Saturday, November 26, 2011
Saturday, November 19, 2011
Still - now we're here, closing on a house and thriving in new jobs. What's next? It might be time for us to start thinking of that, or of thinking both broader and deeper.
What amount of money will you haggle over? My comment on that post details the great deal I got last week - I saved $30 by waiting 10 minutes for a manager to determine that she couldn't match the online deal but could order the shoes for me and have them delivered to my door. They arrived just three days later, and that was worth it to me.
This is a great round-up of what to do during open enrollment. My open enrollment period started six weeks late this year, because my employer was negotiating pricing on our health insurance premiums. Even after such a delay, they are increasing by 12% - so I'm really glad we're switching over to Peanut's high deductible plan, for which his employer covers premiums 100%. Still, there are other things we'll be taking a closer look at:
- Retirement contributions. Because we switched jobs, we haven't been able to contribute. We're now out of the trial period and are both able to start taking advantage of employer matches. (We already each maxed out a Roth for the year).
- Heath savings account. We'll take advantage of this to cover the high deductible insurance plan, and to cover dental work for which we are no longer insured.
- Reviewing life and disability insurance. I recently read Insurance for Dummies, and was ASTOUNDED when I realized how terribly underinsured we are.
I plan to meet with an insurance agent during our open enrollment period to review homeowner's insurance as well as do an audit of our existing car insurance and employer-offered life, health and disability options. I can manage on my own, but it'd be nice to have a professional check-in for once.
The must-read list of personal finance books.
Krystal talks about the cost of hobbies over at GMBMFB. Last year my hobbies were pricey! But then we moved, and I no longer have dance classes, costumes, makeup, or accessories to buy.
My family has put a $3 limit on gifts for each other this Christmas. That means getting creative, so things like this homemade sugar scrub sound just right!
Tuesday, November 15, 2011
2. Today I am thankful for a day off! I took today and every Monday for the rest of the year off to use up my vacation time and deal with some things that need to be dealt with during business hours. Today was super-productive, and I'm feeling good.
3. Money can’t buy happiness. One free thing I did last week that made me happy was attend a conference for work. Okay, it's not like I really had a choice in the matter, but all my expenses were covered and it will help me be better at my job.
4. I will consider this week a success if I make a decision about home owner's insurance and sign up for a policy.
5. I am looking forward to Thanksgiving! Five days off in a row - what a luxury!
Sunday, November 13, 2011
So, 18 days ago we got pre-approved for a mortgage. Eight days ago we found a fantastic house. Seven days ago our offer was accepted and we put down earnest money. Five days ago we passed inspection with flying colors. Three days ago we discovered our scheme of delaying closing per the sellers' wishes wasn't going to pass muster so we agreed to a rent-back option (yes, making us defacto landlords on the first house we own). Yesterday we got revised numbers from our mortgage broker and were asked to decide whether to finance the mortgage insurance, pre-pay, or pay it monthly. Today we locked in our interest rate and have written the check for the appraisal fee. This week, I guess, we get the results of the appraisal and do some more paperwork, and start shopping for homeowners insurance so we can finalize the rent-back agreement. Then, I think we just sit on our laurels until closing, which will happen right after the holidays.
Oh, except for all the time I'll spend on virtual makeover sites seeing what the rooms look like in different colors.
The process is still going very smoothly and fairly quickly, but it's in the middle of a whirlwind of other things, including a weekend-long sales conference for me that's left me hardly able to type in complete sentences.
This whole homebuying experience has taught me that I really know nothing. Earlier this year, I said a 20% downpayment was a necessity for Peanut and I to buy a house, because I was really morally opposed to paying private mortgage insurance, or PMI. I really had no idea what PMI was, exactly, except that it was something only suckers -unqualified buyers- got dinged with and something to be avoided at all cost, probably about a 20% fee on your annual payment. Turns out, it's a charge on the sales value of the home that enables you to go in with less of a downpayment, and the cost of it varies by the amount of your downpayment - in our case, less than half of one percent (not the violently evil charge I was expecting!). Trent's article at The Simple Dollar explains it well.
Yes, Peanut and I could have waited until we had 20% to buy a house, which would have taken us another year or so to save up. In the meantime, we would be putting the rest of our life plans on hold, and possibly paying a higher interest rate a year from now - meaning we wouldn't be much further ahead anyway (and that increase would be over the life of the loan, not until we'd eared another 10% equity). As it is, we are putting down 10%, which is apparently a very good number since the housing crash a few years ago. We'll still have a healthy emergency fund in the bank, and our monthly costs will be less than our rent in New York, for THREE TIMES as much living space. It'll still make more sense to pay back our student loans on an accelerated schedule before attacking the mortgage to get rid of the PMI - 6.8% and 5% are way more evil than 0.49%. (Trent explains this philosophy here.) We'll be able to handle the mortgage payment on either of our salaries alone, which was a big requirement. And with two incomes, we'll have enough money to sock away a healthy chunk each month for quicker student loan payments, an eventual second car, new furniture, and so on.
Just goes to show that what you think you know about finances, when you haven't actually had to make these decisions or looked at the numbers close up, isn't necessarily an accurate portrayal of reality.
So. I'm Little Miss Moneybags. I'm a personal finance blogger, and I will be paying PMI. I also put all my monthly expenses on a credit card, took out loans for graduate school, closed my oldest credit card, merged all my accounts with my spouse, and only contribute to a 401(k) up to the company match. Sometimes, I buy shoes just because I like them - even if they're not on sale. If those things bother you, oh, well. That's why it's called personal finance. :)
What was a financial term or decision you thought you understood, but when you faced it personally, you felt differently?
Saturday, November 12, 2011
If you have ever thought about purchasing a timeshare, you're sure to hear a lot of information about how amazing the opportunity will be for you from the sales agent. But what sales agents don't tell you is just as important as all the so-called perks. Here is some advice that timeshare agents are sure not to share with you.
Gifts offered have little real value: Agents always try to get you into timeshare presentations by offering free gifts and no hassle. Beware of the gifts you receive, however. What potential timeshare owners need to remember is that these gifts are all about drawing you in, while costing the timeshare agency as little as possible to fulfill them. This is especially true for vacation certificates. Yes, they might offer some sort of free experience, but other components of this gift will be out of your own pocket, including plane travel, food expenses, and hidden property fees.
Always look over paperwork carefully: You might need the help of a professional to find all obligations hidden in the contract, so don't jump into anything just because you're feeling pressured. Just because you hear a sales agent make promises, doesn't mean these promises are written into the contract. Therefore, be specific when asking questions about deals and gifts.
Don't plan to make money: There are simply too many available timeshare properties for there to be any demand. This means you should never plan to treat your timeshare as an investment. Those selling their timeshares rarely make money, and most lose a significant amount. Some even find themselves in a timeshare trap where they can't even give away their timesahre for free. Never consider a timeshare as a money-making opportunity.
Don't plan to resell without problems: There are also a lot of bad feelings surrounding timeshares and their tricky contracts, so you might have a tough time getting rid of the property. In bad economic times, people are even less likely to spend on vacations or properties in general. Take this into account when purchasing, and never assume that the market for timeshares will turn around within a few years.
It's not so easy to swap: Timeshare owners are often told that certain organizations can allow them to network with other timeshare owners all over the world, and allow them to swap vacation weeks. However, if you're looking to upgrade to a fabulous foreign destination, good luck finalizing a swap. If you can't wait to get out of your lock-in property, chances are people will not want to trade to get into it either.
There are a lot of associated costs and fees: This is a big one. Agents might try to sell you with the supposed great deal on the initial cost, but timeshares also come with lots of fees and other charges that agents don't necessary tell you about up front. One of the biggest expenses are the maintenance fees. As an owner, you are partially responsible for the upkeep of the property, and these fees can cost you hundreds of dollars per year. That's money you could be spending on vacation-related expenses like transportation or food. Plus, you will likely have to pay taxes on the property. Other fees that can add up over time include utilities charges.
Timeshares are less cost effective and less personal than other vacation homes: Timeshares lock you into one, or a specific set of locations, and are often dictated by rules that restrict how much the timeshare can be personalized. Other vacation homes allow travelers to rent and reserve time on the property without signing a contract. You can find these vacation rentals all over the world, and they do not require that you pay for an extended period of time up front, or rush to reserve the best dates. Plus, these vacation homes are often personally decorated and well cared for by their owners, who have a direct stake in how well the property is maintained, and how often the furnishings are updated.
You might need to reserve months in advance: Some families are better off planning vacations months or even a year or more in advance. But others enjoy taking last-minute getaways, or have to work around ever-changing schedules. With timeshares, it can be difficult to reserve your time on the property any sooner than 6 months in advance. Plus, certain destinations will be in higher demand than others during certain seasons of the year, which means they will fill up even faster. For instance, warm destinations will book up fast in the winter when people are hoping to escape the cold weather for the holidays. Don't count on booking your timeshare for Christmas, New Years, or Spring Break. You'll get locked out faster than you can plan to reserve.
It's no fun having the same vacation year after year: A timeshare might be in an enticing location now, but what about after weeks of time spent there? Or months? People's lives change, and with those changes comes desire for different experiences, or even an inability to travel to the same places they once could. Agents definitely don't warn you that events like a cross-country move, expanding your family, or changing jobs could affect how often you will want to use the timeshare in the future.
The final warning: Timeshares are not for most people. Despite what an agent might say, timeshares are not perfect for most families or every type of vacation. Some people prefer booking last-minute, taking cruises, road trips, or exploring exotic locations. Timeshares don't usually offer these different types of experiences, and in fact, can lock you into the same kind of getaway each year. While this might be a nice idea to some, others will just lose money, feel trapped, and regret their decision.
Friday, November 11, 2011
Trent has a saving pennies or dollars post today (love that series!) about saving money by driving under the speed limit - and it saves dollars!
Spend your money where you spend your time - so true! Peanut and I have discussed getting some nice computer desks and chairs for our house - we really spend more time there than anywhere else, so we should make sure we're comfortable! Likewise, spend your time AND money where you reap the most rewards - should be a no-brainer but sometimes I need that reminder to let things go.
Money Saving Mom is doing 21 Days to a More Disciplined Life. I'm using my Mondays off for the rest of the year to accomplish a similar goal.
7 Ways to Simplify Your Life from Pick the Brain: I especially like the note about noticing when a task moves from list to list and figuring out if it's really worth doing based on that.
GREAT points on this post about managing vs. micromanaging your money. I frequently fall into the "micromanaging" category, which takes up more time - and as we all know, time is money.
I read this article about improving home security with great interest. I think a house is much more likely to be broken into than an apartment, so there are some things for me to think about in there.
JD at Get Rich Slowly asks the readers how much money you need before you have kids. Great question - I think you're never truly prepared, but if you know it's something you want in the future, you have to take steps (including saving) to make it easier on your future self.
I want more winter clothes! So this post on how to update your winter wardrobe on the cheap was very well timed. I do need some warmer things, living in such a colder climate, but I don't need to get them new/full price.
I'm thinking of suggesting a Yankee Swap for Christmas with my family. I managed to cancel Christmas last year, because we weren't traveling and I didn't want anyone to ship us anything. This year, all my siblings and our SOs will be together under my parents' roof, so I don't think the idea of canceling all together will fly. But we could draw names and shop that way - fewer gifts to buy, less time spent shopping, more time together. Has anyone else switched to a Yankee Swap for Christmas? How did it go?
If you've read any great posts this week that you'd like to share, please leave them in the comments!
Sunday, November 6, 2011
I don't think I've even had time to do a post about the mortgage preapproval process, which we completed a week and a half ago. Yesterday we went out house-hunting for the first time, and came across a house that was within our budget, in our desired neighborhood, had all the big things on the list and some we didn't anticipate, and is super cute to boot. Realizing that there were absolutely no drawbacks to it, we put in an offer last night, and lo and behold, it was accepted this morning!
We'll have the inspection and appraisal this week, but we expect everything to go very well. The house is in really great shape (new roof, new siding, new trim, nice carpet or hardwood throughout, updated appliances, lovely landscaping) so it'll likely pass both with no problems. We've scheduled closing for just after the new year - the sellers need to find a house, and we weren't expecting to find anything until January or February, so we're in no hurry to move. The longer we wait, the more money we can sock away for moving expenses, furniture, etc. Also, the sellers agreed to lock in our mortgage rate, so if rates go up between now and closing, they'll pay for it - a great bargain for us!
This whole thing was the least stressful thing I have ever had to deal with in my entire life - finding our current apartment was more stressful than this. Planning my wedding was way more stressful. Going to the grocery store is frequently more stressful than finding and buying this house!
Of course, the deal could still fall through for any number of reasons - which is fine, actually. We looked at enough houses to get a good sense of what we want and what we don't, and we know we didn't see everything out there. If we have to start looking again, no problem.
On the other hand, we won't wonder "what if" for the rest of our lives if we do get it - we definitely saw enough houses to get a feel for things, and I can't think of anything I'd change about this one. We're in the best negotiating position we could be in, although since they took our first offer, there isn't much to negotiate on.
I'll post update as they come in - in the meantime, I've got to go return all the "Home Buying for Dummies" books I checked out of the library last week!
Friday, November 4, 2011
I love Beks' plan for Black Friday, as inspired by Cosmo. I'm right there with you!
Is it possible to live for for free? Coupon Mountain tackles the question and determines which items you never have to pay for again.
When is rental car insurance worth it? I couldn't have said it better myself.
Tomorrow Peanut and I are spending the day house-hunting. Fun times!
What are you doing this weekend?
Wednesday, November 2, 2011
Some of my favorites are as follows:
January 20: Be not humiliated by having others see you truly.
"My clients hire me because I'm a person - not a personality."
February 2: Bother to do things.
"To come. To call. To stay. To ask. To reply. To say hi. To clean up. To give it some thought. To include people. To learn their names."
February 9: Calm comes from experience.
"There's nothing more calming than communicating your mutual humanity."
February 20: Come out swinging and you'll be perceived as a threat.
SO TRUE! This is one I've had to learn repeatedly in my own life - my instinct at having been "wronged" means I go firing off to a company or colleague or loved one, only to find that there's just been a mistake or miscommunication. Oops.
Note: I did read through the entire book! It just so happens that most of the anecdotes that really stood out to me were at the beginning. Part of this reason is that much of the book is repetitive, sharing the same idea in a different way. This is to be expected - even desired! - in a title that's intended to be read in short bursts, every morning or evening or whatever. (Unlike the way I read it, in two sittings.) That repetition helps to drive home the point, and many of these points are really good. I work in marketing and I've done a lot of these types of branding brainstorming sessions, webinars, and workshops. Much of it is nearly impossible to put into practice, because it ignores what Scott drives home again and again: it's about people.
The only downside about this book is some language - it does come off as authentic (if a bit immature), but it's unnecessary. It distracts me from the message, and would make me think twice about sharing the book with some people who I think could use it but who I know would be offended. I don't consider myself a prude, but I also don't like the use of profanity, vulgarity, and slang in books for professional growth. Otherwise, I thought it was a neat little book full of useful ideas presented in an interesting way.
If you like books about using marketing/branding as a tool for connecting with people or using your brand to connect with your customers, this is a good book for getting ideas percolating.
Thanks to the author for providing me with a copy to read. I was not compensated in any other way for this post, and my opinions are my own.
Tuesday, November 1, 2011
1. Weekend projects! Done-ish. I did finish our Halloween costumes, and they turned out great, but I didn't really go to the rest of the list - in fact, I effectively extended it by starting to search for a house!
2. Try some new crockpot recipes. Done! Unfortunately, we didn't really like most of them, but I did try them.
3. Save another $2,000 to the house fund. Done!
4. Up our student loan repayments to $500. Done and then some, thanks to Direct Loans screwing up my payments.
5. Change the oil in our car. Success - I took it to the mechanic, which turned into an ordeal, but it ended up only costing $25 and introduced me to public transit here.
6. Speaking of chilly, here's a bonus goal: buy winter boots. Fail - it didn't get cold enough or rainy/snowy enough to need boots so I put it off. Snow is forecast for tomorrow, however, so I'll be getting some this weekend!
1. Sell two costumes. I may never get back to dancing, at least not in the sense of joining a company and performing regularly. There are some costumes that I will never wear again because they are so specific to my old company, so I'm going to get rid of them. I'll start by offering them to new members of the old company, and then stick 'em on ebay if no one's interested.
2. Get more critical. That seems like a weird goal, right? I've noticed over the last few months that I feel like I'm getting stupider. I blame it on reading blogs and short form news stories, skipping over things that bother or challenge me, reading unedited books for work. Really ever since finishing grad school, I haven't tried to do much of anything that's very mentally taxing. I'd like to continue to hone those skills, and that means being more critical. To achieve this goal, I'll be seeking out more difficult reading (fiction AND nonfiction), attempting to think critically about what I read or see (instead of "Oh, I liked it"), and trying to cut down on entertaining media in favor of educational media. I'll also be attempting to be more thoughtful and critical in my own writing.
3. Complete my car winter preparedness checklist. Pretty self-explanatory!
4. Do a work-at-home day. As I mentioned last week, I've got some stuff to take care of that I just can't get to during evenings and weekends. I've picked my day and am starting a list of everything that needs to get done! If you've got any suggestions, leave 'em in the comments.
5. Book all holiday travel. I should have done this in September or October, but I just didn't get to it. I'm sure prices are outrageous already, but we're still figuring out when we can be off work and when we need to be back and - it just needs to get done.
What are your goals for this month?
Business expenses (deductable) $3.89
Food—dining out $318.14
Mystery Shopping $59.80
Student loans $629.03 ($225.20 more than normal)
Total Spending: $2,899.83
Things of note:
New categories: sewing/quilting and house! The house fund includes expenses related to the house search and eventual purchase; this month was a credit check fee that will eventually be applied as a credit at closing. The sewing/quilting category is for my newly rediscovered hobby and our Halloween costumes. Many of those expenses were one time things that I'll use repeatedly (self-healing mat, rotary cutter, patterns) and some were just for the costumes (fabric, thread, trim). I don't expect it to be very high in general.
Take a look at all those reimbursable business expenses - can anyone say POINTS with me?! I get reimbursed very quickly, too (if I file quickly, that is) and so far I've been reimbursed before the bill comes, so I'm liking this arrangement quite a bit.
I also brought in $76.75 in mystery shopping income, and our retirement accounts had an EXCELLENT month - almost $5,000 in gains! We are within $500 of our highest net worth ever right now, and that's after moving across the country and buying a car, so I am quite pleased. We also had the third cheapest month this year in terms of cash outflow, and I'm proud of that. It seems like the effects of the move are officially wearing off, and while I'm not sure we can keep it up through the holidays, we really seem to be back on track. I made my house savings goal for the month, too!
How'd your month go?