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Archive for October, 2015

Our new loan

October 12th, 2015 at 07:51 am

We were approved for the new loan on Thursday, and I returned the signed paperwork on Friday. Our new loan is $38,000, and will be used to pay off my Aunt and my mother and father-in-law for loans they made to us to renovate our house several years ago.

I wanted to clear up one thing that, according to a comment I received on my previous post may not have been clear - We have been paying both my Aunt and my in-laws with monthly installments of $500 and $600 respectively. We will use this loan to eventually pay them off completely.

DW suggested we pay my aunt, rather than her parents first. It makes no difference to me, so we'll do that. Our Oct. 14 payoff to my aunt is $12,273.04. The check is written, and will be mailed once I receive confirmation that the money is available. Columbus Day is throwing things off. Once we receive the final bid for the roof and siding on the barn, we'll make a payment to my in-laws. Depending on what the bid is, I think I can make a payment to them of about $10,000. We're waiting for an Amish crew to return the bid for the roof and siding, and they don't return bids as quickly as "English" crews, but their work is cheaper.

Someone else asked through a comment on here whether this is a HELOC or not. It is a HELOC right now, and can be for up to a year, with only quarterly interest payments due. After a year, or whenever we decide within that year, we'll amortize it for five years.

During that time, of course, we'll continue to make monthly payment to my in-laws. So, I might just wait to amortize the new loan until the entirety of their old loan will fit in. It depends on the final cost of the barn renovation, but I think I can do that by next March or so. We'll see.

It does feel good to be able to 1). pay off my aunt, 2.) make a significant payment to my in-laws, and 3.) get moving on this barn renovation.

The guy we're hiring to do most of the work on the inside also runs a lawn care business, so he said he'll be busy with that until the end of October. The water line out to the barn and hydrant can be done as soon as the plumber can fit us in.

I ran the numbers - Barn renovation loan

October 7th, 2015 at 09:01 am

Regarding my post yesterday - I ran the numbers on a relatively small loan from the bank, and not paying my aunt's loan off right away versus maxing out the loan from the bank, and paying my aunt off right away.

The difference is $1,210 more paid in interest over 5 years. Or $242 per year. Or $7.95 per month.

To be clear - my aunt is not badgering me for the money. She is not rolling her eyes when we go on a vacation, or buy something for the kids. In fact, she was absolutely thrilled when we borrowed money from her to renovate our family's farm house.

But, my heart tells me that we shouldn't be beholden to her. Now that we have a way to pay her back, we should. It's the right thing to do.

When we borrowed the money from her, our options were limited. Conventional borrowing from a bank was not an option. In fact, I let her know that we would pay back the money as soon as we were able. We will soon be able to pay the money back.

DW and I will discuss. I've made up a handy-dandy color coded spread sheet (DW is a visual person) that outlines each of the options.

More on this later.

Flexible Spending Account

October 7th, 2015 at 06:43 am

I completed the open enrollment process for my benefits at work. I maxed out my Flexible Spending Account to $2,550, because of DD1's braces. We were woefully short this 2015 year because, again of DD1's braces.

The Flexible Spending Account period runs from Jan 1 2016 - March 31 2017. On Jan 1, our balance on the braces will be $1,580, so that leaves $970, or $80.83 per month for other out of pocket medical expenses in 2016. That should get used up, and if it doesn't we also have Jan - Mar of 2017 to get it used up.

It's kind of unsettling to commit to having more than $200 per month withheld from my check, but that reduces my W-2 income, so it's definitely worth doing.

Also, my FSA plan allows me to pay for expenses even before the money is deposited to my account. So, my plan is to pay the entire braces balance in January with my FSA card. So I won't have to worry about monthly payments to the orthodontist.

Barn Renovation Update

October 6th, 2015 at 07:57 am

I've blogged a few times about our barn renovation project.

We did get a bid from our plumber - $1,400 to dig a 170 ft. trench from the house to the barn, run a water line from the house to the barn, and hook up a hydrant at the barn. The total projected cost is about $16,000.

The first time I blogged about this, a handful of you suggested we have our kids pick up some of the cost, as the renovation is really about keeping their 4-H and FFA projects going. Between the four kids, they have about $7,000 is savings. What we've decided to do is borrow some money from the kids, and pay them back over time at no interest. DW and I both think that's the right thing to do.

We have applied for a loan for the balance of the costs. I hope to hear back about loan approval this week. Here's a Cliff's Notes (do they even use those anymore?) version of our loan.

Some of you who have been here for a while may remember that we took out loans from two family members to renovate our house ago. Even though we have been paying on the loans faithfully each month, it's not a great situation owing money to family members. We would like to get one or both of them paid off as soon as possible. We owe my mother and father-in-law about 17K, and my aunt about 13K.

The loan we've applied for is up to 38K. The original idea was to use that money to pay off my in-laws, and use the balance to renovate the barn, and borrow only what was needed - about 33K - we applied for the loan before we had many bids in for the renovation. The loan would be amortized for either 5 or 6 years, depending on how much we actually borrowed. Paying off one of the loans would also free up some cash flow.

Now that we've had this idea about borrowing some of the money from the kids, it seems to me that we can pay off both sets of family members, and also renovate the barn.

Yes, that will cost us interest, and we will be extending the total loan out longer, but we will feel better having my in-laws and aunt all paid off.

So, for right now, that's the plan.

I paid off my truck

October 2nd, 2015 at 06:34 am

I paid off my truck with my October 1 payment. The final payment was due Jan. 1, so I'm three months early - a 36 mo. loan paid back in 33 mos.

I'm happy to have my truck paid off. I really am. But, I've discovered, or maybe re-discovered something about myself.

When the payment went through, I thought to myself about how it will be another almost 2 1/2 years before my wife's mini van is paid off. And that my truck will need to last AT LEAST that long before we can replace it. And what if it doesn't. What if it breaks down tomorrow. We're screwed.

OK, maybe all of those thoughts didn't come into my head that rapidly. But still, that's the basic flavor of what was running through my head. Instead of being completely happy about having my truck paid off, I was worrying about having this van paid off in time that we wouldn't have two $300+ payments at the same time.

I need to be worrying about something at all times. My grandma P.'s contribution to my psyche, I guess.

Truly, I am happy about having the truck paid off, and no, I'm not really all that worried about my truck taking a crap.

But, that thought was still there, and that says something about my approach to life.