Tuesday, March 18, 2014


Yet another step in the Dave Ramsey process is looking at your current mortgage.  Fortunately, we are well within the 25% limit of what he recommends so we aren't even considering selling our home.  (Your house payment shouldn't be more than 25% of your monthly take home pay.) 

Currently, we are almost 7 years into our 30 year mortgage at a 6.125% interest rate.  That was a very good rate 7 years ago, but now is quite high.  We are refinancing at 3.75% and taking a 15 year fixed which will increase our payment by only about $40 a month.  It's amazing to think that we will shave 8 years off of our mortgage by just refinancing to a lower rate!

Refinancing is not for the faint of heart though!  It's been a long process and even though we're looking at closing in one week, there is still work to be done. 

Our house did not quite appraise for what we had hoped (it was about $10K lower) however, we were happy to find out that we're not "underwater" on it.  ("Underwater" meaning we owe more than it's worth.) 

It costs about $2,500 to close a new mortgage and we are trying to decide just how much of that we want to pay out-of-pocket so we're not borrowing as much over the 15 year period.  It's hard to decide whether to plop down cash or keep it to put toward the debt snowball.  I think the hardest thing is finding time where Aaron and I are available to have an indepth conversation about what we want to do!  It just seems that we are both working non-stop these days.  I guess that's the power of gazelle intensity.  :)

Saturday, March 8, 2014

It's Raining, It's Pouring, the Old Man is Snoring!

When Aaron and I began working on our budget back in November, my mom told me that once I had my emergency fund it place to get ready - it was going to rain.  I thought to myself, surely not...the baby emergency fund is supposed to be my murphy-proofing!  Boy oh boy was I wrong!  As always, my mom was right. :)

Since getting that fund together, we have had to tap into it three or four times.  The next time, I'm afraid, is going to be a DOOSEY!  Back in September we got a letter from our county saying that the ditch that runs across our side yard needed to be cleaned out.  We had sixty days to clean it. 

The kids and I worked tirelessly to get the ditch emptied out.  We raked out all of the leaves and picked up any trash we could find.  I called the man in charge and left a message telling him the work was done.  He in turn told me he'd be in my neighborhood soon and would let me know if we did enough.  I never heard from him.

Two days ago (on my anniversary, no less) we got a letter from the county attorney saying we did not complete the work and if it wasn't completed in twenty days, they would hire a contractor to do the work and slap a lien on our house.  I contacted the guy and he said he'd come out today to meet with me about it.

It turns out, we have about two dozen trees that we have to cut down along with a ton of smaller bushes and other vegetation.  The county engineer said it'll cost a couple thousand dollars to hire the work done.  Instant stress.  :(

I'm hoping Aaron will get on board and do the work before they hire a contractor.  I hate to bug him, but it's just work that I can't do. 

I tend to stress out about these kinds of things so I'm trying not to.  Wish me luck...  ;)

Update!  Update!  Update!
I realized I never finished and published this post, so I thought I'd go ahead, but I'm happy that I can give a positive update to it!

Aaron plugged in BIG TIME and cut all of the trees down in less than a week.  Our awesome friend from church, Teresa, helped us with the whole project.  We have a ton of firewood stacked up for the upcoming bonfire seasons....okay we probably have three or four year's worth....and a cleaned out ditch.

I handed the dealings over to Aaron and he has dealt with the county engineer since I met with him and was upset by what all we had to do.  Aaron has been awesome, not just with the work, but with following up with the man.

It turns out the house on the other side of the ditch is bank owned and the bank has completely ignored the county's request to clean the ditch out.  The engineer came and looked at our work and he told Aaron he was signing off on our part of the work!  This means that when the contractor comes out next week, the lien will be put on the other house, not ours.  Yay!!

"The quickest way to building wealth is having no payments." -Dave Ramsey

It's Saturday morning and Aaron is working all weekend so I stayed in bed a little longer listening to Dave Ramsey's podcast.  I especially liked this quote from the show:  "The quickest way to building wealth is having no payments."  This is ringing especially true for me lately as I've had a couple older people "poo poo" me for having consumer debt.  Of course, they think the mortgage is fine, but "they never use credit cards and if they did, they'd pay them off the very next month."  Yeah, yeah.  You're cooler than me. 

I've learned that the very next question to ask when someone talks down to me because I have credit card debt is to ask about their savings.  Guess what?  I've yet to find anyone with a "pile of money" as Dave likes to call it. 

I'm realizing that even though I thought this program was about getting out of debt, it's not.  That's just one step along the way.  You have to clean up your mess so the money you earn has your name on it, not Bank of America's, Chase, Discover, etc.  Once the debt is clear, all of that money you were paying to them, you can now pay to yourself.  (After giving, of course.) 

Right now, my minimum payments on my credit cards and cars is almost a thousand dollars a month.  $1,000!  If I didn't have those payment going out, I could invest that money, and within very little time, have a BIG pile of money.

To those who don't have credit card debt, car payments, and even student loans (fortunately I don't have this one, but a lot of folks do)....kudos to you!  I mean, really!  I'm impressed.  I wish I could say the same thing.  But I've learned that's not the whole battle...by ANY means.  The whole idea of paying off the debt is to get it out of the way so you can build wealth, live and give like no one else.

I'm no longer going to feel bad about my consumer debt.  And I'm not going to let people poo poo me.  When you know better, you do better.  Now I know better and we are doing better. 

I totalled up some nerdy figures and since November, we have paid off 5% of our TOTAL debt...mortgage included!  We've also paid off over 15% of our credit card debt!

Our target debt right now is Lowe's Consumer Credit Card and we used this card last fall to buy materials to build a barn for Aaron.  We started with a balance of $3,735.83 and we now owe a flat $2,300 - that's over 38% paid!  I was hoping to have it paid off by Aaron's birthday (April 15th) but we've had some emergencies we've had to cash flow, so I'm not sure we'll be able to.  I've been thinking of some things to sell to get the balance down quicker but the next round of cuts will hurt.  ;)