American Senior Citizen

PAYING OFF MY HOME ONE MONTH AT A TIME (post #8)

Well here it is again, almost Christmas time and I managed to eek out another $600 and some odd dollars to put towards the principal only on my mortgage. Actually it was exactly $635.04 which put my new balance down to $129,842.88!

I am almost a full 4 years ahead of my mortgage. Dave Ramsey would be proud (I think)!

This next month is going to be a little tough. As much as I want to pay off my mortgage YESTERDAY, Christmas is very important to me and I want to spend some money on some of my family. It’s hard to determine how much money to spend during this season. But it is possible if you decide to make a budget.

My next post will be about using the envelope system, by Dave Ramsey.

Let me know how you budget.

LIVING LIFE

Well, well, what to do, what to do. You know that sometimes you really need to live life.

BUT ONLY WHEN YOU CAN AFFORD IT!!!

I don’t go out often, and don’t go out to eat often. But one of my biggest downfalls is going to McDonald’s and getting a regular Ice Tea with lemon. They are only $1.00, plus tax = $1.08. That’s my big thrill of the day on my days off. But the last time I went, besides being out of lemons (McDonald’s informed me that they will no longer carry lemons…ugh) the girl who took my money at the drive through and the girl who handed me my Ice Tea both had their nails done. I mean, long sculpted, fancy rhinestones (are they rhinestones now a days?) or bling on them. And I wondered “how much do they spend on those?” Well it turns out in California you can spend anywhere from $30 to $70 to get a manicure and some fake nails put on! And that’s every two to three weeks! OUCH. When you are only getting paid $10 to $12 an hour for work, why in the world would you spend that much money on nonsense? This is why some people complain that “life’s just not fair” or “I can’t afford school, or a car, or clothes”. Where do these people think that they are entitled to all of this stuff. Have they never heard of saving up for items, or waiting until they can afford it?

You can not make $10 per hour and expect to rent an apartment or house and have a car payment (unless you have roommates). You can not expect to get your nails done, have fancy clothes and go to school, unless you can afford it or someone is helping you pay for it. You can not afford it if you are on any kind of assistance (welfare, SNAP, etc). If you are over 18, you should not be having your parents take care of your kids (you shouldn’t have kids unless you can afford them, without having your parents help you) and think that you can still go out, get your nails done, drive a nice car and expect the public to foot the bill for all of your “necessities”.

Enough of my howling….back to the subject of this blog which today is to LIVE LIFE. I am on Dave Ramsey’s Baby Step # 6 (pay off mortgage early) and even with sending extra money to pay down my mortgage I have managed to save some extra money to get an electric bike!

I did it. After intense research by the BF, we have both decided on getting Rad Rover Power Bikes. They are the best. We went down to Balboa Island and rented them from SportsRent for a couple of hours just to make sure they were the ones that we wanted. It was a wonderful time. The sea breeze rushing through your hair as you barely pedal (I love pedal assist!). Looking at the wildlife in the marshes, gliding down the bike path on a beautiful sunny California day. I don’t know if I could live anywhere else (although the taxes here are killing me, I may have to move someday).

Anyway, using an electric bike instead of my car will help the environment, somewhat and my health. Although there is no way I can use it to drive to work. I leave too early, come home too late and there is no safe path for biking back and forth to work for me, otherwise I would definitely use the bike for that. I will be able to go to the grocery store, the bank, the new movie theater, and even to the BFs house. I can’t wait for it to arrive!

The one downfall I have is that the money I have spent could have gone to pay off an additional 4 to 5 months of my mortgage, which at the time of this writing I have already paid off an extra 4 years in 8 months. But I think the goal is to be frugal and remain happy. Do things you like, but only when you can afford them and that may inspire you to push yourself and be successful.

How do you want to be successful in being frugal?

Let me know in the comments below.

Here’s to reading on!

Affiliate Disclosure: Posts may contain affiliate links for which I’ll receive a small commission. Thanks!

No, that is not me and my boyfriend (BF) walking on the beach. We both have longer hair! That is a free picture from the internet.

PAYING OFF MY HOME ONE MONTH AT A TIME (post #7)

On 11/4/19 I paid an extra $419.04 to my principal which puts my balance down to $130, 477.92.

So far with regular monthly payments I have paid off almost $10,000.00 since my very first house payment in April 2019 (8 months). If I wouldn’t have made extra payments, my balance would be $138,603.13 with still 29 and ¾ months left on the mortgage. A difference of $8,125.21 and 26 years left on the mortgage. I have the discipline to make my 30 year mortgage into a 15 year mortgage and more. I am hoping for another 3 years to have it paid off, that’s an average of $43,333.33 per year or an average of $3611.11 per month. Considering I am a single taxpayer, making a good living, I pay high taxes (California is one of the highest taxed states with the highest poverty rates = my money goes to poor people who don’t want to work for a living – my opinion), I don’t bring home much from my paycheck. I will have to figure out how to be in a lower tax bracket. I try to put as much as possible into my TSP (government for 401k) retirement plan, but if I put the max in, I wouldn’t have hardly anything left to live on.

Dave Ramsey recommends that once you are in Baby Step 4 to put 15% of your income into your retirement plan, then you can start paying off your mortgage (unless you have kids then you need to start saving for college). So since I started saving for retirement late I currently put up to 19% into my retirement.

If I can do this, so can you. All it takes is the drive and determination to be successful. Again, if a single person who is frugal, but still lives life (hike, bike, movies, etc) can do it, anyone can.

Let me know how you’re paying down your mortgage. Leave a comment below!

Here’s to reading on!

Affiliate Disclosure: Posts may contain affiliate links for which I’ll receive a small commission. Thanks!

No, that is not me and my boyfriend (BF) walking on the beach. We both have longer hair! That is a free picture from the internet.

PAYING OFF MY HOME ONE MONTH AT A TIME (post #6)

I am trying to catch my blog posts up to where I am at on my amortization chart. So here is another update, this time for October.

And the 2nd chart, which shows I am now down to $131k.

What would you give up to pay extra to your principal in order to pay off your mortgage early???

Leave a comment below
Here’s to reading on!!!

Affiliate Disclosure: Posts may contain affiliate links for which I’ll receive a small commission. Thanks!

No, that is not me and my boyfriend (BF) walking on the beach. We both have longer hair! That is a free picture from the internet.

PAYING OFF MY HOME ONE MONTH AT A TIME (post #5)

It’s time again….here is the amortization chart. It’s getting rough with Christmas on the way. Yes, you need to set aside money for Christmas. No big spending. Do you even remember what you bought your brother or sister last year? How about the year before? My family has a “Secret Santa” Christmas, so that helps tremendously. Although I want to splurge on my granddaughters.

So I made 3 extra principal payments for the month of September which totaled a little more than $600. Not as much as I wanted but the BF and I budgeted for a short vacation to the Sequoia’s this month. We paid cash for the short vacation. The trees are beautiful and I had never been there, even though I was born and raised in Southern California. I highly recommend going to see the magnificent beauty of the trees and the caves.

This 2nd chart is my way of showing me how many $1000 dollars I have paid off and how many I have left.

Let me know how you’re paying your mortgage off early.

Here’s to reading on!!!

STRESS/RETIREMENT

Retirement…ahhhh…sounds like such a nice word, until you don’t know where your money is at.

The stress of having an account that someone else has control over is overwhelming sometimes.

I am finding this out from my BF (boyfriend). He is a very responsible, accountable, old fashioned man (not old in years, he is only 54). He happens to be a responsible person who worked for the same company (company changed hands 3 times) for the last 31 years and lived below his means.

The company is now on the verge of filing bankruptcy, which is why he unexpectedly retired early, otherwise there would be a good chance of him losing more than half of his pension. And after 31 years of hard manual labor, he wasn’t about to let his pension slip through his hands.

When a company files bankruptcy and their employees have pension plans, there is usually a guarantee provided by the government called a guarantee pension. PBGC is a federal agency created by the Employee Retirement Income Security Act of 1974 (ERISA) to protect pension benefits in private-sector defined benefit plans – the kind that typically pay a set monthly amount at retirement. You are not guaranteed your whole pension, in some cases you are only entitled to about ⅓ of your original payout.

One day while I was at work he texted me…”I pulled the trigger, I gave my two week notice and retired”. He wasn’t ready for it, I wasn’t ready for it. But I was extremely happy for him. He had been dealing with incompetent managers (people who had degrees but never once worked in the field, couldn’t read a road map to get them out of a ceral box, and just thought “they knew better” than someone who had a degree but also had 31 years experience out in the field but didn’t want to be in management).

But then came the fear. The fear of “what happens next?” “How do I get my money”, “How do I invest my money”? He only had two weeks to roll over his pension and his 401k. For someone who has been debt-free for the last 10 years, I couldn’t understand how he didn’t know what to do with his money. I have been following Dave Ramsey, Mr. Money Mustache, The Money Wizard, Root of Good, etc for the last couple of years, and I know exactly what I would have done if it was my money. But it’s not my money and I am trying to understand how hard this is for him. Any advice I give him may be wrong and I wouldn’t know who to advise him to go see.

The problem with retiring early (prior to 59 ½) is that in order to take money from any retirement accounts without penalty you have to do a 72T withdrawal. This is just the IRS way of distributing your retirement plan with equal periodic payments without charging a penalty. But, and here’s the big but….you have to know how to withdrawal from a 72T.

Unfortunately or fortunately, the BF decided to use a finance person who is also helping fellow employees with their respective retirements, but how much does anyone know about this person? BF is now having trouble seeing his money on the financial website. The brokerage firm is now using a new company. All of this stress is unbelievable. I suggest that if you’re not going to manage your own money, do yourself a favor and learn as much about finances as you can and if you still don’t want to manage your own money, search out someone who you’ve done your homework on and interview them…interview several of them and then pick the one that suits you, understands you, and has your best interest in mind.

I have read Simple Path to Wealth by J.L. Collins and Quit Like a Millionaire by Bryce Leung and Kristy Shen. Both are great books but I still can’t tell the BF to “just put your money here, or there”. What happens if he loses it, I would feel that I was responsible.

So please, if you are anywhere near retirement know exactly what you are going to do with your money. Have the foresight to look ahead and plan.

I suggest getting a Personal Capital Account as does every other FIRE person (financial independence retire early) to keep track of budgeting, investments and bank accounts and also go with the Big 3 at Vanguard:

VTSAX

VTIAX

VBTLX

If you like, comment below on your views for retirement.

Here’s to reading on!

Affiliate Disclosure: Posts may contain affiliate links for which I’ll receive a small commission. Thanks!

No, that is not me and my boyfriend (BF) walking on the beach. We both have longer hair! That is a free picture from the internet.

PAYING OFF MY HOME ONE MONTH AT A TIME (post #4)

Well here I am again…trying to keep my promise by updating the paying off of my mortgage post by posting every 2 weeks.

For this post I am showing you the month of August.

I was only able to pay $1183.11 towards the principal this month. I was saving cash for an upcoming vacation.

As you can see the balance is coming down at a good pace and it is now only a 27 year mortgage. I have paid off 3 years of a 30 year mortgage in 5 months!

Dave Ramsey would say to get a 15 year mortgage, but I think I am doing pretty well paying it down myself. I just have to remain focused and intentional (as Chris Hogan would say – finance guy, not football player).

As the months continue to fall to the wayside, it is getting harder to pay more of them. As I look through my amortization table I realize it will take me longer to pay off each year as the principal amount gets larger. I am not sure I will be able to continue to post every 2 weeks. Since I get paid every 2 weeks, I try to squeeze as much out of my bi-weekly budget as I can to put towards the principal. It may boil down to just posting updates once per month. But I encourage you to follow me for updates and to keep you encouraged to pay off your debts and your mortgage.

Here’s to reading on!

PAYING OFF DEBTS

On your way to being a senior citizen, it is very important that you become debt free prior to retiring. Your life will be so much more enjoyable without having the stress and worry about paying credit cards and car payments.

I first started off reading the blogs by Mary Hunt. Mary Hunt is an author of “Cheapskate Monthly”, a subscription newsletter. As much as I tried her techniques to become debt free, an “emergency” would always came up and I could never get to the point to save $10,000 as an emergency fund.

Step in the boyfriend (BF)….the BF in his wisdom, has been debt free, including his mortgage, since the age of 45. It was always his goal and he obtained it by being frugal, eating at home, taking his lunch to work, etc. He is not so frugal that he hasn’t lived. He owns 4 cars…yes I know that’s more than any one person needs. But one of the cars belongs to his daughter. The other 3 all have a purpose (in his mind). The ‘84 jeep – a “classic”…the F250 – “to pull the Seadoo”…the 2014 Jeep Wrangler – “cause I like it”. Hey he has the money and has been frugal, who am I to tell him he’s crazy? Anyway, whenever we would talk about finances he would tell me about some guy named Dave Ramsey who believes in being debt free, including your house and “living below your means”. I would talk back and say “no thank you I’m doing it “MY” way. But as the months and then the years would go by, “MY” way wasn’t working.

One day, driving down the freeway to go more than 45 minutes away to a mall to buy some bras from Victoria Secret (best fitting, best quality for the money bras), I decided to listen to a Dave Ramsey podcast on my radio.

STOP THE CAR!!! I couldn’t believe my ears. Here was a married couple 15 years younger than me, making half of what I make combined (that’s awful) and they were doing their “debt-free scream”. What the heck is a “debt-free scream”? It’s what you do when you have no more debt. Zero. Nada. Zip. This couple had paid off over $80,000 in something like 4 years. I thought to myself. “This is crazy. No one can make $42,000 per year and pay off $80,000 in 4 years, NO WAY”. Well, one after another, I heard all these people for over an hour coming on the radio screaming they were debt free. Some even had their houses paid off, some just their student loans and credit cards.

I turned the car around, went home, (no I didn’t buy any bras that day) and listened for the next 4 hours of what Dave Ramsey calls his “baby steps” and people screaming about being debt free.

Dave Ramsey’s Baby Steps:

Save $1000 for emergency fund.
Pay off all non-mortgage debts using the debt snowball:

List your debts from smallest to largest, regardless of interest rate.
Make minimum payments on all your debts except the smallest.
Pay as much as possible on your smallest debt.
Repeat until each debt is paid in full.

3. Three to 6 months expenses in savings.

4. Invest 15% of household income in retirement funds.

5. Fund college for kids

6. Pay off your home early

7. Build Wealth

I wanted that. I wanted my furniture payments gone. I wanted my student loans gone. And most importantly, I wanted my mortgage gone. I didn’t want to be 78 yrs old when my house was finally paid off. I didn’t want any payments of any kind after I was going to retire. I knew that night what I was going to do, what I HAD to do, and how long it was going to take me to get there.

I took all the money I was saving, the way Mary Hunt had suggested, and used it to pay off all of my furniture and credit card payments that night. I cut up my credit cards that night. I paid extra toward my student loans that night. I was on fire. I was going to start living below my means as much as I could. My problem was that I had a huge house with a big yard and a big pool and a bigger electric bill because of the big pool! I needed to get rid of the house. But there was a problem. I was 53 at the time and I knew about 2 little propositions in California called Proposition 60 and Proposition 90. Those 2 propositions help senior citizens (55 yrs or older) keep their property taxes at decent rates when downsizing. So I had 2 years to pay off the rest of my student loans, then hope the housing market would go up (more) and sell the big house and buy something smaller that would fit me better.

sorry for the terrible pic, have to learn how to edit photos

Each square = $1000. I started on 2/4/17. As you see I owed and paid off $43,000.00 in a year and a half. It was actually more, I didn’t do this chart for the furniture ($2200 and misc credit cards approx $1000).

Present time: I am now 55 yrs old. I sold my big house and bought a smaller house in a 55+ Active Community. I have paid off all of my debt, except for my mortgage. My mortgage should be paid off in 3 years. I will be 58 at that time. I have added a new goal for myself. Besides being debt free including my mortgage, I want to be able to retire at 60, which now leads me to reading the blogs of Financial Samurai, Mr. Money Mustache and the rest of the FIRE group (FIRE = financial independence retire early). Why don’t you come join me!

Here’s to reading on!

PAYING OFF MY HOME ONE MONTH AT A TIME (post #3)

I know, I know….I was supposed to have this 3rd post out a couple of weeks ago but…..it’s very hard when your BF is already retired and wants to spend your days off with you. I’ll take all of the time with him I can get!!!

So here we go:

How does that look? I look at this everyday on my refrigerator.

The month of July seemed to be a bit tough for me to put extra principal towards the mortgage, I think because I had taken some time off from work. I only paid off 7 months worth of principal at $1344.41. I would like to work extra hours, but being summer and having a pool, a gym, a golf cart (for cocktail cruising at night!) it’s very difficult to be focused. Can’t wait for fall to get me intentional on working extra hours.

I have this other chart that I keep on the fridge also:

I love visual aids/charts that help give me a purpose to keep pushing on.

This chart is helping me to see how many $1000 dollars that I need to pay in order to be mortgage free. It’s 14 squares across and 10 squares down which = $140,000.00 which is what my mortgage was after buying the house and putting down $130,000.00

If you have any opinions let me know. Also tell me what YOU do to keep on track with either the Dave Ramsey Baby Steps, or your journey to paying off your debt.

As always,

Here’s to reading on!

HOW TO GET SPENDING UNDER CONTROL #1

BY USING DAVE RAMSEY’S ALLOCATED SPENDING PLAN

Dave Ramsey has a free app called “EveryDollar” that you can put on your phone and your computer. It is a budgeting app that helps you tell your money where to go, instead of keeping track of where your money went. What’s the difference? In my opinion it puts you more in control of what you’re doing with your money. This app is very easy to use.

The problem I had with this app is that I get paid every two weeks and I would split my paycheck up by only putting half of my monthly mortgage payment to my mortgage checking account every payday. For example let’s say I got paid $2000 on the 9th, then I would take $650 of that and hold it for the next months mortgage. When I got paid $2000 again on the 23rd, I would take another $650 and put it with the first $650 and make the house payment. It was just easier for me to take half of the mortgage payment from each paycheck, so my accounts are a little complicated for the average person. Every so often I would get paid 3 times per month, and when that would happen I would continue with how I was paying the mortgage and I would just be a month ahead on the mortgage payment.

Alas, I found what worked best for me was the Dave Ramsey Allocated Spending Plan:

It’s pretty easy to use. It’s actually 4 pages long (yes, there are lots of categories to choose from). Just put your net income in the “pay period income” column, then place the amount of money you will be spending for each separate category and deduct it from the previous remaining balance column.

I have been using this for the last 2 and a half years. It’s what works for me at this time. Try it. It also is simple to use. If you need any instructions for it, just comment below or you can look it up on daveramsey.com or look it up on YouTube.

I love the allocated spending plan. It makes me more conscious of where my money needs to go. I can also plan vacations, buy big purchases, etc. ahead of time by utilizing this form. I know exactly where my money needs to go and how much will be left over to fund my retirement.

But now that I am on Dave Ramsey’s Baby Step 6 (paying off mortgage early) I may try to use the EveryDollar app again. What do you think?

Here’s to reading on!