Our 2015 Financial Outlook

Financial Outlook 2015

We just wrapped up a marathon 2015 budgeting session tonight — it was glorious. And by glorious I mean it was lots of “You seriously think we’ll be able to get by on [X category] with [X amount]? That’s just dumb.” Three hours of that. We’ll share the juicy budget details next week, but until then our attention is diverted to the long list of other financial to-do’s that loom large in 2015. The thing we love/hate about personal finance is that we’re never done. There’s always more to do, always ways to patch things up and get better. Very rewarding and totally overwhelming.

So here’s our financial outlook for 2015. We’d love to hear where we cross paths.

Review 2014 budget. The 2014 us is different than the 2015 us… understatement of the year. We’ll need to take a long, hard look at our 2014 budget and see what is and isn’t going to work with a baby on the way and that [enable sarcasm font] super tiny NYC cost-of-living adjustment [disable sarcasm font].

Set 2015 budget. After reviewing our 2014 budget, we need to set (check) and implement any necessary changes for 2015. We’re set on keeping our savings goals the same this year (thanks to backwards budgeting), so we’ll definitely need to tweak expenses here and there to fit that.

Finalize life insurance. We’ve been working on getting life insurance since Sally was born, and we’ve just about got it finalized. We’ve chosen a provider, an amount, and a date to have some random person come to our house to collect my blood and urine (that’s weird, right?) before we git’er done.

Max out Roth IRAs. We’ve told you the why behind maxing out our Roth IRAs each year, and we plan to do it again in 2015. We’ll need to shore up a few questions on non-income-generating (but mucho mom-awesomeness-generating) spousal IRAs, but no compliance worries there.

Set aside lump sum 529 money. We wrote about cheating our 529s last year, and we’ve started doing just that. But it’s time for lump sum #2 this year for our future scholar (that’s you, Sally… no pressure).

Decide whether we should start a 529 for child #2. Saving for college for Sally already seems like quite the investment for 2015. We’ll have to take a look at our finances and decide whether to hold out until 2016 for #2.

Finalize a will. We’ve started this process as well, but it still isn’t done. It’s really hard to find motivation to do something that’s so tedious and morbid. Whoever we bequeath our blog to, I pity you.

Figure out bookkeeping for side business. The time has come to start getting legit with our side income, which we’ll share more about soon.

File claim for Aflac. When baby #2 arrives, we’ll be going through the same Aflac claims process we did with Sally. Here’s hoping the payout ($4100 last time!) is just as good because NYC ain’t cheap.

File claim through health insurance. We probably won’t make money off baby #2, so we’ll probably be a little more careful with reviewing our labor and delivery claims to make sure we don’t overpay.

Add a dependent to health insurance. Easy in principle, but hard to remember in the new-parent-no-sleep-I-don’t-know-what-month-it-is stage. We’ll just have to send an email or make a phone call for this one and then see how much our monthly rates go up when we become a family of four.

Pay taxes. This one is just around the corner. Here’s hoping for a no whammies, big money tax refund this year.

And that’s it! If we can just tackle one a month, we’ll be done by… the end of 2015. What’s on your 2015 to-do list? I KNOW filing taxes is on your list, so at least we’re 1 for 12. Then again, you could be a principled tax evader which makes you way more rad than us. What’s on your financial horizon in 2015?

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  • Reply Rob January 3, 2015 at 7:43 am

    Hi guys, I see that you have done your 2015 financial planning for the year. Not to sound morbid or anything but, based on our past planning experience, have you also planned for this:

    (1) When you make your wills (notice – plural), you will probably name Sally and her “sibling-in-waiting” as your beneficiaries – right? However, will you also decide on an executor for your wills? (and ask that entity if they would be willing and able to take on that responsibility)

    (2) Have you appointed god parents for your children (in case anything should happen to you both)?

    (3) Have you thought about a Power of Attorney (to handle your financial affairs in case anything should happen to you both and make you incapable of handling your affairs properly)?

    Just a little more dull and boring parenting stuff to think about. 🙂

    We’ve already maxed out our Canadian RRSPs (since my wife and I are both retired and no longer earning a salary) and so we can’t contribute any more to them. We’re also contributing our max to our Canadian TFSAs this week for the year. Other than that, we’re just budgeting, house upgrade planning, spending within our means, minding the store in effect.

    • Reply Joanna January 7, 2015 at 11:45 pm

      Thanks for those tips! We need to look into all of that for our will when that time comes!

  • Reply TT January 3, 2015 at 7:55 am

    We had a whirlwind couple of days this week with our finances that should set us up for the next year. We just finished paying off all non-mortgage debt, which will mean a bit more coming in the door each month; topped off our retirement accounts and HSA for last year; asjusted 401k contribution for the coming year to use some of those dollars freed up from the loan payments. A will… adding that to the list. 529 plan is also something I’d like to do, but I’m going to wait until at least a few months in to see how the year is shaping up.

    • Reply Joanna January 7, 2015 at 11:46 pm

      Awesome. It sounds like you guys have set yourselves up for a financially successful 2015. Well done.

  • Reply Katie Ball January 3, 2015 at 8:24 am

    This post has my heart racing a million miles a minute!!! The life insurance, the IRAs, the 529s… help me Lord! Haha! I am approaching 30 this year and am really taking a hard look at our long-term investments. With my husband still in graduate school, I feel like we’re never going to get to a place where we can make a sizable contribution to these types of accounts. We are already so far behind! We also have student loan debt and I really feel like paying it off ASAP is necessary. Once he graduates and we are both working, we will have a much heftier income but that student loan debt is looming. Should we make paying it off the priority or saving for retirement the priority? I feel like we need to just start throwing money at our loans… but that means we won’t have quite as much for retirement savings.

    • Reply Joanna January 7, 2015 at 11:57 pm

      We felt the same way when we first started paying off our student loans. While paying off your loans should be the priority, you can still save for retirement. If you or your husband’s employers offer a 401k match, do it. That’s free money. Come up with a debt repayment plan that you both feel comfortable with, and then do what you can with whatever’s left. In the long run, having that debt paid off will open up the doors for you to save much more. But if possible, we are big advocates of still saving for retirement while paying off loans. The longer that compounding interest can compound, the more money babies it can make! Good luck!

      • Reply Katie Ball January 8, 2015 at 9:32 am

        That is a great point. I work for a University, so I am automatically enrolled in our state teacher’s reitrement (it takes 7.5% of my salary) and I have 403b plan, although right now my contributions are quite small! My “plan” once my husband graduates is to continue with the state retirement (he will work at a university as well) and up our 403b contributions a bit, but to really focus in on tackling those student loans. I agree that freeing ourselves of that debt will allow us more room to save for retirement in the future.

        I just keep seeing all these charts that show the difference in starting your retirement fund at 25 vs 35 and it freaks me out that we might be losing out on gaining interest. But… that’s life! Gotta work with what you have!

  • Reply Ann January 3, 2015 at 11:27 am

    Sounds like you guys are way on top of things! Can you do a post sometime about your Aflac insurance? What kind of plan it is, how much it costs, what you get, how it is different from health insurance, etc. I see the commercials all the time for Aflac, but don’t know much about it.

    • Reply Joanna January 8, 2015 at 12:02 am

      Hi Ann! Good questions… This post gives some more information on it: http://www.ourfreakingbudget.com/how-we-made-money-off-our-baby/

      I don’t know that my exact plan is still available (I’ve been grandfathered in), but if you speak with an Aflac provider and tell them that you’re planning to get pregnant, they will let you know the most beneficial plans for you. We pay $80/month, and the payout last time was $4100. It is a supplemental insurance in that you have it on top of your regular medical insurance, and you usually sign up for it yourself, not through an employer. With my specific plan, when I signed up, I had to wait at least 10 months before I had a baby. In other words, I just couldn’t already be pregnant when I got the plan. We will do a post on this when we’re faced with all of it with the second baby, but hopefully this information is helpful in the meantime!

  • Reply Mrs SSC January 3, 2015 at 1:14 pm

    That is great you are taking time to set up a will. I am shocked at how many people with children don’t set up a will. Even if its just a boilerplate style will, it is better than nothing, and will save your family so much hassle and fighting if the worst ever happened. My company offers a free will service (for basic wills) and still so many of my coworkers don’t make one… it is a hard thing to think about, but so important to make sure your children are taken care of.

    • Reply Joanna January 8, 2015 at 12:03 am

      It’s no fun to think of the worst case scenario, but totally worth it to be prepared just in case. Pretty awesome that your company offers it for free!

  • Reply Alysia @ Slim Sanity January 3, 2015 at 6:55 pm

    We’re getting serious about our debt snowball this year. we got our first (small) loan paid off last november, and it was so liberating! we will have another 4 loans paid off by march. Even though we have a LOT more to go – we’ve got a great plan in place!

    • Reply Joanna January 8, 2015 at 12:04 am

      Way to go! We loved that about the debt snowball… the little victories along the way. You guys are setting yourself up for major success. Well done.

  • Reply Tarynkay January 3, 2015 at 8:10 pm

    The weirdest part about having the random life insurance person come to your house to collect blood and urine is that you aren’t allowed to eat for a number of hours beforehand. So not only is this stranger taking your blood and pee, you are also all woozy. It was a very strange experience. But life insurance is worth it! Just remember that minors cannot inherit, so you will need to roll all of this into a trust administered by a guardian or cook up some other work around if you want Sally and Co. to have access to the funds before age 18. In my experience, life insurance salesmen do not warn you about this.

    • Reply Joanna January 8, 2015 at 12:12 am

      Oh man, Johnny was so hungry. And he hadn’t had caffeine in two days, which was a record for him. And he had a killer headache and couldn’t take anything for it! I think we were both relieved when his life insurance home interview was OVER.

      And great advice on making sure our kids would have access to the funds. We’ll definitely be looking into that. Thanks!

  • Reply Courtney January 3, 2015 at 9:29 pm

    Thank you for writing this blog. My husband and I are in the process of saving for our first home- something that will hopefully happen this year- and since reading your blog we’ve gotten more serious about our personal finances. We set a savings goal for the year (which we ended up exceeding due to some lucky circumstances) and have set up 529s for both kids and a 401k. I know we still have more we need to do and a mortgage will bring up lots of other fun budgeting restrictions for us, but thank you for helping us get motivated and helping us find a starting place to feeling financially secure!
    Also- since we’ve had our second baby we’ve been on 3 different insurance plans with 3 different companies and none of them have charged extra for our second child- it has just been a “family” policy, whether you have 1 kid or 10- adding the extra kid did not change the premium- so maybe your policy will be the same?

    • Reply Joanna January 8, 2015 at 12:21 am

      Awesome, Courtney! It sounds like you guys are on a great path. And how exciting to be saving for your first home… I’m so excited to buy a home eventually, and it’s fun to at least be looking toward that day!

      We were really hoping our insurance premium wouldn’t go up with kid #2, but it’s going to for sure… about $100/month. Yuck! But we’re planning for it now so hopefully it won’t be too bad. And thank you for your kind words! It means a lot.

  • Reply Jayson @ Monster Piggy Bank January 5, 2015 at 6:29 am

    Your 2015 financial outlook is impressive. You’re really owning your year! Me? I just started to talk to my life insurance provider so that I can get some money for me to maximize in other investment. Yesterday, I increased my contribution to 401(k) plan. This year, I have set smart goals, which is really my first time. I hope it or I can make a difference.

    • Reply Joanna January 8, 2015 at 12:22 am

      Awesome, Jayson! It sounds like you’ve got a great plan set up. Here’s to a great 2015!

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