January 28, 2019
In 2017, we took on a HUMONGOUS loan. (Was that really two years ago??)
After we signed those papers, we sold our previous home and applied a small chunk of those sales proceeds toward our loan with an eye on recasting the loan – recalculating a new monthly payment based on the new principal amount while keeping the same terms (interest rate and length of loan) at no extra charge.
I made sure, when we were researching loans, to confirm that Chase would do this at no charge and there were no limits on how many times we were allowed to do it.
That first recast, and the second one with double the payment to principal when more sale funds were available two months later, brought down our monthly payment a total of $700. Not TO $700, reduced it BY $700. The remaining payment is still in the multi-thousands. That gives you an idea of how high our mortgage is! YEEKS.
Making those two moves not only reduced the total balance and our monthly payments, it also saved $102,599.54 in interest! (I used this calculator to figure that savings out.)
I continued to pay a little over the monthly payment due to cut down the principal further, little by little, and made the equivalent of half an extra payment last year.
We don’t have any huge chunks of money coming in this year (that I know of. Feel free to bless us, universe) so I was only aiming to pay down a set amount to principal this year but then I got this email from Chase inviting me to enroll in their New flexible mortgage payment options!
Ok, I’ll bite.
I went in to explore and see if they could offer me anything better than we could do on our own. (I can never resist a do better with money challenge.)
(more…)
January 21, 2019
I’m having a bit of a patience problem.
- I’ve almost closed out the 2018 budget but there’s one last check to be cashed from December 1st (when is it ok to tell someone to take their damn money already??)
- I was fortunate enough to have a choice between maxing out our IRAs this year right away or investing more in our brokerage so I did the former to get it out of our hair.
- I’ve calculated our expected cash flow for the first three months of 2019 and scheduled automatic savings to reflect that.
- I’ve calculated our expected large expenses for the year and scheduled automatic savings to cover them over the course of the year.
What’s left?
Mostly the everyday things.
- Working my job every day with attendant frustrations so I can keep earning that paycheck that feeds our savings and investing.
- Feeding my family – meal planning, grocery shopping, thinking about diet stuff.
- Walking the dogs – training Sera, making sure Seamus has every possible health need covered.
- Making sure to the best of our abilities that JB grows up to be a good and decent human. We also need to get zir into some sports and activities to be a bit more well-rounded and make a few more friends.
- Reading all the good books I can reach (more more more!)
- We’ve got one big trip for later this year to be planned out. After that? Probably staying close to home for a while. Now that Seamus is showing his age (his hearing is suspect, his eyesight seems to be less sharp, he’s definitely much crankier) we’re going to curtail international travel so we can spend this time with him.
These are good things. I’m enjoying them. I’d like to enjoy more of them. I’d like to be out in the garden ripping out the rest of those weeds now that the rains have softened the previously rock hard ground.
I should be pretty content.
Instead, the past few weeks, I’ve been obsessively sitting here staring at our accounts, glaring at them to sprout 100x their income as if Power Stare is a method of investment growth (it’s not). I’ve been cranky and impatient. (more…)
December 10, 2018
As the holidays and focus on gift giving ramps up (we have some obligatory gift exchanges), I like to review my purchases from the past year (and sometimes from the past few years if they were that good) to see if they held up to the expectations.
- Last year: This was a rare impulse buy but I adore my Owl Silicone Coin Purse and so do the dogs. It’s one of the few things I’ve bought solely because it was too cute to pass up, not because it was a gift or because I had a purpose in mind. Three months after buying it, inspiration struck and it became my dog treat pouch – something I’ve needed for years! With silicone, there’s no worry the treats will stain and it’s airtight enough that the tiny treats don’t dry out overnight.
- Last year: I have the sold out dachshund puppy pouch but I adore the Catseye London zip pouches. They’re so thick and sturdy, mine survived a ten month loan to JB.
- Last year: I still adore my only full price clothing purchase: Barefoot Dreams Circle Cardigan. I’ve worn it multiple times every week since buying it last year and it holds up. Of course it gets furry because I keep forgetting and hugging the dogs but it machine washes just fine.
- This year: Hands down, the furnace. Being warm again is such a novelty.
- This year: $7 of fabric purchased on Thanksgiving weekend at 70% off. I’ve started hand sewing again this year and I’m really enjoying the act of creating something useful though my skills are quite limited to just an almost straight seam and a backstitch.
PiC
- This year: An expensive piece of sporting equipment that I’d managed to forget about because 2018 has felt like a DECADE.
- This year: But also the furnace.
JB
A few things stayed on rotation all year long from past birthdays and Christmases:
- Magnetiles and Magformers for building strange architecture and “stables” for zir little animals
- All manner of small animals and figures
- Books books books. We have been slowly building zir library and ze loves rotating through the lot of them, even the baby books.
- A very basic Lego train set. Even simpler than this one but ze loves it.
(more…)
November 12, 2018
I’ve had a hankering for an electric vehicle for a while now, as part of our striving to be as environmentally friendly / sustainable as we can with disastrous climate changes hovering over our heads, but it’s not been in the cards for a few reasons.
We have philosophical differences.
PiC thinks a smaller EV is ok to be our daily driver as long as we have our second car for longer hauls. We tend to the two extremes of driving: very little locally day to day and a few very long distances.
I think a new car needs to be able to hold our whole family (2-3 adults, 1 car seat, 2 large dogs, everyone’s luggage) because I’d rather the EV take the brunt of our driving day to day AND be our comfortable road tripper. But no EV is big enough for that.
That difference of opinion alone will keep us from buying anything until one or both of us compromises or is persuaded to the other’s point of view. I confess I’m not sure which way it’s going to go! I suppose I’m open to persuasion like I assume he is.
Friends buying Teslas a while back told me about federal tax incentives and so on but since I refused to give Tesla any business, I didn’t pay much attention.
Our local dealers have teamed up with the county to offer some incentives but on their own, there’s nothing compelling here for a bargain bin shopper.
Looking at other available incentives, there are a variety:
- Federal Tax Credits for certain vehicle makes and models ($3500-7500)
- Clean Vehicle Rebate ($1500-2500) (San Diego residents can get preapproved!)
- Pacific Gas and Electric Company offers a one-time $500 rebate to customers who own or lease a qualified plug-in hybrid vehicle (San Joaquin gives a $2000 rebate),
- The state of California allows plug-in hybrids like Prius Prime to use the HOV lanes regardless of the number of passengers,
- Pacific Gas & Electric (PG&E), Southern California Edison (SCE) and Sacramento Municipal Utility District offers reduced electricity rates for charging the vehicles.
I don’t anticipate any reasonably sized EV would cost us anywhere in the neighborhood of sub-$10,000 that we’re accustomed to paying. For example, the Volt gets $9,000 in rebates, plus a $4,000 discount, which then works out to about $18,000. The investing opportunity cost on that has me squinting.
Our two are working just fine. We paid $7800 for my car about 7 or 8 years ago and it’s just needed some maintenance now and again. We paid $10,000 for PiC’s car two years ago and that happened well ahead of our planned replacement period only because someone crashed into us.
Of course “planned replacement period” implies that we regularly replace our cars. We don’t. Up until I cut off Dad and transferred, I still owned the first car I ever bought, a 2002 model. Why not? She still runs fine. Both our cars run well and we all fit into PiC’s for road trips (though not comfortably) and could squeeze all of us into my car in an emergency, though the dogs would have to consent to be stacked.
My last hesitation: I’m a bit of a Philistine when it comes to cars. The newest cars we drive are rentals and they’re sort of spaceshippy mysteries to me. I’m really in no hurry to have to learn the ins and outs of a new vehicle! (What’s “regenerative braking”??)
——
I’ve been sleeping on this for a while and doing some more research on EVs and hybrids (I also fell down the rabbit hole of hydrogen powered vehicles via the Toyota Mirai but where are hydrogen fueling stations? Here’s a map! But it doesn’t look like they’re available for Federal Tax Credits).
RoadShow has a reasonable overview of the technology out there.
Oddly enough something clicked for me, while doing this research, though we haven’t discussed it any further while I’ve been leaving this to marinate. What I wanted was an EV (battery electric) for everything but we don’t currently have two cars that do everything. We have a people car and we have a whole family car. The people car is for local commuting and half day trips that the dogs can’t come on, the whole family car is for outings and long road trips.
Though I wasn’t seeing it this way before, it can make sense to just replace the people car with a battery electric car and spend this time burning less fossil fuels while we wait a few years to how battery electric and plug in hybrid minivans develop. Battery electrics still don’t have AMAZING range, it makes less sense to jump into one now for our everything car.
We don’t want to worry about running out of charge without a charging station in sight!
The two things that predisposed me to pressing for the battery electric now was knowing a friend who road tripped up the coast of CA just fine in their battery electric, and already being equipped with the necessary 240 volt charging station that was the far-reaching notion of our contractor that we just went along with.
Since I don’t have $45,000 to throw at a plug-in hybrid minivan, which is still just the (very expensive) compromise vehicle, coming around to the smaller battery electric version first seems like a much more sensible approach. Not that I’m eager to sink $20,000 either, but I do feel a strong urge to stop burning fossil fuels as soon as possible considering what dire straits we’re about to be in with our carbon emissions. I know we need a global solution but I strongly feel that every little bit that we can do matters.
In the meantime, as I return to this post several weeks after saying “Our two are working just fine“, my daily driver is slowly falling apart. It needs new tires ($500-800? haven’t priced this thoroughly yet), the a/c compressor is out ($800), and the automatic shifter was acting really odd indicating we might have a transmission problem. Nooooooooooo….. Considering my car’s served me well for the past 8 years (bought used for $7900) and only needed basic maintenance, I’m loath to give up on it but I’m starting to wonder when we do the math on the continued repairs of an older vehicle. When do we pull out the pot and hand it over for the next daily driver….?
:: When do you know it’s time for a replacement vehicle? What do you plan to get when it’s time? Do you have an actual schedule or do you drive until the wheels fall off?
October 29, 2018
Last November, I hopped into Fidelity’s retirement planning module (access restricted to account holders) and noodled around with some basic retirement assumptions (FIRE in 9 years, for example), and they didn’t have good news for us.
We assumed: PiC would retire in 8 years and I would in 10, that he would last to age 95 and I til age 98 (hah), that we would continue with our current level of household income during that time.
We scored a paltry 31. At that point in time, they estimated we might:
Have $3,242/mo
Need $10,308/mo
Leaving a Potential Gap of $7,066 /mo
(This is based on a hypothetically “Significantly Below Average Market” which is just how I want these estimates to be – very pessimistic.) Not good!
Their recommendations: Consider increasing your retirement savings. If you have a workplace plan, at the very least try to contribute enough so you will receive your employer’s full match.
I would LOVE to. But I don’t have a workplace plan and it stinks that the only way to put away money for retirement is through taxable accounts if your employer is a dud in the benefits department.
That is why I’ve been focused on both dividend investing and index investing.
Reduce spending: I sure hope we’re not spending $10,000 a month in retirement! I need to have paid off our mortgage and be done with childcare to ensure that.
More than half that cost right now is daycare and housing (mortgage, property tax, insurance) so at least 20% of it will be less in a few years.
Looks like your current asset mix appears to be closely aligned with your Target Asset Mix.
We based this on the percentage of stocks in your assigned accounts. You should review this at least once a year, or when markets move significantly.
Woot! I picked our index funds all by myself. Mostly. I had a bit of analysis help from fellow money bloggers.
Almost a full year later, having made some big changes to our investing and cash holdings and adjusting assumptions, our score has improved to 60. A good increase but it still qualifies as “Needs Attention”. Without taking any possible Social Security into consideration, the current projection is that we’ll have $6,022/mo income.
New assumptions: moved PiC’s retirement age up by two years and mine down by 2 years, set both of our life expectancies to 98 years. The excessively high life expectancy isn’t because I assume we’ll really live that long but rather that we’ll need to spend a fair amount on healthcare in our later years and this is my way of adjusting our needed income expectations. If there’s a better way to do that, I’d love to hear it!
This doesn’t spell the end of our early retirement hopes like I felt it did last year when I first poked around. It gives us some decent goals to aim for in a largely uncertain plan based on a lot of assumptions.
If we did manage to close that gap significantly or even entirely, there’s still the potential college costs to think of. Certainly some of it will be covered by the early start on our 529 but at this point, I’m more comfortable planning for a combination of using savings, cash flowing some portion of it and having JB commit to some of the costs zirself.
:: How do you fiddle with your retirement expectations? How much might your future costs change?
October 22, 2018
One of my favorite things about having my office space settled is that even though it’s only October, almost all the Christmas gifts for the family niblings are ready to be wrapped. I might even tackle that wrapping this month to settle my stomach over the upcoming holidays. That’s because I have THE GIFT BOX.
It’s a really simple process. I keep a spreadsheet of the niblings’ ages, sizes, and favorite colors. When I spot a great sale on kids’ clothing or books, and I have a gift card, I pick out as many things as I can for up to $100 total, and voila! Their gifts are done. I can usually get a good armload of clothing so that’s always fun.
I’ll grant you that it’s not that exciting – they don’t get toys just clothing or books, but I’m all about practicality and frankly, all of the niblings have toys coming out of their ears. The clothes will get passed down through all the cousins and the books, well, you know how I feel about books. The more the better!
I also add more random gifts for JB’s friends, and the children of our friends, throughout the year during similar sales but those lucky kids get books, clothes, puzzles AND art supplies. We ran into the Aaron Brothers closing sale and picked up a stack of cool painting projects, all between $4 to $10 each, so that when ze gets invitations to an unexpected birthday party, we’re already stocked up and ready.
We aim not to go to more than 5 parties a year so that keeps us from overspending on random kids.
I’m sure this all sounds a bit cheap, so much cost control!, but it’s just not a priority to spend real money on STUFF at this age. I’d rather spend discretionary money on our library, the homeless shelter, the humane society, and educational museums.
On the environmental front, this year, once I practice enough hand sewing drawstring bags for our own use, I’d like to find cheap happy looking fabric to make up fabric gift bags for at least Christmas presents to reduce the waste of paper gift wrap. If I work up a batch for other gifts too, all the better! But this is likely to be a year round project.
October 15, 2018
Folks shared their plans for saving for their children’s educations over at Stacking Pennies’s post on saving for baby.
I’ve always felt uncomfortable with stocking up the 529 aggressively, or more aggressively than we have been doing. I simply don’t know what JB will choose when the time comes, going to college and graduating is a relatively new thing in our immigrant family. All of PiC’s family went to college and even went on to higher education. That was true even if you went back a generation.
In my immediate family, I’m the only college graduate. My parents went to college but didn’t have the time or money to graduate, they were already raising us by then. Grandparents? Hah. Grandma was smart as a whip and she used her natural intelligence to the fullest, parlaying a 2nd grade education into raising a huge family and running a tiny farm and growing it into something that sustained her into her 80s.
It always disappointed Mom that I didn’t go on to graduate school because she hoped for more, and better, for me, but that just wasn’t my path. Formal education, Asian though I am, simply wasn’t my forte. Working hard and smart was. I got my English BA and hit the working road hard. Honestly, there’s not much a Masters would do for me in my current line of work, I’d have to pursue a PhD to make any difference in my working path and even then I doubt it’d be worth the investment. The ego boost doesn’t seem worth the price tag, either.
Our current savings plan: We’ve been working on contributing $14,000 (the maximum for one parent) per year to JB’s college savings aiming to go north of $100,000 but … there are too many unknowns here for me to be really comfortable with that much or more.
I simply cannot predict JB’s interests and commitment to higher ed, and what the landscape of higher ed will be in 15 years. I’m tempted to forgo much more in the way of contributions to the 529 and simply invest in our brokerage toward our hoped-for early retirement and mortgage paydown, and plan to cash flow college should the expenses rise above the saved amounts. We’d be abandoning tax free growth but if ze didn’t use the money, there would be a penalty to get that money out as well.
:: Am I being too risk averse (avoiding that penalty) with that line of thinking? What would you do?