Happy New Year, Ultimate Money Blog Readers!!

Reading everyone’s 2009 financial goals has been very inspiring but intimidating at the same time. I’ve gone back and forth on how I want to allocate our money. I debate between paying more on my mortgage, paying more on our student loan and car loan, and saving. I think that I’m going to make my 2009 goals simple, because I’m anticipating a semi-large expense next year (if things go the way we would like). It will most likely overlap into 2010, and I want to make sure we’re as prepared financially as we can be.

Mortgage
I love seeing the principal balance on our mortgage go down. I hate seeing how much of our payment goes to interest each month, so every extra little bit I can throw towards our mortgage is a good thing. I’m hoping that I can make one extra monthly payment as a principal only payment for 2009. I can do it one of two ways: at the end of the year, pay $960 in a lump sum on the mortgage, or break it down to a monthly payment of $80 extra on principal. I’ll probably just pay $80 extra a month and forget about it. Our mortgage interest rate is 6.375% and we’ve got about 28 years left.

Second mortgage
Our payment is $172.75. We’ve been paying $200 a month, with $27.25 extra towards principal. This is a 20 year loan at 6.89% and we’ve got 18 years left. We should have it paid off in about 15 years at the rate we’re paying.

Retirement
I’m going to keep putting 8% of my pay into my ROTH 401K at work. I have some concerns that we’re not saving enough for retirement because Mr. Money’s work does not offer a retirement plan at all. He’s 31 years old and I’m 25 so I feel like we’ve got time on our sides, but it’s still scary to think we don’t have enough money for retirement. We both have ROTH IRAs but we aren’t contributing. I almost want to take some money out of savings and put it in those to reduce the amount of taxes we pay on the interest in our savings account.

Student Loan
My calculations show that by making the minimum payment on the student loan each month we’ll pay down $2160 in principal. That will leave a balance of $3940. I’m hoping we can pay this off in 2009.

Car loan
Making minimum payments, we’ll pay down $3000 in principal in 2009. I would love to pay this loan off too, but it’s not my number one priority because we’re paying 0% interest and we’re trying to get the student loan paid off first.

Savings
I’m going to keep putting 25% of my paycheck into savings. From here, we can decide whether we want to send the funds to retirement, pay off more debt, or just keep it in the emergency fund.

What do you think of my 2009 goals? Are they reasonable? Do you think I should focus more on retirement?

Posted under Money

I’m always intrigued as to how other people handle their money. In the Money household, we have a few different accounts to separate our money. It helps us save more and spend less.

Main joint checking- This is the account that 75% of my paycheck gets direct deposited into. We also deposit 100% of Mr. Money’s paycheck into this account. We pay all the bills from this account and try to keep it as close to zero as we can. We’ve got a $1,000 overdraft line of credit on this account that’s free just in case of emergencies. We’ve never used it but it’s there for peace of mind.

Secret account- This is our second checking account that we’ve nicknamed our “secret” account. This account is linked to one of my paypal accounts. Whenever we get any snowflake money, I deposit the money here and then decide where to send it. It is very helpful to have that money separate. Also, in the event that something happened to our joint account, we could have this one as backup.

Savings- We lump all of our savings into one account. Basically this is for emergencies only. We try not to take anything out of this account unless it’s a dire emergency. Right now we’re earning 4% interest on our savings and will until the end of April. I’m glad we locked that rate in when we did! I am very anal about having too many accounts to keep track of so this is why we only have one savings account. Perhaps after the rate goes down we’ll separate the money into separate accounts for different purposes. Right now I can’t beat the interest rate so I’m taking advantage of it! I still have two accounts at ING that have very low balances (probably under $1 each) that I left open because I love ING and plan on using those accounts in the future.

How do you use your checking and savings accounts?

Posted under Banking, Money

On Friday my hearing felt like I was in a tunnel.  That’s never a good sign.  Of course, I immediately thought I had an ear infection.  That night when I got home, I asked Mr. Money to put some naturopathic ear drops in my ear to help fight off any infection.  I hate taking any medicines that aren’t natural.  When I woke up on Saturday, I was feeling a little pain and my jaw was starting to hurt.  Uh oh.  Of course, being as weird as I am, I scoured the internet for home remedies for ear infections.  I wanted to treat it myself.

At 3 P.M. I decided I was going to go to the Urgent Care Clinic to have a doctor look at my ear.  There was no sense in me fooling with it any longer.  I was afraid I’d have permanent damage.   When I got to the clinic, I immediately asked them how my health insurance would cover it.  If I was going to have to pay the $100 ER copay, I needed to know.  They told me that my insurance would treat it as a specialist, so I’d have a $40 co pay.  Not too bad.  After waiting 45 minutes, the doctor came in, looked at my ear, tugged on it, asked me a couple questions, and then diagnosed me with a middle ear infection.  Great.  He wrote me a prescription, and I went on my merry way.

I went to the pharmacy I normally go to, they said it would be about 10 minutes, so I wandered around the store.  When I went to pick up my prescription, they told me the total was $50.  I was expecting it to be around $10, so of course I was shocked.  They told me that I hadn’t met my deductible yet (ugh) and that was the cost.  It was even a generic.

 I was bummed, but what could I do?  I had to have the medicine to clear up the infection.  I paid, and went home. $90 for a darn ear infection.  I was glad that I didn’t pick a high deductible health plan because I would have paid more!  Oh well, at least I’m going to feel better soon.

Are you happy with your health insurance coverage?

Posted under Money