Bah, feh, bother, and so on...
We got a copy of the appraisal in the mail yesterday. The appraised value was $30,000 short of what we needed to drop PMI. A letter from the mortgage company will follow, telling me what I already know.
On to plan B (which is not yet formulated)...
posted by SMB @ 7:58 AM
2 Comments:
No, "Where does all the money go?" is a good question, and one I specifically began this financial kick to answer. :)
To begin, the $5500 figure I gave didn't represent what we currently pay toward our bills right now, but allowed for a little bit of belt-tightening in the event that one of us did lose our job. I'll explain: we regularly pay well over the minimum payments on our credit cards, and in past months I've thrown anywhere from $175-$500 extra towards the mortgage principal. I knew that would be impossible if one of us lost our job, so I lowered those figures a bit (though I still allowed for paying more than the minimum on CCs, because the idea of paying just the minimum is anathema to me). Also, I lowered the figures for things like food--if one of us lost our job, there would be no dinners out (though we eat out pretty infrequently anyway). My husband hates brown-bagging and likes to eat his lunch out--fine, we can afford it, but in the event one of us lost our job, things like that would be among the easiest expenses to slash. I also lowered the amount needed for things like gas (less driving to and from work if one of us isn't working), etc.
Our net income is appx. 8200/month--I need to come up with an average, as it's never the same month to month, it seems. Our take-home pay is largely reduced due to things like taxes, retirement contributions, flexible spending account funding, parking, etc. That leaves us with appx. $2700 beyond the $5500 figure. As I said, we regularly pay well above the minimums on our bills and mortgage. It seems that after the 1st and 15th (when we pay our bills and mortgage, respectively), we usually end up with about $600-700 to spend on things like food, gas, entertainment--in other words, everything except our bills.
Given the outcome of the appraisal, I decided to suspend extra principal payments and pay down bad debts instead. I'm also going to rachet my retirement contribution back up to 20%; I've been uneasy about lowering it all month. I have a few more ideas which I'll post about soon.
I hope that answered your question. If you have any comments I'd be happy to hear them!
I wanted to add that the $600-700 available after expenses seems to be a fairly recent phenomenon, only occuring the past few months or so. Previously we were left with about $450-$500 each pay period. I mentioned this in a recent post--we seem to be spending less money lately.
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