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Archive for March, 2015

Tidbits and not much else

March 31st, 2015 at 02:45 pm

Last night I went to my friend's place to help her with her finances. It was interesting and fun, and she provided wine and takeout Chinese (plus gave me the leftovers!). So it felt like quite the treat.

Luckily she's in a pretty good spot; she'd been afraid to really examine her finances for fear that she was way out of balance. But not really. We sketched out some goals: to stick to a budget using the Mint app, to try and get her student loan payments reduced since she's now getting divorced, and to set aside some money to save up for a future trip and for eventually replacing her car. Then we put a follow-up meeting on our calendars to check on her progress in a month.

Today we signed the amendment to the condo purchase agreement and sent it back to our agent. I emailed the broker about the duplex refi and he said he'd look into whether it was a possibility now. I'll email him every morning until he gets back to me.

AS got $400 of freelance money in the mail. We're at the point where I haven't figured her money into the budget, so when it comes in, it's actually exciting even though I know to expect it. That gets us a bit closer to being able to pay off our duplex seller without borrowing from the LOC with the high interest rate. We need about $2500 more to be able to do that.

After that I'm going to designate some funds to spruce up our outdoor spaces. We've got three balconies and a bricked yard space, and we'd like to get some furniture and gardening supplies. (Cheap, like on Craigslist and such.) Just enough to make the spaces comfy places to hang out.

AS got some work at my job today, and while she was here she went to introduce herself to a co-worker who'd told me he liked her writing and would like to use her for some of his projects. Now that she's gotten in front of him, I bet he'll actually get around to giving her some assignments! And apparently his projects pay pretty well too. Smile

Weekend doings plus a bit of condo news

March 30th, 2015 at 10:59 am

SL's birthday party went really well Sunday. Birthday month is over, thank goodness!

I tried out a very structured party with activities and food being brought out at a certain time, and it kept the noise and chaos levels very much under control. Far less cleaning up afterward than when we let kids and adults have the run of our house including the kids' bedrooms!

It was a clown-themed party, so I dressed up in goofy clothes and pigtails and led the activities. We did:
- Tracing kids' body outlines on a big roll of paper.
- Balloon animals (I learned 4 basic ones and custom-made them for kids)
- Clown hunt (I printed little pics of clowns from online and hid them around the house)
- Pin the tail on the donkey (again, I printed out the stuff I needed from the internet)
- Cake walk (or in this case sticker walk, since the prizes were sheets of stickers)
- Musical pillows (instead of musical chairs)
- Ball toss (or rather, stuffed animal toss, into a plastic container)

I didn't spend nothing, but it wasn't too bad. About $5 on balloon animal supplies, $12 on stickers for prizes, and $100 for 5 pizzas and a large salad from our favorite gourmet pizza place. (We were expecting about twice as many people, so we had lots of leftovers, which will do for several days of lunches.)

I'm not a terribly outgoing or high-energy person and I don't like public speaking, so it was a bit of a stretch to be really upbeat and loud. But it worked to keep the kids in line and, at the end of the party, I felt much less exhausted than when we'd just let the kids run all over the place.

Another great enhancement to my party technique: At the appointed time I said the party would end, I started asking people if I could help them get coats, and talking loudly about my kids needing a nap. Got everyone out 5 minutes after the end time. At AA's party, a few people stayed an hour and a half longer than the invite said!

Our 5-year-old REALLY struggled that day, both with the games (she had some bad luck and didn't really win many of them) and with being jealous of SL's presents. Lots of crying meltdowns. But, I was really proud of how hard she tried to curb her poor loser-ness and her envy. I was a very petty kid so I know it's just in her genes. I talked her through it and she was able to calm down periodically, enough to rationally discuss it and even voluntarily apologize to SL for how she was acting. She really is a sweet kid and so smart, but just, you know, wishes she got her way all the time. Smile

Condo news: The electrician took another look at the fixes needed. The quick fix he did, but the other one he said would require knocking into the wall, possibly the ceiling. Luckily, we'd heard from our realtor that the buyer was willing to waive that repair requirement in exchange for us paying $200 more of their closing costs. That sounded like the much better deal, so she's working on an amendment to the purchase agreement now.

Still waiting on:
- The exact amount we need to bring to closing on the condo (will hear before April 9)
- News on whether the refi option is available for our duplex yet (emailed broker this morning but haven't heard back)
- News on the WV deal (will know by April 12)
- An update on how the renovation of the UK flat is going (may not hear anything until May, but I hope we get incremental updates!)

Setting April debt goal

March 30th, 2015 at 04:36 am

I decided to make the April goal to just pay the minimum on debt, which I believe now that the condo mortgage will be gone will be about $1100.

I do want to start paying extra to debt soon, but since there are a few more things that need clearing up in April, I'm not sure if it will be this month. Definitely by May I want to be paying more than the minimum.

Even if we got the WV money by mid-April, which is seeming less and less likely, we might not pay any extra on debt this month. I'd want to talk to my tax guy and the mortgage broker before I did anything.

I had insomnia last night through this morning, which is why I'm blogging at 6:30 am. Not usually up at this hour! I wasn't worrying about anything in particular, but since I was clearly not going to get back to sleep, I started thinking about how I want my life to change once all this financial stuff is settled.

I've been really really preoccupied with it all, to the point where it's been difficult to turn my mind to other matters. I still do hang out with people, do things with my partners and kids, get stuff done at work, etc., but none of those things have been getting my full attention. Every time I have down time I'm in my head, wondering about various uncertainties and running scenarios. I'm on the computer every chance I get, even if I don't have any new information to add to my spreadsheets, just looking them over and thinking about various items coming in and out, calculating when we might be able to loosen up our uber-tight budget, etc.

I've gotten so used to being in this state that I feel like I need to "consciously uncouple" from it (to steal a nauseating term from pop culture). I used some of my insomnia time to plan how to do that.

One thing is going to be less time on the computer, for sure. So one thing I did today in preparation was pare down my Facebook feed. I love seeing what everyone is up to but it's too time-consuming. So I pretty much hid everything except some news and politics sites and my close friends. (And I only kept the ones that don't post too much boring stuff.) This way I can use Facebook to keep up on news and the people I hang out with regularly. Less close friends will still be able to reach me via Facebook; I just won't know what they post there.

Reached March debt goal, and other bits of news

March 26th, 2015 at 04:55 pm

AS's student loan hit. $141 went to principal, taking us to $1629 of debt paid in March. That exceeds the $1550 goal.

Although we'll be eliminating a lot of debt in April due to getting rid of the condo, but I don't think that counts as paying off debt, so I'm not sure what my goal will be. Maybe $1100, since we won't be making mortgage payments anymore. Still have to think about that one.

Our electrician reckons one of the condo repairs will involve going into the wall, which will mean patching it up and repainting. But he thinks it'll only be a couple hundred bucks and not very time-consuming, so that's good. He's going to consult with a more experienced electrician to see if there's another way he's not thinking of.

Monday I'm helping a recently divorced friend figure out a budget. I'm excited to have a second "client"! Smile

So, time check on the other parts of this month:
- I'll contact my broker tomorrow to see if the streamline refi is open yet.
- 2 weeks until closing on the condo.
- 2 weeks and 3 days until the WV option expires.

I guess that's it for now!

A couple more pieces fall into place

March 24th, 2015 at 11:00 am

NT's mom loaned us the full amount we needed to complete the UK renovation, so we wired that over to the management company. Now we don't have anything to do on that end except wait for updates from them.

NT scheduled an appointment for Thursday for an electrician to come check out the condo and give us a quote on the work that needs to be done per the purchase agreement. So we should know about that, one of the last uncertainties in terms of expense.

That's it for now! So we still need to:
- Hear about how much we need to bring to closing, and get a cashier's check
- Accept the quote and schedule the electrical work on the condo
- Check in with the broker (this Fri.) to see if the streamline refi is an option yet
- Close April 9
- Hear about WV option one way or the other by April 12

Good times keep coming

March 21st, 2015 at 11:24 am

Today was a good mail day! NT got a bday check from my parents, AS got another freelance check, and I got a semi-surprise check for $2000 from my parents.

My dad explained in a letter that this was the one where they were expecting $4000 for each of his kids, but it ended up being less. I'm not complaining! This is to drill a well on the property. I can't believe it's so much less to drill a well vs. build a pipeline through. If I got $2500 on this deal that means it's $10K total. The pipeline, if it goes through, will pay us each $80K or $320K total. Dad mentioned this smaller deal may yield more money if they start producing from the well, so maybe that's why.

Confusing, but I can definitely use the $2K! As long as the repairs we need to do on the condo don't cost much, we're only $2800 away from being able to pay off the duplex seller without taking out the higher-interest reserve line loan, just the LOC loan which has a lower interest rate.

Of course, we're only 3 weeks away from the big WV deal option expiring, so might as well wait to see how that shakes out before paying off the seller promissory note. If I can restrain myself!

Nice surprises, question for tax experts

March 20th, 2015 at 07:40 pm

Got our tax packet back today, and there was a nice surprise the guy didn't mention in his email: AS is getting a $646 property tax return!

Also, NT got notice from one of his student loans that they're giving him a 1% reduction in his balance for good grades. Only $45, but we'll take it!

I got a callout in the daily work schedule email that it was my nine-year anniversary at work! Seems like a lot, but when I think about how much has changed (and how much I'VE grown and changed) since I started there, it makes sense. I should get a $25 gift card at the next staff meeting.

Annual performance reviews are coming up for everyone at work. My boss stopped by to let me know that I wouldn't be eligible for a raise since I've gotten one so recently, but that he thought I was doing really well and he could see another promotion in my future, maybe next year. Smile

So on to my question: Tax guy said he'd provide a recommendation of how much AS should send in for taxes based on last year. I told him that AS is likely to make a lot more this year and asked if there were a certain percentage or other formula I should use to figure out how much to send in.

His answer: "I would say for AS it's best to pay the Estimates I prepare (as a minimum), unless she wants to increase them. If she keeps making money then start bumping up June 15 estimate etc."

So today, I got his estimated quarterly amounts: $1030 for federal and $240 for state.

I've been setting aside 14% for federal and 6% of state from every check she receives, and so far for Jan-March I have $2,594.86 for federal and $1,112.08 for state. I know I'll have more before March is over.

So my question to you: Is there any reason to pay in the smaller amounts the tax guy suggested, or should I just pay in what I've saved up? I feel like she's going to owe even more than I've saved, so I don't see why I should send less. But maybe I'm missing something.

Some more bits of clarity and progress

March 19th, 2015 at 01:43 pm

I heard back from the tax guy that our taxes are done. He's charging us $700 for both sets. Considering the amount of complexity, that seems like a fair amount! The only open-ended thing left there is waiting to see his recommendation for how much AS should be sending in her quarterly payments.

I cleared up a few more things about closing, including how association dues are going to be handled. (I'll pay April, a bit early so the title company can get a final record, and I'll be reimbursed for part of the month at closing.)

So what else is left?
- Finding out the exact amount we need to bring to closing (in the next week or two).
- Finding out about the streamline refi option for the duplex (in the next week or two).
- Getting the loan from NT's mum and sending that to the UK rental management co. so they can complete the renovation (in the next week or two).
- Finding out about the WV land deal (in three and a half weeks at the latest).

After that I can really start to make some projections and goals regarding the bigger picture of our financial situation and future.

Soon soon soon!

It's starting to feel real!

March 18th, 2015 at 03:11 pm

The appraisal was scheduled for today. Not worried, but fingers crossed anyway!

We've gotten in touch with our contractor we liked so much during the condo renovation, and he says his electrician will be able to get into our place probably by next week, definitely before the end of the month, to make the two repairs that were part of the purchase agreement.

Our closing is officially set for the morning of April 9! On the advice of the title company, I've canceled autopay and will settle the final (April) payment along with everything else, at closing. I emailed my condo association to see how they'll handle the April dues. I've budgeted to pay the whole amount but I'm really expecting that I'll just have to pay a prorated portion. Who knows, maybe that gets handled at closing too.

We'll probably be frugal on transportation and take a bus to and from vs. a carshare, but I may splurge on some sparkling wine (and sparkling cider for the kids and teetotaller neighbor) so the whole house can celebrate! There are many shared-space (including outdoor) projects that we can now start to discuss with our tenants.

On another bright note, AS keeps hauling in work without even really trying to market herself. And she just invoiced for one $2K job that she worked less than 10 hours on! That's not the norm for her work, but she does have a couple more of those projects possibly going through in the next month or two.

Less than 4 weeks until the WV land deal option expires. Now that I know taxes will be handled before April 15, April 12 is our new "end of all uncertainty" date. Whee!

Heard from the tax guy

March 17th, 2015 at 12:49 pm

He got back to me with what we'll owe/get back. It was a year of crazy fluctuations with job changes, raises, home buying and new rental income, and he also decided it would be better for me and NT to claim SL instead of AS doing it.

Amazingly, with all that craziness, it balanced out to where we'll owe in a net of just $197! But the actual numbers are all over the map:
CJ/NT federal refund $3,577.00
CJ/NT owe state taxes (240.00)
AS owe federal taxes (3,099.00)
AS owe state taxes (435.00)

I'm glad the net effect of that is so minimal! I asked the tax guy if NT and I should adjust withholding, but he said most of this was from claiming part of the house stuff (points etc.) as losses to our rental income.

I still don't know how much he's going to charge. I had $800 set aside, and $197 is going to pay what we owe. Fingers crossed it's $600 or less!

I also don't know what he's going to recommend AS send in for her estimated quarterly payments. He said he'd work that up and send along with everything else.

Still, it's nice to have some clarity. I was mentally bracing myself to owe a TON this year, so I'm happy.

Bit of spending -- $16,000 out

March 16th, 2015 at 06:21 pm

Today our UK management company needed us to send some money so they could start ordering things for the flat renovation. They also let us know the reno would cost 680 more (plus VAT, so more like 816). We were already going to have to borrow 500 pounds from NT's mum, so he asked if she could front us another 1000. We'll be able to pay her back pretty quickly once we start pulling in rent again.

We're also waiting for the last rental income to post to the account, so I could only send some of the money needed. I was going to send 12,000, but found out that HSBC will only transfer 10,000 per day, so I just did that. We'll transfer the rest once we get the rental income and the loan from NT's mom.

So today's transfer was 10,000 ($16,000). In a day or two we'll send the rest (about 4,000 or $6,400).

It's a lot, but will add at least as much value to the place, so it'll be worth it. At this point the place is barely rentable, but we'll be able to pull in a higher rent once it's fixed up.

It's good to start that process and not have it hanging over our heads anymore.

I also got an email from the tax guy and was hoping I was getting my returns back, but he just needed a bit more information about when we were living where last year. Oh well, at least I know he's looking at our return now.

March 2015 net worth update

March 16th, 2015 at 10:48 am

Assets:
NT's UK pensions:
#1: 17,105 pounds ($27,368)
#2: 20,501 pounds ($32,801)
#3: 4,452 pounds ($7,123)
NT's 401(k): $35,779
NT's Roth IRA: $7,480
AS's trad. IRA: $15,026
AS's Roth IRA: $20,078
CJ's 401(k): $80,016
CJ's Roth IRA: $7,480
NT's flat: 140,000 pounds ($224,000)
CJ & AS's condo: $140,000
CJ/NT/AS house: $440,000
---
Total Assets: $1,037,151

Total Debt: $671,142

Current Estimated Net Worth: $366,009

February 2015 estimate: $365,298

Change in net worth: +$711

Summary: This teeny-weeny net worth increase was only due to paying off debt. Our retirement values actually decreased slightly this month, losing more value than the money we put into them. Ouch!

I'll update the Individual Net Worth page shortly, breaking it out by person.

Notes on the numbers above: House value estimates are approximate. I don't have a way to check NT's UK pensions or flat value, so their values stay static for the purpose of this update (unless I happen to get some info by chance). UK asset values and debt amounts are calculated figuring $1.60 for every British pound..60 for every British pound.

The month ahead

March 15th, 2015 at 07:47 pm

I was looking at the calendar today (we keep everything on a shared Google calendar, and we've also got a Google calendar with our downstairs neighbors that feeds into it). We've got quite the month ahead of us! A lot of financial uncertainties will be settled in the next 30 days.

This Wed. (3/18) is the appraisal of the condo. Not concerned about it, but it'll be one more item checked off.

Sunday (3/22) we've rented a moving van to get the last of our stuff from the condo. We left our couch and dining room table there to give a sense of the size of the place. It'll be good to get them both back!

Friday 3/27 I'm going to contact the broker (if he hasn't gotten back to me yet) to see if the streamline refi option has opened up yet.

Thurs. 4/9 is still the tentative closing date, though it could still move sooner.

Sat. 4/12 is when the WV option expires, so we'll know one way or the other whether that money is coming. That will clear up a lot about our budget for the rest of the year.

And, of course, 4/15 is tax day. Not sure when we'll get our tax return back from our new guy, but it will for sure be by then! That will also clarify our budget because we'll know if we need to be withholding more of AS's freelance money (my guess is probably, just not sure how much).

So yeah, big month!

Some semi-interesting updates

March 13th, 2015 at 07:44 pm

Our buyer's option to rescind expires at midnight Central. That's a little over 3 hours! I know our realtor would call or email right away if anything had happened, so feeling really good. I'll feel 100% great tomorrow morning, when it's over for sure.

Today I got notice that the appraisal was scheduled for 3/18, so that makes me feel confident too.

Got some answers of sorts from the broker. He's really knowledgable but can be kind of obtuse about when he's not providing a real answer or info that makes sense. As a result, he's quick to reply to emails but they can be kind of cryptic. At the same time I try not to get into phone calls with him because he rambles on and on; it's the opposite of his email style.

So anyway, finally got him to say today that he didn't think the duplex would appraise high enough for a traditional refi. And the streamline wouldn't go through; he thought it hadn't quite been long enough.

I thanked him and asked (just to be clear) if we still had to pay off the promissory note for a streamline refi. And if so, whether it mattered how we did it. One reason I've been in a hurry to do the refi is because we'll have much less cash after we close on the condo sale, and I remember how strict all the rules about cash were when we bought the duplex.

He wrote back that NO we don't have to pay off the promissory note for the streamline refi and if we do, it doesn't matter what funds we use to do it.

Oh. He was completely unclear about that before; he made it sound like neither refi would go through unless we paid off the promissory note.

But, even though it's bad news we won't have two options to choose from, it's good news that the one we may qualify for isn't dependent on paying off the promissory note. That means I can take my time on that one, find some lower-interest borrowing options after the condo and possibly the streamline refi. We've been getting some good 0% CC offers and AS has a potential ($2700) big check coming in for an acquisition deal she's been helping with. Plus, by mid-April we'll know about the WV deal, so that's another possibility for the promissory note.

So, not feeling as rushed to get everything taken care of. The broker said he'd get back to me in the next week or two as soon as the streamline refi was available. I'll give him two weeks off from my incessant emails and then bug him again.

For now, we'll just focus on the condo closing, getting that all taken care of. We need to get the electrical repairs done, and I was kind of sweating about how much that would cost. Now that we're not rushing to pay off the promissory note, I'm not as worried.

The UK flat renovation will start shortly. We're about 500 pounds short of what the management is estimating for the cost. NT needs to either borrow the difference from his family, work out a payment plan with the management co., or tell them they need to cut corners somewhere. I can't really do anything about it except nudge him, which I keep doing because we need to get it done ASAP so we can start pulling in rent again.

Cash, debts, sale, refi, etc.: various calculations

March 11th, 2015 at 09:50 am

snafu asked a good question about the interest rates on the debts I'm considering taking on in order to pay off other debt. At this point it's hard to keep everything straight, so I thought I'd lay it out in an entry.

So the two main things I want to do are close on the sale of the condo, which I estimate will cost me $28,300, and pay off the promissory note to the duplex seller, which is $26,500. So $54,800 total.

I have $33,857 in available funds in our checking account. Of that $10,818 is cash we've saved up. The rest was accumulated by either taking on debts or delaying retirement and other contributions:
Owed to a friend $80
Owed to SL & AA Pax funds ($40 each) $80
Owed to AS retirement funds $2,723
Owed to Roth IRAs $5150
Slate credit card balance $10,540
NT extra student loan $4,466

I need $20,943 more to get rid of both the condo and the promissory note. I have a $15,000 line of credit and a $5,500 reserve line with my bank, which leaves just $443 to come up with. AS is expecting a few freelance checks in the next week or two that will easily cover that.

Interest rates/payments of the existing & proposed debts:
Promissory note (what I want to pay off):
5.375% until 08/2016, then 5.875% until 08/2019
Current min. payment (interest only): $118.70
Goes up to $285.96 (interest + principal) 09/2016

Slate credit card:
0% until 12/2015; 12.99% after
Current min. payment: $105

NT extra student loan:
6.365%
Current min. payment: $25
(interest may be variable, and payment may go up at some point since right now it basically just covers interest. The site is terrible -- I'd have to go find the original application or call them to find out.)

Bank line of credit (not borrowed on yet):
9.25%
Min. payment: Dunno...$275? according to online calculator

Bank reserve line (not borrowed on yet):
21.9%
Min. payment: Dunno...$156? according to online calculator

None of the interest rates are as favorable as the promissory note, but everything else about that loan is UNfavorable, so I don't mind paying extra to get rid of it.

***

I haven't really laid out the landscape of what bills will look like if both deals go through, partly because I'm still waiting to hear how the refi would affect the main duplex mortgage payment. But here's how it will look after the condo sale:

Before:
Condo mortgage $1030.32
Condo dues $696.03
Income: parking spot rental $85
Duplex mortgage $3149.72
Income: lower unit rent $1074
Promissory note $118.70
total: $3835.77

After with just condo sale:
Duplex mortgage $3149.72
Income: lower unit rent $1074
Promissory note $118.70
Slate card: $105
Extra student loan: $25
total: $2324.42

And, assuming a refi would take $300 off the payment (don't think I'd consider it worthwhile to do it for less of a benefit than that), here's what it would be:

After with both condo sale and refi/promissory payoff:
Duplex mortgage $2849.72
Income: lower unit rent $1074
Slate card: $105
Extra student loan: $25
Bank LOC $275
Bank reserve line $156
total: $2336.72

So if my estimates of the LOC and reserve line payments are correct, it looks like the refi would only be beneficial to the monthly budget if it took more than $300 off the main duplex mortgage. This is good to keep in mind!

News on the refi (sort of)

March 10th, 2015 at 08:38 am

The broker asked me last night about the 2nd mortgage on the duplex; we'd forgotten to discuss at all. I told him it was still there in full because my payments are interest-only at this point.

He said he wasn't sure if he could do anything, since that loan would need to be paid off for a streamline refi with no appraisal. Or he could talk to the appraiser about the likelihood of a high enough valuation to roll the 2nd loan into the refinance.

I'd already been thinking about throwing everything I have (including taking out the line of credit and reserve line I have with my bank) to both get out from under the condo and pay off the crazy duplex seller.

I was torn because the interest rates on the LOC and reserve line would be higher than what I'm paying the seller, but at least I could pay them down piecemeal without being worried it wouldn't get tracked (which I worry about with the seller) and I wouldn't have to worry about him not cashing the checks each month (he still hasn't cashed the March 1 check I sent out Feb 25 and I'm braced for a nasty email from him!).

But, if it meant the difference between a cheap refi of our main duplex mortgage, maybe it would be worth the higher payments to the LOC & RL, because we'd be saving hundreds monthly on the mortgage (plus not having to pay $118 per month to the seller).

I'd be cleaned out, pretty much, but not for long. And in the long run it'd be a big weight off my chest.

So I asked the broker to get me quotes assuming I'd pay off the 2nd duplex mortgage. Once I see how much we could save per month, I'll decide whether it's worth a little hustling or not!