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

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.

Mr. Sam's Truck

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

Focusing on Debt

This was my December update on debt:

Debt killing goals:
(1) Pay off lingering credit card debt in the amount of $6500.
(2) Pay off Mr. Sam's new car, remaining debt $2500.

Of course, we've added to our debt by buying me a nused car.  But, I'm ignoring that for right now.

I've been chipping away at our credit card debt.  We killed the 0% credit card debt that we took out for tile in one of our rental homes.  Mr. Sam also cancelled that card/account.  As for our revolving credit card (Chase) that has been hanging around since Baby Sam arrived, it is now down to $3809.  I'm utilizing Dave Ramsey tricks by throwing a $100 at it here and there, and sending payments from various checking accounts on the same day.  I expect that Chase will be killed off by mid-March (hoping for end of February).

Mr. Sam's truck is down to $2000 and we have 4 payments left.  I don't plan to pay ahead as we have a 0% situation.  So, by May the truck will be paid in full.

Once the Chase is killed, we really need to ramp up 2015 IRAs savings since the deadline to fund is 4/15/16.  At present we have $2500 in our 2015 IRA savings.  That means we need to find $9000 before 4/15/16.  Our available savings is down because of my nused car purchase.  We do have $4200 in our vacation/travel fund, which means I could likely raid it for a couple of thousand.  And I could probably take $1,000 from savings.  That would mean we need to find $5,500 from other sources in about a month or month and a half.

Updated 2016 Savings/Financial Goals

Still working on our goal planning, some changes since I last posted.

Definite goals:
(1) Max out 401k for each of us, the limits have not changes for 2016 so that is $18,000 for each of us for a total of $36,000. Automatic payroll debits are in place, I will just need to check them in January
(2) Finish funding our 2015 IRAs - $8900, The 2015 IRAs must be funded by 4/15/16. As such, we will have some heavy upfront savings of about $1110 per pay period between 1/1/16 and 4/15/16.
(3) Fund 2016 IRAs $11,000 for the both of us, this number also is unchanged from 2015.
(4) Baby Sam'college fund, add another $5000 this year.

Tentative goals:
(5) Add to emergency fund, reducing this annual goal to $5000 (this year we saved $10,000)

The above savings goals total $65,900.  The highest savings number we have ever hit with our savings efforts is @$64,000 (back in 2013). So, this would be a stretch for us, especially with our child care expenses for Baby Sam.

I've deleted the nused car savings goal, because I went ahead and bought a nused car in December.  More on that in a later post.

Debt killing goals:
(1) Pay off lingering credit card debt in the amount of $4261 (this was at $6500 in my last post, we've made progress).
(2) Pay off Mr. Sam's new car, remaining debt $2000.

Above debt totals at $6261.

Also, I'd like to reduce our total debt to under $450,000 total.  At present our debt total is at $491,863 (this number went up due to the nused car) which would require killing the above credit and car debt and also killing another almost $35,602 in debt. I think that is this is may be a reachable goal since we paid off @$34,000 in debt this year.

Additional financial goals:
Roll over old 401k to my current employer 401k.  This has been a previous goal, and guess what it is still an item on my to do list.

Updates on Debt

I've recently, as of today, updated our networth debt numbers.  One of our goals for 2015 was to get our total debt load under $500,000 and I'm pleased to report that our debt is now at $489,000.  Since, January 2007, our debt load has gone from $735,054 down to $489,000.  That means, on average we have killed about $30,000 in debt per year since 2007.

On our primary home, purchased in 2004, we have paid off $105,546 in principal.  Since we refinanced our mortgage a couple years ago to 2.75% our payments have accelerated.  We also refinanced from a 25 year loan to a 15 year loan and cut off 7 years from our overall term.  On our three investment property mortgages, as of next month, all three mortgages should be below $100,000.

As for our other debt, I've struggled with credit card debt, pay it down, run it up, pay it down, etc.  I really need to kill it once and for all as its now been hanging around since the baby arrived.  We also have a new debt that is not yet listed, 0% financing on floor tile that we bought for one of our investment properties.  That debt is a couple of thousand dollars.

As for Mr. Sam's new truck, we continue to pay down his truck debt (we paid for his new truck half in cash and half in 0% financing) at $500 a month, so that debt will be gone in seven months.  I really need to be saving for a nused car for me, as my car has been acting up.  Recently it was out of commission for a few weeks with an electrical problem but the fix ended up only costing $250.  There are several other more expensive things wrong with the car, but the dealer says none are pressing to fix as of now.  The dealer gave me a print out of things to fix that would likely cost $4000 which is more than the car is worth.  It was kinda funny as I had started to research my next car.  Since Baby Sam arrived I, of course, want a family car.  But, I'm better off trying to make my car last another year or so as I've only got $400 saved in my nused car fund.

Uphill Battle

I'm sorry I've not posted here more.  But, now I understand how busy one gets with a full time job and a new baby.

Financially, we are all over the place.  We can't seem to get back on track post baby.  While our incoming salaries remain the same or better, our outgoing expenses are much. much higher than normal.

Child care is running $1900 a month ($22,800 a year) which appears to be way higher than normal for Florida, but I don't know anyone in my circle paying the Florida annual average of $8300.  Add in diapers, formula, wipes, etc. at $300 a month or so and we are up to $2200 in expenses.  And, we actually don't spend much on Baby Sam, we hit the thrift stores for books and toys and I stick to super sales for baby clothes.  At present, we are also adding $200 a month to Baby Sam's college fund.  So in total, about $2400 a month in baby expenses.

Another challenge, we are converting a rental property from rental to family.  We have, in the past, utilized one of rental properties for our snow bird relatives which was a financial hit.  Now, that we are turning the rental property to a family property, we have had a couple of months where our old tenants have not paid us.  So that also, obviously, impacts our cash flow.

Anyways, we continue to contribute to our 401ks, at max level, and continue to put money into savings, but we need to catch up on our IRAs.

Hope your summer is going well.

Cars, cars, cars

Back in 2008, the first year of this blog, we saved up $17,000 and I bought a 2006 nused car.  While that feels like a short time ago, its been almost 7 years.  That car has served me well, but last year (and the prior year) it cost me a pretty penny in repair costs.

Now that we have Baby Sam, and I have to wiggle and wrangle that baby stroller in and out of my trunk (even though its very large) and as the car approaches the 10 year mark, I've started thinking that I need a new/nused car.  I'm thinking about a small SUV or cross over type of car.  Something with a larger back storage area (not a trunk) so I can more easily fit the baby stroller and all the stuff that goes along with a baby.

The length of time Americans keep their cars has grown.  On average, a new car is kept for 71.4 months (or just under 6 years).  On average, a nused car is kept for 49.9 months (a bit over 4 years).  In my situation, I've exceeded the average for both data points. since I've been driving my nused car for more than 6 years.

I generally do well with resisting the influence of friends and colleagues, but most everyone I know is driving a newish car.  In fact, I recently got together with a good friend and she has a newly leased SUV.  In the last 15 years she has had 5 cars and I have had 2.  In our family, I was the one with the nice car since Mr. Sam was driving an old 1998 truck.  But, that's not true anymore.

While I'm starting to pine for a new car, our financial situation is stretched.  We have the expenses of the baby, indeed we still have a little baby debt.  We have Mr. Sam's truck debt.  And, we've barely made any progress on our 2015 savings goals (indeed we've hardly started).  We also have child care costs and a college fund to feed.  So, if I can hold off on a new or nused car for a couple of years, we'd be much better off.

As a result, my tentative plan is to start a nused car fund now so I feel like I am working towards a goal.  I need to also spend some money to get my car cleaned and tuned up, oil change, tire rotation, etc.  If I do that, I'll feel like my car is in better condition and won't be so antsy for a change.

Truck Update

Big news on the truck front, Mr. Sam is the proud owner of a new truck.  

As I shared recently, we were not finding very good prices on used trucks, they were running $12,000 or so for the type of truck we wanted but were 10 years old.  As such, after doing a lot of research, we opted for new (as Anon noted, the used car market is tough).

Anonymous said...

we had to replace our truck last year too. After looking for used ones in the 3 - 5 year range and finding not much of a price break off new ones, we went new. Its been awhile since we bought new but the cost justified it this time. I was going to pay cash, like you we hate car loans but the rate was so cheap and a $1000 rebate off the price for financing that we financed about 60% of the cost and paid it off over 6 months and came out way ahead with the rebate vs interest expense. I would have paid off the loan with the first payment but feared they would come back at us for the rebate amount. Our weekdays cars we bought in 2007, both luxury cars that are 2002 and 2004 models, bought as a package deal and plan to drive them for many more years.

We bought last year's truck (2013) and opted for a low end model.  We paid cash for about 40% of the purchase price and the rest was paid via a loan.   While I hate having debt of any kind, we will work hard to get it paid off quickly and, in the long run, I think it is a better decision.  We have a new truck that is under warranty, it has four doors which gives us greater flexibility (old truck only had two doors), and Mr. Sam is so happy to be out of his old, beat up truck.  

2014 Savings Goals - June Update

(1) Max out 401k(s) -        $8,088    23%  (goal is $35,000)
(2) Max out IRA(s) -         $8,838    80% (goal is $11,000)
(3) Add to e/r fund -          $4,400    44% (goal is $10,000)
(4) Roof project -              $5,000    100%  (goal is $5,000)
(5) Vehicle replacement -  $5,000     100%  (goal is $5,000)
(6) House projects -          $0            0% (goal is $3,000)

Total:  $31,326  45%  (Goal is $69,000)

We are having the year of unplanned expenses, and as a result our progress chart has been altered.  First, because Mr. Sam needs new/nused truck (and that goal just won't wait anymore) we have cleaned out the house savings account and Mr. Sam's 401k savings account.

Mr. Sam is not currently eligible for his work 401k so we were putting aside cash so when he is eligible (September) he could increase/max out his 401k deductions per paycheck (up to his employer's limit, most employers do not permit a 100% contribution) and we would have cash available to make up for that budgetary shortfall.  But, the truck won't wait so since this money was not invested and available we are putting into the truck fund.  Hopefully, by the time September rolls around we will be able to manage our budget such that he can still increase his contributions to try and put away as much money as he can.

Second, similarly, our house project fund has also been cleaned out for the truck fund.  Our truck fund is $10,000, not the $5,000 listed in our chart.

At present, we are about $3000 behind on our savings goals.

Car Repair Blues

One of the ways we keep our expenses down so that we can save more is keeping our transportation costs low.  I drive a 2006 four door car, which was purchased with cash in 2008.  Mr. Sam drives a truck, a necessity for our rental properties, which was purchased with cash in 2004.  The truck is of the late 1990s vintage.  So, I've had my car for six years and Mr. Sam has had his truck for 10 years now.

This year the average price of new car was $31,252.  Additionally, Americans are keeping those expensive cars for more years (due in part to longer car loans).

Last year, my car needed a fair amount of work.  The work was done, about $2000, and I was hopeful my car would be good for a few years.  No such luck, I've just put another $1200 into my car and I have an outstanding transmission problem that needs to be addressed by a specialist (which means expensive in my mind, but its an unknown at this point).

While we were talking transmission for my car, Mr. Sam's truck has reached its end.  He either needs a new engine or a new vehicle and the mechanic who looked at it said it really wasn't worth putting a new engine into the truck. The truck is also only two doors and we really need another four door vehicle for a variety of reasons.

So, we are on the hunt for a used four door truck (with a shorter bed).  Interestingly, the prices on used (2010-2013) trucks are close to the price for a new one.  I mentioned financing a purchase rather than depleting our savings account (which has already been battered by prior unplanned expenses this year), but Mr. Sam is strongly against having a car payment (I've trained him well).  Which means that we will need to look for something that is older or figure out some other plan.

2014 Planning - Third Time is the Charm

So, for the third time we are going to plan/try to save $69,000, maybe 2014 will be the year we hit this number.  Now that we have our 2014 total goal number, we have been working on planning.

Some goals are pretty easy to establish.

First, tax advantaged retirement savings.  I will max out my 401k savings, $17,500, in 2014.  We both will max our our non-deductible IRAs for 2014, so that is $5,500 each or $11,000.  We will save $17,500 for Mr. Sam in 2014, that money will be after tax until he is eligible for his 401k in September.  Then we will max out what he can contribute from 9/1/2014 until 12/31/2014 which Mr. Sam thinks will be about $12,000.  So, the monthly savings we do for Mr. Sam's 401k between 1/1/2014 and 9/1/2014 will be used to supplement income for the last quarter when he is putting the bulk of his paycheck into his 401k.  Then, the amount that is left over will be put into our trading account.  While Mr. Sam will not be able to save as much in 401k savings, we will make sure to save at least the same amount in our non-tax advantaged trading account.

(1)  Max out 401ks (goal is $35,000)
(2)  Max out IRAs (goal is $11,000)

As for our IRAs, we have already saved $1800 towards our 2014 goal.

Second, other savings goals.  I probably will maintain the monthly savings already set up which means we would put another $10,000 into our emergency savings in 2014.  I like having money go towards e/r savings.  With our various real estate properties, a health emergency fund makes me happy.  For similar reasons, I probably will keep the $200 a month that goes towards our house account.  With an old house, there are always repairs or projects (last year I imagined plantation shutters, but that project got put off).  This year, we are also likely looking at a roof repair or roof improvement on our carriage house.  Accordingly, I am putting $5,000 into roof project savings.  If the roof project costs less, then we will put that money towards mortgage principal prepayment.

(3)  Emergency account (goal is $10,000)
(4)  Roof fund (goal is $5,000)
(5)  House fund (goal is $3,000)

Third, Mr. Sam is going to need a replacement vehicle within the next couple of years.  So, the last goal for 2014 is car replacement fund (goal is $5,000)

(6)  Car replacement fund (goal is $5,000).

How about you, what are your financial plans and goals for 2014?

Time for 2014 Goal Planning

Since it is November, it is time to start thinking about our 2014 annual spending plan and our 2014 savings goals.

First on the list, 2014 IRA savings.  As I previously posted, I have already set up our 2014 IRA savings account at CapitalOne 360 (f/n/a ING).  The 2014 contribution limits for IRAs are holding steady, so we can each contribute $5,500 to our non-deductible IRAs.

Second, 2014 401k contributions, I will contribute $17,500 to my 401k at work (again the limits are not increasing next year).  We need to figure out if Mr. Sam will be eligible for a 401k at his new job in 2014.  If he is not eligible, then he may be able to contribute to a deductible IRA (see above) to get a bit of tax savings.  But, regardless of whether he is eligible for 401k we will sock away $17,500 anyways.  Yes it will be after tax money so we will lose out on that advantage but we will still put that money into the trading account.

Third, I assume we will put money into the emergency fund and for house projects.

We will need to decide whether it makes sense to continue to pay down the mortgage principal on our primary home.  While I continue to have the goal of being debt free and paying off the mortgage on our primary home could provide significant insurance savings, we really are not saving much interest by paying early because our mortgage interest rate is so low (2.75%).

I also think we need to start a savings account for a replacement car/truck.  I bought my car, a 2006, in 2008.  I just put about $3000 into it so, even though it is 7 years old, it should be good for quite some time.

But, Mr. Sam's truck, which we bought used in 2005, is more than 10 years old and not in the best condition these days.  He would prefer to keep it and have me buy a newer car and he would take my current car for his work car.  Then we would have the truck to use for house projects and the like when we need it.  But that means we would have 4 cars (we also have an antique weekend car) and that is a lot of insurance.  I'm also not keen on having 4 cars to store/park.  As such, I'm more inclined to replace Mr. Sam's truck with a newer and nicer truck (something with a bigger cab and shorter bed and a smoother ride.