Follow Up to New Year's Finance

I wrote about "paying yourself first" earlier this week and was asked how it had worked out for us, I realized that while I've done regular financial check-ups and reviews, I haven't taken a very long-term look at our progress.  I dug out some financial goals I had written and saved on my computer back in January 2010...I didn't have any from before 2010, mostly because I just wasn't diligent about writing them down.

Here's a summary of my goals:
1. Build a Short-Term Savings Fund to use for things like car repairs, new tires, a unexpected household expenses, etc.  This would be in a relatively easy to access savings account.

2. Build a large Emergency Fund to cover three months of living expenses.  This money would be in a Money Market Account.

3. Build a Vacation Fund to use each year.

4. Increase contributions for the kid's college accounts so we could meet our goal of covering 75% or more of our children's college tuition by the time they are 18. 

5. Increase our Retirement Savings to a targeted % of our income.

6. Increase our savings rate on our Home Fund so we could have a down payment of 30% or more by 2020.

To give you a little context, in early 2010, Soldier was deployed, Bunny Girl had just arrived (DeeDee wasn't even a daydream yet) and we'd had an expensive year since I had opted to move back home to stay with my parents during the deployment and for Bunny Girl's birth.  I had begun to realize that affording vacations was becoming more and more difficult when you're paying for more little people to tag along and those airline tickets really add when when I needed a "home fix."  We'd also had a few car surprises that year...never enjoyable!  At the time, these were pretty lofty goals.  I couldn't see putting that much of our income aside...especially that 20% number for retirement and the Home Fund. Ouch!  I remember looking at those goals back then and thinking how crazy I was for even aspiring to that.

I'd like to say that it was really easy, everything when smoothly and according to schedule but anything worth doing is never quite that easy.  I spent the first year with the "All or Nothing" approach described in the previous post.    I would get super excited about these goals and go overboard with my savings.  I paid so much to our savings account that we ended up "broke" at the end of each month. Whoops.  Then I had to pull from the savings account or float it on a credit card, both bad habits to get into.

I've spent the last two years taking a more gradual approach, making small changes to the budget each month and monitoring our spending.  The tiny, incremental changes were so much easier to absorb and maintain. I'm a big fan of auto-investing, automatic transfers to savings accounts and etc.  I need it idiot-proof.  Making small 1% or $5, $10 or $20 increases into the amount every couple of months as I could slowly added.

I didn't realize how much it had added up until I pulled out those goals from 2010 again yesterday.  Here's our progress:

2013 Status:
1. Short-Term Savings Fund: CHECK!  We made it to the goal, but since this is a short-term fund, it does end up being somewhat in flux. We keep up monthly contributions hear but don't sweat it if the balance gets a little lower because a surprise expense pops up. After all, that's why we have it! It's been very nice to have for unavoidable surprise expenses.  (WHAT? I have to buy Snow Tires in Germany??)

2. Long-Term Emergency Fund: CHECK!  We made it. However, now that our family is larger I've realized we need to increase this a big, so back to work we go!

3. Vacation Fund: Meh.  This didn't happen until about six months ago.  Part of it was a lack of motivation to save for this.  Moving to Germany and checking out the whooping $1400 ticket price per person for a visit home gave me some serious motivation.  I figured to afford one visit home each year, I would need to stash $400 a month in this account. That wasn't going to happen, so I started with $250 a month. It would offer an annual travel budget of  $3000.  Not enough to fly all of us home each year but it would be a start.  Since we found out we will not be staying in Germany long, I've cut this amount in half to free up some extra "fun money" each month for day trips so we can get the most out of our short German Adventure.

4. Increase College Contributions:  Each of our kids has a 529 plan for college.  We aren't quite at the numbers I'd like to be contributing each month, but we are steadily gaining.  I love that our investment company offers an automatic annual increase in the auto-investment amount.  I have it set for an extra $15 each January.  I have been doing that for three years and don't even notice the increase.  I've also been able to make small increases a few other times each year.  Slow n steady wins the race!

5. Increase our Retirement Savings:  YES and more!  This is a big victory for me.  About two years ago, I did some retirement calculations to figure out how much we might need in assess for retirement and figured out how far three different contributions in % would get us.  At the time, the low % (based off of recommendations from various articles/websites offering retirement planning advice and calculators) seemed a stretch for us.  I was really excited when I realized we made it to our mid-range target.  Way better than I had expected.  It was done with small changes...1% at annual pay adjustments and adding $25 to my auto-investments every couple of months. 

6. Increase our Home Fund Savings:  This was similar to the Retirement goal in that it seemed like a long-shot.  We're very indecisive about buying a house right now. It's tempting and we've heard some success stories from our Army Friends. BUT...the economy is a big question mark and we've also heard many stories of the house creating a burden when it comes time to rent or sell it.  Regardless of what we do in the interim, when Soldier gets close to retirement, we'd like to have a good amount of money to put down on a house. We don't have a ton of money saved but if we can maintain our current rate of savings for this, then we will meet our goal a year ahead of schedule.

In addition to our goals above, I also started a Christmas Fund.  I looked into the Christmas Clubs at our Credit Unions for kicks and giggles but determined that a good old fashioned savings account gave me similar returns and "no-touch-em's" effects but with the easy of moving it to a checking account when shopping time came.  This may not be for everyone, but I really felt like we needed it.   DeeDee's birthday is right before Thanksgiving, then comes Monster Boy right before Christmas and Bunny Girl on New Years Day...combine three birthdays within 60 days with the Holidays and it's can be a bit of a money hemorrhage.  This year was the first year we did this, though I had only been saving about four months. We made a concerted effort to scale back this year because we really felt like the last few years had been a bit excessive.  Between cutting back and the Christmas Fund, we had a really easy time this year.  It was really nice. As a side benefit, we discovered about $200 extra at the end of the month that we could use for charitable contributions. SWEET!

Speaking of cutting back this year...I really think part of it had to do with being in Germany.  We were totally removed from the US Commercial Onslaught of the holidays.  AFN doesn't have holiday sale ads, haha. No Target commercials, no Macy's sales, no tempting holiday displays at the mall, no pressure for last minute gift purchases, etc. Admittedly, there are commercial districts here in Germany but with three small children and living out in the boonies, we just don't go much.  We did make it to several Christmas Markets, but our purchases there were mostly small Christmas decorations and something we easily covered with funds we had allocated in our monthly budget for day trips. 

So, that's where we stand in 2013.  Overall, I'm really pleased (and a bit surprised!) with the progress we made and I'm glad I went back to look at where we were three years ago.   Sometimes, budgeting feels like a hamster wheel....lots of running and work but never getting anywhere...but this showed me that progress sneaks up.  I'm also glad for the new perspective on where to go from here!

Stuff My Dad Says, the New Years Edition

I've reached that point in my life where I find myself quoting my parents.  I know...Teenage Me would have denied the possibility of this ever happening but...never say never!

As we start the New Year, financial goals are one of the popular New Year's Resolutions: savings, eliminating debt, planning for retirement.  They all involve setting and sticking to a budget. My father's advice on budgeting was this: Pay Yourself First.  As a college student, I really liked this advice and took it to heart. I ALWAYS paid myself first.  I made sure I bought my new boots, new purses and dinners out first and worried about the rest later.  You can imagine how that worked out for me: I ended up like many twenty-somethings with a big ol' nasty pile of debt. But, that's a story for another time. 

By paying yourself first, my father meant that you had to carve out what you wanted/needed to save FIRST.  Set your savings goals, then look at your required monthly expenses and see what you've got leftover.  I think that many folks to this in a different order: Take the income, subtract necessary expenses, subtract some "fun" money and then save what's left over at the end of the month.  Here's the problem...my "fun" money demands are limitless.  There was never anything leftover at the end of the month because there was always something I "needed." (Shoes and a new outfit for Saturday night were necessary, right? I mean, seriously, I have to be "properly" clothed.) I have changed my attitude and my first priority every month and every paycheck is to get the money earmarked for savings OUT of my checking account before I do anything else.

The trick for me was setting realistic savings goals. I'd LIKE to say that I saved a thousands of dollars a month from Day One. But that's not realistic.  Even though "Saving" is generally regarded as a good thing, putting too much away can cause problems. If you can't cover your expenses, you must dip into the savings account to cover the overage or you "float" the over-spending with credit cards the intention of paying it off next paycheck. Once you break the seal on that Savings account, it's waaaaay to easy to take a little "extra" to get through the month or to do it a second time.  Don't go down that path! And, seriously...you KNOW the credit card rarely got paid off at the next paycheck!

It's OK to start small.  There have been plenty of studies that explain why an all or nothing approach is ineffective. (Think about weight loss, exercise regiments, smoking cessation, etc.) If you start shaving off 50% of your income each month without some sensible goal setting and budget scrutiny, you will fail. But, DO START paying yourself first.  Anything is better than nothing.  Start with $20, $100, $5....whatever is comfortable.  Then as you examine your spending and budget, you can make incremental changes to increase your savings without feeling the pain.

I love adjusting the savings rates at pay raise time. For the last few years, the military has received small annual increases every January. It's not a lot, .5%, 1.x%, etc. Regardless of the amount, that is a fantastic time to increase your TSP percentage by just one point.  You won't notice a difference in your paycheck; the raise will off set the increase in your savings. And, really, does a 1% raise really make that big of a difference in your salary each month?  If your basic pay rate is $2000, 1% means you are getting an extra twenty bucks a month. I can't do a whole lot with an extra twenty bucks, but in a year that will be $240 in your savings account. When you do the increase again the next January, you still have $20 going to your savings account plus an additional 1% percent from that year's increase -- and extra $40.  So, you are now saving $60 a month or $720 a year with zero pain. No cutting your spending, you're maintaining your current spending* and  passing the pay raises directly to the savings account.  When bigger increases happen at promotion time or time in service anniversaries,  that's the time to make a bigger jump in the portions that you increase.  Give a hunk to the savings and keep a little for yourself. (Yes, it's OK to throw yourself a bone once in a while!)  It will feel like nothing in the beginning...but $20 does add up over time, both in the savings account and in the amount coming out of your paycheck.

I may cringe and laugh when I find myself quoting my parents, but I'm pretty sure my parents would cringe at the thought of this former Shopaholic dispensing financial advice and encouragement! 

PS: If you haven't started a TSP, now is a great time to get started.  And yes, 1% is totally acceptable! 

*A quick note: When I say "maintaining your current spending,"  I'm assuming you are not charging a couple hundred bucks (or more!) a month on to your credit card. If you are, stop it!  Go back to the drawing board on your budget and start making some tough decisions to make ends meet.   Credit Cards completely negate the point of savings.

Lessons in Cookie Decorating

'Tis the season for holiday cheer and one of my most dreaded tasks: decorating Sugar cookies with the kiddos. My mother did this with us when we were little, so it's a family holiday tradition, yadda-yadda-ya. But here's the thing: I really, really hate doing it. I dread this every year. The mess, the sneezed on cookies, the frosting smashed in shirts/hair/noses, the wasted blobs of frosting, the lack of appreciation for anything artistic, neat or orderly. I'm not proud of this...I wish it was different. But, every year, I grit my teeth, paste on a fake smile and pretend to love cookie baking time. I love my children so much, I tell myself, that I will suffer in silence for them.



There's a "but" coming...ready for it?


But, I never seem to manage to fake it that well. Mommy is so tense, nervous and short-tempered that the activity my children are thrilled with turns to misery quickly. Why? The cookie cutters overlap previously cut shapes and chop off a reindeer's head? The frosting is just a disgusting blob of blue, purple and orange and do you KNOW how much it cost to buy/make all of that?

'Tis the season for holiday cheer and one of my most dreaded tasks: Decorating Sugar cookies with the kiddos. My mother did this with us when we were little, so it's a family holiday tradition, yadda-yadda-ya. But here's the thing: I really, really hate doing it. I dread this every year. The mess, the sneezed on cookies, the frosting smashed in shirts/hair/noses, the wasted blobs of frosting, the lack of appreciation for anything artistic, neat or orderly. I'm not proud of this...I wish it was different. But, every year, I grit my teeth, paste on a fake smile and pretend to love cookie baking time. I love my children so much, I tell myself, that I will suffer in silence for them.

This year, I snapped at Monster Boy over the mess he was happily making on top of a cookie. Why? Did it matter that he used half a tube of red icing on one cookie? Probably not. If I was that worried about money, I would have made the frosting myself rather than buy the tubes. He was reluctant to pick up the icing tubes after Mommy's outburst. I apologized and encouraged him to resume. He carefully picked up the tubes of icing and resumed work. Only, this time he asked me if what he was doing was OK....every step of the way. There was a whole heap of lessons in this moment. 1. My temper made him uncertain of whether or not he was walking on solid ground. 2. My desire for control had killed his joy for the activity. 3. My sense of "right" took away his appetite to explore, create and imagine.

As I sit here and write this, I have no inspiring or uplifting thoughts to temper these heart breaking lessons. My only hope is that I will remember them. I'm thankful for the forgiveness offered by our Heavenly Father, thankful that that I get to try to be a better mother again tomorrow and try to demonstrate His gentleness and forgiveness better to my children.

Icy Sidewalks

Responding to God's instruction when we receive it has really been on my heart lately. It's super easy, in theory. We hear THE WORD and we do it, right? Except, I don't ever get a nice, clear, booming voice from a mountain, an Angel appearing to me or a burning bush. Seriously, If I had that, I feel like it would be much easier to obey. Instead, I have a small voice waaaaay deep inside that talks to me. It's so easy to overlook that voice, to let the voices in my head (hahah) over power it and to let the din of life and the world around me drown it out. But it's scary to follow it. Really scary. He doesn't ask anything nice and simple, right?

There's a big hill here where I go to PWOC every morning. I park at the top, walk down the steep hill to the watchcare building and then hike back up to where PWOC meets. It's a bit of a long walk and it's been snowy and icy lately. This is such a small post that maintenance crews are nearly non-existent and they pretty much stick to the main roads. The chaplain's can be out there the sidewalk so that sidewalk is rather dicey. Every Tuesday, I start praying at the top of the hill as I creep down the icy, snowy sidewalk, clutching my sweet DeeDee in my arms.

It occurred to me during one of these walks that obeying God is like that. No one takes a running leap onto an ice patch..that would just be foolish. We all know that we'd end up sliding across the ice with a bruised behind and maybe a cracked skull. Instead, to get across an icy patch, we have to take it sloooow and easy; we gently step out on to the ice, placing our feet carefully and take teeny, tiny shuffling steps. One foot next to the other, I don't even put one foot all the way in front of the other because that's reaching too far. I test the ground and make sure I'm on solid footing and keeping my balance before taking another step. 

It can be terrifying to obey, because He doesn't generally give us easy things.  He gives us the big, scary, uncomfortable, impossible-to-do-on-our-own tasks. I usually take one of two approaches:  I get so excited that I take off running and sprinting to the finish line in a fit of passion or I'm so overwhelmed with the enormity of that task that I'm paralyzed with fear. I take off down the slipper hill, my feet fly out from under me and I end up bruised and battered or I stand with fear at the top of the hill and miss out because I'm afraid to walk.

I need to remember that I don't need to take any running leaps, I don't need to cover all the distance now, and I don't need to know worry about the bottom of the hill. But I do need to take a step forward; just take a teeny shuffling step in faith and keep my focus on HIM to ensure I am on solid footing.  

Bavarian Alps Adventure!

After the month-long rotation in October, Soldier got a few four day weekends in early November.  Over Veteran's Day we decided to "carpe" while we had the "diem" and skip town for a German Adventure.  We headed to Garmish-Partenkirchen.  There's a large military resort there, Edelweiss, but the rooms were rather expensive. We opted to stay in a town just outside of Garmish-Partenkirchen and were able to get a three room "apartment" for about the same amount.  It was great to have the two bedrooms, a sitting area and a kitchenette.  The owners were also wonderful and laid out an awesome breakfast of cold cuts, cheese, fresh fruit, bread, pastries and abundant coffee! Fun fact: Garmish-Partenkirchen has a ridiculously long name because it's actually two towns on opposite sides of the river that were ordered to merge by Hilter during his bid for the 1936 Olympic games.  Despite merging, the towns still feel, at least to a girl wandering the streets, very much separate and distinct.
It's about a three hour drive, so we left in the morning and arrived in time for lunch.  We didn't really know our way around yet, so we took a few wrong turns in town. We learned that taking the MommyVan down a Pedestrian Priority Zone is ALWAYS a mistake. Yes, cars are allowed but seriously, if it's bigger than a golf cart you're going to have new grey hairs by the time you make it out.  I ended up just closing my eyes and thinking that it's just money and whatever we hit can be fixed.   We made it out unscathed and stumbled into the first place we saw for lunch that we thought the kids would go for: PIZZA.  Yeah, I know. We're in Germany and looking for a pizza place?  Well, the kids are not quite on board with German food yet and sometimes it's just not worth the fight.  After a three hour car ride is not the time for that fight.  As it turned out, we stumbled into one of the most popular places in town...a fantastic Italian restaurant.  The owners are Italian and much to my relief, were more than happy I spoke English since they didn't speak much German!   They were so kind to the children; we were seriously frazzled when we walked in.  The food was A-MA-ZING.  I thought I had died and gone to heaven when I ate the torellini in cream sauce I had ordered to share with Ava.

Our next stop was the train station to ride to the top of the Zugspitze, the highest point in Germany.  Unfortunately, it was closed for repairs!  They offered us a ride in the cable cars, but after seeing them, I just couldn't bring myself to stuff my children in there. I kept having visions of that show, "When Vacations Attack" where they show crazy/horrifying vacation video footage.  No, thank you.

 The next day, we hit the road early and headed out to visit two of the most popular castles in Germany.  King Ludvig II, called the Mad King, had a thing for castles.  He built, remodeled and expanded quite a few during his lifetime. Incidentally, he lived pretty recently: 1845-1886. Civil War Era to put it into a context more familiar to us Armericas! Not exactly what I would think of as "Castle" era, but that was part of his "charm."  Anyway,  he inherited one castle from his parents and made a few changes to it.  He remodeled two other castles that he purchased and commissioned another one to be built.  We visited the Castle his parents had lived in, Hohenschwangau Castle, and the crazy, fairytale castle he built in the hillside nearby, Neuschwanstein Castle.  Neuschwanstein Castle will look familiar to you because it's said to have inspired Disney's Cinderella Castle.

Personally, I preferred Hohenschwangau Castle because it had actually been lived in by a family and used as the King's residence, as opposed to a castle built to fulfill some weird dude's fantasy! The kids were real troopers because it was a lot of walking.  The only way to view the inside of the castles was on a guided tour. Thankfully, the tours were blessedly brief and ended right when I was getting desperate trying to entertain kids and protect priceless artifacts from their antics.  We did have one incident in the Grand Hall of Neuschwanstein Castle. Just after the tour guide finished pointing out the intricate, precious mosaic tiled floor and the efforts they take to preserve it, Bunny Girl slipped under the velvet rope and out onto the mosaic floor. I turned around just in time to watch her lift her arms and twiiiiiiiirl across it.  I scolded her and yanked her back, but honestly, I could hardly blame her.  The castles had piqued my imagination as well and I would have loved to twirl across that room.  She spent the rest of the tour peeking out of windows trying to find the best balcony for waving to her Royal Subjects.

The third day was supposed to have been a hike around the Partnach Gorge.  Unfortunately, it was a downpour.   We took a little drive around town, hoping it would clear up.  We checked out the Olympic Ski Jump Stadium from the dry car, then drove around to see if there were any views of the gorge.  We ended up on a small "road" going up the hillside toward the gorge.  I used quotation marks because there is still some debate in our family regarding whether or not it was a "road" or a "hiking trail."  You may fill in the details with your imaginations on that marital discussion in the car that morning!  We ended up hanging out at the Edelweiss lodge and letting the kids run around the arcade.  Not the most exciting vacation story, but the kids loved it. 

The rain stopped by late afternoon and we returned to the Italian restaurant for dinner. We had a blasst again, ate a ton of delicious food and brought home desert. The owners remembered us and offered us shots of some liquor as we were leaving. 

One thing I neglected to mention is how amazing and breathtakingly beautiful the scenery is here.  Really, the three hour drive was filled with awesome sites.  I love the mountains, the green rolling hills, the tiny villages tucked into the country side.  There's no way my photos will ever do it justice.

Time Warp

My last post was a couple of weeks ago!  Time really seems to escape me lately.  We've settled in nicely to life in Germany. I still wonder exactly what the big kids think about all this.  Bunny Girl seems to think this is very temporary and that we will be returning to Grammie and Grandpa's house soon.  (Little does she know...much sooner than we ever expected!)  Monster Boy seems to be wrapping his head around the differences.  He likes to ask questions about "this world" and "our old world."

We are celebrating our Sweet Baby Girl's First Birthday soon!  The poor child has a very odd nickname around the house:  DeeDee Baby.  DeeDee has pretty much nothing to do with her name.  It is a shorted version of Bunny Girl's mangled pronunciation of her new sisters name...Dee-Dee-Yay-Yah.  And, no there are no Ds or Ys in her actual name, which is why it was so funny to us. A year later, DeeDee seems to have stuck as a nickname.  Monster Boy and Bunny girl refer to her as their little Deeders. Though, I think I prefer DeeDee, if she has to have a nickname.  (For those of you that know me, you know how I feel about nicknames and why!) 

I was recently invited to attend the AWAG conference up in Ansbach on behalf of the National Military Family Association.  It's about a hour and a half from where we are.  I really loved zooming up the autobahn to get there!  Manning a resource table at a conference can be a little tedious.  It's a lot of work to set up, a lot of standing/waiting/boredom, while the attendees are in their sessions and then 10 or 15 minutes of busy when everyone is on break.  However, I was reminded how much I really enjoy interacting with spouses, talking with them about their military life experiences and sharing resources. 

We took a weekend trip to the Garmish-Partenkirchen area earlier this month, too. More on that later!

The October Surprise

Somehow the month of October zoomed by. Soldier spent most of the month at work and I spent it hunkered down at home. Our household goods arrived on the 17th, right when they were expected.  Except for one thing, this could have been the Best Move Ever.  We had nothing broken or lost but our wood furniture wasn't wrapped properly so most of our wood items have serious rubs on the edges.  It looks like someone sat around with sandpaper and tried to give all my furniture a "Shabby Chic" makeover.   I was miffed initially, but I know it can all be repaired or replaced.  Plus, I've had all the furniture long enough that the newness has worn off and I wasn't entirely disappointed that I might have to replace it!

The kids were thrilled to see their stuff.  Forget Santa Claus, our movers were BETTER than Christmas!   The two bigger kids spent the day playing at the CDC, so they were totally dazzled by the transformation when they arrived home.  Soldier and I spent the evening tag-teaming kids and boxes.  I managed to unpack both of the girls' rooms that evening and do a little bit of work in Monster Boy's room.  They were so happy to re-discover all of their toys!  The upstairs was a trainwreck but we did manage to get everything put away in time for bed.  Since Soldier was in one of his "Busy Times" at work, I was basically on my own after that.  He was able to take delivery day off, but spent the next three weeks at work, except for a couple of nights where he came home to catch up on sleep.

With the election coming up, the talking heads have been mentioned the October Surprise and what it might be.  I don't know about the politicians, but for the Herbek Family, we got our October Surprise the same day our household goods arrived.  Soldier was notified that his OCONUS Tour was being shortened and that we were PCSing in the summer!  He has to be at Ft. Leavenworth by July to attend a 9 month course. So, we figure this means all the stuff we were unpacking will need to be re-packed sometime in May, or about 7 months from now.   We're laughing about it, because sometimes laughter is the only acceptable response but we definitely have some mixed feelings about it.  We're disappointed that our three year European Adventure and smorgasbord of travel has been reduced.  On the other had, we recognize how competitive it was to get a slot in the course and are very, very thankful he gets the opportunity.  We're also excited to go to Leavenworth since my Grandparents and some other relatives still live in the area. I was born there but moved away when I was three or four years old.  In the mean time, we're going to try re-vamping our travel plans and shoot for a "European Sampler."  Time and budget will be seriously limiting factors, since we had hoped to do our big travels in a year, after DeeDee was a little older and we'd saved up a little from our last PCS adventure.  I'm sort of cringing at all the things we sold before we left because we didn't think it made sense to store them for three years: our washer and dryer, the deep freeze, Soldiers Truck, and more!