January summary

This month has been pretty rewarding.  GJS went back to work.  The mortgage finally got back into the debt snowball groove.  We started Financial Peace University.  The debt payoff plan for the mortgage and the student loan debt has been modified to take into account our new salaries.

We're carrying over some extra funds in our emergency fund to pay for our taxes but other than that we're right back where we were pre-GJS-layoff.  Here are the updated numbers:

Baby savings account:  $116.08
Emergency fund:  $2606.92
Overall debt:  $94,675.87

Another great January turn of events has been how well our investments are doing.  Considering we won't be retiring until 2040 at the earliest, I know it doesn't really matter yet, but it is still nice to see those investments doing well.

Thrift Savings Plan: 26.09%
State of Michigan 401(k): 6.71%
Edward Jones Roth IRA: 14.59%

While the 401(k) isn't stunning us, it is improving steadily and the year to date percentage for 2012 is over the 12% we always hope for.

So while January has been good to us, I'm hoping for an even better February.

Week #3 FPU

Last night was the 3rd week of Financial Peace University (FPU).  GJS and I decided we'd use some of our baby savings to enjoy dinner before class, which is provided at church for a suggested donation of $5 per plate.  This was a small price to pay for a yummy meal that neither of us had to prepare or clean up after.  Not to mention we've been literally subsisting on beans and rice for several days while waiting to go grocery shopping for February.

FPU starts with the leader giving some announcements and then the larger group settles in to watch a video of Dave Ramsey do Dave Ramsey.  This week's lesson was on cash flow planning and using the envelope system. 

GJS is all about using cash for groceries so that we "feel" the money.  We have had a persistent problem of eating like princes at the beginning of the month and paupers by the end (hence the beans and rice diet this week).  I'm really not willing to give up the cash back we get from using our Chase credit card.  Some quarters we get back 5% on groceries.  At $600 per month, that adds up.  So we compromised.  We'll spend around $40 per week on our Door to Door Organics box (fresh produce and other grocery items delivered to your home once per week) and around $88 per week at the grocery store getting everything else.  Right after FPU we went to Meijer with our list in hand and came out with everything we wanted and spent right around $86.  Hopefully having a weekly goal will help us stay even on our eating all month.

The other exercise we focused on was creating a zero balance budget.  Again, GJS and I have been on this band wagon for a while now so we're already zeroing out each month, spending everything on paper before the month begins.  The new part was the form used for this purpose.  It was a list of all possible expenses and a place to put the cost of the item and a place for the new total once you subtract that expense from your total income.  I think it is a great tool for those who need to see how it all works by hand.  Mint.com isn't exactly like this but ultimately gets you to the same information.

Our homework for next week is to create our full budget using this form.  Considering we have so few items we're spending money on, I don't envision this being too tough.  The challenge lies in the columns for each pay period.  We'll have to show where, after each paycheck, the money goes before the next paycheck comes along.  It does make me think about the sinking funds we need to include for car repairs, clothes, hair cuts and the like.  For now we just take those as they come during the month but it would be nice to put a little each months to each one and have those dedicated dollars available when the need arises. 

Me and Dave

So that's me at Financial Peace University with my buddy Dave.  There were some technical difficulties with the DVD player or disc so we missed a chunk of the video - BUMMER, but what we did see was very engaging and seriously funny.  It was nice to have a laugh while hearing about such important stuff.  After the video portion we broke into small groups for discussion, unfortunately, since we missed the first week, we were late to our new table.  Our group is mostly couples, one single lady with two teenage sons and our facilitator, Cindy.  I liked Cindy immediately, but I felt a little out of place with the rest of the folks. 

We completed a little survey that helps determine if you're more of the "nerd" or the "free spirit" in the relationship.  I got 10 out of 10 for nerd while GJS got 9 free spirit and 1 nerd.  I was the only total nerd at the table.  We went over some discussion questions that mainly focused on getting the free spirits to recognize the value of budgeting and to get nerds to recognize the need for entertainment.

I'm hoping we'll get our materials before next week so I can catch up.  One of the nice things about this program is all the videos are available online and I have unlimited access to future Financial Peace University classes, so I can do a refresher anytime.  Our homework is for me to set up a budget.  Now we already have one on mint.com but we've usually given ourselves some wiggle room each month.  Dave requires every dollar to have a purpose on day one of the month.  So I will be putting on my thinking cap to properly allocate the $500 I expect we'll have unaccounted for when I get to work on the written budget.  More than likely I'll add in some budget line items for hair cuts and oil changes and shopping for things that come up.

Overall I'm a little underwhelmed with the small group aspect of Financial Peace but I'm a satisfied customer with the video portion and cannot wait for more!