Louise and Dave's Blog


It’s a whole new ballgame

Last year at this time we were drying out the Christmas day water leak that ran from the 2nd floor bathroom to the basement.  Dave’s chemo was killing his kidneys and giving him lots of side effects.  Money was leaking out of our checking account as fast as we put it in.  We were stressed about paying for new expenses and exhausted by the feeling that our boat was sinking.

 As Project Money ends and 2015 starts, we are feeling like a family with new boat and a new direction.  Creating a budget has given our family a new map to achieve our dreams.   Working with Summit we’ve built our savings in sub accounts to match our budget goals — it’s like Summit handed us brand new paddles.  We have 5 strong paddlers.  In family meetings we discuss our dreams and plan together— we’re all rowing in the same direction (see our youtube video of a family meeting here).  

We’ve really cut our spending the past year.  It has allowed us to save ahead for next year’s private school tuition bill.  We are on track to pay our 2015-2016 school tuition as a single lump sum of about $35 K in June 2015.  Usually we would pay 1/3 in June, 1/3 in December, and the other 1/3 in monthly $1000 installments.  It’s almost unbelievable that we are this far ahead for next year.  

We made good use of our existing resources by:

  • having a garage sale; 
  • emptying our flex savings account and pouring the money into our auto loan;
  • applying for annual wellness reimbursements through our health insurance;
  • applying for transportation reimbursements for private school;
  • using old gift cards for some small and local purchases; and
  • redeeming reward points on a credit card for amazon gift cards.

We cut our media spending — subscription services for news and music.  We cut our food spending by setting a weekly budget, meal planning, and packing lunches.  We stopped buying serving size drinks (chocolate milk, frappuccino, soda).  The benefits of these changes go way beyond money — we are less stressed and healthier.  Dave is 20# lighter.  His cancer has been very stable off chemo for the past 6 months.  And his kidneys are doing great.  

We are feeling relieved.  In November we received a bill from the IRS for $18,000 in back taxes.  YIKES.  Fortunately, it appeared to be an error — the IRS had lost some key documents.  We sent the required documents and just this week received our best Christmas present:  a notice from the IRS that we owed $0.  Having a reliable tax preparer and organized tax records were crucial to resolving this claim in our favor.  We’re so relieved to have this behind us — it was too stressful to blog about while the matter was unresolved.

We’ve made a lot of progress, and talking out loud about finances has had many unexpected benefits.  In particular, our kids have gone through a big transformation.  They went from hauling sacks of money to county fairs to setting aside part of their monthly allowance for savings.  We’ve all learned to think about spending in terms of needs versus wants.

We can’t believe that it’s over.  It’s gone so fast.

Takeaway for the Week

What is more important than we realized:  

Dave’s version:  Accountability is the key.  Making a budget allows you to measure your money, but it doesn’t actually change behavior.  We had our awesome coach, Sherry, to help us be accountable to our goals.  Don’t have a coach?  Write your goals down and talk to a good friend or a financial advisor at Summit.  Goals are all the more meaningful when someone is cheering for you, and you are keeping track of your progress.  

Louise’s version:  Dave’s cancer diagnosis really wiped out our dreams.  I didn’t realize how much that had affected us until we started Project Money.  It’s hard to dream if you are living with a chronic illness or other chronic stressor, but it is really empowering.  Setting dreams as a family gave us the motivation to make some tough choices about our lifestyle.  Sherry had to push us to translate our rough dreams into specific monthly savings goals for our college savings, paying off our auto loan, and building our emergency savings.  We needed that push.  Now that we have goals, we can track our progress.  We can always change our goals in the future.  

What is easier than we thought:  Reducing spending.  Once you have a budget, the little expenses take on new meaning.   Every little change, like packing a lunch instead of going to a restaurant, will get you closer to your dreams.


’Tis the season

It’s easy to get busy with holiday events and miss some important year-end financial issues.

Property taxes

We received our escrow check and our property tax bill this past week.  Our escrow check is $285 more than our property tax bill.  We could mail it in, and the city treasurer would send a refund check in 6 weeks.  The better option for us it to stop by our financial institution.  If we show them a copy of our property tax bill, they will reissue the escrow as two checks — one for the city of Madison and one for us.  

Flex Spending Accounts (formerly known as Employee Reimbursement Accounts (ERA) Program

’Tis the season to empty out your flex spending account for 2014, especially if you are an employee of the state of Wisconsin.  The state is switching vendors for the program.  There will be a black out period starting January 1st where funds from 2014 will be unavailable as balances are transferred from the old vendor (WageWorks) to TASC.  The end date for the black out period isn’t specified —  “it is anticipated that any remaining 2014 funds will be available for use by the end of January.”  (Read more about the transition details here. )  That means if you submit $500 of claims on January 1st for child care or healthcare expenses, you may have to wait 30 days (or more?) to receive your reimbursement. 

We are very thankful that we have avoided this problem by submitting all of our reimbursement requests.  It is the first year we have emptied out our flex account early.  Normally we wait until March and then scramble to find the receipts needed for reimbursement claims.  Using the on line app made filing reimbursements much easier this year.  It also helped that we had a goal (to pay off our car loan ASAP) and we were actively managing our money.  In the past we treated it like a weird savings account (that never paid us interest).  It wasn’t a well-thought out plan.  Now that we have a budget and lots of sub accounts, getting our early reimbursements helps with our cash flow.  

We did get a pleasant surprise with our final round of claims this month.  I thought we had withdrawn our entire $5000 for childcare, but there was still over $800 in the account.  It pays to check your accounts closely.  

Takeaway for the Week

What is more important than we realized:   Submit your flex spending reimbursements requests throughout the year.  You will get your money back to help cover your real-time expenses.   The on-line applications make submitting requests easy.  

What is easier than we thought:  If you are a homeowner with an overage in your property tax escrow check, see if you can get a quick return from your bank or credit union.


Getting jobs done

We are celebrating the end of Project Money by finishing a long planned project — painting the living room.  When we bought our 1920’s house, we stripped the 1960’s wallpaper.  For the past thirteen years we’ve been living with the resulting bare plaster walls.  But not anymore.  Dave’s dad provided the supplies we didn’t already had (I bought the wall paint two years ago which shows how glacial most of our home remodeling projects move).  He helped patch, sand, prime and put on two finish coats.  Dave’s mom took the kids out for a movie and some shopping so we could focus on our work.  

This past year brought major renovations in our family life and finances.  Last year we were stuck and stressed.  We paid our bills every month but our checking account was essentially a revolving door — money went out just as fast as it came in.  This year, we paid the last 1/4 of our school tuition in December, and we still have money saved up for our other expenses.  

We’ll still have some important jobs left for 2015:

  • meeting with an estate lawyer to straighten out the beneficiary status on all of our accounts;
  • reviewing our retirement investments; and 
  • creating a house game plan that prioritizes which repairs should be done next.

Takeaway for the Week

What is more important than we realized:  For us, change has been about having a team.  We couldn’t have done it without so much support from our friends, family, our coach Sherry, and the rest of the Summit Credit Union team.  Our kids have been amazing participants in this process.  

What’s easy?   Paying less money for gas.   It helps offset the costs of driving the van more during the school year.  If we have extra savings, we’ll apply it to the principal of our van loan.

For more information on Summit Financial Advisor's visit:  https://www.summitcreditunion.com/savingsandinvestments/investments.html

For more information on Summit's auto loans visit: https://www.summitcreditunion.com/loans/auto.html


Rust never sleeps — finding financial piece of mind about living in an old house

We live in an old house and have a long list of repairs, maintenance, and renovation projects in our future.  We are setting aside money in our house sub account to cover planned maintenance and replacing the dishwasher in a year.  We plan to build our emergency savings up to $15K over a couple of years to cover catastrophic house repairs.   But for now we have only $2K in emergency savings, and we were feeling stressed about not having the money to cover a major repair.  We’d have to put emergency spending on a credit card, try to do an emergency loan, or pull the money out of another account.  

Our coach Sherry Johnson suggested opening a home equity line of credit with Summit.  This is a revolving line of credit.  You get approved to borrow a certain portion of the equity you’ve built up in your house.  In our case we asked for $20K and were approved for $25K.  

We had no application costs, in part because they did not require a home appraisal prior to approving the loan.  Once the loan is open, there are no annual fees.  That means we can keep the account open, even if we don’t use it, for free.  If we need the funds, we can transfer the money electronically from the line of credit to our checking account.  We can then write checks to cover emergency expenses.  

There is no prepayment penalty.  It’s a variable rate loan with the option to lock in an interest rate.  Interest paid may be tax deductible.  

Takeaway for the Week

What is more important than we realized:  finding no or low cost options to cover you financially while you build your savings can relieve anxiety and worries about future emergencies.  For us the home equity line is a great “free money” option — we have a $20K safety net at our fingertips and it’s free as long as we don’t use it. 

What is easier than we thought:  Applying for the home equity line of credit was easy.  Thanks, Sherry. 


Using our reward points

We have a pretty tight budget for the holiday, so we are planning our purchases carefully. We are using the rewards points on one of our credit cards to save some money.

We converted 20,000 reward points into $200 in Amazon gift cards. A $50 gift card cost 5,000 points.  If you aren’t saving your reward points for travel upgrades/tickets, converting the points to gift cards could help your budget this holiday season.

We like Amazon gift cards because they don’t have an expiration date or fees, and you can upload the money to your account (so you don’t have to worry about losing the card). We are cautious about which gift cards we buy. Over the years we have certainly lost some money on other store gift cards (ie:  left a balance on a card). We plan to use our Amazon cards to buy gifts, rather than giving the cards as gifts.

Takeaway for the Week
What is more important than we realized: Don’t let the promise of a reward wreck your budget. We use our rewards cards to buy necessities like gas.

What is easier than we thought: Check out the rewards program on your credit card and see if it offers discounts or other benefits that will save you money on planned purchases. We had no idea that we could easily get the equivalent of $200 back. 


Goals Goals Goals

I can’t believe we set so many goals (15!?) before we started Project Money.  It is satisfying to look back at them and see how much progress we’ve made since June.  Our blog last week summarized the first 7 goals.  Here’s our progress report on our last 8 goals:

#8  Establish a savings plan to get us to Hawaii:  We will have saved $880 by December which is almost enough to buy one plane ticket.  At the end of Project Money we’ll add $1000 from our $2500 participation award to get the total up to $1880.  We’ll need an additional $4845.  With our current plan of saving $95 a month, it will take 51 months to reach our goal.  

#9  Re-evaluate auto/life insurance premiums:  we got two new quotesand decided not to change our insurance company or policies.  The quotes offered us minimal cost savings on the premiums and the coverage levels were much less than our current coverage.  We weren’t comfortable making a change.  

#10  Establish a dedicated savings account for gifts:  done.  We decided to spend $100 on each kid for his/her birthday/birthday party and $100 on each kid for Christmas.  We set aside additional money for presents for the cousins, Christmas presents for other family members and a Christmas tree.  It won’t be a blow out Christmas, but it should be very nice.  Instead of focussing on shopping, we plan to spend time on our other traditions — like cookie baking.  Meanwhile, the rest of our money will support our short term goals — like paying for the kids’ school tuition — and our long term goals of paying for a dream vacation and saving for college. 

#11 Monitor health care costs and determine how much money to set aside in a pre-tax flex account at work:  We expect our costs to be similar to the past year, so we set aside $5000 in childcare and $2500 in medical expenses.  We plan to submit receipts as soon as we get them so we can get our money back.  In the past we would scramble to get the receipts in right before the tax deadline.  This was stressful and didn’t make good use of our money. 

#12  Cut spending:  

  • Our utility bills decreased by changing to LED lights, using the air conditioner for just 1.5 days due to cool summer, line drying clothes, and taking shorter showers;
  • paid $24 for a bus pass instead of $956 for an annual parking pass at work;
  • saved $1500 this fall by getting extra childcare help from Dave’s parents;
  • Last year we spent almost $2K on restaurants and take out.  This year from January to May we spent $872 on the AmEx for restaurants.  Since June we have spent $0 on the AmEx for restaurants.   We eliminated restaurant spending except for very special occasions (so far, just our anniversary) or when unavoidable while traveling.  


#13 and 14  Become confident and comfortable managing our finances as a couple.  Get our life back by feeling like our choices are running the show, not the lack of money:  Before Project Money not having goals or a budget made us feel constantly stressed.  It also contributed to unnecessary impulse buying (i.e.:  we’ll never go to Hawaii so I might as well buy all of the chocolate milk drink boxes I want).  I felt resentful of having to be in charge of the bill paying so I would ignore it some months and end up with recurring late fees on the Target bill.  

It hasn’t been easy but it has been doable.  Dave and I figured out that we needed to have dreams, and to use budgeting as a way to plan for and achieve our dreams. I don’t resent paying bills any more.  I still run our budgeting data base and pay the online bills.  We work together to track our spending and both use mobile deposits.   

Takeaway for the Week

What is more important than we realized:  Writing down goals.  It's hard to cheer your progress if you don't define what progress should look like.

What is easier than we thought:   We certainly don’t have all the answers for our life, but having a budget allows us to plan for both the expected and the unexpected costs ahead. 


Budgeting is like magic — goals we’ve accomplished

When we applied for Project Money we identified 15 goals we wanted to accomplish.  Let’s just say, there was a lot to fix in our lives.  The past 6 months have been transformative.  If you’ve been reading our blog and feel like you have a lot to fix, you can do this too.  Start small — that’s what we did.  Last March we got 3 sheets of paper and started tracking our spending.  Look where we are now on our first 7 goals:

#1  Learn how to budget:  We started by tracking our spending.  Then we set financial goals (like paying off the car loan in 1.5 years) and did the math on how much we’d have to save a month to meet our goals.  We set up automatic transfers to our new sub accounts so we are on track saving for our future expenses.  We track our numbers using a budget app, and the budget worksheet from the Summit website (To download, go to the “Calculators and Worksheets” page and scroll down to the “Financial Worksheets” tab.  Click on “Budget Worksheet.”)

#2  Pay down our car loan:  We started at $14,834 and paying $600/month.  Without Project Money, we would be at $11,234.  We refinanced and pulled out our remaining flex account money to get our current balance down to $8,202.

#3  Rebuild our savings:  We are 19% of the way to our $15K goal.  Last December after we paid for Christmas, our $13K biannual tuition bill, and annual insurance premiums there wasn’t much left in our piggy bank.  This December we will pay $6990 in tuition, and still have $14K saved for our June tuition bill.  Plus we’ll have over $5K saved in sub accounts for future expenses (oil changes, summer babysitter, clothes, haircuts, gifts, tax accountant, etc) and over $2K in emergency savings.  

#4  Re-evaluate retirement savings:  This is a big TO-DO on our list.  

#5  Establish a meal plan/budget:  our meal “plan” is still a bit random, but we are eating healthier.  We’ve cut our grocery costs, stopped eating out, and have been packing lunches for work.  Before Project Money we averaged $940/month on groceries and restaurants.  Now it is more like $510.   

#6  Prioritize home repairs and establish dedicated saving account for repairs:  we live in an old house that seems to be constantly breaking.  We haven’t prioritized our repairs yet, because there are just so many on the list.  We did start a sub account, and we’ve been saving $40 a month for repairs.  We are saving $83 a month for a new dishwasher (our current one is at least 17 years old).

#7  Start 529 education accounts for the kids:  In August we transferred the money from the kids’ CD accounts to new Edvest 529s.  We automatically deposit $50 into each account monthly.  It took only 30 minutes to open the accounts online.  In four months Ellie’s account has accrued $79 in increased value.  

Takeaway for the Week

What is more important than we realized:  we never realized how much of our monthly spending was on incidentals.  Tracking your spending will help you find some obvious things you can change about your own spending.  

What is easier than we thought:  not spending.  We buy gas, food, gifts, kid supplies, and not much else.  Switching from plastic to cash/debit for purchases has been very helpful. 

And, check out our November video on teaching kids about money.


Teaching kids about money: needs versus wants

Our coach, Sherry Johnson, met with our kids and their friends to discuss money management.  She started the conversation by having the kids discuss what a need is versus a want.  This prompted some very interesting discussion — was clothing a need versus a want?  was a car?  a computer?  

The kids went through newspaper ads and cut out pictures of needs and wants.  Then as a group they had to pick their top 5 needs and wants.  The kids found this challenging.  Sherry used this as a great segue-way to discuss how a budget helps you prioritize needs and wants and set savings goals for each.  

The girls had an interesting dilemma.  They want to save money but they find themselves spending a lot at the school store.  Sherry talked about budgeting strategies for their allowances, and gave them laminated cards with a list of questions to ask about future purchases:  

What to ask when you want to buy something:

  1. Do I need this?
  2. Do I really want it?
  3. How often will I use it?
  4. Have I found the best deal?
  5. Can I get it for free or borrow it?
  6. If I buy it, will I have money left over for other things?
  7. When will I get / earn money next? 


Wow, I can’t say that we as adults have been this mindful of every purchase.  But I love how these questions make you really think about a purchase.   

Here are some more money tips she shared for families with kids:

  • Sit down as a family and make a list of household chores.  Help your kids identify age-appropriate chores that they could do to earn money.  
  • Where does my money go? Help your kids make a poster or worksheet to track what they spent, what they bought, and how much money they have left.  
  • Help your kids set spending and savings goals.  What do they want? (a stuffed animal).  What do they need? (to save for college).   Have them research the cost, and how they could pay for it. Help them create a goal tracking sheet — they write down the goal, how much it is going to cost and set a date to reach that goal.  Then they track how much they have saved incrementally on the same sheet.     

We are so grateful to Sherry for taking time on her weekend to work with the kids.  Summit Credit Union frequently hosts school groups and scouting clubs.  Contact your local branch if you’d like to discuss financial education for your kids, or check out their Project Teen Money

Takeaway for the Week

What is more important than we realized:   teaching kids about money management by talking about needs versus wants.  They really get this concept, and I see it providing a great framework for us to discuss future purchases.

What is easier than we thought:   Summit made it very easy for our kids to open savings accounts.  


Getting our ducks in a row

We learned so much from the recent estate planning session hosted by Summit Credit Union.  We want to thank the presenters Amy Crowe and Bob Nennig for sharing information and giving us a road map to get started.  

Imagine if you become incapacitated and a friend or family member has to step in and manage all of your finances?  How will they know when and where your paycheck gets deposited?  How will they pay your paper and on line bills?  If you die, who do they need to contact to cancel your gym membership or magazine subscription?  Leaving a good road map for the person who needs to take care of you and/or your estate is really essential.

We are using the Personal Inventory (copyright 2014 Summit Credit Union) that came with the seminar to build our estate roadmap.  It includes the following information:

Important people in your life to contact

  • Location of important documents, valuables, passwords and last instructions
  • Current income sources
  • Government/military benefits
  • Insurance policies
  • Financial assets
  • Employers/former employers
  • Companies you do business with 
  • Personal property and possessions 
  • Digital estate plan (ie:  what happens to your Facebook and online photo sharing libraries)
  • Intellectual property distribution 
  • Memberships and Subscriptions
  • Memorial Instructions
  • We are putting our Personal Inventory into an electronic file so we can keep it up to date.  

Takeaway for the Week

What is more important than we realized:   Setting a timeline for completing your estate plan.  And a budget.  

What is easier than we thought:  It is really satisfying to make an estate plan and put things in one place.  For now we are filling the estate planning binder we got at the meeting with our important documents.  Now are ducks are starting to line up.


The finer points of setting goals, Part II

Right now 40% of our monthly take home wages goes to paying for daycare and saving for private school tuition.  24% goes to our mortgage, property taxes and van loan.  We have lots of competing savings goals.  Last week we discussed tuning up our number one savings goal, paying off the van loan (see last week’s post).  

This week we are going to discuss tuning up our number two savings goal, saving $15 K for emergency savings.  Over the summer we had lower expenses and some extra income and put $2838 into emergency savings.  We need to save an additional $12,162 to reach our goal of $15K.  

We used a Simple loan calculator  on the Summit website to calculate how much we would need to save per month to reach our goal (you can set the interest payments to 0%, since you are paying yourself in this example, and not re-paying a loan).  

$12,162 over 60 months = $202.70/mo

$12,162 over 72 months = $168.92/mo

$12,162 over 84 months = $144.79/mo

We can’t meet the $144.79/month payment on our current budget but that will change in the near future.  In March we’ll make the last $115 monthly payment on Louise’s 0% interest computer loan.  In April we can start putting that $115/mo into our emergency savings so we’ll add $1035 to the fund by December 2015.  We’ll have saved $3873 and need $11,127 more to reach our goal.  

In January 2016, we’ll have paid off the van.  That will give us another $400-500/month to divide among our savings goals.   If we set aside $445/month, we will reach our $15K goal in 25 months.  

Our coach Sherry pointed out that we needed to have a plan for when we could spend the money — what counts as an emergency?  For us it means things like:

  1. emergency house repairs that are necessary to keep us safe and protect the value of the home (ie: water or sewer leaks, roof repairs, etc);
  2. emergency travel for a family illness or death; and
  3. to replace lost income in the event of illness or job loss.  

We aren’t going to use it for family trips or remodeling the bathroom.  Those things are important dreams, but they aren’t essential.  

Takeaway for the Week

What is more important than we realized:   Setting long term money goals can be daunting at the start, but just make yourself pick some numbers and a timeline.  See how it works — adjust as necessary and enjoy the ride.  Be happy where you are.  Small incremental progress is progress.  Living within your means and not accruing credit card debt is powerful.

What is easier than we thought:  Saving ahead for our planned expenses in specific sub-accounts means that we won’t have to dip into our emergency savings to pay bills or take vacations.  

Check out our latest video on making a homemade birthday party project - A pinata! 


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