This is so not my favorite thing to do, but the thought of bringing our mortgage payment down to a reasonable level keeps me going.

The 2nd broker sent me some kind of quote, but it was so confusingly structured all I could tell was that the interest rate was 3.75%. He'd felt hard to communicate with, constantly pushing me to submit an application and schedule an appraisal, so I decided to just ignore him as an option.

I called Quicken but they would charge more than the 1st broker I talked to for a 3.5% interest rate loan.

I had a testy exchange with the first broker because I asked him to consider helping me out on interest rate or closing costs based on what I was seeing online. He asked to see itemization of rates I was seeing online and I sent him what AIM was saying. He kind of went off about how it wasn't a "real" offer (which he hadn't explicitly asked for) and how shady brokers blah blah blah. I wrote a terse email back saying I'd get a "real" offer from the site and get back to him.

I submitted an application with AIM. Near the end I got freaked out that closing costs were $10K instead of $7K and tried to cancel but it wouldn't let me. I spoke to a broker and he said the $10K would include escrow funding. I no longer had the itemization in front of me, but when he calls me later to go over the options I'll make sure of that. Because the monthly property insurance estimated was half of what I actually pay, so it might be more than $10K. Of course that was for a 3.175% loan, so I'll see what their total costs are with an accurate property insurance estimate and at 3.5% so I can properly compare with the 1st broker's quote.

The 2nd broker emailed me back to follow up, so I just said I'm not interested in refinancing for a rate higher than I already had, so I'd be waiting to refi if that was my only option. If he gets back to me with a 3.5% offer, I'll ask for itemization the way broker #1 and AIM have provided so I can do a comparison.

Feeling unsure about any of the choices so far, but I'm reluctant to try any other brokers/sites that haven't been recommended to me by someone who knows more about this. I feel very ignorant in this area and worried that I'll get cheated or waste a lot of time and money on something that's not going to work out.

I got in touch with one of the brokers my real estate agent recommended. He sent me three possible refi options. None of them involve a lower interest rate than what we have, and two of them are higher. He said it's really expensive to refi to lower than 3.5% for a 30-year loan right now.

So I'm pondering the one that keeps the interest rate at 3.5. I really don't want to go higher, because the other parts of the mortgage payment could go higher in subsequent years as property taxes and insurance premiums rise. I need to keep that flat part of the payment, the principle and interest, as low as possible, I think.

He doesn't think there's an actual escrow shortage, just that the balance isn't where the current lender would like it. So it's possible there's nothing to pay off there.

The 3.5% one is the most expensive, of course; it would involve $7300 closing costs and putting $1700 into escrow. All of that could be rolled into the principal bringing our loan from $403K to $412K. Again, I'm really reluctant to bring the principal back to where it was a year ago. So I'm thinking if I go for this, I'd bring $2K to closing to at least bring the principal increase a little lower.

The old (new) payment is about $3102. The new new one, if his projections pan out, should be $2622. That's a $480 difference! I could use that savings over the next 4 months to fund the $2K I'd bring to closing, and then we'd start 2017 with a much nicer budget surplus.

The $9K added to principal/closing cash would be offset by saving $264 per month on mortgage insurance. Looks like that would pay for itself in about 3 years. Seeing as how the mortgage insurance is here to stay, that's probably worth it.

So, I'm thinking about trying for it.

Wow! We let our kids have their first sleepover at our house (they've had them at daycare and with our downstairs neighbors but never hosted one). The guests came Saturday after lunch and left today before lunch, so just about 22 hours.

We made it! We had a 6YO and a 7YO as well as our own 6YO and 4YO girls. (We tried to get a friend closer to the younger kid's age but the schedule just wasn't working out.) There was some exclusionary stuff going on with the older girls but our 4YO has an overall sunny disposition and didn't seem to notice for the most part. And they did play with her willingly, many times, so it wasn't too bad. And NT took her out for a couple hours of "special time" (playground and ice cream parlor) just to make sure the older girls got some time to themselves and SL got some extra attention.

Spending-wise it wasn't too terrible. $47 for pizza delivery and $11.59 for SL and NT's ice cream. Entertainment was hose/sprinkler outside, playing in the kids' rooms, movies on Netflix and DVD, blanket fort under the dining room table, and hide and seek. Food besides the pizza Saturday night was worked into the grocery budget; vegan rice krispie treats, various raw veggies, watermelon, cupcakes, pancakes, raspberries and strawberries.

After the guests left and we ate lunch, our kids had honest-to-god 2-hour-long naps. We actually had to wake them up because we'd planned a playdate with another friend's kid! Luckily it was at a playground about 4 blocks away. Needless to say though, I've had my fill of kid stuff for the time being!

My nerves felt frayed a few times during the sleepover, especially as it got later at night. (I'm sure my tone got sharp a couple times.) But our kids kept saying it was the best sleepover ever and their friends seemed happy. We sent them away with leftover pizza and treats and the girls gave them various little toys from their own belongings, and everyone seemed happy (especially the parents who got a free date night; I was happy to provide that because I know how rare they can be).

In some ways I know these will get easier as the kids get older. But I know in other ways the psychodrama gets more intense the older they get. Either way, I don't see hosting them very often but it was nice to give my kids a memorable night. And in the age of Facebook, I periodically posted photos and updates that the parents could see, because I know I love being able to see stuff about my kids when they're with someone else!

Come to think of it, it's been a spendy weekend kid-wise. I took AA to buy her first-day-of-school outfit at Target, and we ended up spending about $80. Everything was pretty reasonable--we got sneakers, flats, a dress (OK, a princess nightgown; it was what she wanted and I think it can pass for a dress!), a backpack and a hairband, and I think the sneakers were the most expensive at $27 or so. It just kind of adds up!

We've also got her supply list from the school and will have to do that big shopping trip in the next couple weeks. Again, it's nothing big but the little things will add up. I'm hoping AS gets a freelance payment soon so we don't go too far in the negative on our shared spending. My company is overdue on a small payment to her ($146) and she's got some bigger ones from them expected next week ($1100 and $500) that I'm hoping they'll send a bit early once they work out why that other payment is way late. Either way, if we go in the red a bit, we know it won't be for long!

Well, my queries about homeowner insurance haven't yielded much. I contacted a broker who was initially shocked at how much we pay, but then looked into it and couldn't find a more attractive option.

My current agent gave me a quote with a lower replacement value and lower sewer coverage, but he also added a new option called "limited matching of undamaged property" for $100 per year to the quote, so the difference was virtually nothing.

However, I wrote to him saying I liked his quote except for that, and the identity insurance $45 per year, which is unchanged. If he took those away, and with the reduced replacement value, It would reduce our payment about $25 per year. Annually it would go from $4274.69 to $4037.59.

I also contacted our real estate agent for refinance broker recommendations and she gave me two glowing reviews with email addresses. I emailed the first one explaining our situation.

I don't think we'd get much of a break from the 3.5% rate. But if we saved $25 on our homeowner insurance, eliminated the $262.89 mortgage insurance, and got rid of the shortage makeup (by paying it off before the refi, $2000 or so), even without an interest rate reduction our payment could go down to $2625.34. That's $476.60 less per month! The savings on the last four months of 2016 could almost make up for having to pay off the shortage in a lump sum.

So that's interesting. We'll see what the mortgage broker says!

Bear with me; I've been in a very posty mood this past week!

So I haven't heard back from the mortgage company about how much of the increase is temporary and when that part will go away. But I found the breakdown on their not-very-intuitive website, and I think I remember the temporary escrow shortage fee would be 12 months. So I think I've got it figured out.

Here's how our payment breaks down:
Principal $676.86
Interest $1,177.24
Property Insurance $360.38
County Tax: $435.86
Mortgage insurance: $262.89
Shortage makeup: $188.71

Total Payment:$3,101.94

(As a reminder, this is a 30-year loan. First payment was 6/1/2015. Interest rate is 3.5% fixed. Principal balance is $403,000. Zillow home value is $538,000.)

So, the good news is, nearly $200 of the increase is temporary. Next August it will go away.

But besides that, I see a few things I should probably consider.

First is the homeowner insurance. I've already got a call in with a broker who should be getting me a quote any day now.

I did hear back from my current broker and he showed me what it could look like with reduced replacement value but he also tacked on a new expense to his estimate. I know I could turn that down but it was just frustrating that he really didn't get that I was trying to cut this extremely big expense down. Anyway, assuming I did say no to the new item and yes to the new quote otherwise, it would be $4082. Vs. the current $4325. So it would save us about $20 per month. Better than nothing, but I want to wait and see if the broker can find anything better.

Second thing to consider is interest rate. I don't think I could do much better than 3.5% on a 30-year loan, but I'll keep my eye out. I know we could get better rates on a 15-year loan but that it would also mean higher fixed payments, so I'm not sure we'd want to do that.

Third, that mortgage insurance. If the Zillow value is anywhere near accurate, we have about 25% equity in the place. However, our current loan is an FHA, and that mortgage insurance doesn't go away when you reach a certain amount of equity. I think it stays for 11 years or something.

Now I'm wondering if a refi would be worth it if only to eliminate that $260 per month. If we got incremental improvements from a lower interest rate and found a slightly cheaper insurance, the combined benefit could be pretty good.

But with that escrow shortfall, I don't know if that affects it. Would we need to pay it off? Roll it into the new mortgage?

I emailed the real estate agent who sold our condo for us to see if she has a good mortgage broker she can recommend. I really don't want to use our last guy; he very much got on my nerves with all the misinformation about how much we had to pay upfront on our last refinance in early 2015.

Just thinking out loud about all this. And, of course, happy to read any thoughts/advice you all have!

Today I noticed that I'm a month ahead on AS's healthcare premiums. Meaning I just paid for August but still had a line item for it. I think at some point it changed from the end of a month to the beginning and I probably ate the cost and didn't realize it was already there in the budget.

So anyway, that was $228 out of the blue! I put $28 in our grocery budget because we're badly over budget from stocking up on various things and from forgetting to pick up our CSA veggies one week (grr). $100 I put in our shared spending because we have a growing wish list that we're waiting to get the money to buy. And the other $100 I stuck into savings. I'm going to try and put at least a bit into savings every time we have an influx of unallocated money.

Speaking of groceries, we've used Instacart several times for weeks when we were really tired or our weekends were super booked. I have to say, it shaves hours of chores out of our Saturday! It's not exactly frugal; there's a $6 delivery fee and I definitely feel like I need to tip the person at least 10% since they're not just delivering; they're actually doing the shopping for us.

But the good thing is if the delivery and tip puts us over budget, we can go through the cart and see if there are things we don't need. At the grocery store, we sometimes go over budget because we only estimate costs of things before we get there, or we throw in an impulse item. This way, we can really see what things cost and scale back or eliminate impulse purchases to stay within budget.

Long story short, last time we ordered I saw an offer to sign up for an account, with a 2-week free trial. After that, it's $149 per year, with unlimited free deliveries. At $6 per pop saved, it would take 25 deliveries before it was worth it.

But, that means that if we used it every week, the delivery charge would average out to less than $3 per delivery. And, we've been using it for one store each week and still going in person to the other stores, so the delivery charge wouldn't add up. If we kept this membership we could potentially do almost all our grocery shopping online. For not having a car, it's a huge time-saver for not much extra money. And like I said, with clever adjusting we could probably still stay within our existing grocery budget.

Bonus: They just emailed me today that they're now doing liquor-store deliveries! I'm definitely going to look into that and see what the prices are like, but I saw that our favorite boxed wine is a good price on there.

We got Chase Freedom offers in the mail this past week for spend $500, get $150 back. Also, if you add an authorized user and they make a purchase, you get another $25. My dilemma: I read the fine print and it specifically says people who open credit cards only for the promotional offers are not eligible.

Now I know for a fact that they'll still give it to me, but having actually read that in the fine print, I'm having misgivings about signing us up for it. It's such a good easy deal that I'd definitely sign all three of us up and get $525 for spending $1500! So tempting, but not sure if I'll do it.

We have the kids' first sleepover this weekend-- a 6YO and a 7YO staying Saturday afternoon through Sunday mid-morning. So...wish us luck! I think we'll order pizza for dinner, but if so we're gonna cheap out and not order from one of our two favorite gourmet pizzerias. I was thinking Pizza Hut. I do love their spicy breadsticks.

We haven't planned much in the way of activities but we already know what food and treats we'll be giving them, so that's a start. I'll talk to my kids tonight and see if they have any elaborate ideas that we need to start planning now, or if they just want to hang out and play with the girls.

Speaking of the kids, the older one (AA, 6) wanted some "special time" with me last weekend. I knew exactly what would thrill her; she's brainy and silly, but she's also a super girly girl. So I hired a car and took her to get a manicure, then to a coffee shop for soda. She adored it, as I figured she would. I went in the hole on my spending money for it, so I can't do it all the time! The car was covered by our carshare budget, but the mani cost me $12 and we ended up spending almost $18 at the coffee shop because she wanted to bring back drinks for the rest of the family.

I can tell my kiddo is going to appreciate the finer things in life, so even more reason to make sure I give her a good financial education as part of her upbringing!

Yesterday I had some down time at work and tinkered with my 2017 annual budget. I'd actually started it a couple weeks ago by making a duplicate my 2016 Google sheet and changing all the years in it. This time I went through and updated exact dates for when paydays, grocery shops, etc. were going to come out of the budget.

As a refresher, I switched from monthly budget to annual budget starting in 2015. I used to have a single-sheet monthly budget and if there were infrequent expenses like Xmas and the CSA, I would set aside a little each month.

Now I set up big annual expenses to come out of the month they're in and estimate utilities amounts based on real fluctuations from the previous year. We pretty much have a big enough surplus every month to do this, but I did have to divide up bday and Xmas line items over a couple months to make sure we didn't have a deficit any month. That's because those holidays come during the winter, when our estimated utilities are at their highest and our grocery budget is higher not having the CSA box to supplement.

My annual budget consists of 13 sheets: one for each month and a final sheet that adds up income and expenses and divides expenses into Needs, Wants and Savings.

I'm sure there will still be changes to the 2017 budget before it's in effect, but right now it looks like our "Needs" will increase about $3000 next year. This is due to a number of factors:

- Our mortgage payment increase is adding $2200 to the year's expenses. (That might be less if I can figure out when the temporary part of the increase ends in 2017 and by how much.)
- Bus passes for AS and AA is now a regular line item, adding $1000. (We used to just pay for them by moving stuff around, but now that AS is going out more during the day and AA is 6, decided to budget something for it.)
- Increases to my and AS's healthcare premiums total $600.
- Utilities are estimated to be $400 more than what we estimated in 2016.
- Daycare costs are going up $300 (for the whole year, not per month).

That's actually about $4500 more, but it was offset by the exchange rate on the UK mortgage and management expenses being lower.

Do any of you follow the 50/30/20 rule (50% needs, 30% wants, 20% savings)? That's my rough benchmark of ideal, but we're not anywhere close to it. (Keep in mind we don't budget AS's freelance income at all; I add that in quarterly but don't track where it's spent, so the annual income ends up accurate but not how much of her paycheck goes to wants/needs/savings beyond the planned stuff. I do add in how much we pay in taxes for her though.)

So, with just my and NT's income and the rental income from both places, my spreadsheet does calculate percent of budget by needs/wants/savings. Of course, me being me, I get in the weeds about how exactly to calculate that, so I have several different results for "needs":
Needs total including NT and CJ tax withholdings: $108,270.92
Percent of gross income 69.23%
Percent of set budget 71.02%

Needs excluding taxes: $86,668.76
Percent excluding tax 66.24%
Percent of post-tax income excluding tax 64.30%

Even though it seems out of whack, when you add in AS's income, our set needs are a much more reasonable portion of our income. For instance, on the 2016 budget, with 2 quarters of her income being added, percent of post-tax income excluding tax is 58.76%. That percentage will decrease as we add Q3 and Q4 income to it.

So, what are my biggest annual expenses? Well (and again these amounts aren't final, especially the mortgage which may decrease about $1000), right now for 2017 it's looking like:
Duplex mortgage (including tax/insurance escrow): $37,223.28
Daycare (some of which is pretax): $13,545.00
Groceries/household: $9,950.00
CJ medical premium (covers me, NT, AA, SL): $5,136.00

The highest "want" that's a regular budget item (we'll probably use AS's income for other big wants like travel and home improvement): $6,843.00
That includes $40 per week for each adult and an allowance for each kid ($4 and $6 per week, will go up $1 every birthday). This year I restarted their allowances and have been scraping it together from other funds, so for 2017 I'm making it easier and adding it to the weekly spending money line item.

I like the annual budgeting a lot. It gives me extra stuff to fiddle with. And when bills or income increase, I can soon see the impact on an entire calendar year. It's not a perfect spreadsheet; as I said, I don't track what we spend AS's income on besides tax and retirement. But it is a valuable tool. And I can easily paste it gradually by the month into my main budgeting tool, my ledger or future checkbook spreadsheet which I call "Number Crunch."

AS did 4 hours of work for my company yesterday and accepted a $500 job from another place. Those combined pushed her for-sure earnings up over $40K for the year!

Last year she earned just over $57K, so that was the benchmark for 2016. But early in the year she hit a couple hurdles; 2015 had started with some big checks coming in for 2014 work, whereas she didn't have as many delayed paychecks for her end of 2015 work. January 2015 she pulled in over $7,200, vs. $805 in January 2016. She also must have had a bigger start to her year than she did this year; Q1 of 2015 she earned $19,400 vs. $5,600 in Q1 of 2016.

But, despite that staggering $14K handicap in the beginning of the year, she's done really well since then. She thinks she can pull in at least another $8K by the end of the year, which would take her to $48K, just $9K short of last year's earnings. Which would mean she's billing higher in later months than she did in 2015. That's promising! She's starting to be able to be a bit choosy and has quit or turned down clients whose hourly rate doesn't cut it or whose work isn't as satisfying. (She tracks her time carefully so she has an hourly rate calculated even for flat fee jobs -- which the majority of her jobs are.)

I'm very proud that she's managed to make this career for herself -- and with her working at home, the house has never been cleaner! (She worked on-site at my company for the past two weeks and the difference showed in our house.) She also can take care of little organizing/admin things that occur to me or NT during the day, which cuts down on our after-work to-do list.

We may someday look at a workspace-sharing thing for her so she can be out of the house more, but for now, her business runs so cheaply, with virtually no expenses, and we get the benefit of a SAH adult at a time we can't afford a house-cleaner. So for where we are right now, it's perfect.

All our mortgage payments hit:

US: $677 to principal
UK1: $210
UK2: $45
UK3: $46

All told, that's $978 of debt paid in August.

In four or five months, the U.S. mortgage will be under $400K in principal! That's exciting.

A couple months ago we got the unwelcome news that our monthly mortgage payment was increasing from $2,789.40 to $3,101.94, effective Aug. 1 (today). That's $312.54 per month! It more than wipes out my and NT's raises this year, which is a big bummer.

We got the notice a few weeks before our Europe vacation and I just couldn't be bothered to look into it at all. I knew from the letter that part of the increase was to make up for an escrow shortage and the rest was to increase our escrow for the future. So the first part of the increase will be temporary (about a year I believe).

So anyway, I'm looking into it now that the higher amount has hit our checking account for the first time.

I looked at our insurance, and it went up from $3,791.88 per year to $4,324.57 per year. It seems this is due to higher valuation of everything. I'm not sure if I can do anything about that; as I recall this was the best deal we could find. Apparently you can save quite a bit if you bundle home with car, but we don't have a car, so that wasn't an option. But I don't know, I may go ahead and sign up for a "Farmer's friendly whatever" to see if there's any way to lower this bill.

Then I checked county property taxes, and they increased from $4,943.56 per year to $5,230.26 per year. Obviously, nothing I can do about that one. They actually value the home way lower than its market value.

Together, these two increases come to about $68.28 per month. Leaving $244.26 of my mortgage payment increase unaccounted for.

I don't have the letter with me at work, so I'm going to check it when I get home to see if that's the temporary increase part of it, or if there's something else contributing to this giant leap.

One interesting thing that a lot of us seem to deal with is unexpected or unwelcome visibility into other people's money lives; their priorities, decisions, mistakes sometimes come through loud and clear.

AS's mom asked for money again a couple months ago (I think I wrote about it here), and as part of the condition of giving it to her, AS asked to get some detailed info so we could see why she was struggling and whether she had a plan that would work.

She sent us a confusing muddle of emails where often the important piece of info would be hidden within rambling that wasn't helpful. Some attachments as well. I was rather shocked to see that she was not bringing in very much; just over $2000 a month, I believe, from disability and military spouse benefits from her ex. Her rent alone is over $1000 per month, plus she has debt payments, medical expenses and just general living expenses. She has no savings and owes about $9000. Several things were delinquent, including electricity and cable. She lives in a moderately HCOL area (DC metro part of Virginia).

It was a pretty bleak picture. We recommended bankruptcy, and I was starting to think we'd need to help with housing somehow. Someone on here (Joan of the Arch?) had mentioned considering buying some relatives a condo, and that seemed like something we could consider. Rather than helping with rent, we could just forgive rent as long as we knew we could afford the payments on our own, and we'd have something to show for it at the end (the condo). Of course we don't have money for a down payment and wouldn't want to risk that hit to our budget at this point, but I started considering it as a down-the-road contingency plan.

Well, we heard back that she has the bankruptcy in beginning stages. She also thinks next year she'll qualify for housing Section 8, as she's been on the waiting list about 5 years and it usually takes 6. It could bring her monthly rent responsibility down to about $200.

With most of her debt discharged and her housing expenses cut by 80%, suddenly her situation wouldn't seem as bleak. So we're in a holding pattern. She might need some bridge loans to get through the next year, but hopefully not. And if she can pull off these two things, we may be off the hook. Fingers crossed!

***

My friend who I helped with her finances seems to be stuck in a holding pattern of her own. She hasn't slipped back into NSF territory, but neither has she decreased her CC debt very much in the past couple years. One thing is that she herself brings in about what AS's mom does, and has a bit more debt than $9K, so there's not a big margin for error. But the other is that she can't seem to say no to any invitation (or mention) of a show, concert, restaurant or anything. If she could tame her social life for a year, she could probably pay down that debt and then have more flexibility to go to the shows and everything. Her debt payments are about 25% of her income, almost as much as her rent!

I hope she does buckle down at some point. She is trying, but she has this disconnect between intention and action. I see the same thing when she tries to avoid gluten, or when she's on a diet. Her hand just goes toward food and it finds its way to her mouth almost like she doesn't realize she's doing it.

I'm happy to help however I can, but it's one of those things people have to decide for themselves. Credit allows so many untenable situations to float along for years, even for most of one's life. Fingers crossed she will sort it out in time for retirement someday.

***

Our downstairs neighbors are pretty much our closest friends as well. I love just about everything about them -- except their bizarre financial behavior. It's bothered me for years, but now that we live together, certain things nag at me.

For one thing, NJ (the main one we talk to due to his husband working all the time) let AS know sometime last year that he hadn't filed his taxes in several years. He left law to become a freelance photographer, and after a while found a very lucrative niche. Basically he's able to book several big shoots and then coast on that income for a few months.

The first return he didn't file was right after leaving law, and typically he would get a huge tax refund. So he thinks that the money the IRS has from that year will cover most of the other years.

Which may be true, but he won't find out until he files all those years. And the more years he doesn't file -- and doesn't send in any estimated tax -- the less likely that is. If he makes about what AS makes, that money from his unclaimed refund may cover one or two years at best.

So he had a bunch of money from a big photo shoot, and he was going to use it to remodel their kitchen. Then he decided instead to work on a subscription website that could pull in a lot of passive income. His business partners flaked, and so he still had this chunk of money sitting there.

Plus, his husband just got a second (part-time) job that pulls in a ton more money.

So this would be a great time to do all his taxes, right? Wrong. First, he gave us another $4K toward buying their share of the house ... which is great, except he hasn't finished the paperwork that would make this official. And I'm not promising anything until I see the paperwork and get it vetted by another lawyer.

Second, he buys a used car for about $7,000. I was kind of pissed because they were carless when we bought together and seemed committed to that lifestyle. We were even thinking of turning the garage into a tiny home for my other friend (from section 2 above) because none of us had any plans to have a car. Then boom, out of the blue, he buys a car. Now we have to accommodate a car that I don't believe they really need. (His main reason was to be able to take his dog to the dog park because there were none nearby. When questioned, he said the nearest one is about a mile away. Wouldn't the dog be able to walk a mile each way? I don't know. My kids walk minimum half a mile each day, and can walk a lot more than that if necessary.)

But the main reason I was pissed is because he STILL hasn't handled his taxes; I feel like both of those big outlays of cash were partly to avoid that further. And I feel like I'm stuck in this place where I'm worried about that, and wanting the documents for the house to be drawn up but wondering if I will need to say I can't go into this agreement with you knowing you might be evading taxes and digging a big hole for yourself. But at the same time, until they start to buy their share of the house, I'm paying $150-$160 per month for water/sewer/gas, and not feeling like I can ask them to pay their share (2 fifths) until/unless they begin to co-own the place.

I feel like I can't talk too much about the home ownership thing until I know he's handled his taxes, but I'm not really in a place where I can make him do his taxes either. I've offered to help, I've given him the name of my tax guy; I don't think I should push it anymore since ultimately he's an adult. But waiting on the home ownership thing is making me feel a bit taken advantage of from the utilities standpoint among other things. I'm keeping track of what we pay into the house and what they pay into the house, so I'm hoping they would want to pay to make up for the utilities paid, since they've always declared their intention (and we've always agreed to it) to purchase a share of the house.

***

Petty, petty, petty. That's how I feel. I just try to deal with it in my own head, but I feel like this is a fairly safe place to air said petty thoughts. This post may self-destruct; I'm not sure.

Now that my finances are feeling more under control than they have been since about March, I'm feeling optimistic and forward-looking. I idly wondered, when will I (well, my household) become a millionaire, and how is that technically defined?

I looked around online and the consensus seems to be that you can either be a net-worth millionaire or an actual-money millionaire. Either your net worth is at least a million, or you have at least a million in bank and retirement accounts.

By the first measure, my household could conceivably attain millionaire status in about 4 years, if things go well and we gain about $10K per month in net worth.

By the second measure, I'd think it would be more like 8 years, since the majority of our assets contributing to net worth are our two properties. So getting to a million in cash and retirement funds will take a lot more time, and debt reduction won't help with that one.

Just some idle Friday musings.

I checked NT's UK account, calculated how much we need to cover August mortgage payments (plus 25-pound cushion) and transferred the remainder--750--to his UK savings account. It makes barely any interest, but moving the money into savings makes it feel more official that the money is saved.

I've decided to use the UK savings account as our EF because A) it accumulates painlessly without coming out of our normal cashflow, B) the money is harder to get to since it's in the UK and C) we don't have any plans for that money except to use as spending money for our next UK trip, which won't be for over a year, so we should be able to save up a good EF plus a good amount of vacation money before then.

GBP750 translates to $1125, which means we're over 10% of the way to my $10,000 EF goal!

In the U.S., we finally saved up enough to hopefully fund the next phase of AS's dental procedure thanks to her latest freelance payment. We had some money left over for once! NT has been itching to spend, so I got him to articulate what he wants most. A) paint for several rooms in our house and B) new underwear (which we could all use). So I set aside $300 for paint and $75 for underwear.

There was still some money left over, so I stashed $250 in our nearly-empty U.S. savings account, bringing it up to $255.74. No specific plans for this money; just a vague idea that we'll probably want to put it toward a larger renovation project at some point, whether it's redoing one of the bathrooms or installing ductless A/C.

Feels good to have money in both savings accounts again! We cleared the US one to help pay our tax bill in April and drained the UK one during our June/July vacation. The last time we had really big balances in both of them was spring 2015, when we emptied our savings over the course of a few months to renovate the UK flat, sell the US condo at a loss, and refinance the US duplex mortgage.

Sometimes I revisit those days on this blog and marvel at it all! Our tax and medical/dental bills this year were a cakewalk by comparison.

Updated my goal based on NT's recent raise and downgrading AS's annual income expectation, and added our recent retirement gains to the balance.

Goal: $479,875 by 2019
(As a reminder, this is to get me to 3x my current salary, which is now $66,625, so $199,875; NT to 3x his, which is now $60,000, so $180,000; and AS to 2x hers, which this year is projected to be $50,000, so $100,000)

Current balance: $279,380

May 2016 balance: $269,301

Progress: $10,079 (over 2 months)

To reach the goal by our birthdays in 2019, that's 31 months, so we'd need to contribute (or have assets appreciate) $6,468 per month to reach it. We came somewhat closer to that level of progress with about $5K in gains these past two months!

I only get updated on NT's pensions once a year, and the last year they stagnated in value. But this year one of them is up about a grand, to 5523 pounds. I'm noting that here so when I do net worth at the end of the month, I'll have that number.

I can't believe it's getting late already! I basically spent all day lazing around. Well, a lot of it budgeting and other organizational stuff on the computer, but it felt like a lazy day.

We got in yesterday evening from our trip. The flight home and getting through customs is always terrible, but it wasn't any worse than usual.

The trip itself was fabulous. Probably the best we've ever taken as a family. Lots of traveling, but worth it for all the experiences. We flew into Heathrow and had to drive about 4 hours to Exeter to spend a week with NT's family. We had a little outing or two every day, visiting different towns.

Here's a rocky beach at Dawlish Warren:


Babbacombe Model Village (a vast miniature world, this is just one small part):


The pier at Paignton, which had arcade games and other fun stuff:


Exeter itself was lovely:


We also visited a sandy beach, an otter sanctuary and butterfly farm and an archaeological museum. We mostly cooked at home (NT's parents had rented us a lovely 4-bedroom house) and brought picnic things out, but we did eat at a couple places.

After about a week, we left the kids with NT's dad and stepmom and drove about 3 hours to Oxford to our friends' house. That night they had people over so we could see some of the people we know there.

The next morning we left for Barcelona (me, NT, AS, our two best friends and the girlfriend of one of them); we took a bus to Gatwick airport, then a plane to Barcelona, then bought a 4-day pass for the trains and subways and found our way to our AirBNB, a nice 3-bedroom condo.

It was incredible there. For one thing, it was sunny and in the 80s (England had mostly been in the 60s and drizzly). For another, the place was just so beautiful. Everywhere had ornate iron railings:



There were tons of little alleyway-type streets that no car could go down, and tapas bars about every 5 feet, it felt like! The tapas was amazing. There were also a number of vegan restaurants; although none of them blew me away, it was nice to have so many options.

There were living statues in some areas that just blew me away:


We were close to the beach as well:


We got out to Parc Guell, a weird and wonderful park featuring architectural touches by Gaudi:


It was high on a hill so we got great views of the city from there.

And basically we spent hours sitting at various outdoor cafes having chilled wine and snacks. Everything was so amazing. The only drawback of the city really was that it could really stink of sewage in places. But you'd keep walking and the smell would go away in a minute.

Meanwhile back in Exeter, things could not have gone better with the grandparents. We Skyped once but it seemed to simultaneously bore and upset the kids, so we just relied on Facebook photos from family members. It was easy not to worry when we saw shots of the kids having fun all over the Devonshire area:




Our Barcelona jaunt went by in a flash; it was only four days, three nights. We flew back to England and took the bus back to Oxford to spend two more nights with our friends. The one full day we had there, we spent in the city itself (our friends lived on the edge in a more suburban area). One friend showed us where he works, the impressive Oxford University exam schools, full of rooms like this:


Then we walked around Oxford, basically just soaking in the atmosphere. It's such a beautiful city:


That night we ate at a nice Italian restaurant and went drinking at a scruffy but charming pub, one of NT's old haunts.

The next two days were no fun, but we were prepared: We left Oxford around noon and drove 5 hours (traffic was awful) to Exeter, met up with the kids and grandparents for a dinner out (luckily there was a play area because the food took forever and was only so-so), spent the night at NT's mum's house (the kids still had to stay at his dad's because of space issues and that made one of them weepy), got up super early, drove to the car rental place with two emotional kids, dropped the car, lugged our stuff on a shuttle to the airport, waited out a delay, flew to Iceland, got straight on the next plane which was already boarding, flew another 7 hours or so, went through the awful customs line, got a taxi home, and put the by-now hysterical kids straight to bed. That was around 8pm last night, which would have been 2am in England, so they were a wreck (even though they were really good on the plane).

But today was a good recovery day. I almost feel ready to face work tomorrow. Almost.

One of the ways I was able to pay our tax bill in full was by putting other purchases on some 0% credit cards we had. I probably could have paid them off a month ago, but I wanted to be able to officially say the money had come in to cover the tax (and dental) bills.

Now that the on-paper deficit is wiped out, I feel comfortable paying them off. So I set up the payments today. I have 0% interest rates until early 2017, but I feel more comfortable not carrying debt if I don't have to.

I never counted them in my debt totals because I felt confident I'd pay them off quickly, so this doesn't change the total household debt. But it does feel good!

The total balance we were carrying across four cards was $6,133.07. There are also some new purchases on one of the cards, but I'll pay that in full when the next bill comes, as I typically do with credit card balances.

Another bonus to being done with the tax bill is that we can start maximizing our rewards by using the Target card for Target purchases (5% off each purchase), the Amazon card on Amazon (5% rewards you can redeem toward future purchases), and the Amex for groceries (6% cashback). The cards we were using only had 1%-2% rewards.

As you may recall, our goal got a big boost when our neighbors gave us $4K toward buying their share of the house, and I decided to just count it toward the debt. Any other time I probably would have put it toward our mortgage or into an EF, but we're just so sick of having to make up our tax bill and dental expenses. So that cut it down quite a bit before we left.

While we were gone, AS got two more freelance payments: $1226 and $758 net. We had to take some travel expenses out, but NT's raise hit with a $50 boost to his paycheck, so even with the travel expenses, our current deficit was reduced from about $1800 to just about $100.

Then I checked the Chase Sapphire rewards card. The bonus had hit and we could either get $601 cash or $775 travel rewards. Again, any other time I'd have saved it to use on travel expenses for our next trip. But seeing the end of the tax bill in sight, I couldn't resist: I cashed it out for $601.

So the upshot is, we've fully funded the tax bill and current dental bills and have a current surplus of $507! Our future projected surplus including all the money AS is anticipating from booked work: $7950!

Now, we still have a few dental bills expected later this year, and with how crazy this year has been, I'm not counting on that money at all. I'm just going to leave it there and we'll use it if we need it. But I declare the tax/dental challenge officially completed.

So what's next? Well, honestly, after about four months of this, there are so many deferred wants that it's hard to choose just one. But generally, we're going to continue to examine our purchases and try to be sensible for the rest of the year, so we don't get caught out by something like the tax/dental double whammy again.

I stopped tracking our spending on vacation once it became clear we weren't going to go over our limit, so I'm not sure exactly how much we spent from our UK account. Somewhere in the ballpark of 2,000 pounds or $3,000, about $200 per day. This included about $300 for car rental insurance, some bus journeys, souvenirs, groceries, eating out, petrol (gas), etc. We also spent some on our US credit cards, but that's already been taken from the budget surplus mentioned above. So I don't feel the need to do a detailed spending tracker, but I'd estimate it was:
UK flights & travel insurance: $5500
(UK lodging paid for by NT's parents)
Rental car & insurance: $900
Barcelona flight and lodging: $1300
Other spending: $2500-$3000

So, roughly $10K or $11K all told. Wow! But it really was an incredible and unforgettable trip, so no buyer's remorse there.

I can't tell if we're still waiting for some pending charges to hit NT's UK account, but I think they're all accounted for. If so, we have about 437 left over ($655). If so, we're saving that as the first drip toward building an emergency fund again. Yay for EFs!

Speaking of, I've decided for now that the EF goal will be $10,000. My reasoning is that we do tend to have a big surplus each month so could conceivably lose one income and still survive. (Technically we could probably survive if we lost one full income and half of another.) So we don't need a massive EF at this point. But I want to have at least enough to pay off our downstairs neighbors if the house deal were to fall through for any reason, plus a little extra. We "owe" them $9K, so I figure $10K is a reasonable figure.

I don't know that we'll go full tilt at this goal or just add to it incrementally. But for now I'll count the $655 in the UK account and go from there.

I'll try to post a more fun travel wrap-up with a few pictures later!

I'm back! Probably going to do several entries today to get all caught up. But first, our July debt payments. All mortgage payments hit, and at our old exchange rate for the UK mortgages, we paid:
US: $675 to principal
UK1: $226
UK2: $48
UK3: $50

So $999 total.

I could calculate it at the old rate, but I just didn't bother. I'll do it next month. We were so close to having $1K per month be the minimum, but now with the lower exchange rate, that won't happen for a while.

However, I'm now switching our debts to the $1.50 exchange rate, plus adding the $4K our neighbors gave us (they said it was toward buying their share of the house, but until we all sign a proper contract, I'm considering it a debt to them). So our new debt totals are:
US Mortgage (duplex) $403,626
Loan from friends (duplex) $9,000
UK Mortgage 1: $43,976
UK Mortgage 2: $9,270
UK Mortgage 3: $9,762
TOTAL DEBT $475,634

So this is rather strange... My neighbor downstairs, the lawyer who was going to draw up a contract for me to review for part ownership of the house, had gone silent on this. I hadn't heard anything about it for maybe a year. I kept thinking about asking him about it, but I've been personally concerned that he needs to clear up a big tax issue (basically, he hasn't paid taxes for years--five or so? and he's self employed, so it's not like taxes are getting withheld from his paychecks). I really want to know that's cleared up before I enter into a big financial agreement anyway, so I haven't asked about the part-ownership thing.

He still hasn't done the tax thing, though I've started gently asking about it now and then so it doesn't get swept under the rug. He'd recently gotten a huge freelance payment, and his husband now has a second part-time job that pays as well as his full-time one, so he keeps saying it's a good time to clear up the tax thing, but he was kind of wrapped up in building a web business.

Well, last night he brings us $4,000 cash, and says he's quitting the online business idea because his supposed partners keep flaking on him. Now he has all this money he was going to invest in it, and wants to give another installment on their down payment for the house.

I think it was partly wanting to move forward on something, and partly because he's no doubt heard me grumbling about money this year. But it took me aback. First, I told him we should get the contract part figured out before he gives me any more money. He says he'll get that done really soon now that he's not working on the business, so he feels comfortable paying some more on the house. Then I say maybe he should keep the cash until he makes sure he doesn't need it for sorting out his back taxes. He says he has plenty more money for that.

So, I took it. At first I thought, I should put it toward the mortgage, since this means either we're $4K more in debt to him or we have $4K less home value (once the agreement is signed). (I mean, that's not how the agreement is structured, but it's how I'm going to calculate things.)

Then I thought, no, I should use it to start an EF. We realize that things would be a lot less bothersome if we didn't have to cashflow all unexpected stuff out of our budget surplus and AS's freelance inaltcome, so that is something we've been talking about doing once our tax/dental budget deficit is cleared up.

But then, AS and I agreed that we just really want this budget deficit gone. So even though I'm counting this as debt, I'm just adding it to the budget to take the deficit down. At least I'm increasing our home value in my net worth calculation, so it will be more than made up for (although I'm also going to downshift our pound-to-dollar exchange rate this month, so that's going to give our retirement values a pounding).

Well, long story short, I'd rather my neighbor had waited until he cleared up his taxes and finalized the purchase agreement, but it's not like we weren't planning him to pay for the house, so I'm just going to take it as a welcome windfall. And I do plan to pay it back should the house agreement fall through, as I plan to do with the original $5K they contributed to the down payment.

House down payment from neighbor: $4,000

Current deficit: $1,822.27
Projected future surplus: $7,661.99

Whew. Some planned hits, and several unexpected ones.

Unexpected: We reserved a car for the UK thinking it would just be a hold on the credit card and we could pay with the UK debit card. Nope, they charged us. We may bring cash home from the trip to pay it off, but for now counting it as an expense from our U.S. finances. $470.83.

Expected: Date night while the kids were at the daycare sleepover. We had a great dinner at a new vegan restaurant and drinks and snacks at another place we'd never been to before. It was a beautiful night. I had $55 stashed for the night but we spent $104.37 over that.

Unexpected: An escrow shortfall meaning our mortgage payment will go up $312.54 per month, starting Aug. 1! (Supposedly not permanently, just until the shortage is made up...) Since I've budgeted the shortfall/escrow through the end of the year, that means $1,562.70. Oof, that hurts. The only bright spot is that it's coming later, and in small increments, so I'm only taking it out of future surplus, not current deficit.

Expected: Father's Day festivities. NT wanted lunch at a Vietnamese restaurant, a day at the movies (Finding Dory: excellent by the way!) with snacks included, and we stopped by the grocery store for berries (were going to get ice cream but everyone was stuffed and sugared up). $160.98 -- almost exactly the same as date night, I just realized!

Anyway, the two expected expenses were totally worth it for the fun we had, and the two unexpected ones were unavoidable, so it is what it is.

UK car rental: $470.83
Date night: $104.37
Mortgage payment increase Aug-Dec: $1,562.70 (affects future surplus only)
Father's Day: $160.98

Actual deficit: $5,822.27
Projected future surplus: $3,661.99

Boo hiss.

AS booked two new gigs today: a $500 writing assignment from my job and a $1250 distance teaching gig (advising one student on their writing project) at one of the two colleges she works for.

Since she's only booked the work, not received the money, this only increases the future surplus, doesn't affect the current deficit.

AS freelance writing job net: $325
AS freelance teaching job net: $812.50

Actual deficit: $5,086.09
Projected future surplus: $5,960.87

We have an upcoming date night Friday (the kids are sleeping over at daycare) and Father's Day Sunday, so we'll probably pull from shared spending from both of those, increasing the deficit and reducing the surplus. But AS is also due about $1100 in checks, so hopefully those will come in yet this week.

I never know how seriously to take Zillow, so I rarely check it. But it seems like every house in our area gets snapped up within a week or two (or less) of the "for sale" sign going up. So I decided to check our property's estimated value.

When we bought in late 2014, Zillow valued it at $369K and we got it for $465K (only a bit less than it was listed at). Does that get used as a baseline measurement for Zillow then? Because it seems like it's been a constant climb from that price point (with just a few dips) and the property is now valued at $530K.

Overall the value has stayed above $500K except for three small dips since Sept. 2014. I don't know whether that's a safe value or not. Anyway, it doesn't really matter, but I'm curious.

My company is behind schedule on paying AS for a couple of jobs (frustrating!), but one of the checks ($500) finally arrived yesterday.

Since this was an expected payment it affects only the actual deficit, not the projected surplus.

AS payment net: $325

Actual deficit: $5,086.09
Future projected surplus: $4,823.37

Ever since the NYC trip, I've been managing to handle unplanned expenses with budget maneuvering. Flex spending, line items in the budget we ended up not needing the money for, random bits of credit card rewards, etc. But AS got a medical bill I can't swing any way except to add to our current deficit. Ah well, it was a good run!

Medical bill: $218.89

Actual deficit: $5,411.09
Future projected surplus: $4,823.37

It's frustrating hovering in the $5Ks after making such steady progress from the $10K mark. But looking at the future surplus, we're still doing OK. We'll get there.

NT let us know yesterday he'd gotten a 5% raise! A conservative estimate is $60 more per paycheck, but we'll see once it kicks in; supposedly it's effective June 1 but will appear in the June 31 paycheck, which I find a bit confusing. But not complaining! Counting AS's teaching raise and my recent one, we've all gotten them this year!

I went ahead and upped NT's 401(k) contribution by 1%. With all the crazy expenses this year I was going to wait to do that, but since it'll come out of raise money and we'll still have a net gain, I figured I could at least do a little. He's now contributing 5%, with a 2% company match, so at 7%. Eventually we'll get that up to 10% and someday 12% or 15%, but this is a good baby step.

We are now at 7% for him, 9.5% for me and 10% for AS, plus we hope to max out all three Roths for the first time this year.

I put in her Q2 SEP IRA contribution and it put her over the mark. I'm very pleased that we've built her retirement funds up from virtually nothing over the past several years. And she is 5 years younger than me (6 younger than NT), so I think it's a pretty good milestone for her age.

So the NYC spending comes out of shared spending, which means it increases our current deficit and lowers the future surplus. A big hit to both, but we got some good news today too: AS received a big check we were expecting ($2500) and found out her teaching gig gave her a tiny raise of $180 for this coming semester.

NYC spending: $913.50 (affects both actual and future #s)
AS freelance check net: $1625 (affects only actual deficit)
AS teaching raise net: $117 (affects only future surplus)

Actual deficit: $5,192.20
Future surplus: $5,042.26

Some upcoming challenges to our tax bill goal: We want to take the kids out tomorrow for dinner and bowling to celebrate AA completing kindergarten, and the adults will want a date night next Friday, since the kids are going to be at a daycare sleepover. I'm going to see what I can do to scrounge up CC rewards and other money so we take as little as possible from the above future surplus. I think there are some little adjustments to the budget I've been meaning to make that we could use to help pay for these two nights out.

Ah, we had a wonderful time in New York! I got to catch up with many of my best college friends and attend some thought-provoking events such as seminars and lectures.

About the only negative was I drank too much the final night of the reunion. I thought I was OK until I woke up the next morning and had to throw up. I haven't done that in years! I gradually felt better, but I didn't sleep well any of the nights I was there. Too much drinking every day was part of it, plus being in a strange bed, plus probably my mom senses being a little fraught from not having the kids around. This was the longest we've ever been away from them--from Thursday morning (we left before they woke up) to this morning (we got in at 2 am after our flight was delayed a few hours, so we didn't see them until around 7am when we woke up to get them to school and daycare).

We got to spend some time in Manhattan Thursday and Brooklyn Sunday, on either end of the reunion (which was in Bronxville). Even though the expenses added up more than I would have liked, we had a great time. And some of the places we ate and drank were actually really reasonable, on a par with or slightly cheaper than comparable offerings in Minneapolis!

One thing AS realized was she was feeling a little shy of talking in the seminars and feeling a little stymied vs. inspired by everyone talking about all the stuff they do. Over the course of the weekend, we realized that working at home all the time may be having a negative effect on her. So once we pay off the tax and dental bills, we're going to look at co-working options so she can get out of the house and be around others when she works.

So on to spending. It wasn't a crazy amount, if a bit more than I would have liked. We had prepaid a number of things, so those won't come out of the current deficit on the tax bill goal:
Reunion registration $495 (included lunch & dinner Fri. & Sat. plus several cocktail receptions and other events)
Donation to college: $500
Hotel 3 nights: $611.04
Airfare (after CC rewards used): $20.80

So $1626.84 for those in-advance purchases. Then the actual spending on the trip:

Money to one of our friends to help pay for childcare expenses (food, activities, transportation): $100.00
Took our downstairs neighbors out to dinner as a pre-thanks for watching the kids the other 2 days: $67.00
Took out cash for the trip (ended up spending it on subway, used books from an outdoor stand, lunch at a place that didn't take cards, and various other small purchases): $120.00
Lyft from home to airport: $22.07
Checked luggage: $25.00
AS in-flight snack: $5.00
Airtrain from airport +subway fare: $8.00 x3=$24
Luggage storage Thursday while we explored NYC: $10.00
Thursday lunch: $35.60
NT purchases at a record shop: $51.18
Drinks Thursday afternoon: $45.00
Thursday dinner: $140.00
Train from NYC to Bronxville: $46.50 (I bought 3 round trips but we all misplaced our tickets and had to buy new ones Sunday, so wasted $23.25!)
Taxi from train station to hotel: $14.14
AS snack at hotel Friday: $7.08
Hangover snack for me Sunday (fries and soda): $6.51
Train from Bronxville to NYC: $23.25
Subway fare from NYC to Brooklyn: $3.00 x3 = $9
Coffee: $6.36
Airtrain fare back to airport: $6.00 x3 = $18
Checked luggage: $25.00
Drinks at airport: $38.40
AS snack at airport: $10.88
Souvenirs for kids (my impulse purchase): $17.40
Airport snack for NT: $3.58
Taxi home: $42.55

So total additional spending for the 4 days: $913.50

All told, $2,540.34. That comes to a little over $200 per person per day. I suppose that's not too bad for a trip to New York!

Just recording our mortgage payments, a bit later than usual because we just got back from our NYC trip. More on that soon, including a detailed breakdown of spending!

All our mortgage payments hit:
US: $673 to principal
UK1: $224
UK2: $46
UK3: $50

That's $993 to principal this month.