Weekly Progress Update #1

White arrows pointing up on a wooden wall, signifying weekly progress

It’s been a tough week for my family.

Well, I should say, it’s been a tough year.  But some weeks are harder than others.

Which is one reason I made the disclaimer that I would occasionally definitely fail at reaching my weekly goals.  Sometimes life just has different plans.  Gotta roll with it.

 

Weekly Goals Review

These were the goals I set for myself this week:

  1. Decide which lender will refinance our mortgage, and start the process
  2. Create a money tracking system that both my husband & I can use
  3. Create a “financial snapshot” of 2018, so we can see how we handled our money last year

 

#1 Refinancing Our Mortgage

I had already found a mortgage lender that I liked.  He had emailed me a detailed breakdown of cost and fees, as well as a comparison table of different rates.   I really appreciated this, and it’s what set him apart.

I could tell he loved teaching his potential clients about the ins and outs of choosing a refinance loan; the guy was bursting with mortgage information that he generously shared with me.  (As opposed to the other lender I called, who felt the need to talk about his family life, his career achievements and how good he is at what he does.)

The next step was to go over the choices with my husband.  I explained (as best I could) how the different rates would affect our current payment, all the fees, the break-even points between rates, and the bottom line:  we’d be shaving $350 off our monthly payment.  Didn’t take much convincing.

I dragged my feet a couple days before calling the lender back.  What I didn’t realize (although he had told me) was that even though the rates don’t change from day to day, the pricing does.  The pricing is the credit you get or the charge you pay for the percentage rate you choose.

So, when I talked to the lender on Tuesday, he said I would get a credit of $742 just for choosing the rate I wanted.  That was an unexpected bonus so I was pleasantly surprised!  But by the time I got back to him a few days later with our decision to move forward, the pricing on my chosen rate had increased to a charge of $286!!  Needless to say, that was pretty disappointing.

So we did a reevaluation of the rates, their break-even points, and their current pricing.  I ended up going with a slightly higher rate because the pricing on that day was a hefty credit, which will offset the slight increase in monthly payment for several years, so I’m good with it.

We also have a home equity loan which we’re rolling into the first mortgage, because our chosen rate is lower for that one, too.  This will not only give us just one overall lower monthly payment, but we’ll also be able to write off all the interest.  Starting in 2018, home equity loan interest is no longer deductible unless you use the funds specifically to improve your primary residence.  Because we got the second to consolidate credit card debt, we’d lose this deduction if we kept the loans separate.

The nice thing was that all the paperwork was online.  We didn’t even have to drive anywhere!

The next step is the home appraisal, which is scheduled for this week.  We’ve been fortunate with the housing market here in Denver.  We got a sweet deal on our home because the buyer had already moved and was motivated to sell.  And since we bought the house, its value has increased by 52%! (Fun fact:  the previous owner was Eddie Royal, who played for the Denver Broncos, San Diego Chargers, and Chicago Bears!  He had moved to San Diego by the time we found our house, so we never met him.)

Besides just comparing rates and fees, there were a couple of really helpful things that came out of calling a second lender.  One, he repeated what the first lender had told me, which was that he thought our homeowner’s insurance was really high.  I looked into this further and I plan on getting some quotes from a few agents.  I’m expecting to save at least $50 a month, which will bring our mortgage payment down even more.

The second thing I learned from the other lender was that the timing of closing can determine if you skip one or two of your regular mortgage payments.  Although you’re not saving this money (it just gets pushed into the next loan), it’s a way for us to increase our cash flow now and pay more towards our credit cards.

I mentioned this to our lender and he confirmed this was true, so we’re timing the closing so we can skip the mortgage payments for both February and March.  This will give us over $5,500 we can put towards our other debt!

So far I’ve been really pleased with the whole process, and super excited about the money we’re going to save.  Those extra funds will really help us pay down our credit cards faster.

 

#2 Money Tracking System

Between my family’s tough circumstances right now, working my sub jobs, and taking care of the refinance, I didn’t complete this goal.

I did buy some materials that I’ll be using but that’s as far as I got.  I know this one is going to be time-consuming and possibly frustrating, as I find out by trial and error what’s going to work for us.  Also, I don’t work well on big projects like this unless I have large blocks of time to devote to it – which are hard to come by these days.

Still, it needs to get done.  Every day that passes I feel like we’re getting farther behind in tracking our finances, which means money is inevitably slipping through the cracks.  I’ll keep this one on my goals list and may just need to attack it in smaller chunks.

 

#3 Financial Snapshot

For the same reasons I stated above, this goal was also not met this week.  However, this one won’t require the same time investment as #2, so I’m confident I’ll be able to complete it soon.  I like the idea of having charts and tables, but I may have to go simple this time around.

This one isn’t as important as #2, but I still think it would be helpful to know how we handled our finances last year.  I want us to learn from our mistakes and understand the consequences of them.

 

For This Week

Because I didn’t achieve two of the goals I had set for myself last week, I’ll add them to this week’s “Big 3”.  I don’t know what the week holds or how much time I’ll have to devote to them, but the first step is writing them down.  And that’s the best I can do:  just take one step at a time.

These are my top three financial goals for this week:

  1. Create a money tracking system that both my husband & I can use
  2. Create a “financial snapshot” of 2018, so we can see how we handled our money last year
  3. Determine how we’ll allocate the extra cash flow we’ll get from the mortgage refinance

I’ve already explained #1 and #2, and #3 is self-explanatory.  Basically, I want to make sure those extra funds are going towards debt with the highest cost.  We also have a large balance with a promotional 0% rate, so I need to make sure we get that paid off before the rate skyrockets.

Overall, I’m feeling very hopeful about making progress with our finances.  We’ll be able to pay off a large chunk of debt over the next couple months, then we’ll be cutting our monthly expenses by about $400.  Things are looking up!

Do you have financial goals for 2019?  How far have you gotten in achieving them?  I’d love to hear what your financial priorities are as we close out January.  Leave a comment and let me know how you’re moving towards financial freedom!

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