Refi Fever

They announced the mortgage limits for our county the other day. For King, Pierce & Snohomish County, the new limits for conventional & FHA mortages is $567,500. Looks like our housing market will get a nice shot in the arm. While it hasn't fallen like many other areas across the country, it certainly has slowed. So I'm gearing up to get the paperwork done.

I was chatting with a mortgage broker the other day and she indicated that lenders might tighten their credit requirements along with the limit increases, which isn't entirely unexpected.

Luckily, I signed up the other day for a monitoring service called True Credit . It costs 14.95 per month to view your credit report and scores from the three bureaus. I don't plan to keep it long, I just wanted to monitor my progress as I prepare to refinance prior to Dec 31st when the loan limits are supposed to expire. So I have had a look at my credit scores. Suffice to say, I'm not doing bad at all. I've cracked 700 series for two of the bureaus and 695 in the other. My plan to pay down the debt should bring the scores up to the desired range.

Based on what the broker mentioned, she expected lenders to require a score in the 700-teens and above range. I've achieved that already for 2 bureaus, I just need to raise the other one, which I definitely think is doable without more effort than writing checks.

All of these efforts will have significant impact on my budget and lower my monthly outgo by approximately $550-650. Talk about having some cushion each payday...I've already squeezed many of of my expenses until they screamed, so I was able to create a pretty nice cushion each month, which is currently earmarked for debt payment. This additional amount will make the checkwriting easier and faster! I can't wait until the debt payments are done...Finally, the money will be able to work a little more productively for me.

Burning temptation....

This weekend, I went shopping for ceramic tile for a home improvement job we are planning for our bathroom. Just picture a 1959 ranch style home with all the original fixtures, right down to the pink toilet, tub and sink. You get the idea...remodeling emergency. Anyway, we are on a budget and this is a strictly DIY job. So we were looking for some cheap, but good looking tile... We found some suitable choices and brought the samples home to view in the naturally dim lighting. On the way, however, I got side-tracked. 

My boyfriend and I have had several conversations about Audi cars and why I should consider purchasing one. But I have no knowledge of them and have never driven one before. As we were driving home, we drove past a dealership that had a couple used ones on the lot. I should mention that I have a weakness for cars...especially expensive ones. 

Anyway, my mistake was stopping at the dealership and test-driving not one, but two Audis. Did I mention that I fell in love? I was able to tear myself away from the dealership, but I did spend a considerable amount of time this weekend trying to figure out how to buy one even though it would directly conflict with my other financial goals.

So what happened? Well, I finally came to my senses today and decided to not even consider the purchase any more. Why not? It would completely take me off track from my goals and even though I am in love with the car. I know I would love being debt free even more. It was tough convincing myself that this temptation was not a good idea in the long-term, but it was definitely the right decision. 

Missing in Action

Sorry I've been pretty quiet lately. The problem is I'm fighting this cold that won't quit. It came back with a vengeance just when I thought it was getting better.

Anyway, I'm on this mission to lower my expenses. So far I'm doing pretty good. I've cut back my cable and phone bills as well as my credit card bill. I've replaced all of the lightbulbs in my house with the energy saver bulbs. We put a timer on the porch light to prevent it from staying on all night and day.

Installing insulation is also on the list of things to do soon to try to keep more of the heat in the house.
So one other step I plan on taking is refinancing my mortgage. I was putting that step off for awhile given all of the problems in the mortgage market. However, the recent rate cuts have me thinking about how much I might be able to save. I think that I may take it slow and see if the recent stimulus proposals will help sweeten the deal and make my decision to refi even easier.

TMI! Too Much Information!

Recently, I talked about using Yodlee and how great it is to keep track of my finances. It has some really great features that I love and will never go back to MS Money or Quicken ever again. However, I should report that there is a downside to using Yodlee. This downside was not apparent when I first started using Yodlee, but has become a glaring issue as of late.

I set up my investment accounts (401k, play money)in Yodlee. I thought it would be easy to keep track of how it was doing and that would be great. Note to self: "This was not such a good idea."

Given the current stock market performance and the big dive it took this week, I've been able to see the impact on my accounts right away. No more surprises or ignorance when the statement comes in the mail. I can see my accounts shrinking right before my eyes!! Why is this a problem, you ask?

It is a problem because I want to commit a fatal error that many investors make, myself included. I want to pick up the phone in a knee jerk fashion and get out of the losing positions and move into something else. Translation: Sell low and buy high instead of Buy low and sell high.

Previously, I could have remained ignorant about the condition of my accounts
and been puzzled, but not disturbed as to why my accounts were lower than the previous month or only up by a couple of bucks. Translation: Fat, dumb and happy.

Traditionally, the following has been my M.O. Each month or quarter, I glance at the statements when they arrive, note the balances, forget what I read and repeat. No need to panic or worry. By the time, I know that something happened, it's too late to do anything about it. Which has also served me well; especially during the dotcom bust.

The questions remain.....

Should I keep my account visible on Yodlee? Can I resist the temptation to try to make up for any losses by trading? (not that I am some skilled trader by any stretch)

I'll keep pondering these things while I stay away from the phone...

Tools for keeping up with all that "paper" (the green and the white kind)

Last night I had dinner with my kids and my mother. She was asking me to help her get some new software for her computer for word processing and personal finance. She and I both have used MS money over the years and both of us are throughly disgusted by the cost and yearly upgrades that have become necessary. She mentioned that she had to purchase the latest MS Money in order to access her older MS money files.

Don't get me wrong, I have a lot of love for the home team. That company and its employees have created their own kingdom in Redmond. They are printing their own money out there with Bill Gates's face on it. Not to mention that they make up a significant portion of our local economy through consumption and traffic. Without them, there would be no need for a drive through Starbucks and dog spas. But MS has gotten a little crazy with the now required Money upgrades at $50 or more a pop.

So I have decided to get off the MS Money bandwagon and search for a suitable system that doesn't require as much set up, provides more useful features and has a cheaper price tag. My search yielded a worthy contender which I promptly shared with my mother over dinner.
I have converted to Yodlee. Yodlee offers online banking services, bill pay and account aggregation for many of the largest banks as a service for their bank customers. It is a product marketed as directly to financial institutions. However, you can sign up as a consumer independently of your bank as I did and use it like you would MS Money. It is the best thing since sliced bread.

Why you ask? First and foremost, it's free! Secondly, its web based. I can view the current status of all of my accounts, pay bills, view my net worth and analyze my monthly spend rate from a web browser or my mobile phone. I can't do that with MS Money or any other software application. It helps categorize my transactions which is a huge time-saver. In MS Money, that task alone could take hours if I neglected this too long. Which would also impact my ability to see where I stood at any given point in the month. Now it takes minutes, because most of the time Yodlee has intelligently categorized things based on the transaction data or uses some custom rules that I have built.

Check it out! Here is the demo of Yodlee.com
Here is how you sign-up.

It's tough but I'm making it happen...

There are a few things that I have implemented recently to help me get on the right foot financially. Truthfully, this is a financial transformation plan that I set into motion couple years ago. It has taken awhile to get into the groove because I retired from a previous profession during the. implementation phase. I know, you're thinking..you are too young to have retired! You're right I am, but I had already put more years in and become fully vested far earlier than most of the peers my age. So I feel like I'm on my second career, when most people my age are beginning to hit their stride in their first career.
That transition slowed down my progress, but allowed me to get more focused, better at living within my means and budgeting.

So what am I working on now? I quit smoking cigarettes for starters. That's like trying to pull out of the war in Iraq. The hardest thing ever! Anyway, I had been planning it for a while. I figured I would monetize the effort by planning a vacation with the money saved by quitting. I spent roughly $100 per month on cigarettes. No, I didn't really smoke that much, roughly a half a pack a day. But yes, I spent money like a fool. I never bought cigarettes by the cartons because I was in denial about how long I would continue to smoke. My logic was that I might quit tomorrow (which was lie, most of the time) so I shouldn't buy a whole carton and waste the cigarettes.

So my new year's resolution was to quit and am 17 days smoke-free! What else have I done? I have severely cut back on my daily Starbucks habit. I buy coffee maybe once in 2 weeks or more. I've switched to hot tea. I spend $4 per month now versus $45 per month.
That's not all...I've turned over a new leaf and made peace with my dinner leftovers. Previously between my boyfriend and I, we spent enough money on eating out for lunch, dinner and breakfast on the weekends that we could have carried another mortgage or two luxury car notes.

So what is the "new me" doing now? Bringing my lunch and even breakfast to work.
I haven't crossed over to the everyday lunch-bringing world, but I'm getting there. So what am I saving? I was spending almost $75 per WEEK on breakfast, coffee & lunch! That's a plane ticket to a vacation spot. My spending is down to about $30.00 per week at this point. I've decided to slowly cut back, partially because my cooking skills suck and I have limited time in the evenings. However a fellow blogger has turned us all onto some simple recipes that work well for lunch and breakfast at work. Trent at the Simple Dollar has a flare for freezer cooking. Check it out..The Simple Dollar

So I forsee some white sandy beaches in my future paid for in advance using my expense budget savings

Expense Shakedown

So I'm on a mission to lower my expenses so that I can free more cash up to pay off my credit cards and other assorted debt. Ever since I got my credit card company to lower my rate, I've been calling up companies that I do business with and threatening to leave unless they cut me a deal.

Unfortunately this won't work on every company unless there is adequate competition in the industry. So for example, my electric and water companies would laugh in my face if I threatened to leave because they have their industries "on lockdown" a.k.a. monopolistic grip. My only defense is to lower my consumption in order to lower my expense. So it looks like I need to put a sweater on and get some low flow toilets...

The latest target in this shakedown? My cable company, Comcast. I called today to see if they could lower that crazy bill otherwise I would be forced to put them on the bench for awhile.
I didn't even have to argue. One bargaining chip that I used was my local phone service. I currently use Vonage because it is cheaper than the local phone company service. Anyway, Comcast, like other companies are chomping at the bit to grab customers from other providers and therefore were more likely to give me a deal to earn my business.

So how did I do? After the deal, I was able to shave $65.00 per month off my bills for phone, internet & cable. It only cost me 15 minutes of hold time...