Timetobeme's Blog

With all the craziness the last couple of weeks I have not been as good at writing and that has to stop. I want this blog to be a place to sound out my ideas and figure out what I am doing.

On the financial end, we are doing pretty well. Got a bit of savings but when you still have some debt, you do not really have savings. That said , I am not willing to use the savings to pay down debt as I feel pretty strongly that in this current economy having savings is more important than being debt free. I have to have some money for ”  in case ” even though I feel we will be fine. It will take a while to get that eight months to a year of  emergency money put away, but that is okay. I have one month for now, and that is a pretty good start.

I am looking over any and all ways of saving money on our current expenses so more can go into the savings. We hope to refi down in May, but have to wait until then as we made the choice to actually go up in interest last Aug as the 15 year loan was just too much per month and we made a very difficult decision to go from a 15 year 5 percent loan to a 30 year 6.5  loan. I can hear people saying how stupid that was, and it seems that way when you just read it with no history behind it.

At the time, late last summer, we were really struggling to make ends meet and paying almost 1200 a month on a house we owed 89 grand on was just too much. Texas has very high property taxes and insurance premiums and added to our mortgage payment of principal and interest, it was choking us every month.

We decided even though we would be giving up a great interest rate, that we would refi and when rates came down, do it again to get back to where we were. We did add to our loan balance quite a bit more than we planned, the new escrow account alone added around 3 grand and the fees and costs of the loan added more. We ended up at around 98, which we did not like, but we felt we had no choice.  We took the escrow refund and used it and the two payments we got to skip to get us back on track as we were not late, but paying things as late as we could and be on time, although the mortgage was getting paid late in the month at that point too and it scared us. We also used that extra money to get our cars serviced and two cars running that were not running and that helped a lot too. We had to put a ton of miles on our fairly new car driving it over 100 thousand miles much quicker than we would of because we could not afford to fix my husbands beater truck he drives to work.  He is now driving it again and the new car is just driven around town now.  We fixed our sons car and he is making us payments on the repair as he can.

After we did the refi my husband got the chance to change his shift and now gets more days off working a rotating 12 hour shift and he gets scheduled overtime every single month which upped our income a decent amount and added to the two hundred a month saved on the mortgage has made a world of differance in our monthly budget.  Did we make the right decision, many would say no, how could we add to our mortgage and go up on our interest rate, but having agonized over it since then, we could not have afforded to fix the cars or get back on track without it. We were slowly getting later and later and the time would have come we would have danced on the line of being 30 days late on several things including the mortgage. Now, we pay everything the day it comes in the mail unless it is scheduled to come out a set date, and we have money in the back.  Having taken off the stress, we became more positive about our finances and more money making opporutinites came along for overtime at my husbands work and we were able to pay off 2500 in credit cards, pay for our Christmas cash and end up today with a full month of living expenses in the bank. So, I still feel we made the r ight decsion and we will refi after the eight months is up if we can get it down to five or so again, but this time, 30 years. We plan to keep this house and have no plans to sell it but to rent it out one day when we move to another one  and that also had an inpact on our decision. To rent out a house, you have to have the mortgage be no more than 75 percent of the rent or they count the differance as a bill, now we are only at about 70 over what we could rent it for using that formala, so that is pretty good, before, rent was right at our mortgage payment.  Now, we find out we have to have the house paid down 20 percent as well, so that kind of bit us in the back side as now we have the ratio of payment we need, but owe more and have to pay off more now to get to that 20 percent equity . Our house has gone up a bit in value so that is good.

For now, we will stay here a few years. Get our last child through college and out on his own and then make a decision on where we want to move and what we want to do.  We will just save until we have that 8 months emergency and then pay down the mortgage a bit more and then save to have a nice down payment, that will all take some time.

I think  when it comes to personal finance, it is personal. What makes sense on paper does not always work for someones budget so we all just have to work hard to make the best decisions we can .  We feel we made the right one for us and we  will keep working on our debt, two years we should be completely debt free except for the mortgage and that is a very nice feeling.   By the time our son graduates and moves out on his own, no more bills, we should have our emergency fund done and our house paid down to where it needs to be and be on our way toward the down payment so I am very happy with our future at this point.

We will continue to work hard to cut corners where we can. Reduces wasteful spending as much as possible and do everything we can to bring in some extra money encluding me working on getting a job in the near future.

For the first time in our 27  years married, we are excited about money and looking forward to what we can do next !!!