Last month (January):
Years left: 0.166666667
P =$1,214.40, I =$10.74, Escrow =$812.79
This month (February):
Years left: 0
P =$1,214.40, I =$5.98, Escrow=$0, Recording fee: $30
Amount of interest saved in this month’s prepayment: $1.20
So, I know that this is ending a month early. But what happened is my regular mortgage payment is $2027.19, and there was only $1510.75 left on the mortgage (technically $1510.79 because Wells Fargo steals micropennies from us), so it seemed silly to write a bigger check this month and then another check for ~$1100 in March, only to have them send back ~$1600 from the escrow for those two months (along with the ~$500 that’s still in there after they paid our property taxes). Cashflow and interest argue that in this specific instance, it is better to pay off the loan than to let them have two months of escrow.
[Update: After we paid off the mortgage in full, we got the bill for the next month’s mortgage. Then a few days later we got a note saying that we were not allowed to pay the bill (that we had just gotten), instead we would have to pay the mortgage in full because the mortgage balance was less than a payment. And the in-full payment was due three weeks before the regular mortgage bill! For a mortgage that had already been paid. Wells Fargo’s departments really need to talk to each other.]
So we got a final payment slip and sent off a final payment check. Now we wait for our final paperwork to return to us.
So what does this all mean?
Well, the house cost $265,000. We have paid down that $265,000 including the $53K downpayment in principal in ~10.5 years. In total, we have paid $364,161.71 on the house, or about 100K in interest more than the house cost initially (but only $20,761 of that since we refinanced 76 months ago– those big interest costs really do come at the beginning of the loan). We paid $114,873.36 extra in pre-payments since our last refinance. We’ve saved $18,783.83 in interest (not accounting for inflation at all) by prepaying since we refinanced, but I don’t know how much we’ve saved overall since I wasn’t tracking before the refinance.
As we’ve said many times, we will not ever really own the house free and clear. This year we’re paying about $8K/year in property tax and $2K/year in insurance. Those numbers will only go up. We could rent a 2br apartment in town for about that amount and not have to worry about repair bills. But we won’t.
How does this change our lives? Well, we now have about $14,573 extra cash flow each year that we had been sending to our mortgage as principal or interest payments. And I no longer have to write out a mortgage check every month which should save ~12 checks a year meaning we should have to buy new checks less frequently (daycare still takes checks out of the credit union account– I have lessons and incidentals coming out of the Wells Fargo account right now).
It also means that we will need to keep a high enough balance in both Wells Fargo savings and checking to not get charged monthly fees on those two accounts. Right now we are already doing that because that’s where we’ve been depositing DH’s reimbursement checks and any side payments or gifts that we get. But I’ll have to be careful going forward.
OPEN ENROLLMENT FOR THE ACA ENDS ON TUESDAY. ENROLL NOW!!! It will last the entire year no matter what happens with the government (absent nuclear war, anyway).
If you are/were a Republican, here’s Evan McMullin’s group that is fighting for bringing decency back to your party and to government. Mad props to him. I would really like to get back to arguing about where on the frontier we should be based on our beliefs about redistribution and less with the worrying about destroying the world.
Holocaust victims turned away from the US. A story of many who were rescued. The contrast highlights the duality discussed above with the two links in the previous bit. I hope I never ever have to find out if I’m the kind of person who would keep my head down while people are taken or a hero. Mainly because that would mean horrible things are happening, but also a small part because I’m afraid of the answer. #neveragain
How to stay outraged without losing your mind. We’ll have a post later this week or next that talks about why we think it’s ok (and still sane) to go broad instead of deep, but the rest of the advice is good.
I signed up for Swingleft. Though I bet (HOPE) in 2 years it’s going to be more than just those districts that are going to be vulnerable.
I’m considering leaving a tenured academic position for a soft money position at a private foundation. I’m very excited about the vision of the new program and the resources and time it potentially affords. I’m worried about the pressure of needing to get grants and walking away from tenure. What would you consider (or negotiate for) if you were making a move like this? What would make you decide to stay put? Financially, what would you consider necessary to be prepared for a move of this nature?
#1, as always, starts:
Save a lot, in case your funding runs out. If I were on soft money I’d be stressed; hard money is one of the good things about my current job.
I was lucky that I couldn’t stay put in my tenured position because it was so bad. (Although lots more money would have kept me there for a while; but if they had lots of money for me I wouldn’t have been considering leaving in the first place.)
I mean, you gotta do a mental balance sheet. Leaving is bad: loss of tenure, possible loss of ability to do your own research, loss of stability, have to move. OTOH, never teach again; no more grading; possibly more money; could be a better work situation.
Academia is an extremely flexible and independent schedule; are you willing to potentially give up some or most of that flexibility?
If you pass on this opportunity now, will you be able to find employment later if you should need to leave your current tenured position? Balance that with, if you go for this opportunity and it doesn’t work out, will you be able to find employment later?
What would it take to definitely make you leave? What would it take to definitely make you stay? Which one is more likely?
If things stay exactly as they are for 5 more years, would you be ok with that? 10 years?
#2 chimes in:
One of the things that made it easier for my DH to leave academia was that we had savings and I had a stable position. That meant we weren’t dependent on his income and he was better able to deal with the loss of job security that an academic position affords.
Finally, what $ amount in the new place would make this decision obvious? What would your current location need to do to make it obvious in the other direction? Don’t forget to include the value of benefits (health insurance, retirement matches, etc.) in your decision as well.
Update: Shannon in the comments adds:
Many institutions have a leave of absence policy for tenured faculty so rather than resigning right off the bat, you can take a 1 (or more) year leave of absence and have the right to come back if things don’t work out. This might give you some reassurances if you make that leap – if you really don’t like it, you can go back to what you have now. It’s definitely worth exploring, and even if there’s not an official policy, it’s worth asking. Given that you have tenure, they can’t let you go for being disloyal or anything, and the worst they can say is no.
She is absolutely correct. In fact, my DH took a one-year unpaid leave pre-tenure to work on a start-up.
After this post, I searched through my library history and my memory to see if I could come up with anything appropriate for #2’s kid, who I know a little bit…
Has zie read Tom’s Midnight Garden? I think it’s YA but it’s older, from maybe like 20 years ago. (Answer: Yes.)
We decided that Sorcerer to the Crown by Zen Cho is too grown-up for hir so far. Ze’s not really into romance (yet?) and that lets out a lot of books like Jane Eyre. Ze’s also not that into animals; didn’t like the Redwall books, probably won’t like the James Herriot books (but I do!).
The Blue Sword by Robin McKinley is a perennial recommendation, which ze has already read. I remember liking Interstellar Pig, so ze’ll probably try that. Ze read and liked Hoot by Carl Hiassen. Sherlock Holmes stories are classics.
I suggested the series that starts with Peter and the Starcatchers, but #2 vetoed it because she hates Peter Pan. However, #2 wonders if maybe ze’s old enough for The Three Musketeers.
I recommend the Amulet series of graphic novels (the first one is The Stonekeeper), but fair warning: the dad dies immediately. I think I’m on book #5 right now.
The Abhorsen series by Garth Nix is on #2’s to-read pile, but she might move it to DC1’s pile instead. I like those.
To both #2 and DC1 I recommend The Mountain of Kept Memory by Rachel Neumeier, which is fantasy adventure with no romance. I recently enjoyed it a lot.
If DH and I remain employed at our current jobs for the next ~6 years (something that is not incredibly likely given DH’s job situation), then we will not qualify for financial aid at most schools. (IIRC, we’ll be in the phase-out range for Harvard and Princeton and may be able to move money around to get some aid there.) If one of us loses a job, then DC1 will qualify for about ~10K/year in aid at many private schools, which isn’t that much given sticker prices (although on just one income, hiding moving money around will have a larger effect).
We currently (barring weird changes in the stock market between the writing of this post and its posting) have around 98K in DC1’s college account. That’s $500/mo for the last 10 years invested in Vanguard. That’s enough to go to our local flagship schools for 4-5 years if we stop saving now.
And that really sounds like a lot. But in the world of private schools it isn’t.
It’s hard to tell what DC1 will want to do in 6-10 years, but current indications are that computer science or some form of electrical engineering will be involved. Zie might want to go to MIT or Harvey Mudd or Stanford (and zie might get in– it is hard to say). These schools are not cheap, and at >55K/year in total costs (and rising), there’s not enough in the 529s to pay for even two years of school. We have another $170K in taxable stocks (that’s from the 50K we had in 2005 and the leftover money from leave we just put into the market) that presumably we would use for the remainder. However, we will be taxed on that remainder, so it might make sense to start saving *more* in the 529 vehicle while we still have six years for earnings to accrue.
If I drop DH’s income, then the college calculator suggests we should start putting away $638/mo, which is still more than the $500 that is currently going towards college.
Both Harvey Mudd and MIT have 5-year BS/MS programs that are a good deal. DC1 is so young– maybe we should be open to funding some graduate school. It is also true that we have two children, and by the time DC2 is ready for college, we should know how much DC1’s experience ended up costing, so we’d be able to move some money over. As of this typing, DC2 has $33K in hir 529 plan. We’re on an oversaving path for hir for state school (the calculator recommends cutting back to ~300/mo), but would need to put away more for the average private school– for my alma mater, for example, zie would need more than double what we’re putting away (same for engineering schools, though it’s harder to tell if engineering is likely with a preschooler compared to a 6th grader).
Looking over all my old 529 posts, I usually contemplate putting less money into the 529s. This is the first time I’ve addressed putting more money there. I’ve been assuming we wouldn’t pay for any graduate school and have been worried about the risk of over-saving. But with only 6 years left before college, I think it is unlikely I’ll end up moving to work for a university that pays even part of school tuition. And college costs have been increasing, as has our net worth. Maybe it makes sense to get more tax advantage, especially given that in 6 years taxes may have to go way up (or inflation may be sky rocketing). It’s hard to say. Not to mention that $500/month isn’t worth what it was 10 years ago.
And we’re no longer paying $1200/mo in principal and interest on a mortgage. If DH doesn’t lose his job, that money has to go somewhere.
Under what circumstances would we regret putting more money in the 529s? 1. If we move to the bay area for DH’s job and want to buy a house. That scenario suggests needing loans for private school and DC1 being on hir own for graduate school. 2. If for whatever reason neither DC1 nor DC2 end up using the money (ex. tragedy, one or both of the DCs becoming successful entrepreneurs, both DCs deciding they prefer much cheaper college options). 3. The world goes to heck and we have to leave the country (in which case money in the 529s will be very low on our list of regrets).
Ugh, I keep going back and forth on this. I could increase our monthly contribution to be more in line with what the simple calculator thinks we should be contributing, and then we could cut if off if DH loses his job. We could put in a lump sum (though dollar-cost averaging seems much less risky given the current uncertain political environment). I could split the difference and put in, say $750/month per child instead of either $500 or $1000 (which is about what we would need if I kept my job and DH stopped bringing money in entirely). Or we could just keep doing what we’re doing, which is usually the easiest thing to do.
*note for newer readers: We are already maxing out our easy retirement options (required contribution, one 401K, one 403b, one 457) and will pay off our house very soon. So don’t worry about our retirement savings or debt loads!
What are you doing in terms of college savings? How do you decide to change what you’re doing?
All of the depressing links are from #2, who you may have noticed is back on the blog after an absence. She also notes: Anyone can text their zip code to: (520) 200 2223 and it will instantly shoot back your Federal and State Senators’ and Representatives’ names and phone numbers.
The beginning of the Trump year(s). My dept chair told me today that he suspects that in a couple of years Trump will do a Palin and declare he’s made America great again and quit. He already doesn’t leave the house.
An important theoretical insight is that gerrymandering becomes fragile over time– the very thing that makes districts just a little bit more red also makes them vulnerable when the opposition gets determined
Contemplating retirement in 12 months. It is recommended to have a plan for your life when work no longer fills so much time. Well, work (and raising a child) pretty much filled most/all of my spare time, with a little left over for reading and quilting (neither of which can I really use to fill a day). So any recommendations for new interests to take up? I may try some volunteering (which had done at the library in the past) but need to find where I can make a contribution (but have no interest in being in charge, of anything). Live in a rural area with access to a tertiary city- so apps like “meetup” are ok for occasional, but not daily activities. I do have a spouse but he has been retired for years so he already has his own routine(s).
Have you considered political activism? If you live in the US, there’s a lot of work that needs to get done. Click up on our activism tab for ways to get involved. I know it’s not the most fun thing in the world, but it’s so important right now. Living in a rural area means that your voice is especially important because you’re likely to have representatives who are not 100% blue and can be swayed with some effort on your part. Being in charge can really suck, but you might be able to nudge those who are in charge into being a little bit more active. This is especially true with state and local politics.
Your library is a great place to go not just for volunteering directly (or for reading books)– they can also connect you. For example doing people’s taxes for free at the library is a popular volunteer activity and one that can be done in rural areas. Ask your local librarian about that and about other groups in your area– the library is a place that many groups meet, particularly in small towns. Your parks and recreation center may also be able to help you but they might think the request is odd whereas librarians will totally think it’s normal.
#1 recommends anime. :) #2 recommends your local animal shelter. Other popular retirement activities include taking continuing education classes, doing exercise classes with parks and recreation or the YMCA, gardening, cooking, hunting, hiking, etc. And, of course, travel… or working part-time.
Someday I will figure out the light switches in the house I’ve been living in for 10 years.
the best thing about dc1’s after school care at this public school is that they provide extra time on early dismissal days so we can pick hir up after a full days work.
hibiscus mint is my new favorite tea
I ate moose. I like elk better, but it’s still pretty good. I like elk better than venison and venison better than beef, but beef better than moose.
Over Christmas, the next oldest cousin (~2 years younger than DC1) was literally bouncing off of walls, so I started quizzing hir on hir multiplication tables. It worked to calm hir down just like it does with my kids. Hir father looked at me a little oddly though. :/
Dear conference organizer, if you want me to pay attention to specific parts of your email and get back to you in a short time frame, WRITE SHORTER EMAILS. I don’t actually have to do anything until the end of next month so I’m not going to read your multi-page email now. If you have responses that you need before then, you need to put them and their deadlines at the top of the email in an itemized list, and, if there is information in your lengthy screed that I need to get you those responses, either tell me where to find it or repost it.
DC2 was getting hives on hir face at night and sometimes in the morning. We think we’ve narrowed it down to hir toothpaste (it’s either that or the water or the towel she had been using). We’ve switched from toothpastes with red dye to those without (and rewashed all the clean hand towels, just in case) and it seems to have gone away which suggests it’s not the water. Zie was also a bit hyperactive and defiant the weekend that was the worst rash-wise, so I’m kind of wondering if zie has that red dye allergy that people talk about on mommy forums. (Hives also happened in conjunction with hir deciding zie only wanted bubble-gum flavored toothpaste, not mint. Now we’re using Tom’s of Maine strawberry and it seems to be ok though DC2 is upset that it is strawberry and not mango.)
She wonders if she should put the 20K in a separate account both physically and mentally as if she hadn’t gotten a loan at all, or if she should incorporate the buyback and payments into her regular budget, and if so, how?
Now, there’s a proper accounting way to answer these questions, using assumptions about depreciating assets and so on, but proper accounting methods aren’t necessarily that helpful in personal finance where we aren’t getting tax breaks on rates of depreciation (meaning you should still do them for rental property or small businesses).
Instead what matters is that you get the information that you need to get a handle on your spending and your savings so that you’re taking care of your future self, saving for things you want to save for, and not penalizing yourself unnecessarily in the now.
I tend to think of things just in terms of my “emergency” fund (really it’s a slush fund since it includes money both for emergencies and for regular lumpy expenses) and how much it is growing or shrinking each month. Whenever we have to decide on housing expenses like rent or a house purchase I’ll look at the whole fiscal picture and map out what we can afford, but in generally I’m really lazy about keeping track of our money, so just looking at the size of our slush fund each month. We can do that because in general we spend a lot less than we earn each month. So in the new car case, the car purchase might deplete our slush fund below levels that I felt comfortable with, meaning more of each month’s excess would need to be diverted to savings, and any monthly car payment would make it more difficult to refill the slush fund.
Another common strategy is instead of having one “emergency/slush” fund is to have specific separate accounts. So car spending would come out of the “car” fund and anything not accounted for with the car fund would have to come out of the actual “emergency” fund (or luxuries fund or what have you). Then you’d take into account the inflows and sizes of each of those accounts each month. This method is similar to my lazy method but allows for more control. You can better fine-tune your monthly spending and tracking of monthly spending so that you don’t have to have such a big gap between your take-home income and your spending.
How do you account for vehicle purchases (both with and without loans) in your budgeting?
I’ve been busy this week with activism (and class prep and research, but lots of activism). I’ve been calling and talking and doing my best to protect the affordable care act. Don’t let anybody tell you that your calls don’t matter. THEY MATTER. If you’re in a blue state, your representatives want your calls and letters and emails. This information helps bolster their claims about what their constituents want and really care about. So don’t think, well I know my reps are in favor of this so I don’t need to call. Call. Leave a message, or talk briefly with a staffer. Email or fax if you can’t call. If you’re in a red or purple state, your calls and faxes really matter. I have been amazed how my senators’ staffers message has changed just over the course of two weeks from of course we will repeal immediately without replacing to… well, people will still have the ACA for 2 years. Similarly on getting in ethics reviews before hearings. We are pushing that dial and we can keep pushing it. Bad legislation is still going to get passed. People are still going to die, but if we are vocal and continue being vocal, we will drown out some of the voices of evil (I’ve recently started believing evil exists again). Bad legislation will be passed, but it will be less bad than the legislation that would have been passed without our efforts. Let them know we’re watching. Keep them accountable. We are saving lives.
My local legislators are undecided on a couple of extremely vile bills coming through the pipeline. That means that they’re waiting to hear which direction their vocal constituents are leaning. Be those vocal constituents. (Today one staffer told me she agreed with me, but the legislator had not talked with staff about his view yet. She hoped he voted no. The staffer for my other guy ended saying he was excited to pass along my thoughts and my argument. They’re both against evil too. But they need our voices to add to theirs.)
And if you don’t want to make calls, don’t tell people calls don’t matter. That’s the same mistake anti-vaxxers make– if you truly believe that you don’t want your kid vaccinated, you should want everyone else to vaccinate their kids in order to keep your kid safe. Instead, do what you can (which hopefully is faxing or letter writing or emailing or limiting to 15 min per week of activism or whatever it is you are doing to protect your time and sanity) and praise the person who is trying to get you to pick up the phone for what they’re doing on your behalf. People will understand that you need to get tenure or you’re dealing with grief or your children need your attention but you’re doing what you can. And you know, three years ago, your lone voice might not have mattered. But that’s the thing. With the Trump presidency, people like me who only vaguely knew the names of their representative or that other senator are making phone calls *every single day*. People like my sister are calling AND are organizing local groups to meet each other and talk to each other and get things done. People like wandsci are keeping us aware of what is going on via social media and are calling too. That means your voice isn’t the only voice. It’s one of many, but of a small enough of many that your voice still matters. You need to keep calling because your voice amplifies other people’s voices. And there are enough other people’s voices that we can get change. Your voice can be that voice that causes more change. Even if it’s just 15 min a week.
How to best use your activism time?
If you have a lot of energy, get with other groups and help them organize. Figure out what issues to address and how to address them. Then get the message out. However, most of us have jobs that make doing all of that difficult. (DH and I are mostly lending support on this front, though we are trying to find a group to be active with!)
If you only have a little time or a little mental energy, do one of two things.
1. Check in your area to see if there’s an indivisible group in your state that is organized enough to have a mailing list or online webpage of weekly items. This is ideal for you because they will be covering state and local issues as well, and your voice has a lot more power, even if you’re gerrymandered, on state and local issues. And, of course, state and local affects federal. There may not be one in your city, but check the biggest city in your state and the most liberal city in your state to see what their indivisible group is up to. You may also have an indivisible group in your district. Many of these smaller groups are going to die from disuse, some will merge, etc. But if they’re giving action items each week you’re golden.
2. If 1 isn’t working out for you or if you want a sure thing, go to our activism tab and pick one of the (now 5) different list-serves of action items. My favorites are still Actions for Americans and Wall of Us, but they all have their own styles and you may prefer a different one. After having done that, pick which 15 min you’re going to use to do phone calls (Moral Mondays are a good time) and do their items using their scripts each week. If you don’t want to talk to a staffer, do it after hours and leave messages. If you want to make the most impact use a more combative script if your representative is making a bad decision. If you have extreme phone phobia, fax instead. Get that box checked and if you have more energy, make some noise while doing it. Most of us will probably have brief and polite conversations where we read off a script and the staffer says “Thank you I will pass that along”.
Next weekend I’m going to the women’s march in the city near me. Is there one in a city near you? If so, there may be bus transportation. Several of our local churches have buses and our local dems office does as well. If you call, you may be able to reserve a slot. Men are included too– my whole family will be going, even though the shirts I got for the DCs are too big.
And now for some links.
If you’re calling and the vm box is always full and you can’t get through to a person, tell David Yankovich. Stonewalling is illegal and he’s doing a story on it. In retrospect, I suspect this is why one of my senators’ aides kept me on the phone for 30 min the other morning. (Note: You do not get the 30 min response unless you’re combative with them which I was because they were spreading falsehoods about the ACA– so don’t let that keep you from calling and voicing your opinion!)
There’s a lot of Republican hypocrisy on Obamacare. Also, one of my senator’s current lines is that the ACA shouldn’t have been passed without GOP votes. I told one staffer who tried to push this harder that made total sense and that the Republicans should stop voting on partisan legislation RIGHT NOW. If they can’t get full democratic buy-in, then they shouldn’t be passing any laws. He was a political science major and I’m a lowly economist so I deferred to him on that one.
My senator’s staffer told me that hospitals are closing because of the Affordable Care Act. That’s not true. And more rural hospitals will close if the ACA goes away. The only part that’s true is the effect of decreases in Medicare payments which were put in mostly in an attempt to get the GOP on board with the ACA.
Similarly, why did insurers withdraw from state marketplaces? Because the GOP did things to get that outcome. GOP who support these things care about politics over people. They’re willing to let people die in order to gain political power. And one wonders why I’m beginning to believe that evil exists.