Tuesday, June 28, 2016

You Really Never Know

So, I know a woman from high school (she was a year behind me) that I sometimes follow on Facebook.  We were not friends in high school, but I was sorta friends with her brother who was a year ahead of me.  I haven't seen her since high school, many years ago, since I moved away from where I grew up.  But, she is very active on social media and one of those people who is friends with everyone and hard to ignore.

She is attractive, tall, super athletic (she played sports in college), fit and thin, and glamorous.  She married an athlete as well, tall and handsome and super successful guy.  I mean really successful - works in media in California.  They have super attractive, sporty kids.  I mean really sporty, probably will play in college level type sporty.  Because he works in media, they attend fun events like award shows and movie openings.  She is always posting photos in their black tie outfits, posing with celebs and the like.

Bottom line, it was easy to be jealous of her.

Recently, I went to her Facebook page because she had posted a quote that I had read but wanted to reread and save for myself.  I couldn't find it though, and I was poking around trying to find it (as I'm persistent in that way).  In my poking around, all of sudden I realize her about section says she is divorced.  What ??!!?

When the heck did that happen....  I poke around some more, because obviously I'm entitled to know this woman's business (this woman that I haven't seen since high school, this woman who is not even a friend of mine) and see that she is no longer friends with her husband (now ex-husband) and his profile also says divorced.  I see that they haven't really been in photos together for a year or so.

I was really shocked because they seemed so perfect and seemed to be living the most perfect life.  But, you really don't ever know what is going on in people's life.

Social media makes it easy to compare our life to someone else's life, but social media, while a great way to keep up with family, doesn't give you the whole picture or the whole store.  This is true in a "keeping up with the Joneses" mentality as well.  People can project wealth and riches, but just because someone has a big house or a nice car that doesn't mean they are wealthy or financially savvy.

Monday, June 27, 2016

10 Year Reviw - Part I (The Beginning)

Mr. Sam and I will be celebrating 10 years of marriage this fall.  As a result, I'm starting to think about what we've accomplished, together, in those 10 years.

We started our financial journey together, before we got married, but January 2007 was the beginning of our effort to pay down our unsecured debt and implement a debt free life.  The journey was mostly inspired by the fact that I wanted and needed a new car, but did not want a car payment.  It was the summer of 2006 and my car, then a 1999, had hit expensive repair time.  I had made some repairs to it and it was calling for more repairs and I was fed up.  So, I was doing some internet research and I came across a Dave Ramsey article about car payments.  I read some more on Dave's web site and I later checked out one of his books from my local library and read The Total Money Makeover.  I read some other books as well like The Millionaire Next Door and others.

We were in the middle of getting ready for our wedding, so I did not have time to implement the plan.  Instead, over the December holidays of 2006 (after the wedding and honeymoon), I reread TMM and we started working the plan.  We began with Dave's baby steps which we also modified a bit as we moved forward (side note, my husband is a lapsed Catholic and I'm not religious, while Dave's books and message can be a bit preachy we just ignored those parts).

We began 2007 with a financial reckoning.   First, we combined our assets and our combined net worth was $807,539.  We were holding real estate valued at $1.27 million dollars (that changed dramatically the next year).  Our retirement savings was at $216,184.  We had the $1000 emergency fund already covered (TMM baby step one).

Second, we had a lot of debt.  We had $679,520 in mortgage debt, our primary home, three rental properties and a piece of land.  And, we had $50,946 in unsecured debt, $27,000 for Mr. Sam's student loans (MBA) and the rest credit card debt.  So, we began 2007 with TMM baby step two, pay off all debts but the mortgage.  We had added up all our debt, we had a chart showing interest rates, minimum payments and totals.  I took over paying all the bills (prior to marriage I paid our joint bills and my bills, but Mr. Sam handled his own bills).  So, we began working the debt snowball.

More on debt later, I also want to look at where we are, 10 years later, with careers, education, family life, savings, real estate, car habits, etc.

Friday, June 24, 2016

Chase Auto Wants to Be a Little B*tch

So, following up my post from the other day, I have been putting some extra funds towards paying down my nused car loan.  When I bought my nused car in December 2015 I went with a short loan, two years, with a low interest rate.  I also made sure there was no prepayment penalty because I knew that I might want to pay it off early.

Well, yesterday I realized that Chase Auto is not applying my payments towards principal and instead is moving my next payment date out farther in time.  I sent Chase Auto a message and they reallocated all my payments from January to June 2016 to match my preference.  Thanks, Chase.  But, they sent me the below snotty message.
Please note that any payment coming from a non-Chase bill 
payment service will be processed as a regular payment. If
you would like the excess payments to go towards the 
principal balance, we suggest you to enroll your automatic
payments via Chase.com. 
 I'll interpret for you, Chase Auto is saying we won't put excess payments toward principal unless you switch your payment account over to Chase Bank or unless you give us access to your accounts.

This type of crap annoys me to no end, why make things so difficult.  I've told you want my preference is, you've demonstrated I can get my way by sending you a message every month or every quarter, but you won't do it automatically.  My credit card is with Chase and I've previously had a savings account with them, although I closed it recently because they just took fees out of it and I had to email them every 6 months and tell them to put the fees back.

So, while I'm not a big Chase customer, I am a Chase customer.  However this type of game makes me LESS likely to do business with Chase not more likely to move my accounts to them.

And, no I'm not doing automatic payments, I only do automatic payments for my mortgage.  One bad experience with a gym membership years ago has taught me not to give anyone access to my account.  I

Thursday, June 23, 2016

Voting by My Actions

So, even though we need to focus on savings and adding money to our 2016 IRA (in 2015 we saved nothing in our IRAs), I find myself doubling up my monthly payments for my nused car (purchased in December of 2015).

Why am I doing so?  Well, we paid off Mr. Sam's 2013 truck in full as of last month.  That means that I have an extra $500 a month.  So, rather than using that $500 for savings I sent it off to Chase for my auto loan.  I'd frankly be better off putting that $500 towards our linger credit card debt (now down to $1195).

So why do I make these choices?  I much prefer killing debt than saving money.  Now don't get me wrong I love saving money and watching the balances grow in our retirement accounts.  But, I seem to get more satisfaction paying off debt.  I also am not a fan of car loans.  I'd prefer to pay cash for cars, but over the course of 2013-2015 we found ourselves buying a new truck for Mr. Sam and a nused car for me.  I seem to dislike car debt more than credit car debt, etc.

Monday, May 30, 2016

Amazon Mom Update

Almost a year ago, I signed up for Amazon Mom/Prime program.

What I have learned, and it is also what I expected, is that having Amazon Prime makes it super easy to buy stuff from Amazon.  "Free" two day delivery on lots of items means that I often go to Amazon for my buying needs.  Does that mean I'm spending more in general?  Hard to know.  I could be making the same purchases, but simply making them at Amazon instead of other retailers.  Or I could be making more purchases since Amazon makes it so easy.  I suspect it is both.

Today, I was working on my Amazon Prime subscription box.  The subscription service allows one to sign up for purchases that are regularly occurring.   For us, that includes diapers, wipes, diaper genie liners, baby sunscreen, baby snacks, etc.  If you sign up for five items a month that ups your savings to 15% off on everything and 20% off on diapers.

So each month, we get diapers and wipes.  Normally we get some puff snacks for Baby Sam.  That normally leaves two items left.  We have storage space, so I'm genarlly looking for something we go through a lot of and is a dry good or cleaning supply.

As working parents, coffee is a big thing for us, so today  I decided to look at coffee options.  On Amazon, even narrowing by Prime, that brings up thousands of choices.  Select ground and hazelnut and I'm down to hundreds.   Sort by price and I come up with some brands that Mr. Sam buys regularly.  Ok, price per bag, price per ounce.  No idea if this is a good price.  Am I falling into the trap of buying something to get a discount that isn't a good deal?   Cross check to the Wal-mart site and yes this is a good price.

Do the same thing for Mr. Clean Magic Eraser and I'm good to go for check out.

So bottom line, discounts can work but you have to be careful about making a poor buying choice for purposes of getting a discount.

Also, being able to get items I need delivered makes my life so much easier.  Between, work, baby, family life, maintaining sanity is important.

Thursday, May 26, 2016

Keeping Up With the Joneses - Part III

Earlier I posted about some of my friends and former co-workers that have been engaging in expensive housing purchases.  See the posts here and here.

Today, I'm discussing Leslie and John.

Leslie and I used to work together, so we are in the same industry.  John works in the arts business.  I really have no idea what kind of income John pulls down, but back when Leslie and I worked together she earned considerably more than he did.  I don't know if that is true today, but assume it is. Leslie and John have one child.

Last year they bought a $1 million dollar foreclosure home.  Yes, a foreclosure at $1 million.  Back during the housing bubble, the house had actually sold for $1.7 million so you could argue they got a great deal.  I would expect the house to appreciate quickly and, in fact, the property appraiser has it assessed at $1.6 million.  As a result, annual taxes on the home are $35,000 ($2900 a month).

The house is 4 bedrooms and has 4700 square foot of living space.  It also has a pool.  The neighborhood they moved to has an excellent elementary school, but after that it gets mixed for middle and high school.

They have a mortgage in the amount of $750,000.  And, they also took out a home equity line of credit in the amount of $100,000.  So total debt is $850,000.  With a 30 year mortgage their monthly payment is $3800, add in taxes monthly carrying costs are $6700.  This does not include insurance, which is expensive in Florida.

Leslie and John previously lived in very nice historic home in a community with a good elementary school.  They actually sold that nice home for a decent profit -  $172,000.  There old home was also 4 bedrooms and had a pool.  I'd argue their old home was in a better location because the street their new home is on is very busy.



Mr. Sam's Truck

Happy to report that Mr. Sam's 2013 truck is now paid off.

Tuesday, May 17, 2016

Keeping Up with the Joneses - Part II

Earlier, I wrote about some of my friends and co-workers whose house purchases have caused me to suffer house envy.

Next on the list, Jessica and Tony.  Jessica and I used to work together and she and I are in the same industry.  Tony works in the engineering field.  They do not have any children together, Tony has children from his prior marriage and just recently concluded his support obligatins.  They live in the same county we live in.

Last year, they built a home that cost more than a million dollars.  The home is more than 5000 square feet and has four bedrooms along with a pool.  Taxes on the home are $20,000 a year.  They have a $1.1 million dollar mortgage mortgage.  Carrying costs, assuming 30 year mortgage and not including insurance costs (which in Florida are expensive), are $7000 a month.

As a comparison, taxes on our home are approximately $3500 a year.

Also, when Jessica and Tony sold their prior home they lost $125,000 on the sale.  They had bought pre-recession and the value of their prior home had not yet fully recovered.

What do you think about this type of real estate purchase?  On the one hand, Jessica and Tony have a gorgeous home in a great location.  On the other hand they have a $1.1 million dollar mortgage and that type of debt would keep me up at night.