Let's Do This

I am tired.

I am tired of feeling like I have no money.

I am tired of disappointing my life because she thinks we have no money.

I want to enjoy life.

I do not want to stress about making debt payments.

I do not want to cringe every time my wife wants to look at a house.

I do not want to see the look on her face when I say we can’t afford it.

I make $62,700 a year in a job I do not love.  I enjoy it at times.  However, I don’t get any satisfaction from it.  I worry that I won’t find my passion.  I worry that my passion won’t be able to provide for my family.

I have a $20,000 car loan and $30,000 in student loan debt that needs to be paid off.  I have a mortgage for $131,000.

My wife wants to buy a $360,000 house.  It’s a great house.  It has lots of space and the neighborhood is fantastic.

How come all I can think about is “how the heck am I going to afford the mortgage?”  How can I pay those taxes?  How much is insurance going to cost me?

I don’t want to live like that.  I don’t want to live like this.  I need to change.  I need to do something.

I’m going to start blogging again to try and find my passion.  I am going to vent more.  I am going to research things more.  I am going to have fun more.

I’m not going to solely talk about money and finances.  I started this blog to talk about everything.  I’m going to post my weight-lifting goals and achievements.  I’m going to research home-brewing and bourbon.  I’m going to talk about money – because it comes up – but it’s not going to consume me.

I’m not going to settle.  I’m not going to be average.  My little boy upstairs is not going to have a dad who is miserable and can’t provide for him.

I’m going to be better than that.  My son deserves better than that.  My wife deserves better than that.  I deserve better than that.

List of topics I want to blog about by the end of April:

1.     Property Taxes and how they effect the home buying process

2.     The weight lifting program I need to get into beach shape.

3.     The best bourbon for my dollar.

4.     The Pirates

5.     Derivatives.

I am tired.  So, I’m going to go to bed.  April 17, 2013 is the beginning of my journey to make sure my wife can be a stay at home mom.

March Net Worth Review

Here's an updated picture of the reason we are all here:

There he is!!  It's amazing how fast they grow up!  It's true though - all the investment monitoring and budget checking is done for him.  So that he can grow up with the necessities he needs to grow up strong and with the same opportunities that his mother and I had growing up.  I want him to go to college and not be stressed about loans or food money.  I want him to dream big and then work to achieve those dreams!

For the March breakdown:

Cash - $17,504 (-$3,837)

Investments - $110,546 (+$6,715)
Home Value - $197,000 ($0)
Personal Assets - $52,112 ($1,289)
Less: Liabilities - $182,567 ($-2,087)


Assets -

Cash - Lots of greenbacks flying around this month!  So, March is the month my bonus and raises go into effect - so that was a nice bump to offset the loss of the Prof's pay since she's not back working.  The major change is just a re-allocation from cash into RLS's 529 Account!  The original contribution of $3,000 was set aside in Growth, so not a big deal.

Investments - On March 30, 2012, the S&P set an all-time high!  The markets are doing their thing and we are doing ours!  As I said before, we set up RLS's 529 Account.  We have a good mix of growth mutual funds to help him pay for ND in 18 years!  (That's probably a good blog post in the future - the funds I picked and why).  Otherwise, I am still contributing to retirement and I made a small transfer to House Fund.

Personal Assets - 

I have no idea why the cars would go up in value.  The Sonata was only driven 3x, so it shouldn't be depreciating too much - but that's not really how it works.  It's really just odd.

Liabilities -
Mortgage - $131,100 - Another mortgage payment.....
Student Loans - $30,112- I nice decrease here.  An extra $500 payment made this balance decrease sharply.  The Prof and I talked about paying down high interest loans faster and trying to get debt free in 3 years.  So, I'm going to take a more aggressive approach to these bad boys so that I can buy a bigger house and make larger college and retirement savings contributions in the future!

Acura Loan - $20,988.  I paid down an extra $200 in order to get the balance below $21k!  Every little bit helps!!
Total Joint Net Worth - $194,596

Well, well, well!!  Not too bad considering the wife is on maternity leave!  Obviously, our investments are making greater headwinds as the Joy of Compounding Interest takes effect!!  Otherwise, we're going to continue paying down loans and paying less interest!!

February Net Worth Review

I'd like to introduce RLS!!!!

 

Isn't he the cutest thing EVER!!  It's amazing how awesome he is!  I feel so lucky to have him and my wife in my life!

 

That being said - I should probably get down to the reason we are all here - the February Net Worth Review!!!  (crowd goes wild)

 

February was an interesting month.  Obviously, we have our son, which led to some changes within our financial spectrum.  First, the Professor went on Maternity leave.  So, she received pay for the first 4 days she worked this month and one disability benefit payment.  Also, we are hermits now.  RLS isn't vaccinated, so that means we are spending our nights at home just enjoying him.  It's awesome - plus, everyone (mostly grandparents) have been super kind and made some very delicious dinners for us to enjoy.  Lastly, I filed our Federal Income Tax Return for a refund of $1,447!!  It's less than last year, but still a nice pay back (See post from last year on getting a refund!)

For the breakdown:

Cash - $21,341 ($11,755)

Investments - $103,831 (+$893)
Home Value - $197,000 ($0)
Personal Assets - $50,823 ($0)
Less: Liabilities - $184,654 ($-1,290)


Assets -

Cash - I thought we changed this to avoid these crazy swings!!  We did.  However, we received a Life Insurance policy from grandpa Prof that has a cash surrender value of $11,918!  So, we had to add that to the breakdown - which encompassed the entire gain in February.  Otherwise, things were pretty good considering Prof didn't get her usual pay this month.  Plus, our balances actually grew, but we're putting most of the money aside for tuition.

Investments - It was actually a very wild month for the markets.  The Sequester begins March 1, and everyone is afraid of the impact it will have on the economy.  Therefore, the markets were constantly in a state of flux based upon latest governmental headline.  We are still investing in retirement and saving for the next house - but I'm keeping that money more liquid right now until uncertainty eases.

Personal Assets - No changes here.  Mostly because I haven't had the time to review the car values.  I feel like every other month is adequate time period to jot down depreciation - especially since we probably only put 100 miles on the car this entire month!  On the other hand, we did have a realtor come through our house to get an idea of the market and what our house would sell for.  She gave us a listing price of $225k with idea that it sell for $215k.  I'm not boosting our value herein though.  I believe her, but just don't want to get false sense of security yet.

Liabilities -
Mortgage - $131,491 - Another mortgage payment.....
Student Loans - $31,052 - Another modest decrease here - although we had a lot noise from these accounts.  Since I'm only taking 3 credits this semester with the baby - my loans went into repayment/grace mode based upon losing my half-time status.   Not that big a deal since I'll gain the status back in Summer - but it does mean I had to pay $69 toward undergrad loans now.  Actually, it turns out my payments based upon loans now would be $394 - just a tad more than I'm paying now.  I still plan on making my payments and using excess cash to reduce high interest loans, but I was glad to hear the payment terms aren't outrageous.

Acura Loan - $21,693.  Another payment.  I'll probably make larger payments on this as well.  No benefit from this guy (unlike tax benefit from student loan interest).

Total Joint Net Worth - $188,341

Not too shabby!  This gain was mostly due to CSV on Life Policy, but we still had modest gains in February elsewhere.  Also, RLS's Savings account is not included within this calculation - which is awesome to see the little guy making money!!!

January 2013 Net Worth Review

2013 is going to be a great year!! Little guy is set to come any down now!  It's so exciting!  I can't believe the pregnancy has gone so fast!  The nursery is fully stocked, the diapers are organized, and Mom and Dad are anxious to meet him!  With all that established - its time to review our finances!!!  YEAAA!!!

Cash - $9,586 ($-10,464)

Investments - $102,938 (+$4,863)
Home Value - $197,000 ($0)
Personal Assets - $50,823 ($-578)
Less: Liabilities - $185,944 ($-2,578)

Okay - let me explain...

Assets -

Cash - I've changed the presentation of cash in the Net Worth calculation.  Within our Growth account, I've set up various sub accounts for future liabilities (ie. Auto Insurance, Property Taxes, and Education) and it doesn't make sense to keep including these as Net Worth when I know they are going to be subtracted in the near future.  In addition, this should eliminate the drastic swings in Net Worth that occur within various months when I make a Tuition payment.  Overall, cash actually held steady.

Investments - Go Market Go!!!!  We only made one small contribution ($500) to our house account, but the markets grew nearly 6% in January!  It was one of the best months since pre-2008!  We continue to invest in retirement and I've noticed bigger gains as the accounts have grown, compound interest baby!!!

Personal Assets - Small amount of depreciation on our two vehicles.  Ho-hum.  We have been going to open houses in our neighborhoods, which has got me very interested in selling our house.  I'm intrigued by what the real value of our house/neighborhood is.  However, I don't want to take on a bigger mortgage right now with new baby and other debts in line.  The Joneses can have their fancy crap, we'll live in comfort and harmony for our entire lives!!

Liabilities -
Mortgage - $131,882 - We made our first mortgage payment on the refi and saw a $362 reduction to the original balance, which is much better than the $200 reductions we were seeing on the old mortgage. 

Student Loans - $31,405 - Big move here as I used a portion of our Christmas gift to make a $1500 payment in January.  Seeing the balance drop so significantly really got my juices flowing for more debt reduction.  It's like an addiction - I want the balance to be ZERO RIGHT NOW!!!
Acura Loan - $22,191- Double payment made in January.  See above.  I might have a problem - or I"m a genius!!  I hate paying First Commonwealth $50 a month for the right to use my car....

Total Joint Net Worth - $174,639!

So, we saw a slight reduction in NW, but only because of the reclassification of the accounts.  Overall, we saw massive gains in our investment portfolio, our debts were greatly reduced, and we still live comfortably and happily.  Unfortunately ND lost in National Championship game, but we still had a great time!  The little guy can't get here soon enough!!!

Can Saving and Debt Co-Exist?

I love spreadsheets.  We have our budget on a spreadsheet with various categories and calculations.  We also have our debts allocated in a spreadsheet with interest calculations and amortization.  I also monitor our investment growth in a spreadsheet.

I like reviewing spreadsheet and manipulating them. 

However, I'm starting to think spreadsheets may not be a good thing.  Can you obsess over a spreadsheet?

I'm constantly flip-flopping between saving money for future expenditures and paying down our debt.  One month, I love making a trade and watching our savings balance grow.  The next, I'm pissed off about our debt level and want to make a double debt payment.  It's a vicious cycle.

I'm content with our plan to save money and pay down debt.  I just wish I could do both more.  We have a pretty substantial amount of investment funds available to us and we also have $5k in an emergency fund.  Our debt payments aren't outrageous right now, mostly because the student loan debt doesn't have a minimum payment due to deferment period.  Our debt to income ratio is about 34%, which is a bit high.

Is this why Dave Ramsey screams about paying off debt first and then saving.  The simplicity of the action.  Perhaps.  However, the accountant in me also understands that my interest rates are low and that the student loan and mortgage interest is tax deductible, which helps alleviate some burden.  However, I still get angry about those debt balances - especially when I look at my spreadsheets!!

Where is the middle ground?  I have a son on the way and desperately want my wife to stay at home.  However, I worry with our debt levels that that is not possible.  On the other hand, without saving more money we may not be able to put 20% down on our dream home, which would be worse.

Perhaps I should get a 2nd job....

December Net Worth Review

Well, 2012 is over and done with and 2013 brings about the year of "Little Guy" in our household as we prepare for the February birth of our son!  We're very excited and also very excited to get crackin on some debt reduction and Net Worth boostin!!  Here we go!!

 

Cash - $20,050 (+$2,915)

Investments - $98,075 (+$10,619)
Home Value - $197,000 ($0)
Personal Assets - $51,401 (+$509)
Less: Liabilities - $188,522 (+$823)

Here's how it breaks down:

Assets -

Cash - A nice increase to our cash balance that was caused by a SERIOUS Christmas gift of $5k from Gram and Pap S.  Amazing how fortunate the Prof and I are.  However, we did make a tuition payment of $3.6k for the Spring semester.  So, we still had a nice increase without those two items, however, the first item will help us pay future tuition and pay down current student loans.  Also, I'm looking into 529 Plans for the little guy.  So, it's nice to have the liquidity.

Investments - This increase is a bit deceiving.  I've added a Pension Fund of $6.7k that the Professor has which I did not know existed.  I guess its a mandatory thing for all teachers at her Charter School.  So, that was a nice bump.  Otherwise, the Fiscal Cliff didn't really happen, which saved our investments and we made our usually $2k contribution into House Fund.

Personal Assets - No change here other than the car values inexplicably going up!  I can't explain it, but I'm sure it will go down more often than not.

Liabilities -
Mortgage - $132,244 - So, we added about $1.7k to our Mortgage Loan this past month as we closed on the refinance loan.  The actual loan is $132k, but because its a Home Equity Loan, the interest is calculated daily and reflected on the website.  Frustrating because I see the balance go up every day, however, I'm okay because we'll be paying this down faster with the 20 yr term.  Plus, I used the small amount left over to pay down a student loan.
Student Loans - $33,089 - As I said, we made an additional $126 payment this month, which was almost all principal.   

Acura Loan - $23,190 - Second payment in the books.  I'll be making extra payment on both of these items in January as part of the Christmas gift utilized.
Total Joint Net Worth - $178,004!! 

We accomplished our 2012 goal of $170,000!!!  Amazing!  The increase is largely attributable to the new Pension Fund account and the extra Christmas gift.  However, with those two things, we still saw an increase of $2k even though the mortgage went up.  With the baby on the way, we've discussed getting more aggressive with the student loans - so we may see more head-way there.  But, for now, I'd like to wait and make sure we have a healthy, happy baby until doing anything major to our current savings/debt ratio.

November Net Worth Review

Alright, alright - Let's get down to business.  We've had a lot going on this past month which effects our Net Worth results.  Let's get started and I'll explain throughout!

Cash - $17,135 (+$2,049)
Investments - $87,456 (+$4,087)
Home Value - $197,000 (+$17,000!!!)
Personal Assets - $50,892 ($0)
Less: Liabilities - $187,699 ($-930)

Here's how it breaks down:

Wow!  So, obviously the home value has increased!  A few weeks ago we decided to refinance our existing mortgage since PNC offers a super-sweet Home-Equity Installment Loan, which reduces the closing costs to $250! since they remove the need for title transfer and insurance!  So, we're going to get a lower interest rate of 3.77%.  Plus, we are going with a 20-year fixed rate tenor so we'll be reducing our principal more and more each month!  A huge WIN-WIN if I ever heard one!  What's the catch?  Well, the Installment Loan does not come with escrow, so we're on our own to manage the taxes and insurance payments throughout the year.  Although, the luxury of having that taken care of was nice - it does not match my desire to reduce interest and principal.  Plus, I was always a little fishy of how they handled it!

Assets -
Cash - A huge increase that was impacted by two things.  1)  November was a 3 paycheck month for me and 2) No mortgage payment this month.  Since we will be closing on the new installment loan next week, the mortgage payment was not required.  I could have made a payment - but didn't see the reason since the loan will reconcile everything in a week.  I may make an extra principal payment anyway.

Investments - Wow.  I was very surprised by the results of our Investment accounts.  However, most of that gain is offset as contributions of $2,822.  I was surprised because immediately following the election, the Dow fell 400 points due to impending fiscal cliff and the worry that Obama would screw it up since the House and Senate are republican.  For some reason though - the markets bounced back on decent manufacturing and Black Friday data.  So, the markets should be in flux for a small period, but the gains are nice to see!!

Personal Assets - The change in Home Value is due to the appraisal that was performed by the bank as part of the Refinance.  Personally, I was shocked.  I did not think the value could rise that high in 30 months, but I'm happy to admit I was wrong.  Location, Location, Location!!!  That really makes me feel good about potentially selling this house in the future - to think I could reasonably expect to sell it for $200k and only have to pay down $130 mortgage, makes for a very good return!!  That might make my desire for Income Property a reality sooner than I expected!!

No change in the car values since I researched them in October.  Every other month review seems appropriate based upon the depreciation levels.

Liabilities -
Mortgage - $130,524 - No change now, but they are pending.... 

Student Loans - $33,493 - We made 3 payments this month along with the 3 paychecks.  So, an additional $140 was knocked off. 

Acura Loan - $23,682 - First payment is in the books.  Long way to go!

Total Joint Net Worth - $164,784!!  ($147,784)

A huge increase based upon the new home value.  However, even without the new appraisal, our Net Worth increased $7k!!  So, we definitely had a very good month!!  I'm also encouraged because following the refi we should see bigger gains in Mortgage Reduction and we'll receive a slight increase in Cash as we now are responsible for Escrow, which has a couple thousand in already.  We'll keep chopping wood!!!