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Archive for September, 2021

What happens when you aren't paid?

September 30th, 2021 at 04:50 am

When you aren't paid what happens?  Thankfully for our EF nothing.  I logged in and moved the paycheck amount from our sink fund into our checking account to cover our mortgage and bills.  Days like today I am pretty grateful I took the lowest common option and did the refinance from 30 year fixed to 7 year arm.  As ridiculous as it sounds the extra $720/month still went to savings but it just feels like if we had to we could cover the $3100 easier tha $3800.  

But this non-payment is probably standard for a startup.  Yes they have money but it's outsourced and there was a problem proabbly because it was a 3 paycheck month.  I suspect this sort of snafu will happen when you outsource the work.  Just like how we are navigating our new helath insurance which isn't as comprehensive as DH's last job but better in many ways because it's a better network (blue cross blue shield versus aetna).  Aetna was the worse because no one took it.   

Because of this I think that we are definitely looking at spreading out the cost of the new furnace. I think that outlaying $15k in one go doesn't make sense since we may have to cover this type of mistake again.   If people wonder this is what an Emergency Fund is for.  To not stress out about covering your expenses.  I do think Dave Ramsey is correct in being gazelle intense about debt.  But I disagree about $1000 baby EF.  That wouldn't cover half of our mortgage payment. If it were me I'd probably have an EF of at least half a month of expenses plus my mortgage payment.  Otherwise I don't know what I would do if we had only $1000 cash.

My progress budgeting

September 24th, 2021 at 06:57 pm

So I've always struggled budgeting.  Even before with less money I've alway reversed budgeted.  Figured out what was important and what needed to be saved and then spent the rest.

This time I'm sort of doing it but also sort of tracking my spending.  I've been reasonable successful at tracking eating out and groceries which are the budget busters.  It's easy to track airline tickets, hotel stays, or big ticket one off spending.  It's even easy to track monthly kid activity.  But I've found that miscellaneous spending, eating out, groceries seem to get away very easily from me.   Plus before our income seemed to be a bit of a mystery with bonuses and stuff.

Now we are on a strict income only with taxes and medical and it's the same amount every time.  We are netting $5800/pay period which is biweekly.  This needs to lower around $5400/pay period.  That means 2 extra paychecks a year.  But it's easier to budget $11600/month than it is to spread it out. The biweekly paychecks I was thinking should probably go to savings so we automatically save $11600/year getting us close.  This year we've saved close to 40% of our income but it was an odd year for income.

$3150 Mortgage
$720 Robinhood (extra mortgage)
$3600 Spending
$1000 property taxes
$1000 sink funds/savings/travel
$1500 Roth/ESA

We've been pretty good at sticking to this.  The only small problem controlling the sink funds/traveling.  I'm not sure we'll be perfect but we are trying.  I've been trying to maximize not paying cash for anything travel related and using all our miles and points. 

We also decided to spend $15k on the A/C furnace.  We decided even if we stay 2 more years the people who buy it from us might think a house worth $1m+ should have a new a/c furnace.  I'm going to try to get it on a 0% CC for the next 15 months with a 2% cash back credit card.  Then we'll make monthly payments instead of using all of our sink funds right now.  

the market and my Adjustable Rate Mortgage

September 23rd, 2021 at 04:53 pm

So in June we refinanced from a 2.875% 30 year fixed rate mortgage to a 2% 7/1 adjustable rate mortgage.  Previously in September we had a 3% 7/1 adjustable rate mortgage that we were given a free fix rate when we were about to refinance.

So how's it been going?  Well we were paying in May $2035 in interest and $1808 Principal.  Now we are paying $1405 in interest and $1717 in principal.  We are saving $720/month in payments most of it interest.  I have saved it for 4 months and October 1st I'll transfer another $720 to our index fund VIOO.  VIOO is a small cap index fund. I thought something broad but risky.

Sadly we are actually down and losing 1.4% on VIOO.  But until we sell, refi, or pay off the house I'm curious if I can get ahead by keeping on investing the difference in payments.  Trust me I've been tempted to not save it but I'm curious.  We've been on a pretty "tight" budget and sticking to it has been hard.  But moving the $720 on the first of every month seems to be working.   Let's see how a year goes.  It's a dollar cost averaging strategy into a risky sector index fund.  But it's a low cost and broad sector index at the same time.

Travel is coming back

September 22nd, 2021 at 07:34 pm

Well at least for us.  I booked a ton of reservations.  It's interesting that I decided that 2022 is it.   Started with Christmas 2021.  We are going back to Hawaii. I booked using a combination of miles and points.  Then I booked our tickets in February 2022 to Mexico.  Using the travel companion fare on Alaska it was $1500 for the 4 of us on the only direct flight.  We also paid for today our friend's timeshare for $1800 for the week.  It's a very fancy resort and for $1800 we got a 2 bedroom suite.  That is huge considering that $250/night is not unreasonable nowadays especially for a 2 bedroom suite which technically can fit another family.  If we wanted to save money we could easily invite another family for $800 for the week.

Finally I booked a flight to Canada for DH's cousin's wedding.  I finally snatched up and used our united airlines miles.  So we booked 4 tickets for $12 each and 26k miles.  Considering we've been sitting on our miles for years and never earning or using them.  I'm glad to be over and done.  1 less account to worry about.   We basically now always fly hawaiian or Alaska mostly because we want to fly direct.  Flying direct is a premium always.  This is also why using our unused miles is so nice.  We get to use miles we don't earn anymore and we get the only direct flight considering alaska didn't have any direct flights!

I am so excited right now.  Last hold up is DH's passport.  He sent it off for renewal this month and they said 18 weeks.  That puts him at January.  But I think we should be fine by then.  

Can you feel the energy?  I think life is getting back to normal.

College is what you make of it

September 16th, 2021 at 12:21 am

My cousin's daughter is in her 2nd year at college.  She is going for free at a cal state college and living at home.  She had a 2 year tuition free scholarship.  Amazing.  So she's going to have 2 years of university for free and then transfer to a different UC or Cal-State and finish up.  So amazing.   She plans on being an elementary school teacher which as people know is not the best paying job but an essential one.  Since it's not high paying it's pretty amazing she's able to do it with minimal output.  This will mean she'll be further ahead when she gets out!

On the flip side I have a client paying for UC Davis $70k year out of state tuition.  I'm not sure what his kid is doing in their 2nd year as well. He has another child about to go and he's again estimating $70k, so he'll be shelling out $140k in tuition and living expenses a year.  

You can see how on both sides of the coin college can be as cheap or expensive as you choose to make it.  What will I do? I don't know.  But I'd like to believe that I'm being flexible.  I am on track to have 4 years saved at an in state college tuition/living expenses.  I am on track for about 2 years at a private/out of state school.  And I've saved both in ESA, 529, and taxable so there is a ton of flexibility on what the girls might choose to do.  I will admit seeing the $70k price tag gave me a bit of sticker shock and fear over what it might cost me.  If my kids went that route $300k seems a bit insurmountable.  We don't have the time now with 11 and 9 to save that much nor will we get there with what we saved.

Sink fund?

September 10th, 2021 at 07:33 pm

So I'm leaning more and more to a new furnace and AC.  Our furnace is 19 years old.  It will cost us around $13k all in (another estimate) with 15% costco cash back rebate.  Includes permits and electrical work all done and disposal.

I know it would be smarter to at least use the AC from the other person and pay only $6k.  But I'm not sure that's what I really should do.  We can sell it with a new AC and new furnace.  But the money.  Do we have it? Yes.  Do I want to spend it?  No. I sort in many ways want to put it on a credit card and pay 0% for the next year.  Unfortunately they aren't offering that right now.  

I have $11,500 in sink funds right now.  We've managed to cash flow everything.  The question is do we use that up?  Do we go with the $6k option?

sometimes i just wanna vent..

September 8th, 2021 at 11:52 pm

Nothing financial.  Nothing about finances but just write a vent.  Please read with a grain of salt that this is just me complaining. I've lead my DK1 girl scout troop for 4 years now. I have lead it solo for the past 3 years.  Even the 1st year I lead it (2nd grade brownie) I did everything and the co-lead showed up.  Since then we've done a rotation of parents signing up to stay and help but never lead.  Okay I was with the program but it's exhausting. I have always had 12 girls until this past year and covid. I started September 2020 with 8 girls and the parents were great.  But it was mostly virtual until around May 2021.  I had 3 girls drop/move away.  So I was left with 5 pretty dedicated girls. I had 2 that I lead to a Bronze award (yay! cheers!) and the other 3 contributed intermittently.

That being said with such a low number and hoping I could finally have help yesterday I met with another troop out at a playground for pizza to see if we couldn't run meeting in parallel or merge.  The other troop had 3 girls and 1 new girl.  We had previously been combined but due to high interest split.  

Well the girls got along great.  But the other troop leader and new "co-leader", I was happy at the thought of not leading anymore weren't really interested.  We discussed when we would meet and the answer was "whenever we feel like it."  Where we would meet?  Outdoors and then when the weather turns who knows.  It's too far in advance than tomorrow.  I said have we settled on how many times or how long or are we always masked and space?  The other mom said to me "i don't know about anything more than today."  It's too much planning.  She said it's not about earning badges, learning things, activities.  They just wanted time to socialize and get together and hang out.  A clear case of this was her thought that she had earned a bronze award badge for doing paint collecting, but hadn't bothered to read the requirements or process to do it.

I went home disappointed.  Fortunately I got a text saying we were way too different in expectations of running a troop.  When I had heard of her activities I thought that it's because she's low key. Instead a lot of activities were just watching movies at home, eating pizza, playing, no camping, no learning, no contributing to society. I get it, it's a social activity and the main purpose is to make friends.  But I sort of wanted something more.  An expectation of doing more.  

My husband gave me a hard time when I got home.  Yes I'm a little controlling.  But he also said truthfully there's a reason why people drop it?  And this totally fits the troop leaders personality.  Why didn't I see this?  I don't know but I am thinking maybe it'll be totally easy and manageable with the girls getting older and 5 girls who seem to really like it?  It's a big difference than babysitting those who don't want to do it.