I found a new blogger group to join!

Many, many moons ago I joined J.Money's millionaire goal blogger's group.  Friday I updated my plan, and let him know.  When I did that I checked out a bunch of new and newish bloggers to the group.  Through that I found a new group.  It is a group that has a goal I want to reach.  A goal I doubt I can reach this year but I know I can reach it at some point, so why not join up now.   So you are sitting there going,  So what is the group?!
The group's goal is to save half of their income, after taxes are taken out.  This does not mean that you don't count pre-taxed savings, just that we are looking at the lower number.
Go check the two leaders out at YoungFinances and FrugalPortland.

With our daughter's expenses of over $12,000 for daycare alone which accounts for about half of my income, we can't afford to save half our total income.  My husband and I make about the same, plus we have our joint rental income.
Now this group is not strict, paying off debt counts as savings.
Right now I only have two debts we are paying off:
My mortgage which is 4.75%, minumum payment of $252.48, total balance of $45,040.31
Private loan through NYSERDA to replace my water heaters and furnace which is 3.49%, minimum payment of  $36.79 but this has been on autopay for so long, I don't know the total balance.  It started as $5150 and was a 15 year loan.  I am trying to get the information.

Keep in mind that paying interest does not benefit you, so this group only allows for principle payments.  That means I can only count $73 of the $252 payment as "savings".  Still better than nothing.  I believe I paying about $24 per month on principal towards the private loan though.
So, just with debt repayments I am "saving" $97 per month.
So averaging my rental income and our salaries, that would give us a savings rate of 2.33%.  Obviously that is way too low.  But wait!  We have not accounted for real savings:
We have a retirement savings of 16.4%, which right now is $625/month plus my pay in to my pension.  That brings up to 18.60%.  Not bad, not bad at all, but still short.

Well, here is where the rental comes in.  The income is variable so I don't account for it in the budget and it ALL goes to savings or debt repayment.
This is because we have debts we are not paying on as most graduate student do:
$17,000 in graduate student loans 0% for now, 6.8% six months after my husband graduates (Nov 2014 is the expected start of repayment)
$5,500 in undergraduate student loans 0% for now, 6% six months after my husband graduates (again Nov 2014 is the expected start of repayment)
$5402 in undergraduate student loans 0% for now, 6% when I graduate in three years (May 2017 is the expected date of repayment)

We already have set aside $17000 to pay off the graduate loans, so we just need to pay off the undergraduate loans and start an EF.   Prior to this, the money set aside for debt repayment and our EF were one and the same.
So assume we can either save or pay down debt by $4000 per year?  How much, as a percent, will we be "saving"?
So, that is up to 26% of our net income.   Not bad, but we still have a ways to go.   So my goal within this group is to increase income and decrease expenses until I can truly say "I am saving half my salary".
So who is with me?

Updated Millionaire plan February 2014

Now that I have a job, we have revised our millionaire plan and we actually have a goal in mind as well as a goal to beat!

In order for me, The Frugal Student, to become a millionaire, I (and my husband) pledge to do the following (each year):

1. Now that both my husband and I are students, we are not eligible for the saver's credits...
2. Therefore we are contributing $625 per month to our Roth IRAs (this is 15% of our salaries).
3. I am also contributing 3% to my pension (the max I can).
4. We also now have access to a daycare FSA allowing us to deposit $5000/year tax free and FICA free for the little frugal baby's daycare.
5. We have not done well on selling stuff so we shall be changing this around to try to find something to earn $10 extra a month towards our EF.  This will increase surveys, being part of experiments and possibly selling things.
6. Living frugally.  

Our previous plan was:

1. Contribute to the traditional IRA if it will make us able to use the saver's credit at the max of .5
2. Contribute $200 per month to our Roth IRAs depending on the saver's credit to determine where the money will be deposited
3. Sell stuff on eBay, craigslist and Amazon - $10/semester ($20/year)
4. Live Frugally - $1000/year (put into my EF



Using CNN-Money’s millionaire calculator with a conservative interest of 6%, I will see a cool $1 Million in approx. 35 years and 7 months!  So now you see why we have a goal to beat.  I am not waiting till I am 65 to become a millionaire. 
So what is the next step?  We will follow this plan until life changes and we will update as we go along.  If anyone has any ideas, feel free to throw them at me.

Always Check! My shock with my credit union

So, this morning I restarted my deposits to my IRA.  I want to try to get as much in for 2013 as I can, so I have three months to go!  Remember you can deposit under last year's limit until April 15th.  After I set up my automatic transfer, I was checking out my credit union's website to see if there was anything new.  I saw that they had student loans now.  Wow, credit unions normally have better rates than anyone else and variable private loans can be found as low as 2.75%, whereas fixed rates can be found as low as 6%.  So, I try to check it out and I can't find a rate ANYWHERE.  I can find the rate for every other loan but not this one.  But, I have gotten in the groove and want to know!  I pick up my phone and call.  Go through the automated system and finally get a person and do you know what the lowest rate they had was? 9%

They say they have private student loans but charge the personal loan rate?  Why would you do that?  I asked the woman for a reason that they were so much more expensive than their competition.  And was just told that they don't do many loans so they keep the interest high.  Don't you think it might, just might, be the other way around?  Your rates are way over the norm so no one uses you.
Do they not legally classify these loans as private loans and therefore the loan is not insured by the federal government?  Oh no, they do.  So.... what is going on?  Why is a credit union price price gouging? 

I don't know if I am cranky enough to write a letter to our board about this or not.  If I do, I will report back.  However, it does make me happy I checked and not trust in their past behavior.
Never assume when it comes to money, always confirm. 

The difference in college frugality and normal frugality

Basically, most people can't be extremely frugal for a considerable amount of time because they get worn down. But college students have a end date if they try to be extremely frugal, of graduation. Hopefully, after we graduate, our income increases quite quickly, unlike any other time in our lives. Also, we are surrounded by people who also don't have a lot of money and we have access to a ton of free or cheap entertainment.

I just posted my budget on a money message board and everyone said my fun money amount was too low.  How did do ANYTHING?  Well, last Saturday I went to a film screening, got a free lunch then went out to a "Winterland" at our school with free ice skating, free horse carriages, and free sledding. I had a great day out, yet did not spend a penny.  This is a major advantage of being a student.

We can have great fun on the cheap or even for free.  If your weekends and nights are taken up with events that are cheap and free, why would you spend money?  Yes, this takes planning, it takes looking for these events but you have those options.  When I was just working, I did not have as much access to these things.  I spent time at the mall, I wanted to go out to eat, if I wanted to have fun with friends, I spent money.

So take a minute, google your school and student association or clubs.  See what in the next month that is at your school that is cheap and fun?  Where is the free food?  Then, go tell your friends, invite them along.  That invitation was why I went to a great movie, and had a great lunch on Saturday.

Millionaire Update!!! Febuary 2014

So I have to apologize because I have not been posting updates because during the last year we have not had any extra money to deposit and I thought it would be boring.  But, I was wrong.  I was sending money in, once in a blue moon, by using my FIA card services AMEX which gives me 2% into my IRA.  We had a lot higher expenses this year, because of daycare and did put a lot more away than I expected.  We redeemed enough points to fund our Roth with $339.85.  It is a big lesson to me, that every penny adds up.  I pay attention to that in regard to spending, but I forgot that it would also add up for savings.  Also, it is a lesson how how much we spend in daycare, lol.  We spend $240/week and that adds up.  It actually is our largest expense, costing us about 1/3 of our income.

And being able to put it on a credit card really helped us.  We did not have over three hundred dollars to put in to retirement.  We were barely keeping our heads above water.  Even one cent was too much, yet our credit cards funded it while I was not paying attention.  I truly believe that credit cards can help and help a young person.  In my opinion, a young person should find a good cash rewards credit card and use it for needs only, and then the rewards are there for you.  Some people use the rewards for fun, but in the beginning, I think it is important to use credit cards to build yourself up.

As of March of 2013, we only had $14,441, and now, 11 months later, we have $16462.  We benefited by the market as well as that nice chunk of change from our credit card.   We now have six months of expenses including COBRA but minus daycare.  We only four months if we include all expenses.  To get up to six months of all expenses it will cost $21,000, so that is our next goal.  I think we can put away more than $4538 this year. 
I promise I'll keep up these updates this year.

I got into the PhD program this semester!

I was planning to graduated my Master's in December but I wanted to keep going and get my PhD.  But, my PI was unwilling to keep as a PhD student.  He told me that he could not fund me, ironically he did find money for another student.  But, I did not let that stop me.  I found a faculty member who had just joined the medical school who was interested in me.  We had meeting after meeting, talking science but we also talked money.  You have to negotiate your salary, some of your benefits and your travel.  It was the hardest thing I have ever done.

I got some of what I want, but not everything.  So, did I sit down and accept it?  No, I have a plan on what I have to do to get a raise.  My boss pays my tuition and for the first year I take eighteen units but after my preliminary exam, I get to go drop down to two units.  That saves my boss about $7000, so when I drop down I plan to ask for more money.  Also, I plan to apply to multiple grants, if I get him more money, how can he refuse me? 

But, this will mean extra work.  I get into lab before everyone else, because I have to leave at 5:30 because my daughter's daycare.  I have to fight harder than before to show that a woman with a child can do the job a man can do.  I have to learn to be more efficient than anyone else in lab.  But, guess what?  I can.  I can do the job and I will fight to have to income that I think I deserve.  

So, what are you going to fight for?