Mortgages, part 3, or The Happy Part

I got another end of year report from my mortgage company. The escrow account estimates.

See, insurance and taxes are paid out of the mortgage. At least, mine are. I don't know if that's normal or not.

All that money I've paid? I forgot a portion of it is insurance and taxes. Almost a third of the refinanced mortgage payments, actually, if my estimates are correct. That means in 10 years, almost a third of what I paid to the mortgage company was taxes and insurance, not interest. I would have been paying that anyway.

So, I haven't been wasting my time, or money, paying ahead on principal. The mortgage company isn't lying about what I've paid on the principal. That huge amount breaks out into smaller, reasonable amounts. I just had to take a couple of weeks and marinate on it.

I still wish I'd known to get a 15-yr, fixed rate mortgage with 20% down, but I did what I could at the time, and it wasn't horrible. I still have a real chance of paying this off in 3 years.

I'm not likely to ever "make the money back" by selling the house, but I never intended to sell the house. I bought this house for life. We like each other most days, and I like to think we respect each other the rest of the time.

So this is probably the last post about the mortgage for a few years, but I will absolutely let you all know when the last payment is posted.

Applaud the jellyfish.

Mortgages, part 2

So there I am with a new 30 yr, lower interest fixed-rate mortgage on the same amount of money, no PMI, paying extra on principal. Larry would be proud. I didn't know Dave yet.

I thought that was fabulous, so I put it on auto-pilot.  I met Dave, heard I'd still done it kinda wrong, shrugged it off, and lived my life for the next 10 years.

This winter, I ran some year-end reports. I do this every year, but this was the year I paid attention to the mortgage. I used a mortgage calculator from the Internet (and we all know those have to be true), and learned I might be able to pay off the mortgage in 3-6 years.

I got nervous, and excited. Could this be true? Was I really that close? I could be gazelle-intense (a Dave phrase) for 3 years, if it meant ending the mortgage. Hope in the future revived.

Then I ran some more reports.

I was stunned. HOW MUCH money had I paid on this house already?! Quicken doesn't lie, and I'm very careful about categories, so there it was in black and red. The first mortgage, the refinanced mortgage...

Where was my savings? Why wasn't the house paid off with those amounts? Were they lying to me about how much I owed? Who kept tabs on mortgage companies and how did I complain?

I got instantly depressed, then angry, then depressed again. The money was gone. I'd been duped. Again. Like Lavender Squeak, only with way more 1000's of dollars.

I ran more internet mortgage calculators and couldn't find the same results as the first one. I got more depressed as the time stretched far into eternity. Eight years feels like an eternity compared to three.

I used the mortgage company's calculator, and decided those folks just plain lie. They're like credit card companies. They probably call me a deadbeat because I pay early.

That's where I sat for a week.

Push button. Receive bacon.

Mortgages

You thought I'd moved on, didn't you? Nope. Just got real quiet while I kept worrying at it.

This is advice for the young people, who don't bother to read anyway, so I guess it's really for me to get off my chest.

I grew up listening to Larry Burkett of Crown Ministries on the radio on the drive to school. RIP, Larry. I'll hug you long and hard when we meet in heaven.

When I bought a house, I knew to get a fixed-rate (as in the interest rate remains the same through the whole life of the mortgage instead of going up and down with interest rates in the market) mortgage and pay extra on principal with every payment. I also knew to specify "principal" when I paid, so the money didn't get applied somewhere else, like interest. I knew to buy less house than the bank said I could afford because the bank is only in it to get the interest, and the bigger the loan, the more I pay the bank in interest over the lifetime of the loan.

I bought my house with a 30 yr, fixed-rate mortgage and paid extra principal on every payment. Not crazy extra but as close to $100 per month more as I could get by rounding up.

I hadn't met Dave Ramsey, also a Larry Burkett student, before I bought my house. I started listening to him years later, and it took a while for him to make sense. I get it now.

Dave says to put at least 20% of the cost of the house down in cash to remove the PMI (mortgage insurance) which is a huge portion of those initial mortgage payments.

I didn't have 20% at the time I bought the house, but God was kind, and between what I paid down with extra principle, and the house value going up, I was able to refinance in 5 yrs with a lower interest rate and no PMI.

I kept paying that extra principal, knowing the sooner I paid off the loan, the less interest I would end up paying the bank. I felt good about myself.

More tomorrow.

Push button. Receive bacon.

Cutting the Cable

I have proved to myself that too many hours of computer games is bad for the Turtle. Went overboard yesterday morning, and by 5 o'clock, I was irritable, depressed and apathetic.

I play games when the TV is on, or I turn the TV on when I want to play games. Probably chicken and egg. Except for The Walking Dead and The Librarians, during which I never do anything except watch, I'm not actually watching TV. I'm listening, and I have a radio for that. I also don't watch new shows because CBS canceled three shows in a row after three episodes each years ago. I learned not to trust networks or their audiences. 

I don't DVR. If I don't have time to watch it when it airs, why would I have time later? With Cox's switch to all digital, I'm paying full price to watch one TV when I'm home. It makes no sense. 

I'm steeling myself to give up cable TV. I got it when the government forced all TV off antenna channels because The Swamp gets no reception for the new kind of antenna, and my weather issues require access to TV during bad weather. On the other hand, the more paranoid station in this area has moved most of its weather coverage online, so I may be able to do it. 

I've heard Cox had a basic, basic package of just local channels in 2012. I don't know if they still offer it because their website blocks any service less than I have now. Whatever. I know where their store is, and I'm not afraid to use it. 

Friday is the day I will either downgrade to local channels or remove TV altogether from the Turtle household. I can use that money to pay off the mortgage faster, and avoid the temptation to fry my brain cells on the weekends. That's a win-win. 

Applaud the jellyfish. 

Dangerous Hope

Now that the initial terror of an emotionally measurable end of the mortgage has ebbed ('cause we all know it will be back), I'm getting a little excited about the possibilities.

Excitement makes me nervous, and not in the synonymous way. Keeping my expectations low is what keeps the Turtle happy with life. I'm a born cynic, after all, and I can make the return of Christ a gloomfest if you give me half a chance. The moment I make actual plans, life will smack me with a 4x4 (such as Lavender Squeak the Van), and I will not pass "go" and collect my $200.

However, since life will progress until I die, I may as well have a sketch for the future. I'm already considering how to shave down that six years without eating beans and rice, or cats.

There are only 3 things to do with money: save, spend and give. A balanced life does all three.

Save: Without the mortgage, I could get my retirement up to 15%. I could get my emergency fund to what I consider fully funded. Dave Ramsey says everyone has a "security gland" that begins secreting anxiety when certain things happen, like the emergency fund being too low. I haven't yet experienced what I consider the "right amount" of emergency fund. I suspect six months of expenses in cash would do the trick, but I don't want to be greedy.

Spend: I could vinyl-side the house. I could build that screened-in porch I crave, and maybe add a foot or two to the kitchen while I'm at it. I could take friends to lunch and pay for both of us, or bribe the nieces to visit me. I could be a Realm Makers sponsor and force them to come to Topeka for a conference.

Give: I could give equally to my current charities, and maybe add one or two to my monthly giving instead of just what I can manage here and there. I could give spontaneously to those opportunities I hear about on AFR, or be that anonymous matching donor for pledges. Who doesn't want to be that anonymous donor?

Well, we'll see how life goes. No point getting too excited. Something horrible is bound to happen and screw it all up.

Happy Friday! Push button. Receive bacon.

The Number of Man

Every year or so, I evaluate my financial goals. I've learned not to do it more often because either 1) I get depressed, or 2) I seem to trigger a universal "you're not allowed to get ahead" reaction that causes my plumbing to go south within a month. When it happens enough, I can be taught.

If my math is correct, and we all know my hate-hate relationship with math, there is a reasonable chance I could pay off my mortgage in the next six years. As in, own my own home free and clear.

This terrifies me. Seriously. Weight in the pit of the stomach, trouble breathing, hard to concentrate on anything else fear.

I should be thrilled. From the day I signed those papers, I've paid ahead on principal deliberately to shorten the life of the mortgage. I got rid of PMI early by refinancing so I could pay that amount on principal instead. I know that if you only make the "scheduled" payments, you end up spending way more for your house in interest than most people ever think about. Like up to a third or half of the loan over 30 years.

TT: I wasn't listening to Dave Ramsey when I bought this house, but I followed the advice of his mentor, Larry Burkett of Crown Ministries, to buy a 30-year, fixed rate mortgage with a payment I could easily afford (not the loan the mortgage company is willing to give but far lower) because houses create their own expenses. Had I known Dave at the time, I would have lived in a low-rent apartment without animals and saved every penny until I could either buy a house with cash or pay half in cash, finance the rest for 15 years and pay it off in 7. Sounds impossible, but people do it every day. Just not the people on those home shows we all love to watch.

Six years is a third the life of a cat. It's a first grader. It's the shelf life of a Twinkie. It's just not that long. But a lot can happen in six years. I could lose my job. I could suffer a serious disability. The house could get hit by a meteorite.

Worse, I could actually pay it off, and have what I've wanted since I started listening to Dave Ramsey - that mortgage payment available for other things, like retirement, charitable contributions and new sneakers every year.

Going back to the first paragraph, I can be taught, and what life has taught me so far is anytime I come into money, I run headlong into an expense that takes that money away. I should be grateful that God provides a way to meet my needs without debt, but I worry. I worry about what I will need that mortgage payment for in six years.

Randy Alcorn says we don't get to know security in this life because it would prevent us from relying on God. If that's true, I should expect my life to be one continuous struggle after another.

Maybe the jaw isn't nausea after all.

Push button. Receive bacon.

PS. Randy Alcorn was quoting C.S. Lewis from A Problem of Pain. Gonna have to reread that.

Money Musings II, or Why I Should Get Rid of Cable TV

To paraphrase those famous words from Airplane!, looks like I picked the wrong week to quit Farmville.

Not really, but last night was the first night this week I didn't have something to do as soon as I came home. This will be the case for most of Winter. I have no Swamp to play in physically, and my brain is tired after eight hours at work. The TV goes on, and the desire to start mindlessly clicking emerges. I played solitaire for an hour before I made myself stop, turn off the TV, and read.

I have watched too much TV my entire adult life. I picked up the habit of having it on in the background from mom, who has tinnitus and uses the noise to distract herself. I don't have tinnitus, and I'm opposed to noise in general, so it makes no real sense for me to do it. I'm increasingly annoyed by the change in volume from show to commercial.

I finally bought cable when the government forced everyone into digital TV. I can't get digital reception on an antenna in a storm, and as a lilapsophobic (yes, I finally looked up the official term for fear of tornadoes), I have to have access to weather information. This incredibly stressful weather year has seen most weather information move online, so I am seriously considering doing away with cable TV altogether. That would save me a bit of money every month that I could use to replenish my emergency fund, remove one of the Farmville triggers, and remove one of the impediments to writing. Should cable prices go up again this year, and I can't imagine they won't, I will say goodbye to TV.

I hope the more I say that to myself, the more likely I am to follow through.

Since I have found a morning routine that, for the most part, fills my time with non-Farmville activities, I am sure I can find some evening routines for Winter. At the very least, I can add a second Classical Stretch program.

Push button. Receive bacon.

Money Musings

Two weeks ago, my dentist said that magic word "crown." This will be crown #2. I have slightly better dental insurance than I did for crown #1, but the bottom line is a large sum of money will be leaving me in a bit more than a week, and it was money I didn't plan to spend.

That's what emergency funds are for, Dave Ramsey would say, and I agree with him. That's why I have one. I even use it for actual emergencies - things I couldn't have known about and planned for - like a filling giving out and requiring a crown to replace it.

OK, I suppose I could have anticipated that someday I would need another crown, but, come on. Do I really need one more thing to over-control in my OCD life?

Anyway, money keeps coming out of my emergency fund, and it is very hard to put back. I have made a concerted effort this year to put money in, and I've done fairly well, but Murphy keeps showing up - in alien van invasions and crowns and sewer stack replacements. It's tiresome.

Does anyone else have trouble reconciling the Proverbial ant vs. grasshopper with Jesus' "do not worry about what you will eat or what you will wear?" I mean, Old Testament teaching is "plan for the future." New Testament teaching is "God will take care of you." No offense, Jesus, but you were a bum. You had no job, no house, no dependents, and you lived off the generosity of various women, like Joanna and Martha and Mary. Yes, all Your needs were met, but I don't want to be a bum.

I guess that would make me one of the various women.

Just a few thoughts as I balance my checkbook.

Push button. Receive bacon.

That Money Thing

I recently took a walk on the dreamy side imagining life where money isn't an issue. Came home this weekend.

I took the holiday to build that shelter for my blueberry plants in The Swamp. I had planned, measured, sketched and calculated until I was certain I couldn't fail. On the DIY scale, this was a 1. I bought materials and went at it.

Well, it's done, but in the process I made three trips to the hardware store, failed to anticipate the effect of the PVC elbows on the overall dimensions, and even though I thought I'd left plenty of overage, underestimated the amount of fabric I needed for the shade. So much so that I will need to make a new one that takes into account the southern exposure. In short, I made mistakes. Lots of them.

Mistakes happen. I'm not going to kill myself because my blueberry shelter isn't perfect. What I have figured out as an adult is that certain mistakes cost money. Sometimes a lot of money. If I'm not willing or able to deal with losing money to mistakes, I won't take the risks.

This is why I stopped drawing. Somewhere in college I subconsciously did the math of supplies + time = massive waste unless I'm selling or gifting the stuff, and I did neither. I can't afford piles of artwork lying around or boxes of pens and brushes that don't pay for themselves. Therefore, I don't create art (It was so simple when the folks paid for everything).

It's sad, and kinda pathetic, but there it is. I don't try more things because I can't afford the inevitable mistakes. I want that loft bed with desk, but after this weekend and my 1 that turned -1, I don't know that I can afford it. Back to the calculator.

Happy Monday, dear readers. Take your risks, if you can afford them.

If Money Weren't An Issue

Would my life be different if money weren't an issue? I wouldn't have to be as rich as the Queen or Col. Sanders, but, you know, wealthy enough to not have that immediate dollar-shaped "stop" sign when an idea pops into my head.

1) I'd still work. I enjoy work, and I'd enjoy it a lot if I didn't have to think about how cheap my special brand of enthusiastic slave labor is. I might not work 40 hours a week, but I probably would. I get oddly upset on extended weekends.

2) I'd have a similarly sized house. Maybe a little bigger (900-1200 square feet) but nothing huge. Even the plot wouldn't be outrageous. Maybe an acre or three. Enough that my nearest neighbor can't hear my toilet flushing. I would have a different house, though, an Earthship with a cistern and solar power. Maybe some of those solar freakin' roadway panels. I could pay workmen to do stuff, so I'd have lots of built-ins, catwalks, a solarium and an atrium. Skylights would be nice. And rounded edges instead of square. Oooh, and one of those endless pool things. Those look neat.

3) I'd buy used cars. I might splurge on a work truck as a second vehicle, but it would be used. Through a dealer. I learned that lesson.

4) I'd have more cats. OK, maybe not more, but the current ones would have the best of everything. I could afford the exploratory surgery I suspect Skuttle needs because I have back-seat diagnosed her with some kind of colon issue after reading a Catnip article. I could leave food out for everybody instead of the current four feedings a day because I could afford every cat eating the same prescription cat food all the time.

5) I'd help more friends. I have so many people I wish I could slip a $100 or $500 just because they could use it. Or a $20,000 investment in a good idea (like solar freakin' roadways). They're trying so hard, but life doesn't always respect effort. It would be nice to be the generous friend. I mean, I buy a coffee now and then, but it's not the same.

6) I could support more causes. I give currently (more than 99% of Americans, apparently), but I wish I could give more to more. I have three charities I regularly support, but I wish it were five or six. I bet I could find a few more if money weren't an issue.

7) I would never get upset over money again. I hate worrying about money. It's a family habit, but when I think I won't have enough to cover whatever needs covering, I get very upset. More upset than need be, considering I'm a person who learned this year (through testimony, not experience) that utility bills come in different colors depending on how late your payment is. I didn't even know a utility payment could be late (Hate me if you must. I'm a Princess Turtle, but I do pay my own way).

8) I'd go back to school. Not for a degree. I don't ever want to do that again. But I'd love to take some vo-tech classes on electrical wiring, or woodworking, or oil painting. Or Photoshop. Maybe welding. To have money to learn something just because I want to learn it? That would be awesome.

I find these musings following me around this year. They distract me while I'm driving. They follow me into my dreams. Is this a mid-life crisis? It's a little early.

Anyhoo, now that I've written it down, I should stop thinking about it. I bet you won't. How would your life be different?

Financial Squeeze

Been a while since I didn't have to get up early and shovel my driveway. At least, it feels like it's been a while.

Part of me wants to share minor life details, like Skamper is back on The Heights. Part of me wants to rant a bit about life. Part of me is hungry and wonders why the turkey sausage and eggs aren't cooking.

How are the rest of you surviving? I got a raise in September, have no debt except my mortgage and I'm just scraping by. At least, it feels like I'm just scraping by.

I use Quicken to keep track of my money, and by the time I schedule the necessities from gas, pet food, utilities, mortgage and tithing, I have nothing left over for groceries. I still need to file my taxes and this is the first year I wonder if I'll owe the government. That raise probably moved me to a new tax bracket.

I'm not complaining. I'm one of the very few Americans who's in a good financial situation. All the years of listening to Larry Burkett and Dave Ramsey, putting money aside, living (mostly) within my means, and a few providential circumstances mean I'm not frantic every second of every day wondering how I'm going to feed the cats. However, I know most people aren't like me, and I can't imagine how they're making ends meet. I guess they're not.

One thing I have learned listening to Dave is it's never too late to start managing money, and managing money always means managing yourself first.

I've fallen off the wagon plenty of times. I can be extremely frugal for a long time and then -wham!- I can't control myself any longer and buy supplies for a catwalk (I always have the money when I do it, but it means I might be tight somewhere else for a bit). I've learned to let off steam in little ways, like a Melted Snowball once a week, to avoid those big wonk-outs.

The emergency fund is also a lifesaver. A thousand dollars kept in reserve for when the unexpected creeps up, like a cavity where there was no cavity 6 months before. I can't plan for everything, and the emergency fund stops an emergency from becoming a crisis that will bury me. The trick with the emergency fund, though, is to replenish it whenever you use it, so you might be tight for a bit afterwards. Hey, at least you don't owe 17% interest on a credit card.

I'm praying for all of us, dear readers, but the solution is complicated. It involves changing yourself, changing the culture and changing the political climate that says the government should own everything, including you and your money. Prayer is the only way to change any of that.

Happy Thursday. God is generous, and He's waiting to bless You if you'll cast your burdens on Him.

Budget Success?

One, I don't know how people without computer check register programs do anything worthwhile with their fiscal planning. Maybe they don't. Maybe that's the problem.

While struggling with pen and paper to "create a budget" like Dave Ramsey tells me, a brilliant idea hit me. After I picked myself up from the floor (it hit rather hard, ba-dum-bump) I went to the "budget" feature in my program.

I may have cheated here, but it's a start and a start is what I needed.

I created an automated budget using my spending pattern from the last year. That gave me average percentages of spending per category (yes, I've been using categories for a while so that made it much easier). I applied those percentages to my new paycheck and voila! I have a budget!

You might argue that all I have is a record of how I've spent my money in the past. You'd be right. Except... I'm going to try Dave's envelope system. Using my new budget, I will spend only that much per month on those categories. I hope this will do a couple things.

1) It makes my spending deliberate and limited. Since I'm using cash, I can't go over those amounts and if I try, I'll know it immediately.

2) Since I'm accustomed to spending this way and in similar amounts, I think it will bypass my concern that I won't have the right amount in the right envelope at the right time.

I don't quite feel like I've gotten a raise (although I did with the new job) but I do feel a bit more in control of my money and consequently my life.

I can't remember if I've said this already, but I want very much to be responsible with God's blessings on my life. Living in a world just starting to feel the burden of its fiscal irresponsibility, it seems even more important to get my own house in order. I'm hoping this helps set my mind on long-term goals while allowing me a little breathing room in day-to-day living.

On a side note, let me know if you use a budget or envelope system or any type of method to regulate spending. I'm curious how other people do it.

No Worries - I'm Poor

Before I got all bent out of shape over the new and improved salary, I should have sat down with my pen, paper, calculator and checking program.

Yeah, I'm definitely poor.

Dave Ramsey says when you make a monthly budget, you feel like you got a raise. I've never experienced that feeling. When I make a monthly budget, I feel utterly miserable at just how little money there seems to be.

TT: I'm not complaining. God has blessed me above and beyond what I deserve. I've never had to choose which bill to pay. I've never paid interest on a credit card. I've never paid a late fee or a bank fee, except for that one time I used an ATM that wasn't from my bank and discovered it came with a service charge. I had no school debt, thanks to my parents and a couple scholarships. I do know how to manage money in little increments and avoid the most common and costly mistakes people make that keep them poor. It's the "wealth-building" I haven't yet mastered. I've got "debt free except for the house."

This miserable feeling may be why I resist the monthly budget so very hard, even when Dave explains how vital it is. I don't like to see on paper how little I can afford without putting aside money every month. It's pretty much a few take-out meals. That's a hard truth to accept, so my sympathies for those who don't want to accept it.

I pulled out Total Money Makeover last night for a little light reading before bed. Sandwiched between the chapters on getting out of debt and investing, I did find the five times he repeated "save your money." They were all in a row and spelled and punctuated differently for emphasis.
I think he's telling me to save money.

OK.

I guess since the next chapters are about types of investments, he means I should invest/save money.

OK. 

Here's the rub, and maybe it's the rub for other "poor" folk like me.

I worry about my money being "liquid" enough.

Since I'm the only income and I have the furballs depending on me for food and such, I worry (yeah, I'm gonna use the word even if it's a sin) that I won't have the resources I need at the moment I need them.

This may be that "security gland" Dave talks about. Mine secretes when I consider I might not be able to take care of my family.

How much liquid is enough? A number seems to be emerging the more I work with Dave's plan, but I can't be sure until I reach it.

What I don't want to be, and what is absolutely not something Dave teaches, is a money-hoarder like Silas Marner. Money is active, so the best places for it in general are places where it can move, hopefully in good ways. To Dave, that means charities (the giving away) and mutual funds (the saving).

Wish me luck on my continuing journey to make wise decisions with the blessings of my new job. I'm praying daily that God will show me how to use His money to glorify Him.

Money Trouble

I'll begin by saying I have no complaints about my life. God has blessed me generously with resources, family, kindness, and patience above and beyond what I would supply were our positions reversed.

TT: Be grateful I'm not God. I would have killed us all before Noah, let me tell you.

With the new job comes a new and slightly improved salary. What's the problem, right?

Well, the problem is the turtle seems to come with a subconscious glass ceiling where money is concerned. Too little and I freak out. Too much and I freak out.

There's nothing wrong with having money. I have no problem with people being rich. I don't think I deserve what they have and I don't want to redistribute anyone's wealth to my bank account (or anyone else's bank account).

In my own life, however, I seem to have this idea that I can't have more than a certain amount in any of my emergency funds or I'm a bad person who's keeping God's money from doing God's work.

Weird, I know.

Again, I don't think God has anything against rich people. Lots of important Biblical figures were rich. Like ridiculously wealthy rich. Like move money to get to the toilet rich. Job. Abraham, et al. Joseph was the second richest guy in Egypt. Solomon the richest in the world. God didn't have anything against those guys.

Dave Ramsey, and his teacher Larry Burkett, equate wealth with an ability to be responsibly generous. Those with money ready can give faster, better and more than those who have no money saved and debt to their eyeballs and beyond.

The connection I can't seem to make is exactly when I cross from being "poor" to being "rich." Please remember the dollar amounts in question are so small as to make the poorest Californian laugh at me for worrying.

"That's my monthly house payment," they might scoff.

Well, if you want to know my feelings about California in general, read my other blog. Plus, Dave would say "broke is normal," so, take that, scoffing Californian!

Where was I? Oh, right. Money.

I'm revamping my budget, rearranging columns in what I hope to be a responsible manner. Having no real experience with wealth building, I'll have to trust Dave and hope to get used to this feeling of not struggling and equate it with "good."

I'm also rereading Thou Shall Prosper. God willing, the good Rabbi Lapin will encourage me yet again.