Back to Square 1

Our new mortgage needs to have a snowball payment otherwise we will not have our house paid off until 2038. Ouch! Ideally we could pay off our current mortgage in 10 years.
Here are the different choices.


This needs to be a substantial enough goal that we will be willing to make the payment each month. I found with our previous mortgage that the best way to do the snowball payment was automatic transfers in weekly installments for 52 weeks each year. This way there is no monthly decisions to make each month.

Refinance
In the past, we have not been in favor of refinances. Closing costs were too substantial. I would rather see a large chunk of money like that go to pay down the principal.

The other item to look at to boast moral is how much interest will be saved by paying off early. Let's assume that 2026 would be the longest we would consider going on this loan.


Our amortization schedule from the mortgage company has the finance charge for a 30 year loan at $340,000.

The Power of Technology

Many changes in technology affects communication. Teleconferences, web conferences, smaller and smaller cell phones, email, voice recognition, live video from around the world and from outer space. The internet brought the world to our fingertips. You can purchase or sell anything without leaving your home.

When the internet first starting coming into our homes I saw it as a threat to have misinformation too readily available and it stealing time from individuals. People need to be disciplined not let computer use overwhelm and take over their lives.

Can you get thru a church service, a meal or a trip to the grocery store without your cell phone ringing. Some people complain that their spouse is not really on vacation if the pager, cell phone and laptop are along for the trip.

Technology is a tool to improve our lives. We just need to balance this part of our life with everything else we need to do in our daily lives. Parents limit their children's tv usage to create well rounded children. Do we limit our technology use so we can help show the next generation that there is more to life than the internet and cell phones?

The Expansion of Pawn Shops

A pawn shop used to be a place where people put their items into hock and hoped that they would be able to redeem the items prior to a customer acquiring the items for themselves. People are foregoing the pawn shops and selling items on their own either thru yard sales, internet sales, trading items or bartering for good and services.

Buying 2nd hand is what the car industry calls pre owned. How many things in your home including your home are pre owned? For years we have had hand me down dining room tables and chairs. If it were a good set that would be considered an heirloom. In our home we have purchased a little furniture. The same pieces keep traveling around with us whether they fit in the space or not. My living room holds an O'Sullivan type entertainment center that has followed me to every home that I have lived in. Is it hard to say good bye to the pieces or is there some underlying memory such as my father put it together for me?

Do we hang onto things because of nostalgia or because of the person that gave us the items? If we sell or pawn items when they are newer we have a better chance at getting a higher value for the items. Does your child want a 6 year old bike or does he want his own? There is a toss up between buying new and buying slightly used.

Donating is a great alternative to selling items. Your items will get a 2nd life and you are helping someone else that needs the items.

Expectations vs. Reality of Selling a Home in a Recovering Economy

Approximately 10 houses in our neighborhood are for sale. The average price of the homes can be found on a few websites, zillow.com, eppraisal.com, and cyberhomes.com. Unfortunately they do not show the true sales prices b/c sellers concessions are not deducted on these sites. Property tax documents can also show the most recent sales price.

history of the average sale price of homes on our street
end of 1970's 40K
mid 1980's 70K
end of 1980's 90K
mid 1990's 105K
2003 130K
2004 180K
2007/8 200K

The uptrend of these houses was significant. One real estate agent was surprised that I realized that I would not be able to sell for the 2007 prices. Inflated home prices take a toll on families' life styles when the homes are no longer worth the same or higher amounts. Was 2007 the peak of the real estate boom? What does that mean for families who bought on the upswing and are trying to sell now?
When we purchased our most recent home, the seller's agent mentioned that he has sellers that are bringing money to settlement. Sort of frightening. The home owners are paying money to be let out of their housing commitments.
Could the housing market slump have been predicted?

So How Do You Impulse Buy a Bedroom Set and Still Get a Good Deal?

1. Wake up in the morning and realize the air mattress isn't cutting it anymore.

2. See signs on the road advertising 50% off sale of mattresses.

3. See more signs on the return trip advertising a mattress sale.

4. Visit an empty showroom -void of customers.

5. Ask for discounts.
a) returned, unopened bed.
b) % off the frame.
c) Free delivery.

6. Sign on the dotted line.

7. Review the purchase.
a) Didn't pay full price.
b) Mattress was a need.
c) Wasted 1 hour tops.
d) Not free delivery but next day.
e) % off the frame.

8. Problems
a) Low expectation of keeping with original mental price for the bed.
b) Price shopping didn't happen.
c) Two people sleep on the bed; only one person shopping.

Last mattress shopping trip was 10 plus years ago. Recall paying $400 for a queen mattress, box spring and delivery. Expectations for a king was around $500. Paid just under $1000.

Interesting approach by a salesman when a couple was not ready to buy. It sounded more like a sales pitch for a car than a mattress. I think he even asked what was the reason for their financial restraints on the purchase.

Now back to the original problem. Signs were indicating 50% off mattresses. The selected mattresses that were for sale were too expensive even on sale.

I think my husband should go to another mattress store and try to get the best offer possible. Then we can compare and see if I got the best deal. In reality, this is a waste of time because the purchase is already made. Move on with life. This particular store has a price match plus 10% so it might be helpful.

Sometimes impulse buys work but you never know for sure if there was a better deal around the corner. You just need to be satisfied that it was the best deal that you could make at the time.

Credit Card Spending

How Does Credit Card Spending Get Out of Hand?

1) Spend more than you make each month.
A. Don't spend more than you are able to pay off each month.

2) Credit cards allow you to pre spend your future paychecks.
A. Set a cap on your credit card spending each month.

3) High limits allow us to charge more than we should spend.
A. Be disciplined and set your own limits that you do not want to go above. Some banks have high spending emails for your credit cards that you can set up through your on line bank account.

4) Store credit cards normally have a higher interest rate than non-store credit cards.
A. Try not to use the store credit card if there is a possibility that you will not pay it off by the due date.

5) Carrying a balance.
A. Do not charge on a credit card if a past due amount is on the credit card.

Reduce, Reduce, Reduce

When we are younger, we have small bank accounts and small areas to store things. When we get older, our bank accounts hopefully grow and our storage areas increase.

Our need to have possessions unfortunately can overwhelm us. Our computers are maxed out of space, our credit cards could be maxed out and our homes are maxed out. Did you ever feel calmer in a hotel room rather than your own home? Look around the hotel room. You have no work to do and no clutter to clean.

Now imagine your home / room how you want it. What do you need to accomplish that goal? If your stuff = headache, get rid of the stuff. What is your weakness? Retaining books, gifts received but not used, stationary, computer equipment or toys. If you went to the store, would you rebuy the items you have now?

As you reach the end of spring, take the time to let some things go. Whether it is the picture frame that needs repairing, the tv that is outdated or your favorite pillow that you already replaced.