Something I Don’t Understand…

During President Obama‘s SOTU address he touched on something about making it easier for people to refinance their mortgages at the current bargain basement prices and today I’ve seen two or three articles about it.

I haven’t researched it (at all) but I’m assuming that this is some kind of after-the-fact reactionary federal government proposed “solution” to the housing crisis of the past few years, you know, an attempt to quell the number of foreclosures that dot the landscape.

But that’s where I lose the connection.

Refinancing at a lower rate (at best, 3 or 4 percent lower which, technically speaking, is nothing) doesn’t solve the foreclosure problem.

For instance, my newest neighbor moved in back in 2006 and paid around $275k for their home.

In general terms, it’s pretty much the same house as mine except that I only paid $141k for mine in 2002.

Following the housing “slump” our homes are currently only worth around $200k.

It’s not rocket science to come to the conclusion that my neighbors are underwater (they owe more than the house is worth) and are likely prime candidates to “walk away”.

The re-finance “solution” won’t ease their pain.

It’s not the interest rate on their mortgage to blame — it’s that they paid too much for their house.

So what’s the point of this government proposal again?

To make it easier for people who can’t afford homes in the first place…again?

It’s too soon for history to repeat itself.

This blog apparently is repeating itself…

Back in 2008 I asked, Are Home Values Important to the Economy?. That post was along the exact same line.

It was a better read, though…

I’ve lost my touch.

No, really…

- – - – - – - – - – - – - – - – -

Full Disclosure: I freely admit that I benefited from the easy and available money back when I purchased my home with a tiny tiny tiny down payment.

Yes, mortgages were easy to come by and I’m fortunate enough to have rolled the dice, made a “wise” investment with the money loaned to me, and come out the other side a winner with a low rate, a low monthly payment, and a house worth more than double what I still owe.

Posted on February 1st, 2012 at 10:24 pm by Brainy Smurf
Current Events, Finance, Mortgage, Rants | 3 Comments »

Spending Report for December 2011

As with December of 2010, I once again finished off the year with a load of expenses.

What do they have in common besides Christmas? Well, the culprit is at the top of the list.

$2324.17 : Property Taxes
$922.22 : Day Care
$722.57 : Christmas Presents
$498.72 : Mortgage
$350.99 : Gasoline
$310.00 : Cash
$225.39 : Auto Insurance
$201.86 : Electricity
$138.11 : Cable/Internet
$134.68 : Natural Gas
$71.74 : Business Expenses
$68.29 : Finance Charges
$40.08 : Life Insurance
$21.27 : Cell Phone
$13.02 : Wicked Cool T-Shirt
$12.00 : Hockey Tickets

That totals $6055.11.

For those that haven’t read super closely in the past — and I would never expect you to — the lines in red are infrequent or unusual expenses.

When you omit them, my spending starts to look a lot more reasonable. Sadly, though, it takes real money to pay for those infrequent or unusual expenses.

Anyway, property taxes come along twice per year. Most folks have the property taxes on their home (along with the insurance) built in to their mortgage so that they never have to worry about them.

When we re-financed back in 2010, though, I opted to take care of those myself so as to ensure a *much* lower monthly mortgage payment.

The downside is that twice a year, I get hit with a HUGE tax bill. It’s okay though — I budget for it.

The only other line worth nothing in this month’s report is the $68.29 in finance charges.

In November, I paid $129.14 in finance charges.

In October, I paid $135.14 in finance charges.

In September, it was $196.20 and prior to that it was over $200. Ouch.

In today’s report, it was just $68.29.

What does this signify?

Well, first, I think it shows that I’m doing an awesome job of achieving my goal for 2012 but also that I’m utilizing all of the options available to me when it comes to credit cards.

Someone is *always* offering an outstanding promo rate.

You just have to have a zero balance (and a high credit limit) on the card that has that rate. I’ve been fortunate to have this occur repeatedly allowing me to make some pretty large purchases (like a $40k renovation) at a difficult-to-believe rate.

Fine — I won’t tap dance around it anymore. I was offered a balance transfer offer that I couldn’t turn down and it’s already saving me money.

Lots of it.

Posted on January 14th, 2012 at 5:50 pm by Brainy Smurf
Finance, Spending Report | No Comments »

Credit Card Paydown…Winning!

Having done this a few times now, I’ve learned that it’s not so much about how large a balance you’re carrying but how able you are to make constant and consistent payments while keeping the credit cards in your wallet.

Here are the three puzzle pieces that determine success or failure: Payments Made, Interest Charged, and Purchases Made.

The total balance doesn’t matter one bit. $20 in the hole or $200k in the red, it doesn’t matter.

In hockey terms, it’s a lot like a player’s plus/minus rating.

For those that don’t follow ice hockey, the +/- is a statistic that doesn’t take into account how many goals a player has scored. If you’re on the ice when your team scores a goal, whether or not you’ve influenced the play at all, you get a plus one. If you happen to be on the ice when the opponent scores a goal, you get a minus one. Pretty simple, huh?

Well, sometimes the most valuable player on a team is the guy with the fewest points. Some players are just “good luck charms” for those around them and the +/- rating is what showcases an otherwise un-noticed talent.

Brad McCrimmon, who sadly died in that hockey team plane crash a few months ago, has always been the “stud” of this statistic.

He was a defenseman who never once scored more than 13 goals in an entire season. Thirteen goals isn’t very many.

Casual fans thought of him as a, well, just a generic and totally replaceable player. I know I was never “excited” to see him on the ice — really, just a boring player among the likes of an offensive lineman in football or the guy who bats eighth in baseball.

Simply put, no one was chanting his name.

But when you took into account the +/- statistic, well, he was second to none. It became crystal clear that his team scored often and the opponent pretty much never scored while he was on the ice.

So, even though he wasn’t on the score sheet very often, he was, in a technical sort of way, the best player on the team. By far.

Back to finances…

So, first and foremost, my payments for the month (goals for) must exceed the sum of my expenses and the finance charges (goals against).

It’s really that easy.

I don’t even need to address the total balance — as long as the above holds true, I’ll always be headed in the right direction.

Duh?

I know, this isn’t rocket science but so many people somehow manage to lose track of how simple it all is…

So far, in January, I’ve charged $399.06 and I’ve submitted $1473.95 worth of payments. There have been no finance charges as of yet.

That means that my plus/minus rating is plus $1074.89.
And we’re less than halfway through the month…

Winning!

(I know, I know, I’m 6 months late with the Charlie Sheen references…)

Posted on January 14th, 2012 at 7:43 am by Brainy Smurf
2012 Goals, Credit Card, Finance, Motivation | 1 Comment »

Networth Update: January 2012 (+$1722)

Starting the new year off right with a net worth just north of $250k.

Yep, that’s right, I’ve reclaimed my status as a quarter of a millionaire.

Cash:
December was a three paycheck month for me so there’s a little bit of extra padding here.

Savings:
Oh no! What happened? Well, property taxes came due. That’s okay, though. It’s totally built into my budget that when they come due (every six months), I’ve got enough in savings to cover it… no matter what.

Gov’t Bonds:
Will I hold on to these for the entire year? I doubt it. But while they’re still in my asset tank, I’ll gladly take the six or seven bucks for nothing each month…

Home:
Zillow.com currently lists my house as the most exensive on my street. This makes the roof of my mouth nice and warm. I know it’s not really true — but it’s still nice to see.

Auto 1, Auto 2, and Auto 3:
With no movement on the BMW or Land Rover, I’m thinking that their values may have bottomed out. I can’t tell you how awesome it’s not having to pay a car payment for almost four years now…

Credit Cards:
Crazy considering all of the Christmas expenditures but it’s on like Donkey Kong. Yep, I got started on my Goal for 2012 already.

Auto Loans and Other Loans:
Nothing to report.

Mortgage:
Just another minimum payment.

Posted on January 12th, 2012 at 8:46 pm by Brainy Smurf
Finance, Net Worth Updates | 1 Comment »

Goal for 2012

I’ve been farting around without any “real” financial goals for two years now.

As a result, my finances have been, well, farting around. They’re okay, sure, but I’m not moving in any kind of direction. Just kinda treading water.

In 2007 and 2008, I was on a mission to eliminate my thousands upon thousands of dollars of car and credit card debt and I did it…quickly. Total success. Cheers all around.

In 2009, though, I got sloppy and set goals having to do with imaginary numbers from dream land. Save for “this” and “that” which don’t have pricetags attached to them. There wasn’t anything concrete.

It’s like the, “I’m saving for college” line you hear so often. I always want to follow-up and ask, “Any idea how much you need to save?” knowing full well that what they’re saving will barely put a dent in what they’ll actually need to spend.

Sorry, a few hundred dollars tossed into a 529 plan each year won’t add up to anything.

In 2010, I started to paydown all of my new found debt resulting from “this” and “that” which I didn’t save enough for in the previous year but I never really got serious about it.

Sure, the balances were falling all year long but it was a lot like a 529 plan — my payments weren’t getting me very far.

I could have done better. I should have done better.

I should be debt free again already…but I’m not.

I’ve been like a broken record player for two years now. It’s time to replace the needle.

(Where would one but a new needle in 2012?)

My goal for 2012 is simple — to be debt free and able to realisitically convince my wife that we *need* and can afford a third smurfling.

Here’s how I’m going to do it:

• Weekly $300 Auto-Payments – I’ve been doing this for months now and it’s what’s always driven all of my debt paydown efforts in the past. This is nothing new.
• End-of-Month Lump Sum Payments – This is what went by the wayside after I first cleared all of my debt. On the last business day of each month, I used to make as large a payment as I could afford so as to “pad” the numbers reported each month in my net worth updates.

The second bullet point is key to the success of the plan — I must-must-must start doing this again.

This site (the net worth updates) held me accountable to myself and even motivated me as I saw progress, real progress, each and every month.

Once I achieved my original goal of becoming debt free, well, that kinda stopped.

As for the third smurfling side of things, having kids has certainly forced me to cut my out-of-wallet spur of the moment spending drastically.

Before we had kids I used to hear people talk about how much formula costs, and doctor visits, and clothing, and this-and-that relating to having kids.

I haven’t found those things to be terribly hampering — it’s the daycare costs that kill you financially.

Did you know that we pay four times our mortgage payment for daycare?

That’s the crippling part. And it’s also the part that has us on the fence about a third.

Can we afford it?

Right now, the answer is no.

But when you take out the $1300 I’m autopaying to the credit cards to get out of debt each month, the answer leans more towards yes.

Can we get a new kitchen too?

Well, I wish but that puts us back to no.

And while I’d really like a new kitchen to match the rest of the renovation, when I look at my two angry birds, I know without a doubt that they’re the best thing I’ve ever done and they’re the best thing I’ll ever have.

So much more rewarding than a new kitchen.

So I’m getting greedy — I want another.

I just have to get my finances in order pronto.

And then we’ll start “saving” for that kitchen without a “pricetag”.

Posted on January 3rd, 2012 at 4:36 pm by Brainy Smurf
2012 Goals, Finance | 3 Comments »

Networth Update: December 2011 (+$773)

In these unstable times, I’m perfectly happy with modest $773 gain. Especially with all of the holiday spending, though, I suppose I shouldn’t make a final judgement until next month’s update.

Cash:
There’s no real strategy here at all. I get paid every two weeks and I’ve got automatic payments pulling from my checking account right down to the $2000 balance level (to avoid bank fees). It’s like auto-pilot.

Savings:
I withdrew $600 from here early in the month (to pay off a credit card balance) but managed to replenish it almost 100 percent. Unfortunately my property taxes are due this month so it’s going to drop off considerably but that’s what I set the savings account up for — property taxes.

Gov’t Bonds:
Month after month I question why I still have these. The return is just so much better than a savings account that, for some reason, I just can’t part with them completely…

401k:
It’s up. It’s down. It’s…whatever…

Home:
It’s worth far more to me but the mortgage payment says otherwise. It’s a total win-win.

Auto 1, Auto 2, and Auto 3:
Just this month I realized that we have four “older” cars (my wife owns one that isn’t reported here) that all have insanely low mileage. It doesn’t really mean anything, I suppose, but I’m starting to think that when you have a mini-fleet of cars to choose from, they all last longer.

Credit Cards:
I’m kinda shocked this went down, actually. That week after Thanksgiving turned out to be pretty expensive but I guess I didn’t charge quite as much as I thought I did. That’s a good thing — we’ve got to get this slate wiped clean by May 2011.

For the record, nearly the entire balance is on a Chase Slate card. See what I did there? Pretty cool, huh?

Auto Loans and Other Loans:
Nothing to report.

Mortgage:
Just another minimum payment.

Posted on December 24th, 2011 at 6:19 am by Brainy Smurf
Finance, Net Worth Updates | No Comments »

Spending Report for November 2011

November just flew right by — I don’t even remember finding the time to spend *any* money but according to my reports (have I mentioned that I finally replaced my beloved Micrososft Money with Moneydance yet?), I certainly spent freely:

$922.22 : Day Care
$618.97 : Christmas Presents
$501.30 : Business Expenses
$498.72 : Mortgage
$398.65 : Gasoline
$360.00 : Cash
$164.65 : Electricity
$145.57 : School Pictures
$137.78 : Cable/Internet
$129.14 : Finance Charges
$122.82 : Vacation
$114.37 : Water/Sewer
$92.69 : Natural Gas
$85.24 : Groceries
$13.02 : Clothes

That totals $4305.13.

The daycare at the top is really starting to wear on me. That’s actually only half of the total bill as my wife pays the other half (as well as for 99% of the groceries and eating-out expenses.)

I mean, just over two years ago we somehow had nearly $2000 worth of extra disposable income per MONTH?! Now I’m not saying the kids aren’t worth every penny — they are, which is why I want another one — but if you haven’t had kids yet, starting thinking about doing something intelligent with your “extra” money before the kids come along.

I’m just sayin’…

The holiday season is upon us. I almost wanted to wait and combine the November and December spending to showcase how crazy I went with Christmas this year. Christmas was all but cancelled last year following the death of my dad (while decorating for, get this, Christmas).

While trying to remember what the “big” gift for Duncan was last year, I was coming up blank. Reason being, we didn’t get him anything last year. Sure, we had Christmas (there’s even a picture) but it was pretty low key.

Now, with Henrik in the fold (and in the picture at the top of this post), I wanted to make up for it.

Tomorrow morning is going to be smurf-tastic.

Business expenses were high in November too but it was mostly on hardware and equipment, you know, real things that’ll serve a purpose for years to come. Most importantly, I added two terrabytes to my fileserver which is something I’d been dragging my feet on for, well, forever.

School pictures are a rip-off. We even got ripped off worse as they took one picture of both of our kids like it was a 2-for-1 special or something. I’d have much prefered individual sittings, though I suppose then it would have cost me twice as much…

Yes, I still want three.

Vacation in November? Well, sort of. We spent a night in a hotel following our awesome Thanksgiving feast. I’m not usually a fan of big sit-down type meals (burger and fries are more my thing) but there was plenty for me to hunt-and-peck at — and then not have to drive for two hours to get home, well, totally worth the expense.

Honestly, though, seeing my two boys and they’re three cousins running wild for a few hours was worth the room rate all by itself. Can’t wait until they’re all a bit older….

And those pesky finance charges… Argh!?

Well, great news on that front too — it’s going to drop like a rock.

A year ago now, I wrote about Smart Credit Card Strategies and, once again, I’ve followed my own advice and made a wise money move.

After years of being debt free and then suddenly finding myself paying over $200/month in finance charges again (as recently as August) as the 0% offers expired, I’ve transfered the balances again to a more manageable offer where I’ll have the balances paid off in full long before the offers expire.

Just taking advantage of the tools in my wallet…

Posted on December 24th, 2011 at 5:44 am by Brainy Smurf
Finance, Spending Report | 3 Comments »

Spending Report for October 2011

Bet you were starting to wonder if I’d ever return…

Yeah, I know, it’s December 24th and I’m just now posting my spending report for the month of October. No excuses.

But worry not! After all these years, my finances are practically on auto-pilot. Occasionally there’s some turbulence but never anything too extreme.

Here are the expenses from October:

$922.22 : Day Care
$498.72 : Mortgage
$450.00 : Auto Insurance
$276.52 : Gas
$271.78 : Clothes
$260.00 : Cash
$150.52 : Electricity
$135.43 : Finance Charges
$131.85 : Groceries
$128.06 : Cable/Internet
$80.16 : Life Insurance
$54.47 : Business Expenses
$49.09 : Natural Gas
$24.75 : Toys
$14.00 : Bank of America Maintenance Fee
$5.00 : Car Wash

That all adds up to $3452.57 which, while high, is the second lowest total all year. Hooray for me!

I’ll spare you the line-by-line analysis since, well, all of this spending occured months ago and there isn’t really anything terribly unusual or hard to comprehend on there…

Posted on December 24th, 2011 at 4:52 am by Brainy Smurf
Finance, Spending Report | No Comments »

Networth Update: November 2011 (+$7764)

Loving these huge swings up and down.

I mean, just look at the last year’s worth of updates and all of the movement has been huge…

Here we go…

Cash:
Still tight. I think I even inadvertantly went under the “threshhold” this past month. Booo…

Savings:
Nothing new here — just where I’m tossing $135 in per week to cover my property tax bill (due in December) and anything else unexpected.

Gov’t Bonds:
Treasury Direct’s login process just switched again. They claim that it’s easier but I’m finding it even more annoying than ever. If I weren’t earning nearly 6% on what I have left in there, I’d sell out in a heartbeat.

401k:
Months like this are why I don’t support the whole Occupy Wall Street movement.

Home:
A big snowstorm and tons of tree damage apparently had an impact on the value of my home. Or maybe it was a coincidence.

Auto 1, Auto 2, and Auto 3:
Not much movement here.

Credit Cards:
Not as much progress here as I’d have hoped but still over $1000 wiped out. I was really hoping to have it under $10k at month’s end…

Auto Loans and Other Loans:
Nothing to report.

Mortgage:
Just another minimum payment.

Posted on November 7th, 2011 at 9:12 pm by Brainy Smurf
Finance, Net Worth Updates | No Comments »

Spending Report for September 2011

Well, it was the thriftiest month since May but it’s still way to freakin’ high…

$922.22 : Day Care
$873.00 : Homeowners Insurance
$498.72 : Mortgage
$450.00 : USCIS
$337.00 : Gas
$360.12 : Business Expenses
$225.95 : Auto Insurance
$196.20 : Finance Charges
$180.00 : Cash
$179.54 : Hockey Jersey
$176.65 : Electricity
$130.00 : Framed Photo
$128.07 : Cable/Internet
$41.92 : Natural Gas
$21.27 : Cell Phone
$6.25 : Airport Parking

Put it all together and that’s $4726.91.

Again, unusual expenses (those in red) killed me this month. Though the fact that I said “again” kinda means they’re not as unusual as I think they are.

Sigh.

The homeowners insurance is a once per year thing. And I knew it was a budget buster. The good news is that I paid the bill in full in September when it isn’t actually due until mid-November.

Spend now instead of later.

For those not in the know — and I’d hardly expect you to be — USCIS is the abbreviation for the US Bureau of Citizenship and Immigration Services.

I’ve mentioned a few times on here that I’m not a US Citizen though you’d hardly know it if you ever met me.

Anyway, since all of us immigrants are now supposed enemy combatants or something, the federal government forces us to check in every so often and submit ourselves to an FBI background check while writing them a big fat check to “renew” something that clearly states that it’s “permanent” right up top in CAPITAL letters.

Since I’d rather not be sent to a secret prison in eastern Europe and tortured, that’s all I have to say about that.

But outside of those two big chunky expenses, I think I did a pretty decent job.

Sure, there were still a few purchases that weren’t exactly necessary and the business expenses crept a little high but, all in all, it was a good month.

Posted on October 28th, 2011 at 10:50 pm by Brainy Smurf
Finance, Spending Report | 1 Comment »

Networth Update: October 2011 (-$10237)

Yes, I know I’m 3 weeks late with this…

What can I say? I’m in a funk. A $10k loss will do that to ya…

But really, things are going pretty well financially.

Sure, money’s tight, but this latest round of debt elimination is moving right along. I see the end of the tunnel already and I’ll be right back where I was the last time I was debt free.

Seven or eight more months is my guess…

Here’s the breakdown:

Cash:
It’s tight. I’ve been sending $300 per week (on an autopayment) towards debt and whatever’s left at the end of the month.

Savings:
This is essentially an account where I’m tossing $135 in per week to cover my property tax bill (due next in December) and anything else unexpected.

Gov’t Bonds:
This is my emergency back-up.

401k:
Ouch. Things are so volatile lately. One day I’m up $2k and the next I’m down $4k. This number totally depends on what the last day of the month looks like. I think the top and bottom value for this month were over $17k apart so, yeah, it’s all over the place…

Home:
Yep, I live here.

Auto 1, Auto 2, and Auto 3:
Evidently this wasn’t a good time to own a car in Connecticut.

Credit Cards:
Now we’re getting down to business. The HUGE drop last month probably won’t happen again anytime soon as I don’t really have anywhere else to pay it down in $10k chunks.

This pace is more like what I’d expect it to be from here on out and I’d expect that by the end of this month, the total balance will be under $10k.

Auto Loans and Other Loans:
Nothing to report.

Mortgage
Just another minimum payment.

Posted on October 21st, 2011 at 5:43 am by Brainy Smurf
Finance, Net Worth Updates | 1 Comment »

New Feature from Citi!

Mixed in among all of the inserts that always come with my Citi statement and bill was this nifty little flyer.

Talk about spin… I mean, they’re trying to imply that they’re meeting my “borrowing needs” better than ever before by raising the minimum monthly payment.

Say what?

This reminds me of how owners of Sony Trinitron televisions and monitors in the 1990′s would brag about how they’re screens were actually better than anything else on the market when, clearly, they weren’t. They had a MAJOR flaw. A visible one?!

I fell victim to it.

Anyway, none of this really matters since I don’t carry a balance with Citi.

I just thought it was hilarious that they tried to spin a rate increase as a feature for the consumer.

Posted on October 17th, 2011 at 1:30 pm by Brainy Smurf
Credit Card, Finance, Rants | No Comments »