Educating the Wheelers

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Chronicling the Experience of Educating our Children and Managing our Family

Saturday, December 31, 2005

2005 in Review

This year has been great!

We transitioned from Andrew handling the bulk of the finances and me being totally clueless to me handling the bulk of the finances and Andrew keeping occasional tabs on things.

Audrey turned 2 years old, and we finally got pregant again.

We put together a solid financial plan, and pretty much the whole thing [save for how much we prepay extra on our mortgage each month] is on complete autopilot. We cut back our discretionary spending, we cut back our day to day living expenses significantly. We have +/- 45% of our pre-tax income going into savings these days. And that is AWESOME.

And a bunch of other stuff. But all told, it was a good year for money. We have been very lucky, and tried not to squander our good fortune.

Friday, December 30, 2005

Our Frugal Christmas, Part II

After nearly a lifetime of money-sucking hobbies, I am relieved to note that almost all of our Christmas presents were things that were more designed to save us money than to make us spend more.

Case in point, I noticed this afternoon that we were running out of yogurt and I went to put it on tomorrow morning's grocery list when I remembered, "Hey! Didn't we get a yogurt maker this year from my Godmother?"

I just pulled our first batch out -- made with a scoop of leftover yogurt, 3 cups of reconstituted nonfat powdered milk [with extra powder for protein] and 1 cup of leftover heavy cream from Christmas ... and, yum, it is good. The bit of heavy cream in there gives it that "Brown Cow" brand yumminess, but for way, way cheaper.

Our Frugal Christmas, Part I

We had a great Christmas, and a relatively inexpensive one. Admittedly, that's pretty easy to do when you only have one kid so far and she's only 2 years old. She had a lot of small presents, and a fair chunk of them were from the local used toy store. I wrapped them in shiny foil-like packaging, and I think she liked playing with the boxes and bows and stacking them in different places more than she liked opening them. In fact, I'm thrilled because she wasn't too interested in opening them. We'd cajole her into opening one, and then she would just want to play with that one, not open another. So it took us two full days of that to open her presents. I'm not complaining!

I waited until, hmm, it was either Wednesday or Thursday to get a Christmas tree since that's when they go on big sale. I was able to get a really nice looking pre-lit artificial one for about 60 bucks. We used two cannisters of Big Lots plastic glass-looking bulbs [important with a toddler, and only 15 dollars total] and a Big Lots star for the top, 4.99. My mom donated an old hand-crocheted skirt for the bottom, so we came in under 100 dollars for a nice looking tree we can use again.

Tuesday, December 20, 2005

We love free!

Andrew just won us a free year's subscription to Kiplingers in a contest over at All Things Financial. We love things that are free!

And speaking of winning contests, Andrew also just won a tablet pc in the Microsoft One Note PowerToy programming contest [one of the top 5 winners of over a 1000 entries] -- more about that when they finally make an official announcement and post the winners for download.

Maybe I should have him buy a Powerball.

Saturday, December 17, 2005

Our Frugal Wedding, Part II

Once Andrew and I decided that we didn't want to deal with the hassle, stress and expense of a traditional American wedding, we started kicking around other ideas. Vegas, Justice of the Peace, etc.

There were a lot of other strange factors involved, but suffice to say that we needed to do it quickly before my quit date at work, which was rapidly approaching for our move to Austin. So we went down and got our state of CA paperwork, that was about 75 to 100 dollars. Then we got some wedding bands. Here we splurged a little, that was about 600-700 dollars total for the two of them.

A friend of ours is a minister [well, minister enough for legal purposes. Heh.] so he and three of our friends met up with us at a local Japanese garden for a small ceremony. Parking/Entrance Fee: 9 dollars.

After a five minute exchange of vows and rings in a beautiful, tucked away corner of the garden, we headed to a small Italian restaurant and treated everyone to a big lunch and official marriage paperwork signing. Lunch and Drinks: about 150 dollars.

Our parents received email notification that the deed was done [they knew it was coming, at least], and about 3 months later we had a big, big party at a restaurant near my Grandma's house in Upper Michigan as the reception. That part was a gift from my parents and it was modest, though not cheap. Probably a few thousand dollars. Not bad for a hundred guests.

All told for us, less than 1000 dollars. And we're just as legally married as folks who spends tens of thousands of dollars. We used the difference on the down payment on our house.

Thursday, December 15, 2005

Our Frugal Baby, Part I

Over at 2million's site, we've been discussing in his comments about the fallacy of having kids blowing your budget. I believe that just the culturally entrenched ideas that if you get married you have to have the diamond and white dress and all that crap, there are similar ideas about babies.

So, if you have a baby, you have to have a crib, a stroller, a changing table, cute little brand new outfits, bottles, formula, a mobile, jarred baby food, all that junk. And that junk is expensive. And all of it falls under "want" vs. "need." You hardly even think of them as choices, because "everyone" does it. *** We have a few things on that list. We found we hardly used any of it, and what we did use, we could have easily done without.

Now with one toddler, and another child a few months away, we spend less than we did before our first child was born. How is that possible? Well, we don't go out as much anymore, for one thing. And it's harder to do things like watch movies, so we certainly don't go to the theater, and we rarely get dvds anymore, either. Becoming parents made us even more of homebodies than we were, and that is not an expensive lifestyle to maintain.

*** I'm not going to go into the whole "But I couldn't breastfeed!" angle. If you're sensitive about this -- and some people really, really are -- I'm not making moral judgements here. Some small percentage of women really can't, and I have friends in that category. But for everyone else it's a choice, an expensive one, and that's the point of this post. Our baby couldn't latch for the first three months of her life. I had to pump every two hours around the clock to bottle feed her expressed milk, so I know about overcoming nursing difficulties.

Wednesday, December 14, 2005

Where Audrey learns to Cook

Audrey is really interested in cooking. I suppose since I do quite a bit of it, she wants to know what the heck Mom is up to.

Her first "recipe" that she learned and has been able to make [with help] in the last few weeks is guacamole, which she charmingly calls "avocado seed" after the first step of cutting the avocado in half and popping the seed out.

Today she was rummaging through my stash of Christmas cookie ingredients and fixated on the white almond bark. She brought it to me and said, "Audrey cook." So, we melted it down on low in a heavy bottomed pan and then stirred in a cup of peanut butter. Into a pan and then into the fridge. Boy, was she thrilled a few hours later when she got to eat her first piece of "fudge."

Later on, she helped me make a lentil/brown rice salad, and then jambalaya for dinner. She's really starting to get in there and help!

Sunday, December 11, 2005

Our Frugal Wedding, Part I

My Grandmother was appalled that I didn't let Andrew buy me a diamond engagement ring. I didn't really want one, but he thought it'd be a good idea to go and try them on, just to "make sure." So we did, and I was sure. The idea of spending several thousand dollars on a trinket just blows my mind. Oh, yes, but it's a "symbol" of our love. Yeah, right. It's a symbol of the effectiveness of DeBeers' decades of marketing effort. What a racket.

Additionally, I was really disheartened to see some of my normally less materially competitive friends scoping out other women's rings and ranking them. It all felt very high school.

So, we started off on a good foot with no diamond. Instead, we got a nice-looking pearl ring for about 70 dollars. I told him that if he really wanted to spend a little cash on me, he could upgrade my computer. And he did. Heck, if I'm going to get a gift with high depreciation, it might as well be something useful!

Wednesday, December 07, 2005

Bye, bye Schwab...

Well, we've liquidated all of our taxable accounts as one of the final steps to moving everything from Schwab to other investment houses.  We've already transferred all our IRAs from Schwab to Vanguard, so once we move the taxable stuff we're done w/ Schwab.


I was happy with Schwab for years.  The service is excellent, and the web site is pretty darn good - especially compared to Fidelity circa 10 years ago when I migrated out of Fidelity and into Schwab.  The problems started to creep in when Terri and I started to get more involved with our investements, and figure out what exactly we were looking for.  What we primarily want are index funds with very low expenses, and pretty good returns without huge risk.  But most importantly, we also don't want to have to do much "active management" of our funds.  Neither of us are really into "playing the market", and I think we'd be happiest if we could put our retirement investments on "cruise control", and feel confident that our investmenting is sound, without much more than maybe a quick monthly checkup.


The problem is that Schwab seems to be more geared to the "active traders" than the "set and forgetters".  Their selection of no-load index funds are pretty good, but aren't the "best of breed" that can be found at Vanguard.  They also don't have any no-load "target retirement" funds: funds that balance themselves, and get progressively less risky as your retirement date approaches. 


To that end, we're moving our long-term investments to Vanguard, and our short-term/emergency funds to Emigrant Direct (4% and FDIC-insured - yippee!).


A word of caution if you leave Schwab: Schwab hit us with a $95 transfer fee for each account we rolled out of Schwab. 


And we had 4 IRA accounts - ouch!  They didn't give us any warning - the fee just showed up on our statement.  If we would've known then we could have done a few different things to reduce or completely negate these charges.  This was, by far, the slimiest thing I've experienced with Schwab.

Sunday, December 04, 2005

Whittling Down the Budget

I'm getting to the point with our money situation that all the low hanging fruit has already been whacked off. We don't go to Starbucks, we're not paying any ATM fees, no credit card debt, no car payments, our grocery budget has already been cut in half, I've stopped using the dryer and hang dry all of our laundry. That kind of stuff.

It's like that feeling you get when you read a magazine article that tells you how you can painlessly lose X lbs a year by drinking water instead of soda and you're thinking, "But I already drink water!"

I've been putting it off, going through all the receipts and having to face up to all the other little things that I've been in total denial about because I don't *really* want to give them up. December feels like a particularly painful month to do that, so I think I'll take this month to psych myself up for it. January it is.

Then maybe in February I can craft a real budget.


Friday, December 02, 2005

On the Home Front

Today is Audrey's 2nd birthday! We had two of her play buddies over this morning, and that was a hoot -- 3 toddlers is enough to fill a house, that's for sure!

We also had our ultrasound yesterday, and everything seems to be in its right place and all that, which is always a relief. I'm not exactly getting too old for this stuff, as they say, yet -- but I'm creeping up there in age, and you begin to worry about this kind of thing.

Oh, and it's a boy!

That Pesky Mortgage

Our house cost about 225k, our mortgage was for about 185k. [We actually refinanced our mortgage within a couple of months of buying the house, but the story of why on Earth we did that may make its own post some day. Heh.]

We've now had this mortgage for about two and a half years, and we've whittled the principal down to about 146k, as of this month. That's pretty aggressive, and my goal is to have it paid off in less than 10 years. Even if we run into any financial trouble between now and then, I still hope to have it paid off before Audrey enters college -- we have a good 15+ years for that.

I have friends who think it is foolish to pay down your mortgage early. Some because they think the mortgage deduction is so wonderful [though I don't see why paying a dollar so you can get about 30 cents back is so great], and some because your mortgage loan is the cheapest money you can get. Then there's the "put it somewhere else where you'll get more return!" crowd. Well, we don't have any other debt whatsoever, so that sort of wipes out #2. And #1 is kind of silly on its face. As far as #3 goes, we already max out our 401k and our IRAs, plus put an extra chunk every two weeks into Emigrant to bolster our emergency fund, so we've got all of our basics covered already. Plus we have another chunk just "in the market" that's non-retirement. I guess what I'm saying is that we're not exactly skimping on our other investments. And paying down the mortgage has a few add bonuses: First, the return is guaranteed. Second, the psychological advantage of having zero debt whatsoever is worth quite a bit to me. Third, the cash flow issue -- that's a pretty large check that I'm looking forward to no longer having to write every month.