my cash??

I just socked another $15.24 in the tiki $20 challenge fund. The money came from sales of a display ad on one of my Web sites. I'm happy that there is now over $600 in the tiki bar fund, and it's only March.

We also managed to sock an additional
$175 in the 529 plan for the soon-to-be-born bean
$200 extra in the savings account
$180 in the stock-buying account.

Feels nice. Also, when the checks for my latest freelance project come in, it should be enough to max out my IRA for the year. Yay!

Being forced to articulate my goals on this blog has really helped me make things happen. I wish I had started sooner...

The last 1099 finally arrived, so I finished our state and federal taxes. It was almost a wash. We qualified for a $1,130 Federal refund but then had to pay about $900 to the state. So, we have about $200 to spare tax wise. Like a geek, I've already transferred it to the savings account.

I also earned a good chunk freelancing this month. I got a gig covering a securities fraud trial in Ohio for a news service. I've managed to put in a good 70 hours on this project this month. That is welcome money, considering we're two weeks away from having our first baby.

I may be able to earn some more from a related trial this week, but at 38 weeks pregnant, big as a house and swelling ankles, the wood courthouse benches don't seem that appealing. (The bailiffs also keep asking me if they need to go boil water...)

Still, I think I should try to work as much as possible while I still don't have to worry about babysitters...

Last week was a good week for freelancing because Bankrate.com also published another one of my stories, so that is more to the IRA. Between these two projects and another Bankrate project, it looks like I'll be able to max out my IRA by May this year. That feels good.

After that, the hubby may let me use some of my writing money to fund the future tiki bar fund. At least, I have my fingers crossed.

Otherwise, March has been a slow month, as you can see from my Tiki calculations on the sidebar. Only about $20 has gone into the fund so far and the month is halfway over. Oh well, I guess I should expect that number to go down when I have to focus so much of my energy on my main income stream.

Yay! I added $67.29 in Google adsense profits from my Web magazine to the Tiki $20 challenge.

2008 Total: $560.25, $939,75 to go!

I also paid an extra $143 this month on my student loan, bringing the balance to about $16,140. Down from $40,000 in 2001!!

I have long had an "accelerated" payment plan for the loan. When I work full time, I have used any money I've made as a freelance writer to pay extra on the loan every month. It's really sped up the pay-down.

I know it has a low interest rate and all, but it's our last outstanding debt, and I want it paid off. I totally hate debt.

I'm a financial journalist, so I think I do a decent job managing my finances. But, every week at the library I load up on 4 or 5 personal finance books and read them all just in case. I call it job research, and usually it's no big deal.

But last night, I read the Automatic Millionaire by David Bach. It was great. So simple. And,even though I do a good job staying on top of the cash as family CFO, it made me realize we weren't paying ourselves first and we could do so much better.

We hadn't "paid ourselves first" since Hurricane Katrina threw a wrench in our plans. But that was almost three years ago. I guess that kind of financial/emotional stress makes you even more conservative, to your own detriment.

So, this morning, I hit the computer and automated our savings.

I set up bimonthly transfers to our stock brokerage account, my hubby's Roth IRA, the high-interest online savings account, and the 529 college savings plan for our soon-to-be-born baby.

The money will be taken out on the Monday after each payday and will be enough to max out our personal savings goals for 2008, and then some.

I hope it will also instill more discipline because now we REALLY only have what's left over to spend.

Today was also great because my hubby's annual bonus finally came through. Although taxes cut it in half (love those taxes), it allowed us to pay off the new windows we just had installed. I had used the credit card as no-interest loan for them, so that's now paid (And I get rewards on top of that...)

I also socked away the "monthly payments" I should have made to the above accounts in January and February, so we will be on track for the year.

I boosted the reserve in our checking account, too. I had run the balance razor thin since Christmas, in part because of the holidays and the window expense. I wanted to pay for all of that with normal cash flow, not savings, even though they were larger, partly unplanned expenses.

And we still have a little left over. I think what's left will (hopefully) be enough to cover any out of pocket expenses we'll have to pay the hospital when our baby is born this Spring. Of course, it's nigh impossible to read the mind of the insurance company...

A friend sent out lotto tickets in her thank-you cards. I won $5, so that's going to the Tiki $20 challenge.

Total for the year: $492.96

I believe your money is your vote. So for the second year in a row, I'm voting for locally grown pesticide-free produce from a local farmer. Last year, we joined a farm co-op for the first time, not knowing what to expect.

Basically, we paid $275 a season for bags of vegetables from this farm. The season is from May through Oct. and we pick up once a week. The food was so good last year. Much better quality than what you get in the grocery store. And it turned out to be a lot of food for the money, so it was a lot more and better than what we could have bought at the grocery store.

(We supplement this with what we grow in our garden. We didn't buy one veggie at the store last summer.)

Throw in that our farmer is super nice, and at the beginning and end of the season gave us tons of hanging baskets, flats of flowers and pumpkins for Halloween. Heck. Why not sign up again?

So I filled out the form and am mailing the check today.

I know it seems like a lot of money up front, but it's well worth it. I'd rather have my grocery money supporting a local farm than a multinational grocery store chain any day.

If you have a farm co-op in your area, I highly recommend it. It's a much better way to buy veggies.

I got to add $9.51 in profits from Amazon marketplace sales and $3.40 in profits from a sale on my Web site to the tiki bar fund.

Tiki "$20" challenge: $12.91
Total this year: $487.96

Turns out the hubby is getting a bonus this year.

I don't know how much it will be after taxes but I am pretty sure it will be enough to pay off the last of the new windows we bought this month (around $3,000 left to pay) and to fund at least part of his Roth IRA for 2008 ($2,000 to $4,000).

It feels really great to be so close to meeting those 2008 goals and we're only in mid-Feb. Plus, it'll free up money to help us meet the rest of the year's goals, including maxing out the 529 college plan and adding $5,000 to our liquid savings.

With a little one on the way this is like pennies from heaven!!

Well, the tiki fund isn't growing as much as I'd like it to this month. Seems like I just can't get moving. Sales on my Web sites and on Amazon have been slow, and I haven't dedicated any time to crafting more items to sell.

I guess this is the trade off. My normal professional life has been busy-- I have a new, potentially lucrative freelance gig that only lasts for the next 6 to 8 weeks-- until this baby pops out.

And of course add in that being very pregnant is exhausting, and I'm not much of a go-getter at the end of the day.

I am happy to have an assignment that will help me max out my IRA for the year and contribute to the household budget. But that doesn't get me much closer to the dream!