Friday, December 31, 2010

December's earnings

Here's our December earnings.  I thought it was going to be less than last month because I didn't work as much overtime, but since there were 5 Thursdays this month (my pay day), there was an extra paycheck.

Husband's income: $3624.90
My income: $2425.93
Total: 6050.83

So a couple with no kids and that has $6,000 worth of income should not be broke at the end of the month.  I need to figure out where the money is going. We should be able to live on $3,000 and pay $3,000 toward that mortgage. Even if we lived on $4,000, we should still have $2,000 left.

Thursday, December 30, 2010

It's going to be tight but...

I paid $1,000 towards the second mortgage today.  I'll give an update on the balance next week once the payment goes though for both mortgages. Now let's hope my husband keeps the credit card bill low. It was around $1,900 with 8 more billing days left.  So still a lot higher than I'd like, but about $700 of that was car repairs.

Monday, December 27, 2010

Mortgage rebate time!

I have a quick update on our mortgage total because our credit card is through the same finanical institution as our mortgage and we get 1% back from our credit card purchases that gets applied to our mortgage principal in late December. It's taken out of the 1st mortgage, but at least it brings the grand total one step closer to the break even point. Our rebate was $323.09 - that means we spent $32,309 on that credit card - wow! That means we spent an average of $2,692.42 a month.  We had some rather big purchases this year including LASIK surgery, carpet, and of course the iPad.  We really need to keep monthly bill $1,600 or under.  I'm sure we can get by with $1,000 if we tried.

Anyway, here is the updated mortgage principal balance:

1st Mortgage: $185,469.35
2nd Mortgage: $22,993.70
Total: $208,463.05

Sunday, December 26, 2010

Checking in with the "baby steps"

I've recently started listening to the Dave Ramsey Show.  I've only had the chance to listen to the first hour because I podcast it and listen at work.  But he keeps mentioning the "baby steps" for financial freedom.  They look something like this:

Baby Step 1
$1,000 to start an Emergency Fund

Baby Step 2
Pay off all debt using the Debt Snowball

Baby Step 3
3 to 6 months of expenses in savings

Baby Step 4
Invest 15% of household income into Roth IRAs and pre-tax retirement

Baby Step 5
College funding for children

Baby Step 6
Pay off home early

Baby Step 7
Build wealth and give!

I have step 1 complete. Step 2 is where I consider myself to be even though the only debt we have is the mortgages.  But I believe this 2nd mortgage is what would be considered "unsecured" because we owe more than the house is worth.

I have step 3 started - we have about 2 months of expenses saved. We are also working towards step 4, but it's not at 15%.  I think my husband is putting away 6% and I've been putting away $200 in a Roth the past few months. I don't want to tell my husband to stop putting money into his 401k to pay down the mortgage, but I probably could suspend my IRA contributions for awhile, but the question is should I stop contributing to the IRA until the 2nd mortgage is paid off? What do you think? Also, should I take all but $1,000 of our emergency fund to pay off the 2nd mortgage?

Sunday, December 12, 2010

So how much do we owe on our mortgage?

My goal by the end of this year - or even better by next September - is to only owe $200,000 on our mortgage. I added up what we owe on both mortgages combined and it wasn't has bad as I originally thought ($210,000), but we still have a long way to go to get to "break even".

Main mortgage: $185,792.44
2nd mortgage: $22,993.7
Total as of December 12: $208,786.14

So I want to pay down $8,786.14 by next September - that would be approximately $1,000 additional principal each month.

Tuesday, December 7, 2010

That "Small" Mortgage

Here are some more details about that "small" mortgage I want to get rid of:

We owe $22,993.70 on it at 8.65% interest.  It was originally a $25,000 loan and I paid $1,315.33 in additional principal since September of this year. So prior to September we had only paid a grand total of $690.97 off the principal in almost 3 years.  That's sad when our monthly payment on this loan is about $200 per month. It ridiculous to pay only twenty-something odd dollars of principal each month and then throw away the rest to pay interest.  It's a 30 year loan, but my goal is to have it paid off in 2 years. My short term goal is to get to our break even point (I explained more about that in this post) by the end of the 2011.

Monthly Income

Here is an idea of what we have to work with.  My husband is salaried, so his income does not change.  My income is variable because I'm hourly and sometimes work overtime.

Here is what November looked like:

Husband's income: $3624.90
My income: $2274.52
Total: $5899.42

I had some good paychecks last month since I worked a lot of overtime. So, these results are not typical. I make around $1760 if I don't work any overtime.

I just started my job in August.  Before then I was working odd temporary jobs - actually my current job is also temporary as well. But, this is the first job I've had for a while where I'm making decent money (this time last year I was working a seasonal job at a busy retail store - hopefully I won't have to do that again). Anyway, before I started this job, we could get by on just my husband's income.  So technically all my income should be used to pay down our mortgage debt.  However, my husband has other plans. He bought an iPad this month, last month he bought a new couch, the month before that he hired someone to paint some rooms in our house, and the month before that we had new carpet installed. Now our house looks better, but it was expensive. I did manage to start investing a little bit of money into my Roth IRA, and paid probably $1000 towards the small mortgage, so I'd still like to be making faster progress.

Wealth Goals Introduction


I have decided to get a little more organized with my financial goals, and thought blogging would be a fun way to do so. 

Here is a little about myself.  Despite the fact that I have a bachelor's degree, I have not been able to find a great job.  I suppose just majoring in something basic like Psychology could be part of the problem.  I've held odd jobs here and there over the past 10 years, but nothing I really could consider a career.  I am married to a man who has a business degree, and actually has would you would consider a career.  He - I'll call him Joe (name has been changed to keep this anonymous) - makes decent money at his job, so I feel I'm the dead weight.  The problem with him is he loves to spend money.  I'm the frugal one.  Because he makes most of the money, I feel guilty if I try to tell him he can't buy anything. 

A few months ago he wanted to try to re-finance our house.  Unfortunately, we bought our house at the worst possible time - Fall of 2007 - right before the house values and interest rates both plummeted. So we bought our house for $243,000 3 years ago.  We still have $210,000 left to pay on it and we are paying close to 6% interest on approximately $186,000 of it and almost 9% interest on $23,000 of it (we opted to take a second mortgage instead of paying PMI). We were hoping to get a new interest rate in the 4% range, but they couldn't give it to us because after they did an appraisal, they determined our house is only worth $200,000.  So we now officially owe more on our house than it's worth.  That is depressing that we spent $43,000 for nothing.  So my first financial goal is to pay down the mortgage until we are at the break even point.