We ended up filing our taxes as if DS 1 didn't exist. We'll now wait for the refund checks and the new birth certificate before we pursue the rest of our refund/adoption credit with IRS.

I just checked my checking account balance. It's +$900. Not bad for the end of the month. Actually, it's pretty darn great. We still have our van payment to make before the end of the month, and we still owe $300 on our heating fuel. So, we'll end the month about $400 to the positive. That cash will go toward CC4.

If we get our reduced income tax refunds (state and fed) in the next two or three weeks, the opressive CC4 balance will be history.

That, my friends will be cause for a (no cost) celebration! Then I will start with much vim and vigor to tackle CC1.

DW e-filed our taxes late yesterday morning. Then she checked the status of our e-file at around 9:00 last evening. She found out that our filing had been rejected. The reason for the rejection was that someone else had used DS1's name and SSN as a dependent. DS1 is our son whom we adopted last month.

Before DS1 came to us as a foster child last April, at least five different adult people probably had access to his SSN.

We provided care for him for 8 1/2 months in 2011. We meet all qualifications to claim him as a dependent.

I guess the bottom line is that this will slow our tax refund down substantially. We will need to now file the old fashioned way, and prove our case. While I was really counting on the money, it will eventually work its way out.

I got my W-2 in the mail last Friday. So, we bought Turbo Tax, and got started. DW did the data entry. We couldn't complete them because we still need to know what we spent on mortgage interest last year. We don't itemize, but we do use the mortgage interest as an expense against our rental.

DW plugged in an estimate, and we'll have about $4,800 in federal refund and $900 in state. Plus, of course, the adoption credit.

I paid my winter property taxes. I think the bill was $328, but I don't remember exactly. Somewhere between $320 and $330, anyway.

We live in a very rural area, and taxes are cheap. I think the summer taxes were just around $200.

Our taxes for the other house we own run about $1,400 per year.

I also ordered fuel oil today for the house. Last time we filled up it cost $750. That lasted October, November and December. January and February will be colder, so we'll see how far this fill-up lasts.

The bill won't be due until after I get paid again (I get paid monthly, at the end of the month). So, I should be able to float the fuel oil bill (or most of it, anyway) with my next pay check.

But, it's likely we'll need another fill-up before March. Hope for warm days!

We had a great Christmas. We even celebrated an adoption yesterday, but more on that in a future post.

We treated ourselves a bit more this year than the past couple of years. We bought a new family computer, and bought some towels. Our old towels were given to us as wedding gifts, 15 1/2 year ago. It was time.

We also bought gifts for the kids, but trust me, we didn't go overboard.

As I read what others have to say about getting yourself out a a financial mess, usually there is something about treating yourself once in a while. That, I think is what this Christmas was about. Sure, that money could have gone toward further debt repayment, but you have to treat yourself once in a while.

Oh, yeah, all of this was cash flowed, we didn't go into debt on our little treat for ourselves!

Happy New Year to all.

I stopped by the bank to cash in my accumulated coins again. The total was $18.19. The last time I cashed in my coins was early October, so let's say 10 weeks. That's an average of about two bucks per week of accumulated coins.

A couple of years ago, when cash was really really tight, we would literally paw through the coins to pay for gas and grocery items at the end of the month. We never had extra coins just sitting around.

Obviously, we still have a considerable debt load. But, from a family cash flow stand point, things have begun to turn around, and I think that the coin accumulation situation is a signal of that.

A summary of some of my personal finacial calculations that I've talked about in previous entries.

Credit card debt to retirement savings ratio: 16.1%

Non mortgage debt to income ratio: 13.1%
Total Debt to Income ratio: 32.6%

Daily Interest Expense (December 2011):
Credit Cards: $2.60
CC + Auto: $3.23
CC + Auto + Mortgage: $21.09

I guess it's time to blog about net worth. I don't think I have so far. I've spent a lot of time on the liabilities side, and not so much on the assets side.

Assets
House 1 $80,000
House 2 $73,000
Retiement $86,274
Autos (2) $7,850
Checking $1,308
Tot. Assets $248,432

Liabilities
House 1 $103,968
House 2 $70,000
CCs $13,867
Auto $6,373
Tot. Liab. $194,208

Net Worth $54,224

The BIG question is value of House 1. We'll not know that for sure until it sells.

Retirement savings has increased about 16K over a year ago.

But now I have it logged in cyberspace, our December 2011 net worth is $54,224. Hopefully it goes up from here.

$5,036

That's what I came up with when I ran a tax estimate on the Turbo Tax web site.

I even adjusted my withholdings last February, so I kept more of my money, and my refund wouldn't be so big.

That's based on my income, my tax withholdings, also I estimated a $3,000 loss on our rental. The big kicker is four child tax credits.

We'll be getting another tax credit that wasn't part of the estimate, because we used energy efficient materials when we had the roof put on. That might be $500.

A 5K tax refund will help a lot.

It won't be used for a cruise.
It won't be used for a new plasma TV.
It won't be used as a down payment for a 25K car.

It will be used, in one form or another, to reduce debt (or toward an EF).

Now to begin planning on how best to place that money for financial security.

I've blogged about our rental house before. We are reluctant land lords, because this is not an investment property. This is the house we used to live in, and put up for sale when we moved almost four years ago.

We've had three different renters in the house. The first was an interim pastor, who didn't pay very much for rent. My thoughts in renting the house to him for well below market value was that it was some income, plus he would maintain the house (which he did), and pay the electric, water, and heat bill (which he did), and keep the snow shoveled out of the driveway (which he did very well). He also paid his rent a day or two before it was due. But, (I thought) the best reason to rent to him well below market value was that if the house did sell, we could ask him to leave, no questions asked. Well, the house didn't sell, and he left when his interim period was over.

October 2010, new renters moved in. They paid substantially more than the previous renter. They were OK renters. They always paid their rent, just not on time. It was always paid three or four days after it was due. They made a few complaints along the way, and we always felt that they did things to undermine our efforts to sell the house. They moved out last June.

In July, our new renters moved in. They are paying a bit more than renters #2, and they pay on time. We don't hear much in the way of complaints from them. We still wish we weren't land lords, but if we have to be, this is better than a couple of other alternatives.

I bought a new battery for my beater 1994 Chevy Lumina today. It was a hundred bucks. Hopefully it will outlive my car, because it is such a big pain in the rear to get out. It's even almost impossible to jump start my car because of how it's positioned in there.

I replaced it three years ago. I bought a cheapie back then, because I thought my car didn't have much life in it. I should have gritted my teeth and bought the expensive one then!

It's been a while since I updated this blog. I've been busy with work.

So, our roof project is complete. We hired an Amish crew of four for the job. They began Nov. 1 and finished Nov. 4. It actually took three days of work, but Thursday was rainy. Thankfully, a tear-off wasn't necessary, so the rain was no problem.

The best news is that labor was over-estimated by about $1,500, and materials were over-estimated by almost $500, so the whole project was about $1,500 less expensive than our budget.

The results are great - a new shiny steel roof!

We turned our furnace on Friday. That's Firday, September 30. I usually like to wait until Oct. 1, but, it was cold Friday.

It would have been turned on Thursday, but our two young boys had thrown a number of toys, sippy cups, bottles, and other assorted items down into our duct system. I reached down and grabbed out everything I could from the ducts, and my wife screwed the register covers down on Thursday, solving half the problem. There were still some items that had to be recovered from the far end of the ducts in the basement.

So, on Friday, I bought some of the very large zip strips that attach the flexible ducts to the main. When I got home from work on Friday, I went down to the basement, and cut the existing zip strips, removed the various debris from three different ducts, reattached them with the zip strips, and turned on the heat.

Hopefully we have enough fuel oil to last through the end of December. We'll probably need another two $750+ fill-ups before heating season is over.

...not really. Well, I am. A 1.5% raise, in fact. But, my contribution to my health insurance plan is increasing, too. Both will go into affect Oct. 1.

My health insurance contribution increase is greater than my raise. I've known that for a while, but I've not calculated the actual monthly net until today.

The difference is $40 per month less in my net paycheck than before the raise and increase in contribution.

What it comes down to is that I'm thankful to not only have a job, but to also have health insurance. Health care is ungodly expensive, and my employer is covering the majority of the cost.

I've blogged on and off about a new roof we need. Well, we've decided to bite the bullet, and get it done sooner rather than later.

We met with the roofer on Friday. He can get to it the first or second week of November. It's a metal roof, so we don't need the heat of summer to make the tar shingles stick better (or at least that't what I've heard you need with tar shingles.)

This mis not the best of moves financially. We will dry our saving almost completely up, with a very small EF. We did decide to peel $1,400 off the estimate by choosing against the standing seam roof, and for a barn-type metal.

My wife has been pushing for a new roof for a year now. I've been trying to hold off - we would have plenty saved if we waited until next March. But, alas, I've come to accept that it would be better to not endure another Michigan freeze-thaw cycle on this 25+ year roof.

So, November 2011 is a comprimise between October 2010 and March 2012. I'll still have two paydays (Sept. 30 and Oct. 31) to put some money away, but I'm afraid the well will be dry once we've paid for the roof.

I've bought a lottery ticket exactly once in my life - just after I turned 18 in 1990 - because I could. I spent a dollar, didn't win, and have never bought a ticket since.

I've come to believe that the state lottery system is simply a regressive tax on people who largely cannot afford to play. And, I also get annoyed at people who stand in front of me at gas stations and convenience stores and laboriously choose their scratch-off selections, or numbers to play that night.

A couple of days ago, I was in line at a store, and an older well-dressed gentleman, probably about 75, dropped $80 on ten and twenty dollar scratch-offs. We walked out of the store at the same time, and he drove off in a newish Cadillac.

Obviously, I don't know if the car is paid for, or any other single thing about his financial standing, but he didn't really fit the profile of a typical lottery ticket purchaser.

I've blogged before about a house we have for sale. It's about 135 miles from where we currently live. It's been for sale for going on 4 years in a very sluggish rural Michigan housing market.

Well, our former neighbors are leaving town. Mr. neighbor works for General Mills, and he has been transferred to their headquarters in Minneapolis. GM will buy their house for its appraised value if it doesn't sell in 45 days.

Our houses have some similarities. Same street, similar sizes, similar ages. In fact, when we moved to town in 2002, they were both on the market, listed at the same price. This house was one of the three we had narrowed down to before we made the offer on our house.

About a month later, our neighbors bought the house they are now moving from. I'm not sure what they ended up paying for it, but I assume a similar amount that we paid.

Anyway in the next 45 days, something will happen. Either a), the house will sell, and we will have a new data point to help us determine a selling price, or b), they will get 2 or 3 appraisals (three if the first two are not within 95% of each other). Mrs. neighbor will share the appraised values with us.

So, this is good news. Great news would be that our house actually sold!

Here are a couple more financial ratios that I've calculated.

The first is the minimum payments for all non-mortgage debt (credit cars plus van loan) that we owe divided by monthly (after tax) income. So, it's not necessarily what I pay, because I've been paying more than minimum, but I's what a bank would calculate if I went in for a new loan. My non-mortgage debt payment to after tax income ratio is: 13.7%.

The second is the same calculation, but I include my mortgage debt. That ratio is: 33.4%.

I would feel a lot better if that first calculation was less than 9%, and the second calculation was less than 30%. Actually, I would feel a LOT better if the first calculation were 0. There are, of course, two ways to improve those calculations - boost income or reduce debt (or stretch out payments, but I don't want to go there).

I've read that mortgage companies will approve loans that make your total debt to income ratio up to (and even beyond) 40%. That's scary. Things would be pretty tight if 40% of our income were going to debt repayment.

I did some thinking today about what I'll to have saved before I retire. Part of that equation is life expectancy. The on-line tool I used calculated my life expectancy at 84 years. Don't ask me what site I used. I just googled "life expectancy calculator" and used one that looked good.

The 84 years result sounded OK. My maternal grandfather lived to 71, maternal grandmother, 79 and both paternal grandparents lived until they were 89. Actually Grandma was within a week of her 90th birthday. So, good genes on Dad's side and not as good on Mom's. Actually, it was probably lifestyle choices as much as anything, and I'm probably a blend of both.

I'm still not sure what I'll need to have saved to retire. It's still 20+ years away. I've heard 25 times salary. If I figure modest pay raises, that comes to about $1.9 million. Not sure that's going to happen. I've also heard that you'll need funds enough to cover 70-80% of your pre-retirement income. But, I'm not sure what kind of withdrawal that figures.

Like I said, I'm still looking at a horizon of 20+ years, so this is something to consider, but not obsess over. For now, I'll concentrate on reducing then eliminating debt.

I bought fuel oil for home heating. Over the past couple of years, we have struggled to keep payments up for our heating fuel. We generally begin heating the house in October (we live in Michigan, where it cam get cold!). It seems like we usually wait until the tank is nearly completely empty, call to have it filled, and have the bill paid off just in time to get it filled again. We need to fill it three times per heating season.

Well, since we had some extra money in our account, I decided to have it filled in August, and I paid the bill right away. It felt good to be able to do that. I figure we have enough fuel to last through December.

I'm hoping that the fuel will be a bit cheaper than if I had waited until late September, when everyone else will be filling up, but that may be a pipe dream. Regardless, we have a tank full of paid for fuel oil!

We have a black walnut tree behind our house. It drops walnuts on our house, and they tend to be very loud. Also, the tree has grown enough that the branches are now scraping against the roof, and that is annoying. My wife has let me know that it is time to take action.

So, I borrowed my dad's chain saw yesterday, and brought it home. With chain saw in hand I looked at the tree, and I looked at the house. I looked at the tree, and then the house again, and quiclky came to the realization that the likelihood that I would damage the house if i cut even a branch off the tree was probably 80%.

It would probably cost at least $300 to hire a professional tree company to take care of the problem. So I opted for an interim solution - hire the Amish guy who lives down the road. Yes, I have an amish guy that lives down the road. Actually there are three Amish families that live within a mile of my house. This particular Amish guy cuts down trees, and cuts lumber for a living.

The problem is ... he will most likely refuse payment. Which would be fine if I had an in-kind service to return to him. Amish tend to be fairly self sufficient. I'll try to offer him $75 or something like that, but if (when) he refuses, I'll be indebted to him. I'll try to come up with something in return, but I don't know what it will be.

If you look at my info bar, you’ll notice that I have two kids plus two foster kids. Our oldest is 9. We used disposable diapers with her until she was about two. Then we switched to cloth diapers. The switch was for a myriad of reasons, including cost. We found cloth diapering to be cheaper, chiefly because my wife is a seamstress, and she made them.

When DD#2 was born, she was nearly exclusively cloth diapered. The only disposables we used with her were given to us as baby gifts. We used them for some nighttime diapering and when we were on long trips.

Enter foster child #1. He came into our care, March 2010, when he was 19 days old. We continued the tradition of cloth diapering. Because he was a foster child, and had twice weekly visit his birth mother, we did need to have a supply of disposables around.

Foster child #2 came into our lives this past April. He was nearly 3. Because of the situation he was in prior to foster care, potty training is not even yet on the radar screen. Four kids is a lot. Did I mention that the two foster kids have special needs? Anyway, we have found it nearly impossible (actually strictly impossible) to keep up with the three or four times a week laundering schedule that cloth diapers demand. We live in rural Michigan, so a diapering service is not an option. We have switched back to disposables for both boys.

As far as cost goes, my wife orders them on line for less than a quarter apiece. We also receive a foster care stipend that makes covering the cost less of an issue. Cloth diapers are better for the skin, more comfortable and better for the environment. But right now, they are not an option. But, boy do the disposables stink!

There's a plumbing problem at our rental house. First estimate is $1,450. I've called two other plumbers for estimates. Hopefully tomorrow or Monday, we can get better news.

The line that goes from the upstairs toilet to the basement has a leak. I'm no plumber, and I'm 136 miles away.

Last October, my credit score was a fiasco. It was 580. I asked on the forums how long it would take to raise my score up to a respectable level. No one could really answer the question.

Well, I applied for a new credit card for a balance transfer. Apparently part of the new credit card reform law is that credit companies need to provide you with your credit score. Mine is now 667.

So, over the course of 9 months of faithfully paying bills on time, and whittling down debt, my credit score has improved by 87 points. That's close to 10 points per month. Maybe by the end of the year, I'll be looking at a 700 credit score.

I've posted the same question in the forums, but I thought I'd also post the same question here:

I've posted in the forums previously about a house that we own that we no longer live in. My family moved 3 1/2 years ago, and the house has been on the market and unsold ever since. We owe about $105,000, and my best guess is (with input from our Realtor) that it's worth somewhere between $95,000 and $105,000 at this time. The house is located in a small villge in the northern part of Michigan. The list price on the house is $109,900, which when Realtor commissions and closing costs are added in, puts us about $4,500 in the hole.

One week ago, we had new renters move in. They are interested in buying the house, but are not in a financial position to do so right now. We struck a deal with them to remove the house from the market for 12 months. They are paying $100 per month above what we asked for rent in exchange for us removing the house from the market (we had been asking for $800 in rent, and they are paying $900 per month.) Also, when the 12 months is up, the (presumed) $1,200 they've paid in addition to the rent will be put toward a down payment.

So ... on to my question. Would it be a good idea for us to refinance our loan while we wait? We are paying $6.25% interest. The original amount borrowed was $120,000, and we are paying $738/mo. Int + Prin.

There is of course no guarantee that our renters will buy the house in July 2012, but I'd like to use 12 months as my planning horizon.

Over the next 12 months, I will pay $6,500 in interest on the loan as it currently is.

If I were able to refinance for 5.25% (one point lower than current), I would save $158/mo. in mortgage payments and $1,000 in total interest payments, assuming a 30 year refi.

Or we could refi at a 20 year payoff, keep our payments approximately the same, and bite off more principal each month.

What are mortgage rates these days? What can I expect for closing costs? Clearly, I don't have 20% Loan to Value.

Any thoughts would be appreciated.

Thanks

I took all of our household coins to the bank today. We had $24.12. I do this about four times a year, and it seems like there's always between $20 and $25 worth of change.

I applied and was approved for a new credit card yesterday. Yikes! I haven't had one of those in three years. I'll not use it for any purchases, only a balance transfer of CC#2 - the 16.99% APR monstrosity.

Some stats: My credit limit will be $5,000. So, less than half of the limit will be taken up by the transfer. The balance transfer charge is 4% of the amount transferred. The six month introductory APR is 0.0%. Then, it increases to a rate between 9.99% and 20.99%. Ouch and ouch. I don't know yet what the APR will move to, but will find out when I receive the card and details in the mail.

Some calculations: Best case scenario is to have the entire balance paid off by next March - With a 9.99% APR. If I (we) can do that, I project that we can save $127 over what we would have paid in interest by keeping the balance where it is. If the interest rate spikes up to 20.99%, and I don't have the balance paid off until next April, we'll save $43 over keeping it where it is.

If the balance is not paid off until May 2012, at a 20.99% rate, I will go backwards $24. If the rate goes to 9.99%, I have until July 2012 before I go backwards.

It may seem like an awful lot of hassle just to save $127 over the course of 8 months. It probably is. But, I feel as if I've waged an all out war against credit card debt, and every small victory is a step closer towards my ultimate goal of being credit card debt free.

I will shred the card as soon as it arrives in the mail.

We made the 136 mile trip to our old house this weekend. Our new renters moved in. We met them, signed two copies of the lease, and collected their rent plus security deposit. Fortunately, their check cleared. They also seemed like genuinely nice people.

We weren't aware of it, but there were community-wide garage/yard sales going on. We had some items that we had left in the house. Things like my wife's antique sewing machine collection, a changing table, an antique buffet, and an antique rocking chair. These are all items that we 1- don't have room for now and 2- have gotten by without for 3 1/2 years. So ... we put them all out in the front lawn, put prices on them and sold everything but the rocking chair. We paid for the gas for the entire trip, plus a bit more.

We certainly didn't sell the items for nearly what we could have, but they are now sitting in someone else's house collecting dust. My wife didn't want to get rid of the rocking chair unless it sold for at least $75. So, we brought it back home with us, and she'll give it to her brother.

Long story short - we have a house that we no longer live in that has been for sale for nearly four years. We're probably $5-10,000 under water. It's listed as Mort. 1 under my info on the side bar.

We had renters in that house from last October until about a month ago. Our new renters are moving in this Saturday. The rent covers about 3/4ths of our PITI.

I don't like being a land lord - always wondering if the payment will come, if the check will clear, etc. I just want to sell the house and be done with it all. Our new renters are interested in buying, but are apparently not in a financial position to do so at the time.

So, we're doing the back ground check, and signing the lease agreement, and crossing our fingers that at a minimum, they pay every month and maybe just maybe were aquainting ourselves with the future owners of our house.

The interest rate that we pay on CC 1 dropped last month. It was 12.9% APR prior, and it dropped to 8.9% APR. That's about $30 less in accumulated interest per month. We didn't even have to call to ask for the rate change. I guess it has to do with the fact that we've faithfully paid that card, and all of our other obligations each month since October, and our credit scores are improving as a result.

An 8.9% APR is still highway robbery, but it sure beats 12.9%!