New Years Financial Resolution (post your resolution & updates)

[jasperandchar]

My income will significantly drop come May so I will have to completely overhaul the budget. We're going into the bank tomorrow to renew our mortgage. Our mortgage rate is 5.324% so I am looking forward to getting a much lower interest rate! DH still wants to try and put some of the LOC into the mortgage. I really do not think it is a good idea especially considering I'm losing most of my income. I'd rather have the lower mortgage payment and pay interest only on the LOC (if need be) until we get through this tough time.

@bobbiegirl2010 did you get prices from brokers they are generally cheaper than banks, just a thought and they would also let you roll some of your debt into the mortgage if you qualify. Also keep an eye on the rates for the next 6 months because if they drop your bank will amend the rate but they won't call you .

I think you and your dh should write out the pros and cons to rolling some debt into the mortgage vs. the loc by itself, only you both can determine what is best for your family, good luck with your decision.

Also don't let the bank make you pay for your house evaluation they are quite expensive if they want to know the value and want your business they can pay. If you add debt to your mortgage they will want a current house evaluation atleast they did when we renewed with scotiabank 3 years ago.

Also don't be afraid to ask for a better rate than what they are offering and ask that they waive all your bank fees as they have the power to do so.

Good luck

[bobbiegirl2010]

@jasperandchar Good advice, thanks! We're going to see what the bank says but aren't necessarily going to sign anything. We want to renew 6 months early, get them to waive the 3 months interest penalty and get a good interest rate. I'll do some research as to what brokers are offering to see if they'll match.

As for bank fees - I'll be talking to them about that too! Last month DH got his bonus so instead of transferring it to the emergency fund we had kept it in our chequing account. We had the minimum balance for the whole month and were still charged the monthly fee. I think they've either up'd the minimum balance or cancelled that all together - grrrr..... Our type of account isn't available anymore so I can't find the fee information online. I'm not very happy about that so I am willing to close our chequing account and go with pc financial to get free banking if they won't give it to us.

[jasperandchar]

@jasperandchar Good advice, thanks! We're going to see what the bank says but aren't necessarily going to sign anything. We want to renew 6 months early, get them to waive the 3 months interest penalty and get a good interest rate. I'll do some research as to what brokers are offering to see if they'll match.

As for bank fees - I'll be talking to them about that too! Last month DH got his bonus so instead of transferring it to the emergency fund we had kept it in our chequing account. We had the minimum balance for the whole month and were still charged the monthly fee. I think they've either up'd the minimum balance or cancelled that all together - grrrr..... Our type of account isn't available anymore so I can't find the fee information online. I'm not very happy about that so I am willing to close our chequing account and go with pc financial to get free banking if they won't give it to us.

Brokers have better rates than banks for sure, I am quite confident your bank won't match brokers rate but it's worth a try. I would take a moment before you go to the bank tomorrow and call a broker before going so that you can feel out your bank regarding what the broker is offering. I know you are not in my area but to give you an idea do a google search for Ottawa Carleton mortgage to see the posted rates and then go to your banks website and see their posted rate and then bring this up don't have to say you got the rate from the Ottawa Carleton website but it will give you a good idea about whether or not your bank is willing to work with you.

AND most importantly take your time and ponder for a few days before decision.

We switched to pc financial and did all the legwork today, I just need to contact my payroll deposits to have them switched.

[macw1960]

Great savings on the plywood, it's great when we can wait for the sales and save $ it all adds up.

Great plan about putting the extra on your mortgage.

We never did get the plywood as he realized it wasn't going to get done on the weekend as planned so we just will wait for another sale and hopefully it will get done then.

[bobbiegirl2010]

Surprisingly we were offered some very good mortgage interest rates by the bank:

5 yr closed at 2.89%
2 yr closed at 2.49%
5 yr closed variable at 2.35% (prime - .50)

We decided to go with the variable mortgage and we are saving over $200 per month We also decided to pay our own taxes which also reduces our monthly payment another almost $200. There was already enough in the tax account to pay May's tax instalment. Now we have the flexibility as to how we want to save for property taxes going forward.

I'm glad we renewed when we did as the new mortgage payment is effective April 28th and I had already budgeted for our old amount so that's an extra $400 we save.

Now the bad news... We put the SUV back on the road 2 months ago. Took it in to get a minor repair done yesterday and got some bad news... Our mechanic says that we need: a left lower ball joint, muffler and tail pipe, rear axle seals, left front axle seal and front shocks. They are supposed to be calling this morning with a quote....

[Frugalbigmama]

You should pretend to pay the old amount and put the difference in a slush account. Then at the end of the year if you haven't needed it (I know your income is up in the air right now) then you could make a lump payment on your mortgage

[bobbiegirl2010]

Right now we are putting the extra $ towards debt repayment. Once we are out of debt (probably will take 4 -5 years) then we will start double payments on the mortgage.

We were thinking of rolling some debt into the mortgage but we didn't like what the bank offered. They said we could apply for a home equity line of credit of approx $19,000 at 3.89% interest. We'd have to pay for all the fees including a home appraisal. We currently owe around $47,000 on a LOC with an interest rate of 5.10%. It did not seem worth all the trouble to save 1.21% interest on only a portion of our debt. We feel that we'd better off chipping away at what we have and put the savings from the lower mortgage payment towards the debt to help pay it off faster.

[jasperandchar]

@bobbiegirl2010 glad that your bank offered you a rate you were happy with

[jasperandchar]

I will do a electronic $ transfer on Thursday to our new bank (PC Financial) and call Scotiabank on May 1st to reduce our account for the 1 month transion from $12.95 to $3.95 for the month of May. We'll save $9 and well before the end of May I will officially close my last bank account with Scotiabank.

I am going to ask Scotiabank to waive the EMT as they did a big screw up with our last mortgage payment, it's a small fee but they could right the wrong, however, it won't change my opinion of their services, costs, etc.

While dh is away I will be working on some prelimary budget figures, etc and hope to do the budget with dh once he gets back on Friday.

[Frugalbigmama]

Payday so did budget clean up. Moved $157.39 from groceries forward ( did stock up on lots to but redeemed $130 in pts)
$26.71 move forward for gas. (travelling more for sports so won't be much surplus but better then being under) Have a credit of $15.32 on one CC and $34.76 credit on the other. Free Chinese one night maybe

[Frugalbigmama]

Renos- Entire house (besides basement, that is next year project) has been puttied and ready for paint. Main floor bathroom is complete! (new paint, new tile flooring, new vanity, sink etc, new trim) Looks great. Entrance floor has been tiled and looks good Also new trim in the entrance. Entrance, hallway, upstairs and upstairs hallway has been painted and all trim and ceilings have been done too. (Ceiling in kitchen has been painted too) Next finish my room (have paint just need to re-paint patched walls) All doors to be painted (have paint) Little things to be finished but we have most supplies so shouldn't cost much. Now that the nice weather is here we want to garden etc. Hope to get him to paint more

[bobbiegirl2010]

Update: So far I have had both full time children leave so I am left with 3 school age children with one of them leaving at the end of the school year. My income will be cut in half - this will be tight but managable. June is usually when families start looking for summer care and care for the next school year so things should improve.

Our financial situation for the year is looking uncertain right now. There is a good possibility that my daycare families may all leave sometime this year except 1 school age kid. I cannot continue doing daycare if I lose 85% of my income so we'll see what all plays out...

For now these are our goals for the next 6 months:

1) Do not incur any new debt - if we don't have the money we don't buy it or do it. We are not spenders and we live within our means as far as clothes, furniture etc goes... Our problem always been large expenses (like vehicles and home renos/repairs) that we impulse buy instead of planning and saving. To counter this problem I've set up various savings accounts (see #3)

Update: I had saved $1000 in my car repair fund however the repairs on the suv ended up being $1800 We have $400 extra this month (thanks to the early mortgage renewal) but I still have to come up with $400 more. Looks like I will either have to reduce our LOC payment for May or take it from the emergency fund.

2) Stick to budget for all categories

Update: Its been really hard sticking to a $500/month food budget. We pay for groceries from our pc mastercard so our budget runs from the 13th - 12th. It is May 1st and I've spent the entire grocery budget already and there's still 2 weeks left I should have $30 in pcplus points next week (thanks in part to the truck repair....) so I'll have to use that to buy a bit of groceries next week. Then we'll just have to survive off what we have in the pantry, freezer etc... until the next billing cycle.

3) Continue to fund accounts for various expenses: car repairs, vet bills, vacations, sports for girls.

Update: I get paid a month behind so I should still be able to fund all the sub accounts in May. I will have to completely drain my car repair account (SUV repair ) and vet bill account (one cat needs rabies vacc and both need more flea treatment meds this month). Since my income will be reduced I will stop payments to the vacations and sports sub accounts and put the UCCB payment we'll receive in July back into that account.

4) Start saving 15% of my daycare income every month for 2015 income tax and CPP instead of waiting to figure out how to pay it come income tax time.

Update: I have also opened a RRSP that I put monthly deposits into (I subtract this amount from the 15% that I set aside). I may have to suspend my income tax savings if my income drops too low and only continue with the RRSP deposits.

5) Pay aggressively down on LOC - currently it is maxed out after transferring balances from 2 credit cards (home reno purchases). Half is vehicle/trailer purchases (some we don't even own anymore ) and the other half is home reno/repair expenses (see #6).

Update: this area of my budget will also take a hit now that my income will be reduced. I will do the best that I can to put all extra towards debt repayment but there's a possibility that some months we'll only be able to pay the minimum payment. It will help that my mortgage is $200 less per month. We have paid down $4000 on the principle so far but still have a long way to go.

6) Try to renew mortgage early in May (when 6 months are left) and get a better interest rate. Get home appraised and consolidate as much of LOC into mortgage as the bank will allow. I am hoping at least $20k can be consolidated (to cover the home renos and renovations that we've borrowed money for). As long as interest rates do not go up we should be able to increase our mortgage and the payment will remain the same (our current interest rate is very high 5.25%)

Update: We renewed our mortgage 6 months early and got a variable rate which is 2.35% right now. This is a monthly savings of $200 which will go towards debt repayment. We opted not to consolidate any debt.

[macw1960]

Update: So far I have had both full time children leave so I am left with 3 school age children with one of them leaving at the end of the school year. My income will be cut in half - this will be tight but managable. June is usually when families start looking for summer care and care for the next school year so things should improve.

Sounds like you are on the right track and doing everything possible. Hang tough and you should make it through the month of May.

[jasperandchar]

@bobbiegirl2010 like @macw1960 said you are doing everything you can, shin up - as they say things happen for a reason hang tight and keep us posted

[jasperandchar]

@Frugalbigmama dh has abandoned inside projects but the deal is when it's rainy day back in the house he goes (lol) great job