As I look back on our 2010 Goals I'm amazed by how much things change in a year. The goals we followed we smashed. The rest, well... they just seem so insignificant to me now. I see the value in the accountability, but the reality of the time involved in tracking stuff in the blog format, creating a price book, etc just doesn't fit with living life with a young family.
Here are the updates on the 2010 goals that we did focus on:
Goal: Set specific dollar amount to save for car replacement, home improvements, and other major savings categories and track it in side bar. -- We set the amounts early in the year, but didn't track them in the sidebar.Goal: Save 50% of car replacement fund by the end of 2010.- Actually saved 100% of the amount we targeted AND bought a new to us car. Paid cash for the whole thing.
Goal: Save 75% of deck replacement fund by the end of 2010 (other 25% in 2011). - Actually saved 100% and built a new deck in pergola. Paid cash for the whole thing.
Goal: Budget money each month for clothes for the kids, so there are fewer surprises and less temptations. - I got a lot better at separating my categories in 2010. My spreadsheet is a lot longer, but I have separate categories for clothes, gifts, entertainment, blow, etc now that I didn't have in 2009
We also did pretty well at the resolution to have more fun in 2010. Tim actually got to golf more, we took a couple weekend trips as a family, joined the Children's Museum, Center for History, and Potawatomi Zoo, I spent some money on my new obsession - Thirty-One, etc. Overall, it's been a great year.
How did you do in 2010? Did you set goals and stick to them?
Showing posts with label Goals. Show all posts
Showing posts with label Goals. Show all posts
Saturday, January 8, 2011
Friday, January 1, 2010
2010 Financial Goals and Resolutions
Be Accountable - I find I do best when I have a focus. Even more importantly, I do best when I am accountable to others.Goal: Create 3 Financial Goals each month that I will focus on and track. Post these goals (along with the update for the previous month) by the 5th of each month.
Goal: Review weekly expenses with Tim every Sunday.
Goal: Reinstate side bar tracker for money saved (through couponing and such) and to track larger savings goals.
Be Gazelle Intense - Dave talks about this a lot. I think we were pretty gazelle intense when we were paying off debt, but we've been too content since then. We've been staying on track and watching our money, but haven't had a gazelle intense focus since we met our goal for the emergency fund.Goal: Set specific dollar amount to save for car replacement, home improvements, and other major savings categories and track it in side bar.
Goal: Save 50% of car replacement fund by the end of 2010.
Goal: Save 75% of deck replacement fund by the end of 2010 (other 25% in 2011).
Plan Ahead - I always "find" money each month to cover our expenses, but some times I think I could have done better and planning ahead and saving for those things.Goal: Set 2010 irregular income wish list with Tim. Complete before the end of January.
Goal:Review circulars and coupons on Sunday to plan meals & grocery shopping for the week. STICK TO IT!
Be REAListic - A lot of things got dumped in to our blow fund category last year. This year I'm going to try to keep better track of more specific expenses. I'm not going to track toiletries and personal care items separately, but will break down entertainment, clothing, etc.Goal: Budget money each month for clothes for the kids, so there are fewer surprises and less temptations.
Goal: Review receipts to make sure expense is in appropriate category.
Goal: Create and maintain a price list for major items, especially those frequently purchased at Sam's.
Resolutions:* Increase the amount we give back to the community.
* Have more fun. We're debt free now, it's time to put an entertainment category back in the budget.
* Get grocery budget (more consistently) under control.
* Find new and creative ways to reduce our monthly costs.
Goal: Review weekly expenses with Tim every Sunday.
Goal: Reinstate side bar tracker for money saved (through couponing and such) and to track larger savings goals.
Be Gazelle Intense - Dave talks about this a lot. I think we were pretty gazelle intense when we were paying off debt, but we've been too content since then. We've been staying on track and watching our money, but haven't had a gazelle intense focus since we met our goal for the emergency fund.Goal: Set specific dollar amount to save for car replacement, home improvements, and other major savings categories and track it in side bar.
Goal: Save 50% of car replacement fund by the end of 2010.
Goal: Save 75% of deck replacement fund by the end of 2010 (other 25% in 2011).
Plan Ahead - I always "find" money each month to cover our expenses, but some times I think I could have done better and planning ahead and saving for those things.Goal: Set 2010 irregular income wish list with Tim. Complete before the end of January.
Goal:Review circulars and coupons on Sunday to plan meals & grocery shopping for the week. STICK TO IT!
Be REAListic - A lot of things got dumped in to our blow fund category last year. This year I'm going to try to keep better track of more specific expenses. I'm not going to track toiletries and personal care items separately, but will break down entertainment, clothing, etc.Goal: Budget money each month for clothes for the kids, so there are fewer surprises and less temptations.
Goal: Review receipts to make sure expense is in appropriate category.
Goal: Create and maintain a price list for major items, especially those frequently purchased at Sam's.
Resolutions:* Increase the amount we give back to the community.
* Have more fun. We're debt free now, it's time to put an entertainment category back in the budget.
* Get grocery budget (more consistently) under control.
* Find new and creative ways to reduce our monthly costs.
Wednesday, May 13, 2009
The Light at the end of the tunnel will light a fire under your butt!
So, part of my post that got lost in the Blogger hiccup yesterday was about getting back on track with our budget. I've still been tracking our expenses, so that's not the issue. We've gotten lazy about what we're spending our money on, though. The line between "needs" and "wants" has gotten blurred. Yes, Addison needed clothes for the next size up... but probably not as many as I bought her. Yes, the broadcast spreader works better than the one we had but either will do the job.
I can't speak for Tim, but for me I have gotten good at justifying things. The biggest justification is that we can "afford it". Like I said, we're tracking every penny and the money is there... it just probably should have been more focused toward debt. I guess that's the other justification. We're SO CLOSE to being debt free and we've paid HUGE sums toward debt already that I don't feel that guilt that often motivates people in the early stages of Baby Step 2. Well, I think it's time to get back on track and put things in perspective again.
Last night, Tim and I sat down and started putting some numbers down on paper. When we first started the Dave Ramsey program, the numbers were so big that we couldn't even get our arms around a realistic time table. I remember thinking that we would be doing REALLY well if we could have the school loan (the largest debt other than the house) paid off by the time Troy started school. This was a huge leap since my goal used to be having it paid off before they started college. When we sat down last night we realized that we could actually be debt free before the end of the summer... and if we're really diligent, we could probably have our emergency fund fully funded by the end of the year. This will take some discipline and effort, but it could be done.
So, what's the plan. First of all, having a goal is the best thing we can do. We know it can be done and we're determined to do it. Knowing that it's attainable is motivating. Very motivating. It would probably only be 3 months worth of expenses in the emergency fund, but it can be done. One small thing I'm doing is pledging "NO E-BAY IN MAY". Sounds silly, but I can totally get addicted to buying clothes on e-bay. It's evil. We're also participating in a neighborhood garage sale this weekend. I don't think we'll do as well as last year (not as much stuff), but I'm hoping to make a couple hundred dollars. Every little bit helps, right?! I think garage sales also help keep you grounded. It makes you realize that you don't need nearly as much stuff as you thought you did at one point. That's always a good thing when you are trying to keep your unnecessary spending to a minimum. The biggest part of the plan, though, is accountability. Now that I've told all of you what we're planning on doing, we better stick to it!
I can't speak for Tim, but for me I have gotten good at justifying things. The biggest justification is that we can "afford it". Like I said, we're tracking every penny and the money is there... it just probably should have been more focused toward debt. I guess that's the other justification. We're SO CLOSE to being debt free and we've paid HUGE sums toward debt already that I don't feel that guilt that often motivates people in the early stages of Baby Step 2. Well, I think it's time to get back on track and put things in perspective again.
Last night, Tim and I sat down and started putting some numbers down on paper. When we first started the Dave Ramsey program, the numbers were so big that we couldn't even get our arms around a realistic time table. I remember thinking that we would be doing REALLY well if we could have the school loan (the largest debt other than the house) paid off by the time Troy started school. This was a huge leap since my goal used to be having it paid off before they started college. When we sat down last night we realized that we could actually be debt free before the end of the summer... and if we're really diligent, we could probably have our emergency fund fully funded by the end of the year. This will take some discipline and effort, but it could be done.
So, what's the plan. First of all, having a goal is the best thing we can do. We know it can be done and we're determined to do it. Knowing that it's attainable is motivating. Very motivating. It would probably only be 3 months worth of expenses in the emergency fund, but it can be done. One small thing I'm doing is pledging "NO E-BAY IN MAY". Sounds silly, but I can totally get addicted to buying clothes on e-bay. It's evil. We're also participating in a neighborhood garage sale this weekend. I don't think we'll do as well as last year (not as much stuff), but I'm hoping to make a couple hundred dollars. Every little bit helps, right?! I think garage sales also help keep you grounded. It makes you realize that you don't need nearly as much stuff as you thought you did at one point. That's always a good thing when you are trying to keep your unnecessary spending to a minimum. The biggest part of the plan, though, is accountability. Now that I've told all of you what we're planning on doing, we better stick to it!
Wednesday, March 25, 2009
Crossing them off the list...
As we're coming to the end of the first "quarter", I decided I should look back on my goals. In part, I want to evaluate where I stand and if I'm on track, but I also realize that some were vague and may need to be tweaked (or possibly dropped all together. Bear with me as I rehash and revise these...
(For a full explanation of each goal, see the link above.)
Accountability: I've been doing pretty well at tracking our savings and our debt payments. It's been a little hard because some of our savings are at Walmart (which is really hard to track). Another big savings area for us is buying second hand and on e-bay. Those don't show up on our savings tab at the right, but I wish I could find a way to include it. So far, though, I'm right on track with my accountability.
Check it twice: I started off doing this and found it wasn't really worth it for me. I've gotten better at separating clothes and drugs, but tracking cleaning supplies and other household goods just got too time consuming. There are far better things to occupy my time. For now, I'll continue to include the majority of those in with my grocery budget.
Putting a Price on it: I sort of forgot about this one (which is why I'm revisiting this). I haven't done this yet, although it will be sort of easy as I continue tracking my E-mealz expenses.
Refi and Refocus: DONE!!!! See this post!
Attack Debt: We've been doing AMAZINGLY WELL on this. While we're not done attacking debt, I can say we're DONE! DONE! DONE! Cutting my school loan in half! Wow, seeing that in writing is almost as amazing as he reality. We've been really going after the debt like crazy people. I think the biggest factor in this has to do with taxes from my business. I had been setting aside the recommended 25% for taxes, but with all my deductions (included horrific legal fees) we owed a LOT less than that. This allowed us to put the remainder of that money on debt. The result... my year end goal came after just 3 short months. Now we're going REALLY bold. Our revised goal is to have my whole school loan gone by the end of September. That would mean that we will be DEBT FREE within 2 years of starting the program. THAT WOULD BE AMAZING!
Cash for Glass: While we did just get 4 more windows installed, finishing off the back facade of the house, we are still working on this one. We'd like finish the house off by doing the front facade this year. It will depend a little on when we finish our debt snowball. Now that we have momentum, I just want to get it done and the windows may have to wait.
Give Back: Okay, I haven't been budgeting $5/month but we are starting to give back. We signed up as a
Partner in Hope and are now budgeting $20 per month for St. Jude's. We've also increased our giving at church. I haven't pursued The Box Project because I don't feel well researched yet, but I think with the new E-mealz focus we will be able to donate a lot to the food pantry.
Real it in!:We are well on track with this. Now that I am using E-mealz for my grocery lists, I don't buy lot of stuff we don't need. I've been stocking up on cleaning supplies, but have cut out a lot of the other fluff spending I used to do just because of the deals.
Use it up, Wear it out, Make Do, or Do without!: I have fully switched to reusable grocery bags. I LOVE THEM! The rest of this is still a work in progress. I'm hoping to move a tub to the upstairs to hold the recycling stuff from the second story in hopes they'll avoid the trash. Again, I'm glad I'm revisiting these so I can put this back in the forefront of my mind.
I'd still like to think through some more things and write more specific, measurable goals, but for now this will help keeps things fresh in my mind.
(For a full explanation of each goal, see the link above.)
Accountability: I've been doing pretty well at tracking our savings and our debt payments. It's been a little hard because some of our savings are at Walmart (which is really hard to track). Another big savings area for us is buying second hand and on e-bay. Those don't show up on our savings tab at the right, but I wish I could find a way to include it. So far, though, I'm right on track with my accountability.
Check it twice: I started off doing this and found it wasn't really worth it for me. I've gotten better at separating clothes and drugs, but tracking cleaning supplies and other household goods just got too time consuming. There are far better things to occupy my time. For now, I'll continue to include the majority of those in with my grocery budget.
Putting a Price on it: I sort of forgot about this one (which is why I'm revisiting this). I haven't done this yet, although it will be sort of easy as I continue tracking my E-mealz expenses.
Refi and Refocus: DONE!!!! See this post!
Attack Debt: We've been doing AMAZINGLY WELL on this. While we're not done attacking debt, I can say we're DONE! DONE! DONE! Cutting my school loan in half! Wow, seeing that in writing is almost as amazing as he reality. We've been really going after the debt like crazy people. I think the biggest factor in this has to do with taxes from my business. I had been setting aside the recommended 25% for taxes, but with all my deductions (included horrific legal fees) we owed a LOT less than that. This allowed us to put the remainder of that money on debt. The result... my year end goal came after just 3 short months. Now we're going REALLY bold. Our revised goal is to have my whole school loan gone by the end of September. That would mean that we will be DEBT FREE within 2 years of starting the program. THAT WOULD BE AMAZING!
Cash for Glass: While we did just get 4 more windows installed, finishing off the back facade of the house, we are still working on this one. We'd like finish the house off by doing the front facade this year. It will depend a little on when we finish our debt snowball. Now that we have momentum, I just want to get it done and the windows may have to wait.
Give Back: Okay, I haven't been budgeting $5/month but we are starting to give back. We signed up as a
Partner in Hope and are now budgeting $20 per month for St. Jude's. We've also increased our giving at church. I haven't pursued The Box Project because I don't feel well researched yet, but I think with the new E-mealz focus we will be able to donate a lot to the food pantry.
Real it in!:We are well on track with this. Now that I am using E-mealz for my grocery lists, I don't buy lot of stuff we don't need. I've been stocking up on cleaning supplies, but have cut out a lot of the other fluff spending I used to do just because of the deals.
Use it up, Wear it out, Make Do, or Do without!: I have fully switched to reusable grocery bags. I LOVE THEM! The rest of this is still a work in progress. I'm hoping to move a tub to the upstairs to hold the recycling stuff from the second story in hopes they'll avoid the trash. Again, I'm glad I'm revisiting these so I can put this back in the forefront of my mind.
I'd still like to think through some more things and write more specific, measurable goals, but for now this will help keeps things fresh in my mind.
Tuesday, March 24, 2009
I get it now!!!
Last night Tim and I were looking up some information on my school loan. I stumbled across a page that shows our payment history. What is nice is that it shows the amount we paid, the amount applied to principal, and the amount applied to interest. WHAT AN EYE OPENER!!! I knew you saved on interest by paying loans ahead - like mortgages and school loans - but I never fully understood the full impact until I saw it in writing (have I mentioned I'm a visual person).
The minimum payment on my loan is $296.33. Following Dave's plan, we've been paying the minimum amount on our largest debt (yes, I owed more on my school loan than we did on our second mortgage) until just recently. I couldn't believe when I saw the summary just how little those minimum payments were doing at knocking down what I owed. I knew it seemed like the balance never changed, but I didn't think too much about it until I saw in in writing. Here's a few lines from the report to help show what I saw...
April 10, 2008 - Paid $296.33 = $78.99 to Principal - $217.34 to Interest
Sept. 10, 2008 - Paid $296.33 = $81.19 to Principal - $215.14 to Interest
Jan. 10, 2009 - Paid $296.33 = $117.21 to Principal - $179.12 to Interest
We were making progress, but it was slow. Then at the end of January we started really ATTACKING the debt.
Jan. 23, 2009 - Paid $2,750 = $2,674.96 to Principal - $75.04 to Interest (because this was not a regularly scheduled payment).
After a couple more large payments like that (thanks to deferred house payment after refinancing, payment on my work, extra paycheck in February, and some scrimping) the real affect can be seen in our most recent "regular" payment:
March 10, 2009 - Paid $296.33 = $249.51 to Principal - $46.82 to Interest
Now that is the proportion I like. We're FINALLY paying more on principal each month than we are on interest. What a great feeling. The change started right after our large payment in January. Our regular payment in February was the first time we actually paid more toward principal than to interest. Now that each payment makes a significant dent in the principal, I finally understand the power of paying ahead. This could be a great motivator when it comes time to paying off our mortgage too. That's getting ahead of things, but I can happily say that I AM SO EXCITED about the numbers I'm seeing on paper right now. Stay tuned for more on that...
The minimum payment on my loan is $296.33. Following Dave's plan, we've been paying the minimum amount on our largest debt (yes, I owed more on my school loan than we did on our second mortgage) until just recently. I couldn't believe when I saw the summary just how little those minimum payments were doing at knocking down what I owed. I knew it seemed like the balance never changed, but I didn't think too much about it until I saw in in writing. Here's a few lines from the report to help show what I saw...
April 10, 2008 - Paid $296.33 = $78.99 to Principal - $217.34 to Interest
Sept. 10, 2008 - Paid $296.33 = $81.19 to Principal - $215.14 to Interest
Jan. 10, 2009 - Paid $296.33 = $117.21 to Principal - $179.12 to Interest
We were making progress, but it was slow. Then at the end of January we started really ATTACKING the debt.
Jan. 23, 2009 - Paid $2,750 = $2,674.96 to Principal - $75.04 to Interest (because this was not a regularly scheduled payment).
After a couple more large payments like that (thanks to deferred house payment after refinancing, payment on my work, extra paycheck in February, and some scrimping) the real affect can be seen in our most recent "regular" payment:
March 10, 2009 - Paid $296.33 = $249.51 to Principal - $46.82 to Interest
Now that is the proportion I like. We're FINALLY paying more on principal each month than we are on interest. What a great feeling. The change started right after our large payment in January. Our regular payment in February was the first time we actually paid more toward principal than to interest. Now that each payment makes a significant dent in the principal, I finally understand the power of paying ahead. This could be a great motivator when it comes time to paying off our mortgage too. That's getting ahead of things, but I can happily say that I AM SO EXCITED about the numbers I'm seeing on paper right now. Stay tuned for more on that...
Thursday, January 22, 2009
Housing History
All gazillion documents are signed. It's official. Our refinance is finished. Woohoo!!! With the refinanced wrapped up, Tim and I have been reflecting on our home ownership history.
House #1: In 2002 I bought a REAL fixer upper. It was a 1902 Queen-Anne in our little down town. I was single with no kids and some construction experience, so it was perfect for me at the time. The house wasn't even for sale; I had just tracked down the slum-lord and bought it from him. I was working for the City at the time, so I had a few connections. I knew the bank was concerned about red-lining issues, which meant they were very flexible in my financing. I basically did a construction loan with the primary contractor being me. After the about 6 months I rolled that in to a 5-1-Arm at 5.25%. I bought it with the intention of refinancing within those 5 years. Fate had another idea. I ended up meeting Tim about 3 months after I bought to house. Even though I was knee deep in construction, he fell in love with me any way and ended up moving in a year later. Over the next year and a half, we got married, finished up the majority of the house, and ended up finding out we were moving. Luckily the move was work related with a relocation package. I was a little pushy with the relocation company and insisted they list the house for $99,900 even though the average of the three realtors was only $90,000. We got EXTREMELY lucky in that some one who was living in the area and watched us fixing up the house had fallen in love with it like I had 2 years earlier. Just 2 days after the open house we had a full price offer. We gave 5% back at closing, but we had still covered all our costs (I basically bought it for $50K and put $35K in to it) with a little left over.
Our house was the bright blue "beacon" in the middle of the picture (It was supposed to be a deeper, darker blue but picking paint from a small square can be deceptive)
House #2: Our relocation was to a much tougher marker, so we didn't buy right away. We had a year to use our relocation package, so we rented for 6 months while we shopped around. Because we were young and stupid (and not on Dave's plan) we felt we NEEDED to take advantage of the program and buy a house within a year. We ended up finding a place about 45 minutes from Tim's office in a far north-west suburb. Because the market was so expensive, we ended up buying the house on an interest only loan. Yes, we were stupid. In our defense, we got the house at a good price. It had been on the market for more than 6 months and the people had already moved. They were carrying a bridge loan and willing to sell cheap and fast. We LOVED the house. It was perfect for us. Unfortunately, Tim's job wasn't. Within a year of buying the house, we had Troy and decided to move back here. Again, we got VERY lucky. We had a great agent and had bought the house right. Less than a month after putting it on the market, it was sold for $20k more than we paid for it. Once we paid the realtor fees, moving costs, and other non-sense we pretty much broke even. It was well worth it to get out of a bad job.
House #3: After selling the house so quickly we had to find some thing FAST back here. We had made several weekend trips to look, but with no luck. I had seen this house on the internet, but it was out of our price range at the time. At the last minute we found out this was reduced and on City water & sewer. We made an offer without me even seeing the place. Again, we got a great deal. The people had already moved out 8 months earlier and they needed to sell it. They had originally listed the price for just over $200,000, but we bought it $166,000. Since pretty much all our profit on the previous house had gone for expenses, we ended up doing an 80/20 mortgage. Our first was a 30 year fixed at 6.625%, our second was 8.5%.
That was about 2.5 years ago. Since then we started on the Dave program. We have been paying aggressively on the second mortgage. We were on track to pay it off this year, but decided to refinance instead when the rates dropped. Before the holidays we were able to lock in a rate of 4.75% for a 30 year fixed. We were a little nervous about the appraisal because how bad the market is right now. Worst case scenario, we figured we'd have PMI for a little while but we would pay it off quickly and get it eliminated. We were thrilled when the appraisal came back at $181,000. That's a 9% increase in 2.5 years. Outstanding in this market. Even better is that it gave us more than 20% equity so we didn't have to do PMI. The best part for us will be the change in payment. Because of a screw up with taxes we had been paying over $1750 per month (for both payment). Now with the lower rate and only 1 mortgage (and the tax fiasco resolved) we'll be paying less than $1000 a month. Yes! That is a savings of $750 per month!!!
We've come a long way from ARM and Interest Only loans. I never imagined we could have a 30 year fixed with a lower rate that my original ARM loan. You have to love that. Now we are down to just my school loan debt and then we'll be able to make that long awaited call to proclaim ourselves DEBT FREE!(house excluded)!
House #1: In 2002 I bought a REAL fixer upper. It was a 1902 Queen-Anne in our little down town. I was single with no kids and some construction experience, so it was perfect for me at the time. The house wasn't even for sale; I had just tracked down the slum-lord and bought it from him. I was working for the City at the time, so I had a few connections. I knew the bank was concerned about red-lining issues, which meant they were very flexible in my financing. I basically did a construction loan with the primary contractor being me. After the about 6 months I rolled that in to a 5-1-Arm at 5.25%. I bought it with the intention of refinancing within those 5 years. Fate had another idea. I ended up meeting Tim about 3 months after I bought to house. Even though I was knee deep in construction, he fell in love with me any way and ended up moving in a year later. Over the next year and a half, we got married, finished up the majority of the house, and ended up finding out we were moving. Luckily the move was work related with a relocation package. I was a little pushy with the relocation company and insisted they list the house for $99,900 even though the average of the three realtors was only $90,000. We got EXTREMELY lucky in that some one who was living in the area and watched us fixing up the house had fallen in love with it like I had 2 years earlier. Just 2 days after the open house we had a full price offer. We gave 5% back at closing, but we had still covered all our costs (I basically bought it for $50K and put $35K in to it) with a little left over.
Our house was the bright blue "beacon" in the middle of the picture (It was supposed to be a deeper, darker blue but picking paint from a small square can be deceptive)
House #2: Our relocation was to a much tougher marker, so we didn't buy right away. We had a year to use our relocation package, so we rented for 6 months while we shopped around. Because we were young and stupid (and not on Dave's plan) we felt we NEEDED to take advantage of the program and buy a house within a year. We ended up finding a place about 45 minutes from Tim's office in a far north-west suburb. Because the market was so expensive, we ended up buying the house on an interest only loan. Yes, we were stupid. In our defense, we got the house at a good price. It had been on the market for more than 6 months and the people had already moved. They were carrying a bridge loan and willing to sell cheap and fast. We LOVED the house. It was perfect for us. Unfortunately, Tim's job wasn't. Within a year of buying the house, we had Troy and decided to move back here. Again, we got VERY lucky. We had a great agent and had bought the house right. Less than a month after putting it on the market, it was sold for $20k more than we paid for it. Once we paid the realtor fees, moving costs, and other non-sense we pretty much broke even. It was well worth it to get out of a bad job.
House #3: After selling the house so quickly we had to find some thing FAST back here. We had made several weekend trips to look, but with no luck. I had seen this house on the internet, but it was out of our price range at the time. At the last minute we found out this was reduced and on City water & sewer. We made an offer without me even seeing the place. Again, we got a great deal. The people had already moved out 8 months earlier and they needed to sell it. They had originally listed the price for just over $200,000, but we bought it $166,000. Since pretty much all our profit on the previous house had gone for expenses, we ended up doing an 80/20 mortgage. Our first was a 30 year fixed at 6.625%, our second was 8.5%.
That was about 2.5 years ago. Since then we started on the Dave program. We have been paying aggressively on the second mortgage. We were on track to pay it off this year, but decided to refinance instead when the rates dropped. Before the holidays we were able to lock in a rate of 4.75% for a 30 year fixed. We were a little nervous about the appraisal because how bad the market is right now. Worst case scenario, we figured we'd have PMI for a little while but we would pay it off quickly and get it eliminated. We were thrilled when the appraisal came back at $181,000. That's a 9% increase in 2.5 years. Outstanding in this market. Even better is that it gave us more than 20% equity so we didn't have to do PMI. The best part for us will be the change in payment. Because of a screw up with taxes we had been paying over $1750 per month (for both payment). Now with the lower rate and only 1 mortgage (and the tax fiasco resolved) we'll be paying less than $1000 a month. Yes! That is a savings of $750 per month!!!
We've come a long way from ARM and Interest Only loans. I never imagined we could have a 30 year fixed with a lower rate that my original ARM loan. You have to love that. Now we are down to just my school loan debt and then we'll be able to make that long awaited call to proclaim ourselves DEBT FREE!(house excluded)!
Wednesday, January 7, 2009
New Years Resolution: Financial Goals
2008 proved to be a better year than we anticipated. Getting on the same page financially has made a huge difference in our marriage and life.
Accountability - While I was pretty good about tracking our expenses for the entire year of 2008, I feel like I need to do a little more. I need to keep a good account of not only what we spend, but what we save, and how much debt we've paid off. Tracking what we save should make me feel better about the time I spend on such things. My husband laughs at my obsession, but he likes the affect on our bottom line.
Check it twice - For the past year we've used a budget sheet on Excel. While I was getting my feet wet, I was also figuring things out. One of the things I want to work on this year if better categorization. Right now I tend to put things in our grocery or blow fund category when it probably fits better some place else. Some of the things I would like to track better are medicines, cleaning products, gifts, baby products, and clothes. I think one of the reasons I can't get my grocery budget under control is because every trip to Meijer goes under grocery... even if it includes clothes or other general merchandise. What categories do you use?
Putting a Price on it - This one will be hard because it will be very time consuming. I'd like to create a price book so I know when we're getting the best deal. I have a lot of things figured out in my head, but I would like to see some of it on paper a little more. There's some thing about actual proof that makes me feel better.
Refi and Refocus - At the end of last year we started the process to refinance of house (Current rate - 6.625%, Anticipated rate - 4.75%). This would eliminate our second mortgage and leave us just one remaining debt - my school loan. Between the refinance and getting our taxes straightened out in escrow (LONG STORY), we're going to be able to reduce our housing expenses SIGNIFICANTLY! If we refocus this to my school loan, we should be able to make serious progress to becoming debt free.
Attack Debt - Thanks to a couple trips abroad, my school loan is a lot larger than I would like to admit. When I graduated I just assumed it would be a monkey on my back for decades to come. After all, my school loan debt was even bigger than our second mortgage. About six months ago we set a personal goal to have the loan paid off by the time the kids were in school. That idea was exciting. What a relief that would be. Then the snowball started kicking in. Our debts were dropping off and the reality of reaching that goal seemed so attainable. With our refinance on the horizon, we now think we can do even better than that. If I keep working this year at about the same pace as the last 6 months, we should be able to cut my loan about in half. YES, BY 50% before the end of the year. Tim thinks we could do better than that, but since my work is not consistent and I like to plan for unexpecteds... I'm going to leave it to cutting it in half. I want to be realistic.
Cash for Glass - Last year we paid cash for 4 LARGE windows. We were hoping to do more than that, but the windows are over sized and had to be made of tempered glass so they were really expensive. The company we contracted with has what they call a maintenance plan. Supposedly they lock in your rate & price for up to 5 years provided you replace at least 2 windows a year. We had planned on doing about 4 a year, dividing the house in to sections that made sense and would look right aesthetically. I'm going to meet with the sales man and get an estimate for the rest of the house. Tim and I talked about it and, provided we can set the cash aside, we're going to try to actually finish the rest of the house before next winter. Since there was ice forming on the inside and huge drafts, this is really more of a need than a want so we're making this a priority for this year.
Give Back - Growing up I never remember my parents giving holiday gratuities, so it's never really been part of my usual practices. This year, I wanted to, but still didn't know "how". If you never see the person, how do you get it to them. I've been talking to a lot of people and definitely want to start doing this. I've decided that if I simply budget $5 per month for holiday gratuities, it would add up quickly. If I combine that with great sales toward the end of the year, I can actually give them this year! In addition to that, I'm looking in to an organization called The Box Project. I think you can give gently used stuff, so if we get partnered up with a family with young children we should be able to do this pretty easily. I would much prefer to do some thing domestic than over seas and I like that you actually get to know the family. I think by shopping ads, take a realistic look at the stuff we have, and setting aside a little each month we should be able to work this in to our budget and our practices. We've had a good year and I feel the need to give back.
Real it in! - Couponing and bargain shopping is great, but I feel like I get out of control. I really want to stop buying stuff just because it's on sale. I need to take a hard look at what we need and stay a little more focused. Now if it's free, or nearly free, and I can donate it... I'm all for it, but I don't want to end up with a bunch of stuff we just won't use. It sort of defeats the purpose of a lot of my other goals.
Use it up, Wear it out, Make Do, or Do without! -- I'm going to try to keep this in the forefront of my mind. There are a lot of things here that we could reuse or repurpose. Not only will this help reduce clutter and chaos, but it should help the bottom line too. This ties in to a lot of personal goals I'm setting for myself this year - like gradually switching to reusable grocery bags, getting away from plastic containers, etc. We recycle a lot, but I know we can do better. I actually plan on printing this really big and posting it on our fridge as a daily reminder. I'll confess that we aren't likely to completely follow the mantra, but I think we could do a lot better than we have been. You have to start some where, right?
I also need to work on setting some personal goals, and you may see a link soon, but for now this is a good start. Here's hoping for another good year.
Accountability - While I was pretty good about tracking our expenses for the entire year of 2008, I feel like I need to do a little more. I need to keep a good account of not only what we spend, but what we save, and how much debt we've paid off. Tracking what we save should make me feel better about the time I spend on such things. My husband laughs at my obsession, but he likes the affect on our bottom line.
Check it twice - For the past year we've used a budget sheet on Excel. While I was getting my feet wet, I was also figuring things out. One of the things I want to work on this year if better categorization. Right now I tend to put things in our grocery or blow fund category when it probably fits better some place else. Some of the things I would like to track better are medicines, cleaning products, gifts, baby products, and clothes. I think one of the reasons I can't get my grocery budget under control is because every trip to Meijer goes under grocery... even if it includes clothes or other general merchandise. What categories do you use?
Putting a Price on it - This one will be hard because it will be very time consuming. I'd like to create a price book so I know when we're getting the best deal. I have a lot of things figured out in my head, but I would like to see some of it on paper a little more. There's some thing about actual proof that makes me feel better.
Refi and Refocus - At the end of last year we started the process to refinance of house (Current rate - 6.625%, Anticipated rate - 4.75%). This would eliminate our second mortgage and leave us just one remaining debt - my school loan. Between the refinance and getting our taxes straightened out in escrow (LONG STORY), we're going to be able to reduce our housing expenses SIGNIFICANTLY! If we refocus this to my school loan, we should be able to make serious progress to becoming debt free.
Attack Debt - Thanks to a couple trips abroad, my school loan is a lot larger than I would like to admit. When I graduated I just assumed it would be a monkey on my back for decades to come. After all, my school loan debt was even bigger than our second mortgage. About six months ago we set a personal goal to have the loan paid off by the time the kids were in school. That idea was exciting. What a relief that would be. Then the snowball started kicking in. Our debts were dropping off and the reality of reaching that goal seemed so attainable. With our refinance on the horizon, we now think we can do even better than that. If I keep working this year at about the same pace as the last 6 months, we should be able to cut my loan about in half. YES, BY 50% before the end of the year. Tim thinks we could do better than that, but since my work is not consistent and I like to plan for unexpecteds... I'm going to leave it to cutting it in half. I want to be realistic.
Cash for Glass - Last year we paid cash for 4 LARGE windows. We were hoping to do more than that, but the windows are over sized and had to be made of tempered glass so they were really expensive. The company we contracted with has what they call a maintenance plan. Supposedly they lock in your rate & price for up to 5 years provided you replace at least 2 windows a year. We had planned on doing about 4 a year, dividing the house in to sections that made sense and would look right aesthetically. I'm going to meet with the sales man and get an estimate for the rest of the house. Tim and I talked about it and, provided we can set the cash aside, we're going to try to actually finish the rest of the house before next winter. Since there was ice forming on the inside and huge drafts, this is really more of a need than a want so we're making this a priority for this year.
Give Back - Growing up I never remember my parents giving holiday gratuities, so it's never really been part of my usual practices. This year, I wanted to, but still didn't know "how". If you never see the person, how do you get it to them. I've been talking to a lot of people and definitely want to start doing this. I've decided that if I simply budget $5 per month for holiday gratuities, it would add up quickly. If I combine that with great sales toward the end of the year, I can actually give them this year! In addition to that, I'm looking in to an organization called The Box Project. I think you can give gently used stuff, so if we get partnered up with a family with young children we should be able to do this pretty easily. I would much prefer to do some thing domestic than over seas and I like that you actually get to know the family. I think by shopping ads, take a realistic look at the stuff we have, and setting aside a little each month we should be able to work this in to our budget and our practices. We've had a good year and I feel the need to give back.
Real it in! - Couponing and bargain shopping is great, but I feel like I get out of control. I really want to stop buying stuff just because it's on sale. I need to take a hard look at what we need and stay a little more focused. Now if it's free, or nearly free, and I can donate it... I'm all for it, but I don't want to end up with a bunch of stuff we just won't use. It sort of defeats the purpose of a lot of my other goals.
Use it up, Wear it out, Make Do, or Do without! -- I'm going to try to keep this in the forefront of my mind. There are a lot of things here that we could reuse or repurpose. Not only will this help reduce clutter and chaos, but it should help the bottom line too. This ties in to a lot of personal goals I'm setting for myself this year - like gradually switching to reusable grocery bags, getting away from plastic containers, etc. We recycle a lot, but I know we can do better. I actually plan on printing this really big and posting it on our fridge as a daily reminder. I'll confess that we aren't likely to completely follow the mantra, but I think we could do a lot better than we have been. You have to start some where, right?
I also need to work on setting some personal goals, and you may see a link soon, but for now this is a good start. Here's hoping for another good year.
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