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.
Viewing the 'Budgeting' Category
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 blogged yesterday about how my fuel oil budget plan bill was cut from $220 per month to $95 per month. First of all - snafu - we use #2 fuel oil, which is diesel fuel without the red dye that (at least in Michigan) means that its taxed. That is, our fuel oil is not dyed, and not taxed. Road diesel is dyed, and taxed, but otherwise it's the same stuff. Yes, #2 heating oil is expensive, but that was the furnace that was in our house when we moved into it. The cap price used to calculate my budget payment was $299/gal.
Anyway, that reduction in payment adds another $125 to my monthly cash flow. I'm going to use that money to pay off my truck early. To make a long story short, when we bought our van last December, rather than make a big down payment on the van, we made a substantial payment on my truck. The way my credit union does it, when you make a big payment, they extend the due date. So, when we bought the van, I owed something like $4,000 on the truck. We paid about $3,000 toward the truck (and some down on the van, too). So, the next month rather than having a payment due in January, the CU extended my due date to I think this next November.
I've been paying about $50 each month on the truck since then. My current balance on the truck is right around $250. Using the extra cash flow from the reduction in heating bill, I will pay the truck off in September, four months early. After that, I'll make bigger payments on the van, at least until the end of this heating fuel cycle.
Now, back to the barn. I've been talking about renovating the old hog barn. There is another barn on the property. That barn is where the cows were kept. The cow barn is in a great deal of disrepair, and has basically been abandoned. doingitallwrong left a link to a buyer of old barn wood in a comment on my blog a couple days ago. I checked the site out. The buyer is about 90 miles from my place. He requests an estimate of board feet, and sizes of boards, etc. plus my bid on price.
So, what I'm thinking is cannibalize the abandoned barn, and use those funds to improve the smaller barn.
One problem is that we don't own either barn. My dad does. When we took ownership of the property, we got the house plus one acre. Neither barn sits on that acre. I'm sure that my dad would be OK with us selling the barn wood, and using the funds to improve the other one, especially if I do all the leg work to sell the lumber. But, it is a decision that we will have to talk to him about.
I looked back into my archived blog posts, and I see that I blogged about this same topic one year ago yesterday. Except this year, it's the exact opposite issue.
Two years ago we went on to our heating fuel oil company's budget plan. A year ago ended our first cycle. June is the settle up month, and the specifics of the new year's plan are set up in July.
Our initial year (July 2103 - May 2014) plan was $220 per month. We ended that year with a $400 credit, but they wanted to increase our monthly payment to $250. I called, and complained, and they set our payment back to $220.
We got our new plan letter in the mail yesterday. This past year we finished with a $857 credit, and our new calculated payment is $95 per month. Doing the math, it should work out to be about even, it just seems like a big drop. It also seems to be very different than last year's calculation.
I understand that there is an El Niño developing, and this winter may be warmer than usual. Which is OK by me for a bunch of reasons. So, we could end up with another credit, even with the lower payment.
But, I'll pay attention to our monthly statements, and if we need to adjust our payments up near the end of the cycle, I'll do that. Because the last thing I want is a big settle up next June.
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?
I blogged earlier this month about how our fuel oil supplier increased our monthly budget payment amount, even though we finished the year with a credit. A quick call fixed the problem, and our budget payment was reduced.
Today I was looking through our checking account withdrawals, and saw that $220 was debited from our account on July 21. That's our normal fuel oil budget payment date, and our normal payment amount. The problem is that we weren't supposed to have the withdrawal made this month, and the amount withdrawn in August was supposed to be reduced, so that our Sept. 1 credit would be $0. That was according to a conversation I had with a rep from the company in May.
I made another quick call this morning, and the $220 charge will be reversed, and a reduced amount will be withdrawn in August. Problem fixed.
But, I've had two billing issues related to our budget plan this month! I'm left wondering if:
1) they were two honest mistakes
2) the billing person is incompetent
3) there is something more menacing going on, and they are trying to milk as much money out of the customers as they can, and if a customer catches on, and makes a call, they will only then fix the problem
Please convince me that option #1 happened.
Last summer I began a budget plan with out fuel oil provider. We've been paying $220 each month since July, and each month we receive a statement detailing how much we've paid vs. how much we've used.
Each month, our account balance has been negative - that is, we've paid in more money than the value of the fuel oil we've used - until this month (March statement).
Our March delivery brought our balance up to a positive $42.
Of course we'll still be making payments in April and May. June is the settle-up month.
Our usage (home heating) is about to decrease greatly, so we'll end the cycle with a negative balance.
I'm thinking it would be better to apply that balance to next year's monthly payment, rather than receive a lump sum in June.
Our monthly payment has been $220. I'm thinking that a monthly payment of $20 or $25 less each month would be better than a $250 (or whatever is is) payment in June. Unless we really need that money for some reason.
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.
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!
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.
We're getting a load of gravel today (actually, it's probably already delivered). We used two loads of gravel six years ago when we made our driveway. We've had lots of rain this spring/summer, and the potholes have become very evident. The delivery fee is $75, plus $6.50 per ton for the gravel. The dump truck holds 19 tons. So, I ordered 19 tons, and the total comes to $198.50.
It's fortunate that the porch contractor has a skidsteer on site. The gravel driver will spread the gravel as best he can from the dump truck. The porch contractor will help spread it evenly with the skid steer. Will save me from moving it around. We're going to extend the driveway a bit back from the road, too. We would have done that six years ago, but there is an electrical line in the way. The addition of the skidsteer will help that.
I also contacted a professional carpet cleaner. He will be at the house on Monday. He'll charge us about $100-$150. Yes, we could have rented a steam cleaner (and bought cleaner) for about half that cost. It can be a challenge to coordinate that, especially with two kids with special needs. The boys are in school Monday, and DW and the girls are busy, and will be out of the house.
We've got a couple minor, but out of our area of expertise plumbing problems. I've contacted a plumber to take care of them. Not sure on the cost yet.
The gravel and the plumbing have been on the to do list for a while. We just needed to wait until we had the extra cash. Plus, doing the gravel while the porch contractor is there will make the finished product much better, and easier.
Other home improvement projects for the future:
Generator with transfer switch installed. We live in a very rural part of Michigan, and have been without power two times recently. One of the times was for about 20 hours.
Couches and easy chair. We haven't bought a single couch at all ever. The two that we are using are hand-me-downs from my in-laws. The easy chair is about 11 years old. It was a gift from my brother-in-law (purchased new) when our first daughter was born.
New dressers for the kids. Again, all kids dressers are hand-me-downs, and they don't work very well.
Refrigerator. Our refrigerator was left in our old house when we bought it. We moved it with us. Not sure how old it is. It still refrigerates and freezes things. The ice machine does not work. We can do with this for a while, but it needs to be in the replacement plan.
These items are on the wish list. We need to see how the dusts settles out on other priorities.
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 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.