Home > Archive: January, 2010

Archive for January, 2010

Hmm how do you forget that? and new numbers

January 28th, 2010 at 02:17 pm

I have had an HSA for a number of years but it seems I never connected that to my networth. While you can't spend an HSA on just anything, its the pot of money I use for all my medical expenses and its a decent sized pot. So from now on I will be adding that in as well since it is money I have access to and use on a fairly regular basis.

I went back and edited through November showing the account so the jump didn't occur at the same time as when I upped the house value.

New Numbers

Okay, I finally have enough pretax items to base things off of gross income. So here is the new budget.

Gross Income 6208
401(k) 475
HSA 83 (167 per month employer)
Taxes 1412
Utilities 103
Entertainment 115 (tv/internet/netflix)
Gas 150
Irr. Bills 100 (phone/car ins.,etc)
PITI 1140
IRA 200
Student Loan 194
Credit card 1000
Allowance 800 (tends to get adjusted)

You will notice this leaves a leftover amount which I alternate between building my savings, paying off credit cards or covering a new lovely car expense or other bill for things breaking.

Once the credit card(s) is gone the excess will go straight into Roths, then into savings for projects.

This puts Needs at 53%, Savings at 32% and Wants at 15% so pretty close to my ideal budget.

Appraisal came in!

January 26th, 2010 at 08:29 pm

There is something very validating about having a supposedly objective person look at everything you have done and tell you what a fantastic job you have done. I have updated my networth to reflect my current home value (minus the repairs needed in his report).

There is something shocking about seeing my networth jump like that. Nonetheless, the only thing it really does is validate all the money we have spent on repairs. I will update the mortgage value as soon as the new mortgage goes into play.

The other nice thing is this means that our FHA loan is flipping to a conventional because our equity is high enough. No more mortgage insurance premiums and a 1.5% drop in the interest rate. We are of course sticking with a 15 year and I promise not to grumble too much about being set back a whole year on the loan (especially to people who prefer 30 years).

The appraiser also confirmed what I had long suspected, our initial sales price had been under market value at the time we bought. Our neighborhood just doesn't have a lot of foreclosure activity (not even at the height of the market scare) and so no one wanted to deal with our property due to short sale when they could spend a little more and not have to wade through the additional time constraints. No wonder the seller's agent bought us a water heater to close the deal.

All in all, it will be nice having a slightly lower payment ($100+). I am afraid hubby is disappointed though. He hoped it would be 186 (it was 180) so that we could add my student loans to the balance. It would have lowered the interest rate and freed up the cashflow in the $200+ range. I was more worried it wouldn't come in high enough to flip to conventional since comparables are sometimes hard to find in such a small and unique area.

First 401(k) contribution

January 22nd, 2010 at 02:54 pm

It didn't hurt as much as I was expecting but then they haven't cracked down at DH's work on overtime yet so that spared us a little. Nonetheless, its good to know that our savings rate is going back up to a somewhat decent level (7.8%). At the end of the year we will load up the Roths so it will jump to a healthy level at that time (depending on the constantly jumping income somewhere around 22% to retirement savings).

This year's goals are simple. Pay off the debt and max out retirement savings to best of our ability.

This will get a little bit easier if we do manage to refinance. The mortgage payment difference isn't huge but it would definitely gives us more to work with. Needless to say, I am waiting with bated breath to hear the appraisal number. They have to tell us before next Wednesday...

All in all, not much going on.

The New Plan

January 13th, 2010 at 02:50 pm

As much as I wanted to pay off the one card by March, we need more breathing room. We can not be operating without a savings cushion while DH is employed by a temp agency (not that working full time for another company would be any better in his field, but I digress).

The new plan will require 36% (so less than before) of our income to go towards the debt repayment but leaves us both with a cushion and some money to spend (4.4% of the budget and includes all groceries). Our payoff will be in October (*sigh*) but the chances of needing to resort to the credit cards because something else happens (we just had 4k worth of something happen) goes down tremendously.

Strangely, the evaporated balance transfer offers have come back so I won't have to pay a high interest rate for the privilege of time (this is a mixed blessing since I know I would never pay over 10% apr for any type of loan but 1.99 and lower doesn't encourage speedy payoff).

Part of the additional setback is the access to the 401(k). We are putting 15% into it pretax and that is a big chunk out of the budget. On the other hand, the habit of saving has already begun to pay dividends for us. Our retirement accounts have been steadily climbing and our net worth with it. I wish we had begun these accounts back when we first moved out here. The delay in waiting for our debt to be paid off was a poor choice since it takes awhile to reform bad habits. And thanks to that 401(k), tax time will avoid being a big hit to the wallet.

Overall, I am more than a little disappointed by this delay but I am trying to be realistic with my budget.

Ouch, that hurts

January 11th, 2010 at 06:35 pm

A rebuilt transmission will be necessary for the car. That will deplete the rest of our savings so I am going to have to get creative to rebuild the savings fund.

We still haven't had a setback that we haven't been able to pay in full but this last one is cutting it close. I may need to slow down the repayment schedule to allow our cushion some healing time.

Time also to nix the allowance increase. The new paint will just have to wait till March. In fact, time to cut back more. If I can just get through March, everything opens up after that but its going to be tight until then.

Random musings

January 11th, 2010 at 03:14 pm

This weekend was fairly productive. We priced out some items and picked paint colors for the house so probably next weekend we will restart the house projects. The cork floor I want for my kitchen will only cost a little over $400 so we are going to start saving out for that. Retrimming the doors will cost $30 for each doorway side which means the trims with 6 coats of paint (that were never sanded) can go bye bye.

I also found out that we could possibly refinance the mortgage which would lower the interest rate and drop the mortgage insurance. Should be interesting to see what number they attach to the house. I know its worth more than the original sales price but how much more has never been established (which is why I use sales price in our networth calculations).

Its now or never with the refi though. And yes never is okay too. Mortgage insurance drops off in 3 years so it just wouldn't make financial sense to refinance closer to the drop off date because 6% isn't a very high interest and our loan is too small for interest rates alone to make up closing costs.

The car is at a different shop today. Decided that since the last two times, the shop had given us back a car with more problems than we sent it to them with, we would try someone new. It means we will probably pay more than we should to fix the previous guys mistakes but that is better than trusting them with our car again.

The new shop already sounds better. Instead of dismissing our change in transmission sound, they told us that the other shop probably used too heavy a weight of transmission fluid when they changed it. If they can hear that noise, they should have no problem hearing the clunking in the middle of the car (other shop told us they couldn't find that noise and then changed the transmission fluid and claimed that cured it, un hunh).
*Sigh* This is why I didn't own a car for a number of years. They are a lot of work.

On a slightly depressing note, my friend with the much newer car has had to send her car in for repairs even more than us (we have been mostly doing maintenance, hers is new things breaking) despite us getting a bad job the past two times. I'll pass on the new car thank you.

Budget Change

January 7th, 2010 at 02:59 pm

Its a little early to come out of hibernation, but that's just the type of girl I am. I am ready to get back to work on the house projects (little ones, one at a time, I promise) so our allowance will need to go up to accommodate the things we will need to pick up like paint, trim and tools.

We have a lot of things that are mostly finished so I think our projects will mostly be about completing what we have started.