Holiday roundup
I’ve put off posting lately, because of the holidays and other financial issues. Like many people, I probably went overboard at Christmas. I had a budget but I went over. There have also been lots of other things going on in debt-land.
Here are the highlights
- Spent too much at Christmas and used my Discover card which I intended to pay off in full. I’ll still be able to do that, but it took some serious finagling and a stroke to luck.
- Intended to refinance my home loan to take advantage of lower interest rates and get 10,000 cash out to pay for a truck we need.
- Refinanced home loan but got no cash out.
- Put the family truck up for sale because it can’t haul my RV camper long distances.
- Prepared tax return so I would know what, if any, cash I could expect to get refunded.
- Looking for a truck and a way to pay for it that won’t put me back in debt up to my eyeballs.
Christmas spending
I knew going into the holidays that I didn’t have enough money saved up for Christmas. I intended to cut way back on my spending this year, but when the numbers came in on my Discover card, it was clear that my spending hadn’t decreased at all. If anything, it went up. Take that on top of the $389+ I had just put on there for my refrigerator repair and my bill seemed overwhelming.
When I paid the first statement, I paid it in increments throughout the month until the full statement amount had been paid. I took the $389 from savings and the rest from my bonus and some overtime my husband worked. The dates crossed over onto two statements thank goodness, splitting the amount owed into two payments that wouldn’t cost me any interest since I wouldn’t be carrying a balance from one statement to the next. That left the next statement, which still came in at $1,118. Eeik!
So, lesson learned? Cash, cash, cash. I should have carried cash and stopped spending when I hit zero.
I’ve already talked to my husband and he agrees that this is what we’re going to do next year. We’ve also added $50 a month to our savings so we have the money when the time comes. That’s approximately $11.60 per week and we think we can handle that okay.
Refinanced home loan to save money
Our original plans when we started talking about the refinancing of our home loan was a simple re-fi to cut our interest rate. Then my husband started talking truck. Now, I understand the need for the truck. The truck we have won’t pull the camper more than a twenty or thirty miles before it starts acting up. It’s a 1994 model and it doesn’t have the power needed to handle the weight of the camper. I want to take some trips this year to some campgrounds that are farther from home. I mean, we bought the camper; we’re paying for it, and I want to use it.
But the numbers didn’t make sense and we had to sacrifice the dream of having a few extra dollars on our house payment and no other payments and a newer used truck.
The refinance of the principal only incurred no fees (at our local small-town bank) and our interest rate went from 7% to 5.75%. Before you mention that I could have gotten a better rate somewhere else, you might be right, but we’ve never had to have an appraisal and we paid $0 in fees. This is just a 2 year balloon based on our original construction loan. We won’t qualify to get a traditional mortgage with all the associated fees and hassles until we finish our master bathroom’s shower and some additional work on our staircase. I like having my loan at my local small-town bank and will probably keep it there for as long as possible.
The refinance to get cash back, however, was a different story. The rocky economy has made even my small-town bank nervous. To get the $10,000 cash out, we would have had to get an appraisal and pay fees and it would have cost about $1,500 total. Not worth it in any universe. I want to reduce my debt not add to it, if that’s at all possible!
Finally, my lender asked if I wanted my first payment due in January or February. I said February. And just like that, I had the money to pay my Discover card. :-)
Buying a truck
Okay, so I’m not sure how this fits with my determination to get debt free forever, but here you have it. We need a truck. We’re going to buy used, and since my husband is handy with the autos, we’re hoping to get the best deal possible. But that still means $6,000 to $8,000 we need to come up with.
$500 – Tax refund
$1,000 – Bonus (fingers crossed for more!)
$2,400 – Truck we’re selling (if we get within a few hundred of our asking price)
$145 – Difference in old house payment and new house payment
Finally, we’re going to get rid of our third car. At the moment we have two small cars. One, my husband drives to work (80 mile commute, 5 days, 34 mpg) and one, I drive (112 mile commute, 2 days, 34 mpg — BUT I get reimbursed for gas based on actual cost). Two days a week, I’ll drive the truck to work. My husband will start driving my car, since we’re going to sell his. We should come out with no changes to our gas budget, since my car is the family car and will remain the vehicle of choice for weekend and evening driving.
So, that gives me the last bit of money we need to pay for the truck.
$2,000 – Car we’re selling
Closer than ever to living debt-free
Despite all that’s happened in the last few months, I feel closer than ever to living debt-free.
Going forward, that $145 difference in our house payment is going to go toward one of my current debts (see my NetworthIQ for details of my debts). I’m excited. Once we have this truck, we’ll have everything in place to start moving forward, and barring any emergencies that we aren’t yet financially prepared for, we’ll have time to start saving now for future purchases.
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