October Mortgage Update: Perspectives on $500

This month (September):
Balance: $74,178.15
Years left: 5.9167
P =$916.47, I = $297.93, Escrow = 613.58

This month (October):
Balance: $73,085.37
Years left: 5.75
P =$920.78, I = $293.62, Escrow = 613.58

One month’s prepayment savings: $0.68

$500 this month on new carseats.  DC1’s old ones expired just as DC2 outgrew hir infant seat.

$500 for plane tickets to include the family on a conference trip this month, though we spent that in August (and it was more like $600).

$500 to each kid’s 529.  $500 tuition at the community college after financial aid (for the non-new-mom daughter of the relative), but the relative paid for it out of the 529 we set up earlier, so we didn’t write a check this time around.   He can do that because of the three years in the past that we put in $500 for each of the girls.  We used to pay an additional $500 into the mortgage each month, but no more.

This time last year, $500/month here or there didn’t seem like a big deal.  Now it does.  Last year, if it was under $500 we could do it without thinking about it.  Last year we had a few extra $500s each month from DH’s take-home pay.  This year we have to think about things like eating out.  Maybe.

I still don’t have a handle on our spending.  We spend about what I take home.  I’d rather spend less than what I currently take home or make more money each month.  But the things we spend money on are either important or very enjoyable, and thus difficult to cut out.  Eventually we’ll figure things out.

Does $500 seem like a lot or a little to you these days?  What level of spending is small enough to not have to worry about, or is there such a level?

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45 Responses to “October Mortgage Update: Perspectives on $500”

  1. Belle Says:

    $500 is a catastrophic event, triggering the release of the credit card and a boatload of angst. This even though, at a significant distance, are funds that I can tap into. But a lifetime of scraping has ingrained a comfort limit that is in the double digits.

  2. Alyssa Says:

    Now that I’m on maternity leave, anything unexpected over $200 will give us some angst, I’m guessing. I still get paid some salary through Canada’s maternity/parental benefit plan. That, combined with DH’s salary, leaves us only a few $100 over our monthly expenses as they are now (keeping the same quality of life as we had before I went on leave). Of course, we might re-evaluate things in a couple months and try to reduce our expenses if we’re finding it difficult to stay on track.

  3. Holly@ClubThrifty Says:

    Ok, at the risk of sounding like an awful parent, I have a question. Carseats expire? I guess I should check on that!!!

  4. delagar Says:

    $500 is a disaster. The car broke down last month, with a repair bill of just over $400. That ate all our pitiful savings. It was traumatic.

    We spend everything I take in — it’s a good month if I have fifty bucks left over. I save every nickel I can, and it’s usually on that level, nickels and dimes.

    And I feel whiny complaining, because my students have it so much worse than I do.

  5. Jacq Says:

    Yes and no. Certainly not as big of a deal as $5 or $50 was years ago when it made the difference between eating or not. Part of that could be that seeing the stock accounts move in 5 figure fluctuations in a single day causes immunity. Or that $500 is less than NI for a day of work. Or some extremely low percentage of NW – that only got there because of so many $500’s not being spent. It’s nice to be able to spend them now without thinking.
    Resource scarcity is not a nice feeling, but I tend to dislike the feeling of having time scarcity more than money scarcity. With money scarcity, I only have to fight with myself (and I don’t put up much of a fight) and with time, it’s usually other people (esp. work demands). On a positive note, I bet you have more time with DH home.
    What amount would cause me to worry? Not sure – I don’t think in a month to month way, more like a 20-40 year cashflow way. Spending even 10% over budget does bug me a little bit though for sure and I’d like to get to the point where I’m passively generating about 25% more than I naturally spend since I think that would truly be a “don’t have to think at all” level. Even the money I’ll be making the next couple of months I have a problem seeing it as “mine now” to spend, it’s probably going to buy future cashflow and/or to help the kids.

    • nicoleandmaggie Says:

      I have to think about stocks in a completely separate mental account, at least until it is time to sell. The day to day fluctuations would make me crazy otherwise.

      Having DH at home definitely helped with the daycare fiasco the other week.

  6. gwinne Says:

    It depends on what I spend it on. If it’s budgeted, not a big deal; if it’s five payments of $100 I don’t think too much about it, though I should; when it’s $500 extra on having windows replaced, I’m annoyed. I can pay for it, but it comes out of savings. We also spend what I make on usual monthly expenses (although I got a big tax refund, even without medical expenses, which suggests I’m having too much taken out of my check…)

  7. bogart Says:

    $500 is an aggravation, and certainly noticeable. Last month’s $500 (+) was my share of a root canal, not that I’m not clued-in enough to be grateful that I have access to both the medical and the financial resources that when I need a root canal, I get one. This month’s $500 may well be the maintenance on DH’s vehicle, which is at one of those “big” service points, and that’s just the foreseen $500. Also, the dishwasher’s performance is — erratic (it shuts off mid-cycle regularly for some unknown reason), and the washing machine is likely next to go (sometimes it doesn’t drain, first go ’round). Oh, and I’ve finally decided to take the dog with skin issues to the vet to see if there’s anything that “can be done.”

    And there’s an “it all depends” angle. I’m also eyeing plane tickets to Europe for next summer which, even covering 1/3 with FF miles (looks feasible), will — duh — exceed $500, and I feel far less annoyed about those than the stuff listed above. And I’m aware there’s a huge difference between an aggravation and (per @delegar) a disaster.

    We’re expecting DH’s income to about double in about 12 months, or examined differently, our household take-home income to increase by about a third. It makes the fact that — ignoring retirement savings — we’re not doing much better than treading water, though of course that projected increase does assume that nothing (else) goes wrong, i.e. that other income sources don’t dry up.

  8. Ana Says:

    Not a disaster, but definitely a hassle, and something to think seriously about and plan around (i.e. will come out of savings most likely, and thus, need to be replenished soon lest I lose my mind). Really anything over about $200 at once (or over about $500/month) is a biggish deal around here. There was a time (pre-kid #2) that $500 wouldn’t have been blinked at.
    I also am confused about the “carseat expiration date”. That’s a thing?? I had no idea.

    • nicoleandmaggie Says:

      http://www.parenting.com/article/car-seat-guidelines

      Our Britax Roundabouts both expire in October! (That’s what we get for getting sale models and having kids 5 years apart, I guess.) So we replaced them with Marathons, which are metal and probably will last longer even though we don’t need them to.

      • Bardiac Says:

        What does it mean that they expire? Is this a planned obsolescence thing, a way to get you to spend more money? Or a thing where the plastic doesn’t last more than five years, no matter how you use it?

        It seems fishy to me, I guess. (I know nothing about car seats, though.)

      • nicoleandmaggie Says:

        Supposedly the plastic gets weaker. (The marathon has very little plastic, so we probably should have gone with that instead of the roundabout back with DC1… or at least checked the manufacture date when we purchased.) Also there’s a limit of 9 years just more generally because safety standards change over time.

        http://baby.about.com/od/healthandsafety/f/car_seat_expiration.htm

        Being paranoid with young children’s safety…

      • Rosa Says:

        We were told the metal buckles wear out as well, with an infant seat.

        I am suspicious of any dating on the older kids seats, since their main function is booster seat so the kid doesn’t get strangled by the seatbelt that actually protects them. But maybe seatbelts wear out too. Ours have certainly gotten weird about locking up randomly, now that the car is nearly 15 years old.

      • nicoleandmaggie Says:

        These aren’t boosters, they’re actual carseats.

        Boosters are cheap!

  9. EMH Says:

    We have currently been living on my husband’s salary and saving my salary in preparation of our first child. When we used both incomes, $500 was annoying but we didn’t have to alter our lifestyle. Now, our buffer is $250/month so $500 will set us back a bit. Granted, we have plenty in savings to cover it but I hate using savings on things that I feel aren’t major expenses like a new roof or a new car. I guess we should review our budget and increase our buffer.

  10. First Gen American Says:

    I’m doing some planned renovations on our new home, so $500 expenses are a regular event these days. It won’t feel bad until our cash buffer starts to dwindle. We have always been way more time constrained than money constrained. This means our pace of buying/installing things is generally slower than our rate of saving for said remodeling project du jour. The one exception is the kitchen remodel. That takes a big bite all at once. The crazy big expenses we had recently (new roof, foundation, grading the property and heating system were built into the initial cost of the home and we used our home equity from our last place to fund those items as a minimum to make our place habitable. It doesn’t realy feel like that was a day to day expense. It more feels like we put a 40% downpayment on our house instead of a 20% one.

  11. plantingourpennies Says:

    $500 planned isn’t a big deal, unexpected it is pretty likely to make me grumpy for an evening, but not likely to have much of an impact long term so long as it’s not recurring.

  12. chacha1 Says:

    $500 is not a ton of money chez nous, but it’s enough to make a big difference in the cash flow. My take-home pay per period is $1880. From that I have $350 in insurance to pay (every pay period!!), all our food, our entertainment budget, knocking down the credit cards which always have small balances owing to leveraging car repairs or cat maintenance, short-term savings, and long-term savings.

    My DH spends every dime he makes. If he didn’t, $500 would be negligible.

  13. Liz Says:

    $500 is quite a chunk of change! That said, my heart can stop beating so fast at the scary thought. This summer I had one of those $1,000 emergency vet experiences. My dog is (and was) fine, but I demonstrated to myself that I can handle one of those situations — “minutes” after purchasing the $1,000 vacation plane tickets, of course — without hiccuping too hard. I’d still prefer not to pull out my pocketbook like that.

  14. Debbie M Says:

    Suddenly I feel very rich. The kinds of things I’m likely to spend an extra $500 on, like medical bills and car bills, don’t really matter to me because I have plenty of savings for those things. However, my vacation/electronics savings are pretty low, so an extra $500 there would be noticeable (but would just come out of other savings if there were an opportunity I didn’t want to miss). And an extra $500 for groceries, when my monthly budget is currently $100, or for other monthly spending (clothes, gifts, movies, restaurants, games, parties) would be crazy high.

    I’ve come a long way from college when every penny had to be accounted for.

    As far as amounts of money that I worry about, I’d say I worry about all of it except that some of the worrying was in the past. For example, car expenses are worrying. So I’ve thought really hard about whether to have a car, what kind of car, what kind of driving habits, who’s a good mechanic, etc. But now that I’ve worked all that out, I’m done worrying about that.

    Currently, I just worry about utilities, groceries, and other monthly spending (trying to keep it nice and low while I’m between jobs and in case I never get another one) and also about job-hunting issues. The rest is already both decided on and taken care of (heh, to the best of my knowledge).

  15. rented life Says:

    $500 would make me cry. That’s a lot right now. My mind is rattling off what monthly payments that would be. We got rid of the second car this summer because it was just over $500 to fix (and was likely facing more expensive repairs down the road so not worth it), and I just couldn’t justify that chunk of change. I miss having a second car, no matter how crappy it worked.

    Overall I think that the amount for us depends on what it is. Paying upfront for meat takes a lot out of our budget for a month, but buying from a local farmer and know what I’m getting (and not having have to buy meat for months from the grocery store), make it worth it. Plus, per pound, it’s cheaper overall. If I had more job security or we knew what was in DH’s future, or we had less debt, I’d probably be a little more relaxed, but right now I think about every purchase over $50. It also helps us from buying crap that we don’t need but seems “affordable.” Even if we can afford it, do I really need more stuff cluttering the house? Unless it’s books, probably not.

  16. Foscavista Says:

    What a coincidence! $600 is the amount that DH paid for new tires. He has the longer commute, and we put safety over money. (Think Suze Orman’s mantra.) Thank goodness for emergency funds!

  17. J Liedl Says:

    $500 of an unexpected expense is an annoyance now. Once, that is. $500 twice in a month or two months in a row? Starting to be a pain and inspiring some creative budget tightening on my part in order to keep us on an even keel. I can remember when $500 was a catastrophe when the girls were little, we had one income and it was partially clawed back by an austerity government’s legislation. Bad times!

    I’m always pinching pennies, gaming loyalty plans and pulling out coupons to cut costs. Some of my colleagues consider that bizarre behaviour since they know I earn a healthy salary. So what? Life still costs way too much! Even though I’ve been working out budget for years with the plan that Eldest would likely head off to university (and thus cost more than the free tuition here plus room and board), it was a hard thing to have all of that money ready in August to pay her big bill (everything but the second term room and board bill, which money is sitting in a short-term account). If she goes on to post-graduate studies or professional school after her undergrad, I’m going to be introducing her to the world of student loans to bridge the gap between what the program offers and what it costs but not yet. Until then, I’ll keep pinching those pennies (or nickels, I guess, as we got rid of pennies this past year here in Canada).

  18. oilandgarlic Says:

    $500 is a lot, especially because sometimes it seems like EVERY month has a big unexpected expense. I do budget for emergencies but didn’t expect to need some dental work this year (both me and my husband), for example. And we have been spending more on decorating and appliances this year which means we’re dipping into savings. Yikes.

  19. tracy Says:

    $500 I can handle – its pouring over here right now. Our student health insurance plan changed, and we had to pay the whole year up front at a little over $6,000. I was able to put it on a credit card and delay payment for a month, but it hurts. I had anticipated the cost at about half that amount and saved accordingly. UGH. Although we do keep the insurance through August 15th despite completing by doctorate this semester (need to go do my edits…. need to go do my edits….), so that’s one thing I can delay worrying about.

    Add 2012 taxes due Oct 15th and a higher than usual regular credit card bill – UGH again. We have the savings to pay it, but it hurts.

    Just found out our home equity (mother-in-law’s house) was sold to what looks like an shady/unpleasant mortgage servicer, so I am contemplating how to pay that off quickly to be done with them. Thinking a discover card makes sense if we can get a 0% – even with the 3% fee we’d be better off.

    We have so much to be grateful for – new healthy baby born just last week – although he does add to my focus on paying off this debt and building a solid emergency fund.

  20. Leigh Says:

    $500 can be both a lot and a little depending on what it is. If it’s medical, there’s more than that in my HSA to cover it, so no worry at all. I’m guessing that this injury will end up costing about $600 when things are all said and done. /knocks on wood

    I would say that I would worry if I had to pay for something unbudgeted that cost over $1,500. My cash flow buffer right now is currently around $3,000/month. When I go back to paying Social Security Tax in January, it’ll be back down to around $2,500/month. I would feel crimped if my cash flow buffer went down to < $1,000/month.

    On the flip side, I would consider taking up to a month off unpaid without really worrying about it since I can basically replace the cost of one month's expenses with the next month's paycheck. If I wanted to take more than one month off, that's where I would start to worry a bit.

    In a general sense, I guess $500 seems like a lot of money, but not something worth worrying over really. I had about $931 in unexpected expenses in September, but that didn't seem like the end of the world at all! (Basically, half of my non-mortgage, non-HOA expenses for the month were unexpected/unbudgeted. That hasn't happened in ages!)

  21. Carnival of Personal Finance, Epic Edition Says:

    […] from Grumpy Rumblings presents Perspectives on $500, and says, “Nicole and Maggie ponder how $500 can seem like a big deal or not depending on […]


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