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2015 Financial Goal Update

January 4th, 2016 at 08:14 am

About a year ago I set a financial goal for the 2015 year. My goal was to gave a 250K net worth by the end of the year. I missed that. By a long shot.

My net worth a year ago was $227,074. My net worth today is $227,948. An $874 increase.

Of course the stock market is tanking, that's a big factor.

I've also taken on more debt - to renovate that barn that I was talking about last time I was actively blogging, and braces for DD1, that I blogged about in April/May.

Also, when we were lining up the barn loan, our house was appraised. It wasn't fully appraised. We got what is called a BPO - Broker's Price Opinion. That's a drive-by appraisal.

I had our house listed on my balance sheet at 85K, and the BPO came back at 80K. Who knows, if the broker had walked through the house, he might have been closer to an 85K number, but to "official" number was 80K, so I changed my balance sheet to match that, so that's a 5K difference.

I wish I had recorded and saved what my retirement fund balance was a year ago. I have no idea, but I know it is less than it was a few months ago.

I suppose it only makes sense to set my 2016 goal back at 250K for 2016. We'll see how I do this year.

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.

Response to my request

February 26th, 2015 at 01:37 pm

After my post yesterday about the negative entries on my credit report, doingitallwrong suggested I send a letter to my creditors asking for a goodwill removal of the negatives from my credit history.

I have an ongoing relationship with one of the creditors, our credit union, where we have taken out two car loans over the past three years. I logged on to the CU site, and sent an e-message asking if they would remove the negatives. I based my letter on a template found on a link provided by doingitallwrong. Here's the response I received:

Thank you for contacting Credit Union via eMessage. We appreciate you taking the time to message us with your request. We greatly appreciate your membership with Credit Union and are happy to hear you have had such a positive experience with us. Although I am able to confirm you have had a very positive payment history with us in the recent past we are not able to reverse or remove late payments reported to the credit agencies unless they were reported in error. If the payments were reported late and it was not the result of an error on our part we are obligated to report them and are not able to remove them. Although we are not able to accommodate your request and remove late payments from your payment history, I would like to assure you that your credit history only reflects the last two years of your payment history. As the payments referenced in your previous message were between the years 2008 and 2011 they should no longer be reporting on your credit. If you have any additional questions or if we can assist you with anything else you are always welcome to contact us …

I struck out.

There is one other CC that has reported negatives. I cancelled that card a long time ago. I have no idea what my account number was. I do have a mailing address that appeared on my credit report, but the above mentioned credit union at least has the incentive of keeping my happy because of my continued business. The other company (Bank of America) really has no incentive to make or keep me happy. So, I doubt that I'll send a request to them.

There was really no harm nor foul in sending the request to the credit union.

Credit Maintenance

February 25th, 2015 at 07:23 am

I pulled my credit report yesterday. I don't pull my report often enough. I know that you can get a free report form each of the three companies once per year. So the best strategy is to pull each of the three every four months. I just don't do it often enough. It's probably been 12-18 months since I last pulled it.

What I've done is recorded the date and reporting company in the same spread sheet where I keep my budget, balance sheet, and amortization schedules. That way I can keep better track of when and where I pulled my last report, and keep on a better schedule.

I have a total of 17 negatives, from two credit companies on my report. The first has a string of 11 negatives ranging from May 2009 - March 2010, where I was 30 - 120 days past due. The other has a string from August 2008 - November 2008 where I was 30 - 90 days past due, plus March 2010, and October 2010 where I was 30 days past due. Note that I started becoming active on the SA forums around October 2010.

If negatives stay on a report for seven years, my first string of four will start dropping August through November this year. May of next year through March 2017 will see the end of the entire string from the other card, and the last negative will drop off October 2017. But, that's a long time from now.

According to my current Discover card statements, my credit score hovers between 720 and 725 any given month. It will be interesting to see how my score comes in as these negatives drop.

I also did something I should have done a long, long time ago. There were three open accounts listed that I don't use. One was a credit card I no longer use, one was a store card I opened when I bought a suit at a department store, and the third was an Amazon card I opened two Christmases ago. I called today, and had each of those accounts closed. We'll see what that does to my score.

This credit report monitoring is something I think I can and will keep up on from now on.

February net worth update, tax income and braces.

February 16th, 2015 at 08:53 am

I know it's mid month. Actually a bit past mid month, but I just figured my February net worth - it's $229,440, a $2,366 increase over last month.

We filed our taxes this weekend, and I can't remember our refund amounts, but it's around $3,000 federal, and $1,000 state. We still have that federal adoption credit working in our favor, but I'll plan on adjusting withholdings.

DW is still working on that freelance project. She hopes to have it finished by the end of the month. Once she's finished, she can bill for another $5,600.

It looks as if DD1 needs braces. That would be a $5,000 bill. If she gets them, we would probably time it so that she got them right after DW has received her freelance income.

Our dentist has fairly strongly recommended that she get braces. It's his opinion that teeth will touch each other, and cause future cavities. We took her to see an orthodontists, and oddly, he wasn't as strong in his recommendation for braces. He seems to think it would be more for cosmetic reasons. So, I'm not sure what we'll do.

We can easily wait for the freelance income, but there are lots of places for that money to go. We can get on a no interest 18 month payment plan. If we pay up front, we'll receive about a $200 discount.

DW had braces as a child, I did not, but my sister did. My teeth are a little crooked, and I could have had some cosmetic benefit from braces (I think). And it's clear to even me that DD2 will need braces after more of her permanent teeth have come in.

So, again, I'm not sure what we'll do, but we probably won't make any decisions until April or May.

Does anyone have kids who were on the borderline of needing braces? What did you decide?

What is the value of my name?

January 23rd, 2015 at 06:55 am

We bought a new-to-us vehicle last month. A 2012 minivan with a bit more than 3,000 miles. So, it's still under the manufacturer's warranty.

We bought it for a good deal. In fact, our lender has informed us that we paid about $1,000 less than the National Automobile Dealers Association (NADA) value.

For the past three weeks or so, every third day or so we've been receiving cheesy form letters in the mail telling us that our manufacturer's warranty is about to expire! We had better act fast, and purchase their extended warranty!

It's apparent to me that this dealer has sold our name to these cheesy companies. It makes me wonder just how much our dealer sold our name and address for.

It's a little bit annoying, but also a little bit funny. It's also sad, because there would be no value to selling our name if the tactic didn't work on a certain number of people.

It would be tempting to add that to the negotiation next time we buy a vehicle - "I'll pay $XX,XXX for this car with the understanding that you won't sell my name to any cheesy companies", for example. Not so much because of the burden of getting these mailings, but more of a "I know what you're going to do" type of a thing.

And I guess, if we were able to buy the van for less than NADA because our name was sold, then so be it. It's not a really big deal. I am sad that it apparently works on so many people, though.

New Year Financial Goal

January 5th, 2015 at 09:52 am

Happy New Year! It's Jan. 5, so maybe I'm a bit late.

I'm not sure if I've ever set a New Year goal in this blog. After I post, I'll check the archives to see for sure, but I don't think I have.

My financial goal for this 2015 year is to end the year with a $250,000 net worth - a quarter of a million dollars.

My current family net worth is $227,000 - 23K short of 250K. To reach the goal, we'll have to increase net worth by about 2K per month - or $1,916.67 per month to be a bit more precise.

We currently have three debts - house, mini van, and pickup. We'll be making average principal payments of about $1,080 on the house, $300 on the van, and $140 on the truck. That's $1,520 average monthly decrease in debt. The rest will have to come from growth in retirement investments. Between my employer and personal contributions, I invest about $780 per month into retirement.

Between investment and debt reduction - that's about $2,300 per month increase in net worth. As long as the stock market doesn't tank, I should reach my goal. We'll see.

Some of you my disagree with how I calculate net worth. I include home equity as well as vehicle equity, and even include $3,700 for household items. Basically, if we were to sell each and every item my family owns, how much would be left.

I do estimate home and vehicle equity low.

A Fresh Start

December 4th, 2014 at 09:28 am

I'm going to kind of start this blog over, right where I started it in April 2011. At or near the beginning of each month, I would list my debts. I set different debt reduction goals for myself along the way, and I tried to use this blog to keep myself accountable. My situation isn't nearly as dire as it was four years ago, but that formula seemed to work well.

Last time I reported in the blog, about a month and a half ago, Oct. 24, my credit card balance was $4,361. The current (not really current, I just now made the payment on-line, and it won't post til 5:00, but I'm going with it as current) balance is $4,149. My total debts are (debt, interest rate, balance)

Mortgage 2.25% $40,037
Truck 3.99% $4,568
Credit Card 19.99% $4,149
Total Debt $48,754

My only goal at this point is that I owe less on each account than I did the previous month.

I'm still toying with the idea of transferring that CC debt to a 0.00% intro rate card, but I'm not really sure I want to play that game again.

Last time I blogged, I mentioned a freelance job my DW had. For the first time in about 12 years of serious freelance work, DW has been stiffed for payment - about $2,000. The worst part of it is that she had recruited her sister, and a friend of ours from college to work with her, and they got stiffed too. Live and learn, but really after 12 years, it seems like a pretty good record.

DW's Freelance Project

July 14th, 2014 at 06:07 am

DW was fully and gainfully employed until DD1 was born nearly 12 years ago. She was an agricultural communications major at MSU, and she worked in the communications/writing/PR arena. She left the world of W-2 employment when DD1 was born, and took on the full-time task of raising children.

She began her own freelance public relations business probably six or eight months after DD1 was born. She would work on her projects when the baby, then babies were sleeping, or when I was home to care for the children. Most years she earned somewhere between 8-10K in income, after expenses. In fact, it was a freelance check that catapulted us into the world of finally addressing our debt problem. She received a check for about 11K in October 2010. We were woefully past due on a hand full of bills. We also had a mountain of debt. That 11K check allowed us to get current on all of our bills, and also take a big chunk out of our highest interest credit card. In fact, looking back, it was kind of funny how it worked out. We were past due on our highest interest CC. I think it was a day or maybe two after we got the freelance check, we got a letter in the mail from that CC company. They were offering us a deal. The int. rate on the card was, I think, 32.99%. The offer was that if we paid the past due amount, which I think was around $450, the company would cut our rate to 16.99%. We mailed the check that very same day, and our int. rate was cut nearly in half.

Once we were caught up on all of our past due bills, and got that CC back to current, there was a glimmer of hope that we could finally tackle this debt monster. I started posting to the SA forums, and six months after that, I started blogging here. Many of you know a lot of the rest of the story.

However, once we had four children under our care, DW was much too busy with children, and she stopped looking for freelance work, and that 11K check in 2010 was the last of of any freelance work, until a couple months ago.

One of DW's former direct supervisors works for another company now. He has a project that is just about perfectly suited for DW. He searched her out somehow, and and talked to her about this opportunity. The job involves interviewing people in the food industry - people who grow, process, and distribute food, as well as representatives from the state department of agriculture, and university agricultural researchers and educators. Once these individuals are interviewed, she will write reports about what they said.

The job is much too big for her to handle on her own, with her other responsibilities, within the time frame that it needs to be completed. So, she recruited one of her sisters, and a friend from college to help out. But, her part will be worth 7K. All of the pieces are in place, and she began working on the project this weekend. Our boys are in summer school this week, and our girls have bible school this week. So, she'll have about three hours each morning to work on the project. I'll give her the time she needs in the evenings, and weekends. It should work out well.

Although we're not behind on bills like we were in 2010, we still have a list seemingly a mile long for this money. And, I think she has an eye on a new printer for home. It does make sense to me that she use some of the freelance money for equipment used in her freelance business.

It also makes DW happy to get into the old groove of things for a while, too.

Another Way Too in Depth Financial Calculation

May 21st, 2014 at 08:39 am

The only non-mortgage debt we have right now is the loan on my pickup. I bought the (used) pickup a year ago December, and borrowed $12,750. I took out a 36 month loan. The current balance on the loan is $5,784.59. Most months I've made extra principal payments, especially after our CC debt was retired last August.

According to KBB.com, the value of the pickup is just slightly more than $10,000 ($10,018 to be exact). The L/V ratio is 0.577. Because I am prone to wondering such things, I calculated what I would owe, and what the L/V ratio would be if I hadn't made the extra principal payments, or if I had taken out a longer (48 month) loan.

If I had just made required minimum payments on the 36 month schedule, the current balance on the loan would be $7,271.03, and the L/V ratio would be 0.726.

As far as the hypothetical 48 month loan goes, I'm not sure what the interest rate would have been if I had asked for one. My 36 month rate was 3.99%. Maybe they would have charged more, maybe not. I'll stick with a 3.99% 48 month loan. In that scenario, making only minimum payments, I'd owe $8,723.56, and the L/V would be 0.871.

I've gone this far, I might as well figure the 60 month loan while I'm at it. I'll use the same interest rate, and assume minimum payments. At 60 months, the current loan would be $9,594.32, with an L/V of 0.958. That's not quite underwater, but close. If I hadn't have made a down payment, it would be underwater!

That's pretty convincing evidence for me to shorten the loan period, to make a down payment, and to pay ahead if and when you can.

Possible part-time job for DW

April 9th, 2014 at 10:18 am

As some of you may remember, my family produces maple syrup.

Three years ago, the state of Michigan made grants available to producers of specialty crops - maple syrup is a specialty crop. When DW was in the work force, her job was as a public relations professional. When the specialty crop grants were announced, she put together some ideas for promoting our product, creating awareness, educating new producers, etc.

After she had put her ideas together, but before the grant paperwork was due, we took charge of our second foster child (now adopted as DS1, who is older than DS2, but we had DS2 in our home first) and she became very busy, and has been very busy for the past three years. So her grant ideas were not forgotten, but they were put on the farthest back of back burners, filed away in her computer.

Fast forward to yesterday. It turns out that a member of the Michigan Maple Syrup Association has been working on applying for the same grant, and her basic ideas are very similar to DW's. The lady who has been working on this grant was seeking input from a handful of producers from around the state - for whatever reason, she contacted my dad. My dad asked DW if she could help him out. She said, of course I can.

So, DW and my dad met for a couple hours this morning. DW took her outline, added some details, and they hammered something out. She attached it to an email, sent it to the grant writer, and headed out the door to pick our boys up at the Autism Clinic they've been attending for about a month.

As she was driving, she gave me a call to talk to me about how the morning had gone. While we were talking, we both heard that annoying call waiting pause. When she hung up with me, she checked her voice mail, and called me right back.

The person who had called was the grant writer. And in her voice mail, she said how impressed she was with DW’s ideas, and that she was planning on writing into the grant funding for a ¼ time position to manage the grant, and she was wondering if DW would entertain the idea of managing the grant.

Wow. DW asked me what I thought of the idea. DW is a SAHM. We have four kids. She home-schools the girls, and the boys have special needs. She already keeps herself busy. What we both decided is that she has about two hours a day October through February when our girls are at swim practice (and I have the boys). It might work.

I’m not sure what kind of money ¼ time means – but if you figured a base salary of 32 – 40K we might be talking about 8 – 10K. Maybe a bit more, maybe a bit less. It sounds intriguing and exciting.

Of course, the grant needs to be funded first. And, DW will need to do her own due diligence to find out if the proposed job can be organized in a way that will work for her. We’ll see, but it sounds kind of neat.


March 27th, 2014 at 08:59 am

Long story short, DW is borrowing her parent's 2013 Chrysler Town & Country minivan for a couple of days. She will be hauling several pre-teens to Lansing tomorrow, and their van is roomier (and nicer) than ours is.

I drove our girls to an event in it last evening, and I'm telling you - this thing is loaded - leather heated seats, digital everything, touch screen radio, DVD - front and back, back-up camera, automatic opening side and rear doors, it rides like a dream, etc. All are luxuries you can get used to. All are temptations.

Before you ask, yes, they paid for it in cash. And they will drive it until it nearly dies.

Sometimes I wish I didn't even know those luxuries existed.

I'm guessing we'll have our van for about another year and a half. Then, we'll be in the market. And, we'll remain true to all of the guidelines I've learned here on SA - finance for no more than three years, with monthly payments not to exceed 10% of take home pay. Actually, I will shoot for monthly payments of more around 6-8% of monthly take home pay. But, yes the purchase will most certainly be financed for three years.

If anything, experiencing these more high-end features will strengthen my resolve to save more for a down payment, so we can actually afford some of them.

Retirement Projection

March 24th, 2014 at 12:34 pm

Anyone who has been following my blog for most of the past three years knows that I spend a lot of time putting together financial projections of all sorts. That includes my retirement, even though it's 20 plus years away.

I've got a retirement tab on my master spreadsheet. It includes an accumulation phase, where I estimate how savings will grow, and a depletion phase where I estimate how well that fund will stand up under various scenarios.

I've struggled for some time deciding what kind of number to plug in for Social Security payments, and to a lesser extent when to plug in a beginning age for collecting SS.

Until recently, I've used a 15K number (annual), and begin drawing at age 72. I thought of those numbers as low-ball estimates.

I know that there is a prevailing attitude among many in the SA community (particularly people younger than about 45) that they are making retirement plans assuming that there will be no SS 25 or 30 years from now, and that they will consider any SS payments to be gravy in their retirement.

While they may be right - there may be no SS 25 or 30 years from now - I'm betting that there will be SS in some form, reduced from where it is now. I just don't know what I can expect for a reasonable guess as to what that amount will be. I don't think anyone younger than 50 does either. The law is clearly subject to (and expected to) change.

So, I set to come up with a more reasonable, and still conservative number to plug in to my spreadsheet. I did some very quick "research" on the internet, and found a site that quoted that SS trust fund reserves would be exhausted by 2033 (oddly enough, a few years prior to my own retirement), and after that tax income would be sufficient to pay about three-quarters of scheduled benefits through 2087.

I also went to the Social Security web site, and found my current projected monthly payments at ages 62, 67, and 70.

I took the number projected at age 67, multiplied it by 0.75, and plugged it into my spread sheet, starting at age 70.

It turns out that I wasn't that far off with my previous estimate. My new number is $2,000 greater per year, and I'm starting the payment two years earlier in my projection now.

Certainly every single number in that projection is subject to a great deal of change. What I really want is a target retirement fund figure to shoot for. That number will change. However, I think my estimate now is a bit more refined than it was a few days ago.

I'll continue to go in and adjust things from time to time. Hopefully in another 15 years, I can have a very solid plan for retiring 5-10 years after that.

If anyone is interested, this is the page that I quoted above: http://www.thenewamerican.com/economy/commentary/item/16497-the-future-of-social-security

October Financial Reflections

October 1st, 2013 at 07:31 am

For the past couple of years I've done some extra financial reflection in the month of October. It was three years ago this month that we finally woke up, and started to pay serious attention to our finances.

A couple things happened that month. DW received a freelance check (that was in the days before four kids, and she did some freelance work). I think it was a couple thousand dollars. We also had our second of three sets of renters move into the our for sale house. I think the house had been vacant since July or August - a couple months anyway. We were also about $450 past due on one of our CCs. That CC had a whopping 32.99% APR.

Within the same week that we received DW's freelance check, we received a letter from the above mentioned CC. The CC company (Advanta) was offering us a deal - if we paid the $450 that we were past due, they would cut our interest rate to 16.99%. We jumped on the deal, and sent the check that day. Advanta kept their end of the bargain, and cut our interest rate. Most of the rest of DW's freelance check went to various other debts.

That bit of momentum got the ball rolling for us. I dug in, and totaled all our CC balances, compared the balances to each card's interest rate, and realized that (after the $450 payment, and interest rate cut on the one CC), we would still be paying very nearly $200 per month in CC interest alone.

The first step I opted to take was to find a 0% APR transfer to a new CC. My credit score was in a shambles, and I didn't qualify for a new card at that time. Another thought I had was to borrow against my retirement fund. I actually went to a bank, and picked up the forms to apply for the loan. I think they were offering an 8.99% APR on the loan. I don't remember for sure, but I may have filled out the paperwork, but I never did submit it.

That previous August, I had stumbled upon the SA forums when my mom and dad had a question for me about retirement savings. I had asked the question for them, and passed on the answers, and never did return to SA until I was faced with the question - should I borrow against my retirement fund to pay off CC debt (or, shift unsecured debt to a lower APR with my retirement fund as collateral, to be more precise). Thankfully I asked the question, and thankfully the forum regulars steered me away from that choice.

DW did qualify for a 0% APR 3% balance fee card that next January. The limit was $750. We transferred that, minus the 3% fee, and ended up doing two more balance transfers until the Advanta debt was paid off this past January.

It would be another six months before I found the Blog side of this site, and those of you who have been following my blog for most of the pat 2 1/2 years know the rest of the story in gory detail.

You also know that we've stumbled at times, and have had help along the way. But, as I remember that seemingly unbearable, rocky mountain that we faced three years ago, I can't believe that we've turned it around.

Flexible Spending Account

September 12th, 2013 at 07:01 am

I'm sure most all of you frugally minded SA bloggers take advantage of your Flexible Spending Account, if your or your spouse's employer offers one. My employer offers an FSA, and I sure take advantage of it.

For those of you who may not know what an FSA is, it's an opportunity for an employee to defer some income into an account. The money in the account must be used for approved medical expenses. The money deferred to the FSA is not taxed. The catch is that if you don't claim the money over a 15 month period (Jan-Mar), you lose it. Forever.

An FSA is like a HCSA for W-2 employees.

The reason I bring it up, is I just submitted an FSA claim. Over the past couple of month, I've polled three of my colleagues about their participation in the FSA. Their responses are a mixed bag:

One colleague participates

One colleague is aware of the FSA, and chooses not to participate. He's afraid of losing his money at the end of the year.

One colleague had no idea what an FSA is.

So, based on my completely unscientific, informal, and extremely limited poll, 50% of employees in my organization participate in the FSA, 25% are aware of it, and choose not to participate, and 25% are unaware of the FSA.

As for me, I have $100 per month deposited into the FSA. My claims paid to date are $394.44. Today I submitted $110.20. That gets us caught up through July.

If you do not participate in an FSA (or HCSA), I urge you to look into it.

Gift Allocation

September 5th, 2013 at 05:25 am

It's been about a month since we received the gift of money from my in-laws. I thought I would make an attempt at an accounting of where the money has gone thus far. So far, we have spent/saved/paid down debt amounting to about $25,200 in the following broad categories:

Savings $9,200.00 36.4%
Home Improvement $8,322.05 32.9%
Debt Repayment $6,361.72 25.2%
Home School $745.60 3.0%
Vehicle Maintenance $636.00 2.5%

A coupe of caveats:
1. Not all of the money has been spent/saved in each of those categories yet, although it is our intent to do so. All but $2,000 of the "Savings" category is sitting in checking yet, for example. Some more to debt payoff and some more to home improvement.

2. We would have spent that, or nearly all of that on Home School curricula with or without the gift. Maybe not in one payment.

3. Same goes for vehicle maintenance (tires) my tire would have blown with or without the gift. Maybe I would have bought the used tire, or only one new tire instead of all four. Who knows. The gift did make the decision to buy four new tires easier.

There is one big ticket item that we have not purchased, but I have included it above. That is a generator and hard wiring for generator. I'm estimating that at $1,200. I think I already blogged about that, or I intended to blog about it. It goes back to the whole living in a rural area, we have the electric service of a third world country, yada yada thing.

We haven't taken action on a Roth for DW. That is big on my to do list.

So, when Savings plus Debt Repayment lines are combined, we get a total of 61.6% of what has been spent/allocated/intended so far. Yes, about a third the total has been spent on "Home Improvement" and yes, most but not all of that is the porch project. It did balloon beyond our original intent a bit.

We still have a pinch less than $5,000 to allocate yet. You certainly can't say that we're blowing it all in one place!

September Financial Snapshot

September 3rd, 2013 at 05:53 am

Mortgage $55,921
Truck Loan $8,555
Lawn Mower $103
CC1 $0
CC2 $0

Total Debt - $64,579

Retirement Fund $127,771
DD1 Savings $5,442
DD2 Savings $339
DS1 Savings $1,000
DS2 Savings $1000
Emergency Fund $800

Total Savings - $136,292

Debt reduced by $6,392
Savings increased by $3,657

About $1,700 of that increase in savings is because DD1 received her check for selling hogs at the fair. It's her money, but is earmarked for college savings, so I'll include it as a family asset.

I intended to pay the lawn mower loan in full last month. I went into the website to pay it off, and it's not easy to navigate. I entered the wrong amount to pay. When I went back in to see if the payment had posted, I saw that there was still a balance. I was unable to set the payment date for any sooner than 9 days before it's due. So, it will be paid in full on the 18th of this month.

I have another milestone to report. Our total family debt is now less than our annual household income! That sounds pretty good to me. Also, our total family savings is twice as much as our debt. Also good!

One last thing on the EF. We intend to beef that up. Right now the money sits in checking, which I've not listed here. Basically, we keep our EF in a bank in DW's home town. That way it's inconvenient for us to access. It's also inconvenient for us to add money. Our goal will be to get that money transferred over to the savings account before the end of this month.

New Tires

August 28th, 2013 at 11:15 am

I blew a tire on the way to work yesterday. The truck is fully insured, including towing, so after some effort on my and DW's part to get the spare on, we had it towed to the tire shop.

I opted to have all four tires replaced. The truck has 85,000 miles. I'm not sure if the tires are original or not, but they needed to be replaced. No need to go blowing them one at a time over the next several months.

The total cost to replace was $636, including tires, labor, and tax. The tire guy said that I could have a good used tire for $50. But, again, we have the cash, so I opted for new tires all around.

This leads to a (somewhat) funny story. Until recently I drove a POS car. Three or four years ago that car had a flat that needed to be replaced. My job has me wearing different clothes depending on what I'm doing, either seasonally or day to day. One day I might be wearing khakis and a button up shits, another day I might be wearing a tee shirt and dirty beat up jeans. On this particular day when I got the flat I was not dressed up. The tire guy probably assumed I was broke (actually, I probably was broke). He offered a good used tire for $20. Different vehicle, different tire, different year, I know, but I can't help but think that I appeared to have a different paying capacity three or four years ago than I did yesterday, hence the difference in pricing.

Anyway, I'm set for the winter now, and maybe set for another 85,000 miles.

Updated DTI Ratio

August 27th, 2013 at 07:19 am

We've retired some debt this month. All credit cards completely paid off. Truck loan - took a big chunk out of the loan. Lawn mower loan - almost completely retired (balance will be paid next month).

So, I decided to re-figure our debt to income ratio. It's now 24.5% - that is a wee bit less than 1/4 of our before tax income is required to meet monthly minimum required debt obligations.

That being said, we'll plan to send more than the required minimum to the truck loan per month from here on out. Not quite a double payment, but I'm thinking a payment that would amount to 10% of gross monthly income. That will bring our effective DTI to about 30%, and retire the loan about 14 months early. I think we can live comfortably with that.

Weekend Happenings

August 26th, 2013 at 06:11 am

I'm not sure how much I've talked about it in the past, but DW home schools our girls. With school about to begin, she needed a block of time to get curricula organized. So, I took the boys out for a road trip on Saturday. The girls had been invited to a birthday party in the afternoon.

Before we left for our road trip, I loaded the back of my pickup with some scrap iron. We live at my family's old farm, so there always seems to be scrap iron turning up. The load ended up being small - 40 pounds. The price I received was $3. Really, I look at it as an opportunity to deliver trash, and they pay me for it. The junk yard is 4 miles from our house.

I went into town, and had an extra key made for my pickup. When I bought the truck, I only received one key. With a copy now, I'll have some insurance if I ever lock the keys in the truck. The copy cost $2.99. Kind of funny how that worked out.

Then, I got the oil changed in my pickup. The oil change cost around $41. The truck is a Dodge Ram Hemi. It holds 7 quarts of oil. The expensive oil changes are something I wasn't aware of when I bought the pickup in December. Live and learn.

I have changed the oil myself in our various vehicles in the past. My brother-in-law has a nice farm shop that makes changing oil easy, and if we're there for the weekend, and a vehicle needs an oil change, I'll go ahead and do it. But honestly, enough of the cost is the actual oil and oil filter, that it really doesn't cost a whole lot of money to have the quickie places do it for you.

Then, I took the boys to a zoo. The zoo is about 40 miles from home. Admission for the three of us was about $25. We had a nice time. The funny/frustrating thing was that the goats at the petting zoo area were the biggest hit with the boys. We have three goats at home.

The boys ended up falling asleep on the way back home, so I pulled over and listened to the Tigers/Mets game on the radio. The Tigers won the game, and swept the weekend series. Go Tigers!

The Truck Payment

August 19th, 2013 at 05:28 am

I bought a truck last December. I financed it through our credit union. We hadn't ever financed a vehicle through this credit union. We had carried a credit card, house re-fi, and home equity loan (back in the bad old days when we did home equity loans) through this credit union, but never a vehicle loan. The dealers always beat their rates, typically by 0.1% point. So, I wasn't really sure how the CU worked the loan if paid ahead.

Some months, I've been rounding the $378 minimum payment up to $400. I had been wondering if the minimum due would gradually ratchet down - like $1 less due per month for every $36 that I was paid ahead on the loan (it's a 36 month loan). But, the payment has never been adjusted down at all, which is fine. I wanted to pay AT LEAST $378 per month, and have the truck paid off earlier. I just figured that the CU would make some adjustment to keep me paying on the loan for the full 36 months - more interest income for them.

Last week, I made a substantial payment ahead. I decided to pay 10% of the remaining balance. The remaining balance was $10,220, so I paid $1,022 (About $16 of that payment went toward accumulated interest. Had I been thinking more clearly, I would have increased the payment so that the principal balance had gone down 10%). I went to the CU website this morning just to check if the payment went through. It did. And, yep, the amount due with the next payment remains $378. What changed is the date the payment is due! I don't owe anything on this truck until December 1!

Of course, I plan to make my Sep., Oct., and Nov. payments. We also still haven't decided if we're going to pay this off entirely with the gift money.

Either way, we're hopefully getting ourselves well positioned to pay this truck off, and start saving cash to buy a replacement family van in a few years. I'm not saying we won't finance it, but we will hopefully at least make a substantial down payment.

Our Septic System

August 16th, 2013 at 06:02 am

No, our septic system didn't fail. But, it hasn't been updated in quite some time, and will need to be replaced. Just, not yet.

But, we want to be prepared, and have the money available for replacement, when the time comes. So, I called an installer yesterday, to get an idea of replacement cost.

His first questions were: which county do you live in, and how many bedrooms are in your house? I told him which county I live in, and that we have three bedrooms in our house. My county requires a 2,500 gallon tank for a three bedroom house.

Next, he asked me if our house was on sand or clay soil. I told him that our soil was loamy, or in-between. The required length of the tiles in the drain field are dictated how fast your soil percolates water. Sandy soil percs faster than clay soil. So, a septic system on sandy ground costs less than a septic system on clay ground (less excavation, less fill sand, less drain tile).

He estimated the cost at about $6,000, but said that the estimate would be much tighter after the county environmental health department came out to do an actual perc test.

So, we'll set aside $6,000 in the EF. The system may need to be replaced next year, or it may be 10 or more years. Either way, we'd like to be prepared.

The very generous gift

August 7th, 2013 at 06:21 am

This past weekend, my in-laws gifted my wife $30,000. For more background on the gift see my most recent post in the forums.

Steps that have been taken so far:

The checks were deposited into our account on Monday.

The credit card was completely paid off this morning.

We scheduled the builder to begin work on our back porch today. It is raining.

We scheduled an appointment with an attorney to set up special needs trusts for our boys. We'll be meeting with the attorney this Friday afternoon.

Our emergency fund is housed at DW's home-town bank, and that transfer has not been made yet.

Our girls already have 529's set up, but we have not allocated any new funds toward them.

I received some good advice from my forum post. We may pay off the truck (10K) and set up an automatic monthly payment for a Roth IRA for DW for the amount that had been going to the truck payment.

Still not sure exactly how everything will be spent and allocated. It will not be spent on a luxury car or a Caribbean cruise.

$30,000 represents a bit more than half of my annual salary. Heck, 10 years ago, I wasn't even making 30K in one year. I (we) are overwhelmed by the generosity of this gift. It gives us the flexibility to attend to some savings goals that have been sorely neglected, as well as make some needed improvements around the homestead.

Our credit score and short sale finally met

July 1st, 2013 at 05:54 am

They shared a firm handshake, exchanged a fine "How are ya?", and our credit score promptly fell on its back.

It's not as if we weren't expecting it.

DW home schools our girls. The company that she buys curriculum from was offering 0% financing for six months, so we decided to take advantage of the offer. The rejection message stated that our scores were less than 620. So, that means that they fell by a minimum of 85 points.

In October 2010, my score was at 580. I had built it back up to 705 by August 2012. So, we'll keep doing the right things, and hopefully in a couple of years, we'll see daylight again.

Lawn Mower Shopping

April 15th, 2013 at 04:21 pm

We'll probably buy a lawn mower by the end of the week. With all the rain we had last week, and the apparent heat we'll be getting this week, the grass will start growing.

Our budget is $4,000. Remember that DW and I will be sharing this mower with my folks. There are three new models available at local dealerships that fit the budget. Or ... should we buy a used commercial grade model for the same money? That's the question we're trying to answer. New residential vs. used commercial?

The commercial grade is better built, sturdier, etc. But, it's used, and the previous owner traded it in for some reason. Maybe because always want a "new" mower. Or maybe because it was giving them problems.

We'll probably end up going new residential. That's the direction DW and I are leaning (I think), but if we seem to find the right used model...

Three Year Debt Comparison

April 8th, 2013 at 12:19 pm

April 1, 2011 Total Debt - $202,374
April 1, 2012 Total Debt - $187,077
April 1, 2013 Total Debt - $178, 952

$ Change - 2011 to 2012 = $15,297
$ Change - 2012 to 2013 = $8,125
$ Change - 2011 to 2013 = $23,422

I borrowed money for a pickup purchase in December; that's the major reason total debt didn't go down as much 2012 -2013.

April 1, 2011 CC Debt - $18,980
April 1, 2012 CC Debt - $8,931
April 1, 2013 CC Debt - $914

$ Change - 2011 to 2012 = $10,049
$ Change - 2012 to 2013 = $8,017
$ Change - 2011 to 2013 = $18,066!

This shows that we moved a lot faster when there was a gun to our heads.

In the next year, we're scheduled to pay off:
$914 CC Debt
$11,947 Mortgage Debt
$3,790 Truck Debt
$16,651 Total Projected Debt Payoff

I'll take a look in a year to see how actual compares. We're not planning on any new borrowing this year.
It might not be any different than whats projected. After CC debt is all taken care of, my big question will be whether we should accelerate truck payoff, or beef up savings. I'll address that later.


April 5th, 2013 at 05:43 am

I got an offer from Discover yesterday.

I picked up a Discover card a year ago January. It's one of the cards I used for a 0.0% balance transfer. I transferred (I think) $2,700, and had it paid off by time the promo period was up. I've also used the card along the way, mainly for gasoline purchases, but also groceries and an occasional dinner out. I've paid each new purchase off every month, and haven't paid any interest on this card. And, it's a rewards card.

So, the offer yesterday was for a "personal loan" of up to 25K at 7.99% APR. They even had a set of nifty tables that detailed my expected monthly payment at varying loan amounts and payoff periods.

There was that fleeting moment when I thought about how we could borrow "just" 4K, and get that porch built this month or next, and my payment would be "just" $125 per month for three years. That sure would be nice. And easy.

Thankfully that thought lasted just a moment, and it passed as quickly as it came. And, I threw the letter away!

Odds and Ends

April 2nd, 2013 at 05:45 am

Our house closing is scheduled for a week from Friday. Buyer's financing is approved, and our bank has approved the sale. All is ready except for one major detail - our renter. She has not yet found a place to move to. Apparently her boyfriend has moved out, and she can't afford the rent by herself, and she knows she has to move out for us and for her. But, she hasn't found a place yet. My gut tells me she'll be out in time, but it's a little hairy right now.

I talked to my folks about going in together on a lawn mower. They are all for it. I looked at some models on Friday. We're at about the 4k price point - a 52-54" zero turn model. Each of the models has a "good" "better" "best" version. We're looking at the "better" style. We'll probably have something picked out and purchased in a couple weeks.

We bought the girls each a bike this weekend. They were actually their Christmas presents, but we waited until Spring to make the purchase. They are Schwinn models, of high enough quality that we expect them to last many years.

We also bought a washer and dryer set this weekend. Our 15 1/2 year old washer gave out. A repair may have been possible. But, we have six people in the household now, where we only had two when the old units were purchased. We needed higher capacity units to keep up on laundry better. Even though the dryer was still working, we switched that out too, to match capacity.

With March (and now April, too) as cold as it was, we will probably need to buy heating oil again before the heating season is over.

So --- with the lawn mower, bikes, washer/dryer, and heating oil purchases, our savings will be wiped out. We'll keep $800 in the EF. They porch project will have to wait. We hope to have enough saved up by September to get that done before the snow flies again.

A couple of things

March 6th, 2013 at 06:44 am

Our state income tax refund was direct deposited into our account Friday. I transferred all of it to our savings. We're now less than $100 away from having our back porch account full funded.

I calculated another pointless personal finance figure. I was curious as to how much of our monthly family income goes toward building net worth, and how much of it goes to other stuff.

What I came up with (month of April projections) is: 32.4% goes to building net worth, and 67.6% goes to other stuff.

Or, for every ten dollars available to our family to spend, $3.24 goes to principal payments or savings, and $6.76 goes to interest payments, food, fuel, insurance (protecting our net worth), child care, entertainment, and some other stuff.

I had to think about how to handle my employer retirement match. I don't think of it as income. It's not available to spend at our discretion. But, it is a big part of the calculation. So, I ended up adding it to income.

I have no idea what a good number is. 32% sounds pretty good. 35 - 40% sounds better. I'll try to track this periodically over time, and see where it goes.

Birthday and Porch

February 22nd, 2013 at 08:49 am

Today is DD2's birthday. Tomorrow is her party. The dress is finished. The decorations and food are bought. The house is mostly clean. We are as ready as we will be. If the weather is nasty, the kids will ride the horse in the neighbor's shed.

We do have a swim meet before the party, but it's a home meet, so we don't have to drive far. But, it will be a busy day.

We got an estimate from our builder yesterday about the new back porch. His estimate is $3,800. That doesn't include siding, though. We still need to pick our siding out. He did include the labor for siding the porch, just not the material. He said that could range anywhere from $80 - $350, depending on what we choose. We also want him to place a boot scraper in the concrete. We'll but the boot scraper, and he'll place it. $25? not sure. The bid also included rain gutters for the whole house. That will help keep water out of the basement, so I guess we'll do it.

I'm using a $4,000 figure in the back of my mind. That fits surprisingly well with our state/fed refund figure. So, we will schedule him as for as soon as the weather breaks. Hopefully the project is done before the end of April.

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