November Budget

Main objective:
For November, SCB and I are going to try and get our emergency fund back to the full 6 months of expenses. Right now we are about $550 away from bringing it back to our comfort level... and with the money SCB brings in, we should make it. We may come a little short since we want to buy our chest freezer this month too, but were hoping we can do both.

Budget Changes

• First, we get to add back in our $100 vacation savings fund so we can begin to save up for a trip to visit Illinois while his parents are serving a mission there for the church.
• We will keep our pocket money to $80 ($40 each in cash)... and keep $100 towards date nights and eating out. 
• Its three paycheck month for me so my Roth IRA will be getting a substantial chunk of change. Since I wait and just dump the full $5,500 into the fund the last week of Dec or the first week in January, it will be nice to see the balance in my savings account jump up... and even nicer when I have the full balance ready to go.
• Since we no longer pay SCB's health insurance out of pocket, we have a bit more money floating around from my paychecks. We have decided to list it as discretionary money for the month ($201.08). 
• Why so much? We want to starting to move towards living off my income entirely and saving 100% of SCB's income. Anything we don't spend from our discressionary fund we will start to carry over to the next month. This is also why we won't be listing additional retirement savings under SCB's paychecks anymore... because its all going to savings come January first (Nov and Dec will be our last two months to get any major spending projects done for the year).

Looking Forward to 2014
We finally took the time to start talking with some financial "friends/advisers" to see what investing and building wealth will look like for us over the next 3 to 5 years.

As we contemplate the idea of starting a family and getting a larger place to accommodate that family, we have also been contemplating the idea of SCB becoming a stay at home dad... and we want to be prepared for the changes that would be associated with that decision financially, should we decide to implement it down the line... so for 2014 we are going to try to live off my income, and save SCB's. Here's our game plan:

1. Max out my Roth IRA every year like we have been with my income. ($5,500).
2. Keep $12,500.00 liquid in our money market account as a 6 month emergency fund. Anything more just looses too much money due to inflation and poor interest rates.
3. Open a new Roth IRA for SCB to act as a temporary savings account/retirement account and aim to put $5,500 a year into it. 
1. The idea here is that we would pull the contributions out (tax and penalty free) when and if we upgrade our living space... but this option also gives our money the ability to earn dividends and grow in mutual funds... or stay in the account if we don't end up needing it. 
4. After both Roth IRA's have been funded, we will pay down our condo since we will need to sell it to be able to afford a larger place on just one income... and this provides us with a risk free return on our investment of 3.75%.

Why so little risk?

We looked into more investment type account options, like a brokerage account or putting more money into my 401a, but since we need the money in five years or less, investing in a 401a would lock our money up till retirement, and a brokerage account is a bit risky for our time table, which is around two to three years. If the market is bad, we could loose in a big way... but just dumping the money into savings isn't smart either because the interest rates are horrible.

At least this way we will expose some of our money to the market via the new Roth IRA... but if its a bad few years, its not so much that we would ruin our financial standing for the future because we could always just stay in our condo for a little longer. It wouldn't be ideal, but it wouldn't not be an option either. 

As for paying down our condo, I look at it as a win win. We will have more equity when we sell, which will help us afford something larger if home prices continue to rise... or we will have the equity to refinance it back out to a 30 year mortgage to reduce the payments and keep it as a rental unit if we can swing the new home purchase on our own and wait for the market to come back to sell it.

We can always reassess our plan at the end of 2014, but between trying to max out a Roth IRA for SCB for both 2013 and 2014 in 2014 (we have until march 30th to max out for 2013) that's a full $11,000 before we start to send a dime extra to our mortgage. We may even pull some money out of our emergency fund to fund the additional Roth IRA for 2013 I'f we are short since that has a fast approaching deadline.