Back to basics

for the last two months all my concentration has been on eating right and losing weight and I let my money goals go by the way side. We spent way too much money eating out the last two months and the time has come to acknowledge how stupid that was and commit to not doing that anymore.

We want to be debt free and work our way to a very secure place. That will not happen if we are spending every extra penny.

So, I am getting back to those goals as well, which will be tough, but I can do it !!

Just to catch up !!

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 !!!

Trying new things

Finally back after a couple of weeks of dealing with a cold.

After my husband and I talked it over, and me suggesting it, we have decided to challenge ourselves to a month of no eating out. I added up  how much we spent eating out from the start of the year through this past Sunday and it was not  something I enjoyed tallying up. It really freaked me out how much we waste eating out. That is money that could go toward any one of our goals, fixing up the house, a new rotto tiller, the work on my teeth which alone will be pricey for two crowns, and just savings.

Today would have been an eating out day normally as it is my husbands day off. But we ate at home and intend to do that through April 2 and then I hope we can challenge ourselves to another month. If we do decide on one treat at the end of  the month, that is fine but then we will challenge ourselves another month at that point. I have no problem with once a month IF we really want it, we may, or may not, I can’t wait to see how we feel at the end of the month and if it makes us want to eat out again, or eat at home .

Making better money choices each day

One of our mutual goals this year is to get serious about saving and getting our debt paid down and we have done very well on both and have a lot of big goals ahead in the next couple of years.

We have struggled with selling our house or staying in it a while and  have  gone back and forth on that subject but with the economy the way it is, we have decided to stay here a few years, fix it up and continue paying off the few bills we have left and saving as much as we can.  We figure if we do those things, in a couple of years when things are looking up , we will be in a much better situation to make decisions on what to do next.

We want to get back to being more frugal, which is how we lived for many years.  In the past few years we have loosened up our stand on finances and eaten out a lot more then we should and spent a bit more than we should but we are getting back to basics and getting and staying on a budget to accomplish our goals.

We have paid off two credit cards in full and one of them just raised our rate to 31.99 percent even though we never paid late and always paid more then the minimum so we paid it off right in the nick of time before they raised it sky high.  Both Suze Orman and Dave Ramsey have been predicting this will happen to card holders in good standing but it is still a shock when they do it.

Saving is what  we are working on now and just making better decisions to get a bit put away a month. Every dollar counts and we are going to cut out the stuff we spend too much on, which is eating out hands down. Bad habit of ours.

We feel that 2009 is going to be one of our best years ever and that for the first time we will see ourselves meeting financial goals we have not been able to get to in the past.  We are very determined to make these changes so we can meet our future goals, retirement savings, personal savings, the home we truely want,  and financial security.