October 2017 Statement of Net Worth Update

Hello and Welcome to our October 2017 Statement of Net Worth Update! It’s been 1 year now since I started tracking our net worth. It’s amazing how time flies when you’re having fun. Our net worth has increased nearly $20,000 but our debt has stayed nearly the same (an increase of $80) in one year.

I feel like the next coming year is going to bring some drastic changes because 2016 going in to 2017 was spent cleaning up a lot of small messes like balance transfers and medical bills. As of October 2017 we have only 2 bills that cost us over 6% interest each month: CP Personal Loan and CP Visa, both of which are 9.5%. I’m choosing to concentrate on bills that are first of all a low balance so that they are within firing range, and I’m also keeping my eye on those with interest over 6% because paying these bills off give us more return than investing in the stock market (assuming the average rate of return of 8%).

We have many bills coming within firing range that will free up a good chunk of money which can then go toward the small balance bills or the high interest ones.

I’m getting ahead of myself. On to the breakdown!

October 2017 Corrected

Assets

It looks like our home is finally stopping its wild run to the top of the market this month. That was great! Let’s just hope that is doesn’t fall drastically like it did around this time last year.

Our Dart also fell a bit in value, but nothing too concerning.

Of course our decrease in savings is a reflection of the normal fluctuations seen after we pay bills and start building up funds for the next month.

The only unusual change this month is our Christmas Fund falling $50 instead of the regular increase of $25. I took money out of this account to pay for a birthday gift for my daughter. We were a little short on funds and I didn’t want to use the credit card so this was the solution, and I don’t regret a thing. I think it was a good choice!

Liabilities

All of our liabilities fell as usual in accordance to the regular monthly payments we send each month. We made more of a concentrated effort to give some love to the CP Visa since we have been abusing it as of late.

Navient of course continues to grow, but we have an exciting change coming up that I am going to talk more about in an upcoming post. Basically, my Income Based Repayment Plan was re-evaluated and my payment changed from $90.61 a month to $217.47, an increase of $126.86. Navient grows typically less than $125 a month so this increase will keep me about even with Navient instead of growing each month. I think in 2017 we are going to see these student loans start to be paid off one by one.

Debt Pay Off

After paying all our October bills we had $275 remaining. My husband and I discussed it and decided to put that extra money toward the CP Visa since it was nearly maxed out. We have been very good since then about not using the card at all.

We are also waiting on the 0% balance transfer offer from Capital One. Once we receive that we will move the CP Visa balance as well as the CP Personal Loan balance on to that to pay off in 18 months and save the 9.5% interest.

We also have canceled our trip to Puerto Rico due to the damaged caused by Hurricane Maria since I updated this spreadsheet so at the time of writing this post, we actually have a credit balance on Capital One which frees up money for the next 2 months.

At the end of October I think we should be very close to paying off the Equinox which will free up $475 every month and the Equinox doesn’t need to be turned in until 3/31/2018! We will have about 4 months of no car payment at all so lots of opportunity to work on more debt pay off.

Conclusion

It’s absolutely crazy how much change can happen in 2 short months. In September we made it in to the 50s, and this month we are well in the 40s for our net worth! We had an increase of $2,408 this month for a net worth of $(47,988).

I hope you continue to follow us on our journey to a positive net worth because I feel like we are going to move up in leaps and bounds this year. We are making smarter decisions, making more money, and just overall dong better. I’m excited to see where we go and I hope you’ll be a part of it.

XOXO,

 

Dolores

Small Scale Home Improvement Goals

 

I have mentioned previously how I am trying to increase not only the value of our home so that it can help our Statement of Net Worth but I am also trying to increase our intrinsic value of our home.

My goal here is to make the home as comfortable for us as possible so that we stay here as long as possible. We however are not going to go overboard with a $15,000 kitchen and bath renovation! I have listed a few small things that we can improve over time that will not break the budget but will make our home so much more enjoyable.

Dishwasher

The dishwasher has been broken for quite some time. It is old, clunky, and doesn’t wash dishes all that well. I have gone through different phases of rinsing the dishes really well before putting them in the dishwasher to washing the dishes and then putting them in the dishwasher to rinse and sanitize.

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One day, I went to throw a load of laundry in while the dishwasher was running, and realized it was raining in the basement!! The dishwasher was literally pouring water through the floor and through the ceiling of the basement!  And it was falling directly in to my laundry room sink so I had never noticed because I had never happened to go in to the basement while the dishwasher was running. What makes matters worse is that the water was raining right next to an electrical box. We were risking our home every time I ran the dishwasher and I even didn’t know it.

New dishwasher: About $500

Floor

I have tried to get the dishwasher replaced before with a tax return a few years ago but learned that the laminate flooring was actually built up around the dishwasher. We were told by the Sears installer that we would have to completely rip up the floor in order to put a new dishwasher in. Which I’m kind of okay with because look at this floor!

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It was like this when we moved in and it’s probably damaged due to the leaky dishwasher.

We have original hardwood throughout the house so you would wonder why they covered it up with a fake wood sticker, but my husband pointed out that it was probably so the transition to this added room would match.

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Ripping up a whole floor is way out of our budget, though. I was told by another handyman that we could actually lift up the counter top, swap out the dishwasher and then put the counter back down and re-caulk it. That will be the plan, and I would like to of course replace the flooring (cover it up) at some point with a realistic tile like this:

http://www.homedepot.com/p/Armstrong-CeraRoma-16-in-x-16-in-Cliffside-Beige-Groutable-Vinyl-Tile-24-89-sq-ft-case-A6207161/202709126

Approximate cost for flooring materials for approximately 124 SF: $300+

Garbage Disposal

I would really like a garbage disposal and I think it would make my life easier because my family is constantly throwing scraps in the sink with their dishes as if we have one!

http://www.homedepot.com/p/InSinkErator-Badger-5-1-2-HP-Continuous-Feed-Garbage-Disposal-BADGER-5/100091168

Garbage disposal: About $100

Speaking of the laundry room sink….

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This thing is dark and scary looking. Especially with our old washer that used a ton of water! Sometimes it would get clogged and I would have to reach down in to the murky depths to clear hair and lint out of the drain while imagining dead mice and other scary things that I might be touching that I couldn’t see!

When we bought the house, the hot water faucet was broken, and when we swapped out the old washer and dryer my husband had a hard time with the pipes because they are so old and corroded.

I’d love this one:

http://www.homedepot.com/p/BigTub-Utilatub-Combo-40-in-x-24-in-Polypropylene-Single-Floor-Mount-with-Pull-Out-Faucet-P-Trap-and-Supply-Lines-in-White-28CF/203155730

New laundry room sink and faucet: About $200

Interior Doors

We have old fashioned bedroom and bathroom doors with the old fashioned doorknobs, the kinds that screw on to a square pole. Our door handles are completely stripped out so they go flying off their poles and sometimes they go missing.

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My daughter is taking advantage of the situation by using it as a way to lock her door. This is a safety concern however; if there was a fire we would have to bust her door down!

Not to mention the bathroom door. Our husky, Aspen is a bit claustrophobic. We tried kenneling him and he would poop and pee in his kennel and pace and try to chew his way out, and actually broke a tooth! So we tried leaving him in the bathroom while we were gone to work and school for the day. He pooped and peed and paced in there, too and it would take forever to get the smell out of the house, and well, this happened:

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We have since discovered if we leave him loose in the house while we are gone and make sure that our house is completely dog proof all he does is take a nap on the sofa (where he’s not allowed) and looks out the window. I just have to sweep off the sofa every day, and I’m okay with that.

I found some really great door handles on Amazon for $12. Similar door handles with privacy locks run about $30 at Home Depot.

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We were advised by the handyman that we could fill the old door holes, sand them down and repaint them so they look nice, and drill a larger hole for the more modern door handles . This would be ideal since our house is very old, these doors all have very odd dimensions, however I’m not sure if that idea will work on our bedroom door. It has a weird block of wood that I’ve never really noticed before, and I’m not sure what that’s all about.

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Cost of modern-izing doors: Unknown! My handyman quoted me a price of $75 per door and then promptly stopped answering my calls. I also don’t know if I need new doors, or if the ones we have can be salvaged so I can’t even make a good estimation of what that would be.

One of my best friends advised me of an app called ThumbTack where you can list the work you need done along with pictures, and handymen will bid to do your work for you! I got some quotes for doing that work but then we had to go to the funeral in NYC so I haven’t followed up on them yet.

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And finally, the furnace and air conditioner. I have a HVAC company coming out today at 3pm to give a quote on a new system through Home Depot’s 24 month 0% interest financing. If the system costs $4,000 this will increase our monthly bills about $175 a month but I have faith that it will make our electric and gas bills so much more affordable. Also, it increases our value of the home because it will be more comfortable and the heat will reach to all the rooms in the house.

Our air conditioner is from the 1980s and our furnace is much older than that and they are both very inefficient!

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*UPDATE*

I originally wrote this post on March 11, 2017 and today is March 21, 2017. The HVAC Company did come out and quoted us $7,100 for both the furnace and the air conditioner. This would have increased our bills $300 a month for 24 months which I was sure we could afford, but my husband talked some sense in to me.

He said that right now everything is perfect, but we should figure our bills on what we could afford if one of us lost our income. That’s a huge factor because with Home Depot 0% financing, the fine print is that if you are ever late on your payment, or if you take longer than the 24 months to pay off your purchase, then you agree to pay your regular interest rate amount retroactively, back to the date of the original purchase! I already knew this of course, but I hadn’t thought so far as to think “What if something happens?”

So long story short, we decided to just go with the furnace for now. The cost of the furnace alone is $3,852 and will get us the Wi-Fi thermostat installed which will also help with the cost of cooling in the summer because we can change the heat and AC from our phones, and also set up schedules with the app.

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Shannon over at financially-blonde.com often asks what our “sacred cow” is. You can only have one, and I think mine is home improvements and/or 0% financing. I know that this will decrease my net worth quite a bit, but having a comfortable sanctuary to come home to is more important to me. And, as long as we always keep that buffer I think the risk we assume when taking on a new loan is minimal.

Finally, here is a repair that we have finally accomplished! Meet our old bathroom sink, Mr. Sink Face.

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Oh, how I hated Mr. Sink Face. I hated it because there was no cabinet space, it was bolted to the wall and sloped downward so everything slid off of it (phones, toothbrushes, soap dispensers). My son, who has Spina Bifida couldn’t lean on the sink to support himself while brushing his teeth and washing his face. It was hugely inconvenient.

When we got our income tax refund my husband and I split it in half to use on each of our “sacred cows”. His is travel, mine is home improvements. We each had $340 that we put in a cash envelope.  I posted the job for the interior doors on Thumb Tack, but we know that didn’t work out. In the meantime, I saw someone on one of those Facebook For Sale groups selling a vanity with attached sink for $75! I quickly jumped on that, talked her down to $70, got my husband and his friend to install everything, and now we have this:

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I am in love.

Do you have a sacred cow? Tell me what yours is in the comment section!

As always, thank you so much for reading!

XOXO,

Dolores

February 2017 Net Worth Update

Welcome to our February 2017 Net Worth Update! We are getting closer and closer to having 100% of the bills paid on the last pay day of the month.

statement-of-net-worth-february

As promised, we are seeing an increase in net worth this month! We had some surprise medical bills come up. A LOT of medical bills, so I’ll be making a post about how we plan to deal with that in the next few days. I suppose at that time I’ll have to add those bills to the Statement of Net Worth if we decide to make a payment arrangement on them. If not, we may do a combination of our Tax CD and Emergency Fund to pay them off. But, I digress! On to the breakdown.

Assets

The house, man! I have been entering numbers in Excel since I started paying February’s bills on January 27th. The house has been steadily decreasing in value since then. It started off with $500 decrease and now we are at $984! Darn it!! There really isn’t much I can do about it.

At the time of writing this blog, I’m waiting for our handyman to arrive and take measurements of our doors and give us a verdict on whether he thinks they need to be filled and sanded with a new door hole installed, or completely swapped out. I have $350 cash to pay him for the job and I think it’s going to cost about $250 plus the cost of one new door. I think the bathroom door is beyond repair. Note to Self: Claustrophobic dogs are no less claustrophobic when enclosed in a bathroom rather than a kennel. Since we will have about $100 left in the Handyman Labor budget, I think I’m going to ask him to install a new dishwasher because ours has been broken a long time, and it would just make my life so much easier! Some other things I considered asking for repair with this $100:

  • Bathroom vanity and faucet – you guys know how much I hate my bathroom sink. Oh you don’t? Perhaps I should show you sometime. That would be a fun blog post. Small Scale Renovation Goals!
  • New kitchen sink with garbage disposal – Oooh how I long for a garbage disposal. Plus my drains in the kitchen sink are shot. One side of the sink is not functional at all, and the other side ate the drain guard thingy. It’s stuck in there now and broken. #oldhouseproblems My ideal sink would be a 60/40 double sink or maybe even 70/30 if those exist.

Moving on…

The Dodge Dart also went down quite a bit. I’m trying to keep track of what I’m entering in to Kelly Blue Book so I can be sure to get an accurate depreciation each time so I can be sure these fluctuations are actual increases and decreases in value and not just me mistakenly entering in the wrong model and wrong mileage.

Savings is a little higher in recent months than it typically would be when I show our Statement of Net Worth because I have been needing to wait later in the month to make our credit card payment, so you’re seeing the savings we are building up for the next month’s bills.

Our Emergency Fund and our Savings – Tax CD might be leaving soon due to the medical bills I discussed earlier. I have a plan of attack for those, though. Will write more about that in a later blog.

Due to the decrease in our home’s value and the Dodge Dart, our assets decreased in value this month $654. Darn. It. All. But on the good side, other increases in assets offset the loss so that’s a bonus.

Liabilities

This month, only one account went up in value and that’s the Navient account which is to be expected. I know I mentioned that I would start sending extra to this account soon, but until I know 100% what’s going on with the medical bills I’m just not sure what I can do with this.

All in all I think our medical bills before fighting and negotiating are going to be more than $2,500. Scary stuff!! But the love of my life is healthy and that’s what matters most.

So all in all we have an INCREASE in Net Worth (just like I promised) of $1,167!! This is by far the largest increase we have seen in our journey and is much more typical of what we can do every month when we aren’t buying new cars and giving vehicles to our children 🙂

Thank you guys so much for reading and keeping me accountable!

Coming up in March 2017:

  • Stupid, stupid medical bill post. Booo….
  • An Increase in the Liability Account – Home Depot for the purchase of a new interior door and dishwasher on special 0% interest financing

2017 Goals

It took me a little while to come up with some goals after I realized how far behind we were due to the major changes we had with our car insurance this month which I will cover more on the January Statement of Net Worth post. I was left feeling defeated and depressed.

be·hind
bəˈhīnd

1. The inability to cover all of the next month’s payments on the last payday of the current month

According to my calculations we should be caught up at the end of March. Once we are caught up it should be smooth sailing from there on out and I thought I would share some of my financial goals of 2017.

Financial

  • Bills caught up (approximately 4/2017)
    • Send extra payment of $175 to Navient
      • Focus on smallest student loans first
    • Increase automatic deposits in to Christmas Club and Vacation Club accounts from $5/week to $20/week
  • Personal Loan sent to 0% for 18 months balance transfer 4/1/2017
    • This will increase our monthly bills $50 for the next 17 months
    • Will cost approximately $101 (3% balance transfer fee)
    • Saves $336.60 in interest
    • Cuts loan maturation date from approximately 8/2019 to 9/2018
  • CP Credit Card paid in full 8/2017
    • Currently send $100/week
    • After paid off, will set up automatic transfer of $100/week in to savings for down payment on a new home
  • HHR 0% balance transfer paid in full 10/2017
    • Currently send $275/mo.
    • After paid off, will set up automatic transfer of $250/month in to savings for future car purchase (projected 3/2018 when Equinox lease is up)

After 8/2017 we will have extra money to send to bills or to send to a retirement account. I’m really unsure what to do at that point. I think I should get in touch with a financial planner to ask which I should focus on. After 8/2017 I could:

  • Send extra money to the home to bring balance down to $56,160 and get rid of PMI payment of $54.54/mo.
  • Send extra money to Navient which has interest rates up to 6.55%
  • Send extra money to retirement account which would earn 8-10% interest over the next 29+ years
  • Could work on complete debt freedom

Perhaps I should add seeing a financial planner as a goal in 2017? What do you guys think?

Home Goals

  • Install new interior doors upstairs 4/2017
    • Safety issue as well as an increase in the financial value (eventually, if we were to get it appraised) and our intrinsic value of our home

 

  • Purchase a High efficiency furnace and central AC 6/2017 with Home Depot special 0% 24 month financing option.
    • Our central AC was installed in 1988, and our furnace is probably older than that. This will not only increase the value of the home, and our intrinsic value of our home but it should also drastically reduce our gas and electric bill which is currently $187/mo.
    • Will increase monthly bills about $150/month for the next 24 months assuming a price of $4,000 for the pair.

 

What are your goals for 2017? Feel free to link me to your blog I love reading and commenting on your ideas.

 

Talk again once the net worth update is ready.

 

XOXO

Dolores

A Very Merry Weekly Recap

Just in time for the New Year I have decided to take a new direction with my blog, which is more of the direction I had originally planned in my first blog post.

I recently heard an interview in which Andrew at familymoneyplan.com stated that he didn’t try to blog about how to get out of debt, but how HE got out of debt. That really hit home for me. I have been slow at posting lately because I struggled to come up with detailed, well thought out, informative posts for my readers when my mission was to document THIS family’s journey to have a positive net worth.

So, going forward I will document our wins and losses as I always planned to do.  Let’s start now.

12/21/2016

Today I was in touch with our credit union to request the interest rate reduction on our personal loan, and was advised that we could transfer our loan for our Dodge Dart from Huntington at a 4.49% interest rate to the credit union at a 3.99% interest rate.

Christmas has us just a little “short” on bills. I say this even though we never pay our bills late. My strategy as the family accountant is to save our paychecks all month long, and on the last pay-day of the month we pay all the bills that are due the following month regardless of their due date. So at the end of December, we would have been $650 short on paying 100% of all the January bills, so I would have to pay 2 of the January bills on 1/8, and those 2 were due 1/10 and 1/11. No big deal, but I don’t like when this happens! It’s a signal to me that we have mismanaged our money this month.

When our credit union told me the terms of the new loan agreement, the payment amount dropped about $40 a month but mostly because the term is now 60 months. On the old loan our terms were 54 months. Also, our first payment will not be due until 2/4, so we are skipping the January payment. The financial side of me knows that it’s a bad idea to skip a payment and to extend the loan, but in the short-term it really helps! I figure once I catch up and pay off things that are costing us more money in interest I can work this down quickly.

We also added GAP insurance for $399 since we owe more on the Dart than it is worth, so we will see the balance owed on the car go up again this month.

I have also created a list of all the loans we have currently that cost us interest.  I have a plan of attack which basically amounts to the debt avalanche method (paying off highest interest first). Whenever I start thinking about these plans I get excited and carried away and start planning the next debt, and the next debt until I find myself planning budgets for 3 years in the future! I’m not joking!

There is some marital discord because my husband wants to buy a new home because the one we are living in now is really a starter home. I would like to stay modest in the home that we have and spruce it up to our standards. I also want to buy rental properties, but my husband wants us to be in a better home first. I can’t plan too far in to the future (ie: past 10/2017) because at that point I would really like to be throwing all I can at my student loans, and my husband would like to pile up money for a down payment on another home. I usually do go with what my husband wants first, because as long as he’s happy then I can go about doing what I want! What do you think the best course of action would be? The more I have been thinking about it, I start to think that maybe we can halve our savings between a down payment on a new hone, and paying off student loans. But I have also heard a saying, “If you aim at many targets you’ll miss them all’, which basically means to focus on one thing at a time.

It’s killing me not to be able to look ahead. I guess all we can do is take it one day at a time…And I’ll continue with the small home improvements here and there to make our humble abode ever so slightly less cumbersome.

12/22/2016

Today was No Spend Thursday and I started the day off by buying a $2.12 Extra Large coffee from Tim Horton’s because I knew I had a big shipping project to work on at my first job. Then, I went to my second job at the dance studio and bought crackers and a soda for $1.50 with $2 I found in my husband’s pocket while I was sorting laundry 😉 So we had a tiny bit of a fail for No Spend Thursday and it was all on me!

12/23/2016

I’m writing this just before noon in my PJs sipping on a coffee from a Santa mug. I’m going to have a busy day today. We need to:

  1. Grocery shop for Christmas Eve dinner
  2. Put up the Christmas tree
  3. Finish wrapping the Christmas presents
  4. Clean house

Luckily only one of these costs money! Christmas Eve dinner shouldn’t be too bad since I coupon a lot, I have a lot of the stuff I need stockpiled, and some stuff left over from Thanksgiving. Here’s what’s on the menu:

  1. Small Turkey Breast
  2. Ham with Pineapple
  3. Stuffing
  4. Mashed Potatoes
  5. Macaroni and Cheese
  6. Green Bean Casserole
  7. Hawaiian Rolls
  8. Apple Pie & Chocolate Pudding Pie
  9. Watergate Salad (made by my mom!)

An update from Future Dolores: Christmas Eve dinner cost about $50, and we got all our goals accomplished this day. Win!

12/24

One of our big splurge events happens on Black Friday. This is when we give ourselves the green light to go ahead and buy things that we really want if they are on sale. Some of the things we bought this Black Friday were:

  1. An electric fireplace for my daughter – $38 marked down from $70 (the heat doesn’t quite reach up to her room in our old drafty home)
  2. A pair of boots for myself and my daughter – $20 each, marked down from $80 each
  3. 4 pairs of leggings for my daughter – $5 each marked down from $20 each
  4. 2 boxes of Tupperware – $10 each
  5. Decorative baskets – $10 (I have a thing for baskets and boxes)
  6. 2 double slow cookers – $20 each

I can’t remember what my husband and son got!  Anyway, last night we had our traditional Christmas Eve dinner and I was finally able to use those double crock pots for the first time. All other Thanksgivings and Christmas Eves in this home we have had disposable tin foil pans laid out along the table and I would be stressed out trying to time everything so it got done at the same time. This year I was able to cook the stuffing and green bean casserole early and just throw them in the crockpots on warm. In the other crock pots I put the mashed potatoes and macaroni and cheese. I wasn’t too worried about the turkey and ham, but then my mom came over with her Christmas gifts, and what did she give me? A 3 pan warmer! I was a little disappointed at first because I really liked my slow cooker set up better, and my mom comes to all the holiday dinners so there’s no way I could get out of using it without hurting her feelings – but then I discovered that it perfectly fit our turkey breast, ham, and dinner rolls!

christmas-eve-dinner

The picture doesn’t do it justice; I snapped the picture quickly before my phone died, but Christmas Eve dinner looked so beautiful and stayed warm for everyone to get seconds and thirds, including my nephew who couldn’t make it until 8pm due to work. Truly a wonderful Christmas Eve.

I hope your holidays were just as great!

XOXO,

Dolores

December 2016 Net Worth Update

Hello, World and welcome to our December 2016 Statement of Net Worth!

statement-of-net-worth-december

This month we see a decrease (egad!) in our Net Worth because we bought a 2013 Dodge Dart. Buying cars is definitely a learning process for us and I expect we will get better as time goes on. This was an expense that we expected and did plan for. The car was for sale for $10,000 and we negotiated with the dealership to get the price down to $9,400 which I thought was awesome. We were aiming for $9,000 but there was really nothing wrong with the car so we went ahead and paid that. BUT my husband really wanted a warranty added on to the car. We disagreed about this so we came to the conclusion that we will go ahead and get the warranty because he really wanted it, and I would feel terrible if something happened to the car where we needed the warranty! It cost $2,495 and was added on to the loan, which automatically makes it cost more. I really wasn’t happy about this! But we went ahead and added it to the loan and we are using it as a learning experience. I have an ongoing note of the repairs that we get under this 3 year/36,000 mile warranty. If the costs don’t exceed $2,495, going forward we will know to opt out of the warranty for future car purchases and just hold that money aside in an Emergency Fund especially for car repairs.

I looked up the car value using Kelly Blue Book and I believe I selected excellent condition, and sell to a private party. Dealerships are always more expensive but we aren’t to the point yet that we are ready to risk going to a private seller. I might attempt it when I buy my daughter’s VW Beetle in 2018. Scott Alan Turner had some good ideas on how to achieve this: Look up the cars you want on your preferred search tool, and then arrange for the seller to take the car to the dealership for an inspection. If everything is up to par then you go ahead and buy the car. If everything is not up to par, you and the seller both know what cards are on the table and you can perhaps negotiate the price even lower if you are still interested in buying the car. If not, you’re out the cost of the inspection but that’s a small price to pay because you avoided buying a lemon. Plus, you could save thousands by going to a private seller. Just look at our deficit for the Dodge Dart: It is worth $7,524 had we purchased it from a private party and we owe $12,526… Stupid warranty. Grr.

On to our regularly scheduled breakdown:

Assets

­The value of our home went up $477! Great news, but nothing under our control, just the fluctuations of the housing market.

The HHR went down in value $46 which isn’t a big deal, but what will be a big deal is when I sign this car over to my son it will be coming off our Assets resulting in another $2,000 decrease in net worth! I really don’t want to hit $(70,000)!

In regards to the Christmas Club and Vacation Club accounts, my husband and I have agreed to make a New Year’s Resolution to increase the automatic transfers in to these accounts from $5/week to $20/week! That will be super helpful come Christmastime next year, and should allow for something of a vacation eventually.

On to the ugly…

Liabilities

This was the first month of our increased principal payment due to the regular monthly payment amount due dropping from the escrow adjustment last month. So our mortgage decreased $124 instead of only $95 in November.

We will be scoring a 5.5% interest rate reduction on our personal loan later this month due to our credit scores increasing 2 letter grades in 1 year, so that will help take more off the principal until I add this to my Capital One 0% balance transfer I have planned for April.

Some awesome news is that we paid off my 401(k) loan last month! I left it on the spreadsheet to reflect the 0 balance, but I’ll be taking if off next month. I can’t wait for the day when we have more asset accounts than liability accounts. Maybe in April when I  transfer the personal loan to Capital One.

I made my first Income Based Repayment Plan payment to Navient this month, and my balance actually went UP $161! How heartbreaking, right? There were some hiccups with autopay which was supposed to start 11/3 and then again 12/3 but they never drafted, so I had to call and make the payment myself. I’m going to watch next month and see what the balance increases to and then increase my payment that much. It stinks I’ll have to pay that much extra just to keep from falling deeper in to debt, but if I had done it years ago I wouldn’t be paying compounding interest on the balance now. I have to draw the line somewhere! I can’t choose to wait for the 25 year forgiveness to save me because my balance will have grown to $81,000 by then and all of that will be counted as income on that tax year. Plus, I just want it gone. I really want to pay this off.

Home Depot went up a little bit because we purchased a leaf blower, the expense of which was offset by my payment. This will actually be going up quite a bit more in the next month or 2 because I’m planning on updating the bedroom and bathroom doors in our home. I’m doing a bit here and there to try to not only increase the value of our home but increase OUR value of the home. I am trying to make it as comfortable and accommodating as possible so we are happy in it as long as possible.

Our Capital One account balance has decreased $351 thanks to $275 coming of for the 0% HHR payment, and other miscellaneous balance changes that happen month to month since we have many of our bills on autopay and pay it in full each month.

And here we have our December 2016 Net Worth amount of: $(69,580)! A decrease of $2,611 from November. Whomp Whomp.

Fun Facts:

This month we have started a New Month Resolution called No Spend Thursdays! I have been inspired by Youtubers who engage in No Spend Months but I really can’t imagine going that long without spending! Another Youtuber suggested to start out small by having a certain day of the week where you don’t spend anything. That’s Thursday for this Family!

Exciting Changes Coming Up in January:

  • Increased principal payment to personal loan due to interest rate reduction
  • Increased auto transfer of $20 to Christmas and Vacation Clubs

I really wish this month had more success to share. I love that this blog and the monthly updates keep me accountable.

Talk again soon!

XOXO,

Dolores

My Path to Home Ownership: Land Contracts

My first big step forward was when I moved from NYC back home to Michigan after the death of my father in 2011. My then fiancé (now husband) and I purchased a home on Land Contract. A Land Contract is when a seller is willing to finance you in purchasing their home if you have a good sized down payment.  There is usually a “balloon payment” at the end of the contract, the amount of which could vary from contract to contract.  The terms of the sale: down payment, interest rate, and balloon, payment at the end are up to each individual contract. The original terms of the Land Contract on our home was $74,900 with $10,000 down and a 30 year mortgage payment of the balance at 7% interest for 3 years, and then the balloon payment which was equal to the balance owed less all payments toward principal that had been made during the 3 years.

We knew that our credit needed help. I think our credit scores were in the low 600s and I had a vehicle repossession that would come off my credit report a little more than 3 years away from the purchase price, so we negotiated and got the land contract to $73,500, and offered 8% interest if they would allow us 4 years. They agreed and we put down $10,000 and had payments of $458.91 for 4 years. We were of course responsible for all insurances and taxes during these 4 years. Now that I know more about interest, offering a whole percent point more for an additional year probably wasn’t the smartest idea, but I wanted to be 100% sure that we would be able to keep our home. In 2015 we were able to obtain a traditional mortgage through a lender by the grace of God! I cannot tell you how many nights I worried about not being able to secure financing at the end of the contract.

land-contracts

Land contracts really are a gamble for both parties. For us, if we were not able to come up with the balloon payment, we lost the $10,000 down payment we had put on the house, any investments we put in to it, and all of the payments we made along the way.

Sellers are also at risk because the buyers could completely wreck the house and then disappear leaving them with the mortgage if they still have one, repairs to be made, and no tenant!

A land contract can be an absolute blessing for the right people with the right mind set, working to improve their credit and obtain the American Dream. I would warn to be aware of predatory lending when it comes to Land Contracts. I haven’t seen it myself, but I am sure that there are some people out there that would jump at the opportunity to boot you out for breach of contract if you slipped past the due date on your monthly payments, or your financing took longer than expected and you go past the end of the contract date. It really can be a leap of faith!

If you are thinking about obtaining a land contract in your pursuit of home ownership, be aware of the risks and set yourself up for success by knowing the payment is one that you can truly afford – don’t take on more home than you can pay on a worst case scenario basis. Have fun, good luck, and happy house hunting!