Real World Finance$

Talking Real Finances from a Real Person

Our New Health Insurance

December 08, 2008 By: Curtis Category: insurance

So, I finally made the leap this past week.  We are purchasing our own private medical insurance starting in January.  After getting notice from my employer that my current HSA plan will be going up in cost by 7% this next year, I decided it was time to move out on our own.

We will actually be on the same plan through the same insurer, but only on a private policy rather than a group policy.  Here’s the details of the 2 plans.


  • Deductible - $2,000/$4,000 (Individual/Family)
  • Out of Pocket Max - $4,000, 0% Coinsurance thereafter
  • Employer HSA Contribution - $500
  • Max HSA Contribution - $5,950 annually (before tax)
  • Current HSA Contribution - $3,250 (before tax)
  •  Monthly Premium - $634 (before tax)
  • Total Out of Pocket - $10,858 (before tax)


  • Deductible - $6,000 (Family)
  • Out of Pocket Max - $6,000, 0% Coinsurance thereafter
  • Max HSA Contribution - $5,950 annually (before tax)
  • Monthly Premium - $318 (after tax), $374 (before tax assuming 15% tax bracket)
  • Total Out of Pocket - $10,438 (before tax)

So, by contributing the max this next year to our HSA account, we will still save over $400 on our medical insurance thanks to - GE Money.  We’ll have around $1,200 in our HSA account at the end of the current year, so I expect to have a balance of close to $6,000 by the end of 2009.  That means, for 2010, we’ll have savings set aside to pay our entire deductible for a year should we need it and have access to another $6,000 for paying down debt.

To make the savings even better, I’m planning on actually putting my HSA funds into one of our E*Trade savings accounts at 3.3% interest during the year and make a gross contribution by year end to get the tax write off.  I may have to move some money earlier in the year to pay medical expenses for my braces though(which I finish paying for come May).  Either way, the 3.3% interest is a much better deal than the 1% in the HSA currently.

In reality, we won’t see much of a savings in 2009, but in years past that it should get considerably better.  The fact that we can spend our health care dollars this next year, saving for future years tax free, leaves me feeling very good about the solution.  That’s what we’re doing to save money on our medical insurance, what about you?

Progress Update November 2008

December 05, 2008 By: Curtis Category: progress updates

It’s that time again.  I got a chance to see how we are doing with just one month left to go this year.  Despite the stingy market, we have done pretty well.  We are under budget for spending this year and over budget on income (not a bad place to be huh?).  But let’s look at our current net worth, shall we?


  • Assets - just a slight increase this month.  Still, the problem seems to be mainly with the market, so it’s not too concerning.  Despite putting another $600+ in my 401(k) the total value is up by only $5!  It’s a little depressing if I think about it too much, but not so bad when I take a the long term approach.  We’ll shake this dust off soon enough and I’ll be better off for it.
  • Debts - Good progress here again.  It’s been a very consistent drop this year.  Our credit card debt started the year at like $54,000, so being close to breaking the $45,000 mark at the end of the year feels good.  Just regular payments are accelerating the rate at which that amount goes down.   I’ll also have to keep an eye out should the government actually do something about mortgage rates and they drop down to 4.5% as is being talked about now.  A streamline refinance would be a great solution for us if available.  We could either save $160 a month and put it towards other debt, or keep paying the same and pay the house off sooner.  We’ll cross that bridge when we come to it.
  • Net Worth - Obviously, we aren’t going to be getting back to a $0 net worth still this year.  Of course if our retirement investments had simply held value and not dropped like they have, we’d have another 4-5k towards our net worth and be much closer.  Still, we’ve made good enough progress and will continue down this path.
  • Look Ahead - December is looking to be a good month.  I should get paid 3 tims this month as I am currently scheduled to get paid on 1/1/09, so I’m assuming they will move that back to the previous business day and put it in the month (otherwise, January will get 3).  In addition, I will get that extra paycheck from teaching at the end of the month.  We aren’t spending a lot on Christmas this year as we are taking a vacation in early February.  In all honesty, I’m expecting to be within $10k of our $0 net worth mark before year end.  Next year is looking pretty good as well, thanks to about $40k of business loss of which 40% will come back to me.  That will give a nice extra tax refund I hadn’t really planned on and that will get applied to some extra debt payments.

Our Black Friday Adventure

December 01, 2008 By: Curtis Category: Gifts, finances, frugality

Yep, we were one of the crazy few up and about bright and early this past Friday.  After getting to be a little after midnight we were up again at about 3:30 in the morning.  We got dressed again and headed to the car and got to our neighborhood JC Penny just after they opened at 4:00.

We spent 30-45 minutes there.  We took advantage of the sales to stock up on our winter wardrobes (good timing since there was snow on the ground this morning).  We dropped a couple hundred dollars, and we hadn’t really purchased much in the way of clothes the last 2-3 months, so it was within our budget.  We have a vacation planned the first week of February, so we aren’t doing much in the way of Christmas this year.

The store was busy, but wasn’t really crowded.  The store near our home doesn’t have a lot of other shopping nearby, so the real die hards were elsewhere.  We got checked out, headed out to the car and then back home to bed by 5:00.  A little silly maybe, but that was the extent of our Black Friday shopping.  One stop to buy only clothes that we really needed anyway.  No impulse shopping, no fancy electronics, not junk that’s going to collect dust in someone else’s home.

Besides, we are working on doing a homemade Christmas this year and using our talents to make gifts for each other.  My wife has been having fun with her knitting machine and learning how to felt knitted items, so those will be some great hand made gift items that cost a fraction of what they would cost in a store, and they will be worth so much more because she made them.   Hope your Friday was as financially easy as ours!

When Last We Met

November 24, 2008 By: Curtis Category: budgeting, insurance

When I was on here last, I was on my way out the door to a trade show in Arizona for my new business. We had a GREAT 4 days and got several contacts for some potential clients that could make us very busy early on next year.

In the mean time, the proposition for funding of public transportation around here failed. I guess gas prices falling from nearly $4 this summer to under $2 by the time of voting (I actually saw $1.499 this weekend) made people seem less anxious to spend tax money on public transit. The system has since announced rate increases for January, and my bus line continues to be on the list for probable elimination come spring. Of course, I’m hoping that my other business takes off by then and I can just work from home when the time comes. Otherwise, I’ll need to decide on how to get to work.

Other than those things, we continue to watch our retirement savings dwindle with the market. I’m on the verge of increasing my contribution through my company. I also hope to wrap up in the next couple of weeks our new medical insurance plan. My employer’s plan for next year came out with a 7% rate increase. Doing the math, I can get my own plan (same plan from the same insurer) with a higher deductible for $350 a month less. By contributing the max to the HSA portion to cover the rest of the deductible and taking into account the tax benefits of both, I still end up with a couple hundred dollars a month in my pocket. I just need to make a few phone calls and get the plans finalized.

One final note here as well. My wife decided that the boy needed to get a better understanding of where our money goes. Our current budget gives us an average of $300 a week for groceries, gas and other expenses we pay with our check card. She decided that once he gets back from his dad’s for Thanksgiving, that they will start going to the bank every week and pulling out the “allowance” in cash. It won’t be quite as convenient in all cases, but she’s hoping it will help them save money for our vacation coming up in February. I’m looking forward to the experiment as well. I know we don’t always use that amount every week. We have many weeks we don’t spend nearly that amount and others where we make up for it.

Hope everyone is doing well getting ready for the Holidays!

Education Meeting

November 05, 2008 By: Curtis Category: education

I’m going to be stopping by a bank in my neighborhood this evening when I get home from work.  I’ll be talking with the bank manager about a possible joint-venture type of deal between them and our neighborhood association to offer free financial education classes.

I’ve met the manager on several occasions (they hold our association account) and I posed the question to him a few weeks ago.  He said they were in the middle of budgeting for next year and did have plans to put on some sort of community classes next year.  He said they’ve done some in the past and  would welcome the help in promoting and providing them.

Have you ever been to any kind of classes at a bank before?  If not, what kind of class could they offer that would make you show up?

Getting to Work

November 04, 2008 By: Curtis Category: budgeting

Part of a ballot initiative here today deals with increasing taxes to help fund our public transit system.  If this does not pass, it is almost a sure thing that my current bus line will be discontinued by the Spring.  If it does pass, there is a still a pretty good chance that service will at least be reduced.

If the line is cut altogether, I’m going to need to decide how I will get to work.  I’ve thought of several options and don’t really care for any of them.  We currently have 1 car for our family of three and it stays home with my wife and son during the day.  I currently work 4 miles from home.  It takes about 15-20 minutes to make it there through city traffic and all the lights.  My time actually on the bus is about the same as it takes the same path I would drive and makes very few stops after I get on and before I get off (there are a number of people on the bus, they just get on before me and get off after me).  My monthly expense for a Bus Pass is current $60 (and is likely to get raised to $70-75 by next year).

With that background information out of the way, here are my other options as I see it:

  1. Stick with riding the bus.  There is still a couple of other bus lines near home, but they don’t take a direct path towards my work.  My current total time with walking to and from the bus stops is about 30-35 minutes.  If I take another line, I will have to go out of the way, wait and transfer to another bus or Metrolink which would make the trip closer to 50-60 minutes long.  I’m not exactly thrilled about spending an extra hour every day away from home.
  2. Get a scooter.  With it being a short drive and city streets, a scooter is an option.  For about $1,500 you can get one that would suffice and get 80-90 mpg.  Still, I do live in St. Louis and we do get snow during the winter.  I’m not sure I’d feel safe on the road with other drivers during inclement weather.  I suppose a bicycle could work here as well, but again, I don’t trust car drivers on the streets during poor weather.
  3. Get a cheap, used car.  This would keep me more protected from the weather and would still keep up front costs low, but I’m not much of a mechanic for doing my own auto repairs.  Anything cheap and used at this point is likely to be pretty inefficient fuel wise as people are finally getting rid of them and moving to better fuel economy.  In addition, with state personal property taxes and license fees, there is an additional cost for the car (a scooter under 50cc engine size does not pay those additional fees or taxes).
  4. Get a new, fuel efficient vehicle.  If we did this, it would probably involve getting a new family car and me using the current Versa as my commuter vehicle.  It’s been getting nearly 27 mpg in purely city driving, so that would make me feel a bit better about gas, but I still have to deal with a new car payment, more insurance and the taxes and fees.
  5. Carpooling.  This could possibly be an option.  I do know several people in the neighborhood that work near me or at the same place.  Of course, that always puts you at the mercy of their schedule as well.  At least with the bus it is a fixed schedule and I know that going in it’s not going to change by the afternoon.  Also, I suppose I could offer a carpool to some others on my current bus if I chose to buy a second car as well.
  6. Force the wife and kid out of bed.  I could always force the wife and kid to get up early with me and take me to work and then pick me up as well.  They would only have to do that if they actually wanted to go out during the day (which is most days of the week currently, but they could probably rearrange things if they knew we were doing this).
  7. Green Car?  If I knew of a viable, affordable alternative electric vehicle, I’d gladly consider it, but I honestly don’t know of any.
  8. Any other ideas???

Any other ideas or thoughts on my alternatives here?  I need to come up with some sort of plan to try be prepared for this as part of our budget because it’s looking like a possibility.

Busy… but Good

October 31, 2008 By: Curtis Category: blogging, progress updates

This past week has been amazingly busy for me.  Work has been full of planning meetings as we are moving towards a conversion of our custom software to a new programming language and from a actual application to a web based function.  In addition, my own company is preparing to leave for our trade show a week from tomorrow, so we’ve got brochures to finish a booth that just got done and is being packed for shipping as well as our final draft of the patent application that just got filed today.

With all that going on, I just haven’t had much time to get in here and write any posts this week.  I have been working on our budget some and we have been doing really well at cutting back on our spending again.  We just filled the car up with gas last night.  It had been 13 days since our last fill-up  and we bought less than 9 gallons and paid less that $18 (it was $2.179 per gallon).  Of course, as we were on our way back home, we saw it for 2 cents cheaper a few blocks from our house!  It always seems to work that way.

I did a quick look at our net worth coming up on the end of the month and while our debts will be down again this month, our assets are down even more thanks almost entirely to the stock market.  Still no worries, we actually have some money back in the savings account now and I start teaching a new class next week and will have some extra paychecks the next 3 months.

Hope you all have a nice Halloween.  Hopefully next week won’t be quite so busy, but don’t count on it!

Self Fulfilling Prophesies

October 24, 2008 By: Curtis Category: economics

6 a.m. this morning, the alarm goes off and NPR starts playing.  Market news comes on and the first thing I hear is about how markets in Asia and Europe have gone down while I was sleeping.  Because of that, they are saying the US market is going to go down today too.  Guess what, it did!

I guess I’m still not sure why people continue to sell off stocks at such a loss.  What is everyone afraid of?  In reality, no one loses money in the stock market until they sell their shares.  Those who are in retirement and selling now are the ones hardest hit.  The rest of us have no reason to panic and sell.

Should the stock price of a financial institute on the brink go down?  Sure.  Does the stock price going down have any real effect on whether the business will survive?  Not a bit.  The company doesn’t rely on the price of the stock to do business.  A piece of stock was sold to the general public as a right to future earnings of the company.  If they company isn’t going bankrupt tomorrow, then they will have future earnings and the stock price should be worth something.

Should we use the stock market index to determine the value of our economy?  No.  If more people were taking a long term look at company profits, the prices of the stocks in general would reflect their value.  Instead, people are panicking about a single point in time and taking a sky is falling mentality.  We tend to do just the opposite when things are good as well.  Just because times are good doesn’t mean they always will be.  A more moderate approach is needed.

The current stock market downturn is nothing more than the pendulum swinging the opposite direction.  When times are good we buy buy buy because everything is going up and it’s always going to do that of course.  When times are bad we sell sell sell because everything is going down and it’s always going to do that of course.  It’s those people who have the sense to do just the opposite that are the true wealthy investors.  They buy low during panicked selling and happily sell at overinflated prices when everyone is euphoric.  These prices we see today aren’t truly indicative of the value of the companies, only the present panicked fear of those who think the sky is falling.  For the market to be truly making this big a decline there have to be 2 things.

  1. People who are scare and willing to sell their stocks to take a known loss now rather than an unknown in the future
  2. People who are willing to relieve the people above of their fears knowing they can sell things back to them at a much higher price in a few years when their mood swings the other way.

Hopefully, you can be part of the second group.

Our Efforts of Conservation and Savings

October 24, 2008 By: Curtis Category: budgeting, frugality

I’m sure I haven’t spent much time on this topic, but considering the recent post over at Get Rich Slowly about
How Low Can You Go? Cutting Back to Minimum I was a little inspired to spend a few moments on this.

I have to admit though, that my wife is the brains and brawn behind much of this. Here’s just a few things we have done over the past year to save some money and try to be more eco friendly.

  • CFLs - Yes, those good old compact florescent light bulbs. If you haven’t looked at these lately, they aren’t your father’s CFLs. There is a much wider variety out now that have a much softer light and you can’t really tell you’ve got a florescent light in. Plus, I LOVE that I haven’t had to change a light bulb in ages.
  • Cleaning Spray- My wife has found some recipies using regular old white vinegar (which is amazingly cheap) some essential oils (for scent) and some other stuff that I don’t remember to make a very effective general household cleaner.  She uses it for sinks, counter tops, floors and all kinds of other stuff.  Trust me, it’s MUCH cheaper than the $4 bottle of stuff you buy at the store.
  • Laundry Soap - Another home brew concoction my wife found a recipe for.  She uses Borax and Washing Soda to make powdered laundry soap at a fraction of the store cost.  It’s also more powerful because it doesn’t have all the fillers you find in most detergents.  Having had a college instructor who was once a divisional director for a large conglomerate that made laundry detergent, having fillers makes people need to put in more which makes them feel better about the cleaning.  Evidently our psyche is such that we think more soap is better, even if a little will do the job.
  • Curtains - My wife is nearly finished with this project as well.  The curtains in our bedroom for the last 2 years have been old bed sheets (attractive I know).  She had bought some fabric and made camo curtains for the boy’s room, but ours has still been lacking.  She dug out her boxes of fabric that have always been intended for quilting and has pieced together some beautiful curtains in her favorite colors.  She just needs to put on a backing to help block the light (she bought that yesterday when the fabric store had a 40% off 1 item sale) and then we’ll be all set with some wonderful custom curtains with stuff we mainly already owned.
  • Garden - It’s amazing what you can grow in such a small space in your backyard with a few bucks worth of seeds.  Our only fertilizer was a bag of crushed up, lump charcoal we mixed in when tilling the soil.  We were awash with wonderful fresh tomatoes, peppers and cucumbers.  Our counter top is also getting pretty crowded with acorn squash as well.  Oh, and I should mention, we rarely had to water the garden (though we aren’t on a meter, so it doesn’t technically effect our bill if we do).  We’d like to get a rain barrel attached to the garage so we can water with that next year as well.  To boot, we did almost zero weeding and things still grew just fine.

All little things you can do that not only save you a few bucks here and there, but they can also save the environment a bit as well.

Budgeting for Yourself and the Government

October 22, 2008 By: Curtis Category: budgeting

As I have started making plans for our budget for the coming year, I’ve thought back to some business accounting courses I’ve had (and taught).  There’s one crucial thing you have to remember when you get to your total budget:


If you spend less money than you bring in, then the remainder should go a budget line for savings.  If you are spending more money than you make, the remainder either has to come from savings or from new borrowings.  If you don’t plan those at part of the budget and realize the consequences, you are merely fooling yourself.

I did a quick search last week for the budget of the US Government.  I found this website that has the details and even has a ton of historical spreadsheets that you can download with details of past budget performance.  Being the number junkie I am, I naturally downloaded anything I could and I’ve looked through some of it.  First, it’s really a misnomer that we have a budget deficit or surplus.  A deficit just means we had to borrow more money to operate that year and a surplus means we were able to pay back some of our past borrowing.

The frightening thing is that, according to the data, the actual approved budget has only shown a surplus 3 times in the last 50 years (1960, 1999 & 2000).  And don’t get me started on the whole section of the data for “off-budget” dollars.  What the heck is that about?  Especially considering they have estimates for it going forward.  I can understand some new thing not being part of the budget some year, but don’t you know for next year it will be there?  Shouldn’t you be actually planning on that going forward?  Considering the off-budget portion is about 1/3 of the on-budget (or 1/4 of the total) I think someone should start consider budgeting for that revenue and expense.

Of course, in the end, our government is behaving the way of it’s citizens.  After all, it’s citizens that are running the government.  We spend and get in debt then raise a stink when the government does the same thing.

Here’s some tips for you to create your own budget at home.  We’ve done okay with ours this year in total, but individual categories vary wildly.

  1. Start by planning for your revenue (or income).  I like to be a little pessimistic here.  I’m a contractor and not a salaried employee, so I typically plan for me to actually work about 45-46 weeks a year and not a a full 50-52.
  2. Next, I’ve been using the 60% Budgeting method I described here.  I divide my expenses up into Committed Expenses (60%), Long Term Savings/Debt (10%), Retirement (10%), Fun (10%), and Short-Term Savings (10%).  It helps me focus on categories of budget rather than the minutia details when it comes to our performance.  I can always drill in deeper if something needs to be reviewed, but otherwise just stay at the top level if everything is okay.
  3. I’ve adjusted my percentages some as we are spending less on retirement and short-term savings in order to spend more for long-term savings (which is strictly debt repayment) at this point.
  4. Short-term savings, however, is still a very crucial point.  Don’t ever leave yourself with a budget that has 100% of your money accounted for.  You should always have a “slush-fund” of money you think you might spend, but isn’t allocated to anything.  This helps cover emergency car or home repairs  that may happen.  It should end up in a savings account in the mean time.

From a personal perspective, there is always the question of whether to do your budget as before or after tax.  Personally, I like to do mine before taxes so that I can try and pay as little as possible during the year (not getting a large refund later) and plan to pay off debt and put money in savings.  Others prefer to have higher taxes withheld and then budget for after taxes, using their return as a bonus to pay off things in a lump sum.

So, make your choice and sharpen your pencils!