Friday, May 14, 2010

Off Topic - Budget Crisis

When we bought our place a year ago, I put together a monthly budget to make sure we could afford it on one salary, should one of us be out of work for an extended period of time. At the time it seemed doable. Now, I am extremely unhappy at work, and have been looking at our family budget from a new angle: "Can I afford to quit?"

So inspired by today's post on the Juggle Blog, and the State's finances.....I am seeking some budget advice. Before I start in, let me preface this by saying, we have really tried to find a financial advisor, but have not had any luck. Advisers tend to fall into several camps, they only deal with folks with high net worth (focus on fewer clients), they work on commission only (we don't have investments outside our 401ks/IRAs), or they don't follow up with you.

Ideally I would like to get answers to questions like, "Are we saving enough for retirement?", "Do we have a big enough cash cushion?, " "How much life insurance is really necessary?"etc.

Looking on the web, I find lots of advise, but none of it seems that realistic. Do people really have that big of a cash cushion, or that much life insurance? (given that the personal savings rate in this country is so very low).

I have attempted to go it alone, and created a large spreadsheet for retirement projections, factoring in inflation, SS earnings, contributions, and withdrawals. It all seems reasonable, however because retirement is so far off for Mr. BT and I, the projections are especially sensitive to the assumptions due to all the compounding, so the exercise becomes almost meaningless.

If I were to quit, we would no longer be able to save for retirement, and we wouldn't have much extra cash to start saving for our kids college education. On the other hand, we do have a substantial nest egg by national standards (we have been putting away the max contribution in our 401ks for several years now). Mr. BT and I used a combination of loans, work study, and scholarships to pay for our educations.

So any words of wisdom or advice? I'm really not satisfied with any of my options at this point.

Or perhaps a financial advisor to suggest. The irony in all this, to get a financial advisor, you have to have a lot of investable assets. But how do you get a lot of investable assets if you don't have a financial advisor?

Friday, May 7, 2010

Are we there Yet?

Dare I Say Bottom? I know we have had a lot of fits and starts, especially in the spring time, when you typically get a little bounce, but the market around here is really beginning to firm up (of course it's hard to say with all the tax credits flying around these days).

This winter things were looking pretty bleak for my beloved neighborhood, almost 10% of the homes were up for sale, several still left to be sold by the builder, some short sales, a couple foreclosures etc. When I checked this morning, all but one are now pending sale. That's a pretty dramatic turn around.

And as much as I would love to think everyone else has discovered how wonderful our little community is, I know our situation is not unique. Melissa Data average prices in El Dorado Hills hit a bottom in November (09), and have been slowly (but erratically) climbing since then. Similarly, Folsom has had 3 months since their last low (back in Jan 10). And year-over-year sales have increased for both those zips since December 2009.

The fact that price and quantity are beginning to move in tandem, which hasn't happened consistently since Mid 2005, is a big deal in my book. After 2005, prices were still increasing, but sales started dropping. In the last year or so, sales have been increasing, but prices were still dropping.

So what do you think....are we there yet?