Crazy life changes

 It's been awhile.  Life got a little crazy as of late.  I'm sure may of us can say the same thing.  I quick break down.  Wife took a new job, wife got a root canal, one kid got a cavity, dentist bill woos, and signing up for new windows. As a start.

The main thing I've been focusing on for the past few months it when I wife wanted to change jobs.  She has been with the same company since graduating college and decided now was a good time to try something new.  She got a few offers all with good salary increase and various benefits and job opportunities. 

Some of the things that happen when you leave a company if they company decides when you benefits/insurance ends. For she it was the the Monday following her last day.  Unfortunately for our family all of our insurance was through her benefits.  This is were the trouble began. First off she had a week between jobs. So we had to decide do we go a week without insurance or what do we do?  So I decided to issue a life event with my company so at the least add the family to my dental insurance. With the intent of adding FSA/HSA/medical to her new company.  Here is where my trouble began. My company gives me 30 days to make my selection. So I add FSA/HSA/medical for the family for a week and I took them off. All within my 30 days.  Once the period ended the conformation of benefits had just my family on dental which is what we wanted and FSA/HSA/medial with my wife company.  

This did not work out. For some reason my benefits days I'm only enrolled in dental, but medial/FSA/HSA were being taken out of each paycheck.  Now this has been going for a month and half.  Not only is this adding up to be a significant amount; it is also doubling up on FSA and HSA amount which is going to make tax season difficult.  

So far I've contacted HR/Benefits 3 times and it's still not fixes and it seems every time I call it gets worst.  My mistake it trying to tell them what happened instead of what they need to fix. I think it confuses them and they only focus on one piece or they start blaming me.  

If only I could walk up to an office and talk to someone to fix this.  Oh well.   This goes to show to be very careful in picking your insurance and avoid working with HR/benefits.  

Next time I will talk about dentist bills and how to deal with collections.

Cost of a puppy

 Well the family has been pushing it for awhile.  A month ago we picked a new fur baby. She is a very sweet dog and fits right in with the family.

As much as we love our furry pets. They are a lot of work and energy. With all the love they give they do put some pressure on the finances.

Here list of costs in the first week:

• Cost of puppy 
• Kennel  
• Puppy food (they eat 3 times a day) $50 a bag
• Puppy potty spray 
• Puppy toys  (adult toys are to hard)
• Collar and leach
• Puppy Treats
• Dog tags and registering 
• Training door Bell (already had one)
• Vet visit few hundred $$$ to thousand if you sign up for puppy packages for there shots.
• Baby gate to block her from the house (Already had from my twins):) dual use.

Cost for a puppy over the next months

• More food
• Tons of treats - Treats for potty training and obedience training 
• Tons of toys. She tares through them. If she doesn't the other dog does
• Vet shots
• Training classes
• Repairs to walls from chewing
• Seat belts for car
• Harness for travel and walks

Honestly puppies and dogs in general are a lot of work and not really great on the old wallet, but they are tons of fun and they keep you healthy with all the needed walks. Of course they love you more then anything.  Getting a pet is a individual choice.  Every pet needs a person, but not every person should have a pet.  Make you your life style fits in with having a pet.  If you can't dedicate your time and life then maybe just volunteer
to walk a neighbors pet to get your furry time. 

I got Crypt in my wallet

I find it hard to invest/buy cryptocurrency.  I have found it hard to judge the value of it as a currency.  I know the practical application of its uses.  Like paying services to people that live in another country. It avoids paying fees for currency conversion between counties and provide payment to individuals were a bank isn't an option.  Now these were probably great uses a few years ago. Now with the crypto crazy idk.

I am interested in the blockchain technology behind it.  To get to know it I have to read and learn. Best way it to do.  So I've done a little research on wallets.  Basically what I've found you can have a wallet on a broker, one on your PC, or a cold storage like HDD or thumb drive.  There are so many it's crazy.  I picked Exodus to try it out.  From there I looked at some crypt exchanges. Basically a place to buy and sell.  I looked at coinbase/coinbase pro and Kraken. There are some of the more popular ones and I would say the more reputable ones.   I haven't done much with them except look around.  I got a few free fractions of coins for signing up.  

From a technology point of view. It is cool to have this mass amount of computer solving problems to verify a transaction is real. This is happening all over the world. The dark side of this of course it the power to run these equations and the hardware/video cards to do this quickly. 

What's the point?

Is this something that is going to stick around or is it the latest fad.  

What it currently is:

• A way to get rich quickly 
• decentralize currency that is not regulated
• Give power to the people
• Will change as gov'ts get involved 
• Become more popular with people and businesses

What it is not:

• Currency that you can count on
• Back by anyone

It sounds negative, but really it is a hard thing to get your head around on it's staying power.

It will either be a unground currency with only fring use or it will grow and one cryptocurrency will be win over and will dominate the currency landscape.   From an investing aspect it is gambling, but for some it is worth a small gamble with their fun money.  

Garage Sale

 Well this weekend I help my first garage sale.  Now growing up my family did a garage sale every here.  I didn't realize how much work it was.  Having to get everything out and price your stuff.   The end results was so so. I wasn't able to get rid of some of the bigger items we owned.  We did sell one item which was nice.  

My kids made out like bandits selling lemon aid. The made something like $30. Now they had a fun time make lemon aid and pouring it for their customers.   

What I plan to teach them from this how to save and how to invest.  From the roughly $80 we made I will give them both $40 and from that $20 will be free for them to buy anything they want and the other $20 each will be for savings.  We are going to take these $20 and add it to there existing saving and invest it into a M1 pie for each of them.  From there we will talk about that we are buying a piece of a company.  They will get the choice to pick companies and index fund and see how there money grows.

Marriage and Fixing Credit scores

 Everyone has there own history and have made mistakes.  You really find this out once you decide to combine your life with someone.  This is great, but this is also when the problems arise.  The question comes up what do you do when one of the two of you has "bad" credit.  No matter if you are going to combine your finances or keep them separate. It is important for the both of your long term health and piece of mind that you are on the same page.  

This usually isn't the first thing people talk about in a relationship and often is something that is found out after they are already married.  The important thing to understand if you are the person with bad credit is that you are not a bad person and these are now the facts. Work with you partner to find out how you go into this situations.   This goes the same if your partner is the one with less optimal credit. 

First figure out the cause and develop a plan to get out.  Some are easier then others to fix and you might already be on the right track to fix them. 

Now where you are in life has a big factor on why you credit is low. Notice I said low not bad. We must think positive :{). Here are the top reasons for someone to have lower credit.

1. Failing to pay bills on time
2. Collectors/charge-off
   
3. Bankruptcy 
4. Default on loan
5. Large balances
6. No credit
   

You may ask yourself what effect does my bad credit have when we go to buy a house or when we apply for a car loan.  In reality is does a lot.  There is some pride and security to have both your names on a deed for a home or to buy a new car together.  The thing is. There are some legal reasons you may do this, but it is probably not the most financially sounds thing to do. The bad things that can happen are you could be denied the load or you interest rate could be many points higher.

OK lets look at this from if you have good credit.  You will worry that there bad credit will effect you.  The answer is. No it will not effect your score, but there bad habits could effect your habits.  I don't see a reason for people to share credit cards, unless one of them is a responsible buyer. Or if you are keeping your finances separate and both in-charge of there own payments.  This goes the same if you co-sign anything. You are now the responsible party even if it there "their" car and they are making the payments.  

This goes back to why one of you had bad credit. If the reasons are because of large balances and failing to pay bill on time.  There are sometimes valid reasons for this and they are working to correct this. i.e Medical bills, school, family, or loss of job.  There could be some very good reasons and what sank the credit score is not a long term issue.  Now on the other hand if the issues are mismanagement or a life style. Those issues need to be corrected otherwise marriage issues will follow. 

The last issue is almost no credit. This is not uncommon for people that grew up using mostly cash or lived with there parents for awhile. 

This is not going to be a quick process and really it doesn't need to be.  

Use Case

• One person has Above Average or better credit the other has below Average.  
•  Work on paying off any credit card debt first. Go with highest rate first.  Once all paid off work on raising the below average through on time paying, keep cards open a long time, and in time applying for more credit or asking current card to increase available balance. 
• The Above average person can open up new credit and may consider opening major purchases in there name to get the best rates. Adding the lower credit person onto the load will help them build credit also so it is something to check on the cost.
  
• One person had Average or credit the other has below Average.  
•  Work on raising both score by paying off any credit card debt first. Go with highest rate first.  Once all paid off work on raising the below average through on time paying, keep cards open a long time, and in time applying for more credit or asking current card to increase available balance.
  

•  Both has below Average 
•  Work on raising both score by paying off any credit card debt first. Go with highest rate first.  Once all paid off work on raising the below average through on time paying, keep cards open a long time, and in time applying for more credit or asking current card to increase available balance.
  
• One has Excellent the other has Average
• This can be very difficult, because the excellent scorer may feel protectant of their credit and not want to jeopardize it. This is normal. Like all the cases you need to figure out the root cause.  If you spouse just doesn't have much history with credit. Signing them up for there own card or a authorized user is an option. If you are both responsible with credit that is a great way to build your history. Otherwise, if the below average user is working on behaviors. Then signing them up as an authorized user and shredding the card is another option. 

It's import to be open an honest with each other. Work on it as a team. If you are like many families and want to keep everything separate then just be honest when sign a load to your signification other why only one of you is on the car/house.  You can't force your spouse to be financially responsible, but you can be there to help them when they ask for help.

Backdoor roth conversions

 This is the dumbest and possible the best thing ever.   I strongly believe for the first 5 to 10 years ages 15-30 of your career you should be doing Roth IRA contributions.  Your income is just starting to go up and will probably be in the lowest tax bracket you ever will. In some cases you will get married during this time which may increase or decrease your tax brackets. In most cases spouses don't make the same amount and will lower your tax bracket.  Hence besides love marriage can make financial sense. 

Why this is so dumb. If you or your combined family income exceed this 208k barrier as of 2020 you cannot get any tax advantages from a Traditional IRA and you can't directly contribute to an Roth you only avoid paying taxes awhile in the account. So in sort you make too much so you don't get the benefit. 

Now you can contribute to a Traditional IRA with after tax money and let it grow tax free until you take it out and then pay taxes. But it is also locked in until you're 59.5 years old. Blah I would rather just put it in another account.  

Ok now the dumb and great part.  Let's say you have $6k just laying around in January. You can put that money into a Traditional IRA and wait a day or so and the with a few clicks Convert all the amount into an Roth IRA (assuming your traditional is empty).  Don't report your withholding and voila you can contributed to a Roth IRA without paying any extra taxes or fees. That money will now grow tax free and when you take it out at 59.5 it will be tax free.  The big different in this Roth IRA contributions vs a normal contribution is you can't take out your contribution right away you have to wait 5 years or year you put it in plus 4.   Note this is also how you access your 401k for early retirement. Now that is awesome, but WTF if this is legal why is there an income limit on a Roth IRA anyway.  This is also why tax law is dumb.   If I had to guess the reason this loophole exists because the tax law professionals don't know how to remove it with removing the benefit it provides retires in the 70s. Or the tax income the gov't gets when someone rolls over a 401k into a Traditional IRA and then converts that money into a Roth.   Since this is a taxable event and you will pay taxes on gains. IRS probably doesn't care to much since the FI community is probably the most know group using this to there advantage. As we are a small group.

Since these Individual Retirement Accounts are a way to encourage people to save for retirement. I don't see why there would be income limits for even the well compensated individuals.  Even some people make alot of income doesn't mean they have a high net worth. It is interesting.  Would it be better to taxes this high earners more when they are trying to be responsible.  They are trying to save enough money now to avoid being a burden to their family and the system.  Or to use there excess income and tax revenue generated to help those who need it in the system.

Random Cool travel hacks

Look Hacks I've found 

Restaurants 

Here are some restaurant hacks I've done:

• You walk into a restaurant and put your name in to find a long weight.   

• Look online to see if you can put your name in online - many places priorities online reservations over walk-ins 
• Similar to the first, but all in.  Phoning in may all you to put in a time i.e in 10 mins that beats walk-ins. 

• Share will others.  Look at appetizers as you walk in. May times the appetizers are either as big or bigger then a meal and cheaper.
• Look for discount before going out. Restaurants.com and Groupon are two choices.
  

 

Air Travel

• I think most people know about getting PreCheck to help avoid some of the lines. One thing I don't think everyone realized many travel cards come with $100 reimbursement for getting PreCheck.  
•  Southwest companion pass.  Really I had no clue on this until a couple of years ago.  We may of changed from United to Southwest sooner if we would of know about it.  In short once you reach the miles/points either through travel or CC points you get a pass for the rest of the year and next for a buy one get one free airline ticket.
• Next his child rates.https://www.southwest.com/html/customer-service/family/children-pol.html
• Bring an empty bottle to fill up at the airport. All snacks and drink are marked up 5x 
• Always take advantage of early entry on the plane
  

 
Kids

• Always ask for a twins discount if you are buy two of the something.  I joked about this once with a cashier and they gave it to me. From then on every time I've gotten something off. 
• Don't throw away old toy or cloths.  Look into selling it or donating. The stuff was expensive and was probably only used a few time.  Bike and other size limited toys are meant to be used for year and just the one year it fit your kids. They don't do any good rotting in you garage encase you have another rugrat. 
• Rent car seats at your destination. Not worth the headache of carrying it on. Or sending your $300 car seat under a plane and having it break.  
• Get in umbrella stroller for travel. Again not worth bring your expensive Bob stroller or the likes with you. 
• The one caveat would be if you have very young kids and bring the stroller and car seats are the best options.  Get travel car-seat bags and a snap-n-go stroller.  Lightest weight and security of your own seats.
  

Hotel

• This is well known but always see if there are any free upgrades.   
•  Always signup for the rewards program.
• If you staying multiple days. Ask for a refrigerator and stock it with breakfast food. 
  

 

Health and Fitness - live your life long

 I've all made cuts this past year that either positively effected our health or negativity effective it. 

I for one cancelled my gym membership. Granted I kept it way longer then I should of hoping they would reopen.  We dropped all eating out from our lives and budget. This was tough as at first felt like we should support the local community, but that got expensive and really wasn't the best for long term health. We also didn't sign up to any ski passes this year.

I know many people gained weight and stressed ate over this last year. I know one of my friends switched to diet pop since he couldn't workout as much. He is an IRONMAN athlete. And it seems more exercise equipment was bought this past year in the last 5 years combined.  Probably not true, but it sure seems that way.

I pivoted a lot of my "normal" activities.  We had a small home gym already which was mostly used during the winter. Treadmill, a bench, and one of the free weights where you can change the weight by turning the dials.   I used the basement gym more and tried workouts I found online.  After while I found that I wasn't pushing myself and more going through the motions.   My wife cancelled all her yoga, pilates stuff, but for awhile she used at home stuff with her membership.  She used that for until the pre-paid part was over. And realized the cost per month was not worth online classes.  

We asked around some friends what equipment they were using.  One of them just got a Peloton bike and said we could use there rowing machine.  Score.  Our basement is unfinished. So concrete floors and cold in the winter.  In the past couple of days I bought some interlocking pads to cover the ground were we working out on.  This helped so we didn't need 6 yoga pads to save out knees.   Our gyms has slowly grown through the years and really has been for while now good enough to get ride of gym memberships.  Yes you miss the dedication/guilt of a gym membership, but huge savings.  

I will say we resent got the latest Apple Watches.  I had the original series 1 and the apps were not working anymore.  Any the point is that it came with free 3 months of Apple Fitness+.  Now I would of never tried this or paid for this. But since it was free and we are all stuck inside I gave it a chance.  After using for a month or so. I do enjoy it and it does give you a great workout.   They people are all encouraging, entertaining, and a nice variety of workout.   Once the "free" part it over I think we will continue the $5 family subscription.   I know there are some similar ones out there and if you are using them 3x a week keep it or signup for the paid service.  If you are not using them drop it. You can also find workouts in books or youtube.  I for along time used a Bruce Lee book with his workouts as my model for workouts.  

We all want to eat great food that is good for us and helps us lose weight. This is much much easier said then done.  I found books like cook your self thin as a great source. Otherwise the really only and probably best way is to track your book.  Apps like myFitnessPal  is an app that you can track your food. You can scan the stuff you eat or create recipes and it tracks your calories. This also will sync with most of you fitness trackers.  The point of it is to measure Calories your intake vs Calories you burn.  Only way to lose or maintain weight. I am not currently using the app, but I will probably start to again. I used it for many years and have used it constantly for long periods of time.  It does take a routine to track you food and a team effort if you are not always cooking your own food.  i.e. wife has to remember was ingredients she used. It has an amazing database of meals from almost all restaurants or common made food at home. It just takes a reminder to input it into the app/page. 

The world is changing and you need to as well.   Gyms are the way our parent got in shape and it just it the way anymore.  Cut the cost find something that works for you and live a long life.  Enjoy.

Knowledge is Power

I was never someone who sat down an read a book/blog or whatever.  While time moves on I do want to understand what interests me more.  Until we can just inject the information in our heads. I think there is really only three ways to do it.  Reading (or touch), listening, or watching.  I personally think reading and listening are the two best. Watching either on TV or PC is to distracting and doesn't seem to sink in as much.   

I started to read books for personal enjoyment in my late 20s. The Four Pillars of Personal Finance by William J. Bernstein said it perfectly.  "Personal finance/investing can be quite boring or dry to due to the content."  He recommended you read the educational book for a chapter or so then switch to another type of book that you enjoy. I know some people can just plow through non-fiction books while others need a break to not get bored.  I have found it to work very well in keeping my interest up in some books that has great information, but it was either very long and full of numbers and such.

I list of must reads or listen.

1. 'A Beginner's Guide to Investing: How to Grow Your Money the Smart and Easy Way' by Alex Frey
• This explains the concepts very well and helps you understand all the terms
  
2. ‘The Little Book of Common Sense Investing’ by John C. Bogle - Audio booked this one
3.  'The Bogleheads' Guide to Investing' by Taylor Larimore, Mel Lindauer, and Michael LeBoeuf
4. 'The Richest Man in Babylon' by George S Clason - Audio booked this one
5. 'ChooseFI: Your Blueprint to Financial Independence' by Chris Mamula, Brad Barrett, and Jonathan Mendonsa
   

 
 
 The more I learn about personal finance and investing the more you release you don't know.  You hear stocks, bond, put, and short all the time. But do you really know what they are?  You know what a budget is and they are important, but do you know why?   I find the best time for me to improve in walking my dog. I listen to podcasts or audio-books exclusively on my 30-40min walks. Exercise and knowledge. Enjoy.

Start of year checkup and Tax prep

I'm one of those DIY tax guys.  My father was before me and I hate paying for something I can do myself.  I could do it all paper, but I do like to make things easy for myself.  I used to use the free online tools for H&R Block or TurboTax, but I haven't qualified for those in awhile.  These are mostly for simple tax returns.  I use H&& Block for no particular reason.  My wife used to TurboTax before we met.  They are basically the same so pick whatever you like.  Unless one doesn't work for you I would recommend sticking with one so you get an understand of the software year after year. What I like to do during this time of year is look for the software at discounted.  I look on Amazon, newegg, costco etc.  I can usually get the software for around $25 or 40% off.  No point in paying full price. This also was a tax write-off.  It may only be now if you use the standard deduction. 

 

 

Start a folder if you don't have one to keep all your tax docs either at your home or on your computer.  Best would be a encrypted thumb drive that you backup. You can either buy one, or use software like BitLocker or  Veracrypt.  This is also a great time to backup all you legal documents and HSA receipts. Copy this information to a external HDD and put it in a safe or lockbox. 

Check your IRA contributions either finish up your 2020 contributions or 2021.  This year we pulled back on contributing to our IRAs to build up more into our cash savings.  After this checkup I will pick how much I will put into an IRA this year.

Check on your investments across all your account and see where your are sitting.  I like to be around the 85-75 % in stocks and 25-15% in bonds.  With this crazy year it is sure to be out of wack.  

Check where your Net-worth is at.   This is usually pretty simple.  Add up everything you own. Including cars and homes. Then subtract everything you owe.  If its a positive number. Great. If its better then last year Even better.  If 2020 got in the way.  That is OK 2021 will be our year.  

What I also like to do is see what my net worth is without House or cars. One because car value decrease so much every year and your house is a place you live and your are unlikely to sell it and not replace it with something close to the same value.  Then compare with previous years if you can otherwise write it down in google docs for future reference.  I use Personal Capital for this so it is very simple to get.

Also a great time to look at your insurance (home, car, and life).  If you don't have a will start getting that done. I've been very bad at this and very over due. 

 

Lastly since it is the beginning of the year it is time to reevaluate your budget.  Make sure it still make sense and look how well you did over the year. Adjust accordingly or see if you can trim it a little more.

 

Lastly talk with you spouse if you have one.  This is a great time sine you've done all the work to talk through everything and to make sure you are both aware of your goals.  It is very important you are both aware of the state of things.  You spouse doesn't have to be onboard with FI/FIRE, but they can't be against you. If they are things will no go well for either of you.  I will say hope is not lost if they are not onboard and there are ways to continue the path and still be happy together.

Last of all. Give yourself a pat on the back. You made it 2021. Barely.

HYOSA - Saving account

 HYOSA - High-Yield Online Savings Account

 

I've been using an online savings account for about 20 years now. I switch because my bank was providing a tiny .01% interest rate and I wanted something that would provide value and protection from my checking account.

 

I like having access to a savings account that I can get to my money within a couple of days or next day for a fee.  Some may say you don't need any cash in a savings account and invest that money.  I believe having 6 months expenses saved in these three categories is a good safely net for everyone.

Between Checking account (enough to cover monthly expenses with some buffer) and Savings about two months in chase to building interests and only touch for emergencies.  If I've done my math correctly thats about 3 months of saving in cash very accessible.  The last bucket for the next three month is investing is a safer allocation.  I put mine in Vanguard  LifeStrategy Moderate Growth. Yes the expenses ratio is a little hire then straight index fund, but it gives a good balance of US Stock, International Stocks, and bonds.  Basically 60/40 which is conservative in my mind. I fill them up like you would a bucket I fill the checking once that is filled all the spillover goes into the online savings account.  From there the rest goes into my saving investing until I reach the 6 months total.  This works the same for taking money out.  All money comes out of checking.  If you miscalculated you checking or an "emergency" happens you first pull from the online savings.  Only pull from the investments bucket if needed for that emergency not to fill up the online savings. This is because it will be a taxable event and you will having to pay taxes on any income made.  At this point you stop added to the emergency investment account and fill up the checking then the online savings.  Everything else after that is your to using for other investments.

HYOSA account are great and bad at the same time. The interest rate usually changes by a few points monthly e.g. 1.1% to 1.0% usually not enough for you to care, but like now they are around 0.4% which is sad since last year it was 1.5%.  Still better then the 0.01% from the traditions bank savings account.

I have heard from allot of people that there really isn't a point in having a savings account and anything about your monthly expenses could be in an investment account.  There is something to say about using a money market account for your online saving, but I like the ease of transfer encase I need the money quickly while online saving usually have a higher return.  Also since it is part of the emergency fund I want it isolated from other account being able to access.  Only my checking has access this account accept maybe auto deposits from work. You can make the same argument for those who say it should all just be invested into the market.  I can easily see that if you have significant stock pile to invest/invested in a taxable account this could work.  The problem I have is if your investments went down by 20% would you still be able covered for an emergency and be able to pay taxes on the selling of your investments.  I personally like to be a little more cautious then only having a checking account and investments only.

Really if you are working to build any kind of savings you can be wrong.  Last year was a reality check for everyone. Hope for the best and prepare for the worst.