It's too early in the year to call it (for 12/31), but we have surpassed our 2017 net worth goal. Woohoo!

As of today, Net worth is up $60,000:
--Investments up $43,000
--Home Value up $10,000
--Mortgage Down $7,000

Will see how the rest of the year shakes out.

MORTGAGE:

I went ahead and transferred my overtime monies ($3,000) to the mortgage. So I put the big "X" on my sidebar goal. I've had the cash since April, but I wanted to see how some of our home improvements shook out and how trip shook out, etc. In the end, trip was not of any significant consequence. We haven't gotten to home improvements yet, but the "biggie" will have to wait until December. That is a large cash infusion month for us, so I just let it go. (Will probably have a lot more cash before we get to it). I still don't have MH's MRI bills (all of them) but I received one and I don't have to pay it until November. So I decided I could live without this $3,000 cash through the end of the year. (I am being way super uber cautious, but that is just how I roll).

HOME VALUE:

The market has been so WEIRD. Our home value has been pretty stagnant for the past four years.

Anyway, our specific home model is more rare and rarely goes up on the market. There is one pending sale behind us that has been remodeled to the hilt. It's GORGEOUS! If we were going to live here for decades I might be tempted. I mean it's my style and I love the colors, etc. (As is, we only plan to stay another 6-10 years? Don't plan to stay in this neighborhood at all, so I guess that part makes it easy to resist).

So it will be interesting to see what that ends up selling for. They were asking about $500k. For reference, we paid $290k. $650k was the peak. Things are starting to barrel towards $500k, but that is starting to feel like bubble territory again. Higher prices are probably a direct result of a mass exodus from CRAZY expensive Bay Area (now twice expensive as when we bailed). I've been surprised how slow that is to hit, given mostly stagnant home values for so long, but as California real estate tends to go: When it hits, it hits!

Anyway, I increased our home value by $10k (up to a $450k sales price), for net worth purposes. It seems likely that I will bump this up more as the year progresses. (Will see what this particular home sells for when the sale finalizes, and then what follows after that. No one seemed particularly scared off by the high asking price; it sold in a flash).

EDITED TO ADD: FINAL SALES PRICE $10K BELOW ASKING. This is about +$35k to my current valuation of our house (450k), but I will hold off and see how this affects future sales.

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In the interest of privacy, this isn't the house. But our neighbor remodeled very high end with a black/white/grey theme. O.M.G. My favorite color is black. I guess I like black and white when it comes to home decor.

It's kind of crazy seeing my house (which is pretty much my dream house already) in this style. It looks AMAZING. But I just don't care enough to invest in this. Plus, my husband HATES dark colors and would never go for any of this. So I am sure that is also a big factor. I am saving some of the MLS pictures for future inspiration. This is the general idea:





Honestly, I couldn't even find a kitchen that compared, on the internet. They did a really nice job. Makes me wonder how much they spent (or if someone in that house is an architect or designer).

I think it's been a long time since I have done a mortgage update.

The short version is that our last refi was in 2012, for lower interest rate. Given the high unemployment rate here, we've not felt comfortable with a 15-year mortgage. (Well, between that and our health insurance literally going up by $1,000 per month). But we also did not want to reset the clock all over again for 30 years. So our goals with our current (30 year) mortgage have been to pay more principal than interest, and to also not have a mortgage on this house for more than 30 years total.

To that end, as long as we are well employed, we do throw an extra $3,000 per year at the mortgage. I fund with my overtime. (I think we did a bit more in the beginning to have more "principal than interest." Maybe an extra $1,000 in year 1).

We will want to shave off 10 years, so that we don't have a mortgage on this house for 40 years total.

I do have to say that these lower interest rates are absolutely amazing when it comes to mortgage amortization. Our first mortgage on our first condo was $1,500/month. We paid $1,400/month interest! (Only $100 was going to principal). We really barely paid anything down the first 10 years or so of home ownership. (We had basically the same mortgage amortization when we bought our current home).

In contrast, we've paid $40,000 off of our $200,000 mortgage, since our last refi. We are paying off about $8,000 per year, and that is just accelerating with time. So it feels like we are making some real progress. & to be clear, this is with much smaller mortgage payments. It's just that so much less of the payment goes to interest.

Current status:

We have shaved off 4 years off this loan. So that leaves 6 more years that we want to shave off. Will keep chipping away at it.

{Note: Our last $3,000 payment shaved off 7 months}

We don't have any plans to throw any (additional) extra at the mortgage. We have kids starting college in the near future and so are hoarding up cash and investments to that end. Would rather err on saving up enough for college and not having to take out any new loans.

It's all fairly moot as it is 100% likely that we will sell our house in the next decade (while still in our 40s). I am guessing it is most likely that we will sell before we ever pay off? It seems more prudent to save up the down payment for our next home. (Our plan is to downsize and pay cash for our next home. But I am guessing we will settle in our next home before sell current home. A down payment will give us more options on that front, versus having to wait to sell first).

Our house value has been rather stagnant for 3-4 years at this point. When we moved here (2001) so many people were moving up from So Cal and Bay Area, for the more affordable housing. At the time, the median house price in the Bay Area was $500k. (We thought *that* was absurd). Now? $1 mil! $1 mil-ish, if you just want to buy a small starter home.

& so I have been wondering why things are so stagnant here. I know that was really instrumental in the housing bubble, regionally. Not that we need another housing bubble, but I would expect a little more growth. I guess I have mixed feelings about it all. I do like that housing is more in line with wages and people are being more prudent.

In the end, I saw an article last week that so many people are moving here that we should be building an extra 2,000 homes per year. So I guess it's happening. I just haven't seen it so much myself, and home prices seem to be left in check.

I also got a flyer from a local real estate agent and it listed that a 3-bedroom house (down the street) sold for $450,000. What in the heck!? I figured that must have been a typo or it must have been one of the bigger houses which have been selling at that price point, but I looked it up out of curiosity. Indeed, the largest home model on our block and the smallest home model just both sold for the same price. WOW!

I have to back up a bit though. It's funny when I look back and some of the most ridiculous splurges in our family have ended up being the best long-term investments. & it's not like these purchases were made with any regard to long-term investments or making money. It was just about ridiculous splurging. So, our home is the perfect example of this. We changed cities to lower our housing costs by 70%. The housing seemed so cheap to us, that we decided we would buy a home with space for a movie theater. In the end, the price was an even trade for our Bay Area condo. (We didn't even spend any more money to get the theater space).

The sole purpose of this purchase was "ridiculous splurge". The End. But, we ended up only paying pennies for the extra space. The reason is because land is so expensive here that land is the primary driving cost of housing. If you buy a larger two story house, it's not going to cost a lot more. I've said before, but our first floor cost $130 per square foot. The second floor only cost $35 per square foot. Seriously!

We did buy new construction, which is a lot of why we got such a substantial discount on our home. On the open market, our house had never fetched less than a $100,000 premium over the smaller models, so this was obviously an immediate financial gain we received for going bigger. & of course, bigger was better during the boom. At the peak, our home could fetch an additional $200,000 over the single story homes.

As our house prices have stagnated, I have noticed the trend of increasing values of smaller homes. It's clear that people are buying what they can actually afford, and maybe even embracing that more is not always better.

For the most part, we weren't planning to sell for another 6 years minimum, so it will be interesting to see where things head. A lot can change in 6 years. I expect the market to eventually adjust and allow some benefit for bigger homes, even if it's just a very small premium. I expect that we will see some movement on our home value this summer. Will see.

The other interesting thing is that our house is still a solid $200,000 below the housing bubble peak. The peak is nothing I expect to get back to before we sell. It was pretty absurd in our region. But it just hit me that the single stories in our neighborhood have hit peak levels. Amazing!

**I paid down the mortgage below $175k, as planned. Woohoo! I threw an extra $800 to the last payment of the year, to get there.

**I am happy with financial goals and have updated sidebar. I think financially I am mostly done with this year.

The one goal that I will fall short of is our investment goal. I am waiting for end of year credit card rewards to sort out, but I expect to get to $4,300-ish of of our $5,000 goal. I am actually feeling very okay with this. We will get our total taxable investments up to $10k with our tax refund in a couple of months. & if dh works all year we will be able to throw a lot into investments. So I was okay with the short term sacrifice (being $800-ish short) since the longer-term is looking better than I expected.

Overall, these goals were pretty aggressive and I never really expected to meet them all. I will say that often writing down the goals seems like 99% of the battle. Sometimes it just seems to happen magically. Certainly not always, but this year was more of a magical kind of year.

**I expect next year to be more of a savings year and less of a splurge year. Will see what we can do. I am thinking we can maybe save 40% of our income next year. Need to sit down and work the numbers though, probably mid January when I find out my salary for next year. A lot of our bills/utilities are creeping up, and I know we have some home improvements to tackle, plus expect a lot of medical bills. It could be a spendy year on the not-so-fun stuff. But on the flip side, we can probably boost our savings rate by about 10%, if we save everything dh makes.

Just got back from annual camping trip in the Sierras.

Life continues to be stressful and crazy. The minor annoyances continue to pile up.

While my dad was here (we camp with my dad and in-laws) he fixed a couple of minor things around the house for us. But we found a new problem that we will have to call the gardener to fix.

Of course, we appreciated the break and our trip went smooth as could be. Phew! (A nice sea of calm in a month of crazy).

Finances:

**Dh has been earning tons of google credits and amazon gift cards for whatever survey stuff he is doing. He ended up getting a new roku for $25. (Our old one has been clunky for a while but I didn't really want to spend the money. In the end he spent a whole $25 and it is 10 times better).

I suppose that is unofficially his Father's Day present.

**I sent a payment to the credit cards today. I had booked summer classes for BM, our random wildlife vacation, and had charged dh's MRI. I had charged that all in June wanting to push off actual payment to next month, BUT the credit card balances were getting kind of crazy. Plus the one card has a low limit and so I think it was best to pay it down before the end of the month.

So much for delaying those expenses...

**I had to deposit my big check in person. For whatever reason (I guess since I was very nonchalant about it) they made it available immediately. Which was nice since I received the check Saturday night and we weren't back home until yesterday. Seriously, they asked me when I NEEDED it and I shrugged. Apparently that is how you get immediate access to large sums in this day and age. (If you haven't had a large deposit lately, they usually put a hold on some of it).

So I went home and took all the money out (online). I didn't NEED it but if it was available I might as well allocate it.

**So... I went ahead and made my big mortgage payment.

Mortgage balance is now $177,999. I project that we will be at $174,999 by end of year. $169,999 by April 2016.

**I had already opened a $10,000 CD (at my credit union) for a 1.50% rate and so opened up a second one. I don't know that I felt entirely comfortable tying that much up in CDs, but... we also expect a chunk of cash in December. I am always way too cautious, anyway. Odds are we will probably never never touch this money. (I consider about $15k of our cash savings completely untouchable but for extreme emergency). Of course, the CD is easy to access and there isn't much downside if I have to raid it later.

**Money continues to rain down from the sky. I had my piccolo on consignment and apparently it sold recently. Received a $300 check in the mail yesterday. Woohoo!

I am putting this $300 into investments.

{It was in disrepair and this was a very easy route to get it sold for more than I am sure I could have gotten on my own. Certainly was far less hassle than FB and CL have been of late}.

It was funny because I swung by that area yesterday and was stuck in the heat and traffic staring at the music store for a while wondering if they would ever sell my piccolo. (It's an area that I do not frequent). The check was, at that time, on a mail truck en route to my home. Ha! (We kind of reasoned summer/fall would be a good time to sell but had left it at the store at some point in the spring. Better than gathering more dust in my closet).

**The kids just told me that they have no piano lessons next month and so the snowflakes continue to fall. That's another $200 that I will move to investments. Plus credit card rewards this month (About $90?). Plus $30 to investments since we don't have a Ting bill this month. We also have a REI dividend to cash out.

Possibly a $600+ snowball for this month.

**I received my overtime for the year (paid as an annual bonus) and was able to fund a chunk of my savings. For the rest of the year all our monthly savings goes to IRAs, and my 2014 raise will go to savings. To top off those goals in my sidebar.

I can't believe how behind I feel still after last year. That said, though I would like to fund 2014 IRAs in 2014, it's not a necessity. That buys us a little buffer if crap happens.

Bonus:

$5,000 to savings
$ 300 to mortgage
$ 100 new kids bike

I was planning to spend more on the bike, but we just happened to find a $100 bike this week. So that worked out perfect.

Great-Grandma insists on giving me $300 for doing her taxes. I asked her not to, but I know her. Will see. This way I figure I already threw $300 to my mortgage so I really don't care either way.

If she insists, I could use $300 for summer classes for older child. I don't sweat that stuff any more. Whether they know it or not, Grandma (MIL) and Great-Grandma pay for that. BM is attending a camp with his school next month and I used Christmas money to pay for that. & I get the feeling Great-Grandma is paying for summer school...

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**My gross check was about what I expected, with extra overtime on a big project last year. BUT, the net did not reflect all that extra work. UGH!! I have said that if spouse worked we wouldn't take anything more home. But, my own income seems to be entering that black hole. It's extra shocking because I am used to literally keeping 90% of my paycheck. You get used to what you get used to.

I ran a tax projection and everything looks fairly breakeven for 2014.

Our tax rate on last $10k - $15k of income is hitting about 25%. So, it looks like we will be doing Traditional IRAs this year. I like the way this works out. Our taxes are even steven if we change our mind. But if we do the Traditional I should be getting about a $2700 refund. Which will go straight back into retirement savings. (This would bring our retirement savings rate up to 18%. But, I don't know if that is all good, as we give up the ROTH contributions to do so. I think it just means we need to save more to pay for future taxes. Saving more doesn't necessarily mean much to our bottom line. Though I suppose I will probably be able to work some tax magic on the back end. When we retire).

I also checked the extra property tax deduction and that would save us about 25% too. For several reasons, will probably do this year. I just want the simplicity of one tax payment per year. But I want to make the extra payment in a year I actually get a tax benefit.

We've been doing ROTHs for so long because we haven't been paying any income taxes of any note, since spouse stopped working. But I am not personally comfortable with paying $2,700 taxes that I don't need to. Circumstances change, so we re-evaluate.

In our young 20s I Was strongly encouraged to fund ROTHs. I kind of understand it more with age. There has just never been any tax break quite like it. So when I entered the tax profession it was, "Are you crazy??? Do the ROTH!!!" BUT, we were young and starting out and paying a crapload of taxes. We chose to fund my 401k and our Traditional IRA. I am sure we could have cashed flowed the ROTHs and whatever, we were saving 50%+ of our income. Not like we NEEDED the tax break. BUT... Absolutely no regrets. When dh stopped working, we converted *everything* over to ROTHs. It was win-win. Get a big tax break up front. Convert over at a lower tax rate. So, I am pretty partial to just taking the tax break. I don't know if we will ever be able to convert again, but we do have $100,000+ working for us in our ROTHs. As Dave Ramsey would say, that will be $5 million or something in 40 years. (I don't think it will ever be near that much, but it will do nothing but grow, and I am happy with that. All our aggressive investments are in the ROTHs, for sure).

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Housing Update:

I guess housing has settled down here. Absolutely nothing has listed in immediate neighborhood for about 12 months. A house went for $400k last spring, which meant a 65%-ish increase over a couple of years. (Nothing new, around here. It's always a roller coaster!). But then, that was it.

SO... I saw 3 houses like ours up for sale this month and that piqued my curiosity. I just saw that one had sold for $400k. It will be interesting to see what the others go for.

Overall, I think this is a good sign. Anything much more than that is getting back into crazy bubble territory. Our house actually peaked at $650,000. Which is crazy insane. At this point, anything much more than $400k is "crazy insane". Especially given the chronic unemployment, regionally. But even in a robust economy, the local wages just don't support these kind of home prices.

So I am kind of marveling at the restraint. No huge bidding war??? Heck, the other two houses have been up a week and are still available. (Not a common sight in these parts, even when the bottom was falling out). I am hoping these are all good signs, overall. That things are settling a bit. A sellers market is good for us, but another market collapse would not be good. I am all for sustainable home prices.

Though, who knows... Bay Area real estate is crazy crazy crazy right now. & that always blows up our housing prices, because then our real estate looks super cheap compared to that. (Which is the only reason anyone ever paid $650k for a house in our own neighborhood). IT will be interesting to see how things play out this summer.

Had some time today to see where things are with the checkbook and such.

**We are getting 2% back on our Visa this month, due to a temporary promotion. In fact, the 2% promo kicked in the day we bought our new garage door (& they did not accept our 2%-back AmEx). So, phew!!

**Sent $5,000 off to the AmEx, earlier this week, for plumbing bills.

Kind of a non-event, because I had already transferred $5,000 from savings when we got the first quote. I thought it was possible we'd need a lot of money *fast*. But, we were able to charge it in the end, so I got to hang onto it for a month. {We keep checking balance around -0- and so I don't bother to include it in my net worth. It has felt like the money was *gone* since the minute I put it in my checking account}.

**I was $10 in the negative, as of 8/31, so I decided to fix that before I forgot or got distracted. I didn't think much about it because it's been *crazy*. But I realized since we could not charge the garage door repair that I had paid cash for that from checkbook, without pulling the funds from savings. (Which makes me not in the negative at all).

I usually do one net transfer a month, but had not done the August transfer yet. Once I added that garage door money from savings to checking, I was back in the green. This was much easier than moving $100 over now and moving it back after payday, which was my initial plan. Phew!

This is one of the biggest reasons I really like using Quicken (or any electronic system). It's easy to move things around and just keep things simple. I threw in all the September deposits and bills, and it seemed to $0 out (income = outflow). So, phew.

**Total cash still seems to be hovering around "6 months of expenses." I stopped funding ROTHs, due to all this hoo-ha, so that explains the most of the why. If things settle down, we should be able to fund one entire ROTH by 12/31. I always send 20% of every month's pay, to savings. So, that is why we are treading water. I also receive January 1 paycheck on December 31, which is why it should be enough to fund an entire IRA, through the rest of the year. The worst case plan is to fund the rest of second IRA in Feb, March, April. I have already put $1,000 into one IRA (plus $500 credit card rewards). We should also have some Christmas gift money to help fund the IRAs.

**We did an unofficial inventory and this sums up my year, financially:

--Two Dead TVs (the only two we had/both fairly new)
--One major car repair
--One MRI
--Vet bills/lost pet
--Replaced computer (was crazy old)
--4 Plumbing Repairs in one month
--Clothes Washer broke
--A/C broke
--Garage Door broke
--Cell phone Broke (it was rather new)
--Major carpet cleaning (more ailing pet stuff)

& it's only August??? OMG - I am exhausted. (& I am sure I am forgetting something...).

Many thoughts and comments on this (wanted to put this all in one place).

I've seen the comment to save 1% - 3% of home purchase price, for home maintenance. Given the overall low maintenance of our home (we aren't maintaining acres, and many other low-maintenance factors) and due the general higher cost of housing here, I find that 1% is more than ample. In the grand scheme of things, if we had done this from Day 1, we'd have about $30,000 saved today for home maintenance. (& I am not aware of any large repairs on the immediate horizon). The reality is we got about $-0- saved up specifically for home maintenance, because we had some really low income years and weren't particularly saving. Which is fine - our house was bought new and has been VERY low maintenance. Which was our plan, and has worked out fine. We can save more now to make up for lost time. If we save 2% of home purchase price, every year for next 10 years, is about what we are doing anyway. In the meantime, we have fully funded our car replacement funds (with no plans to replace anytime soon) so can borrow from that. Just to say, planning ahead is a VERY good thing, and is most of our ease with this crazy financial outflow.

When we started the year, we were thinking along these lines for things we might do this year: Replace carpet and reface kitchen cabinets. (The kitchen cabinets aren't the best quality and are really messed up).

In the end, we got a GREAT carpet cleaner who has our pet stained carpets looking like new again (we still have to bring them back to do the upstairs. I was giving it time to see if it was true - but yes, the stains are totally gone). SO, we completely crossed "carpet replacement" off of our list (might never do so as long as we can hire these people) and started thinking about the cabinet refacing. We like to do one big project a year, and just spread it out a bit. I suppose cabinets came next into our line of sight once we wrote off the carpet replacement.

But, this year has been crazy, so I think we will put that off to next year. I share because keeping on top of things and being able to be flexible, I think this is also all key to not panicking in times like this. Anything that has to be done, is done, but things that don't *have to* be done, we try to space out as much as possible. I can survive with fading cabinets a little while longer.

Notes on each of the above:

--It's unfortunate that dh's newer TV died, but the older one we were able to fix very inexpensively, all on our own.

Even if we aren't the most handy people, being willing and able to fix things or hire people to fix things, is a HUGE financial savings. (Versus tossing everything that breaks, which many people seem to do).

--Car repair and MRI - these are kind of usual and predictable, but just add to the insanity of this year, I guess. Seems like I have had a $1,000+ bill every single month. Gah. We do have a great very trustworthy independent mechanic to keep our costs way down.

--Vet bills... I think we got off easy with this. Could have been a *lot* worse. This just added to the overall crappiness of the kind of year it has been.

--Computer replacement was more than expected - dh called it the old Frankenstein computer. Which bought us a lot of time. Why did it have to die *now* though? Gah! Dh built his own computer and got something way better for the money.

--Broken stuff:

We have reasonable low-cost contractors we can call for basic repairs. So, did this with the AC, the washer, and our new faucet.

We installed our own garbage disposal. That was a long time in the making, and we had already bought a new one, but it did literally die the end of June, before we had replaced it. It is one of those years!

We had a freezer water leak and fixed it ourselves before calling out any help. (That one was at least easy).

Major plumbing repair was a freak thing, but it happens. That's what "$30,000 saved" should have been for - something like this. We were lucky we had some time to do some research and to gather various quotes and opinions. A truer emergency would have not given us that time.

{This is actually the first time in 12 years of home ownership that I actually felt at a disadvantage for being less handy. It's possible we could have fixed this ourselves, for about 1/10 the cost, but the odds did not seem good. With the way things panned out, I think we made the right choice. I've mostly felt that our other strengths - computer and tax and financial skills - make up for hiring someone for $100 labor here and there}.

--Garage door - it's unfortunate we spent a fair amount of money last year trying to just fix the stupid thing. When it broke this year, even after we had just spent a large sum on plumbing work, we just wanted to replace it and move on. I could not stomach spending one more dollar to just put another bandaid on it. Our only complaint before was that it was loud, and just really cheap quality. It wasn't giving us any issues. But, it just wasn't worth saving, once it broke. I am so happy we ended up replacing it - it cost far less than we were expecting. & Was able to cross that off our more near-term repair list.

--Cell phone - not much to say to that - a freak thing but nothing substantial in the end.

The next question is: Are we done yet??? Because if this is it, I can deal. But, I don't know what else the year has in store.

Well, it is *never* boring here. !!!

I am not sure we had a day of peace since July 23. Yesterday I made it through the day and to the land of zzzzzs without much event. But when the kids went to bed it woke me up, and it was kind of warm. & so I flipped on the A/C (also thinking to cool down the kids' rooms). Dh came up a minute later. I figured he just heard me awake and wanted to say good night or something. Nope. He asked if I turned on the A/C because...

It sounds BROKEN.

Seriously...

Couldn't make it *one* day without finding something broken, calling contractors, researching contractors, or dealing with contractors. At least dh had a bit of a breather - he must be going *insane*. I mostly get to go to work and let him deal with all this. HE at least had a quiet day!

Ironically, we bought some service plan from the plumber, so we figure we will call them out first. It gave us a substantial discount on the plumbing repair, and they would do tune up on all of our major appliances (A/C and heater and I forget what else). I figured we'd just start there because it's free.

I am not utterly and entirely jinxed because tomorrow is supposed to be like 20 degrees below average. PHEW!

Financially, the jinx is annoying me. I had a credit card payment and a mortgage payment lost in space. ??? Could have been the credit union. BUT, then the mortgage payment hit after a week, but they left the extra principal unapplied. ??? I also had two returns to a retailer, shipped. One made it back and was credited about a week ago. The other one is shown as received by tracking, but not on their website, and no credit. *Bangs head on wall* I don't have to pay any bills for about 3 weeks, and I don't intend to. Everything I touch seems to be messed up! The credit card payment did eventually show up, but it seems no avoiding follow up on the other two. [I can't recall *ever* have any problems with any of the above - so this is just crazy}.

Emotionally, I think I checked out quite a while ago. Obviously I have no say in any of this. For anyone who has never particularly read my blog, we tend to keep up on things around the house. IT's not like we keep everything in disrepair. I am not sure if it is just so beyond our control that we don't even *care* any more. OR, there is also that we have dealt with so many health problems (us and loved ones) in recent years, that we just can't muster a lot of emotional energy for this stuff. I don't know. Maybe a little of both. It could be we are just both spent on the emotional front. We lost our pet earlier in the year, we both had loved ones in the hospital, yadda yadda. But I think we both have a renewed perspective that "stuff is stuff" and I can't say we care that much. We have plenty of savings to weather the storm, so no point stressing over it.

We did replace our garage door and that is *divine*. I am not upset about that at all. Forced to do it at a bad time, BUT, it's really nice, and we can cross that off the to-do list.

To be continued...

Murphy is getting on my last nerve. !!!

That is all...

**Well, the child is back from England! That is a whole other thing and wouldn't know where to begin with that, but they had a blast!

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**We have actually managed "low maintenance" home ownership pretty well, for the first 14 years that we have been homeowners. I get a lot of comments that things don't always go as planned. I am well aware of that. But, doesn't mean you can't manage risk and odds.

Anyway, to set the stage, the city had a water main problem and asked us to turn off irrigation on Sunday night. & to use water sparingly. We obliged. Having grown up in drought country, it was a simple adjustment. We still conserve water pretty aggressively, anyway, just out of habit. But, in the meantime, our yard is very dry (it's hot and dry, like it always is during summer). & the laundry and the dishes are piling up...

No sooner than they fix that (late Thursday), then we had a break in our own main water line (to our house). UGH!!

We initially thought it was relatively minor, and we kind of inwardly rolled our eyes at the first in-person quote we got. Unfortunately, it only got worse from there. The diagnosis and the advice has been the same, 100% across the board, so the difference seems to be in the tools available. We had called a big plumbing company out first, because we thought they could come out sooner (which they did), but it turns out they have the tools to do the job with the least cost and disruption to our landscaping. So, after vetting plumbers for 3 days, we went with that option. (Though in general they are known for being way more expensive on smaller jobs). They need two days for permits, so if we are lucky we will get our water back on Wednesday night. Which puts us a full 10 days of super water conserving mode. FUN!

I did water the trees last night and we decided to water the grass with cold shower water. We are borrowing water from their neighbors (a hose is connecting our houses) and trying to run the outside hose made a noise racket, so I don't think the yard will get much more than cold shower water until its fixed. But, at least the trees got some water. The grass can take a lot of abuse, but is also a fire danger. Our lawn/yard is small though, so I figure a little shower water moisture will at least help. Though we aren't planning to take many showers either.

Oh, and the water tastes TERRIBLE (like a garden hose?) and so I will get some bottle water today. I have been melting ice, and will at least get the benefit of Alhambra water at work all week. I will smuggle some of that home too (the boss will understand).

So yeah, FUN times!

We were actually waterless on Thursday night and we stayed at a hotel down the street for $50. If I had any idea we'd have a $5,000 repair job, I never would have done that. But I *really* needed a shower. We should have showered the kids when we were in San Jose yesterday, but was not thinking. (We had to go pick up the child from the airport). But they don't have to go anywhere the next few days, so they will be fine. The dishwasher and the washing machine don't use enough water to really worry about, but are trying to use sparingly, regardless. I am mostly thankful that we can still cook. The water is providing most useful for that, and for the toilets.

Can't really clean or sweat or make more laundry, so going for a low-key "read a lot of books" weekend.

Financially, we have the savings to easily cover this up front, and I think we have plenty of give and take for it not to particularly set us back. I might fund IRAs 3 months later (for 2013), will rethink paying property taxes early, and probably won't get anywhere near our mortgage pay-down goal. But, if we do delay IRA funding by 3 months (push back to April) I still may be able to stick with mortgage and property tax goals. Of course, China trip seems dead in the water, and we were already talking about just sending BM to Japan. I guess that is officially the new plan, because financially that is all we can swing now.

The finances aren't particularly stressing me out. I am more worried about just getting the job done for the quote, and not finding worse problems. Getting our water back will be VERY nice, too. I will probably worry about the finances and figure the rest all out once I know what the final bill is.

In the meantime, I think for the first time I REALLY feel like a homeowner.

**I applied for improved disability insurance earlier in the year (offered by same provider I already have - was new more extensive coverage than previously offered). I just got word I am approved. Awesome!! IT now covers partial disability, which is a substantial improvement.

**Wow, real estate is HOT here. A house sold down the street for $375k (in minutes). That officially puts our home appreciation at 50% over 12 months ago. !! I thought, "Yeesh, I haven't heard anything about real estate picking up so much." So I caught up on the real estate news, and I guess our city is on fire. Apparently also high in the ratings for "flash sales" (or homes that sell within 24 hours). Flash sales have generally always been the norm since we have been homeowners (common enough even in the "slump."). But, it is definitely noticeable today that homes in our own neighborhood are 100% selling within days. (1 or 2 or 3 days - same difference to me. By the time you evaluate your pile of offers and sign on the dotted line, it might take a couple of days). In the "slump," homes priced right would always sell in a flash. (Yeah, it's hard to consider that a slump. Hence, the quotes). But others would languish at higher prices.

Bubble 2.0 is definitely here. I call it that, due to the abundance of zero-down home loans. (And 3.5% FHA loans).

Regional real estate is interesting because it seems to have little to do with regional economics. Unemployment is sky high here and wages/employment have never been overly fruitful. But home values are hyper inflated by outside investors and transplants from LA and San Francisco. So, I wouldn't be surprised if home values fly past $400k this summer. (& if they fly past $500k, $600k eventually, as they have before). Especially since buyers seem more concerned with monthly payments than home values. I have never really gotten a sense where things would settle down. For the past 13 years, real estate has been a rollercoaster ride every step of the way. I think it's some of why I find it so fascinating. If my home didn't swing wildly in value, it wouldn't be so interesting to keep track of.

**We got the catalog for the courses my 4th grader can take this summer at college. O.M.G. It's becoming clear to me he got the engineering genes from my dad. (& my dad will be so jealous!!). I've already guessed what classes he will want to try for, so will see. Electrical engineering, circuitry, designing, that kind of thing. Anyway, I am so relieved we can fit in two weeks of classes with our busy summer schedule. This summer will absolutely fly by.

That's 2 weeks of engineering classes (most likely) and 10 days in Europe. We have our annual camping trip, and summer break is only 8 weeks for the kids. I doubt we will plan anything else in particular. Except finding something fun to do with LM while his brother is in Europe.

**It's been a sad, sad week since we said good-bye to our fur baby.

Dh and I, fatigued by the care of our elder cat, had many many talks probably for years about all the things we would do when we were some day petless. *No more pets.* (At the least, no pets for a couple of years so we can do some longer-term travels).

Well, spiritually, I had a very quick change of heart. I did peek at the shelter. Well, the many shelters and the gazillion homeless cats in our city. & it immediately hit me that I no longer cared for the simplicity of being petless. We have a nice, stable home, and I just couldn't say no. Of course, my spouse is in a space where he thinks this is a choice of grieving and he is actually open to it. I don't think it has anything to do with grieving. IT's realizing that having a pet is a lot of work and responsibility and a PITA, but that's what all the *best* things in life are. & I don't think anything has taught me that quite as much as having children. So, on some level, I think it's just an extension of being a parent. When I Was 23 and picked up my fur baby from the shelter I couldn't imagine being petless. IT was my first decision as a renter-turned-homeowner. These days I can imagine being petless and enjoying it (mostly because I am in knee deep with kids), but I also have very well learned what is truly important in this life. It's love. Bringing more pets into our home is just more opportunity to love.

Anyway, so we will take our time. But, I look forward to adding all that crazy to our life again, when we are ready. Crazy and love.

We have crossed over. Woohoo!

More cash and mutual funds than DEBT!!!

*Most* our our savings is in retirement funds, so obviously not planning to cash that all out to pay the mortgage. But I am very pleased to be here. What might not be that exciting of a milestone to some is extra huge to us because of the high cost of living here. I don't think we would be in this financial position without or low-cost move.

This is a very tenuous goal, as these things seem to be. So, the next goal is just to KEEP it this way. To get so far on the other side that we will stay there. That might take one year or five years. I don't know. (Historically I find these kind of goals take about 5 years to stick, but that's with the economy in the crapper and everything).

There is nothing spectacular we have done over the years. Save a little every year. Don't borrow any money against home. That's really it. Time does the rest. I share because it's so important just to save what you can. To consistently save and to stay the course. I am sure I would have found these numbers overwhelming or impossible when I Was younger.

Being very debt adverse, the mortgage still has never bothered me much. (Though obviously no plans to keep it forever!!). Why not? Because if we wanted to be 100% debt-free tomorrow, we sell the house. The End. Debt Free. There is certainly a lot of bad mortgage debt out there, but we have avoided putting ourselves in that type situation.

So why is this such an exciting milestone? For the first time I can envision paying off the mortgage and being 100% debt-free, *while keeping the house.* That feels AMAZING!! That means, keeping a roof over our head and not having to pay rent or a mortgage. & to me, this is a level of financial security we have never achieved before. Woohoo!!

I totally understand it's a little premature to get too excited about it. But then again, it only took about 4 years to turn $100k to $200k. Our savings level is back to where it was last we both worked - trying to save about $30k per year. At some point it becomes an obvious choice to save and invest rather than to be "debt free, today."

At current, I still envision paying off the home age 45 or 50. I am 36 today. If we have another good stock market run in the interim, I'd consider cashing out at a peak and being debt free. It just depends on all factors. With these low interest rates I lean towards investing in mortgage payoff (4%) versus bonds and more cash. If interest rates were higher I'd maybe keep more conservative investments in cash or bonds, earning more than our mortgage rate. I am a risk-adverse type, so will not be putting 100% of our money in the stock market. & it seems silly to settle for less than 4% with the more conservative portions of our investments (above and beyond more immediate cash needs). This is something we just evaluate constantly as economic factors change. What I am doing this year might look totally different next year. It wasn't that long ago I had a 6% CD at the bank. So, will see.

In other news, real estate is HOT here. Our house might be worth $350k today and will easily hit $400k this summer. Homes are selling in minutes and going up in $25k increments. Bubble 2.0 is here. (I call it Bubble 2.0 because no one is putting down any money on these homes, nothing seems to have been learned in the first Bubble. I don't feel like we ever got anywhere near true rock bottom with all the investor speculation keeping home values artificially inflated. The market is spiking as real families are actually starting to buy these homes, to live in).

Or maybe more to the point, "Death to the Mortgage Interest!"

I am at the point where shorter term mortgage are extremely enticing with lower rates, BUT not willing to give up the liquidity. So, I need to put away the amortization tables, at least until next year. Or until something significantly changes.

Our current mortgage goals are "to pay more principal than interest, going forward," and "To pay $10k off per year." At the least we are committed to paying more principal. In good years (gainfully employed) we can commit to the $10k annual payoff.

We've been in our house for 10 years, and have refied 3 times. We have only ever refinanced for lower mortgage rates - no cash outs.

Out of curiosity, I looked at where we are today on the principal balance, versus where we would be if we had never refinanced. Keep in mind, we have 30 years left on this loan, versus would only have 20 years left if we had never refinanced.

As of today? Our principal balance is $3k higher than it would have been if we never refinanced. Which is interesting because we were planning to pay about an extra $3k this year. I have the cash, but just making sure no one has surgery this year - probably won't commit this amount until 11:59pm on 12/31/12. But, I think that makes it pretty even steven!!

I found this really surprising (up to today, we have basically never borrowed against mortgage or prepaid anything - so this is basically just with regular payments). How is this possible? Well, our mortgage payment is about $600/month smaller than it used to be, BUT more of the payments are going to principal with the significantly lower interest rate.

Yes, I do still have 30 years left on this mortgage (versus the 20 I Would have otherwise) so it's not apples to oranges. But, obviously it's going to be pretty darn easy to knock off those last 10 years. If we commit to pay more principal than interest...

As of today, we are pretty committed to never refinancing at 30 years again. But, I may have said that before. Ask me again is I can get 2% on a 30-year. But I think the point is we would just get a 20-year mortgage in that case.

I was always amused by advice not to refinance again at 30 years because "one should have no mortgage debt in retirement." Our mortgage goal pay off is age 45-50. Who said anything about a mortgage in retirement? I think we have already knocked off a year or two off our newest mortgage (with some very small pre-payments). So, if not of concern to us. Worst case - age 63-ish payoff. By next year we may have knocked it down to age 60. Odds are we will refi to a 15-year or a 20-year at some point. Which would be age 50-55 payoff.

All this to say, be careful of overly simplistic financial advice. I am all about keeping it simple, no doubt! But, I am also about thinking about the big picture and running different scenarios.

Apparently our refinance was funded, because our old mortgage is showing as paid. (It probably funded Monday, but is just showing up online).

Better yet, when I logged into my CU account today, I saw the new mortgage there.

Talk about simplicity!

Now, what are the odds that they will keep the loan? Hmmmm...

Until and when/if things change, I will really enjoy the simplicity of just having our mortgage with our primary banking instutution.

I have a huge principal payment to make mid April, so it will be a good test. As is, it wasn't "100% set up" yet so I couldn't check out the "extra principal" interface. Though I could send a payment today if I wanted to (for however much I wanted to pay). So, that is good.

I was only going to send about $400 of my bonus to principal - first payment due - but that would make it a $1000+ principal payment. Holy low interest!

Though I would rather refi with CU than a bank, I believe this is the slowest refi we have ever done. With exception of 4 month refi from hell (which probably should have never been approved in the first place - was in order to buy second home - we kept that loan 5 minutes because were able to sell property immediately after refi).

Anyway, though we only refi when interest rates are rock bottom and there is a stampede, this definitely takes the cake for *slowest.*

I finally just e-mailed the CU today to ask status of appraisal, not expecting a response for quite a while. But, I JUST got a response that appraisal is fine and well.

I knew I was overly paranoid. Gee, what a surprise? I needed $250k value for 80% loan to value. I guessed $250k. They appraised $250k.

Has anything changed since the boom?

I told dh I was so good that I could do an appraisal without even doing any work. Clearly I don't understand the whole process - it is just always magically what it is supposed to be, it seems to me.

This is good news for property taxes and bad news for net worth. Property tax went with $263k assessment at 12/31/10. So this will be another $13k or so drop to value. The value date for property taxes next year will be 12/31/11. An appraisal dated 12/23/11 will be useful if they try to assess at higher than $250k. So far I have found assessments to be on the low side - I am sure they don't want to spend a lot of time and effort on appeals, so they just aim for the low side. Seems to be how it has been. So I am guessing our tax assessment will be under $250k for the next year's property taxes.

As long as I can refi, have 20% equity, and my property taxes are going down (especially since no plans to sell right now) then is fine by me. Maybe property values can shoot up when we are ready to sell and downsize. In the interim, we enjoy the reduced taxes.

I am really surprised the bank updated their balance so fast. They tend to be a little slower.

So, it is official!

Per bank:



I suppose this is the first time our debt load has ever been under $200k, since being homeowners.

Woohoo!

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My checking account is also drained, as mentioned before.

I am not really sure how much money to expect for Christmas. I don't know if 10 years at my job buys me a bigger Christmas bonus?

BUT, whatever cash we receive this week, I will be hoarding for our refinance. It probably won't be too much of a cash drain in the end, to pay cash for the closing costs. Will probably receive enough cash this month to cover it. That wasn't my plan, but it works out very well!

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Tomorrow is our day of many anniversaries. (Primarily, 10 years of owning this home and moving to our low cost haven). I thought of more (I've had my CPA license 10 years, too). Boy were we BUSY 10 years ago! I am not feeling very reflective or philosophical, so maybe tomorrow I will think of a better post. For today, I am just relaxing and enjoying this milestone.

Tomorrow we do dinner out - lots to celebrate.

Does it sound too good to be true?

You betcha!

I'll get back to you in about 60 days.

I see no reason why we can't close a refinance in 60 days. But, from prior experience, and considering the insane rate of refinancing right now... All I Can do is not think about it or get too excited until it is official and those closing papers are signed.

But, a commitment has been made, and a huge leap towards 4% has been taken.

4%, 30 year mortgage. I can't even tell you how much this improves our long-term financial position. Will most likely pay it down as a 20-year-loan, by simply paying old payment which also very low to begin with, while still trying to scrounge about $4,000 per year in extra principal payments (outside of my own income). In the first year, we would knock out $10,000 in principal.

Anyway, I absolutely can not think about it until we sign the papers! It is too good to be true! (& yes, I Said the same thing last time - I think that one was almost more shocking, because we knocked our mortgage payment to the realm of the crappy studio apartment rentss I was looking at in the mid 1990s. I will never complain about paying $1100/month for this beautiful home, neighborhood, community. $900 is simply too unreal to imagine).

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What's funny is that last time we refied was the year my identity was stolen, and I was in the middle of some pretty serious 0% credit card arbitrage (more free money from credit cards). The refi was after the identity issues were cleaned up, but while I had several credit card balances (& tons of cash earning a high interest rate).

I've never opened up so many credit cards in my life, and here I am with another amazing refi opportunity.

Is the greater purpose of this blog simply to say, "I can do a lot of credit card deals without hurting my credit score!" ? IT feels like a theme. I know there are people out there thinking I am insane to do all these credit scores because it will ruin my FICO, and stuff like that. You can see why it doesn't worry me.

I ordered some prints from Walgreens - some more of my dad's prints (one for gift - some to keep - I couldn't decide so picked 3 - got 50% off). OF course, they only print poster-sized prints at another location. IT's about a 5-minute drive from work and kinda sorta can be on the way home, so just went by there at lunch yesterday to pick them up. Ate lunch at home.

Holy Cow.

Firstly, the traffic was insane, since I had to drive past the mall. Though I try to avoid the mall in December, it didn't occur to me that driving past on a weekday noon hour would be such a painful experience.

Secondly, the line inside Walgreens was a mile long. I needed to pick up a couple of things, so just paid with the photos - there was no line at the photo counter. Phew!!

Mental note: No more "quick trips" anywhere in the vicinity of any mall.

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I need to get another frame, and just saw that Michael's has *buy one get one free* this week. I will brave the crowds. That shopping center has the worst parking lot ever - I hate it any time of year. BUT, Michael's is kind of off to the side, so it is not too hard to get in and out without bypassing the rest of the traffic. I will give it a go. Crossing my fingers! This is for myself, so no deadline. But I want to see if I can get more of the same frames I already have - is the only rush.

Lord knows when we will ever hang these pictures - dh can never seem to agree on anything when it comes to home decor. I tried to get him to help me hang them over the weekend - it was a no go. I wanted to replace an "ugly picture." Dh does not agree. Beautiful pictures, but no idea where they will end up. Will see...

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Okay, I can't take it any more. 4% for 30-year mortgages. I know this is not the first time. But I e-mailed our broker. One more thing to piss dh off about - he hates refinancing.

Just call me the perpetual refinancer.

If we keep our old payment, we will shave about 6 years off our current loan - would go from 27 years left to 22 years left. (If not - still pay off by about age 64 - which is about my maximum). I'd rather go through this broker because he was great and low stress and no problems. The fees are the exact same at our credit union. I'd rather get a credit union loan but they seem extraordinarily inflexible on waiting for an interest rate lock. With broker guy, I think it took over a year to get the rate we wanted, last time. Talk about service. Anyway, I informed him we had paid down our mortgage a bit, and I want 4%! Will see what he says. Last time it took two weeks, from rate lock, so who knows. May be refinanced again by 12/31? Dh won't be too surprised. I already said the ugly word a few times in recent weeks: refinance. Would be 0 point refinance, will pay cash for closing costs. New payment - something like $950 down from $1130.

This is not the *last time ever.* I made the mistake of thinking that the last 2 or 3 times. It is possible we can pay down a chunk and get an even lower 15-year rate, at some point. So, I give up on "this is the best it gets" thinking. Who even knows? I would hope this is the last 30-year loan we ever refinance. I feel uncomfortable with a *worst case payoff* any higher than age 65-ish.

Just deposited my paycheck and paid the mortgage.

Mortgage Balance? $200,874!


What I have so far to apply to the balance on 12/31 is:

$311 regular payment (principal portion)
$150 payroll tax holiday
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$461 Total

Leaves about $415 to come up with. I am just crossing my fingers for Christmas money. If I don't get enough, will transfer from savings.

Ending balance should be $199,998

Wahoo!

I will probably wait until Christmas so that I can use Christmas money to pay it down. Merry Christmas to me!

Anyway, most extra payments made were from credit card rewards this year. Here are the extra principal payments made this year. I haven't had to touch savings for any of these, so crossing my fingers that I can say the same for December:

JAN - 72.79
FEB - 132.79
MAR - 156.00
APR - 177.79
MAY - 65.00
JUN - 552.79
JUL - 50.00
AUG - 300.00
SEP - 450.00
OCT - 150.00
NOV - 150.00
DEC - 876.00
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TOTAL $3133.16
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Boy do those mortgage chips add up fast!

I did mention none of these payments came from regular income? & just a place to park the payroll tax holiday, so I don't get used to it.

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I also wouldn't be surprised if we refinance AGAIN. The refinancing never ends. I am holding off and attacking the mortgage a bit in the hopes of getting 3%-ish for a 15-year loan. The 30-year isn't quite worth it, but getting close. I could never regret our last refinance - it freed up $200/month and locked in a GREAT rate. I wasn't sure if the value of our home would hold, and I am not one to wait for better rates when they are ROCK BOTTOM. But I knew there was a chance that rates would go even lower. So, we just refinance again. Every time I tell my hubby, "This is the last time ever - I swear!" He just hated those loan people, and the whole process. He knows I wouldn't bring it up unless we could save a ton of money! Our home value has held, and I just saw my FICO was 800, credit card dealings and all. So, now I just wait for the right time. (& if I miss the boat - oh well - I can't complain about 4.875%!) One thing that is interesting is that our rate is so low as is, that a small interest rate drop is rather significant. Also, the many times we have refinanced, 15-year rates were generally close to 30-year rates. So I am in awe of these low low low 15-year rates and trying to figure out how to snag one of those without regretting the bigger mortgage payment. All I can do is pay down the principal as much as possible, and hope these rates hold a while longer.

Was just paying the October bills since we will be on vacation soon. Making sure everything is in order and paid ahead of time.

I am not 100% sure, but think we have reached the milestone of lowest mortgage balance ever. $201,333. Woohoo! (Hard to tell because all I have record of is some mortgage payoff when we sold our first home - the payoff included interest).

We are on track to hit $199,999 by 12/31. I expect a $250 Christmas bonus, and so just have to scrounge $165 Christmas money to top it off. $199,999 will most definitely be the lowest mortgage balance we have ever had.

& so I welcome FORWARD PROGRESS.

Story is that our first mortgage was $210k or so (for just a condo). But we traded for a luxurious home (+ yard and garage and stuff like that) for a $230k-ish mortgage. My dh also got laid off and we had a child, so we dropped the 15-year mortgage. Which basically means it took us, oh, 10 years to get back to where we started. A $202,000 or so mortgage. But, you know, no complaining here. The infinitely nicer home, and the spouse not working for a decade - all that is 100% WORTH IT. But I am just excited to make FORWARD PROGRESS. Versus, owing as much at age 34 that I did at age 24.

In another 10 years, we pretty much expect to have our home paid off. (I can handle the 15-year amortization, and dh doesn't need to bring in that much income to knock off 5 more years).

Woohoo to forward progress!

The super plus side is that we were paying in the realm of $1800/month for a smaller mortgage in the year 2001. 15-year amortization. For the next year, looks like we can cobble together $1400/month to the same end (15-year payoff). Low mortgage rates are definitely not all bad. (We can't even justify refinancing below 4.875%). That said, if interest rates stay low, and we can knock off enough principal, we will refinance to a 15-year. I am salivating at 3.25% rates. We just aren't quite there yet.

Hard to whine since we are saving $400/month over our last 15-year amortization. 10 years ago I was paying $1800/month for a flipping condo in a so-so neighborhood. Today we pay $1400/month to pay off dream home in 15 years (same mortgage balance). I suppose we have experienced much forward progress - just nice to move forward with the debt numbers, too.

Officially Received, between 1/1/11 and 9/7/11:

$1030 cash (Chase Sapphire)
$1015 gift cards (Citi $500 + SW rewards $500)
$ 350 deposit to ROTH (Fidelity Am Ex)
-$99 annual fee (SW card)
-$23 lost value for exchanging some Citi gift cards for cash and amazon gift cards
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$2273 TOTAL

cha-ching!

Dh is still due $200 cash from Chase.

=$2473 TOTAL

Today I signed dh up for a reduced Southwest deal. Deal is to make one purchase, pay a $69 fee, and get $250 in amazon gift cards. (HE is eyeing the new kindle, so this will cover it. & how easy is it to just make one purchase)?

I've got my eye on a Citi deal - $300 gift card reward + no fee first year. BUT, I am going to hold out a bit and see if I can get a better direct mail offer. Or, maybe close all the other cards before I start this merry-go-round again. I think you have to spend $1500 in 3 months? I am waiting to redeem that $200 cash from Chase in a couple of weeks. So, I will re-evaluate at that time. For now, the SW card was a no-brainer since it only involved one purchase. Anything more complicated than that, I rather close the chapter on all the other cards first!

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If I get that $300 deal, I will probably turn it into cash for the school. Will see!

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MORTGAGE UPDATE

Expect to make an extra $450 mortgage payment this month, with credit card rewards.

This puts the balance to about $201,750. I had expected to use savings/Christmas money, etc. to pay this down to my $199,999 goal, but doesn't seem too necessary. Normal principal is around $300/month, and I can add $250/month for the rest of the year with no cable + payroll tax holiday (& piano lessons covered by MIL). So, that about covers it.

This is good, because I probably need to divert about $1500 from savings, to max out our ROTHs in 2011. We are on track to put in a full $10k this calendar year, but also diverted a LOT of that to fund tax year 2010. So, I ran the numbers and a $1500 deposit will get us maxed out by April.

I am keeping an eye on the market. If it REALLY tanks, I will slip in that $1500 earlier. IF not, will wait until the last minute (either December or April - just depends). For now, seems like lots of downward pressure on the markets, so I will wait it out and build up more cash, first.

$30,000 cash goal is still so close but so far!! Kids have dental appointments today, which is never good news! I also need to set aside about $1500 for taxes. (The usual was not withheld from my overtime - so will owe)! & that ROTH money I just mentioned. & so it goes - on and on and on!

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I got $10 off at Kohls (Kohls cash) for buying stuff with my free gift card. Woohoo! (I think usually when I spend enough to get Kohls cash - the last thing I need to do is go shopping there again)! But this was a little different.

I also have a 20% off coupon, so will buy myself a treat today. Probably a nice top that I can wear to work. I don't think I've bought any work clothes this year, and I am feeling the boring-ness of my wardrobe.

I think my cautious nature, plus other random circumstances, and continually falling interest rates, has contributed to the fact that we have refinanced more times than I can probably remember at this point!

Every time I can save 1% interest, it seems like a no brainer to refinance. (I am not talking about cash out refinances, borrowing money, blahdeblahdeblah. JUST lowering the interest rate!) But, hell if I was going to sit around and wait for something better. I didn't have the crystal ball that said rates would slide down to rock bottom the entire first 12 years+ I owned a home. I could have just refinanced once or twice to the same end - had I known!

Anyway, I was *just* seeing 15-year mortgage rates at 3.75%, and I had to salivate. They've probably been around awhile, but I completely wrote off the 15-year mortgage at this point in time. Easy peasy if we are both working. But, just a tad too much to take on without a second income.

For whatever reason, I ran the numbers anyway, on the latest and greatest. The extra push to get our balance down to $199,999 this year, seemed to significantly decrease the payment from last I checked. Probably lower interest rates, too (though just barely). We also have the cash to pay the closing costs (maybe we didn't last time I looked).

Payment? $1450 per month.

Really, it's nothing. Our initial 30-year mortgage was MORE Than that. $1500-ish. We've paid $1300-ish on FAR less income.

But, alas, I have really taken a liking to my $1125/month mortgage payment. It's really the only reason we are making progress on our other financial goals. $1450 is probably extremely reasonable considering my income. BUT, I am also paying $1000/month for health insurance. That's obviously the reason I can't really stomach what is otherwise a VERY Reasonable payment.

I decided to run the numbers as if we just paid $1450/month on our current mortgage. Any time I have done this exercise before, we come out MILES ahead on the refi. We are talking a 1.125% decrease in interest!

The verdict? Not so much this time. Huge sigh of relief!

I need to pre-pay $15,000 at some point. If I do so, the $1450 payment knocks out the mortgage in exactly 15 years.

$15,000 might seem like a lot, but once you consider the cost to refi, the hassle factor, the tying up of cash, and the $325 increase to our minimum payments, it's nothing. So we maybe have to come up with $10,000 more - than refi costs - in exchange for some huge flexibility (a LOW minimum payment).

For the first time ever, it just doesn't make sense to refi. Hallelujah!

All that said, I am excited because my goal to pay off our mortgage at age 45 seems little more than a pipe dream lately. I think *this* 15-year plan is doable, and it puts us at mortgage payoff about the time of my 50th birthday!!

Dh then just needs to work enough to knock off 5 years off the mortgage. That, plus the $15,000 I mentioned. If he never works again? I can live with the age 50 pay off. It would mean only 25 years of even having a mortgage, and we'd have our parents beat by a couple of years.

I think between gifts, overtime, etc., we can aim for the extra $3900 ($325 x 12) per year to the mortgage. I am motivated because forming the plan to pay an extra $3000-ish this year seemed like a huge pipe dream, but we are well on the way. I am motivated by how powerful thought and a plan is.

I haven't tried before because too behind on other financial goals. The last decade was definitely: *screw the mortgage - time with our kids is more important - working more would be insane anyway.*

But, today, we are at:

**Rebuilt cash savings. Should reach $30,000 by the end of the year. Have not had this much cash since the DINK years. I feel like we are getting back on solid ground.

**We are maxing out our ROTHs. $10,000 per year.

**As of next week, dh has about 7 hours per week day free to work (no daycare costs). With the economy and all, I don't expect him to be working full-time next week. Hardly! But, being overly aggressive on the mortgage for one or two years doesn't really mean much as we ramp up our income. The last decade it might have left us behind in other savings goals. We might have to be creative for the next year or two, but eventually a second income will take up the slack.

I go back and forth because I regret tying too much cash in the mortgage, in the past. That said, I also feel defeated at how little progress we have made on the mortgage since having kids. I just need to find better middle ground. (In addition - seeing way too much under-employment once hitting age 50 - in the family and such - even before economy really went south. I feel extra motivation to be mortgage free by that age. Age 45 goal comes from the wish to be mortgage free before kids start college).

If interest rates stay low, though, I wouldn't be surprised if we take on a 15-year mortgage if we have an income boost. Though I always caution taking on more mortgage than needed, the flip side is we are talking about extremely reasonable territory with these LOW interest rates. The more we pay off, the more reasonable the 15-year payment is.

Love it!

http://www.mymoneyblog.com/housing-bubble-history-book-cover...

You have to click on the link to appreciate it.

Basically, shows a series of books by one author, about how you are missing the real estate boom! Books published 2005 - 2007 (well after the boom was OVER -here - though I admit books were maybe written a little before real estate began the falter - particularly the first one).

"Comparing old and new reviews for the books can also be a nice lesson in investor psychology."

Yes - I bet those reviews are fascinating. I should probably save this link and send it to anyone I know who gets overly bullish on real estate. I'll have to show this to my kids when they are getting ready to buy their first home. What an education in just these book reviews...

I hear almost on a daily basis how home prices are rock bottom throughout California, and the "deal of the century."

????????

Honestly, I've read enough articles and talked to enough people to know that the majority of home buyers around here are outside investors (other cities, other countries, other states), and buyers with little-down loans (FHA?). That's what is keeping the home market from collapsing in Sacramento, specifically. People who know nothing about the local market, and more creative lending.

Oh boy!

I know a handful of people who got off the fence and bought - maybe with some decent down payments and fixed rates (but I wouldn't know for sure - the terms of their purchases). But, that's rare. I know far more broke people buying because "it's a good investment and no money down required."

The more I talk about this with people, the more disconnect I see between their lofty "get rich quick" schemes and the real estate reality.

I even went through zillow and examined historical home prices in several cities I am familiar with because there is such a huge disconnect between what people are spouting about home prices, and reality. As I expected, home prices are largely higher today than they were in 2001 or 2002. Zillow backs up my impressions. (Zillow runs pretty accurate here because home sales are so constant. Home sales prices are a good indicator, and there are tons of sales).

Sure, prices are lower than the peak, but any year before or since about 2005-2008 would be lower than the peak. That doesn't MEAN anything!

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Anyway, in 2004 or 2005 I saw a graph of Southern Cali Home prices compared to median incomes. It was a historical graph with a HUGE and sudden spike around 2002-2004.

I had seen similar graphs in regards to Sacramento real estate. Back then, it seemed obvious that home prices were unsustainable.

So as I hear all this nonsense, in recent days/months, I was poking around to see if anyone had updated any of these graphs through the year 2010 or so. I'd mostly expect home prices to either have leveled off, or still be quite high. I wouldn't have expected prices to have dipped down to some historic low. Because they haven't. Not from the long historical perspective.

To the next person who tells me I am a crazy investing know-nothing about real estate:



Courtesy of econintersect.com

http://econintersect.com/wordpress/?p=4487

Look at all those graphs on this blog post. Beautiful!

"And the irrelevance of interest rates to home prices during a housing market depression is obvious when one looks at the ultra-low interest rates of the 1920s and 1930s accompanied by home prices one standard deviation below the historical average."

"There is no way that a thorough look at the data can lead one to rationalize that the housing market is poised for recovery."

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If you are wondering why I am not running out and investing in real estate, this would be why...