Wednesday, April 16, 2014

Adding to savings

I just transferred $500 to my EF, so I am now sitting at $2,177.  IF I get that extra bonus I have a hunch about (I know -  I shouldn't even been hoping for it to happen, since I don't know for sure) it will be approximately $5000 after taxes. It is going straight into savings, I'm not even telling DH one word about it.  We still have the possibility of getting our sales performance bonus's for this years sales and he can be aware of that, if it happens. But this bonus would be totally unexpected and to be able to put that kind of money straight into savings would give me the kind of financial peace of mind I have not had since I got married almost 30 years ago. 

What a sad realization that since I got married, except for about a 6 month period of time, I have never had any financial security and no savings. About 4 years into our marriage DH was making really good money for almost a year and we saved about $10,000, but then we put it all into buying this place. After that he went into self employment and we haven't stopped struggling since.  I will say the past year has been much better, especially with getting the 2 raises and the 10% of salary bonus.  Our monthly fixed expenses are quite a bit less than my income and we have been able to use the extra for some needed landscaping, repairs/upgrades and a few personal purchases, such as dh's guns, put a little in savings and start contributing to my 401k again. Heck, if we meet our sales goals this year and get a bonus again, I might even use some of it to take a vacation! As a family we have only had two "real vacations" (DH and I never had any vacations before kids). One, when the kids were really little, we drove to Arizona to visit my snowbird parents, then left the kids with my parents and drove the 5 hours to Vegas and went to a Nascar race weekend. Then my parents brought the kids to us in Vegas and we drove back home.  Then in 2008 we all flew to Florida and spent 5 days, part of that doing DisneyWorld and Universal Studios.  My mom took DD and I on a vacation a few years ago to Hawaii, but I didn't pay for any of that.

I just wish we had some equity in our home! Then we'd have some choices in whether to stay or not. The news keeps saying home values in our area are rising the past couple years, but zillow (the only thing I know to check) just keeps going down! Almost a year ago I started checking it (end of May) and by August it was up to $143,000.  Every time I check since then it just keeps going down and is now down to $127,000. I doubt it takes into the account the $10k in fencing we put in and the other landscaping and new floors in 2 rooms, but still very low and way under what we owe ($120k on mortage and $60k on HELOC).  It kind of makes no sense that it's at $127k when the drug house behind us - which is a double wide, acreage is just a tad bigger, they have no garage and no landscaping whatsoever and zillow shows their home at $142k!

I've been listening to some Dave Ramsey show podcasts on my ipad mini. I love his get out of mortgage debt advice. I'd really like to start knocking some extra on this mortgage and HELOC, but at this point, with the late start I got in retirement saving, it seems the wiser choice to put as much as possible towards that. I'm not really sure what the best plan is. I also don't really want to pay down any of it for another reason.  Our mortgage and Heloc were part of our bankruptcy (chapter 7) and we did not reaffirm either loan after our bankruptcy. The advice I got was that it was not smart to do that because as long as we keep making payments, there is nothing the banks can do and when our loans are paid, the house will be ours.  IF something were to happen to me that affected my ability to earn our one income, then we'd be screwed. We'd be liable for these house payments and no way to pay them and poof - there goes our credit again. With not reaffirming our mortage and HELOC, we still have the option to walk away from it all (if something major were to happen where we couldn't make the payments anymore) without it affecting our credit, as it was already part of our bankruptcy. If I've learned nothing in life, it's that nothing goes as planned and I'm not willing to take the risk of reaffirming.

Therefore, I don't want to spend, say 5 years or so, snowballing money at our mortgages and then lose my job or get sick or something and still have to give up the home because I couldn't make the payments. All that money put into it would just have been for nothing, especially when we are still underwater.  If we had equity, that would be a different story. Any money put into it would/should be able to be recouped in a sale (as long as home values stayed same or better).  I'd rather just keep socking money into savings and if I ever get enough (before it's paid off) saved up to completely pay off the HELOC in one shot, then I would do that.


  1. I've listened to Dave Ramsey and have read some of his info on the internet. I do agree with having a savings account, paying off the credit cards, car, etc. I did all that, and am left with my student loan and mortgage. I do have all my fixed home expenses. I have a savings account, but haven't put much into it since February. It has a total of 3850 in it. I get 10 percent of my pay into my retirement 403B. I would like to snowball everything into my mortgage, but I am scared to not have much for savings. What is a girl to do???

    1. I hear you! I think I really just need to focus on savings right now, especially since I am the only income earner. I really need to work on a having a huge cushion to have in case something were to happen to my income earning ability. Once that is taken care of, then I can work on the mortgage.