$1,600 Under But Okay

We were $1,600 under last month.  And I am kind of okay with it.

I know.  It goes against everything that every other self-appointed personal finance blogger writes, from the millennials to the retired folks enjoying their golden years in splendor or otherwise.

How is it that yet another self-appointed personal finance blogger, moi, who goes so far as to label himself a mensch and a money mensch no less, writes that he is okay with a significantly larger amount of funds leaving is account than entering it?

Isn’t a Jewish guy who writes about money supposed to have some secret knowledge from the tribe that he shares with the masses?  If I had that secret knowledge, I would probably keep it to myself, anyway.  Why waste my time writing it down for a few dozen readers?

Anyway, I reviewed our checking account statement about a week ago for the month of April 2018 and found us once again in the red to the tune of $1,588.96. 

Instead of alarm bells ringing after a first quarter of the year in which the account showed red to a fairly large amount (for us) of$5,857, I shrugged and figured it would make for a decent post.  This one.

With $10,872 coming in and $12,461 going out, I would have thought my wife and I going on a fancy vacation and out to nice dinners about ten times to spend over twelve grand in an average April in our suburban existence.  Perhaps a Broadway in Chicago performance or even a new iPhone.

But it was nothing so exciting.

I have previously shared how I managed to save over ahundred grand per kid over a period of over fifteen years to cover most if not all of their undergrad years.  Our son is now completing his second year and has yet to contribute a dollar to his college.  I pay his college tuition, room, board and miscellaneous fees in monthly installments of $2,558 at present.  That amount will likely increase by $200 per month next year as he moves into better lodging.

Paying for College

I happened to pay both the April 15^th and May 15^th payments last month, thus the largest expenditure in my family’s household budget was the $5,116 that I sent to his college, which comprised 41% of the funds that left our account.

Incidentally, I transferred two grand from his 529 account to our checking account twice, so $4,000 out of the $10,800 came out of college savings and was obviously over a thousand dollars less than what we paid out.

If there is a lesson there besides me sharing specific details of our budget, is that you may end up spending more than what you take in during your children’s college years if you are striving to pay for as much as you can like we are.  There is no evil intention here.  We simply want our children to graduate from college with as little debt as possible so that they can start their adult lives without massive amounts of student debt.  

It is no easy thing to accomplish these days, as you well know.

Paid Ourselves First

In an effort to help our daughter, who is currently completing her freshman year of high school, attend a top-rate college without taking on a lot of debt, I contribute to her 529 account automatically on the first of every month and have done so for over ten years.

For a good stretch of at least five years, I automatically contributed $500 to each of my kids’ 529 accounts on the first of every month, the same day that our mortgage was automatically paid.  Yes, a cool grand left our account on the first of every month, transferred into college savings.  Money that other families spent on trips, phones, TVs and nice cars.  Perhaps you spent it on those things while I was socking away whatever I could.  

Besides that, I contributed $200 here, $300 there and even $500 once in a while to their Wellington accounts.  Yes, there were some months that I contributed two grand to our children’s college accounts.  You could say that I was obsessed with saving for their college years.

I was forced to reduce that amount to $400 per month for each kid due to paying for orthodontia for the past four years for each of them.  After all, there is only so much blood that you can squeeze out of a turnip.

Thus, on the first of the month, $400 was deducted from our account and paid into our darling daughter’s Illinois Bright Start account.

I have taken to Paying Myself First in the amount of $200 every payday.  The math is easy.  $200 times twenty-six paydays equals $5,200 into my Roth IRA.  Add an extra $300 and I am at the $5,500 limit, which I hit last month and intend to hit for the next few years until I can contribute $6,500 at the age of fifty.

I have been paying my wife first, too, but not as much as myself.  I sent $250 to her Roth IRA last month but have since decided to send $250 to it every payday.

Overall, I paid my wife $250, my daughter $400 and myself $400 last month.  A thousand bucks plus a fifty was paid to ourselves last month, which also contributed to the account showing red.

Of course, we had many usual expenses.  Mortgage, car lease payment, too much spent on groceries and dining out.  A nice Jewish deli purchase after attending a meeting in Skokie.  A $360 payment for my daughter to take ten horse riding lessons ($40 each for nine and tenth “free”).  To pass emissions, I had to take my old minivan to Car-X for a new this, that and the other.  $342.60 out.

More Energy Out

If you can get over the fruitiness of this concept like I have, I prefer to think of my family’s April budget as 10.9 in and 12.5 out, an exchange of my energy spent working on developing the economy of a municipality near my own for the goods and services of others.

I’m not the type of dude who could fix tubes, wires and knobs in my car engine, and I would assume that the mechanic would have a difficult time trying to attract a hotel to the community.  I cannot teach my son how to be a professional musician or my daughter how to control a certain horse while cantering, but I can help guide new restaurants through the regulatory maze that our community throws at them.

I could go on with these examples, but you get what I mean.  What I really am focusing on is trying to increase my energy in to better match the energy that goes out.  After all, I do realize that it is really dollars rather than watts and that we cannot constantly have more going out than in.

If we did not Pay Ourselves First and send over five grand to our son’s college last month and we were $1,588 in the red, then I would really be worried.  After all, you cannot constantly expend more energy than you have.