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13
Feb 2009

How Many Financial Blows Could You Withstand?

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A while ago my husband and I were discussing with my dad our plans to move to a less expensive town.  He was talking about how many financial blows a person can withstand, and how increasing that number should be a primary goal.  It resonated with me, and really made me think.  It’s part of the reason why we decided that we’d rather sell our current house instead of renting it out.  Two mortgages, one of which is covered by rent from tenants, is great as long as things are going smoothly.  But things don’t always go smoothly, and having just one house and one mortgage is a lot easier to juggle if things get a little rocky.

My dad pointed out that it would take several financial blows to knock my parents down.  They’ve already withstood a few, the biggest being the autoimmune disease that struck my dad without warning in 2001 and caused kidney failure.  He had to retire at 55, several years ahead of schedule.  Even with health insurance, his medical expenses eat up a huge chunk of money every year.  It’s not an ideal situation, but it would be much worse if they had been in debt when he got sick.  They’ve always planned carefully, and while they’ve never had a great deal of money, they stretch what they do have farther than anyone else I know.

My parents would never in a million years put in granite countertops or buy a big screen TV.  They drive a Hyundai that they paid for with cash.  They taught me everything I know about shopping in thrift stores and at yard sales.  They are the king and queen of do-it-yourself, and make frugal into an art form.  Years of living like that put them in a position where a pretty significant financial blow wasn’t able to topple them.  And they could withstand several more if necessary.

That is our goal.  My husband and I are working to get ourselves to that point.  When we bought our house six years ago, we were far from it.  Our mortgage was a stretch for us, and starting our own business at the same time made things even tougher.  We worked our butts off, but we were also lucky.  We had the various financial hiccups that go along with starting a business, but we didn’t have any major catastrophes.  We’ve gotten ourselves to the point where we could withstand some financial difficulties without too much of a problem, but we still have a long way to go.

These days our income is more than it was when we bought our house.  But we won’t be upgrading to a more expensive neighborhood, buying new cars, or abandoning the thrift stores where we do our shopping.  Upgrades are fine, as long as your financial situation stays the same or gets better.  But what if it gets worse?

I look at every month where our income exceeds our expenses as a gift that should not be squandered.  It’s an opportunity for us to build up a wall around our family to shield us from whatever life might throw at us around the next bend.  That’s why we’re so focused on saving and living frugally.  A few years ago, we had to be frugal because there simply wasn’t enough money in our budget to live any other way.  Now, we choose to be frugal because we don’t know what the future will bring.  Our income isn’t huge, and it could easily be eaten up if we chose to upgrade a few aspects of our current lifestyle.  But carefully considering every purchase means that we’re able to put money aside every month instead of spending it.

I hope that we’ll continue to have smooth sailing for many years to come.  And we’ll be careful and do our best to make that happen.  But sometimes life throws curve balls that are tough to anticipate.  Insurance (life, health, liability, etc.) can help with some of those, but avoiding debt and building up savings will make it much easier for us to weather whatever storms might lie ahead.  And to me, that brings more comfort than anything we could spend our money on right now.

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Category: insurance, savings  15 Comments
01
Feb 2009

Helpful Advice From Wells Fargo

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Yesterday we finally got our letters in the mail from Wells Fargo, officially letting us know that they had closed our business credit card accounts.  The letter is ridiculous, and I thought I’d share it with you all.  It’s good for a laugh anyway.  They mention that they closed the accounts and that they understand that we will have questions about why this happened and what steps we can take now.  The letter goes on to say “to save you time and give you the most direct path to the answers you need, we have included “The Guide” on the reverse side of this letter.  It provides you with the information that we believe you will find most important and useful”.

So I turn over the letter, wondering what brilliant insights “The Guide” will offer.  First, it mentions the supposed reasons why the accounts were closed (as I described in my last post, their reasons don’t make much sense, but it’s convenient for them that the reasons are purely subjective, proprietary, and impossible to fight).  Then, they included some advide that they say will increase the likelihood that they will someday be able to reinstate our account (thanks, but I think we’ll pass on that).  Here are their words of wisdom:

  • Ensure all accounts are handled satisfactory.  Unsatisfactory performance may include untimely payments, items returned for insufficient funds, involuntary closures or overdraft occurances (um, excuse me, but does what you just did count as an involuntary closure?  Just curious)
  • Work to preserve your credit and avoid building excessive additional credit balances.
  • Make sure there are no late payments on any of your accounts.

I minored in math in college.  That advice from the helpful folks at Wells Fargo would be like someone telling me that I really ought to brush up on algebra.  Thanks guys – we’ll be sure to work on that.  In the 12 – 15 years that we’ve had credit, neither of us have ever had a bounced check, overdraft, late payment, etc.  We pay off our credit card every month, and have always done so other than the couple years after we started our business (late 2003 – 2006, during which time we carried balances but always paid far more than the minimum payment, and were always on time).

We’re a week out from finding out that our accounts were closed, and at this point I see a lot of humor in their letter.  If we had received it a week ago, it would have just made me angry, but staying angry doesn’t do anyone any good.  We are going to look at other bank options, but we’re not going to rush into a decision.  I like the idea of a credit union, but we want to make sure that we get one that has a local branch in the town where we’re hoping to move.  So we’ll see what our options are and weigh the pros and cons.  Switching banks will be a very time consuming process because of all the direct deposits we have to our business account and all of the automatic payments we have coming out of our accounts.  It’s not something I want to do without comparing a lot of options, but it is something that I’m motivated to do thanks to this little episode.

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Category: just my life, savings, work  4 Comments
30
Jan 2009

Very Disappointed In Wells Fargo

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An open letter to Wells Fargo and anyone else who cares:

Dear Wells Fargo,

I have been banking with you for six years.  My husband has been with you since the mid-90s.  When we bought our house and consolidated our finances, we decided to merge my bank accounts with his and move everything to your bank (in hindsight, I wish we had moved him to my bank instead, but you know what they say about hindsight).  We added my name to his checking account, and opened a joint credit card through Wells Fargo.  Our Heloc is also through your bank, and has been ever since we bought our house.  Three years ago, we incorporated our business and opened a business checking account, along with a corporate credit card for each of us.  Last month we opened a corporate money market savings account.

Our high-yield savings account is not with Wells Fargo, because as far as I know you do not offer one.  And our HSA and IRAs are with investment brokerage firms.  But all of our other banking is done with your bank, and has been for a long time.  We have a perfect record with you and with every other bank/lender/financial institution we’ve ever done business with.

Last Sunday, we got an email from a vendor we use for our business, letting us know that an automatic payment had been declined.   I called the 24 hour number on the back of my corporate credit card to find out what was up.  I was informed by a very nice employee that our credit cards had been closed as of January 20th.  Well that’s lovely – any particular reason why?  The gentleman told me that they were closed because of a report from Experian.  But I would have to call back the next morning to talk to someone during normal business hours to get more information.   That doesn’t make for a particularly good evening.

We called the next morning and talked to another rep who told us that the reason the cards were closed was because of low usage on the accounts.  To back up a bit, when we opened the credit cards, we told the business banking rep at our local Wells Fargo that we would only be spending about $300 – $500/month on our cards.  But we were given accounts with $10,000 credit limits.  True to our word, we’ve put approximately $400/month on the cards over the last three years.  We always pay the balance in full, and have never paid any fees or interest on our corporate credit cards.  But the cards are essential to our business.  All of the charges are automatic, recurring bills from vendors for services that we cannot operate without.

So on Monday morning we were told that our cards were closed because of low usage.  We asked to speak to a supervisor and were told that one would call us back.  But that never happened.  The next day, I called back to try to get a supervisor on the phone.  The person I spoke with on Tuesday told me that our cards were closed because of BOTH low usage and a report from Experian that indicated (according to Wells Fargo) that the balances on our personal credit cards were too high and that the amount of time our credit had been active was too short.

I spent 45 minutes on the phone with two people on Tuesday morning trying to figure out what was going on.  Conveniently enough, I had copies of our credit reports and credit scores from Experian and TransUnion from the same week that Wells Fargo had apparently gotten their report from Experian.  According to the credit scores I paid for when I got our credit reports, my husband’s credit is better than 93% of Americans, and mine is better than 78%.  So it would seem that you must be closing an awful lot of accounts. There’s not much we can do about the length of time our credit has been active (we haven’t closed any accounts recently), and it’s been active now for three years longer than it had been when you gave us $20,000 in credit (even though we told you we only needed about $500).  I discussed with the rep the fact that we don’t carry balances on any credit cards (confirmed by the credit reports), and that we charge a small fraction of the limit on our personal Wells Fargo card and AmEx each month, and pay off the balances in full.  She didn’t know what to say other than that she was sorry.  As for the low usage factor, no one at Wells Fargo was able to tell me what your requirement is for usage.  That sure does make it hard to adhere to, now doesn’t it?

The reps we spoke with earlier this week told us that notification was sent to us on January 20th, informing us about the accounts being closed.  Today is the 29th, and we haven’t received anything yet.  Did you send the letters on one of your horse-drawn wagons?  Just curious.

So, you want to know what I think?  About three weeks ago, I called to see if we could have our cards set up with automatic payment from our Wells Fargo corporate checking account.  Since we always pay the balance in full anyway, I figured it would make my life easier if I didn’t have to write checks from the account each month, and could just have the balances paid on the due dates.  Ironically, we got our credit card bills on Tuesday, and notification was included with the statements telling us that the balance would be deducted from our corporate checking account on the due date.  So now Wells Fargo is well aware that we will never be interest-paying clients.  We never have been, although I suppose the possibility was always there.  Until we set our accounts to be automatically paid in full each month.

Once you knew that we would never be interest-paying or fee-paying clients, you decided to get rid of us.  But you did it in a way that we can never fight.  Your minimum usage requirement is supposedly a corporate secret.  And while the information contained in credit reports is objective and can be contested (ours is all accurate), a company’s use of that data is subjective, and we can’t argue with how you interpret a credit report.

I truly felt sorry for the Wells Fargo reps I spoke with earlier this week.  They seemed resigned to having a pretty rough time of it right now.  I asked them if this was happening to a lot of clients, and they both said yes.  I was very upset, but I was restrained and apologized to the reps for being upset.  I’m guessing that a lot of your clients weren’t so polite.

The most frustrating part of all this is the $25 billion in tax dollars that Wells Fargo received in the banking bailout.  You’re welcome.

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Category: lessons learned, savings, work  36 Comments
07
Jan 2009

Might Not Stay In Our Starter House Afterall

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I noticed that this is my 500th post on this blog.  Better make it a good one.

Frugal Babe readers are probably well aware of our plans to keep our starter house and avoid the never-ending mortgage payments that happen when people keep upgrading to more expensive homes.  But we are considering another possibility.

We have found a much less expensive community about 60 miles from where we currently live.  It’s only nine miles outside of a city that we both really like, but it’s a small town (about 5000 people) and although it’s population has grown tremendously over the last few years, it’s been overbuilt and there are a ton of houses for sale.  The houses are literally half the price that they would be in the town where we currently live.

We went there last weekend and looked around.  There is a library, a grocery store, a post office, two elementary schools, a middle school, and land purchased to build a high school.  Although it’s a small town, it’s in the school district of the big town just down the road, and it’s a very good school system.

We would have to drive further to get to Costco, but we could get an efficient chest freezer and make our trips less often.  We would have to go about ten miles to get to Whole Foods, which is about how far we go now.  I could still walk to the post office and library, just as I do now.

Most of the houses we looked at are for sale for less than we paid for our current home six years ago (some are quite a bit less).  They’re roughly the same size (or a little bigger) in terms of finished square footage, but almost all of them have full, unfinished basements instead of the partial crawl space that we have now.  A basement room for our hydroponic garden would be a huge bonus.   We could walk around the plants to tend to them and harvest produce, instead of doing the crawl/butt scoot that we currently do.

Another bonus is that the yards are much bigger than what we have now.  Our current yard is literally six feet wide and wraps around two sides of our house.  The picture of the mini-greenhouse my husband built gives a good perspective on how much space we have to grow vegetables.   The houses we looked at have enough room for a huge garden in the backyard.  We’ve proven our dedication to gardening and supplying as much of our own food as we can – imagine what we could do with a basement and a large yard.

There would be some trade-offs.  We currently live in a town of 50,000 people.  It’s a suburb of a metropolitan area that has over a million people.  Moving to a town of 5000 people would be a big change, although its proximity to a large city makes it a much different environment than a small town in a completely rural area.  We think it’s very worth it, and are currently researching all of the details involved.

We don’t want to sell our current home.  We’re looking into the possibility of renting it, and have found that average rental prices in our neighborhood are actually a little higher than our monthly mortgage payment.  We’ve talked with a mortgage broker who is running some numbers for us to determine how much of a down payment we would need in order to qualify for a loan on one of the houses in the less expensive town.  Even with a 15 year mortgage, we should be able to get a monthly payment that is lower than what we currently pay (especially considering interest rates these days).  Of course we would be just as focused on paying it off as quickly as possible as we are with our current mortgage.

So here’s our current plan (Subject to change, of course.  That’s what keeps life interesting):

  • We will make cash savings our primary focus for the next several months instead of paying additional principal on our mortgage.  We want to build up a good cash cushion before we make any changes (to cover a down payment and also have money to pay the mortgage on our current house in case it takes a while to get renters).  The amount is still to be determined – we’re waiting to hear back from the mortgage broker and then we’ll have some more concrete numbers.
  • We’ll work on some home improvement projects that need to be done.  Our house needs a new roof, the bathroom needs paint, the garage could use some new shelves… things that would make the place more appealing to renters and less likely to be a headache down the road (the roof is a good example, as it’s on its last legs).
  • We will continue to live as frugally as possible in order to build our savings as quickly as possible.
  • We will thoroughly research all of the details involved in this process: mortgage lenders, property managers, rental income, interest rates, etc.

I’ll let you know what comes of this as time goes by.  We’re excited about the possibility of lowering our housing costs and at the same time getting more space to grow our gardens.  We could become nearly self-sufficient in terms of the produce we eat (which is by far the largest part of our diet).  There are still a lot of kinks to work out, but we feel like we can make this happen.  We both work at home, our son is still a baby – we have a lot of flexibility in terms of where we live.  So why not make the most of that flexibility and move to an area with lower housing costs?

Would you ever consider moving in order to lower the cost of your house?  Or have you already done so?

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Category: home improvement, Our stuff, savings  25 Comments
11
Dec 2008

Frugal Because We Want To Be

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I got a comment today on my post about our financial goals that I thought was worth further discussion.  Dave wrote:

“I don’t know much about you but it seems like you folks have plenty of money. Anyone know of a blog directed toward the working poor? Somebody making / surviving on $30K a year?”

Dave, you make a very good point, and one that I’ve thought about a lot as I write a blog focused on frugal living.  But as as recently as 2004 we were indeed living on about $30K.  That year, our savings amounted to $100/month into our IRAs and that was it.  We were frugal out of necessity.  When we found out that my husband would need $5000 worth of dental work that year, I took a second job at the library, shelving books for $8/hour to pay off the dental bill.

When I started this blog in 2006, we were still in debt and although our income had increased a little beyond $30K, it still wasn’t huge.  Over the last couple years our income has increased further, but our lifestyle has stayed about the same.  Yes, we could spend more money now.  But we choose not to, because we’d rather save for the future than spend everything we have right now.

We’re actually earning a pretty typical income for two college-educated professionals in our 30s.  But we’re still in the same modest house we bought six years ago (we plan to stay, and are paying off the mortgage as quickly as possible).  We still drive cars that were made when nobody outside of Arkansas had ever heard of Bill Clinton.  We buy all of our clothing in thrift stores (and rarely shop at all, even at thrift stores).  I think the last time we went out to eat was in September when my in-laws were visiting.  Yes, we have options – we could choose to drive new cars, upgrade our house, shop at the mall, and go to Starbucks.  But instead we’d rather pretend that we still earn $30K and save the rest.

In order to make our goals happen next year, our family of three will have to keep our monthly expenses to about $2500, including the mortgage and health insurance, which amount to about $1500 together.  I feel confident that we can do it, because we’re used to living frugally.  Being forced to make do on very little money in the past taught us that we really don’t need a lot of money at all.  Now that we have more money, we’re able to give to causes that matter to us and save for the future, since we’re still perfectly happy with our frugal life.

I remember when I started blogging, I read NCN’s blog and was amazed at how much money his yearly savings amounted to.  I remember thinking that he was saving nearly as much as we were earning in a year.  And that served as a huge motivator for me.   The nice thing about being committed to living frugally is that if you work hard and focus on increasing your salary, chances are it will go up as the years go by.  But although the cost of living will increase too, frugal habits will mean that your expenses won’t increase as much as those of the people around you.  I’m sure that people see me pulling out of the thrift store parking lot in my 91 Civic and assume that I’m poor.  And that’s fine with me.

I’ll open the rest of Dave’s comment up to my readers:  what are your favorite blogs written by people who are working to stretch small incomes?  And what about your own experiences – have you found that frugal habits you developed years ago have stayed with you even though your income might have grown to the point where you don’t have to be frugal anymore?  Anyone finding that well-ingrained frugal habits are helping them weather the current recession?  I think this is a great topic for discussion – are you frugal because you want to be, or because you have to be?  For us it started out as a necessity, and then just became a way of life.  My guess is that a lot of other people find the same thing – once they get used to living frugally, they notice that big TVs and shopping at the mall and cars and fancy houses no longer hold much appeal.

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Category: savings, ways we save money, work  31 Comments
26
Sep 2008

My Thoughts On Cars

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I got this email from a reader yesterday:

“My parents are driving me insane. They want me to buy a new car. Or, if I won’t, they will buy one for me. It’s getting ridiculous. My car is fine. It’s paid off. It’s a subaru with 185,000 miles. But with a subaru, it could seriously last another 100k. Their argument is safety. Mine is frugality. I’m paying off debt, I have no intention of getting a car loan. And absolutely don’t want to be in the situation where I owe my parents, or where they give me such an expensive gift. (and I’m 36) Plus, I think it’s ‘greener’ to continue to use my current car. I could be wrong, but it gets decent gas milage. It isn’t low emissions or anything, but if I don’t buy one, in my mind, it’s one less car on the planet. Anyways, I don’t feel particularly unsafe, although there is only one airbag. I’m just wondering about your thoughts on all of this and would be interested in reading a post about it. You say you drive used cars, did you buy them used? Obviously one day I’ll have to purchase a car, what would you recommend (as far as new v. used v. ‘green’ etc).”

I’ve written a lot about my car. It’s a 1991 Civic wagon that my husband and I bought in 2003 for $2300 cash. It has about 214,000 miles on it. (my husband drives a 1990 Audi with 110,000 miles on it). Both of our cars are still going strong. I am on a mission to drive as little as possible. I walk or bike anywhere within five miles of our home. My yoga class and the bank are both four miles from our house, and I bike to each of them every week. The grocery store, post office, thrift store, and library are all about a mile away, and I would never dream of driving to any of them. Since we both work at home, we often go several days without taking either car out of the garage.

Here’s our long-term plan: We’ll keep both of our cars until one of them dies and/or needs very expensive repairs (we’ll do things like spark plug wires and brake pads, but not an engine overhaul). At that point, we’ll get rid of the dead car and keep the other one. We’ll keep that car until it no longer drives either, at which point we’ll go looking for a new-to-us car. We will never buy a new car, under any circumstances. In fact, I can’t see us ever buying a car less than five years old. We’re currently saving $200/month in an online savings account earmarked for a new car. We just started this summer, so we only have $600 in the account right now. But it should take a good long while before both of our cars bite the dust, and by then we should have enough money for a decent used car. (It’s a myth that you have to spend a fortune to get a good used car. We only paid $2300 for my car, and it’s already lasted us more than five years). So our plan is to eventually be a one car family. But for now, with cars that are 17 and 18 years old, it doesn’t make sense to get rid of one, since we don’t know which one will end up lasting longer – we could get rid of one and then the other one could die next week. It only costs us about $350/year to register/emission test/insure each vehicle, so we’ll keep them both around until they don’t drive anymore.

I also agree that it’s greener to keep your current car than to go buy a new one – but it depends on your circumstances. For me, since I drive so little, it’s a no brainer that keeping my current car is the greener choice. And it helps that my Civic gets nearly 30 miles to the gallon. It would be a different story if you drive a truck that gets 12 mpg and you put 20,000 miles on it every year.

But what about the safety issue? Breaking down is a possibility with any car, regardless of how old it is. Back in the bad old days, I worked at a car rental company. All of our cars were less than three years old, and the majority of our fleet was always less than a year old. And there were plenty of breakdowns. A new car is no guarantee that you won’t be left stranded on the side of the road. But most of us have cell phones these days, and that’s what they’re there for.

Speaking of cell phones, let’s look at the other safety issue – accidents. It’s true that newer cars have better built-in safety technology, and that is the only argument I would ever make in favor of a new car (and possibly the warranty, if you go with a company that offers 100,000 mile warranties). If cars were free, I would drive one that had a great safety rating and great fuel efficiency. But cars aren’t free. So I choose to continue driving my Civic (which doesn’t have any airbags at all). But I wonder how many of the people I see on the interstate driving 80 mph, talking on the phone, 15 feet behind the car in front of them, bought their new car because of the safety features? I’m guessing a lot of them would give that as a reason, but their behavior indicates that they really aren’t that concerned about safety at all. A safe car isn’t going to keep you from being in an accident – it’ll just help protect you once the accident occurs. In the winter, when our mountain highways are covered in ice and snow, I invariably see SUVs flying past everyone in the fast lane – no doubt counting on their four wheel drive to let them drive 55 mph on ice. So instead of going into debt (to the bank or to your parents) to buy a fancy new car, here are my ideas for enhancing our safety on the road, which I think work a lot better than having 25 airbags in the car:

  • Driving is not a multi-tasking sport. Don’t talk on your phone (and people who text while they’re driving shouldn’t have licenses), don’t eat, don’t shave, don’t put on make up, don’t put in a new cd, etc. Just drive. With both hands on the wheel and both eyes on the road.
  • Drive 65 mph on the interstate. You’ll save gas, and you’ll be able to just stay in the right hand lane most of the time (frequently changing lanes increases your chances of an accident)
  • stay far back from the car in front of you. If someone ducks into the space in front of you, slow down. You’ll get fewer rocks in your windshield, and reduce your chances of an accident.
  • Who cares if someone cuts you off, doesn’t let you in, doesn’t use their blinker, honks at you, etc. Just chill out. we’ll all get there eventually.

I honestly think that these things (combined with driving as little as possible) matter more than the safety features in a car.

That’s my two cents on cars. We’ll have to wait and see how much money we have in our car fund by the time both of our vehicles go to car heaven. That will determine what we end up with as our next car. The number one issue for us will be fuel economy, but we’ll also be looking at safety, maintenance issues, and cargo space. I’m hoping that we won’t be car shopping for several more years though, and we’re careful about staying on top of routine maintenance to keep our cars going as long as possible.

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Category: Our stuff, savings  18 Comments
31
Aug 2008

Spending Our Paychecks

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I deposited paychecks amounting to $2200 in our bank account on Thursday. Back when we were in debt, we would divide our paychecks among the various debt accounts we had, all neatly noted on the yellow legal pad that I used to track our debt progress. We still “spend” our paychecks, but it’s a lot more fun these days. After I deposited our checks, I sent $1000 to my Roth IRA (only $2000 left to go for this year), $300 to our solar panel fund, and $200 to our car fund. $430 is allocated to pay for our health insurance for September. We’re giving $100 to Friends of Tanzania, and the little bit that’s left over is going in the HELOC. I like to move money out of our checking account as soon as it comes in – out of sight, out of mind. We do make more money than we used to, but once I’ve moved it to an IRA, or the HSA, or an online savings account, it doesn’t look like we have more money. Which makes us spend about the same amount as we always have on day to day stuff.

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Category: savings  3 Comments
04
Aug 2008

Saving For A Car

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We opened another ING account today.  We have had our emergency fund there for the last two years, and last month we started a fund to save for solar panels.  Now we’ve decided that we should start saving for a car.  We have no intention of buying a car any time soon, but our cars are getting up there in years (mine is a ’91 and my husband’s is a ’90) and we know they won’t last forever.  We won’t ever finance a car purchase, but we would rather not be caught off guard and have to buy a $600 car when one of ours gives out.  So we’ve opened a savings account and put $200 into it.  We’ll do that every month until we eventually need a new (to us) car.  If one of our cars were to give out in the very near future (they’re both running great right now, but you never know), we would just make do with one car until we had enough to go car shopping.

We’re now officially stretched thin.  We’re paying ourselves first, and it’s all going towards long and short term savings goals, but we’ve allocated just about all of our income right now.  We have our IRAs and our HSA to max out every year, our son’s college fund, our emergency fund, our solar panel fund, and now a car fund.  Plus we’re trying to pay off our HELOC as quickly as possible.  That doesn’t leave much of anything left over, but it feels good to be saving for things that really matter to us.  I’d much rather have solar panels on our house someday, and a car that doesn’t need financing, than a bunch of forgotten restaurant meals and clothes that I no longer wear.

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Category: just my life, savings  4 Comments
08
Jul 2008

More On The Solar Panels

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We started talking more about our quest for solar panels last night. Our local energy company does some pretty huge rebates when you install panels, and that’s a great big plus. We started contemplating the possibility of financing the panels in order to start using them sooner, but eventually decided to continue on our current path of saving the money first. I’m not promising that this won’t change down the road a ways, but for now, we’re sticking with plan A.

Our solar panel fund is at ING. So the money is very liquid and works as a back up emergency fund. Let’s say that a year from now we have some emergency that costs more than we have in our emergency fund. We could take money out of the solar panel fund to cover it. And if we come upon hard times and can’t afford to put $300/month into the solar panel fund, we can just stop putting money into it for a while. But if we finance the solar panels, we’re stuck. We have to keep making payments until they’re paid off – regardless of our financial situation at the time. And since we’d be making payments to them instead of to our ING account, the money could not be used for anything else in the event of an emergency. Yes, we’d have the benefits of the solar panels right now, and would likely not have our $100+ monthly electricity bill, but there are a lot of drawbacks. We don’t want to be in debt is pretty much the long and short of it. We didn’t mind financing our kitchen remodel through Home Depot, because the interest rate is zero as long as we pay it off by next February, and we only charged $2000. We had the money (and still do) to pay it all off at once, but we figured we might as well let the money work for us in savings accounts over the year, and just pay the Home Depot account off little by little. But in the case of solar panels, we do not have the money in savings to pay for them now. We would truly be going into debt to do it, and it’s just not something we’re comfortable with. So for now we’re going to continue saving for them. We might start with a solar hot water system, which is much cheaper than setting up solar for the whole house, so it would give us some instant gratification. I’ll keep you posted!

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Category: savings, the simple life, When we spend  8 Comments
03
Jul 2008

Since I Didn’t Take Any Vacation Time…

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I got my final paycheck from the library yesterday.  It was a good one, because I had more than 200 hours of vacation time saved up, and they cashed that out on my last check.  After taxes I ended up with over $2000, which is a good windfall.  Over the last year, I didn’t take any vacation time at all – I worked every shift I was assigned, and I also volunteered to be the person who goes in and empties the book drop and checks in books on holidays.  Every single holiday for the last year.  So instead of having to take vacation time for holidays, I was getting paid to work.  I did that because while I was pregnant, we weren’t sure if I was going to quit my job or not.  If I hadn’t quit, I wanted to have plenty of vacation time saved up for maternity leave and to be able to take days off to stay home with our baby after I went back to work.  Since I decided to quit instead, I just got a check for all the vacation time.  Makes all those holidays when I went in to empty the book drop seem very worth it now!

Anyway, I put $1000 of the money into my Roth IRA.  That’s the first money I’ve put into that account this year.  We plan to max it out, so we still have $4000 to go, but it feels good to have made a start.  The rest of the check will be going into our HELOC.  I’m really looking forward to getting the HELOC balance under $20K, and I’m hoping that will happen within the next couple months.  This will help.

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Category: Debt, goals, HELOC repayment, savings  3 Comments
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