Everybody Loves Your Money

I have to confess something. Lately my self control has been out the window. I’ve been spending too much on things I don’t really need. I have been eating more than I should and am 20 pounds overweight. And you know something that’s just crazy? I’ve found myself having some anxiety about money and my weight. You’d think the anxiety would drive better behavior but it is actually having the opposite effect.

So what am I doing about it? Well, a couple things. We are taking a much more conscious approach to our money. It doesn’t take a rocket scientist to notice that our economy is damn near in a free fall. The markets are nervous and frankly I think we are already in a recession. Yeah, I know it takes two consecutive quarters of negative growth but I think we’ll see that soon enough. With all the negative things happening in the economy I’m just hoping we don’t end up seeing worse than a recession. Okay, now you know my frame of mind. I’m just another nervous consumer/saver. We are going to be one of those households that makes it worse by saving more and spending less!

The other thing I’m doing personally is getting the weight under control. I’ve decided to start dropping weight. I’m only down about three pounds but that’s over 10% of the weight I need to lose. I’m using the Weight Watcher approach and am counting all the food I am consuming. I’ve always had the best luck with that. If I find I’m not following it tight enough I may even go join officially and sit in the meetings to force myself to do better.

It’s really kind of amazing how I can have such good control over spending (normally) and not be able to use that same skill set to manage my diet and overall health. You’d think that it would be an easy jump from managing finances successfully to managing your diet. It’s not, at least not for me.

On a completely unrelated note, my wife was officially hired by her company after over a year of being a contract employee. That means matching 401k, vacation, sick leave, holidays and a little more stability. Needless to say we are pretty excited about that!

When we purchased our lake house, we used a little bit of money from our home equity line of credit. We had never used the line of credit but had it sitting there in case we had an emergency, or a good opportunity. When we got the loan, we locked the rate at 7.49% because we didn’t want to have the fluctuating risk. Of course it was just our luck to borrow the money when the rates were at their peak.

Fast forward 1.5 years and rates have gone way down. I called my credit union and asked to have the fixed rate lowered to 5.99%. They said, no problem and mailed me a form to sign. A few days later, our rate was lowered 1.5% just from making a phone call! While that doesn’t change our payment amount, it does shave many months off of our loan.

That got me to thinking, is this possible with a primary mortgage? Has anyone ever been able to get their 30 year fixed rate mortgage lowered simply by calling and asking? The sense that I get is that it’s not possible with primary fixed rate mortgages.

QUESTION:
Do you know anyone that has lowered their primary mortgage with just a phone call, or do you always have to “refi”?

For all of those people (not unlike me) that are saving, saving, saving for retirement and always thinking about that magical day that you can retire……. Don’t forget to dance to the music along the way. (see video below)

I don’t know if you saw this article on CNN but it highlights Kent and Mysti Cope. They both worked for New Century Financial, which was the number 2 subprime lender in the country. They have both lost their jobs and have realized they have to make some tough sacrifices.

Sacrifice number 1: Trade in the Corvette for a Suburban. Huh? Wow, talk about really taking one for the team. I wonder if it was new.

Sacrifice number 2: Let the gardener go. Wow. Way to pull out all the stops there. I hope your homeowners association can tolerate your gardening skills. You certainly should have the time to keep the yard up now.

What wasn’t talked about in the article was all the sacrifices they aren’t making. I’d be interested to see a breakdown of their expenses. Clearly the largest rope around their neck is their home. The article points out that their equity line of credit, mortgage, health and life insurance equals about $10,000 a month. HOLY MOLY.

I did the math from another tidbit in the article. They say that the monthly unemployment checks of $1800 only cover about 1/8th of their expenses. That means they must be spending approximately $14,400 each month. To make matters worse, they are both dabbling in commission/sales type work. She is trying to sell jewelry and clothing online and he has gotten his realtors license. Both of those have significant delays in generating much income, let alone generating profit of over $14,400 each month. Yikes.

Check out the article:
http://money.cnn.com/2008/03/31/news/economy/copes/index.htm