Holiday Time

I just finished my last working day of the month. The verdict is no change with my current work schedule. My associate is going to keep their schedule as is.

I am off to start a weeks holiday.

Have a great one everyone. Back end of next week.

Back to the Drawing Board

The tally is in after my girlfriend's visit and for the month overall. Because of increased pace due to car shopping and the generally busy schedule, we managed to rack up a larger than usual Visa bill for areas such as dining out.

That upset me a bit last night as I was reminded of how a bunch of moderately priced items can add up to $800! Back to the menu planning for us!

I ran through a spreadsheet exercise yesterday to help answer the question of "If I move to a 2 day work week, how does that impact on the mortgage?" The result was that I would only be able to put 50% of the current rate of yearly prepayment for the main house and 100% of the prepayment for the ski condo.

The overall end date will be pushed back by 1 yr 7 months. Shorter than I would have thought. I think I could live with this....

The reason I want to know is that there is currently some movement about at work with one of the owners wanting one of my shifts. We are working to make a fair trade but if it isn't possible, it is nice to know that I would be able to manage otherwise. Maybe I'm just looking for an excuse to cut back.... : )

Sound Pollution

A pet peeve of mine are loud vehicles. Those of which have been purchased because they are loud (Harleys etc) or those that have been modified to be louder (extra large exhaust systems etc).

Summer time tends to be the season in our area where vehicles like the above are in higher abundance. There are days when I wish I lived in Switzerland where they take sound pollution very seriously. At the risk of sounding like an old codger, I like not being disturbed by certain motor vehicles.

I've seen few exceptions but the sort of people who seem to purchase such vehicles (they don't come cheap) come across like they are trying to prove something or compensating for something else? The goal seems to be to disrupt the areas (and ear drums) of the places they pass.

Having Skin in the Game

D likes to use the phrase "having skin in the game" to describe why some people seem more dedicated or motivated to a cause. Though it isn't a common phrase of mine, it is quickly gaining popularity because I think it can explain some money and relationship dynamics pretty well.

For example, in a previous post, I described a relationship dynamic involving a wife who is oblivious to how hard her husband works, gets bailed out regularly and has not really ever earned any significant money before.

Would it be reasonable to assume that because of that, she has not felt any real pain of having to save for anything in advance, balance expenditures, live according to a budget etc. etc.? Not ever having anything ride on her actions, hard work or behaviour?

Some people consider common law relationships to be in the same category. There is a relatively easy out, should you decide that it isn't for you. So is it level of commitment? Even the best relationships require a significant amount of energy to keep it fresh and fun and loving.

So what happens when one person in a relationship has more "skin in the game" than the other? Personally, I do not expect exactly equal ways of reciprocity because that may not be possible.

If the other doesn't make as much money, for example, it may not be possible to match but they can give into the relationship in other ways. This is a bit different if you are talking about the levels of wanting to be in the relationship. A bit trickier there.

Recovery

I am recovering from my friend's visit today. I really like having the house to myself despite loving to share. Guess I enjoy my routine more than I thought!

The week went by fast. She is very independent so we didn't have to have activities lined up or anything. I haven't seen her for a number of years as once we graduated, we went our separate ways and her being about 20 hrs away by plane makes it harder.

I believe that situations and people serve as a mirror to your own life. This past week was no exception. Time and life has changed both of us. We only had one moderate blow out. We disagreed on how we managed our respective businesses and being of different cultures led to some misunderstanding of intended meanings.

It is also hard to be around someone who feels the need to prove almost everything/every idea wrong. I do not remember this trait about her so much in our history.

I came out of this visit very grateful for my life. I have much more peace within me than I ever gave myself credit for. Even D, who is a zillion times more laid back than I got riled up. That says a lot!

In other news, D had a crazy adventure last week en route to picking up his '05 Civic. His CRV would not start at a gas station after he went to pay for the gas. He had to run to the nearest mechanic shop (for trucks) to get help as a line up of cars were forming of people who didn't know he was having trouble with his vehicle.

I was at work and didn't know this until I walked home to see the new car in the driveway. D was looking for me out the kitchen window anxious to tell me the story.

It turned out the wire to the starter had corroded away and the truck mechanic physically used pliers to clamp the 2 ends together to get it started again. So off D went to the dealership, feeling worried about what to do once he got there as once it was turned off, would not be able to start again without help.

Because it was past 6pm, the mechanics there were done for the day and the salesman wasn't too thrilled to hear about the news. Once D explained that it wasn't the starter but the wire, he was better about it. If D had any reservations about selling his 12 yr old 316000 plus km vehicle, he didn't after that. Who would have thought!

With it being 12 years since we last bought a vehicle, we both forgot the other things -- like cost of car mats, snow tires and rims (I like Blizzaks), chip paint, oil undercoating, increased cost of insurance etc.

D has been a bit silent about the above added costs and I suspect he may be feeling a bit of pain regarding it, especially since I have been toying with the idea of some distant travels. You can have everything you want, but often not all at once.

He knows I was on the one car family camp. Though he says he only trusts my car 70% (his previous car 50%) whereas I am 100%. It is the same 12 yr old car as he traded in ($1500 at that!) but I have 267000 km. Funny how different perception can be.

P.S.

Posts may be sporadic this week due to my girlfriend being in town. The added bonus is that this week and the next will be 2 working day ones. I'm very happy to end August with that.

Car Decision

I will be calling the bank later this morning to request a certified check be made up for D as he has decided to trade his vehicle in for another. Total cost for this purchase after trade in is just under $9000.

We will be paying $2500 (max allowed) by credit card (I want the points!) and the rest via the check. D will be cashing in his non tax account (around $5200) to pay for most of it while the rest is coming out of our car working account.

We did a mini road trip to the dealership yesterday (about 1 hr away) so that I could see this vehicle for the first time. Also, we had a chance to go see some more Subarus. We probably ought to have seen the Hondas first because it was a slight let down after seeing the other sporty ones.

It was very difficult for me to back off in D's car buying decision. I wanted to put my 2 cents in but held back as I didn't want him to feel like I was trying to direct his decision making process. Deep down I knew he was going to make a good decision.

I also know that I am a very strong personality and if I said too much, he would change his mind and pick something different just to apease me and I didn't want that.

Now we will have a car that has almost double the gas mileage as my CRV. It will be great for the trips to the cottage. He is really excited about it and we think it will be ready for pick up tomorrow or the next day.

We rounded our mini road trip with a nice hike around a small lake (hot, hot hot -- 40 C) and then went for some gourmet ice cream and got take out for dinner. Nice Day!

Couples and Money

A couple of money related events happened to people I know recently.

The first one is someone I work with who is going through a nasty divorce with 2 young kids. Her stress and anxiety level is through the roof most days and you can feel the electricity from her. She is in her mid 20's, works part time, would not be able to stand on her own 2 feet financially.

I'm not sure how she managed to find a boyfriend while managing everything related to the divorce -- splitting up assets, selling house etc. but after 6 weeks, she is moved in with him with her children. He has a child from a previous marriage. He is an really awesome guy but I question the timing. Maybe he has a need to rescue women in distress?

Now she is pregnant. Her words were, "No, it wasn't planned but he is only 30 yrs old and he only has the one child. He is not finished yet. What's another kid when you already have 3?"

I did not know what to say. D would tell you that I would be the worst poker player because I cannot hide my facial expressions very well. I had a hard time feeling excited for her.

The second scenario comes from a past colleague of D's. He is a very ego driven guy. Likes to have the multiple racing vehicles, thinks a 3 car garage is a must have and is compensating for have growing up without much money and a previously failed marriage.

So with this new marriage, he is determined to be the hero and the Man that makes everything happen for his new wife and child.

He happens to have married a spouse that cannot and will not manage money. He told D that she spent $1000 on groceries last month, puts between $700 - 800 on credit cards each month that he has pay off, has student loans and in a few months, will have only worked a real job for 1 1/2 yrs before fully retiring. They are in their early and mid 30's.

They have just sold their house and bought another one in a different city whereby he will have to commute over 2 hrs a day because he feels it is "the right thing to do" so that his family can be close to relatives.

His wife doesn't seem to be worried at all that her husband is going to have a crazy commute, especially during the winter.

It is like watching a slow motion train wreck. And to think there are many days I get overwhelmed by my problems...

Car Stuff

No go on the ballroom dance lessons. I'm thinking that the universe does not want me to dance right now. On the money plus side, saves spending $50/lesson.

We did go and look at another car last night. A 2005 Honda Civic for $10500. Not bad. I've only owned 1 car in my life and it is a Honda CRV so it has been a long time since I've been in a car.

The think I noticed the most is the noise. Maybe it was the car. Other than that, it was OK. It isn't the car for me but D likes it and it would be the replacement car for him if he doesn't want to consider being a 1 car family.

There may be someone interested in buying his car. They are working out a time for a showing.

I'm not convinced this is the right timing for a next car. From a cash flow perspective, it is fine, compared to the next 2 years when things are tighter.

The Executioner posed an interesting question yesterday.

"In the US, it is common for fixed-rate mortgages to have NO limit on prepayments. What would you do in that case?"

Here's what we are working with.

• Home -- purchased Sept 2007 for $285000. Amortized for 12 years. Amount owing $129862.23. Payment $819.94 biweekly. Current amortization 6 years 5 months. Variable Interest rate 1.35%.
• Ski Condo -- purchased May 2008 for $78500. Amount owing $37844.70. Payment $297.56 biweekly. Current amortization 5 years 1 month. Variable Interest rate 1.5%.
• Maximum combined prepayment allowed $30900 yearly.

If we follow the above plan, both are scheduled to finish a week under 3 years from now.

So, to answer the question, if we were allowed to put in more, what would we do?

This year we will have invested $16000. Monies we will not be touching for a while. Because of the lowered economy, we have been putting aside cash in accounts for big stuff (like roofs) for the properties and cars. Total value of these accounts are $17000, aiming for $20000.

The timing has been good to establish the above cash accounts this year as our decision to take on the mortgage aggressively hadn't come until very recently. Doing so would eat up pretty much the amount we saved this year. One switches to the other. For the next 3 years we anticipate saving $10000/yr.

Any extra monies would have to come from a different place. Like our trips, the $10000 savings, seasons passes etc.

I'm not sure I'm willing to touch any of that to get the end date from 3 yr to say 2. When you get to this range, the effort difference to get from 3 to 2 becomes exponential.

When I was playing around with increasing our biweekly payment, I noticed that after a certain amount, I had to increase it even more to get the same decrease in amortization time. I liken it to the effort needed to get a 95% mark in school vs 80%.

So I chose the number that made the most sense as well as fit our criteria of not having to renew with the bank in 3 years (we are committed to a 5 yr term) and luckily the effort also means everything is paid for as well. (Note that the ski condo is a 5 year term also but it will be done at the same time as the house)

So we don't have to sacrifice too much of our lifestyle and that is what I meant by Win - Win.

On that note, I have my first Ballroom Dance lesson this afternoon, after a 2 year hiatus. Hopefully my new instructor and I will be a good fit!

Win - Win

I don't know why I haven't thought of this before because it makes so much sense...

Our current goal is to maximize our allowable yearly mortgage prepayments. The reason we have no fun money is because I have a different amount every pay cheque. Then the light bulb went on. Why don't I just divide that total amount by 12 and do it that way?

I was so caught up with the micro part of things, I lost sight of the big picture. So the total amount will get done, on time, with no heroics or sacrifice and it actually frees up some cash flow for some fun! Win - Win.

I've Been Tagged!

I've been Tagged by Lizzie to come up with 7 Amazing Facts about Myself. Not sure I have any Amazing Facts, though here are 7...

1. I am a dreadful Skipper. I have come last in every single sailing race I've been in when I've been at the helm. On the flip side, I am a fabulously intuitive crew member and won my first 2 person race on a 3 mast sailboat as Crew.
2. I am not scared to travel alone. In fact, I rather enjoy it.
3. I only like to drive when on a road trip. Other than that, I'd rather walk. Though I must say I like to drive fast. The fastest I've ever driven is 100 miles/hr on the Santa Monica Freeway. That is why I am currently driving a boring car... so I am not tempted. That may change if I end up with a Rally Car...
4. I've had some of my paintings on display at 2 private art galleries and at Toronto City Hall.
5. I can read and watch my favorite books and movies over and over again...like 20 times!
6. I missed out on a fun and carefree Childhood because I had to take on adult responsibilities on behalf of my parents. Now that I am older, I feel I am living younger in many ways than I was able to a few decades ago.
7. I love to immerse myself in other Cultures to that point where I feel the need to learn languages and customs before I go. I only spoke 1 sentence of English in 2 1/2 wks in Italy -- asking the front reception staff at the hotel to please be patient with my Italian as I wanted to practice.

Dangerous Thing

We did a dangerous thing yesterday....called car research at a dealership...

I bought my car when it was a year old, so never had a chance to go through a showroom etc. As it is my first car, I've never actually owned a new car. Having said that, I'm not sure I would buy a new one anyways. Though I was seriously tempted yesterday.

We met a nice salesman who leads a really active life (motorcycle racing, ski instructor etc. ) so it was really inspiring to talk to him. He knew that we weren't there to buy something right then and there but will give us a shout if something used comes along that fit what we were looking for. I want to give him our business.

So... what were we looking (salivating) at?

A Subaru Impreza WRX STI

Yes, I now want to take a course in rally driving....

Tolerances

For the first time since the economy turned a bit sour, my non registered account has soared above even and is up about $550. It is solely due to 2 holdings -- one of them a new one I just bought a few months ago. The other 4 are still lagging fairly far behind so when they come back to life, I will be quite pleased with the overall result. My registered retirement account has a ways to go still.

This month D and my paydays are off sync. He gets paid bi-weekly, which works really well with the mortgage whereas I get paid bi-monthly. So for part of the year because of the 2 months where there are 3 mortgage payments, we mismatch for a little while. So there is a bit of extra thinking as I am responsible for extra mortgage payments as well as the prepayments.

Someone I know is single and carries about $350000 worth of debt, $230000 for the mortgage and $120000 in various other loans. They recently told me how great it feels to be working less and credited me as their inspiration.

I didn't feel very good about it nor did I realize they felt they were thinking of matching my work schedule at any time during our conversations. Though we probably make a similar range of income, I don't carry that amount of debt and I have a spouse that works too. This person does have a tenant and is working of selling things online and feels our situations are comparable. I'm not really seeing that.

I see my role as D's backup. I am able to match his income should anything happen. Because of our current aggressive debt payback, we are using all of his income and most of mine. So if anything should happen to me, he would not be able to sustain it and would have to resume to a "normal" level of living with regular payments but our lives as we see it now wouldn't be massively affected. I have very little tolerance for chance with respect to money and debt.

Fun Money

Last workday of the week for me. I have tomorrow off. Yeah! I am looking forward to reading a few books that I just got from the library.

There is some sudden interest in a couple of items we have for sale. Hopefully they will sell quickly and easily.

We decided to build in more fun money in our budget. Recently, with our new found enthusiasm for mortgage prepayments etc. we have gone way over board on using every single penny towards our cause.

It has left us with that characteristic feeling that tells us we need to lighten up.

We've been watching some debt tv shows and it really hit home when people who make less than 50% of what we do have more per week in their recommended entertainment budget than we do and they were talking about $25!

So what we are going to do, starting August, is to put all of our extra income and sales money into an account and see what it amounts to, as a start. Then decide what fun thing to do with it.

Because my base debt extra payments are calculated on base income, we still meet our goals on time instead of maxing out prepayments and waiting for when we are allowed to start again -- as in the case of the ski condo.

Next week the last prepayment allowable will be made and I cannot make another one until May 2010. Our focus will then switch to the house prepayment until that is maxed out etc. etc. jumping from one to the other.

After I realized that, I wonder what I was thinking?! Bring on the Fun Money!

This & That

My car need some fluids changed -- Oil, transmission, differential... We have a free oil change coming to us so the rest will be around $150. Haven't made the appointment yet but am thinking sometime this month or next.

Month end time again. I did end up making extra in July, to the tune of $753.59. So far this year my extra has totalled $8408.05. Selling stuff account is at $4445. Really grateful for both. Where did it all go? Mostly "life" expenses and debt repayment. We are one payment away from maxing out the prepayment for the ski condo.

We recently used most of our last travel credit on flights out west in December. There is enough left over to pay for one of us to come home (to which I said to D -- Great! You get to come home and I'll stay!). As I do need to come home too, I will be using my credit card points. So no expenditure of money on these line items. I love it!

Traditionally, these flights are our most expensive domestic ones because of Christmas. This year, we are test driving something new. By heading out a week earlier, we get to take advantage of the pre-Xmas sale and by coming home after New Years, we save then too. No more paying $850 per flight! The savings are in the 50% range so very significant.

Extending Christmas holidays will impact the amount of time D has off the rest of the year. It makes it tough for him to take a couple of weeks off in the summer. Skiing is a priority for him so we'll see if it works. He won't get another week off for 7 years. That's really gross, if you ask me. With our mortgage paid off, he will be able to take time off without pay so he will not have to wait too long for that.

Honest Questions and Answers

I indulged in a couple of my favorite pastimes yesterday -- real estate and travel searching. Doing so opens a can of worms I know but I like seeing what is "out there".

Of course I hit upon a couple of great deals and start swooning over the possibilities. It is like being a kid in a candy store!

In my past past, my only criteria for taking a trip was "Can I afford it? The answer was usually yes!

In my past, the criteria eventually morphed into "Can I afford it and the time off?" The answer was sometimes yes!

In my current state of mind, the question has become "Can I afford it, the time off and the money not made?"

The honest answer doesn't always make me happy...

Extras

It is a long weekend in Canada. For us, we are just laying low after a very busy week. Most of the people we know have already packed up and have headed north to camp or cottage or visit family. We prefer to go against the flow literally and traffic wise.

D works on the Monday as he doesn't have to take the holiday on the day it lands and as I don't work Mondays anyways, the long weekend doesn't have to apply to us.

On an exciting note, D feels back to normal. He wasn't able to get test results yesterday as the clinic was closed early for the long weekend. So we'll have to wait til Tuesday.

On another exciting D note, he has managed to secure himself a part time contract job with his old company likely to the tune of 20 hrs a month, just to get his feet wet. This is the type of work that has potential as a early retirement type job that can be done anywhere where there is Internet. I am really excited for him.

He has been searching for options for a while as he did not have as much stuff to sell as I did and felt he needed to come up with something else. Unlike selling stuff where there is a clear end, his opportunity can last a very long time.