Last Tuition Payment!

I made our last tuition payment the other day. Yee ha!!

Granted, the money continues to drain our bank account with her rent, living expenses, cell phone, etc. etc. etc. BUT we just made the final tuition payment for child number two in September. So, until recently, we were paying tuition for two kids.

SO THIS IS HUGE!!

Child number one has been independent for close to five years, about a year before our youngest started college and moved out.

Child number two graduated in December and started a good job in January. An “I can support myself” kind of job. He’s responsible for everything now. He’s even started paying us back for expenses racked up over the previous 6 1/2 years (yes – it was a long haul). I’m taking $100 out of every paycheck until we’re good. I haven’t bothered to put a number on it but this means we are no longer shelling out for gas or rent or utilities. And I’ve set up automatic monthly transfers to cover his share of our Verizon and auto insurance bills.

Child number three graduates in May. I don’t want to get ahead of myself and jinx anything. Graduating doesn’t guarantee getting a job providing self sufficiency. And getting a job isn’t the same as getting the right job or keeping a job. And, let’s face it, you’re never really out of the woods if you’re a parent. Bad stuff happens.

But good stuff happens, too, and you may as well celebrate it when it does!

Tax Notes

taxesWe have an accountant do our taxes. I’m really organized and keep track of everything and present it to him as such. No boxes of receipts from us! I want him to spend the minimal amount of time on them, hence keeping his bill as low as possible.

Once the taxes are done, I go through them carefully. Accountants make mistakes, too. In fact, last year I realized that the some property taxes had been omitted from our 2012 return and we had to file an amendment. Our accountant acknowledged that I had, indeed, included them in the tax organizer and he had missed them. So, he didn’t charge us to file the amendment.

Our accountant has just sold his practice to someone else. We will see how it goes this year. But I am pretty determined that I will start doing our taxes again – once the kids are done with college and we’re done flipping properties. I did our taxes for years and, without these complications, it was well within my comfort zone. In preparation, I recently spent a few hours creating spreadsheets to calculate depreciation on our rental properties. Between the tax documents from our accountant and researching accounting practices on the internet, I was able to figure it out.

This past month, I’ve filed returns for our sons. And I’m putting together everything our accountant will need for our taxes. As I do this I go over my tax notes from last year and have been adding new ones. For example:

– make sure to record the insulation expenses for residential energy credit
– find out how many books one of my publishers donated to a charity headed by a politician I would never vote for (I felt compelled to agree to forego the royalties)
– kept track of how I filed for the kids (website, login ids, passwords, hints)
– reviewed exemptions and deductions we qualified for (or not) in 2013, to anticipate how things might look in 2014

Track Your Medical Expenses

doctorEvery year I keep track of all our medical expenses – copays for prescriptionsdoctor visits, and emergency room visits (remarkable how many of these our kids rack up), vision expenses, dental expenses. I’ve even started keeping track of what our various prescriptions would cost if we had to pay out of pocket.

As a result, I know that, in addition to the monthly deductions Jay’s employer takes out of his paycheck, we spent $3,529 in 2012, $1,402 in 2013, and $3,136 in 2014. I can quickly determine how much we spent on each person, and for what. Should we have to make choices on new health care options, or by the time we’re choosing supplemental health care coverage once Jay retires, etc. I will have years of data to help us analyze our choices.

I Am Updating Our Wills

will testamentIt’s been awhile since we had our wills drafted. We have a “subscription” to a company named Legal Shield. For about $26/mo and have access to a local law firm, as well as identity theft protection. We’ve used the legal benefits before, but Jay’s company now offers something similar and we’re thinking of dropping Legal Shield. Not sure if we’ll keep the identity theft protection. I have alerts set on all my credit cards and I check our bank activity regularly. When we were the target of credit card fraud a few years ago, it was me who immediately discovered it, not the identity theft company.

Anyway, one of the benefits is having them draft a boilerplate will, free for the main member, and $20 for a spouse. We had this done years ago, but we are redoing it. The kids are no longer minors. The guardians we appointed back then are no longer married. And I’m changing executors.

Having a will is a good thing. It does not, however, mean that your estate will avoid probate – something many people erroneously believe. Probate is avoided by having beneficiaries designated on all of your assets. We have this done for our mutual funds and 401Ks, etc. But we haven’t recorded Beneficiary Deeds for all our properties – something that is on my To Do list.

Know Local Mailbox Locations

mailboxDo you know where local mailboxes are located? Not necessarily at the post office, unless that happens to be as convenient location as any, but mailboxes located near businesses/places you regularly go to.

Years ago I put a check in our mailbox, setting the red flag up for our mailman. Then we went on vacation. By the time we got back someone had stolen the check out of the mailbox, called our bank to verify funds (possibly numerous times), “washed” the check and rewrote it to themselves for as much money as possible ($5,000).

It took weeks to get resolved. An investigator came to our house. The bank at first “loaned” us the money before making it official. Our account had to be closed and a new one opened. It was a massive pain in the butt. And, ultimately, the bank took the hit on the $5,000.

Since then, I’ve rarely put mail in our mailbox, especially if it contained a check. Luckily, with online bill pay, I rarely have to write checks anyway. I now try to pay attention when I notice a mailbox somewhere on my regular route. There’s one at the library. There used to be one at the rec center I go to (and now work at), but that disappeared last year. There’s one a mile away that I pass almost every day. And I noticed last week that there’s a new one outside Costco, somewhere I go almost every week.

Knowing where a number of convenient, easy-to-access mailboxes are means I don’t have to put mail out for our mailman to get. And, based on what I’m doing on a particular day, it’s easy for me to plan where to drop it off at.

Rebalancing the 401K

401kA substantial amount of our net worth is tied up in Jay’s 401K. He puts in just enough to maximize his company match. It’s been years since he originally picked the funds that the money is allocated to and it definitely needs to be rebalanced. About 63% of the funds were in one of the riskier, aggressive stock funds.

So, at the beginning of the year we specified that all new contributions go into Vanguard’s 2025 Target fund. We also moved about 15% of the existing funds out of the aggressive fund into the Target fund. And we’re continuing to do this on a weekly basis, moving a small fraction so that by the end of the year another 15% will have been moved.

We picked the 2025 Target fund even though Jay is probably going to retire closer to 2020. But we don’t expect to need the money until 2025. Also, there’s a chance that he’ll keep working past 2020, especially if he can find a way to take time off without pay. If, however, it starts to look like we need an even more conservative position, we’ll move the funds from the 2025 Target fund to the 2020 Target fund.

Rebalancing his 401K has been on my To Do list for awhile and I’m really glad we’re finally taking action. 😉

Paying Homeowners Insurance by Credit Card

homeowners insuranceSome time ago I posted that Denver county started to accept credit card payments for property taxes in 2014. I’m hoping that Arapahoe county follows suit. In the meantime, about 18 months ago I had made a request to the company that holds our mortgage to allow us to pay our homeowner’s insurance by credit card vs. them escrowing it for us. I want the miles!

Our mortgage was relatively new, having a) just bought the house in 2011, and b) having refinanced within the first year. They told us they needed us to have made a full year’s payments before considering.

So, I resent my request a month or so ago and, voilà, last week I received a letter saying they were no longer escrowing insurance or property taxes. Now I really hope Arapahoe county starts allowing credit card payments for property insurance! Without the escrows, our monthly payment drops more than $800. Yowza – our property taxes are high!

Transferring Money Between Bank Accounts

chase quick payI posted about Chase’s QuickPay function last year. We still have accounts at two banks, despite having paid off the HELOC we had at US Bank. I haven’t gotten around to consolidating everything at Chase. Our kids have accounts at US Bank and I still have boxes of checks to use and I have all our online bill pay set up there. One of these days…

Anyway – last year when I got the QuickPay all set up, I wasn’t sure how often I’d use it. Turns out, I use it quite regularly (unfortunately). I say unfortunately because it means I’m having to transfer money from one of our three HELOCs to sometimes pay the household bills.  Those college tuitions and sorority fees take a huge bite out of our bank account! If everything goes according to plan, and it never does ;), all three kids will be done with school in three more years. Best case scenario. Until that happens we won’t seriously start planning for Jay’s retirement. We’ll need at least a couple of years to see what our living expenses look like once we’re truly empty nesters and not paying tuition.

In the meantime, though, I’ve already started looking into social security details. And paying close attention to our tax returns and what our situation might look like once Jay does, in fact, retire. Luckily, I like to do this kind of stuff!

Keep a List of Expenses to Eliminate

to do listI’ve started keeping a list of expenses to eliminate. Someday.

I’ve decided to give up my Massage Envy membership. This will be the easiest to eliminate. I had a couple of gift cards I bought at a 20% discount and I will get a couple of massages in before they charge my May dues. And I’ll close, or at least suspend, my membership. I’ve never been able to replace the masseuse I initially went to 3-4 years ago. She was the best. I think she does massages out of her home, now. If I really need one, I can go to her. Plus, they just increased their monthly dues by 99¢. A pittance, I know, but my understanding when I joined was that I was grandfathered into the existing rate. As in forever.

I pay $38/month for a subscription to a real estate website. It was essential when I was doing all the foreclosure work, but its value is becoming less and less apparent to me. I can see dropping this in the next year or so, especially if my agent lets me use his account the few times I need to.

I’m a member of The Authors Guild, costing $90/year. I also pay $18/qtr for website hosting. In order to drop my membership, I’d have to find a new platform for my website, in addition to rebuilding it there. Someday.

We’re members of a prepaid legal plan. This has come in pretty handy because we have three kids who get in some kind of trouble on a somewhat regular basis. Hopefully, they will wise up one of these days! Also, we have rentals and have sought legal advice a couple of times regarding landlord/tenant issues. However, I’d like to lose this expense sometime in the next 3-5 years.

Anyway – these, and other, expenses are on my elimination list. Every time I notice an expense or a charge that I reasonably can see eliminating, I add it to my list.

And, so long as I have my list (which is on a spreadsheet, of course), I’m confident that one of these days I will get around to addressing each and every one of them. Call it saving. Call it simplifying. Call it control.

You manage what you measure.

Today I Got My Bank Statement

I refuse to pay bank fees. Talk about paying something for nothing! Yet, I’ll bet a huge percentage of bank customers regularly pay fees. And I’ll bet they’re often also the ones who can least afford to. (eg. A dear friend of mine pays $25/month for the privilege of having a checking account. Yet she rarely has more than a couple hundred dollars in it. She’s flushing money she can’t afford to lose down the toilet.)

Here’s some advice regarding bank accounts that I will add to and repost as I come up with new ideas:

1. meet your banker. Introduce yourself; explain what kind of accounts you have/need; find out what kind of benefits you’re missing out on; get his/her card so that you can contact him/her, if necessary. (eg. My computer died last year and, in the confusion, I accumulated $33 in overdraft fees. Because I had a relationship with my banker and, because I try not to abuse his kindness, I was able to plead my case in an email and he reversed the charges.)
2. always open and go through your bank statement (whether you receive it in the mail or online).
3. balance your checkbook, preferably to the penny. (Over the years I have developed a system that, while somewhat OCD, is a huge help when balancing my checkbook. I may embarrass myself and share it one of these days.)
4. read any notices or news printed on your bank statement. This is how you find out that they are going to charge you $3/mo for receiving a paper copy or that they are now charging for the overdraft protection you’ve had for years for free.
5. save your bank statements, all of the pages, for at least a year. If you apply for a mortgage or refinance an existing one, you will be asked to provide at least two months of statements. I keep them in case I need to research something that has happened over the course of the year, usually when I’m preparing our taxes.
6. look for fees that you are being charged, legitimately or otherwise. And, yes, banks DO make mistakes. (eg. my bank charged me $15.51 for a negative collected balance* when they shouldn’t have. My statements show a daily balance summary and my account was never negative. I emailed my banker, he looked into it, agreed that it was a mistake, and reversed the fee.)
7. if you are paying ATM fees STOP!! Know where your in-network ATMs are. If they aren’t convenient enough, consider finding another bank.The only time I will ever pay an ATM fee is if I’m out of the city. And, in that case, I make sure to take out enough money so that I don’t have to pay ATM fees multiple times. The bank charges you the same amount to take out $20 as it does to take out $200.
8. consider checking your banking activity online every day or so to see that balances are good and to look for unusual activity.
9. set up alerts to email or text you when your balance gets low or every time a payment is being sent.
10. use your bank’s online bill pay.** Hopefully, it is free and, if not, check around to see if there’s another bank, convenient to where you live, that offers this service for free.
11. don’t bounce checks. Talk about a no brainer. The bank fees for bouncing a check are astronomical! And there may be costs charged you by the party to whom the check was made out to. For example, if a check from a renter bounces we are charged $19, which we pass on to them. Their bank probably charges something closer to $32, making the total for one bounced check upwards of $50!!! If you follow my advice in 3, 8 and 9 above, you will be much less likely to ever bounce a check.

*A common reason for getting charged for a “negative collected balance” is when you deposit a check and, before that check has actually funded, you withdraw more money than is, technically, available. This happens at one of my banks and it drives me nuts (which is why I’m shifting my activity over to another bank.) This bank shows an “available” balance before deposits are actually funded. The other bank does not do this. If the deposit hasn’t funded, you can’t take it out. (At least I’m pretty sure.)

**Here’s my hierarchy of payment:
1. pay by credit card if the company does NOT charge you a fee to do so. I want MILES! I use autopay for recurring charges.
2. pay by check via my bank’s online bill pay. You don’t have to pay for a stamp, and it creates a better audit trail. Also, my bank guarantees that the check will get there by the scheduled date and they will refund any late charges incurred if it doesn’t. For recurring charges, like our mortgage payment and HOA dues, I set this up to occur automatically.
3. pay by regular check out of my checkbook.
4. pay by cash, something I rarely, almost never, do!