Monday, November 08, 2010

Getting the House in Order

Wow, did the weekend ever fly by! Even with the extra hour yesterday. The only good thing about the autumn time change is that my children instantly go from "staying up too late" to "bed at a reasonable hour." (The spring time change has no redeeming qualities.)

Last week, we finally, FINALLY! closed on our mortgage refinancing. That was a painful, long drawn-out process and doubly disappointing because our bank, USAA, has never ever even once come close to disappointing us in the customer service arena. :( Apparently, the first loan processor did nothing on our file except gather the information I sent to her in one place (at least she did that). For about ten weeks we languished in Delay Land and she lied to us lots of times about the state of our file (that it was finished, that it was in underwriting, etc.).

It wasn't until I voiced my frustration on Twitter (of all things) that the service turned around. Someone at USAA saw my tweet and contacted me. I explained our problem and that person got our file the attention it properly deserved. We got a new loan processor (I think the first woman was fired) and from the time of that tweet until close, it was about 4 weeks. But still. I ended up having to deal with it over our vacation, having conversations about why we suddenly had large deposits in our OTHER bank accounts (we'd sold Brendan's car) and similar things. The second we got home after our long drive (and a week of being gone), I had to fire up the computer, get out the scanner, and start emailing her documents. It sucked and I was pissed.

But it's over. We finally closed, and the cool thing about USAA is that they sent the closing attorney to our house, so we at least didn't have to drag the kids to a lawyer's office for closing (BTDT, and it isn't fun for anyone). Now our mortgage payment is $254 less per month, and the best part is that now we don't owe our first payment until January, which means that money we'd have paid in December toward the mortgage can be used for Christmas money.

Money. All year long, Brendan and I have been getting our financial house in order. It's really been longer than that, but this has been the year in which we've been taking all of the actions needed to get our plans going. Part of the reason for this is that it's just a good idea to review your financial stuff closely every so often and make changes based on values. Part of the reason is that we are very, very concerned about how the economy is going to play out in the future. I'm no economist (and neither do I play one on tv!), but I did study economics in grad school (though my strength and interest is more in the micro realm versus macro). What's happening in our country--well, it's not going to be pretty.

So we re-evaluated our finances and made decisions based on our hierarchy of values. We ditched cable/satellite for good (after a brief return for Football Reasons), saving about $80 a month. Now we pay Netflix about $10 a month for streaming video and catch the important shows (GLEE) on Hulu.

We cut back on discretionary spending, and I've become more of a bargain/wholesale club shopper. Another advantage to this is that it's easier for our family to eat healthier, too.

We consolidated some credit last summer and converted big bad credit cards with awful variable interest rates into fixed rate debt that one of our businesses pays (write-offs!).

We ditched the cleaning service (another $252 a month) in favor of a DIY housecleaning program. So far it's been working out okay.

We sold Brendan's beautiful car. Okay, that one hurt a bit. It was a gorgeous car, and really, his dream car. And it made a lot more sense for him to own this gas-guzzling convertible when he worked five miles away. Now his commute is about 30 miles one way, and it was eating up gas (and money). It was ridiculous. So we sold it and got him a used Honda Civic while merely sips gas in a mannerly fashion (seriously, you can practically see it raising its pinky finger over the teacup). That alone saves us a few hundred dollars a month.

And now the re-fi is over and the final big piece is in place. And an unexpectedly large tax "refund" helped, too. I haven't added up our monthly savings yet, but I think it's a big number (yay).

It feels SO GREAT to have this done and mostly behind us. And we've been talking to the kids about this process all along, too. They know how much our old mortgage payment was and how much our new mortgage payment will be. They have learned about the concept of interest and how it works and why banks charge it and why it's good for us to have a lower interest rate. They understand that we are trying to save our money now to protect ourselves in the future (though we haven't shared our concerns about the economy, as I don't think they'd understand and it would worry them unnecessarily).

Sharing the details of our decisions with them has been so beneficial for all of us--it's easier for them to understand when I say "That's not in our budget right now." to one of their requests because they know that Daddy and I have been working so hard all year to make these changes. I think if we hadn't talked to them honestly about this while it's been ongoing, it would be harder for them to understand a "no." (Note: they don't always like it when I tell them "no" to a purchase request, but they do at least understand why I said it, and have seen for themselves the actions we've taken to support this goal.) And it's been a good way to talk about values--what they are and how to make decisions according to our values.

Our financial house is mostly in order and we are going to try to keep it that way, but we will still need to make a few tweaks as we go forward.

And speaking of the house! The kids and I have been revamping our playroom in a serious way in preparation for the holidays. It's been quite a job, and I considered calling that Hoarders show more than once. But everyone has been pretty helpful, and it's been another great way to talk about values! We've got a few donation boxes going (good condition toys we don't value so much anymore, but maybe another child will value them) and I've hauled out three bags of trash so far. :o)

And since that project needs to be finished pronto, I'd better stop here and get to it!


Jennifer Snow said...

I know a few people are worried about inflation, so you may also want to look into turning some of your savings into commodity-based investments (e.g. buy gold). Even though the price is high now, I don't personally see it going down any time in the future.

Tim said...

Speaking of your finances, I'd be interested in hearing what you and Brendan settled on in terms of life insurance, living trusts, etc.

Anonymous said...

Very interesting. As a financial consultant, I am always amazed at how so many people look to the "professionals" to tell them what their values are, what their purpose ought to be and what their goals are (i.e. "you should be doing __________").

I'm so glad that you decided to take the initiative to examine your values and make your financial decisions based on those values. Bravo!

Anonymous said...

@ Jenn -- I would personally think twice about precious metals at this stage in the game, even though long-term they may very well come out ahead (unless we return to a gold standard or the Fed confiscates gold again).

As always, whether a certain financial product is good or not, regardless of whether it is life insurance, trusts, precious metals, or stocks, depends entirely on the context of an individual's life, their goals, and knowledge about said product (and how to use it).