Just a reminder...

When was the last time you checked your credit report? You can get a free report every 12 months from each of the big three companies. Go to www.annualcreditreport.com to get your report. If you get one report at a time you can check your report three times a year for free.

Checking your credit report is one of those things everyone should do periodically, like checking the air in their tires (you check the air in your tires, right?).

Contemplating a Fixed Income

I am on vacation this week (but staying home and relaxing) so my paycheck will be just for straight hours. Usually my paychecks are bolstered by shift differential and taking call and such so there is some flexibility in how much I make. I was thinking about what life would be like if my income was fixed, as it will be when I retire. It was a scary thought. The result of this contemplation is that I feel more committed to making sure I have a really good retirement savings.

Blowing the budget

I am totally blowing my budget this month, and I came at the damage from both directions.

On the income side, I decreased my income by not taking any call in the last pay period - an accidental oversight. I wasn't going to have any this pay period either, luckily someone was willing to give a shift away. Next, I went home several hours early one day when things were slow and elected to take the time off without pay because I have a vacation coming up and didn't want to burn any extra PTO.

On the expenditure side, I neglected to realize that because the bank changed one of my accounts due to a data compromise, that my cell phone bill stopped getting paid automatically. I don't open those statements in a timely manner since they are automatic and I ended up having to pay for three months at once. Then I signed up for a class in cartoneria (Mexican paper mache) which I wasn't planning on because I didn't know it existed. This year's Halloween theme (we go all out with Halloween decorating) is Dia De Los Muertos and I was going to try to figure out how to do the paper mache on my own but now I don't have to and this is (for me) a justified expense that I am willing to pay for (and if you knew how excited I get about Halloween you would agree).

Ultimately, there has to be some flexibility in any budget for inevitable ups and downs. I keep some slush money for budget overruns and fortunately have the ability to increase my income by picking up extra call shifts on occasion. I have a system and I know it works for me. If I couldn't make extra money I'd have to come up with a different system.

This has also been a lesson in diligence. I shouldn't be waiting over three months to check on bill payment.

Underwater loan modification

Today I sent in my application for a loan modification. My lender has a program in place for screening applicants to see if they qualify for any government loan modification programs (I don't - my loan is too far underwater, among other things). Then they see if the applicant qualifies for their in-house programs (they wouldn't talk to me about what I need to qualify for those until they screened me for the gov't programs). Current backlog is about three weeks so if I haven't heard anything in four weeks I'll start being a pest.

All I really want is a lower interest rate that I could get if my home hadn't lost so much value. It's frustrating that I can't refi when interest rates are so good.

Current interest rates would save me at least the $300 a month extra I need to pay my second mortgage off in 8 years or less.

We'll see what happens...

Anyone else trying to get a loan modification?

Cost of housing, then and now. Also loan modification and the underwater loan

Housing costs where I live are very high, and I think this example illustrates it pretty well:

The parents of a friend live a couple blocks from me and paid $18,000 for their house in the 60s. At the time it was twice her dad’s annual salary. In the late 70s my parents bought their house in an equivalent neighborhood in the same city for four times my dad’s annual salary. Two years ago I bought my house (which is a lot smaller than my parent’s house and somewhat smaller that my friend’s childhood home) for almost six times my annual salary. My friend’s dad, my dad and I are all in the same salary bracket for our times so it is a good comparison.

What would it be like to have a house that only cost twice my annual salary? Or even four times?! OMG I would think I was rich! The entire mortgage would probably be paid off in ten years! Wishful thinking....

In a related story, I recently called my bank to ask about loan modification. They are going to send me paperwork to fill out and return (along with my last tax return and proof of current income) to see if I qualify for government programs for loan modification. If I don't they will then see if I qualify for their in-house program. I already know I don't qualify for government programs based on what I have read about them (too far underwater, loan too big, income too high) but the bank is going to make me go that route anyway. I don't know if I'll be successful but I figure "nothing ventured, nothing gained".

Being underwater makes me unable to do a traditional refi, otherwise I would and take advantage of today's better rates. Even half a point off my current 6.25% would save me a bundle. It irks me to no end that I am otherwise a great risk for the bank and all I would do with the money I save would be to pay more towards the principal of my second mortgage so they'd be getting the money anyway. In order to do a refi I need 20% equity and in order to get 20% equity in my home based on its current (Zillow) value I would need $245,000. If I had that much money I would pay off my second and 20% of my first and I wouldn't need a refi or modification!!!!!

Eating at home, Part II

After spending a pile of money on groceries last week and worrying that eating in wasn't going to save that much money, it was a welcome realization that the food I bought last week will last me all of this week as well. I forgot to take into account that I bought a lot of staples and stocked up on frozen fruit chunks (for my now almost daily breakfast smoothie). All I bought this week was milk, cornbread mix and some fresh shrimp. Some of what I bought will last me through next week, too, so I will only have to make a smallish purchase this weekend.

Another side benefit to better eating habits has been more energy. All that junk was really dulling my senses.

Experiments in eating at home

I started cooking at home this week. Maybe you don't think that's a big deal, but in the two years I have lived in my house I have cooked maybe three or four family meals that weren't for a holiday. Everything else was snack food or eating out, with the occasional partial dinner for one. This is going to get expensive if I keep cooking for everyone. At the moment eating in is costing almost as much as eating out for just me would cost. I think that once I get the hang of it eating in will be cheaper and after our guest leaves I'll go back to making food for just me - Mr. K isn't too excited about my cooking since I don't like tomatoes or cheese.

I'm going to have to pay more attention to all the posts out there about cooking at home and budgeting for food now that I'm eating at home. It is a very weird experience. I'm also running the dishwasher more often, twice in a week now instead of once every ten days; I am also washing more kitchen towels and napkins (we use cloth napkins). Also if I keep this up the lack of counter space in my kitchen may drive me to a remodel sooner than expected. Given all that, maybe it would be cheaper to eat out all the time.