About that Emergency Fund: Roof Replacement

 Originally Posted on June 12, 2018 in Free, Fun, Family

Ours is the end unit. See that roof with those two leak holes–I mean skylights? This is from three years ago when she was already an old lady. Farewell, girl. RIP.

We’ve known since we moved into our beloved home five+ years ago that we were due for a new roof.  The house is 24 years old with the original roof–four years past the maximum expected for the current roof.  We’ve known that we were going to have to cough up $4,000-$8,000 at some point, but we kept hoping we could save up for it after debt repayment was complete.  This weekend, the rain finally won–we have a small leak around the skylight in the master bathroom.

I’ve had a variety of emotional responses to a major home repair in the middle of finally mastering debt and crawling out of our hole.

“It’s not fair!”  It’s not.  Toughen up, buttercup!

“Maybe we should just repair it and wait?” (This is the method Dave Ramsey recommends, by the way, which made us give it more thought than we really should have since we knew the roof was past its time).  Wait for what?  The drywall to soak through and mold to start growing in the attic?  Our debt payoff will take another 21 months or so.  No thanks!

“What’s the point?  Every time we get a little bit ahead, we just get sucked back into debt!” This is a dangerous line of thinking for me, because when we emergency replaced our HVAC unit last summer (where a substantial portion of our current debt comes from), I gave into this and it caused me to increase our debt in the second half of the year because the number just felt too high and ridiculous!

“You could use the IRA contributions… you haven’t touched them to pay off your debt, but this is your HOME!  It’s an emergency!”  Yes, but it’s one we knew was coming and should have planned for.  Just like we should have managed our finances better and not been in this precarious debt situation in the first place.  We did this to ourselves–the IRA is for retirement.

I knew I needed to do something different here.  We needed a new roof.  Ultimately, being stingy here would make the final costs much greater.  Instead, I took a deep breath.

I looked at the big picture of how far we’ve come in four months.  We’ve reduced our credit card/consumer debt by almost $7,000 in just four months.  That’s enough to pay for the roof plus some!  Our habits are changed.  While we have a big vacation coming up that was planned pre-debt-elimination, and we will enjoy it, we have no other major expenditures planned/anticipated for the next few years other than the roof.  We have some things we WANT for the house, but really the roof was the last thing hanging over our heads as a NEED.  We have $1,000 in the emergency fund and can tighten our belts even more in the coming months.  I know I’m getting a raise in July (final amount pending, but it was approved by the governing board) and that our frugal habits are sustainable.  We can do this!

We took a few bids from local, highly rated roofers and decided to go with a local guy who could squeeze in the job while Min and the kids are in Korea, so they don’t have to deal with a construction site one day.  He quoted us a touch over $6,000 ($4,800 for the roof and $1,200 to replace the skylights).  His bid was in the low-middle of the offers (ranged $5,500-$7,000).  This guy, specifically.

Now, how to pay?  We could put it on a credit card, but I’m so focused on paying off that debt, I really don’t want to add to it.  It would feel like a step backwards.  I looked into home repair and home equity loans.  Too much paperwork and fees!  In the end, I decided on a $5,000, 3-year personal loan with an interest rate comparable to our (low interest) credit cards, no origination fees, and no prepayment penalties.  Hopefully, we can zap the balance when we’re done paying off the credit cards, but this will keep the loan manageable and fast.

Bye, bye emergency fund!  I guess I am going to have to try to sell off some stuff to restock it to $1,000 quickly.

This journey to gain control of my finances has made me feel more confident about this emergency, even with the fears of hopelessness, than I have felt about similar problems in the past.  I have the confidence to keep going down this path to building wealth.

They say when it rains, it pours; luckily it’s just a trickle right now.  Easily patched.

Book Review: Meet the Frugalwoods

Originally Posted on June 7, 2018 in Free, Fun, Family

I enjoy reading books by bloggers I admire because it makes me hopeful that this practice in writing that I enjoy so much could be one way to make the hobby I love a profession.  I have read a bit of Elizabeth Willard Thames’s Frugalwoods blog on and off since she started it back in 2014.  Her eschewing of the dangerous, unhealthy consumerist culture in the U.S. (while still functioning within that society) is something I have struggled in reaching my own personal goals.  I enjoyed reading even more when she became a mom and achieved her dream of homesteading, which is also when her blog picked up in popularity.  However, I was delighted to see that her first book was published in March–right when I began to get serious about my return to blogging!

Thames and her husband have achieved financial independence at an early age through a combination of hard work, frugality, and vision. Meet the Frugalwoods: Achieving Financial Independence Through Simple Living is the story behind the blog posts. I loved the story! I enjoyed parts of the book that rounded out the story–the details from her time as an Americorps VISTA volunteer and the process of buying the homestead and then settling into it were particularly interesting.

Thames is aware (and acknowledges) that she was in a privileged position to reach her goal, which some people have criticized, but I think she is quite sincere about her awareness of this privilege and appreciation for it. I admire how positive she stays, even when sharing some incidents that were undoubtedly painful and emotionally fraught (her depression while living in DC, her anxiety about work as a high-achieving liberal arts major after graduating from college, her daughter’s week and a bit in the ICU). I think this ability to focus on the positive and remain grateful for what opportunities and resources she has been given allows her to make the best use of those resources.

It would be easy to read this book and nitpick. I’ve read a lot of reviews of it that do so (the most common complaint seems to be that both Frugalwoods had extremely high salaries which she almost never mentions, and that Thames’s husband is still working full time in his well-paid, location-independent job; I don’t think that lessens the work, planning, and research they did to achieve their dream life). I hope Thames does not take these comments too much to heart.

I really do think the best thing Thames offers in her work is an understanding that long term financial goal achievement is only possible through positive perseverance and clarity in values alignment. While my family is currently restrained by some limitations she and her husband were not during their hyper-focus on their goal to purchase a homestead, I think she sets out a clear path to follow that could lead to whatever goals a person wanted to achieve, even if they take longer than she did.

Live the best life you can–the Frugalwoods do and encourage others to do so as well.  Thanks for writing, Liz!

Disclosure:  This post contains affiliate links for convenience.  I would be overjoyed if you checked these books out from the local library to read their wisdom!  However, if you would like to purchase my recommendations and financially support the work I’m doing on this blog, please feel free to use the links above.

Attitude of Gratitude: My Dad

Originally Posted on June 5, 2018 to Free, Fun, Family

Today is the fourth anniversary of the death of my father.  It’s hard to write about it, because Dad and I were very close for most of my life.  The grief I have from this loss is still overwhelming at times.  He was a funny, brilliant, stubborn, laid-back man who worked hard at what he loved (engineering), for those he loved (his family), sharing his passion for what he loved (sailing–see the picture of him on the dock).

Dad helped begin my love affair with frugality and fostered my anti-consumerist tendencies, but also reminded me that it is ok to spend money on what really matters in life.  He supported all my adult career and personal decisions, loved Min and J deeply, and never failed to make the right joke at the right time.  I cannot adequately express the joy and love he brought (and continues to bring) into my life.  That he will never know H (and she will never know him) is one of the few real regrets in my life.

“Today is the first day of the rest of your life.” (Dad’s favorite Dad quote.)

Now that I am a parent, I appreciate the constant, steady presence Dad had throughout my childhood more than ever.  He loved my mom in a way that taught me what romantic love really should be.  He encouraged me to take chances and believe in myself.  I feel his absence every day, as do the other members of my family.  But lately, I’ve been in a place to just appreciate what time we were able to share.  Life is short; Dad’s impact is enduring.  I hope to provide my own children with as much acceptance, humor, and challenge as my Dad provided me.  Thanks, Dad.  Always.

Debt Elimination Progress: May 2018

Originally Posted on June 2, 2018 in Free, Fun, Family

Given that we’ve made significant progress in reducing our spending and increasing our debt repayment that are major, sustainable behavior changes, I felt comfortable pursing an option to reduce the interest we’re paying on our current credit cards: balance transfers.  I applied for one balance transfer card that had 0% interest for 15 months and no transfer fees.  They approved me for a bit over $3000.  Then I applied for another card at 0% for 18 months with a 3% balance transfer fee (this will take only 2.5 months to come out ahead of our interest rates).  They approved almost $10,000.  These two allowed me to eliminate my highest interest rate balance (the Visa) entirely and reduce my next-highest rate (the AmEx) by about $5,000.  I will save over $100 in interest every month, which can help pay off the principal much faster!  Because of the balance transfer fee, the amount we reduced our debt by this month was a bit less, BUT we should catch up quickly!

Progress from May:

• Continued to reduce food spending. I’ve started baking at home, making my own salsa and pizza, and went to Aldi (already in love with it–you will see a post when I’ve been a few more times).  I’m seeing the light at the end of the tunnel for this budget area and finally feeling less out of control in this area!
• Balance transfer cards. As described above, we are committed enough to really paying off our consumer debt once and for all to make this worthwhile for us.  I didn’t do it at the beginning because I know I’ve start “payoff” plans before and quit; balance transfers can be a big risk for debt repayment, but I feel quite good about our ability to pay off the balances before the introductory rates expire.
• Our debt payoff is slowing down, but we are still making progress every month.  I anticipate a modest raise in July, which will help, but our pace is slow and steady for May and June as we prepare for a lengthy trip to Korea to spend time with family.  We continue to focus on ways to reduce our spending.  Here are the numbers for the end of May (with new accounts considered):
  • Visa Card: $0 (transferred and finished)
  • Home Improvement Loan: $3,500
  • AmEx: $8,000 (transferred a lot)
  • Balance Transfer 1 (0% for 15 months): $3,038
  • Balance Transfer 2 (0% for 18 months): $9,589.30
  • TOTAL: $24,127.30
  • Amount paid off this month: $508.88
  • Amount paid off TOTAL: $6,828.70

Add the reduction of non-consumer debt and we’ve torched $8,546.41 of debt in four months.

Goals for June:

1. Cancel cable internet while in Korea
2. From June 20 (when the kids and Min leave for Korea): absolute minimum groceries until I leave.
3. Try spin classes when other exercise classes are cancelled as the Y rebuilds–keeps me focused on goals.