Friday, August 31, 2007

Paying for College Poll Results

The results from the poll are in.

11% (3 people) said No way to paying for college
23% (6 people) said Yes, Unconditionally paying for college
30% (8 people) said Yes, but with grade conditions
34% (9 people) said Maybe, depends on finances

Very neat and interesting. I am pretty sure we're going to pay for college for our kids 100%. But it will require certain grade conditions be meet. DH is firmly that college is their job, like it was for him. Mine were conditioned on grades but my parents paid and I had a job to pay for my own expenses.

If I had to answer the poll though, I'd say maybe depending on finances. I think right now we'll be able to afford it, but who knows what the future holds. We could die, become disabled, or ill. So I would really like to help my children and I've already started saving a small amount for them, but I do realize that you can't plan out your life so thoroughly.

Thursday, August 30, 2007

A disturbing trend...

Twice in one week very strange experiences happened. Something that makes me wonder about the trends of debt in the US. I once wrote that it my CC would have to be pried out from my cold dead hands. I still think that, but I'm wondering if Americans aren't getting worse about CC debt and we shouldn't be forced to take basic money management classes in high school and college?

First we went out to dinner on Friday at a Chinese Restaurant. It was a nice place, pretty reasonable $30 for the two of us. Anyway we were sitting next to this family of 4, who I think were travelling. Anyway they were out of money and had trouble paying for the bill. They began to ask the waiter (who didn't speak english well so we helped to translate), to split the bill on to 3 CC and put down some cash. The cash from was from their two children. The conversation was rather startling, that they could only charge $10 on this card, then $10 on another card, and $10 on another card and $20 in cash. It was very confusing. I thought well maybe they overspent on vacation, but still it was bit surprising.

Then last night I was waiting to pay for my groceries in the express line. It was surprisingly busy, but the woman in front of me couldn't pay for her groceries. She also split a $14.07 bill on to $5 one CC, $5 next CC, and $5 cash. It took forever and the cashier was grumbling a bit because she swiped more than just 2 cards which did not go through before finding cards that worked.

These two experiences were eye-opening. What is going on? I don't recall the last time I saw someone splitting the cost of something on different CC. Or even trying to put things on a CC which was rejected. Personally I rarely notice so I wouldn't know if it were a debit card versus a CC (who can really tell because debit cards are used as CC a lot when you are given a choice). But is abuse of CC getting worse? Are people spending more than they have?

Wednesday, August 29, 2007

Betting on the Market


I decided to jump into the market right now. I put a bit of money into starting a new portfolio for fun. This is to see if DH is right that stocks pay more than mutual funds or try to prove him wrong that mutual funds do better in general than the average investor. I've mentioned this before that DH is dead set that investing in stocks pays bigger dividends than picking mutual funds. I think index mutual funds are the way to go and I prefer mutual funds in general over individual stocks.

DH's current fun money portfolio isn't doing so well right now around 5% but his 401k and our Roth IRAs which are in mutual funds are doing about as well. Last year our mutual funds for the 401k and Roths crushed his stock portfolio which had a terrible year considering the great market.

So my goal now is to see how the last 4 months of the year goes and revamp our entire portfolio at the end of the year. I don't know if we'll position ourselves more into individual stocks or into mutual funds but we'll see. After all being married is compromising and sometimes people just have to learn the hard way about investing. FWIW, DH is getting more into index mutual funds after being burned last year with his stock picks.


What I decided to do was buy these 10 stocks SBUX, TNH, BQI, ELON, POT, PKX, ZOLT, BBY, PNRA, and RL. I'll update the blog periodically on how I'm doing.

Tuesday, August 28, 2007

Dental Update

Ugh...Followup after my letter to them the dental office responded. The dental office said they had no documentation about my change in insurance providers. Obviously my word is not good enough so I am having a letter from BCBS and Delta stating the date of coverage termination and initiation. It will be pretty obvious that we changed 6/30/07 coverage as I told them over the phone.

Second they said that they DO NOT get preapproval of work done from the insurnae provider. They said I was misinformed by the DD representative (word for word from the letter). DD representative said that a pretreatment form should have been submitted and both the dental office and myself would receive copies of the coverage. Thus I would be aware of the charges and it would be approved. However this is for Delta in-network providers only. Thus the dental office was correct in stating they didn't need to because they were not in-network providers. However they should have informed me they were not an in-network provider.

Thus I had a broken an appointment and they were charging us for broken appointment $350. And the carryover fee was to be applied to future visits so they did not have to return the money to me from 2 years ago.

In the letter the office did not state that I had to pay the $350, though they did state they had a right to charge for a failed appointment. Thus they charged for 2 hours of time at $175. Does this mean I owe them the $350? I plan on determining exactly what I should pay for the cancelled appointment. I wonder if I keep arguing with them they'll just let it go? Or if it's already been let go?

Monday, August 27, 2007

Comparing Housing Costs

I'm going to check out my sibling's homes these next few weekends. One lives in OH, the other in VA, and the last one lives in HI. So our lives vary and our homes vary as well.

I decided for fun to put our homes into Zillow to get an estimated price and find some details about the homes. I think it's neat to see what you get depending on where you live. So 2 of us live in townhouses, and the other two have single family homes. Of course the younger two are the ones in townhouses. Also my older two siblings have 3 kids each and live in the single family homes, while I have none and my brother only has one child. So it appears lifestyle plays a role in housing choice.

Starting out west in Hawaii, my sibling has a 5 bd/3 ba, 2801 sq ft house with a 7637 sq ft lot (.18 acre). It is estimated to be valued at $968,976. It is worth $346/sq ft. Pretty good deal when you consider that it's a single family home. By the way my sibling got it for substantially less because he worked for the builder.

The second sib's home in OH has a huge single family home with 4 bd/2.5 ba. It is 4514 sq ft with a 49057 sq ft lot (1.1 acres). The house is estimated to be worth $447,373, making it worth $99/sq ft. Of course having seen the location and the neighborhood, I'd have to say it's a much more beautiful home than the HI home.

My other sibling's townhouse in VA is 3bd/2.5ba and 1400 sq ft. There is no yard and it is estimated to be worth $399,642. This works out to $286/sq ft. The house is cute, but not well laid out it's a split-level townhouse with psuedo three stories. However this particular sibling bought 10 years ago for less than 1/3 the price and almost a paid for home. Unfortunately they've been trying to sell it for 2 years now and no bites. The market is terrible unfortunately, but they haven't leap into a single family and tried to sell while already buying another place is a smart move.

This is a pretty nice comparison of the different places to live in the US. Would I live in OH? No but I'd considered in VA. Definitely HI. I wonder what would happen if I picked more places to examine. Of course there are many other factors such as school district, lot size, etc that should be built into a regression model to determine price of the houses, but that would take more time and analysis. So if you are thinking of moving there are many variables which cannot be measured like proximity to family, lifestyle, jobs, etc.

Where would you live?

Sunday, August 26, 2007

Vacation Time

I read that the US has the lowest amount of time off in the westernized countries. The average time off is 13 days/year. However most people start out with an average of 8.9 days/year. This is about half what most European countries allow their workers.

I get an uncounted number of days off a year being a student. I make my own schedule, as long as my work gets done and I'm not abusing the system. However DH gets I think a pretty generous amount of time off.

In his last company he got 4 weeks or 20 days/year. Currently however he gets 15 days or 3 weeks/year with an opportunity to take 5 days or 1 week unpaid. The 1 week is deducted off his salary with every paycheck and if he doesn't use the 5 extra days it's paid out at the end of the year. I think he's super fortunate to be able to even take 20 days/year. However he is only allowed to rollover 5 days/year or else he loses the vacation days.

Also DH gets a very generous 4 personal days a year as well. These are use it or lose it type of days. He also gets I believe 12 days of holiday as well. So basically he gets 15+4+12 = 31 days year. Plus unlimited sick days, with anything longer than 3 days with a doctor's note.

Also he gets 2 weeks of paternity leave. I thought this rather amusing. But very generous. So in all I think DH gets a very generous amount of time off considering the typical corporate vacation policies.

What do most people get?

Guest Bloggers

I'll probably be on 2 weekend trips with family in September. Hence I'm looking for some guest blogger to write a post. Anything financial would be great. I'll happily link back to your site and add you to my blogroll. Email me at


Saturday, August 25, 2007


I wonder if I'm one of the few people who enjoys using priceline for hotels and car rentals? Most people I've talked to won't use priceline because they hate not knowing which hotel they will get. But I've found it makes it a bit more interesting not knowing what you'll get.

Last night I booked a hotel for the weekend in Washington DC. It was $60/night for a 3 star hotel which turned out to be a Hilton. The place looks nice, is 5 miles from my brother's house and seems convient. When I had checked out hotels in the area using orbitz,, expedia, etc most were running $100/night. I'm not hotel loyal and we don't travel enough to make it worth being brand loyal to earn points.

I also used priceline to get a rental car for the weekend. We got a full-size car for $15/day which turned into $25/day including taxes. That's not bad considering taxes are 10% for rental cars and 15% for hotel rooms.

All in all my experiences with priceline have been excellent. I'll report back on the hotel, but in June when we went to Toronto and Niagara Falls we used priceline and got great hotels for the price. The locations were fantastic and the quality of the hotels were superior to what we would have booked based on price.

Friday, August 24, 2007

Online Bill Pay

Why does online bill pay take so long? I'm frustrated because banks say to have a date to deliver by but it never happens. For every single bill I pay using Bank of America I have to make sure it occurs immediately because there is always problems.

Apparently they still mail actual checks to companies. What sort of companies? Like CC, utilities, cell phones, anything. I can't believe they mail out an physical check 5-6 days before the delivery date.

This really confuses me as to why this happens? Why isn't everything electronic? Why aren't the banks just zapping the money over immediately and it appears that day? A money transfer between two banks (ING and BofA) takes 2-3 days? Do you ever wonder how and why? Or when you roll money from one investment account to another? It takes 10 business days to allow things to happen.

Do you use online banking? Do you find it is convient or inconvient? I find it convient in that I don't have to write checks, but that waiting for the company to actually cut a check is sometimes more frustrating. It feels like for all progress we have made in technology we still haven't done anything in the banking industry.

Thursday, August 23, 2007

Calculating my Retirement Number?

I've thought a lot about this, the problem is I'm not sure what we really need because I'm not working and earning an income so our living is based mostly on one income. Will we scale up our lifestyle later? Will we have more income use to save? Or will our needs change with kids? This is too difficult to predict. So I just picked a number and decided to use the 4% rule.

What's the 4% rule? It's where you withdraw 4% a year from your portfolio and you approximate how much you need. So for example I decided $100k/year in todays dollars would be adequate. I then though why not 30 years until retirement at 58 and 60. So using a 3.5% inflation rate, I calculated that I will need $280680/year in order to match $100k in today's dollars.

This number multiplied by 25 gave me the amount I would need at retirement to live off of 4%. I will need 7.0 million dollars in 30 years in order to maintain a lifestyle of $100k. That is a lot of money.

According to my current savings rate for retirement of $23k/year @ 8% rate of return I will only have $3.3M. This is a bit worrisome. So what do I need to be saving? I should be saving $54k/year. That's probably a bit much right now and possibly even later.

So what should I do? Well I guess it might be easier later to save more as our income increases. I don't know what else to do. Well I guess I'm better off shooting for the moon and hoping to land on a star than not trying at all. After all if a ton of people are saving nothing for retirement then why am I worried? Something is better than nothing.

Wednesday, August 22, 2007

Depreciation of Cars?

I was wondering what is the depreciation costs of cars really? Is it worth to buy used? I think it is, but how used? Is it worth it to buy a 1, 2, or 3 year old car or more? What depreciation hit has our two cars taken?

First I bought a 1999 Toyota Corolla VE brand new. It was $11k when purchased, and current resale according to KBB private party sale good condition $4895. Hence the depreciation was 55.5% over 8 years equalling 6.94%/year. That's not terrible, but most of the depreciation was probably done in the first 1-3 years rather than a set rate each year.

Our second car is a 2000 Ford Focus which was purchased for $14k and is now worth $4775. It took a 65.9% depreciation hit over 7 years. That equals 9.4%/year. Which shows a difference between american and japanese cars.

I was told we don't drive very fancy cars, but the truth is that I can't seem to justify even buying a used car because it'll cost too much. For instance a used Toyota Highlander is probably what we would get. But don't worry this is probably 2-3 years out if not longer.

Right now according to KBB if we bought a new 2007 Highlander it would cost $23.5k, but a 1 year old used 2007 would cost about the same. Ridiculous. Why would anyone buy a 2007 model when the 2008s are coming out and the new 2007 costs the same? I did the exact same models and trim of SUV.

So I thought maybe the older models. A 2006 Highlander according to KBB should be $19805 or a 15.7% hit for one year. A 2005 Highlander would be $16675 or 28.6% less, while a 2004 Highlander would be $14510 or 38.2% less. And so forth until 2001 when the Highlander was first introduced.

I plotted this on a graph and determined the slope of the trendline was -8.76%, so the car depreciated on average about 9% a year. But the biggest slopes were in the first 2 years, after that it appeared to depreciate at the same rate.

So I guess if I were to buy a car I'd buy a used car of at least 2 years. Although you never know, so I'll address it when we have to buy a car.

Tuesday, August 21, 2007

Subprime Mortgage Fallout

Last week Federal Bank President William Poole commented on the state of the subprime economy. He stated that the subprime mess had not yet necessitated an interest rate cut nor was it harming the US economy. He was of the opinion that unless the economy took a major dive a rate cut was unnecessary. He also stated people needed to realize the fallout of the subprime mess was bound to happen.

I wonder whose to blame in all this mess? Is it the borrowers? The lenders? Should the Federal Government step in? And if so will it really work or will it be a band-aid solution?

I am going to comment on my mini-poll. There were 49 voters, and it appears that 62% of borrowers spend less than 20% of gross income on housing. Another 20% spend between 20-30%, 8% between 30-40% and 10% between 40-50%. So if this were representative sample of the population, one could say that the people who fall in the 30-50% range are probably subprime or risky loans.

But that represents ~20% of the population. So out of that 20% the question would be why do they have such loans? Are they able to easily manage it? What made them choose such a large mortgage?

I think that a lot of responsibility for these subprime mortgages needs to fall on the borrowers. Much like credit cards people need to realize that buying a home is the single biggest purchase you'll ever make. How can you spend less time choosing a house/mortgage than buying a couch? Or TV? Or anything? Buying a house without being educated is crazy.

But maybe I'm wrong, maybe people shouldn't bother to even read information before buying a house. Maybe it completely is the lenders fault. However I wonder if you see the mortgage number on the line, how can you believe you can afford it? If it's already 50%+ and an ARM how do people justify it?

Financial Update

Hmm.....I guess I should a few things. One I don't like spending money more than the another person. So I like to complain about it here on the blog because I wouldn't do it in real life. Money talk is weird in real life.

Two, couple of misconceptions also need to be cleared up. I did not finance furniture because I couldn't afford it. I can but I wanted to use a coupon and I had to use the store CC to do it. They gave me 0% financing for 1 year so I decided to use it. I haven't made my first payment yet so maybe I'll pay it off since I have so many people online whining about it.

Second, my DH goes to a private MBA because where we live there are mostly private universities. This costs part-time $30k/year, which is what we spent for 2 semesters and 2 summer sessions. Yes we borrowed $8500 but we paid the rest cash out of pocket. And yes we're borrowing another $8500. So maybe I should be exceptionally frugally and not eat out again until the day he graduates and stretch our food budget thinner. But to be honest I don't want to.

What is the financial plan? Well miraculously I've been thinking about that, if we paid the school loans at the same rate we're paying for his tuition now we can pay off his school loans in less than 1 year. Chances are we might be in the position to pay them off within 6 months.

I'll know more as we both get closer to graduating and our real income is known. What I do know? We max out retirement savings, we eat out, we try to carefully buy furniture and big ticket items, and we try to care for our condo so it doesn't fall into shambles. We make a nice income but we also live in a very expensive area.

We're trying our best together to move forward and get ahead. I have no idea if we'll make it and I don't think it will be easy certainly. But at least we're trying. Maybe debt free lifestyle would be best, but I think that we're setting ourselves up to get jobs that make us happy and fufilled and will provide a stable financial basis.

Monday, August 20, 2007

Parental Condo Update...

I'm a little nervous because my parents are buying another condo. Yes this is without selling either of their other homes. It makes me nervous because they are taking out a mortgage at their age. I'm really frustrated and banging my head on the table.

I just don't get it, they don't like the house I grew up in because they let it rot. So it needs a lot of work and my parents hate doing home maintanence. So they just would prefer to sort of leave it behind and move into something new and worry about it later.

It's just financial decisions like this that worry me. Poor financial planning. One example the condo they almost purchased in Februaryof this year was $377k for a 1 bedroom on the 30th floor. Now they are purchasing a 31st floor 1 bd for $349k. I was constantly yelled at over the phone by my mom (she's going through late menopause), about how much they wanted to buy that condo.

Now when I bring up they almost paid $30k more for a condo 1 floor below she says "Oh the market's coming down." And yet they still are interested in buying. She says things with a serious disconnect that if they had to flip it they could sell it breaking even. Also that she had to rent for 8 months at $1500/month so she lost money renting. Nevermind that the condo lost almost that much in value.

I haven't quite figured my parents out yet but one the way after talking with my mom I nearly reached through the phone because she said "well the housing market can't go down, all the realtors say it's an island. When does RE go down?" Well I hope things work out.

Sunday, August 19, 2007

Bathroom Issue...

Sigh, I'm getting really tired of our developer. So many things happened where she shortcut problems. So we're going to have to discuss with our lawyer more issues which have cropped up. And no you cannot find this out with a home inspection unless you are prying tiles away from a shower. Also you cannot predict that when someone says they will pay for things to be repaired in a written contract that they will try to not pay. Most people do not practice those types of business skills.

Our master bathroom the tiles are coming off the walls in the shower stall. This is because it was probably improperly constructed. Having been a new renovation in a former attic which was dormed, the bathroom is brandnew. The shower stall is made of marble tiles, which unfortunately were glued to sheetrock. Yikes. The developer/contractor should have used concrete or baseboard. Second mastik glue was used to attach the tiles instead of thin-set cement. However neither of these can be told from an home inspection unless you pry the tiles off the wall which is unlikely when they are in good condition. But after a few years the glue wears away and the sheetrock disintergrates, leaving a non-waterproof shower.

So basically the developer built a shower which disintergrates with water. Of course we called contractors and building inspector and was told it was improperly built and now we have to go and ask the developer for more money. If I weren't already asking for our money from the retaining wall I think I'd not do it, but at this rate, what does it matter? We're already having to get money out of her for our parking pad retaining wall (also in our sale contract), but she refuses to pay until all reciepts are tallied and she sees the final reciept.

The developer is infamous where we live for going to court and losing because she doesn't like to pay contractors. More than one contractor has filed suit against her. And yes she's very, very rich.

The cost of repairing this shower is probably around $2500-3000. One part which varies the price and is a bone of contention between DH and I is whether to replace the marble tiles with marble or with porcelain. DH wants porcelain because it's easier to clean. I want marble because of resale value. I don't want to care for the marble and would prefer porcelain but I'm not sure it's a good financial decision. I suppose we'll be tossing it to a RE agent.

Right now as it stands with our fireplace, I won the argument about keeping our original mantle when over 5 contractors and fireplace installers said to keep the original mantle. DH hates it wanted to tear it out, I said no. I don't think it's lovely or anything but it's value is in the resale. Sometimes home maintenance is not worth the hassle.

Saturday, August 18, 2007

House Payoff versus Large Savings???

OMG. My best friend from childhood lost her job yesterday. Of course she was in the mortgage industry and did sub-prime loans. So these past 5-6 years she has been rolling in the money. Fortunately my nagging did some good. We're like sisters, she's an only and well I'm closer to her than my own siblings. We've known each other pretty much since birth.

What you say? In college my best bud use to be deeply in CC debt and ran up a ton of bills. However since she meet her boyfriend 3rd year in college, he cut up her CC and made her pay them all off. Since then she never abused CC again. I also nagged her about savings, starting her retirement, and putting money aside. So I told her how to invest her retirement money and stuff and got her turned onto coupons for makeup.

Anyway I was a bit worried but my nagging worked. She can live for 3 years at least at her current spending habits without changing a thing because of her money in the bank. A nice $100k. Yes! So while she'd rather not touch her savings, she can not work if she chooses.

I'm hoping she instead chooses to go back to school and retool her career. Right now what would have happened if she had followed Dave Ramsey's advice and put that $100k on her mortgage and only had 6 months of living expenses? Well she'd be desperate to find a job and her mortgage payment would still be there because her mortgage would not be paid off, only the amount of time shortened. Right now she's in the position of choosing a job. And pretty much any job she works at will supplement her savings, and she's getting unemployment. Plus her BF is picking up some slack on the household bills.

But what would most people do? Do they really pay off their homes? I realize we're in unique situation of buying $500k townhouses, but still money in the bank buys time to choose a job without stressing as much. I'd personally rather have 3 years of potential job hunting and retooling than going back to work within 6 months. Plus it's longer if you trim the budget.

How long could we live 6-12 months depending on how frugal we are. I'd really like to have more cash, but we keep spending our "savings" right now on school. It's eating up $30k/year which we would be saving otherwise.

Moral of the story? Stockpile cash until you can pay your mortgage in full, otherwise you tie up too my liquidity in the house. I guess overall it's personal choice. Will you choose to tap an EF for something like home repair or would you have saved cash and touch that and leave an EF basically for sacred things like death and job loss?

Friday, August 17, 2007

Fortunate in Housing???

I realized the other day we really got lucky in our housing. We have a really exceptionally cheap mortgage, and with 20% DP we bought way more house than we could have afforded without a DP. The downpayment is really important I realize because it gives you the choice of selling if you need be and taking a loss if you must.

Many people are being forced to refinance or short sell but are unable to come up the cash to do so. By having equity present we can do either without too much worries. Why am I bringing this up?

Well our two neighbors had a complete meltdown Wednesday night, where a screaming match ensued betwween them. Fortunately we were not present although we received irate phone calls late at night from them about the other one. But they are no longer talking with each other. They are only communicating through us and they are becoming very nitpicky.

So DH says to me, let's move. Eat the loss and leave. We're losing control of our situation fast. Our neighbors are just making our lives misery, but our house is nice. When you buy a condo you never know who your neighbors will be. In a house at least you can avoid them and threaten to shoot if they step into your yard. In condo well there's no escape.

I don't think we can afford to move however. We will have a terrible time renting with two dogs and buying another place would again have to be a condo. So my vote is no we're not moving, we're sticking it out no matter how miserable they make us. I may have to grouse about it for the next two years. This is my only outlet for venting because I can't yell at my neighbors about how stupid they are.

Plus we have a phenomenal deal on our condo. We pay $2263/month mortgage with $650 going to principal. So $1600 is interest, with 25% being tax deductible because of our bracket. So in essence we're renting for $1200. Then add in our property taxes, HOA, and insurance and we're paying $425 property taxes, $25 insurance, $200 HOA. So every month were renting our place for $2250, with $500/month tax break for PITI. That means we're renting it for $1750 for a 3 bedroom townhouse. This does not include repair and maintenance of course.

However DH best friend has looked recently at renting 2 bd apartments for $1600-2000/month so I think we're ahead of the deal. Our rent for a 3 bd that we can have two dogs in is $1750. It's not apples to apples because we have to upkeep the condo. But a lot of places he's looked at are older and their furnances are inefficient so the heating bills cost more than ours for a smaller 2 bd apartment instead of a 3 bedroom townhouse Also their windows are older, and in general the appliances are older. Also most places don't have an in apartment washer/dryer/dishwasher. So we have a lot of bonus comforts.

I don't count principal paydown because hypothetically we should be saving that money even if we were renting, not using it to eat out and stuff. But $1750/month to "rent" our place is too good to pass up. Hence I feel super fortunate in housing. DH is just going to have to play mediator and we're going to try to hide from our neighbors. One day we're going to be kings of our kingdom and no one will ever bother us again.

Also as a sidenote, DH's friend might be living with us indefinitely. But I feel it's okay and good karma. He's helped us out in the past and now we're returning the favor. Plus it's good karma to return the favor. He's paying rent and helping out around the house, and very clean. He does the dishes, does his bathroom, vaccums, and will help reseal the deck, finish the backyard, and work on the painting. In exchange he was thrown over by the girl he was moving in with so now he's considering buying a condo. But the catch is it's a wait-list till next year and by living with us he's not trapped in a lease. And we feel we're going to help him get ahead so he can buy a place.

When we first bought a condo in 2002, he loaned us money because we needed more than we expected, $2k actually because our earnest money check cleared but the mortgage company lost it, and the money was already gone from our checking account to cyberspace. Good karma and now I hope he can buy a place too. I feel better because he's paying rent and at the same time potentially going to be able to buy with our help and has a plan! Plus we don't require a deposit or lease and the money he gives us is just a bonus. It's below market value but whatever. He's a good person and if he buys this place it will be an awesome way for him to get a foothold in the housing market.

Thursday, August 16, 2007

Baseball game

We went to a baseball game yesterday, and it was awesome. First one we've ever been to at Fenway. Lovely! But holy cow the tickets were super expensive for crappy seats. No wonder it's the most expensive seats in the major league. Fortunately DH won the tickets in a lottery at work or else I doubt we could have swallowed paying $45/seat for a pair of tickets.

On top of that we only bought 1 soda for the bargain price of $4. We had a quick burger beforehand, and went to a pub to have a beer afterwards. Decided to cheap out since it was an afternoon game.

The people in front of us were just downing the beers. They were also from DH's company which gave away 50 tickets/day for the Red Sox's 8/13-8/15 home series. A beer cost $7/pop for Bud, which is quite expensive. Granted it was a hot day but I don't think I could be downing beers at that price. I had trouble even buying a soda.

But for a sport that has 180 games and most stadiums have $5-10 cheap seats usually, Fenway is unique for the prices of it's tickets. NY charges more for the concessions and extras, but Fenway's tickets are the most expensive in the US because it's the smallest park with one of the largest fan bases. So the ambiance was nice and the game was exciting.

Would I go again? I don't know, my cheapskate soul says probably not, but I'm glad we had the opportunity to catch a game at Fenway and see the big green monster. We have to try to catch a Patriot's game and a Celtics game. I have a feeling the Patriots may be too out of our league.

Wednesday, August 15, 2007

Following Dave Ramsey...

I was mulling over someone's comment on a message board, how when they reached Baby Step 6 - paying off the house, they felt that squeezed tight in the budget. They felt as though their lifestyle was worse than it had been before. They couldn't put a finger on why, but did suggest that it was due to the extra savings.

I think that Dave Ramsey does an excellent job getting people to pay off debt. BUT what many people probably think is once they pay of the CC, student loans, HELOCs, etc and only have a mortgage then they will be rolling in the dough. Basically after Baby Step 2.

Where's the disconnect? Well there are probably two reasons for this, one during baby step 1, 2, and 3, following Dave Ramsey, you aren't saving 15% for retirement. That's 15% gross, not net. Right there that's a huge chunk of money.

Second big chunk of money saving for sinking funds. Those are things like replacing a car, home repair, vacations, etc. Those things you didn't do or put off in baby step 2, are now back with a vengence. So all the money once used for snowballing is now turned to saving for things a person in debt never had the cash to pay for.

I've found that living responsibly is hard. It's a lot easier to charge and live with free money. It's so much harder to save. But that's my reasoning why after Baby Step 2 the money doesn't appear to be so free.

Tuesday, August 14, 2007

Unexpected home maintenance

So we are installing our gas fireplace. However the plumber is unable to tell where the gas line is (because we are a condo), hence he'd have to cut a 12" x 12" hole in the wall to check. I mentioned we were considering tearing out the mantle to either rehab it or replace it because the wall was buckling.

The wall the mantle is attached we assumed, incorrectly of course, that it was plaster chipping. Nope. We took off the top piece of the mantle, look inside the wall and determined that the drywall is coming off the studs. Eek!

Because we haven't taken off the whole piece we don't know if something is wrong with the studs or if it's just the drywall pulling off. Hence now we are going to have to get a quote for rehanging the drywall. We are considering doing this ourselves, which we've done before, however DH is worried because this drywall is easily pre-WWII. So we might open up the wall and see things we're not expecting because of the age of the house.

Hence, I am going to get a quote about the rehanging the drywall. I might rehab the fireplace because it does match our mouldings, but DH refuses. He doesn't understand why you would want to save an old mantle painted over 20 times. But we live in an area where people want the charm of an old mantle. Ugh, this is going to take a professional telling him what I'm saying for him to listen. That should happen on Thursday when the fireplace guy comes in to examine the mantle and determine if we should rehab or replace it.

This repair is absolutely necessary. We can't have our pipes burst again from the cold because of inadequate heating of our bottom floor. We left the furnance on to heat to 50, but because it has to pipe down 4 stories (attic to third floor), it was working 100% of the time and still having trouble heating to just 50 on the bottom floor. We also used space heaters but it did not help. Thus we feel our only alternative is to install a gas fireplace and attempt to heat the bottom floor as a mini-furnance (though it's radiant heat). It's better than nothing.

We didn't realize this was such a huge problem. Cost will probably be I'm guessing 2x what I budgeted of $4k. So hopefully we can get away with it costing $8k?

Monday, August 13, 2007

Tax Free Weekend Spending

So how'd we do as far as savings go? I think we did pretty well.

We bought the sofa official on Sunday for $1194. We used a $100 coupon and 0% financing, they went hand in hand. The store mailed the coupons with their catalog and to be used with their CC. It was officially expired but they did us the favor since we were "loyal" customers. This is th first and only time we shopped there. Our neighbors gave us the coupon. The $1194 included $99 for delivery and $103 for scotchgard warranty. Trust me we'll use it with two dogs. So the actual price of the sofa was $992. Not a bad deal.

Second we purchased our valor Legend G3 fireplace. Total cost was $2709 including face, unit, installation, chimney liner, etc. The unit alone was $2109 and $600 for installation. We shopped around at 4 different stores and this was the best deal overall for installation and unit purchase. However it turns out well be spending a lot more because of other issues.

Third we purchased our bedroom set from IKEA for $667 - $25 coupon for a grand total of $642. This included the bed, two nightstands, and chest of dressers. It should last until we move out of here, and because it's assembled furniture we were able to get it up the stairs although we are somewhat worried about having to disassemble to get it down.

Finally we bought a shopvac from home depot for $69 - 10% discount = $62. This was a necessary purchase for the installation of our fireplace. I guess I'll discuss our financial options later.

So we spent $2709 + $1194 + $642 +$62 = $4607 tax free. That means we saved $230.35. Is it a lot? I guess so, it's enough to have paid for the shopvac and some of the bedroom set. But it really made me feel better about purchasing all of the items that we have wanted and planned on buying this year. The only impulse purchase might have been the shopvac, but it turns out that as we work on the gas fireplace it'll be necessary.

Sunday, August 12, 2007

Bedroom Set..

My hubby is a SUPERMAN! Woohoo. In less than 7 hours he put together our whole bedroom set from IKEA. We got the Hopen set from IKEA, with a bed, two nightstands, and a chest of drawers. Not bad, considering he was home alone, dragged it up 3 stories, vaccumed and moved everything out of the way.

I won't complain about his housekeeping skills which are sorely lacking because he does a lot of stuff like this. I'm going to finish off by buying the hopen dressers either used or next year. Right now we're fine and we have to see what sort of space we have left.

As of now our houseguest may be staying longer because he was ditched by the person he was suppossed to move in with. Instead she bought a condo. So he's stuck looking. But he is considering purchasing as well, in which case he would just live with us until he buys a place, which as long as he pays rent I'm okay with. So our space issues are compounding.

Tomorrow I'll write what we bought and what we saved this weekend.

Saturday, August 11, 2007

Living Like a Student?

So I keep reading people telling other people to live like students a few years after graduating. I've been mulling that question over a lot because we pretty much still live a lot like students, but this week, we finally started upgrading our lifestyle.

What does it really mean to live like students? I don't really know because our student lifestyle did not really feel like a student lifestyle. We had nice furniture, not necessarily new, but nice, good quality stuff. We had bought 2 new cars, not extravagent, but new. And we have taken care of these cars so after 7 and 8 years they still look relatively new and run well for their age/mileage. We have a new flat screen TV, a nintendo Wii, and a few other toys. We have cell phones, and have recently gotten HDTV.

So our lifestyle I wonder can it really be called "student"? During our leanest years of being students, we never used coupons too much. We haven't even changed our eating habits that much, except now we can afford seafood and better cuts of meat. Before we'd eat mostly chicken or ground beef, but I've never bought much prepackaged foods or processed meals. We used to cook entirely from scratch stuff like bread, pasta, and still prefer it if we have the time.

So our lifestyle has been simplistic rather than studentish. We never really sacrificed a good quality of life for a cheaper lifestyle, we just tried to the best quality items we could afford. I think that's what's helped us keep our lifestyle pretty reasonable. We didn't buy newer cars, we didn't buy a single family home (only townhouse), we didn't immediately furnish our home, and we did not just start eating out all time. Our lifestyle has slowly grown up. After about 6 months we bought a matching dish set. And we have a couch that can now fit more than 2 people.

We also bought a gas fireplace, but that was something even during our poor student days we would have deemed necessary, and if financing was necessary so be it. But now instead we just set some money aside and have upkept our house relatively simply.

So would we go back to living like students? I don't know, maybe. But it really feels like we haven't yet left the student lifestyle.

Friday, August 10, 2007

Tax Free Shopping

Tomorrow and Sunday are tax free shopping day. This is our chance to save 5%. Is it a big deal? Not really, but since we were buying the sofa, gas fireplace anyway I'll jump on the chance to save 5% on purchase I would have made otherwise.

We have to call in tomorrow to get the tax removed from the sofa, because it was a "pre-order" finalized when we call in tomorrow. Then we'll buy our $2800 gas fireplace and that's a savings of $140 in taxes on top of the $60 from the couch. We also are buying a bedroom set for $1k, so we'll save another $50 there. So just those little savings add up.

I wonder would others wait and plan on buying things at the same time? We have been planning the fireplace since May, but have been slow in moving forward. But we had to do it this summer before the next winter. After all last January our pipes frozen and burst even with the heat on!

Also the couch we wanted but hadn't bothered shopping for it. But with our new roomie and my parents visiting the need for a bigger couch became more pressing. Plus we had a coupon so everything seemed to be pushing us to the direction to buy things now. So I guess I'll take our money and just save an extra 5% on things we normally would have bought.

Thursday, August 09, 2007

CC debt Forgiveness?

I question the ethics of "settling" with a CC company. As someone who always pays my CC in full and has not paid CC%, maybe I don't understand what is going on. But it really started to bother me on the WIR message board, when someone mentioned trying to settle with a CC company to forgive their debt.

They felt unable to pay the debt back in full and would like to pay less than what they owe. This did not sit well with me. I do not understand how someone can chose to do this. I do understand at least the CC gets something back instead of nothing, ie the person files bankruptcy. But how can people feel it's okay to buy things they cannot pay for?

Also I don't believe it's entirely interest they are paying. There obviously was charges for things they purchased. Perhaps it was just a meal eaten or something intangible. But where do you draw the line? Do people settle for the amount they charged at least? Or is everyone else left holding the bag who uses CC?

Wednesday, August 08, 2007

June and July Spending Updates

I was very bad about inputting and tracking our spending for the months of June and July. Probably because I wanted to hide from what I knew would be terrible months. But it turns out we managed pretty well.

For June we spent $311 on groceries which caused our 5 month average to be $312. We spent $223 on eating out, averaging $220 also these past five months. We spent $65/gas, because I did not count our trip gas, which brought our monthly average to $102. We spent $16 on fun with our monthly average being $65. So in all our month was a pretty good month considering we had a couple of day trips and a weekend away.

For July, well we did a bit worse on eating out. We spent $306 eating out, bringing out average to $234. We did save a bit on groceries probably because of the eating out spending only $278, bringing our average to $306. We spend $148 on gas, raising our average to $109, however this could be solely due to the rise in the price of gas. As for fun we spent nearly $200, most of which was on the Wii.

I really want to get around $250 for groceries and $250 for eating out a month, down from our highs of $400-500/month each. That's probably our biggest vice. However realize that in July we spent 2 weeks with my FIL staying with us, eating our food and going out to eat a lot. I shopped end of June in preparation for that. And then as soon as he left, our new roomie moved in and has been eating our food. So I think that our grocery/eating out budget of $584/month for food pretty good for 3 adults.

Especially since our roomie eats a lot (about what DH and I eat combined), he bikes all the time and is about 6'3", 190 lbs of muscle. So we could have had a lot of leftovers and not needed to buy so much food. Until he leaves we definitely are eating way more both at home and out. I can't imagine what teenagers do to a food bill.

Tuesday, August 07, 2007

Gas Fireplace insert

So the cost of the gas insert into our fireplace will be $2800 + $1000 for plumbing. But it will probably run more because we have to take off the mantle and do some demolition work.

Unfortunately the gas line is not necessarily right below our fireplace. If it was it would cost $500 to run the gas line to the fireplace. But instead again our condo is giving us headaches because we can't figure out where our gas lines are. I do realize that we will not really be saving a ton of money by doing this, but I do feel we will more efficiently heat our home. Also we will be able to heat our bottom floor to a reasonable temperature during the winter instead of 50F. Even at 50F we have space heaters going to help the furnance.

Another small financially issue is that running water lines to the backyard from the crawl space could be a problem. Because of the construction of the third unit we apparently lost common space. Very frustrating.

And tonight we need to get moving forward on our retaining wall. So all in all our house is costing us a fortune. arrgh. I wish I had a single family so all the cost would be ours sure, but we'd be kings and not have to wrestle with neighbors agreeing to do the work!.

Monday, August 06, 2007

Carnival of Personal Finance #112

The #112 edition of the Carnival of Personal Finance is up at the frugal law student. I submitted my post about "Frugal Causation". What causes you to be frugal?

Interesting posts include "retire rich driving paid for cars," at my money, my life. This post should have been mailed to my parents 20 years ago. If only...I will probably have to rant about their car buying habits later.

Also Chief Family Officer asks where to keep your EF? Honestly I probably should not be keeping my money in my bank but I'm too lazy to set up another account with ING or HSBC, and I often find I need liquid dollars to pay for large expenses way too often like property taxes, tuition, etc. Money cycles for us too much to keep going back and forth.

Anyway it's a full carnival enjoy!

Sofa Debt...

Yes we bought a sofa. In fact we went with a sofa which I did not post about before. Instead we bought a microfiber sofa with a chaise, so a slightly smaller sectional sofa. In the picture, it's a loveseat with a chaise, but we chose to 3 seater sofa so an extra 30". This will fit perfectly in our living room.

We bought it a week early but will get the sofa tax free in anticipation of tax free day. So we saved $60. We also used a coupon I had for $100 off the sofa which made it an even better deal. The original price of our sofa was $1092. Then we added on scotchguard treatment/5 year warranty for $103 making our subtotal $1195. Then delivery was $99 and tax should have been $59.75.

But with the $100 coupon we got free delivery and tax free because of the state law. So $1195 for a sofa seems like a deal to me. We also got free financing for 1 year 0% APR. Okay, now again DH wanted to just pay it off but I decided it was okay. And yes I've already set the money aside. So I may pay it off though at the end of the year when I cash out some stocks, or next week depending on csco, but for now I think we're fine.

So now I just increased our debt by $1195. I wonder if this is me treading the path of debt? To be honest I already feel the weight of the debt across my neck, but I still continue down the path. I wonder what a year will bring? I may not be able to take it and may end up just paying it off asap.

But it really is all about behavior, not the debt. I've financed stuff before on 0% CC and I often think about it and want to pay it off. But I discipline myself to pay $X every month and it's paid off 1 month before the date. Done this 6 times, and it's all the same. Guess it's like money already spent, but it's still weird feeling.

Sunday, August 05, 2007

Payment Plan for MBA?

Right now I'm sitting here deciding whether to do a payment plan on DH's tuition. We are given the option of paying 25% upfront and 75% in Feburary 2008. The amount of money is about $10k. So it's $2500 now and $7500 later.

However there is a fee associated with this, $50 to do this payment plan. This is a 1.3% APR to float $7500. I would prefer to do this because we are going to take out another $8500 subsidized Stafford loan. So we only have to pay $5850 for the semester instead of of $10k. And it will give the loan time to process.

Is it worth it? DH wants to completely drain our cash savings and pay for it. I don't think this a good idea. We have a lot of fluctuating income with the ESPP and stuff that I use to balance our budget. I also use the ESPP to pay for the tuition, and during the summer when we pay an extra $10k cash I find it's better to be saving all year.

DH hates the fact we have to pay $50. It drives him insane to pay "interest". It's so frustrating because I worry if we are cash poor and something happen we'll have to cash out investments and then be in dire straits.

I am not sure what we're doing but I think I'm going to win the argument. Because cash poor is never a good situation to be in.

Saturday, August 04, 2007

17th Child for duggars..

The Duggar family just had their 17th child. They are very well off and debt free. What? Let's tell you a couple of facts about ther family. They live in a 7000 sq ft home, which by any reasonable standards is large.

But how do they afford a huge home and no debt? Well the father Jim Bob Duggar was previously a US state congressman. So he was earning over $158k/year in say 2004, and they live in Arkansas. Which most can assume is a pretty reasonable cost of living. However he currently is self-employed insurance salesman, and one could logically conclude he did not leave for a lower paying job. Hence supporting a family approximate 4x the median salary seems more reasonable.

But also realize their oldest child is only 19 and they have not yet started to pay for college. This could be a deciding factor in whether or not they stay debt free and are able to retire. It was previously mentioned that they did not achieve debt free status until child #12. This is still an amazing feat.

Well I guess if you want a lot of kids, make sure you make a great income. And try to be debt free.

Friday, August 03, 2007

Restaurant Week!

Okay following on my foodie theme, I have a feeling that we'll be eating out a lot these next two week. It's restaurant week (or 2 weeks) in Boston. Yipee! That means these awesome restaurants are serving prix fixe menus for $20.07 for lunch or $33.07 for dinner. These prix fixe menus are 3 course meals with an appetizer, entree, and dessert!

We've gone to this a few times and each time the food has been delicious. These are upper class restaurants which we normally could not afford. We've eaten at the 2x Elephant Walk a cambodian/french fusion. Harvest, an organic style eatery.

This time I think I'd like to go back to Ruth's Chris, an american steak house, Lumiere, a french bistro, and McCormick's a seafood joint. I have no idea which places we'll eat but I'm sure the food will be great and I'll definitely enjoy the price.

One of the benefits of this restaurant week is many of the places participating donate money to charities from the event. They give a portion of each meal purchased to a charity. This is a cheap way to eat out at 5 star places, while eating a large selection of appetizer, entree, and dessert for a really great price.

Thursday, August 02, 2007 review

Okay after last night's dinner I decided that is definitely not worth it for us. We've used two certificates in NE, and a few places in SD. When we lived in SD it was definitely hit or miss and we only used the certificates on specific places we had tried before.

Out here, we decided to try a new places, and it turns out? It's soooo not worth it. What a huge waste of money. Last night we went to an italian place Ricardo's and had a $25 certificate. After tax and tip it still cost us $20. So the dinner out cost $23 with the $3 gift certificate we purchased from Which sounds like a fabulous deal in the city, but honestly, I wouldn't pay $20 to go the restuarant.

Our meals were $19 Calamari Linguini and $21 Gnocchi Spazza and it was overpriced. The food was not good, the bread was cheap, and the service average. I think it would have been better tasting food if we had gone to Olive Garden to be honest.

Our previous meal again cost about $23 after tip, tax, certificate and it was terrible. The service was the best part of the meal. We had gone to an Asian fusion restaurant and the fish dishes we ordered was overcooked. Hence we've decided to not use again.

Though we have one more certificate bought super cheap, I can guess the food will not be worth it. I think the problem with is that these are restaurants in good areas which are bad. Thus they need to drum up more business, so they participate in Thus I've decided it's not worth spending $20 on a meal you don't enjoy. Yuck.

Wednesday, August 01, 2007

July Net Worth

We increased our networth by 1.94%. Unfortunately our networth took quite a hit in the markets this week. So the big part of our networth increase was due to mortgage paydown.

Also we lost more money in our 401k than we put in for the month, so I guess that is a bad sign. Anyway we're still on track to max out all retirement for the year.