Sunday, September 30, 2007

October Budget & September Net Worth

Without much ado, here's our budget this month:

$500 Tithe
$2008 Chase Debt
$1150 Mortgage
$240 Car Gas
$30 House Phone & Internet
$6 Electricity (State forced them to give everyone a credit this month for overcharging)
$45 Water & Trash
$77 House Gas (Called, renegotiated our monthly set rate from $145 since we now have a credit with them of $425, enough for most of the winter).
$120 Groceries (Yes, for 2 people.)
$158 Cell Phone
$95 Life Insurance
$30 Mrs. Fun Money
$30 Mr. Fun Money
$30 Dining Out
$30 Toiletries
$100 Mrs' Chiropractic Treatment
$150 House Repair (More insulation, dehumidifier for the basement)
$400 Emergency Fund Rebuilding

Some of our income numbers are a bit up in the air this month regarding 2 of our renters (and my on-call job has been quiet for over a week now). The slack will be in the last two items. I am also generating a spreadsheet for the rest of this year and next that will show us exactly how we're going to get rid of the CC & medical debts by the end of next year. Once I get some more feedback from my wife on certain items, I'll post it all for you to see.

Our "net worth" has had another plateau month in September. It wouldn't have been so flat if we had been tracking the student loan debt monthly and how much interest is on it. All the more reason to motivate us to get the CC & medical debts taken care of by the end of next year so we can then beat up the student loans.

Thursday, September 27, 2007

Housing Market Effect On Room Rentals

My wife and I had a short chat this morning, it appears that the housing glut in our area and the adjustable mortgages is causing more people to go the route we've been going for over a year, which is renting out rooms. This came to be a realization when last night one of our roommates wanted to give us a heads up that he may be moving out next month. One of his coworkers offered him a room to stay at for $200/month (I'm assuming utilities included, because that is our arrangement at $350/month for him). Math wise, the person must be desperate for money, if you consider utility costs alone for a person come out to about $60 (water, electric, heat, internet) in a shared housing environment (based on our experience). We are going to offer him $300/month and see if he is willing to stay, he was going to check out the place first before accepting the $200/month.

Another item we have noticed recently is several people from our church have independently asked about how we manage it, how much we charge, how we find renters, etc. They probably are going to be doing the same as us, but probably not at our scale of 4 rooms. I did a search this morning on Craigslist for under $300 in the Chicagoland area and I found a lot more than I have found before. Now some of those probably don't include utilities, but I found some that did.

We also decided to make our base rent be $300/month. The new roommate coming in after his first month, we'll bring him down to $300/month (he has the smallest bedroom). The couple moving in at $400/month, we'll bring them down to $350/month (largest bedroom). Our roommate that has been here for a year we will keep her at the $300/month. My goal for the coming year is that we average about $1K/month, which means we won't be able to have a vacancy every month.

Wednesday, September 26, 2007

Going Down To 2 Jobs

After a long time thinking about it, I'm going down to 2 jobs after this coming weekend. The tutoring job has been very few hours (3.5-4/week) and they haven't been all in a row, so between time and gas driving there and back, it's been coming down to taking home $5/hr. They were not too happy, but I figured they wouldn't be. I found out another one of the tutors was leaving as well at the same time.

Besides the time away from home and the money, the other issue is the control they have had on my schedule. Because the students change their schedules often, one week I may be Tues & Sunday, the next it would be Thur & Sunday. It reminds me too much of my days being a kid with divorced parents, not able to plan things too far in advance because I didn't know where I would be in the future.

Labor for Week of Rent

Well, the couple that we met yesterday is still needing a place to stay and the guy has picked up a job near us and will get his schedule at the end of the week. They are right now bouncing from friend to friend to save some money they don't have, but this weekend they're going to be running out of options. I talked with my wife on this because we don't want to see anyone homeless (let alone someone 7 months pregnant) and we decided to offer them a short-term deal:
  • In exchange for a full day's work around the house on various projects, that will be equal to a week's worth for rent ($100). With me working several jobs, projects around the house have been piling up (mow lawn, insulation, gutter covers, etc)
  • They will also need to sit down with my wife and plan out a budget for October, so that everyone is on the same page of when it's ending and how everything will be taken care of in October.
I spoke to the girl and she seemed very willing to do it, but needed to talk to her guy first to see what he thought as well as find out his work schedule. I'm hoping by Friday we'll know one way or the other. No matter what on Saturday I'll be home working on projects.

Tuesday, September 25, 2007

One More Creditor Happy (For Now)

One creditor has been auto-calling me daily for a long time, so I decided to pick up this time. I must have shocked the computer or something, because they ended up hanging up on me before speaking. I called them back, it is one of the 4 credit cards outstanding and they of course wanted $1944 to bring the account just current and around $4300 to settle the ~$6K balance. I ended up making a $300 hardship payment to keep them satisfied for the month and we'll see at the end of next month about making a $300 payment then. The collector actually disclosed a fair amount of information to me, such as they accept 70% as settlement, that the payments made can be used in negotiating a smaller settlement, etc. I know, it's not in writing, so don't believe everything you hear.

I've got two more credit card creditors to contact this month to see if we can put them at bay so we don't have them go to court like Chase's hired creditor wanted to.

Monday, September 24, 2007

Chase Creditor Chasing Us

I knew the creditors would start coming after us harder, but the one that bit this time I wasn't expecting. We had a Chase credit card and due to bad financial situations, we have not paid it. The debt for it has been sold a few times now and the newest owner decided to send it to court. It was a surprise because this is our smallest credit card balance, I was hoping to tackle them in November, but they've changed the timetable.

I called the local attorney's office that is handling the case, they offered either $200/month until it gets paid (with interest) or paying it all off. I spoke to my wife this morning and looked at our budget last night, we're just going to tackle the $2208.25 balance by 10/2 instead (court is on 10/3). There will need to be some tightening going on, including:
  • We are going to have to push heavily on getting her student loans deferred for a bit longer.
  • We have a credit with our natural gas company and they read the meter wrong the last time they came out, so I'm going to call them and see if we can hold off this month paying them. Our credit is about $350 and due to misreading should be around $500.
  • Our house phone we have been paying right when the bill comes in, we'll delay paying it until it's due this time (next due date 11/10).
  • Check when we get back the $200 deposit we did with our electricity utility back in the spring (we were behind for a while, so they required more from us as a deposit).
  • Delay additional insulation until mid-October (we've been having warm weather that has been helping).
  • Keep in touch with the possible roommate from last week. Last we heard it was pretty certain he had a job in the area (doing drug test for it), so now it's a matter of him starting it and them moving in.
  • Mortgage will get paid on 10/12 after 1 roommate pays their monthly $350 and consulting job pays on that date.

Sunday, September 23, 2007

Love Offering for Our Pastor

We received a letter in the mail this week about our pastor. His family has been fighting medical bills for a while for their children and now it has come to be that their septic system is dead and needs to be replaced. The total cost is somewhere around $15,000-$18,000 mark. Our church is going to do a love offering for the pastor. If I had the money, I would do it all myself, but I know others will be helping and it's not the job that God has given me. This church helped us with $1,000 at the beginning of the year to replace our water line (not a fun week) while I was unemployed. Any amount we do give will be taken out of our debt snowball (which next month we'll have around $1800).

My question is (to God and all of you), how much should we give? We've been tithing for most of this year when we could (well over the $1K we were given). Our church is about mid-sized (300-400 people) and knowing our church members I suspect that we will meet and exceed it. We've been going to this church now almost 2 years.

Saturday, September 22, 2007

Insulating to Save Future $

In order to save some money this winter (and future winters) with heating costs, I'm putting in a bunch of insulation. My home is from the turn of the previous century, has had work done to it by many people, but insulating was not something they spent much money on. We've had some cold winters that we've been here, resorting to space heaters and electric blankets. Our basement walls consists of field stones right next to the dirt, so it gets really cold down there and it flows through the house. I'm working on changing that this year.

This morning consisted of wrapping all of the hot water pipes in our basement with insulation so that we don't lose heat along the way to the faucets. They were $0.99/12 feet. I'll be picking up a hot-water blanket as well ($7.99), but uncertain how much that is going to help (our hot-water heater doesn't feel too hot from the outside).

I also started putting insulation in the basement rafters (not 100% up to code, but it will reduce the drafts from the basement), which wore me out a bit. Those of you looking to insulate, Menards has a rebate for the major brand they sell of insulation, for every $100 you spend, you'll get $25 back in store credit. It's only good until September 30th. I'm only using that brand for areas where I can't blow insulation (eg: the rafters I discussed above). I have more to do during the week.

For the best bang for your buck when DIY insulating, I've researched and decided to blow my own insulation into the attic next weekend. Menard's has a special near me (at least the last time I checked into it a month ago) where if you buy the blow-in insulation from them, you can rent their blower for free. Depending on how much you buy determines how long you can rent it for. Math wise, the blow-in is 50% cheaper if the blower is free to rent. The attic needs additional insulation and the floor beneath our kitchen is inches away from the ground, so I"ll be filling in that space as well.

Besides doing insulation, I also purchased storm doors this year. I figure it will help build a barrier for the wind as well. I also picked up aluminum foil tape today and am sealing all the leaks of the ducts. The tape wasn't cheap ($12), but I figure it will help in the long run. My neighbors are recommending the plastic over the windows, but I view them as too tacky and not really solving the problem (drafts). The last thing we'll be doing this year is insulating the
heating ducts, but I want to make sure I get all the leaks first with the foil tape before I cover up the problem.

Next year's big project will be putting in proper windows in the basement. Right now we have plywood, which isn't too insulating, but it's going to have to do until the $$$ shows up (and when we're closer to being out of debt).

Thursday, September 20, 2007

Possible Roommate

Last night we met a possible roommate, though they're going to have to find a job near us in order to make the decision to move. It is a couple that is soon to be married and soon to be having a child and they need to move away from family. This is part of the reason we rent out rooms in our home (the other is to get us out of debt). They applied to a bunch of places for work and if they get something near us, they'll be moving in. The job is for a short time until they get paperwork resolved for the guy to join the Navy by Christmas.

If they do move here, it will be a great opportunity to teach a new couple about finances. They've experienced some bad stuff with trying to find a place to rent (paying fees to apply for a place) and maybe we'll learn stuff from them.

Wednesday, September 19, 2007

Salespeople & Creditors

Most days I don't have to deal with talking with creditors or salespeople, but yesterday was one of them. And as I've been learning, their goals are pretty much the same, to get the money out of my bank account.

One creditor I called yesterday on a 6 year old $90 debt to confirm it was still outstanding (and mail them a check) went into 20 question mode after being friendly. She wanted to know where I lived now, was I married, where I worked, phone numbers, wanted my check over the phone right away (and it was FREE!). I ended up just hanging up on her once I found out what I needed, which it was still active. Sent the check out.

AT&T also sent me an e-mail recently that my DSL contract was ending and that they were going to make it month-to-month for me, for the low low price of $5 more a month or I could sign up for an even more expensive plan. I decided to give them a call and see what we could get. Ended up with a plan costing me $10/month the first 6 months and $20/month for the following 6 months. That will bring my total phone bill down to $28/month for the next 6 months. As we were wrapping up, he started going on how the bundles are great starting at $85/month where you get TV included and that he could offer DISH network to me for only some amount a month. I almost laughed and told him I still owe $300 from the last time we had DISH last year.

Lastly, I called our marriage counselor's billing person and it took a little time but I got her after 5PM. She first apologized about not calling, it had been a busy day for her and she just came back from a trip in Italy. I did my "we're in a financial pickle, anything we can do to pay a lump sum for less than the total?" and then she went on like a recording about how it's tightening up for everyone these days. As if going to Italy is tightening up, maybe she had to give up the month-long trip around the world for just 2 weeks in Italy. We settled for 50% of the outstanding bill.

Tuesday, September 18, 2007

Tackling Debts Today

Today at our house we're tackling a couple of debts. Here's the list:
  • Very old medical bill for my wife under my father-in-law's name (when she was on his insurance before our marriage). It's $90, but she was a bit ashamed for having it outstanding. Going to call them today and see if it's still outstanding and see about settling it.
  • $600 marriage counseling bill. It's been about 15 months since we were there and we tried to fight with our insurance to take care of it, they keep saying they have everything they need and will send it back for reprocessing, but it never happens. The counselor must be hit up for $$$ because we've been sending them $10/month and he called us saying that it'll take us 5 years at the current rate and asked if we could pay more. In the past he had his billing office call us about starting to pay (which is why we pay $10/month). I'm going to offer them $300, which is more than fair if you consider that insurance would only pay them 50% and have them write off 50%.
  • Mrs' student loans, we've been trying to get a continuance of the forbearance on them since she's not working, but she's been having the hardest time getting the last paystub from her previous employer. Tonight we'll need to look over the budget and start paying on them.
One roommate is back to paying us something, she is currently $500 behind in rent (with her rent $300/month). We're still on the hunt for 1 renter at $400/month (large room in Joliet, IL)

Monday, September 17, 2007

Goodbye Debt's Priorities

This past weekend the Mrs. and I went camping and it gave me some time to do some thinking:
  • I'm going to drop my tutoring job. The hours have been low (3-6 hrs/week) and if I add in driving, I'm making less than $8/hr after taxes. It's not worth the time away from family and I could be producing more than the $8/hr.
  • Next month I'm going to just go full-throttle and update our home computer with the items I've been waiting on for a year. I figure I have spent more time drooling over the exact same items, that I could have just worked and paid for them during that time. We're talking a total of less than $200 to keep our computer chugging for another couple of years. That consists of 500 GB hard drive, 1 GB RAM, newer video card.
  • I need to be consistent on my Chiropractic exercies. I don't want to be in the pain my parents are in with their backs.
  • I have enjoyed growing food in our garden. It does not make financial sense to do it, but the flavor and enjoyment is well worth it. It also gives us the opportunity to share food with those in need (e.g. a family of 5 in our church that had a major job change due to restructuring we've been giving them carrots, tomatoes & lettuce from our garden)
  • I will be consistent with our tithe. I have heard all the arguments for & against tithing while in debt and if I'm going to believe in God, I have to believe that he will provide for me. If I was to be on my death bed tomorrow, I would rather know that I was consistently trusting in God to provide than to think I could have been X days sooner out of debt by using the tithe to pay off debts.
  • After the insulation project going on at our home, I'm going to save up money to have a professional take down the trees in our back yard. Hopefully in the spring we can have enough to do that. I have been able to cut a fair amount down, but we're getting to the height that I am unable to do. I am going to request that they just bring it to the ground and I'll take it from there.
  • I am not going to take the folks we bought our stackable washer/dryer from to court. I am going to let God be their judge (they lied to us on the age of the stackable and the dryer motor needed minor service to work properly).
There is a lot more, but this is just the start.

Thursday, September 13, 2007

Missing My Wife

This week has been a hectic week for working. Here's a taste of my week:
  • Sunday: 1-3 PM tutoring, 1/2 hr drive each way = 3 hours
  • Monday: 9-5 PM day job, 7-8PM Night job, 3 hours of driving = 12 hours
  • Tuesday: 9-5 PM day job, 6:30-8:30 PM Tutoring, 2.5 hours driving = 12.5 hours
  • Wednesday: 9-5 PM day job, 6-8PM Night job, 3 hours of driving = 13 hours
  • Thursday: 9-5 PM day job, 7-9PM Night job, 3 hours of driving = 13 hours
This above doesn't include my washer/dryer woes. I'll talk about them in another post once the woes are done with. To put it nicely, I may be taking someone to small claims court over false advertising.

I can't wait for tomorrow. We're getting away for 3 days camping and no work. No cooking, just spending time together.

Sunday, September 9, 2007

Fun Birthday Weekend

This weekend is our birthday's (Mrs is the 8th, mine is the 9th). We had a fun nearly free weekend, here's how it went:

Friday Night: Free "Point of Grace" concert that my wife loved so much. There she is to the left with our little daughter. Afterwards, we went to Baskin Robin's and had a free scoop of ice cream for our birthdays.

Saturday: My wife had a high-tea party with several close ladies of her and I helped serving at the party. One of the items served was homemade tomato soup from our garden.

Sunday: Free burger & fries at Red-Robin near us. Very yummy, have plenty of leftovers. My wife is cooking potatoes from our garden so we can have mashed potatoes this week.

Menard's Free or Nearly Free (After Rebate)

Well, I did a little shopping on my birthday at Menard's, here's my shopping list you can take with you to do your own shopping:
  • 4 - 4 oz Candles, $1/each before rebate, free after
  • 14" Toolbox, $3.99 before rebate, free after
  • 2 - 2" Painter's Collection paint brush, $4 before rebate, free after
  • 8 daffodil bulbs, $2 before rebate, free after
  • 14 tulip bulbs, $2 before rebate, free after
  • 2 - Bracket Shelfs, $1.49 before rebate, free after
  • 1 - Brush/Roller Combo, $4.44 before rebate, $0.44 after
  • 2 - Backpacks, $5.99/each before rebate, $0.99/each after
The only requirement was that I spend $10 there, which I needed to get a piece for one of our toilets I've been delayed on for a while. The backpacks I did a few weeks ago, but they're still available with the rebates. Excluding the backpacks and my $10 purchase, all the other items come up to $2.25 of taxes and then $0.41 for the postage to mail the rebate. Not too shabby!

Friday, September 7, 2007

10% Raise & Health Benefits

This afternoon I had my 6 month review at my current job, it went well as I was expecting (though one can still be nervous about it). Normally they don't give out raises after 6 months, but because of my circumstances they decided to go with a 10% raise. It brings me up to $39,600, just $400 short of the $40K I was hoping for. I'm glad though that this is just 2/3 of our income (rest being rental income of $12K/yr and other jobs I have of $7K/yr).

In addition, I'll be getting my health benefits being taken care of 100% as an individual (but not within a group), but that means we'll have to start planning for my wife and daughter's benefits. That's not going to be a fun activity, but we'll have to make it happen. My daughter I'm not too worried about, it's my wife's insurance that is going to be the problem (has a pacemaker). More about that fun in the coming weeks probably.

Wednesday, September 5, 2007

Washer/Dryer Update

Well, we picked up a used one for $350 in the end, the previous owners told me it was two years old but I suspect it's more like 5 based on one of the manufacturing stickers (year was encoded, so I'm uncertain). None the less, I've got it home, the old one hauled out (had to take it apart, my father-in-law is a magician and got a 27" wide stackable through a 27.25" doorway with no real scratches on the wall a year ago) and got the new one in the closet.

We've got to change the water hoses since the newer one has too short of hoses, we're going to reuse the ones on the old one. In addition, I stripped working parts off the old one and plan to sell some of them and keep some of them in case we need them for our current one (eg: dryer belt, filter, temperature shutoff sensor, water pump, control circuits). I figure I bought the sensor and the filter off of eBay, I guess I can go back around and sell them for someone to buy...

Saturday, September 1, 2007

September Budget & August Net Worth

Here's our September Budget:

$383 Tithe
$1150 Mortgage
$240 Car Gas
$145 Natural Gas
$20 House Phone (had $20 credit)
$50 Water
$89 Electricity
$158 Cell Phone
$95 Life Insurance
$30 Mrs.' Fun Money
$30 Mr.'s Fun Money
$30 Dining Out
$30 Toiletries
$10 Ongoing Dr. Bill
$300 Insulation
$30 Mrs.' Birthday Party
$20 Anniversary Vacation
$100 Mr.'s Chiropractor Visits & Equipment
$200 Car Insurance
$10 Babysitting
$60 Groceries
$605 Debt Snowball

There is a lot here this month, so I'll try to be quick. I had back problems in August and now seeing a chiropractor 2x a week, he has some equipment for me to buy to use at home for strengthing of my neck while he works on adjusting it into place. My wife will be joining a women's bible study during the week and they are collecting an offering to the lady that will be babysitting during the study, so my wife will be giving $10. We're going to start having a grocery budget, we've been having excess on food stamps and they will be running out this month. Based on the past 2 months of groceries, we spend about $120/month for us and we have $60 left of food stamps. Our 6 month car insurance premiums are due this month, it comes out to $200 for 2 cars of just liability only coverage, I feel that's pretty good for 6 months ($33.33/month). Both of our birthdays are this month, but we celebrate one of us each year, alternating. This year is my wife's year and she's doing a tea with the ladies. It's also our 4 year anniversary, so I'm taking her camping for a 3 day weekend from the 14-16th. Shhhh, she don't know what we're doing. Our home needs more insulation (and this morning lets me know that fall is coming), so I'll be putting it in on the 22nd-23rd.

August Net Worth & Budget Results:

Our Net Worth went up as we were expecting, but did not receive a roommate, so our insulation project was put on hold until this coming month. The car repairs were put on hold as we took care of my back instead. We felt our emergency fund was higher priority than the repairs or insulation and it is. I'm proud that since February I feel that we have made big progress of tackling over $13K of net debt, though I know it's been larger since we've been battling interest at the same time. This month I'm going to need the encouragement of a couple of "small" debts taken care of to keep me going though.

New vs. Used Washer/Dryer

We had a dilemma this week in regards to deciding to go with a new or used washer/dryer. Here's how our train of thought went:
  • Our washer's motor is dead and it would cost around $200 to repair it. It's quite old though.
  • "Oh no! We have to replace our stackable washer/dryer! What to do? What to do?"
  • Let's look on Craigslist for one...There's some for $200 that are 5 years old but they may die soon on us.
  • Let's look at new ones...Ugh they go for about $1000 on the low-end.
  • Let's buy the new one with a 5 year warranty so we don't have to worry about it dieing soon.
At that point, I decided we needed to sleep on the decision at least a night and if we were still into going with a new one 2 days later, we would go out shopping for one. I then the next day thought about all that I have been reading in the personal finance world and here's what kept coming at me: "Rich people buy items that appreciate. Poor people buy items that depreciate."

You may ask how does that apply to my washer/dryer issue. If I bought the $1000 new model and considered current used prices as indicators of how much one of these depreciates, we're looking at about $160/yr depreciation of a new one after 5 years (($1000 - $200/5 = $160). Let's pretend I "bought" a used one for $1000, but $200 going to the seller and $800 going into an investment making 10% a year. What would my $800 investment look like?
  • Year 1: $880
  • Year 2: $968
  • Year 3: $1064.80
  • Year 4: $1171.28
  • Year 5: $1288.41
That means if the used one lasts me 2 & 1/2 years with minimal repairs, my replacement would be "free" (using the income to replace it). I did research and what I found was that they last about 10 years normally. So if my 5 year old used one lasts for 5 years after I buy it, not just will I have money to replace it, but enough to buy 2 of them if I wanted and go out to a nice dinner as well.

That's all great math wise, but are we going to invest it? We are by paying off all our credit card debts, that's 20% APR, can't beat that! It means we won't be dipping into our emergency fund much and can still tackle debts this month instead of rebuilding our emergency fund.

Long Time Gone

This month has been a busy month, as usual. Here's a quick update:
  • Had our yearly really bad storm in the middle of the month. 20' limb fell off one of our trees, nothing damaged. I took down a 25' limb that was damaged but didn't fall, got more to take down this weekend and cut up.
  • Washer motor is dead. Will be locating a used stackable for $200. Will put in another post the details.
  • One of our roommates has had a lot of medical problems and visits to the hospital. She is doing better, but has been behind paying us rent. We will be doing a budget with her for September to help her get back on track.
  • 1 vacancy for the entire month, have someone ready to move in at the end of September, but waiting for check in the mail from them to reserve room.
  • 1 roommate moved out with minimal notice. He had mentioned a few weeks ago he was interviewing for City of Chicago police force job, but uncertain if he wanted it or not. We found a note saying thanks and that he had moved out. Posted at several stores in the neighborhood as well as Craigslist.