Remember this post I wrote a couple of weeks ago? I have somewhat of an update to write about.
I’ve been doing quite well transferring all my finances over to the credit union, and this month I will be closing my bank account for good! (possibly next month if the direct deposits don’t work as said). The direct deposits have been changed to the credit union as well, so that is one less thing to worry about. I also ordered new checks from the credit union.
I made a decision to NOT Re-finance my mortgage. I’m sure some of you might be shaking your heads at reading that, but in the long run, I really don’t think it is worth it at all. I purchased my home two years ago, and put down a large down-payment on it, thanks to life insurance I received when my husband passed away in October 09. I did get a great fixed rate at the time, 4.8%, and this is a fixed rate for the life of my mortgage. My monthly mortgage payment is just over $1100, including taxes and insurance. Yeah, you read that right. That’s all I pay, so it is more than affordable right now.
I realize that with re-financing, I will mostly likely have to pay closing costs, and I will probably only qualify for a rate that is .5-1% less than what I have now. A friend of mine on face book gave me this great advice (Thanks!!),
“Take the cost of the refinancing (fees etc) and the new payment and see how long it would take to save back that money you spent on the refinancing (ie. your new payment is $100 less a month, but your fees are $5000, it would take 50 months before you were now paying less). More often than not its break even or not that much of a difference, also if you have had your house for 2 years and you go back to a 30 year mortgage you are adding back 2 years of interest. If it isn’t an obvious savings, probably not worth the hassle unless your bank will give you a really competitive rate and discount on fees.”
So while I might prefer a 15-20 year mortgage, it isn’t in the cards right now until I have more income coming in, and my kids are older and daycare costs are not an issue. One day I would like to re-finance when things are more settled, but for now I will keep it where it is, and try to pay more on the principal each month when I can afford it. Something is better than nothing! (Of course, I might still go talk to a mortgage person at my credit union to get their take on it, but for now, this is what I am planning on).
I’ve also imposed a “necessities only” spending ban. Oy. Ugh. Balls. I know I have to learn how to spend more wisely, and I have been doing better at that, but I’m going to tighten the belt even more. This means no more makeup for a while, No new nail polish, no clothes, no house decor, no cupcakes supplies, no nothing. The only things I am letting myself purchase for the next month and a half are groceries, toiletries, items I need for hiking with Mr eHarmony (boots and a jacket), and clothing the kids might need. Nothing that is a want, only a need. We’ll just test this out till the end of April, and then go from there.
The envelope system is not at all for me, I would hate doing that, and don’t think I’d do well at it. To control my grocery spending, I make a detailed menu list for 2-3 weeks and purchase only what is on that list. I usually have to go out once a week to get more produce, but that’s it, and if I see a sale for something I know we can use, I purchase it then if it isn’t too expensive. While testing this theory out a couple of weeks ago, I realized that shopping at Wal Mart is more expensive than Costco, and that Wal Mart’s produce is pure shit. From now on, I will continue to purchase everything at Costco, and then fill in the gaps at Wal Mart, Target and Safeway (smaller canned items that Costco doesn’t have, some baking items etc.).
That’s all for now folks! I’m looking forward to this new change and think it will definitely be for the better. I’ll re-evaluate again in a month. Tomorrow’s post will be an update on my Biggest Loser Challenge, and my weekly weigh-in!