Changing our side income strategy

A few years past, once my husband had taken his subsidized student loans out, I looked around for a place to put the money.  High yield savings accounts were only offering me about 1%, was there are better deal?  I found one, a high checking account offer 3%, with only 10 debit purchases, a monthly transfer in and online statements.  That extra cash became our yearly emergency fund (EF).  But as time past the deal got worse and worse.  First they increased the purchases to 15, then made a requirement that the purchase had to be above $5.  All the while, decreasing the interest.  By the time we closed the account it was only 1.85%, where a high yield savings account ranges between .75-1%.  And with knowing that most of our money would be gone come December to pay off the student loans, why should we keep it?  So we closed it and moved all the money to a high yield savings account.  But I will miss the $25/month in interest.

And that is not the only decrease we have had this year.  When we moved my daughter to her new daycare we found out that they did not take AMEX, so we got a VISA, but that only give 1.5% cash back instead of 2%.  But the VISA is better than the discover (the other card we used when AMEX was not accepted) which only give 1% (except for certain categories), so we started using the VISA instead of the discover.  But, we had been using the discover to get about $50 a year in CVS gift cards.  We did not get that this year and coupled with the serious lack of deals we ended up spending part of our food budget on expenses I did not expect to.  That does mean that we need to find extra money somewhere but how?

Normally that would have come from the yearly EF, but now my interest is pitiful and won't cover it. What else to do?  Well my husband and I discussed opening credit cards for the bonuses and we agreed to count this as part the side hustle.  Our agreement is that half of any side hustle money belongs to the person who side hustled and the other half goes towards savings.  We separate the saving as well.  If the money is tax free, like gifts or credit card bonus, half goes to EF and half to retirement savings.  If the money is taxable, all of it goes to retirement.  Right now we are trying very hard to stay within the 10%, and save any additional money in the Roth IRAs.  We are very lucky to be able to stay within it, so I want to get as much out of not needing to spend money as we can.
 
So what have we gotten so far?  Well my husband opened an account at key bank when they offered $250.  I did the same, but I'm missed the better deal and sadly they only offered me $100.  So far my husband got the $250 and I am still waiting on the $100.  But we need some non-taxable money in here, otherwise how can we fund the EF?  So we both opened credit cards.  He got a $100 bonus offer and I got a $200 bonus offer.  Neither have come yet, but I expect at least the $100 bonus to come soon.  We plan to rotate these offers at least every three month for the credit offers, so assuming we get $100, half to the person who found it leaves $25 for retirement and $25 for EF gives us $100 bonus every year. Not up to $300/year but it is getting there.

Granted I only can do this because we have great credit scores and sooner or later all the hard inquires will hurt that, but since we don't plan to buy another house for at least fives I am ok with that.   The next question is where else can I find money to put in my EF.  Any ideas from my readers?  My motto is to never stop trying to improve and I won't!

What have you changed this year?  How are you trying to improve, financial or otherwise?

Joining Moneystepper’s 2015 Savings Challenge

I found two amazing new bloggers last week, Simple Cheap Mom And Money Stepper.  I have been having a blast reading both blogs and highly recommend both of them.  Money Stepper has a great challenge for 2015 that both Simple Cheap Mom I have joined.  He has challenged people to make two goals, 1) increasing your net worth and 2)saving a portion of your income.  Given that I joined the blogger group trying to save 50% of your income, yet I am not saving 50%, I am always up for trying to improve.

In 2014, the highest savings rate I had was 30%, but I just got a COLA raise and in 2015 my employer is putting $600 in my daycare FSA, which given that I spend $9,900 annually on daycare counts as a raise too!  So I think I can improve even more in 2015.  My budget says I should be able to save 37% but I don't think that is good enough.  I am going to aim for saving 40% of my gross income which will require some pretty decent side hustles but also should increase my net worth by 50%.  It is a lofty goal, but I think I can do it.

So, what is your 2015 goal?  Will you join Money Stepper's challenge with me?

Updated Millionaire Plan December 2014

We blown past $25,000 and now have $26,316 in our retirement accounts.  Our next goal is $32,200, only $5884 to go!  I have no doubt that baring another Great Recession we will make that goal in 2015.  The goal I really want to focus on after that is my husband's full annual paycheck of $41,700.

Some of my longtime readers may remember that he just got the post-doc position which is paying such a lofty amount and in August of this year his income was just $26,000 as a grad student.  One great thing about being a young person is that your income can jump, but then it does make your savings look a little pitiful. But given our savings rate, if nothing goes wrong I think we can hit $41700 in 2015 too.  It may be a stretch but I think we can do it.  I'm making a few changes for 2015 because of what I learned being a full time student, employee and mom especially for the later half 2014 when my husband worked his post-doc job outside of the area.  These may streamline a few things and save us a couple dollars in the process.
What are your goals as we finish up 2014 and move into 2015?

Expenses During Buffalo's Snowageddon and Why They Pale Against the Real Fiscal Armageddon

People talk about the cost of working, and how you only need to save 70-80% of your income because your costs will go down when you retire.  This might be true for some people, but I don't think it is true for us.  We had a perfect example this week when we were stuck at home during a set of storms that hit the buffalo area.

Since we are home the food we are making is a little higher end (the meat store was open one of those days), the stove is on for longer, the electricity is on more and the heat sure is a lot higher.  Granted I am trying to do work while at home (and I do have a kid that makes that difficult) but I think most of the costs would be about the same.

However, I do have to admit I am not spending gas to get to work, which does save some money.  In this case both my husband and I will be working during the weekend to make the lost days up but if we were retired, we obviously would not.  That is about a $26 saving.  Granted my husband drives an hour each way for post-doc, five months ago that cost would have just be $6.  But let's go with $26.   Are the increase costs of staying home add up to $26?

The meat store was an increase of $5, plus some meals we normal eat on the weekends will have to be replaced for probably another $3.  But that is just $8, surely we did not spend another $18 just on utilities?  And honestly I am not sure.  I have not found an easy was of comparing utilities except for assume a 3% decrease of your costs by for every degree you lower the thermostat.   But that is monthly, plus we are not increase it for the entire 24 hour period, just while we are up. And that does not include water or electricity increases which I admit are very much increases while we are home.  Nor does it include the wear and tear of items at home.  Using my computer at home is likely to decrease years the computer useful for.  Same goes for the oven or microwave.  When I think about it, I don't think all of these expenses add up to $18, but there is a big expense I did not cover.

Health insurance
I spend a little over $140 a month for my share of health insurance, pre-tax.  My employer, well now, they send over $550 a month.  So really, I need an additional $550 plus the cost of taxes to cover my health insurance.  I know some people say, well what the ACA?  I am not holding my breath.  We might get something close but GOP won this last election and they want to get rid of it.  If the democrats don't come out in two years, we will have a republican president and congress and then ACA will be gone.  I can't trust democrats to get out and vote, because they don't.  So, I go with COBRA when I looking at expenses.

So, if compare your "working costs" against COBRA, I'm pretty sure you are going to come out ahead by working.  So please let my Smowmadegon encourage you to save and expect to spend more than what you live on now, because health insurance is not getting cheaper and we are just getting older. 

Updated Millionaire Plan November 2014

We now have $24150!  We are only $850 short of our goal of $25,000.  $25,000 is my gross income and it is also the minimum expenses we have for a year, excluding health insurance, work related expenses and daycare.  Given that we put aside over $1300 a month that means that by next month I should be reporting to you that I have a full year of expenses all set aside.  I can't wait!  Let's hope the market does not screw this up for me.  :)

So where do I go next?  My next goal is to add COBRA to my year of invested expenses and that costs about $600/month so I need to save an additional $7200 for a total of $32,200.  Looking at what we put aside I could get that saved in less than six months, if the market does not crash.  So let's also think about my next goal which will be my husband's higher salary of $41,700.

Things are starting to come along, but we are in a weak spot here.  Either jobs goes and we can't save this amount.  We are lucky to have low expenses and multiple streams of income (2 jobs and our rental), but to me they are not enough.  I am going to keep working on decreasing our expenses and increasing our income, both with adding streams of income and increasing our wages.  I am in the process of working on a grant that would increase my income from $25,000 to $30,000 if I get it, but who knows if I will.  But if I get the grant, I lose access to both my 403b and my pension so we are considering front loading the 403b and leaving more room in my husband's.  But that is a story for a future post.  See you soon and keep saving!

Learning to be Frugal Young: The Best Thing You Can Do For Your Future

When my husband and I were dating and applying to graduate schools, he got in and I did not.  And, strangely enough, that was the best thing for us.  We moved to buffalo with a very strict budget because we wanted to buy a house and take advantage of the 2009 tax credit.  We had discovered that our mortgage would be about the same as rent, if we bought a duplex on my husband's salary.  If we both had been working, maybe we would have bought a more expensive house, may not.  Maybe I would have bought our house all on my own, (we were not married then) and DH would have paid off his debt quicker.  But what I do know is that our budget would not have been so strict.  We had $5/week each for fun money and date money of $10/week.  Prior to moving to buffalo I had $20/week of fun money just for myself.  If we had not had so little money to spend, we would have kept the fun money at such a high amount.  But, because of our lack of money, we did not.  And that means I am used to only going out to eat once a month, or waiting for a DVD of a movie or even finding deals to catch that movie we want to see in the theaters.

We also spent very little on groceries.  We spent $30/week at the grocery store and $40/month at angel food ministries (which has since closed).  That was it.  It was not fun and the first thing we did when my husband got a raise was increase the food budget.  But that means we know how to cut the grocery budget down and that has helped us, when we ran over budget during the first half of the year and now have to cut way down. 

Those two are just small parts of our whole budget and we worked hard to be as frugal in every part.  This meant that when our daughter was born, we could afford daycare while I went to graduate school for my Master's.  It means that now, with my husband doing a post doctoral fellowship and me getting my PhD, paid, we can afford daycare and to save 30% for the future.  We are a long way from saying 50%, which is our goal or financial independence which is my ultimate goal but learning to be frugal is the base in which all of this is possible.  I never stop looking at our budget for leaks or trying to find better deals like geico affiliates or ting, both of which I learned about from http://www.mrmoneymustache.com/.

Updated Millionaire Plan October 2014

So, with my husband changing jobs and commuting, things just have changed. And one thing that has changed is how we save for retirement. We have moved from our Roth IRAs to his employer's traditional 403b. We did this for multiple reasons, one is that they were using vanguard and the prices were very low, much lower than we could get and two, because we wanted to stay in our current tax bracket (10% for federal) and there are tax credits you can get if you put use a employer plan, not an IRA.

The main one is EITC, the earned income tax credit. EITC is dependent on your wage (minus FSA, health insurance and 403b contributions) and your adjustable income. Both need to be low to get this, and your traditional IRA does not affect your wage, though it will adjust your adjustable income. So we are now putting in $5233 into his 403b this year but his HR was not on the ball as much as we would have liked so, we had to adjust how that money came out. He received his first paycheck without the money being sent to his 403b, so we hoped online and increased the amount to make up for that, but that means we only put away $751 in September. And, because of the decline of the stock market that means we are at $22,836. Still not at $25,000, my gross income, but oh so close. Three more pay periods (aka a month and half) and we will be there. Well, only if the market cooperates. Let's hope please?

 As the end of the year comes to a close we will be turning to our taxes and optimizing them which may involve more repairs to the house, we have a list we want to do or increasing or decreasing the 403b contributions. We shall see, and I promise to post all of it here for everyone to see.

Updating our millionaire goal!

My husband started a new job since he graduated from graduate school on Aug 29th.  One of the best ideas I have for students is find a job before you graduate.  My current employer (my husband's old employer) delayed paychecks for new employees by over a month and for many students that meant borrowing from parents or using credit cards.  Thankfully, this employer does not seem to do this.  However, with the job change we have a lot of change.

First change is a pretty large raise of $15,664/year, but that raise comes with quite a bit of expenses.  We bought a second used car with a loan (with a $117 monthly payment), my husband will be commuting about an hour each way along a toll road costing us about $6,200/year.  Obviously, with the new car comes a repair fund that we need to fund and car insurance, together costing about $1000.  His new job does come with a $400 savings because we don't have to pay student fees.    However, students who work as part of their education (like work study) or graduate students don't always pay FICA.  Students at my school only paid FICA during the summer so, we need to pay extra FICA costs totally $2690.  This means our total increase is $10894.  And we have not even gotten into taxes!  But I do have a reason for that.  We have decided to put all of the raise into my husband's new pre-tax 403b but that means finding other money for our increases.  Well, we found that money in what we now save in our Roth IRAs.  But is that savings enough?  No, it is not.  We only save $750/month which is $9000/year.  Where can we find the other $1894?

Right now I am not sure, to be honest.  But, I don't want to pay the extra taxes, so I need to find the money somewhere.  For now, it is coming from our rental income which cuts into our taxable savings, but I am looking at other things to cut, which will be a later post. :)
But on to the millionaire plan:

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

1. We will be contributing $1303.66/month to my husband's 403b
2. I am also contributing 3% to my pension (the max I can).
3. We also now have access to a daycare FSA allowing us to deposit $5000/year tax and FICA free for the little frugal baby's daycare.
4. We will be putting all of our daycare spending on FIA VISA which will deposit $140/year in my Roth.
5. Living frugally. 

  Using CNN-Money’s millionaire calculator with a conservative interest of 6%, I will see a cool $1 Million in approx. 25 years! That is right in line with when I want to retire!  But can I, a young person, retire on 1 Million?  That is the question, isn't it?

Updated Millionaire Plan September 2014

We have beaten our $21,000 minigoal!  We are now sitting pretty at $22,599.  I feel like I should add a dollar to make it even, lol.  So now on to the next mini-goal!  That goal will be my annual gross income of $25,000.  It is funny, at the beginning of this year I hoped to be able to hit $25,000 by December but did not really think I could, but now, I feel it is so close, I could taste it!  So, what changed? 

Well, of course the market was nice to us but also, our FIA AMEX card rolled in some extra cash.  Then, when we changed daycares I added the savings to my retirement contributions.  Then, because I could not use my AMEX at this new daycare, I got a Visa from FIA which gave 1.5% back and we used that for daycare and tuition payments.  Between the two cards we got $300 this year in "free" retirement contributions.  That is over .5% of our entire wage income.  Given that people are suppose to save between 10-15% of their income, getting .5% for free is great!  That is a benefit of a credit card, helping you save unlike the commonly stated benefit of allowing you to pay bills over time.  That is not a benefit, you pay for that.

So, what happens after we reach $25,000?  Our next goal will be $40,000, a full year of expenses, without COBRA/health insurance.  How is everyone else doing on their goals?  Check out the others on J Money's millionaire club to get some more ideas: http://www.budgetsaresexy.com/2008/04/my-millionaire-to-do-list/. 

Updated Millionaire Plan July 2014

We have broken $20K!!!!  We now have $20,756 in retirement savings.  Wow, we are so close to our mini-goal of six month's expenses including COBRA ($21,000).  I know we will get there this month but I do wish we had broken $21K as well.  In that theme, I have decided that I feel my retirement savings is too low.  I am moving some of the money I have been putting towards general savings and debt repayment and putting it towards retirement moving our retirement savings to a round 20%.  This means saving $787.50 per month instead of $625 towards our Roth.  I know this hits my EF funding but I need to remember that in a true emergency, I could pull from the Roth IRAs because both my husband's and my Roth IRAs have been opened for over five tax years.   Hey, maybe I should see if I have any extra room in April 2015 and if I do, store my EF cash in the Roth.  What do people think of that?

So, since I am sure I will make our mini-goal of $21,000, I should mention that are next mini-goal after this one is $25,000, my entire gross annual salary and the amount I need to be able to move from target date funds to individual mutual funds.  I can't wait because often individual mutual funds have cheaper fees and I have more control, which makes the control freak part of myself happy. :P

Updated Millionaire Plan June 2014

In May we decided to start funding my Roth IRA and to do so need to connect our bank accounts to Fidelity, and because of some technically problems that did not occur in May.  We did deposit $71.97 from our FIA credit card (https://www.fidelity.com/cash-management/american-express-cards) but nothing else.  But thanks to the market we still have had some nice gains. We now have $19587 in our retirement accounts.

We do plan to add the $625 that we missed in the month of May but because my husband is changing jobs in a few months we are holding on to the money for now.  Sadly we are still short of our minigoal of 6 months expenses including COBRA by $1413 (total minigoal is $21,000) but I bet we will make our goal by our August update.  After that our next minigoal will be $25,000, my gross annual income which will allow us to diversify outside of target date funds and therefore will lower our expense ratios.

I dislike paying extra if I don't have to and in eight to nine month, I won't have to.  I am still a fan of target date funds for new or inexperienced (or even lazy) investors but I have spent the entire time I have been building up our retirement funds learning about investing using index funds and have a pretty good idea on what I want to do.  That said, because of my husband new job, things may change in what we chose to invest in based on their retirement offerings.  I never want to stagnate, I always want to keep learning and being open.  Part of being a student is learning how to learn and my schools have done a great job at teaching me that. 

Updated Millionaire Plan May 2014

We are plugging away with our $625 invested again this month and we have a total of $19,118 as of May 1st.  That means we only have $1,882 to go before we reach our mini-goal of 21,000 (6 months of expenses, including COBRA).  So, if we keep this rate we will be there in three to four month.  We are so close I can taste it!  Our next goal after that will be $25,000, my yearly gross salary and if we keep up with our investing and market does not work against us, we will be there in nine to ten months. 

It is kind of crazy to me to see how close I am to having, what to me is, a lot of money.  This money is my freedom.  It allows me to make the choices that are best for our family and our future without worrying.  That idea is what pushes me to save when I want to spend more than I can afford. 

As a young person, especially one with student loans and a family, I'm being pulled in so many directs when it comes to money.  Should I pay my loans, invest, go on vacation?  What is best?  I have to make choices that are right not only for me but for my future self and rest of my family.  The more we can decrease our required bills and increase our income and assets, the more choices we will have.   And I like choices and freedom.  What makes you choose the way you do?  What is your goal?  What will it do for you?

Updated Millionaire Plan April 2014

We are doing steadily well, we added $625 this month but our account is now worth $18,532, a $698 increase.  We plan to keep depositing $625 per month for the foreseeable future which means as long as we don't lose money we will make our first mini-goal of $21,000 (6 months expenses including COBRA) in about four months and our second mini-goal of $25,000 (my entire annual income) in about 10-11 months.  Obviously the market can either help us and we may get our goals sooner or it may hurt us and it may take much longer than four or  eleven months to beat these mini-goals.  But I am optimistic that we will make it to $25,000 within the 2014 tax year!

We have considered trying to increase our deposit amount but have decided that paying off our student loans, saving a emergency fund and moving fund at a higher priority right now.  As young people we have a lot of expenses vying for our money and very little money to spend so choices have to be made.  I am doing the bare minimum right now and hope to increase my savings over time as my income increases.

I am also looking at seeing if there is anything more I can cut without hurting my lifestyle too much.  I do want to have fun, and have some spending money but as I continue in my frugal life new ideas pop up.  Never stop looking and you will find ideas where you least expect them.    

How are your investments going?

Updated Millionaire plan March 2014

This is my first update after starting my $625 per month retirement savings.  We did very well this month, with a bit of help from the market.  We now are at $17834.  Our next goal is $21,000 which includes all of our expenses for six months plus COBRA.  We are still $3,166 short but are getting close very quickly.  If the market cooperates with us we will be there in about five to six months, well within our goal of having six months by the end of 2014.  

Our goal after $21,000 is $25,000, the amount of my gross income, as well as the amount we need to stop using target date funds, and diversify on our own.  That will lower our investment costs, increasing the money we keep to invest.  If the market does not crash, it looks like we may be able to get up to that goal in eleven to twelve month (March 2015).  But who knows, maybe the market will help us more, and we will beat both of these goals in 2014.

But, right now we are not looking for extra money to up our retirement savings.  I am happy with 15% while I focus on other money goals, like building up an emergency fund.  Within this year my husband graduates with his PhD.  That means our very secure income, won’t be as secure.  Once you graduate, be ready for turbulence.  That is why I am saving a bare minimum for retirement and focusing on here and now.  We are building an emergency fund and paying off debt.  Once those are done, we will start pushing up our retirement savings again.

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.

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.

Millionaire update-March

The market is being great to us right now.  We now have $14,441 in retirement funds which is an increase of $262 from last month.  That is 1.8% increase which if it was annualized would be over a 20% APY.  I have no idea why the market is doing so well but it is nice to get free money.    All we need is another $559 to have six months worth of expenses ($15,000), including COBRA set aside in retirement but we still have a ways to go before we have reached our mini-goal of $25,000.  It looks like we will be able to start saving for retirement again come September since I should be graduating by the end of the summer.  Because of that, I do expect to surpass the $15,000 by the end of the year but it is unlikely that I will reach $25,000 unless something crazy happens. 

We are still using the Fidelity cash back credit card (https://www.fidelity.com/cash-management/american-express-cards) to save for retirement and unless something changes we don't plan to stop using it.  I believe that I will have another $50 to deposit from it next month because of the cost of daycare, however, depending on when we pay, we may have the $50 by the end of this month.

Because of daycare and class expenses we are about $1000 in negative cash flow per month so until that changes, there will be no investing in the market.

Millionaire Update February

I now have $14,179 in my invesments.  Because of the cost of school I have not been able to invest lately except for credit card rewards from FIA card services (https://www.fidelity.com/cash-management/american-express-cards).  February we deposited $59.45 that we earned from the credit card into my husband's Roth IRA, however most of the increase was just from the market.  We still have a long way until I reach my next mini-goal of $25,000 but we are inching towards it.  We are also $821 short of having six months worth of expenses in our investment account, and given that Fidelity recommends having one year worth of your income at 35, I think we are doing alright for now. 

I should be done with my Master's in August so either I will continue on with my PhD which will mean a paycheck, giving us money to invest or we will be done with daycare, again, giving us more money to invest.  If I do not go on to my PhD, I am going to try to find a community college or two that will hire me to teach night classes. I prefer older students when tutoring so I assume I will prefer them while teaching as well and it will allow us not to pay for daycare which will save a ton. 
I have also thought about teaching online classes but I don't know much about them, maybe someone on here has an idea on where I can look. 

But for now, life is just staying busy with our new baby, classes and trying to get some writing done on my thesis, so I can graduate in August. 

Millionaire Update- Starting the New Year

We continue to grow our retirement savings and are now at $13,867.  Though we will be not be investing any money into retirement until at least September, I am pretty pleased.  Over this last year we have done very well, both because of our investing and because of the market.

We are, though, considering pulling a small amount our of my Roth IRA.  Last year I opened a Roth IRA with ING Direct and received $50 for leaving $200 in there for three months.  At that point we were only investing my husband's Roth, therefore my Roth has just sat in ING, earning very little.  I was planning on moving it to Fidelity and starting my own Roth IRA there (I have a traditional IRA only), however once I got into graduate school plans changed.

We will need about $8000 more to pay for classes than we have from cash flow.  We have the options of either using my husband's subsidized student loans from last year (we have a max available of $8500) or pulling a bit from retirement.  Part of me wants to remove the ING savings because we will have to start paying back the loan before I am done with school at it will be earning an interest rate of 6.55%.  Also, because I am not earning much in ING, I am less concerned about keeping the money in the Roth IRA. 

We also have moved my 401k from my old employer to Vanguard to lower the fees associated with it, so hopefully we will make some decent gains from that.  Even if you are a student and are going into debt, there is always something you can do, to improve your future.  I need to work on remembering that, and I bet others do too.  I read on blogs about people saying huge amounts, or paying down debt and I want to do so, but the money is just not there.  But every cent I save, is less that I will have to pay back in the future.  That counts too.