Detailed Financial Picture – July 2013

June’s Numbers

As of July 8, 2013, we are $464,055.84 in debt (that includes the mortgage).  Without the mortgage, we’re at $41,512.40 in debt.  This includes a credit card, student loans, and an auto loan.  We currently have $938,786.98 in assets (including our house).  Our retirement accounts are at $297,180.17.  Our Net Worth is $474,731.14 (includes house and mortgage), down from $476,125.47 last month (0.29% decrease).

Our net worth has decreased this month – and that’s mostly due to Zillow’s estimate of our home value decreasing (down to 580k from about 601k).  I’m contemplating replacing Zillow’s estimate with the appraisal we had done in April 2012 (540k) and just leaving that number static.  It doesn’t reflect that our neighborhood is changing though.  There are three houses in our neighborhood that are the same model as ours that just went under contract (less than a week on the market!), and their asking prices were all in the 580-590s.  I’m waiting for the final paperwork to be done to see what the final sale prices of those houses were.  I’ve been drooling over the pictures of the insides of them from the listings though – I have lots of ideas on how to improve our house 🙂  One had wood floors on all the levels, not just the main level like ours, and it looked really good.

We haven’t gotten the approval from our HOA for changing our paint colors yet – I expect that this week or next, so we’ve got quite a bit of money sitting in a savings account waiting to be used.  Next month will be the last month that we’re planning on paying the minimums on our debts, then we can go back to really attacking them in September.

I sold quite a few things on Craigslist this month, and “earned” over $200 from that and my Amazon seller account.  I put some of that towards the Chase bill, and the rest went to eating out :(.  As we’re cleaning up the basement for tiling (and possibly some minor renovations), I’m selling, donating, or otherwise trashing things located there.  I try to make money on it first, then donate it.  I’ve got a large box ready for donating, I just need to schedule a pickup or drive out to Goodwill myself.  The basement work itself has stalled as I’ve been traveling for work and catching up on work I missed in the evenings, and baking cakes for parties, but I hope to get back to it after this weekend.

I also did some math on how we’ve improved since the beginning of the year.  4.32% increase in net worth for the year.  And a 15.62% increase in our retirement accounts since the beginning of the year.

Debt (in the order we’re paying it down):

  • Line of credit (8.75%): $0.00
  • Chase (4.99% for life): $ 5,808.44 (-108.83)
  • Student loans (aggregated 6.55%):  $13,203.96 (-137.04)
  • Car loan (0%): $22,500.00 (-490.00)
  • Mortgage (4.125%): $ 422,543.44 (-660.04)

Total paid off in June: $1,395.91

Detailed Financial Picture – June 2013

May’s Numbers

As of June 7, 2013, we are $465,451.75 in debt (that includes the mortgage).  Without the mortgage, we’re at $42,248.27 in debt.  This includes a credit card, student loans, and an auto loan.  We currently have $941,577.22 in assets (including our house).  Our retirement accounts are at $293,456.12.  Our Net Worth is $476,125.47 (includes house and mortgage), up from $472,903.54 last month (0.6% increase).

Our retirement accounts went up by less what we contributed to them this month (0.29%), as the markets have slightly corrected themselves, and while I know a percentage point here or there really isn’t that big of a loss, when you see your account “losing” $3-4k in a day, it gets a little nerve wrecking.  I just have to avoid looking at the accounts on the “down” days.  Over time, I have no concern that the market will go up, and we have plenty of time to ride out a correction before we need the money for retirement.

The job front is looking good for me.  We just got in a lot of work – almost too much for us to handle, so we’re having to schedule it out a month or two.  So we’re bringing in new work pretty regularly, and things are looking up there.

We’re expecting to make a large payment this month and next to pay for some house repairs, so I’ve only paid the minimums on our debts so that we (maybe) don’t have to borrow anything for those repairs.  The minimums are still pretty significant, but still the minimum. Due to the timing, we have two months to “save up” for the repairs – we need 30 days for HOA approval, and I just mailed that in earlier this week, and then we put 35% down for the repairs, and we get scheduled within 30 days, and the repairs will be done in 5 days, and we don’t have to pay the remaining until then, so we’ll have one payment in June (maybe early July, depending on the HOA), and another in July/August.  If we make the second payment in August, we won’t have to borrow anything.  We will be taking quite a bit out of the emergency fund though, and will be “repaying” that first before we aggressively start attacking the debt again.  Dad has a 3-paycheck month in August though, so that’ll really help.  If we make the second payment in July, we’ll be borrowing about $1000 from our line of credit, and then paying it off in August.

Debt (in the order we’re paying it down):

  • Line of credit (8.75%): $0.00
  • Chase (4.99% for life): $ 5917.27 (-59.31)
  • Student loans (aggregated 6.55%):  $13,341.00 (-285.98 amount already deducted for June)
  • Car loan (0%): $22,990.00 (-490.00)
  • Mortgage (4.125%): $ 423,203.48 (-657.78)

Total paid off in May: $1,493.07

Murphy schedules a visit

Just as we pay off the line of credit, we may need to use some of it.  We have a lot of wood trim around the house (exterior), and much of it is rotting, and the paint is deteriorating, and the gutters are failing (and causing a leak).  I’ve got quotes for the work, and the guy I’m going with will run us about $7,000 to do all of the work – replacing the rotting wood, painting, etc.  And we’ll finally get to change up the colors on the house.  A previous owner had some warm cream siding installed, with a bright white and bright blue trim.  The clash of warm and cool colors even bothers my design-dumb eyes.  While I’d prefer the cool color scheme, the siding isn’t getting replaced anytime soon, so since we’re repainting the trim, it’ll become “warm”.

I’ve got at least 30 days to come up with as much as I can before dipping into the line of credit, and we’re going to use some (not all) of our emergency fund to cover it.  I estimate that we’ll need to borrow up to 3k from the line of credit, which would get completely paid off (again) in September.  I don’t want to drain the emergency fund, so we’re taking 3k from there (leaving us with 2k), and before we really attack the line of credit again, I want to “refill” the emergency fund, which is why September is the payoff date rather than sooner.

We have to file for an architectural change with our HOA, which can take up to 60 days (neighborhood rumors say it takes less than 30), then the company has 30 days to start work.  We need to put down 35% for materials, and pay the rest when he’s done, so we might not borrow as much depending on when the work is completed.  The work needs to be done before our rainy season in August/Sept, but we can push it off just a little bit to try to save more, but there is some wood that I hope will survive the next month.  We’ve already put it off as long as we think we can, and the leaking was the final straw that told us “OK, you need to take care of this”.

We looked at covering it with vinyl so that we never had to paint again, but several trusted contractors said not to do that because the wood still rots under the covering, and we wouldn’t know about it.  So, we’re going with painting, which is guaranteed for 4 years, so it’ll be a while before we paint again 🙂

Detailed Financial Picture – May 2013

April’s Numbers

As of May 7, 2013, we are $466,805.10 in debt (that includes the mortgage).  Without the mortgage, we’re at $42,943.84 in debt.  This includes a credit card, student loans, and an auto loan.  We currently have $939,708.64 in assets (including our house).  Our retirement accounts are at $292,621.36.  Our Net Worth is $472,903.54 (includes house and mortgage), up from $454,769.31 last month (3.97% increase).

Our Line of credit is paid off!  I took a little from savings to do so, so this month is mostly paying ourselves back rather than really attacking debt.  It was worth it in for how good it felt to send in that last payment.  Now, we have a significant line of credit which will become part of our emergency planning (new roof, other major disaster, etc) until the rest of the debt is paid off.  It costs us $50/year to keep the line open, but we figure that it’s worth it for the relatively low interest rate it provides.

Our retirement accounts did great this month (up 4.55%).  We’re still contributing less than I would like, but not an insignificant amount of our incomes is going towards our 401(k) and 403(b).  I haven’t really noticed the tax hit from changing 1% of my contribution from my 401(k) to my Roth 401(k), but until the debt is paid off, we’re leaving the contributions where they are.  I’m really hoping the markets aren’t going to correct themselves anytime soon, but I know that’s inevitable someday.

I’ve switched our order of repayment around a bit due to Chase being PITAs as well as a potential job loss in our future (near the end of the year).  My company is not doing so well, and we have enough money in the bank to keep running until the end of the year (and that’s without getting any new work), and so there’s a potential I won’t have a job next year – at least with the same company.  I love where I work, and who I work for (and I own part of the company – sort of – through phantom stock options), so I’m sticking around to help make it work out.  I’ve told my boss if things aren’t looking better by September, I was going to start looking for another job.  I’m confident that I can find another job because of my line of work and my skills, but I’d rather not leave a company that I really like.  But I’m not being stupid about it either.  We’ve switched to paying off the Chase card before the student loans because the student loans can be deferred if I do get “laid off”, the credit card can’t.  I ran the math, and should things go well, we’ll have paid an extra $30 in interest by paying off Chase before the student loans – that’s a $30 insurance policy as I see it.

On the plus side, I’ve just brought in enough work to completely pay my salary (and benefits) for the next year and a half, and our busy time doesn’t happen until September through December, so I think we’ll be OK.

Debt (in the order we’re paying it down):

  • Line of credit (8.75%): $0.00 (-1300)
  • Chase (4.99% for life): $ 5976.58  (-472.43)
  • Student loans (aggregated 6.55%):  $13,626.98 (-139.72)
  • Car loan (0%): $23,480.00 (-490.00)
  • Mortgage (4.125%): $ 423,861.26 (-655.53)

Total paid off in April: $3,057.68

Our Story – Part 2: The Panic

I’ve always been interested in personal finance, but it never “clicked” for me until the end of 2011.  Before Daughter Person was born, we didn’t budget, we didn’t do more than the minimum for saving in our 401(k).  As long as the cash flow was OK – I thought we were OK.  We always had money in the bank, never made a late payment, never even had to time our bills to our paychecks, never been declined/denied for credit, and always had available credit on our credit cards.  So we thought we were doing good.  Obviously, I (at least) had my head in the sand.  This is our story.  It’s not intended to be an excuse for our poor decisions, but to give some background.

Part 1: A Tale of Two Houses

During 2009-2011, we were paying 3 mortgages on 2 houses, and still had about $2k/mth left over for eating out, buying things, etc.  We figured we were pretty flush.  I didn’t *like* having to fix things on our remaining townhouse, and was trying to patiently wait until the two years was up to see if we could sell it.  Daughter Person was born in January 2011, right as the renter’s lease was up.  I had met the Realtor in November to see if it might be worth selling, and notified the renters that I wouldn’t be renewing their lease.  When I hauled Daughter Person over to the townhouse to meet the Realtor, I was frankly disgusted at the mess that the renter’s left and started trying to pursue keeping their security deposit – turns out since I wasn’t re-renting it, the county laws said I couldn’t keep it (boo!).  So, we spent about $7k on fixing it up just to be presentable – we had to paint, replace carpet, replace closet doors – a huge mess.

We listed it in March, and got our first offer in April – the buyer backed out in May because he didn’t like the condo rules.  It went back on the market and we had two offers in July – I took the offer for the person who would be living there, not the investor, and turns out that was a bad decision, despite her pre-approval letter that said she could borrow *way* more than the value of the house, the lender wouldn’t approve her.  Finally, I got an all-cash offer in September, and through a hilarious sequence of events, finally made it to closing – where I brought $8k (borrowed). Yes, I basically paid to get someone to take the property off my hands, I was so tired of it at that point.

And this experience is why we have no intentions of ever owning rental property as a second income stream.  I know we could do it (and make money on it), especially if we selected an appropriate property, but we just don’t want to.

Meanwhile, I go back to work in April, and Daughter Person goes to daycare, at $1600/mth.  Now, we’re down to $200/mth extra and trying to fix all of these problems and issues with the townhouse.  I start to panic about how we’re going to survive, etc.  I can be a bit of a drama queen when things look bleak…

Part 3 – The Awakening

Happy Dance #1

Our Line of Credit is “paid off”! I say “paid off”, because I think I’ll owe them about 6 cents on our next statement. I sent in the payoff amount, but marked it as “extra principal payment” so it didn’t show as paying off the loan. The principal balance is a negative value equal to the interest currently on the loan. The nice lady at PNC offered to fix it for me, but the new statement should be generating in the next few days, so I’ll just wait for that and whatever we owe will be auto-debited in May (or I can go in online and pay it early – by checking the “apply to next payment” option this time!).

Now, on to the next debt: student loans.  There are three student loans, ~$3k at 2.14% and two (about $10k) at 6.55%.  I’m going to explicitly send in extra money and have it applied to the higher interest rate loans first, and those should be paid off in about 5-6 months.

YAY!

Detailed Financial Picture – April 2013

March’s Numbers

As of April 9, 2013, we are $469,922.50 in debt (that includes the mortgage).  Without the mortgage, we’re at $45,405.71 in debt.  This includes credit cards, student loans, lines of credit and an auto loan.  We currently have $924,691.81 in assets (including our house).  Our retirement accounts are at $279,886.34.  Our Net Worth is $454,769.31 (includes house and mortgage), down from $455,341.70 last month (0.13% decrease).

Our overall net worth decreased a little this month as I updated our car values through KBB.  My car lost about 5k in value (considering it’s a 2012 model, I think that’s pretty good), while our house lost some value as well – according to Zillow anyway.  I realize that it’s not perfect, but it should be in the ballpark, and we have no intentions of selling the house anytime soon, so I’m too lazy to run the comparables 🙂

Our retirement accounts did OK this month (up 1.77%); I changed my withholding to 5% in a 401(k) and 1% in a 401(k) Roth account, since we make too much to contribute to a Roth otherwise.  It lets us hedge our bets on taxes in retirement.  But we’ve evened out our new paychecks, so I have a better idea of how much money is coming in.

Our electric bill has increased by about $40-$50/mth to run the humidifier, but we think it’s worth it, so we’ll keep paying it.  And it’s almost 85F here today, so we’ve had the heat pump turned off the last 3 days and the windows open.  We probably won’t turn on the heat part of the system again until next season.  Once humidity levels start to climb though, the A/C will be on.

I got rid of a lot of things to goodwill, and not making too many.  Most of what I have left on Amazon are Japanese language items, which will likely sell better towards the beginning of the school semester, so not too many things leaving by way of Amazon.

Dad had an extra paycheck in March, so I was able to really pay down some of our debt.  And I filed an FSA claim for Daughter Person’s daycare and got a nice fat check for about $1400 to put towards debt payment as well.

I also sent more money to Chase – I think they’re skirting the new CARD rules on applying payments to the highest interest rate balance first.  The annual fee and interest end up being charged at the stated interest rate of 12.99%.  You’re supposed to overpay the minimum for them to apply it to the highest interest – I did last month, but not enough to make sure (only rounded up to $100 from a min payment of $96).  This month, I paid $100 + the balance at that rate: $93.70, so I expect that balance to be gone on the next statement – and if it isn’t, I’m going to be making some phone calls.

We’re really close to paying off our line of credit, and I’m most definitely getting excited at the prospect.  It will be paid off in May, and then one of the student loans is next on the target list.

Debt (in the order we’re paying it down):

  • Line of credit (8.75%): $1,300 (-4,600.00)
  • Student loans (aggregated 6.55%):  $13,766.70  (-0) <- auto-debit hasn’t happened yet
  • Chase (4.99% for life): $6,449.01  (-167.39)
  • Car loan (0%): $23,970.00 (-490.00)
  • Mortgage (4.125%): $424,516.79 (-635.44)

Total paid off in March: $5,892.83