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 what’s 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.

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!

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.

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.

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.

We filed our taxes yesterday. I did some looking, and determined that IRS was ready for returns that claimed depreciation. Apparently they've been ready for the better part of a week.

We got notification that IRS accepted our return. Now we just wait for the refunds. I didn't write down exact values, but our federal refund is around $3,400 and our state refund is around $500.

When we receive our refunds, we'll submit an amended return that includes our adoption credit. Our adoption credit is about $1,200. The reason we're filing an amended form is that it will take longer to get our adoption credit.

Lots of places for the money to go. No problem there. We're still waiting for a bid on our porch improvement, and I would like some of it to go to CC debt. And, of course, we would like to have some reserves if needed to cover costs associated with selling our house.

We got our rent check on Thursday. We also got our insurance check from the freezer debacle on Friday. Both checks were deposited on Friday.

The rent check means we'll have enough money to comfortably pay the remainder of our heating oil bill yet this month. Past due charges would have begun to accrue after Mar. 1. So, that's avoided.

Fairly quiet weekend. We did some substantial house cleaning. DD2's birthday party is next weekend.

DD1 bought a hat for $20 on Sunday. She bought it with her own allowance money, so that's OK. But I thought it was a bit much for a hat. I'm reminded of my first visit to the Michigan State campus, when I bought a hat for $11 at the MSU bookstore. I think I was 14 or 15 at the time. To me it seemed like a legitimate expense - an MSU hat purchased at MSU. My dad had a fit. $11 for a hat! Oh, it's funny how cycles repeat themselves.

Sometimes I see a particularly good quote on the top of the SA banner that I've never seen before. I like this one: "No-one would remember the Good Samaritan if he'd only had good intentions. He had money as well." - Margaret Thatcher. Where do they get all those quotes?

Beginning of the month CC payments have been posted. remaining balance on CC#1 = $929.00 (8.9% APR), and remaining balance on CC#2 = $726.52 (5.25% APR), for a grand total of $1,655.52.

We didn't do anything special for the Super Bowl. I took our boys down to my folks house to watch it. My folks are in Florida for a couple of months, and we're watching their house for them while they're gone. I quit watching during the power outage. I didn't spend any extra money at all on Superbowl Sunday.

Our taxes are completed, but not filed. We claim depreciation on our for sale/rental house. IRS is apparently not ready to accept any returns that claim depreciation. I suppose we could file without the Schedule E, and file an amended form later. But, we were already going to file an amended return with our Adoption Credit claim. We're expecting a $1,200 AC. We could file now, and include both the Schedule E, and the AC on the amended form, or file two amended forms, or just wait for the depreciation thing to work itself out, and file our 1040 + Schedule E, and then the amended with the AC. That last option is the one we're opting for right now.

The reason that we're definitely waiting on the AC is that you cannot file the AC electronically. You need to file that via mail, because they IRS requires proof of adoption, and they look at AC returns very closely. Last year, we filed the AC as an amended return. We got our regular refund quickly, and our AC in August.

The AC in non refundable this year. Last year it was fully refundable. I'm not sure how long we will have to claim the credit. Five years? We've looked, but as far as we know, IRS has not released that information yet.

Most likely (if we do end up selling our house in 2013), we will be able to claim the unused potion all next year, because we expect to owe a butt-load of tax due to the short sale property not being our primary residence.

The heating fuel tank was filled yesterday. We've been paying in full after it gets filled, but that can cause a cash flow crunch in the cold months.

Our fuel company does have a budget program. We've explored it before, but never took advantage. We are leaning very heavily toward enrolling in the program.

The way it works with our company is, starting in July, they will take our average monthly fuel use, and multiply it by a "cap" price. We'll make 11 equal monthly payments, and settle up in June. The June payment could be more or less depending on actual usage, and actual price. Also, our budgeted amount could go up or down if our actual use, or the price is drastically different than what was figured at the beginning.

So, basically, we'll be pre paying July - October.

I know, I know, interest free loan from us to them, etc. etc.

But, once we get into the program, it will be nice to have a constant monthly payment, and not have to scramble to pay only when we're heating the house.

Are any of you on a budget plan for seasonal expenses? Do you cringe at the very idea?

I took our family mini van in for two minor repairs.

1. the rear windshield wiper was broken
2. the airbag sensor was broken (the air bag light was always on)

The total bill was $130.12

Sensor - $33
Wiring - $12
Wiper - $7
Labor - $75
Tax - $3.12

The vehicle is a 2005 Dodge Grand Caravan. It is paid for, and maintenance has been fairly inexpensive.

While the guy who runs the repair shop seems to charge plenty for labor, he is honest, and doesn't try to sell unneeded stuff, or tell you something is broke when it isn't. But, hopefully we're done with repairs for a while.

I ordered heating fuel today. This will be our second fill up of the season. We carried about 80 gallons over from last year.

We have a 200 gallon fuel oil tank in the basement. So I check it periodically, and call when we need a fill up. It's at 1/8 tank today. We use a smidge over 3 gallons per day when it's cold, so we're probably good for another week, but I'd sure hate to run out.

Heating fuel runs between $3.50 - $3.80 in our neck of the woods, so that's about $11.50 per day to heat the house when it's cold.

My wife and I are usually at odds as to the temp the house should be. I'm usually comfortable at 68, and she would prefer 70. Actually, I think she would prefer 72, but she has settled for 70. Probably most of the time the thermostat is set at 69 during the day. She is usually home all day (SAHM), so we don't have the option of turning it down. We do have a programmable thermostat, so the temp runs at 65 at night. I know some people who run the house temp at 65 all day.

I'm not sure how much money is actually saved by turning the thermostat down at night. We got a valuable lesson in home heating costs the winter we moved from our old house. We moved Feb. 14 (easy to remember Valentine's Day), and didn't have a renter until the following May (or June?). So, we heated that house the rest of Feb. plus March and April. I believe we had the thermostat set at 52. Plus, because that thermostat was also programmable, we programmed it to heat for 15 minutes at noon. To get some warm air blowing around to keep the water lines from freezing.

Anyway, what we found out is that the cost to heat an empty house to 52 degrees isn't terribly different than heating a lived-in house to 68. It was less, of course, but not as much less as I would have expected. I don't remember the exact figures, I just remember being surprised by how much we were spending to heat an empty house. Thank goodness the house has been occupied by renters ever since!

So, I'm still not sure how much, if anything we may be saving by turning the heat down at night, but it just seems like the frugal thing to do.

I had set up a very aggressive CC debt payoff plan that would have had us out of CC debt by April. I'm afraid it will have to remain just that - a plan.

As most of you know we have a house we are desperately trying to sell. We came to the realization that we might need to have significant cash reserves to actually get the house sold.

I had mentioned that the current buyer has made an offer backed by a USDA Rural Development loan. USDA RD loans have some hoops to jump through that can require the owners to make improvements before the house is sold - things like replacing worn carpeting, sufficient rain gutters, energy efficiencies, etc. Also, it's not unrealistic to expect that we may have to cover some closing costs for the buyer, or the bank may require that we bring some cash to the close.

So, we've set a goal of $4,000 in cash reserves to finally get this monkey off our back. Where will this cash come from? We'll have to slow down CC repayment. For now, anyway.

So, I've set up a new CC repayment projection that has CCs paid off by next October. It will cost a grand total of $35 in additional interest, over having the CCs paid off in April.

Of course we'll be probably be getting income tax refunds that will help build this reserve, but we're also saving for that porch improvement.

So, until we know how much our tax refund is, when we will actually close on the house, and how much our porch improvements will cost, we'll be going with this October CC debt payoff plan.

The negotiations with the short sale continue. I'm the pessimist, and lean toward thinking this deal is dead. DW is the optimist (and a better negotiator than I), and knows that this is how the game is played. Still, I believe that this deal has a less than 50% chance of closing. The negotiations are between our bank, and the buyer, so we just sit back and watch at this point.

A number that I've not reported on in a while is my credit card debt to retirement savings ratio. That's a number that I (to my knowledge) made up a while back. Seven years ago, that number was 100%, we owed about 30K in credit debt, and my retirement savings was about $30K. In August 2011, that number was 20%. My retirement savings was 5 times greater than my credit card debt.

Today that ratio is 1.66%. For every dollar I have in credit card debt, I have about $60 in retirement savings. I know that the number is meaningless. It's not as if I'm using my retirement savings as collateral against credit cards.

But, I still remember that day seven years ago, when I realized that CC debt was equal to retirement savings. That was one eye opening experience. And, ever since, I've used it as sort of a personal proxy of financial health. I also like it, because it tells two stories - decrease in CC debt as well as increase in retirement savings.

The temperature on my way in to work started out at -2 this morning. For a brief time, it rose all the way up to 0, but settled back down at -1. Brr.

I bought new windshield wipers yesterday. I had a choice between three models. The cheapest was $14 for a pair, there was a pair for $28, and the most expensive was $38.

I opted for the middle of the road $28 pair.

I know that you get what you pay for, and I probably would have been replacing the $14 set in a few months. And, $38 seemed too much to pay for windshield wipers.

It seems as if I usually choose the "middle of the road" option in most cases. Even when we were butt-crack broke a couple of years ago, we almost never bought the cheapest of anything. Again, you get what you pay for.

But, I still almost never opt for the most expensive model, either. Even if I were debt free, and had my EF at 6 months spending, and were contributing 15% to retirement, and had extra cash, I don't think I'd part with the money for the most expensive of anything.

So, what's your opinion on simple things like windshield wipers, car batteries, shingles, cabinets - things where there are 3 basic choices. Do you buy cheap, middle, or expensive?

Many of you may remember that we have had a house for sale for about five years. Actually, this week may mark exactly 5 years (seems like it was 1-17-08). Feb. 12 will mark five years since we've lived in the house.

We have been going through the short sale process since August. We've had two offers fall thorough, and now have a third active offer. This one is gaining some traction. We are in the negotiation stage. That is - our bank's representative negotiating with the buyer. Just today we saw the bank's counter. They're about 6K apart. We'll see where that goes.

We've not yet gotten this far in the short sale process before. If all goes well, the close may be in a month or so. If all does not go well ... well, we wait for another buyer. I should add that this buyer is getting a loan through the USDA Rural Development office. Kind of like an FHA loan, but for people in rural areas, and as I understand it, more hoops to jump through. The buyer is waiting for our short sale to get approved before he begins working with the RD inspections.

I need to talk with DW about it, but I think we'll approach our current renters (again) about buying the house, if this deal falls through. They are interested, but claim they have no money for a down payment. And, her credit is trashed due to a recent divorce and foreclosure. Sound like prime buyers, don't they? I will say that even though they are always late with the rent, it is paid every month.

And, if we do approach them again about buying the house, this time we'll be armed with some information as to what the bank will accept for an offer.

Keeping my fingers crossed!

It's not everyday that you get a letter from the IRS. We did today. Naturally, it was the first thing I opened.

You may remember that last August we got a check from the IRS for an adoption credit. That check included $104.43 of interest. The mailing today was a 1099 reminding us that we are required to include the $104.43 interest payment in our 2012 Form 1040.

That's not such a big deal. Letters from the IRS can be a lot worse than that.

On a related note, you may also remember that we finalized another adoption in April 2012. I'm no tax expert, but it's my understanding that the credit for adoptions finalized in 2012 go back to non-refundable status. That's not so good. For us, anyway.

I know that it's recommended to have 3-6 months spending put away in an EF. We have about $1,000 in our EF, and that can fluctuate a bit each month.

I hope to have credit cards retired in May. And, I think we will. I'm thinking that after that phase of our financial life is over, our next conquest should be to beef up the EF.

I've had a figure of $10,000 bouncing around in my head for a while. I decided to take a more serious look at that number.

One month of spending in my family is about $4,680. So, a three month EF would be about $14,000. I was only off by 40%.

If I allocate the $750 that we've been sending toward credit cards lately, it will take about a year and a half to get it built up. OK, that assumes no withdrawals. Better make it two years.

So, here it is, a new goal! My goal is to have $14,000 saved up in an EF by June 2015.

I have solid net worth figures for Jan. 1, 2012 and Jan. 1, 2013. I had to do some financial forensic work to come up with a Jan. 1, 2011 value. I hadn't started posting here by then. The asset side is fairly solid, but the liability side is an estimate.
What I came up with is:

2011 net worth percentage increase = 19.6%
2012 net worth percentage increase = 78.9%

My retirement portfolio is my asset of greatest value. Thus, the performance of those funds greatly influences the change in net worth. 2011 was a crappy investment year, and 2012 was a better year.

And, of course, there is rapid debt payoff. While I was probably paying off debt a bit more aggressively in 2011, in 2012 much more of my payments went
toward principal, rather than interest.

I couldn't help myself. I projected my Jan. 1, 2014 net worth, based on projected decrease in debt plus monthly contributions to retirement, no asset growth. My projected net worth percentage increase for 2013 is about 32%.

I'll come back here in a year, and see how I did.

I've been gone for a few months, but with a new year, I thought I'd get started back up again.

I hope everyone had a Merry Christmas (or Happy Hanukkah), and a Happy New Year!

Despite holiday spending, we've managed to pay down quite a bit of credit card debt. Our current total is $1,963. Down from $4,587 in October. My goal remains total payoff next May.

We've also decided on our 2013 house project. We need something done with our back porch. My MIL is disabled, and has a great deal of difficulty entering our house the way it is. Also, it just plain looks very bad. We'll hopefully be getting a bid next week for a spring/summer project, but for now we're planning on saving $800 per month.

Just yesterday, I also began contributing an additional 1% of my salary per month to my retirement plan. I'll increase that again once the CCs are paid off. For those of you who may have been following my thread on the forums, I decided to stick with my employer, rather than the Roth. There were no transaction fees.

I have 2 high interest CCs. Really, at this point, I have one. CC1 is at 8.9%. CC3 is at 0.0% at the moment, and set to jump up to 23.99% at the end of December. So, that's why I say 2. One is high now, and the other will be high soon.

I'm at the point that if I transferred the balances of both CCs to a new 0.0 card, that the 3 or 4% balance transfer fee would be about a wash. The cost of the balance transfer would be about the same as I project we would spend on interest. So, we'll tough it out, and pay the balances as soon as is reasonable.

We are in a bit of a cash flow crunch this month. We paid property taxes and paid for new license tags and new driver's licenses today (we both have November birthdays). And, I'm expecting to fill the heating fuel tank this month or early next month. So, the payoff of CC3 might not happen before the end of the year. We should have it paid off by January, or February at the latest. But, it looks as if I'll be paying that ridiculous interest rate on some of the balance. Then, we can concentrate on CC1.

We've had a house for sale for five years. We haven't lived in the house for all but one month that it's been on the market.

This past August, we began the paperwork to get approved for a short sale. The mortgage company has made the process as slow as they can. We send in paperwork, and they wait three or four weeks to get back to us only to tell us that we need to send in more paperwork. We didn't have an offer when we began this process. Our hope was to get ahead on the process, so that when there was an offer, it the short sale approval could be expedited.

We decided we should get an attorney involved in the process. Our thinking was that the attorney could help speed the process, and help with negotiations down the line. The first attorney we spoke with said he doesn't handle cases like these. It cost us $45 to hear that. We set up an appointment with another attorney. I tried to better explain our situation as I was setting up that appointment.

We talked with the attorney last Thursday. That was a very good meeting. The attorney is about our age, he's a bit arrogant, and kind of feisty. But he also came across as nice, and someone we can work with. The kind of guy we would like in our corner. He also assured us that he would attempt to negotiate no 1099 for any forgiven debt. That's about a $9,000 savings if it happens.

Less than 24 hours after our meeting, we got a viable offer on our house. $7,000 less than we're asking. I sent the offer to the attorney. We're scheduled to have a call with him this evening. We'll see where it goes. Regardless, things are looking much better for us than they were a week ago.

I thinking about a new pickup. Something compact, like a Dakota, S-10, or Ranger. I'm not particular to makes.

This purchase wouldn't be until after December, when that one credit card that will shoot up to 23% APR is paid off. Then we'll be in the midst of winter heating, and post-Christmas financial trauma, so maybe not til next spring. We'll see.

I bought my current car from my aunt and uncle for a dollar last May. It runs OK. It's a 1997 Mazda 626. It has about 200K miles, so I can't ask for much from it. Of course we also have the family mini van that we recently paid off with adoption subsidy money. That's seven years old, and had 110K miles. It should last another 3-5 or more years, but we'll see.

So I started with the rule that I learned in the SA forums - monthly payment of no more than 10% of your monthly pay, financed for no more than 3 years. I cut the monthly payment in half, because it is possible that we would need to replace the mini van in that time frame. What I came up with is between 9 and 10K for a pick up.

A really quick look at KBB told me that I could buy a 2007 or so model with somewhere north of 120K miles. Not great, but a step up. And, having a pickup, especially in the country is nice.

So, I'm at least four months away from the purchase. Gives me time to possibly save some money, which will either get me a better pickup, or reduce my monthly payment. I can also spend that time becoming familiar with what's out there in my price range.

Yes, this does mean more debt. But, using the 10%, three year rule, I'm at least entering it with some reasonable restraints.

Last month I posted that we were considering getting satellite TV again. We've made our decision - we're not getting it.

While the monthly cost was a factor, that wasn't the main driver. The primary reason is our kids. They don't need it. The crap that's marketed to them via TV. The crap that's on TV. Our kids aren't even bugging us to get TV. So, why would we?

Clearly, we're saving money by not getting satellite again. That's great. And I miss some aspects of TV. But, we just don't need it.

We bought a stove this past weekend. A nice glass top stove. Not the nicest, and not the cheapest. It set us back about $750, taxes included.

To start the story at the beginning, our glass topped stove broke about two years ago. The oven still worked, and three of the four burners on the stove worked, but the biggest burner, the one that could work at two sizes, was cracked, so we couldn't use it. We'd used a three burner stove since.

Well I tried to "fix" it last week, only making it worse. We had the money in our EF, so we bought a new one. It has some nice features that our old one didn't. "Turbo Boil" (gets hotter to boil, say spaghetti water, faster), a warming spot (a fifth burner that is super low heat to keep things warm when they're done), and a probe for constantly measuring internal temperatures of meat. Things that we have done fine without, but are nice.

Most importantly - we didn't go in debt! We cash flowed the purchase. Sure, our EF took a hit, and that money is gone, never to be seen again. But, we have no more debt than we did a week ago, and we have a new stove!

I should add that the oven on the old unit was starting to go bad. Things were taking longer to bake. Sure, we probably could have changed the element, but that whole three burner thing was getting old.

August 2012 Debt
Mort 1 $102,359
Mort 2 $66,080
CC1 $2,384
CC2 $1,522
CC3 $387
CC4 $1,508
Van Loan $0

Difference from June = $10,139. Thank you Adoption Credit!

My current focus is to retire CC4 before December 31, when it shoots up to 22.99% APR. I'll have to make average monthly payments of $377 to make that happen.

We cancelled our TV satellite service about two years ago. We cancelled it because we could no longer afford to pay a monthly TV bill and reduce debt.

We're in a much better financial state than we were two years ago. We can now afford to pay a monthly TV bill, and continue to make substantial steps toward reducing debt. The question is - should we?

We have found life without TV to be not only acceptable, but in many ways preferable. The kids no longer fight about what's on the TV. The TV is not constantly on, rotting our brains. We have an extra $60 per month to allocate somewhere else. Most of what's on TV is crap anyway.

We are missing the Olympics. And I miss the Big 10 network and NCAA tournament coverage most of all (Go MSU!). And sometimes, if used properly, it can give you a parenting break. (The same old DVDs get tiring after a while).

So, we're considering whether or not we should re-up with our satellite TV service. And, getting the cheapest, most basic service is not appealing to me Like I said, the Big 10 network is part of the deal.

What do you all think?

Hey,

I've been inactive for quite some time, but I wanted to let you all know that our 13K federal adoption tax credit arrived in the mail this week, with interest. We deposited it, and the check cleared yesterday. Today we paid bills! $2,500 went to pay off our new front porch, $2,000 went to one of the credit cards, $5,000 paid off our van, $2,200 went to family members for Mort 2, and the rest went to our EF. Sure feels good!

Some of you may be tempted to critique how the money was spent. Please don't. (ie, more should have gone toward high interest credit cards) This was a balance of my wishes, DW's wishes, and sending money to family members with whom we have loans. Trust me, I know that paying off higher interest accounts makes more purely financial sense, but we feel an obligation to accelerate progress on family loans.

Remember how in the early spring I blogged about building a fence in the front yard for a play area for our boys? Well we've been using that fenced area. A lot. The fence connects to the our front door porch. The porch is about 80 years old. The constant use of the porch/fenced area has led to rapid deterioration of the porch. It is no longer safe. It needs to be replaced.

The bid for replacement is $4,500. I had $4K in my mind before we got the bid back, so it's close. We trust the contractor, so we're going with his bid.

He figures he can do the work the week after next, and it will take about 4 days. Until then, no fence for us.

I went through monthly spending and categorized the totals. I came up with the following:

Amount spent on:

Housing - 22%
Other Needs - 35%
Wants - 12%
Savings - 10%
Debt Repayment (or largely past wants) - 20%

According to Disney Steve in the forums the benchmark is 50% Needs, 30% Wants, and 20% Savings. In those terms my breakdown would be:

57% Needs
32% Wants
10% Savings

I've copied below something I just posted in the forums for those of you who don't frequent them.

I've posted about my situation from time to time, but I'll start with a brief refresher.

I took a job closer to where I grew up 4 1/2 years ago. We put our house on the market as we were moving. The value of the house has done nothing but drop since we moved. About a year after we moved we had an opportunity to move into my family's original farmstead home. We borrowed 70K from family members (30K from my aunt/uncle and 40K from DW's parents) to renovate the house. The original agreement was to pay back family after we sold our other home. Just during the last 4 months we have begun to pay them back slowly. $90/mo. to aunt/uncle and $120/mo. to in-laws. These are interest-free loans.

During this time we have had three different families rent our original house. At no time has rent matched our $1,026 monthly mortgage payment. The current renters expressed interest in buying the house when they moved in last July. We were going to rent the house for $800/mo., but we reached an agreement where we collected $900/mo., and the extra $100/mo. was their cost for us to take the house off the market for a year, to give them time to save/line up financing.

To no one's surprise, the renters are not in a position to buy the house. So, we reduced rent back to $800, and put the house on the market. We listed it for $69.9K, or 1/2 of what we bought it for in 2005. As far as I can tell, this price is reasonably close to market value. It's hard to tell because the market is so slow, There aren't really any comps. We owe $103K on the house. This will leave us in a short sale situation.

Here are my 4 options as I see them:

1. Continue renting the house at a loss until the market turns around, and we can sell the house for what we owe on it (that was our strategy up until now).

2. Continue paying the mortgage. Go the short sale route.

3. Quit paying the mortgage. See what happens first - foreclosure or the house sells as a short sale.

4. Get a commercial loan against the house we're living in. Set aside $30 - $35K to make up the difference between what we owe and what the house will sell for.

I'm honestly leaning very heavily toward option 3. Be done with it, and let the chips fall where they may. As I understand it, our credit will be trashed whether we go option 2 or 3.

My aunt has expressed her interest in helping us out. So, option 4 is possible. We would owe her a lot of money for a long time. I hate the idea of that, and hate the idea of not meeting our mortgage obligations.

We are working on getting a commercial mortgage on the house we're living in. The question will really be - should that money go to family, or be put on hold to shore up the difference when house 1 sells.

I've posted very recently about my other debts, but in case you are interested:

We owe about $7.4K in credit cards
We owe about $5.2K in a vehicle loan
Monthly net income is about $5.4K
Small $1.1K emergency fund