The American Dollar

Confession Time.

2010-01-05T14:28:00.002-05:00

Confession time. I'll be the first to admit that I have fallen off the financial wagon. If you've read any of my earlier posts, you know just a few years ago, I managed to get out of debt, invest a lot and learn some valuable lessons in my early twenties. I never considered myself as a blogger just an ordinary guy with a wife and daughter getting out of debt. As my late 20s are closing in and I approach 30, I have ridden back to the top of the debt roller coaster. Let me paint a brief picture of my financial reality. Our sub-prime 10 year interest only mortgage was our biggest mistake. We bought more house than we could afford and hindsight not to carry such a large debt burden. On the naive side I also thought the housing market in my area was still in an upswing and eventually we would sell in 10-20 years for a profit, which still could happen but who knows. We signed the debt note to the tune of $365,000 in 2007. At 26 and 27, we were living large and making bad financial choices. 2 years later we have amassed all kinds of debt. 3 credit cards that were just for emergencies are at a total of $45,000. I have taken a 2nd mortgage out on our rental home for $75,000 and now have little or no equity in either home we own. Also we dumped all our retirement accounts except one at her job which has about $2k.

Now let me get something straight too. Last year I quit my stressful job and went into a business partnership. The 75K equity was used towards the business and I also gained an additional partnership debt of 100k that I have about 3 1/2 years left to pay on.

Ok so that's my family finances in a nutshell. Right now we have personally about -50k net worth. We have the game plan in place because our take home is roughly 9-10k. Restarting the journey in 2010 will be a challenge but it isn't something we haven't conquered before. I'm going to dive in depth of each of our debts and elaborate in the next blog posts. Buckle up because its going to be a bumpy lifestyle change ahead.

Everything comes out today!

2008-05-15T20:02:00.002-04:00

Im ashamed at the way we've been handling our money. This past year was great in terms of us living it up. Mrs. Dollar stayed at home with our 15 month old. We purchased a house and I got a promotion at work. However we have been very very lazy with the finances and even worse we got too comfortable with our lifestyle. First off the budget, we stopped using the envelope system which worked wonders with our debt before we had our daughter. We are now on a manual allocation each month finding ourselves overusing the debit card and even worse starting to RELY on our credit card. We'll fix that problem in a minute...

But lets go to an issue i want to unload.We bought too much house. There... i said it! We are two 27 year olds with a 15 month old and we live in a $365,000 house. Sadly it took us about 8 months to realize this and at the time we were wrapped up in the emotions of having the best because we DESERVED it.Today our mortgage payment is $2400 which includes escrow. We make ends meet every month and have just enough to enjoy some luxuries or extra toys for our daughter. More importantly we have lost the core values and basics of personal finance and we are paying the price.

Mrs. Dollar not working has taken a hit to our income and savings obviously, however she plans on returning to work in August. Ok first things first, get off exempt at work. Ive been claiming exempt to get through a financial rough patch. That has been adjusted to 3. Second, we are going back to what we know best, envelope system and sticking to the budget. No frivilous spending and we are lowering eating out at a restaurant to once a week. Secondly, lifestyle. We either need to sell the stuff we have or take care of it. I am a huge proponent of being appreciative of what we have accumulated, not getting more. We also have to make time to organize and inventory. Im sad to say that we have high consumption tastes with a low income to support this habit. We are officially living paycheck to paycheck. Its time to start cleaning up the mess and get our mindset back in the right financial gear.

More to come after we get our act together.

Turning 1 is FUN!

2008-02-18T21:27:00.000-05:00

Apparently when you turn 1 year old, you get alot of stuff! I mean alot of stuff! My daughter turned one this past weekend and we threw a party and included both my wifes family and my family as well as our friends. Needless to say we went all out with 10 pizzas, 8 soda bottles, streamers, lots of balloons, more decorations, 2 cakes, birthday hat, birthday dress, and of course gifts. She is one spoiled little munchkin.

Today is presidents day so I thought rather than mope around in the gloomy wet yucky weather outside I would come in and grab some double overtime and a half. Being its not too busy today (actually have alot of work to do shhhhh), I have time to write this blog. I really need the extra cash too this month... We have been so lacking in the savings arena its about time to play catch up. Its back to work i go...

Her 1st birthday coming up soon!

2008-02-09T22:29:00.000-05:00

My wife went out today to get some items for our daughters first birthday. Since we believe in the philosophy that your first birthday is a once in a lifetime special occasion, we are going all out with our friends and family on this one. Pretty much everything we purchased had the 1st birthday logo plastered it; everything from plates, napkins, cups, her birthday sippy cup, streamers, tablecloths, balloons, etc. you get the idea. We are going tomorrow to select and order the cake we want and of course any other munchies for our guests. Since we are having our friends and family over, we decided pizza would be a nice neutral selection for an evening meal, not to mention too expensive. The good part about buying all these things for her party is that my grandmother called me this evening to let me know that she wanted to pay for everything. Since this is her first and only great grandchild and also the fact that she wouldnt be able to travel, we were more than happy to accept this gift. Thanks Grandma! The 15th is right around the corner, so much to do, so little time :)

Living Paycheck to Paycheck Sucks!

2008-02-06T11:34:00.000-05:00

I hate it probably more than anything in the world. Its a huge hump in my life that I need to get over and probably the worst part about it is that we are living within our means and even below. For at least the past 5 months (since we bought our second home), everytime I calculate the budget the income equals exactly the out go. Sometimes it gives me a few sheckles extra a month which I blow off because you never know what the increase in gas prices.

The reason why I say this is because we are kinda in an income financial rut right now. I mentioned before we can't really dig any deeper into our expenses and kick back our income into high gear until early March for me and late August for my wife. Although, it is nice to have a break from work and to do really the bare minimum at the office. But psychologically it pains me to see the networth like this. Maybe I'm just being big whiner. (Hey gotta vent somewhere!)

Today has been another grueling day at the office staring blankly at a screen while beautiful sunshine weather is behind me. After work I plan to take a walk with my family to soak up the last remaning sunrays. It will keep my mind off finances at least for today.

A Glance under the Magnifying Glass

2008-02-05T22:46:00.001-05:00

Being out of touch with our finances for so long, we're getting back to the barebone basics. First finding out where we stand overall. Honestly, we are about the point of living paycheck to paycheck before my actual raise kicks into high gear. My wonderful wife is doing a beautiful job at home with our little one who will be turning 1 soon! Our baby has come a long way since she was first born. Obviously the finances are strained a little bit with another mouth to feed but seeing as shes going to be done with formula (the biggest cost) and going to milk, that will definately help. But not everything is her, her stuff is cheap compared to what we've got.

Here is the breakdown of where our money is going every month-

68% - Primary Mortgage/ Rental Mortgage/ Insurance/ Taxes/ HOA

13% - Groceries/ Household

10% - Electric/ Gas/ Water

8% - Cellphone/ Internet/ TV

1% - Home Security

Needless to say, because I've been strapped having a lower paying job these past few months and her being at home, the percentages may look high in some catagories; primarily the "Home" catagory. This will eventually be lowered once my pay increases and she returns to work later this year. Notice that also we have not allocated anything in the budget for our savings. In months in '05 and '06, almost 60% or more went towards reducing debt and savings. Seeing this as a VITAL part of our financial plan and future, I'm determined to add Savings back into our budgeting routine.

In the upcoming days, I would like to go over in detail each of the aforementioned catagories to see how we are using that money and "trim the fat" from each. Overall, there is a sense of frustration that we haven't really moved anywhere networth wise, however we are still surviving and absolutely determined to get back on the board.**

Why I'm 27 and still stressed...

2008-02-05T14:07:00.000-05:00

Yeah I'll be the first to admit that I'm stressed about my age. A certain coworker always seems to remind me of how the corporate grind stresses him out and how he can't wait to do this or that if and when he has the money. He's 49 and in my opinion he's still very young. This is a bit of a paradox because I don't feel the same about me. I feel there are alot more things that I should have done or should be doing with my life. Moneywise, I should have definately gotten an earlier start.

Take a trip with me for a second.

At 21, I was living with my parents working nights for a local rental car company. I brought home roughly $200 a week, which barely covered my car payment and insurance. I was a lost, financially scared child and seriously considering bankruptcy on $31,000 of debt.

Fast forward to today, 27, married, child, no student or consumer debt, 2 paid for cars, rental property with positive cash and a good chunk of equity, mortgage, and a recent promotion. And yes I'm still stressed... perhaps even more than before. Maybe its because I have more responsibilities, you know what they say mo money, mo problems. Or maybe its the fact that I want more and I'm never satisfied. I'll admit I'm a humble guy with simple values and a small town upbringing but there's always been a sense of urgency with me. A fire if you will that lit under me around age 22. I guess it was to ensure I have enough security to never lead myself or my family down that destructive financial path again.

So yes I'm stressed to the core to 'do it right the first time'. Now granted some of my greatest accomplishments have come from my mistakes, but we are plowing forward. So today I'll get up and face another long work day, work week, and work month and maybe by the time I'm 28, I can relax a little.¤

My 6 Month Hiatus~!

2008-02-03T16:02:00.000-05:00

Wow what a interesting ride it has been for the past 6 months not really engaging in the blogging world and letting all our personal finances air out. At the time I left, I thought I needed to focus more on my family and my work. Our baby girl was born last February, so my priorities shifted a bit; and dare I say, even my personal finances took a back seat. She is now a happy bouncing almost 12 month old bundle of joy (and craziness!) ; and after sleepless nights, I can finally get back to a somewhat normal routine (at least with my blog and money :) Parenting has definately changed the game up a bit.

Ok so whats been going on? Well if you check my networth, you will find that staggeringly enough, we have maintained our networth having neither decreased or increased too much. However we did purchase a home in early September that we were eyeballing for quite some time. We turned our first home into a rental and had a tenant move in almost instantly. (More on that later...)

I would say our new home is the single biggest purchase of our LIFE so far and though it was such a lengthy process with the stupid idiotic mortgage company (meaning I had to dot their 'i's and cross their 't's), it was worth it. I'll get into more detail later but real quick and dirty, we got a $383k appraised home for roughly $365k including closing costs, but it was really the home of our dreams. So here we are back to financial basics again seeing what we are going to do and how we are going to get there.

Also wanted to mention I got promoted! Working my way up the corporate ladder isnt easy and at 27, I should be grateful. However with my raise and me making the big buckeroos with a crazy amount of responsibility, the flip side is I have to sacrifice my hours at home and be chained to the corporate wheel. Needless to say, I didnt like working long hours even before I got promoted :P

Finally... at least for today... I have to say, Im glad to be back. I cant wait to free my brain again of all the money/ work/ life/ family bumps along this road and actually have an OUTLET for it!~

Making the most out of a whole DOLLAR!

2007-08-15T23:53:00.000-04:00

Well you certainly can't find $1.00 gas anymore let alone anything that costs a dollar. Ok maybe you can get a package of gum or a couple candy bars, but whats the maximum you can do with a one crisp dollar bill in your hand. Well you certainly cant find $1.00 gas anymore thats for sure. Its so much harder to be a kid in this generation with a dollar in your hand than it would be when we were kids and a dollar went so much farther. Thats inflation for ya! I had a few thoughts on this and shared it with my coworkers who love stupid topics. We were surprised on the hefty list; no nominal idea was rejected. Heres what we extracted on the dealings of one whole US dollar bill thrown out in no particular order, remembering that tax is included in the pricing (*except in Delaware):

-Go to the vending machine and purchase a .75 cent 12 ounce soda can. The bottles are $1.25

-Download an itunes song for .99 cents (provided you have an itunes account)

-Invest the dollar (we always have SOMEONE mention this)

-Find a broken item or for 2/$1.00 item at the local Dollar store (items at full price are $1.00+ tax so we cant get these)

-3 packs of .30 cent 5-stick gum at 7-11 (total cost .97 cents)

-Play one video game at an arcade (most arcade games are $1.00 or more just to play) Chuck E. Cheese is great because you can play 4 tokens for a dollar but you have to have a kid or the employees will look suspicious at you.

-Buy stupid office supplies like staples, a small calculator, a pencil, pen, note pad at your office supply store.

-Small Coffee

- Newspaper

- Small Tip for a server, driver, etc

- Give to charity/ homeless

- Fast food hamburger, hard taco, piece of chicken, small take out white rice

- One piece of grocery produce

- 3/10ths a gallon of gas or LESS (provided your driving a very small lawnmower)

- A garage sale bargain knicknack

Please feel free to add to our crazy list. I know we didnt cover everything but its a start. We really should be getting back to work.

Buying a New Home and Renting the other!

2007-08-05T19:54:00.001-04:00

My wife and I have decided to jump into the real estate investment pool. Right now, our toes are touching the water and getting a feel of the temperature. We purchased our first home when we were 22 years old and it has appreciated quite a bit in the past 4 years, almost a $70,000 gain and since we got the home on such a great deal, the positive equity has been staggering. Now we want to rent it out. A coworker that I have gotten to know in the past couple years has shown a great interest in renting out our home... and they might get their wish.

In these past couple weeks, we found our dream home, wrote up an offer, had it accepted and we completed the home inspection on my 27th birthday. Seeing as the new home was only 2 years old, the home inspection went without a hitch. We basically paid the guy $300.00 for the peace of mind and also he showed me a few things that I probably wouldnt have known about the house(where this pipe goes, what does this particular valve turn off, how to work the dishwasher, etc).

Now that we have found a home, we are hoping to close by the end of the August, depending how quickly the lenders are going to be (a whole other blog post). Anyway I relayed the rental suggestion to my coworker as well as a couple family members. They all loved the idea, however my coworker is willing to pay a little bit more. Since this is strictly a business transaction, I had to tell my family members the bad news. Plus my wife pointed out the drama that would unfold if we had rented to close family. Nevertheless, my good friend and coworker, brought herself and her two children to visit the home and her and the kids loved it. She wanted to sign the rental agreement right then and there. But I didnt know even where to start...

I thought about it last night and was thinking wow, This is my first rental property and my first time being a real landlord. I have a residental lease agreement contract that I can write up and thats it. Perhaps I need to seek legal or tax advice. I have a reputable lawyer but no tax accountant. Im wondering also if I should put my rental in an LLC so I can take the tax deductions and other tax benefits. We may have to seperate business and personal assets too. I know I would need something to seperate the liability factor. I will have to call my lawyer and see what exactly he can answer and whom he can direct me to if he doesnt know. There is just a hundred different checks that I have to do and I want to make sure there is nothing that I'm missing or forgetting. Anyways, other sound advice is always welcome. Otherwise, I'm excited that things have been in motion to get into our new home. We have already gone and picked out mentally some furniture and items we want in the home. Things are just happening so fast, I have to stop and think to myself, 'Is this really happening? Are we really doing this?', and I get a nervous, scared, anxious, and excited feeling all at the same time.

Does working hard ever pay off?

2007-07-28T17:12:00.000-04:00

The question lingers does working like a crazy person really pay off? This past week I've worked a little over 50 hours while my wife enjoyed the company of our little 5 month old. Seeing as how I work my butt off from clock in to clock out, I havent seen any returns other than a pat on the back. I'm wondering does it ever come to a point of either burnout or that you are showered with praise, youre happy and then it goes downhill from there. I don't know how long I can keep the upbeat attitude and competitiveness of being a stellar employee. To my standards, I am stellar because everyone praises my performance or I get a noticable glance now and again from the superiors above me. That said, I feel comfortable with the teacher's pet rep and dont care about the envious eyes staring up at me. What has been bothering me, is that I dont know how long I can keep up with this pace. I know I'm going to burn out if I keep going like this and its not really the hours, its the content within those hours that I pack in before I head home. Maybe I need a stress makeover... Since today is saturday, im just going to relax and not worry about my job or money for a change.

Setting goals and Sticking to them

2007-07-23T21:57:00.000-04:00

Our family sets goals on a regular basis. Whether its next year, next month, or 24 hours from now, we plan it and map it out. I guess thats makes us a little bit OVER organized sometimes. Its hard to imagine that we would be where we are right now without some proper planning. Also if you take a look back at some of my earlier posts when we had opened our monthly bills only to find credit card statements, horrendous student loans and just up to our eyeballs in debt. I remember almost 4 years ago actually being on our home elliptical machine listening to some random music on a bulky ipod, not even having any baby thoughts on the brain, and thinking we need to get a plan together and get this debt cleaned up before we reach 30. I sat down that evening with an excel spreadsheet and got our finances in order. To this day, I still use the same formatted spreadsheet but the expenses column has shrunk dramatically from paying about 12 different companies every month to only 4... mortgage, power, cable, and wireless service. How did we achieve this before we were both 25 years old? We stuck to the plan and worked the budget making sure all our extra money was going towards our debt. Once that debt was gone, we never looked back. Its a great feeling. I guess we are at a crossroad stage in our life where we are building up our emergency fund and saving saving saving for that next BIG thing. Dont ask me what the next big thing is, I dont even know. So it comes back full circle again where we have to determine where this next batch of savings is going. Granted we are paying down our mortgage aggressively, our retirement accounts are going to be maxed this year and a child's college savings account is on the radar. All I know right now is that we have to set up some more goals and stick to them like the way we did the debt. The question is where to start...

Break time from the hustle and bustle!

2007-07-13T12:07:00.001-04:00

Decided to take a half day at work and just take a break from the overwhemling paperwork that accumulates. My wife's friends decided to come over too, during the same time... so I guess I'm playing babysitter for the time being. This week, moneywise our allocations have been all messed up because when I went on leave, they paid me entirely for my vacation, so now when I take half days, I dont get paid at all. This was interesting because I expected my check to be about $200 more since I took some time off last week. Did I mention that I get paid weekly? That helps the process because it allows me to take a look at our financial picture weekly rather than biweekly or monthly. Anyway, I should be back on track next week with my pay and hopefully the "system" won't screw up again. Since its a bit muggy today, I think I'll go for a walk before the rain starts coming down. I really just want to get out this weekend and maybe get a game of poker with the guys.

Small update on the 401k: Maxed 6% matching with employer, and nothing else.

Foreign or Domestic?

2007-07-09T21:59:00.000-04:00

FOREIGN OR DOMESTIC?

Seeing how it was such a dreadful Monday at work, I wanted to just free flow for a while on the blog. The question is does it REALLY make a difference which vehicle moves you or drives you from point A to point B? I wrote about our current Toyota Highlander purchase a couple weeks ago, and bought into the whole idea that foreign somehow, at least in my mind, is better than a domestic vehicles. Honestly, people have their opinions and either are really for or against this issue as I have asked a few fellow colleagues. I really think that my next car is going to be a ford, chevy, or gmc, only because it goes against everything that I've thought about cars and I wanted to take a true test. So far my little compact mazda that I use to ride around town is at 130,000 miles and hasnt skipped a beat yet in almost 8 years. I have had it since the odometer read "2" (yes, TWO). I trusted that its going to take me to 200,000. Do Fords, Chevys, or other American perform to this standard, better or worse; Or did I just buy into the whole commercialism hype of japanese ANYTHING is just BETTER... im sure they are but I'VE never experienced it. I guess I have to find out for myself before I can judge that yes, a foreign car like a Toyota, Honda, or Mazda makes a "better" car.

This thought was brought about by a huge Ford plant closing down in my area and literally hundreds of people are going to be without a job in the next couple months. Maybe American-made isnt what it use to be and maybe the term "community" doesnt apply in business anymore. It just sucks to hear stuff like this.

Purchasing New Tires!

2007-07-06T14:26:00.000-04:00

I decided that it was time...its been over 90,000 miles, balding and frankly was starting to be unsafe, so begins my search for new tires. First of all having a sporty compact car, they come up with some of the wierdest tire sizes... Mine being 195/55/15 to be exact. So I start the online process as normal froogling, comparing sites, even calling around and checking ads in the local paper for specials. To me honestly, a tire is a tire... there are a couple quality specs like you dont want to get a low heated spec or crazy slick tires either. My hunt bought me to Ebay where I found a special was going on in the state right next to mine; obviously making the shipping cost lower. The total for 4 brand new tires shipped would cost me $228.10 so about $57.02 per tire which is alot better price than what I was quoted at the local places here. On the plus side they were a fantastic brand, Kumho Solus with excellent ratings. I decided to pull the trigger, add delivery confirmation, and wait. Two days later, the tires arrived by Fed Ex and I stored them in my garage.

They stayed there for another week, while I called around to do the mounting and balance work. I fully expected to pay at least $100, but I did my insane calling around and found that actually Walmart's Auto Center was the best price wise, about $60 or so for the entire job. However I decided not to go there. We went to our Sears Auto Center, which was about 5 minutes away from my house and paid about $22 more than the Walmart quote. In my head, first it was much closer than the walmart and would save me on gas. And second, I imagined that Sears would do a much better job, and was worth it to pay them an extra 20. So yesterday, I drove down to the Sears, dropped my car off for about an hour and picked it up. The guy there was nice enough to explain what they did and exactly what I was being charged for.

So here was the final rundown-

Four New Kumho Tires: $228.10

Mounting/ Balancing/ New Valve Stems: $88.68

Total: $316.78

Another vehicle maintenance mission COMPLETE.

Enjoyed at great 4th of July!

2007-07-04T23:17:00.000-04:00

Our baby's first 4th of July was pretty uneventful for her; however all her aunties and grandma came to visit. Today we hosted the cookout here in our home for our little get together. It was nice that how many of my siblings are still in the service industry that we could all still arrange to have a few hours of holiday time with each other. The only thing we really purchased in the whole ordeal was a small rectangular table cloth and some festive napkins which we got at Party City for 50% off which came to a $1.86 after tax. We also stopped by the local target to get some charcoal for the grill. $5.60 a bag. Since I dont really know the pricing on charcoal, I bought it and was overwhelmed that people pay that much to heat something on a grill. I can plug in my george forman and go for crying out loud. I mean the grill does have a certain taste to it and the smells of it make it almost "feel like the 4th of July"; so i guess it was worth it bringing back a little nostalgia. Then it was mostly a pot luck and everyone brought something. Of course, we ended up having too much food and I invited a friend over to help finish some leftovers off; and this guy never turns down food. You know there are people out there like that. Anyway, we unfortunately did not see any fireworks because the little one *(and US) were so tired, we decided next year is going to be a GREAT year for her in an umbrella stroller at the local park! Needless to say, it was another great 4th.... which reminds me, my birthday is in a month!

First Week being the SOLE breadwinner

2007-07-01T19:05:00.000-04:00

Last week was my first full week back after being on a 4 month childcare leave. Its amazing that I didnt stay out longer, but my finances probably would not have permitted me such a luxury. Oh well, it actually felt great being back and everyone congratulating me on the birth of our first little one. I was only to perform training exercises and 'getting into the groove' techniques at work because being back after that long, it does shift your reality a bit. Honestly, I really didnt even think about work when I was out, which was in itself my own personal vacation. But it feels good too, being the sole breadwinner, and does put a little pressure on the male ego. Not only do I have to actually work, I have to work harder and smarter because I have a family to support and can't really afford to lose this job. Its a good thing now too that my wife has left her full time job to stay at home with our infant. She is able to get pretty much everything around the house done; chores and all. She likes to space out her time though and make about 1 "trip" outside per day during the week. Because we know its going to be a hectic week with the holiday approaching, that we get the grocery stuff done today, rather than on Monday or wednesday when all the hot dog buns and hamburger condiments are gone. Since I'm off for the 4th, we planned a nice day out, and seeing shes only 4 month, we decided not to go see the fireworks but cookout still and enjoy time with family. Also small reminder, on Thursday, shes going for her shots! *sigh* last time she was really upset. thinking we should give her some baby tylenol before we head out.

Networth Update: $209,849 (+.0001%) lol

2007-06-19T14:46:00.000-04:00

Barely breaking even with our recent SUV purchase , we were fortunate to have some modest gains in our retirement. The market must be moving because the numbers are always jumping in the positive direction. However we did take $3500 for the truck. The savings has been stagnant obviously since it is now my 4th month of not working. I finally will go back this Friday! Not that I'm going to miss our beautiful infant, but I'm going to leave that to the stay at home mom :) She's just excited to finally be out of a job she dislikes. First thing when I get the paychecks this month is make sure we replenish the Emergency fund and savings. Then we can work on retirement, finally.

The Trade-in at the Dealership: Our Story

2007-06-18T23:09:00.001-04:00

After much deliberation in the details, we decided to pull the trigger and purchase the SUV. I'll get to the story which takes us into the dealership craziness, but first wanted to touch base on how we even came to this major purchase. We don't take ANY purchases over $100 lightly. There is a time that we stop and think, 'ok do we really need this' and start listing pros/cons and obviously the more money the purchase is, the more we will actually go though the numbers working out what is the best deal. The thought process has been going on for a while now. Finally we have found what we were looking for while I was searching through online classifieds, I came across our next "new" used vehicle.

Finding the Right Car: While looking online researching thousands upon thousands of cars/trucks, I found our local car dealership was liquidating all their used inventory. I'm thinking to myself, 'yeah...but they are always liquidating', but decided to browse anyway seeing as it was a change from ebay.com or cars.com or our local classifieds. I came across a 2003 Toyota Highlander V6 with the same miles as our Toyota Corolla. They were asking $12,700 for it in the advertisement, which was still way below wholesale value on KBB. Since we were looking for an SUV due to our increase in family, I ran the numbers and spoke it over with my wife. Since our Corolla has no power and is just a CE (base model), I valued it on Kelly Blue Book for $9,700. I thought that the 'upgrade' in car would run us about $3,000. This sounded reasonable enough; that is until we got to the dealership...

The Test Drive: The weather that day was quite cloudy with a drizzle here and there. My wife and I dropped the baby off at my sister's house for a couple hours while we went just a few miles up the street to the dealership. We arrived at the lot to find the used vehicles off to the side in another vacant lot and we spot the truck. I pull up to the front where there is only one other car in about 10 vacant spaces, so a salesperson immediately notices. I can barely open the door to the Corolla when a middle aged fellow with an accent greets us with a grin. "Looking for something in particular" he says. "Yeah, there's a Highlander in your used lot.", I said as I pointed towards the fenced-in dirt square to the left. "Ok, I'll be right back with the keys", he acknowledged darting towards the glass doors of the showroom. I looked at my wife, surprised he didn't hit me with a new car line, like, 'we have some great new cars too'. He swiftly came back and said they are going to clean it up first and shouldnt take but 5 minutes. I looked at my watch as if trying to be impatient. Honestly, I would have driven it as it was. The truck is now prepped and pulling up in front of us all shiny with the metallic paint gleaming from the wash. I gave him my driver's license and insurance card as he handed me the keys and put on the dealer tag on the rear. As I got in, I noticed they didn't pay attention to too much detail on the inside though. My wife pointed out smudges on the dashboard and a couple peppermints and discarded wrappers in cupholders. Off we went down a side street and then jumped right on the highway to test the acceleration and if I heard anything out of the ordinary at 75mph. I made sure the radio was off trying desperately to find the slightest imperfection and call the deal off. Nothing. We drove for about 5 miles and got off at the nearest exit. I pulled into an empty parking lot of a hotel chain and parked far from the door. Time to do the walk around again with the same fault-finding mindset. I was surprised at how much my wife was looking into the particulars so meticulously as well. We must have spent 20 minutes or more in the drizzle going from top to bottom. I was more concerned with the key components: engine, transmission, tires, belts, A/C and heat, etc. Everything checked out nicely, so we headed back to the dealership. I told my wife that it was a good car, but we both knew we should be able to walk away at any moment that the deal falls through. We agreed as we pulled up and were greeted by the our salesman.

Setting the Stage: "How was it?" he smiled. "It was ok." I said stepping towards the glass doors he was holding open for my wife and I. We walked to a smaller room with a desk, a couple pictures of his family, a computer, and two chairs. At that moment, I felt claustrophobic. He got out a pen from his pocket and asked "So, what kind of loan do you have on the Corolla?" Since we had the title with us, I explained we had paid it in full a year ago. "Do you know what the value of it is?" he said. "About $9,800 in the Kelly Blue Book" I said. He turned to me with a disgusted face like anyone would EVER pay that much for our little Corolla. "Nah, it doesnt have power features or anything... let me find how much we will take for it." He stumbled out of the room, while my wife and I faced his drab wall with the picture of his wife and two children. I leaned in towards my wife acknowledging that she was doing a good job. She gets really nervous in these high pressure sales situations. After about 5 minutes, he came back with the used sales manager. I could sense the adrenaline going on in my body.

The Deal: A heavy set guy in his late 40s walked in and introduced himself, shook our hands and took a seat at the salesman's desk. He had on glasses with transition lenses, however they seemed to stay dim the entire time, which made it difficult to see his eyes. This guy had a sales demeanor about him; just the way he carried himself. My wife would tell me later that he represented the classic car salesman. "My buddy here tells me you like our Toyota out there?", pointing to his collegue standing behind him. "Its a great truck... power everything. Lets take a look at what you're trading in today." He went towards a sheet of paper our prior salesman handed to him. "Hmmm... well your Corolla is a base model with no power, we'll probably do $5,000." He took out a sheet of printer paper and a black marker from the desk. He started writing the numbers. (I already calculated it in my head) "So if we take your trade for $5,000 and the price on the Highlander is $12,700", as he checks the inventory sheet again, "will make the difference $7,700 plus there's a dealer fee of $800 for tax, title, and vehicle registration for a total of $8,500 that we can get you approved for today."

Im thinking to myself, ok they really think we are two kids from the street looking to just bend over. I went into my 'are you kidding' mode. "Absolutely not" I said firmly. "First off, we're not financing, we pay cash. Secondly, the Corolla is in immaculate shape with all the service records." I had to catch my breath for a second. "Kelly blue book says I can get it for around $10. I saw our SAME car at your sister dealership selling for $12. $4 is ridiculous." The manager glanced over at the salesman and sighed. He sat back in the chair and said "Ok. I can probably convince my manager to buy yours for $7,000 but thats the best you're looking at. With everything that'll be $6,500." He underlined the new total with the marker.

"Would you be kind enough to give us a minute?" I stated. Let me talk this over with my wife. "Certainly, take all the time you need" as they both stepped out. "This is getting interesting", I gleamed at her. My wife was a nervous wreck at this point. "$7,000? Are they kidding us? Lets just sell the Corolla privately and we can go somewhere else." I rattled in frustration. I was looking to close the gap in the price difference and that was the only thing on my mind. A few minutes past by to the point I thought they had forgot about us. I looked out the glass and opened the door. Our original salesman saw me and headed back to the room.

Round Two: "Are we ready to draw up the papers?", he proprosed. "Not yet. We're looking at these numbers and know you guys can come up with something better." He looked me straight in the eye, "You are not going to find anyone that is going to pay anymore for that Corolla. Honestly. Even though we are a dealership, we won't make any money off your car." Ok, now I was being treated like a kid with no options. "I think you can do better", I said. He sat up in his chair and stared down at the numbers. Then the manager stepped back in with a smile on his face and a sheet hot off the printer in his hand. "Ok you two, I checked the blue book online again and spoke to MY boss. He said, we can give you $9,000 for your car, plus what we're selling is already at wholesale value, making it a $4,500 total fees included." He handed me a sheet of typed up numbers with the deal all stamped out on paper showing a $4,500 difference. I know that alone the taxes/title fees of $800 was going to kill me. I sat back in the chair. Of course my target price was $3,000 or less from the get go but the fees were going to bump that up regardless. I sighed and looked at my wife; I knew she thought that $4500 total was a great deal. I covered my mouth with my hand. Long silence. "How about 3-5... for everything?" I said.

Final Decision: "Let's check with my boss." I got up out of my chair, went out the glass door and walked with him to the front of the showroom. There stood a guy, early 30s with a very nice suit on. He shook my hand and glanced over at the used car manager, "What can I do for you today?"... "Mr. ------- wants to deal at 3-5.", the manager said. I looked right at his boss nodding my head. "Ok lets do it.", he said, "Because I know this guy will be back and recognizes that we won't make much off his trade and we are actually losing money here." (I laughed a little inside there). I shook his hand and thanked him as I walked back to the room.

The whole process took us approximately 3 hours from the time we pulled up to the time we drove off. The paperwork seemed like it was the most lengthy. They drew up paperwork showing we had gotten $10,000 for our trade and after all fees it was $3500 even. I look back on it now thinking I probably could have gotten the deal at $3000 or even $2500 if I was a little more patient and a slight bit more aggressive. Well we live and learn... and what a great learning experience we went though. Now we have a car that we can get our baby in and out of with ease and with more room! Yeah!

My friend wants to hurt me for paying!

2007-06-15T20:07:00.000-04:00

Today after having a fun filled day with the baby, my beautiful wife was nice enough to watch our daughter and let me go to dinner with one of my good childhood buddies, whom I haven't seen in months. We left at about 4pm to a nice local chinese restaurant. The conversations are always light, jovial and reminders of yester year, some good and some bad.

Anyway, the check comes to the table and of course the sweet old lady puts both of our orders on the same check (obviously since neither of us said anything being engaged in high school reunion information> by the way, IM NEVER GOING, I hated high school why would I ever think about going back there it made my youth a living hell; see what I mean by being engaged in the conversation?) . Ok, so she brings the check and my good friend picks it up and says I'll get it this time. First off, whenever we eat, we ALWAYS pay our own way. Needless to say, Im shocked at first because he NEVER offers to pay and his situation is he is in grad school making $15K per year before taxes (AHHH!!). So my first instinct was Absolutely not, lets just pay our own. Then my voice took over my thoughts and said, "No, I'll get it this time". Then it became a back and forth battle of who paid for what last and "he never gets to pay" and I have a baby so I need the money... blah blah. So needless to say I went up to the counter and paid and he was pissed. Oh well... he can be such a whiner sometimes, but then I got to thinking...why shouldnt we just agree to pay for ourselves EVERY time? I know he was just offering to be courteous but it just will lead to a big deal about nothing. Since we have been friends for so long, I know he will get over it. I just didnt want to have to feel like mr. money taking HIM out.

Side note: OUR BABY IS 4 MONTHS TODAY! wow she has grown!~ :)

Taking a vacation from it ALL... is a good thing!

2007-06-14T23:21:00.000-04:00

We have taken a little vacation these past couple weeks; since I obviously haven't had the chance to really get down and blog like I do. However I am still enjoying my time being home with our newborn daughter. This will be my fourth and FINAL month of absolutely no work or having to worry about the daily grind; which I still miss in a wierd way. I truly believe it is still a blessing that we have such an opportunity for one of us to stay at home full time. Now a days, she giggles and laughs like crazy and everyday I learn just a little quirk or two more than I didn't yesterday which makes it all worth it :)

Financially speaking, like we have been doing for the past several months, we are living on just my wife's paycheck. This month is a bit different because not only do we have ZERO of my paycheck coming in, but we are relying on sticking to the budget like never before (ie. no room for error time). So far midway though the month, the funds are looking a bit high and dry. We have depleted over 80% of our cash in the budget during our last week's big Sam's Club and Target run. These were major but they will carry us definately through mid next month. That only leaves us with 2 grocery shopping days left, this Sunday and next Sunday. Since I will actually be in the driver's seat at work this upcoming Friday, the 22nd, I should be getting a paycheck on the first of July. Also after my wife spoke with her work, she will be getting her FINAL monthly salary in July. That's great because then we will live off her paycheck for one more month and all that I make in July will go towards our 2008 annual expenses, currently at $4500.

The "Job" is getting easier

2007-05-22T21:53:00.000-04:00

I consider being at home now my full time job. Its interesting that I've been doing it for about a full month without my wife, however its had ups and downs like any job. I dont want to say my wife isnt here either, because when she gets off work about 5pm, shes home helping out and getting plenty of baby time. During the daytime, I find myself more and more in a routine and just scheduling one thing after the other and repeating it if it works the next day. ie. we have adapted that she gets her 30 minutes of baby einstein where her eyes wander on the baby bach dvd. That is all the tv time she gets at 3 months, but she is calm, happy and it sometimes doubles as her poopy time. With each day that the "routine" is in place, the day goes by much faster and I end up having more "me" time to get things cleaned and prepped for her next feeding, etc. (I tried doing chores with her and putting her in the bjorn but I move so much faster when shes in her high chair or bouncy seat). However things working like clockwork RARELY happen and that little wrench in the cog machine will slow me down or just totally throw the whole routine out, so the philosophy is to just roll with it and keep going... :) So thats what is consuming my days right now.

I wanted to mention a couple things in the finances. First we decided to pull the trigger and get the SUV. I know we have been talking about it in the past few posts about how we have to deal with the space issue of getting in and out of a compact car with a baby. Well the other week, we got it used and with the same miles as our compact car. I'll write another post about haggling at the dealership and the true sales pressure there. I did stand my ground and came out much better than expected. The wife was very happy too.

Ok obviously our bottom line and savings took a hit because of the car/suv trade and the gas obviously is almost double in the SUV. However we are still trying to maintain the budget for May and keep our heads above water, which may be a photo finish on this one. I may need to dip into the emergency fund just a bit to cover groceries and gas til the end, so yeah... I guess thats what its there for and don't worry, its priority ONE when I get back to work is to replenish if I take any out.

Our 2 Year Anniversary!

2007-05-14T19:46:00.000-04:00

Yeah, we made it! Today my wife and I celebrated our 2 year anniversary! I don't care what anyone says, being married to the perfect person really is the best feeling in the world. Its also nice to know that your soul mate is close by you and you can see them every day! So what did we do? Well she spent the day at work while I was at home with our little one, who by the way will turn 3 months tomorrow! She has changed so much in just a month too, I cant wait to see what progresses on the next one. Today my sisters came and helped out by watching the baby while I got some HEAVY needed yardwork done. It looked like an amazon rainforest in the backyard, so I took the advice of my wife and got it done. Needless to say, she cooked me dinner tonight and we had a pleasant evening with baby. Briefly let me touch on the fact that after 2 years of marriage, it seems like ages ago when we first met in college. Boy, were we shy and niave back then. I ran up my credit card while dating her :) and she even co-signed a vehicle for me!! I still tell her that was so dumb of both of us, but we laugh at it now. We have gone through alot, her and I. I know with the baby these past few months we have a hard time just to find time to talk anymore, but I know we will come out much stronger.

SUV or Minivan time?

2007-05-08T10:00:00.000-04:00

We have 2 compact cars, a newer toyota corolla and a mazda. We paid off the mazda a few years ago, and the Toyota about a year ago. After getting 2 booster seats for each car and trying it out for the past 3 months, it seems that getting our child in and out would be easier if we had a bigger car. Is this justified to go out and trade in our paid for vehicles? I mean we could use some of our savings to pay for the difference outside of equity. This part of my brain thinks that yeah it would be easier on my back and my wife's back dragging her stuff in and out plus provide more space and its safer. We are still driving our early 20s right out of college type car... basic transportation. It would help us out alot with a bigger car for longer trips too. The other part of my brain is the who cares, it provides basic get around transport and is safe enough for 1 child. Maybe we can find something of equal value and do like a cross over exchange. Can most dealerships accomodate this kind of transfer? Overall it may be time for an upgrade and since I have the time to look around, why not shop?

We are at the point in our lives...

2007-05-05T10:57:00.001-04:00

I want to go over where we are at in our lives overall. Many of you have surpassed this mark financially, others are almost there, but I wanted to give a brief life summary of where I we are. Presently: Married, 26 years old, 2 full time workers (soon to be 1), 1 child with 529 account, monthly 'needs' allocation at ~1100-1200 (so we are way under our budget). We own our home and have approx $72K left to pay on it. Max amount in retirement. We have over $200k in networth. Good, not great. (Not to sound overambitious, however I am so grateful to be where we are, but I know we have to work harder to get where I would like us to be)

In a recent post of 'what to do with our home' I'm scared that if we stay here that we dont get an opportunity for a more appreciating home. Ie. 200k at 8% gains and 400k at 8% gains, which one will be ahead? Obviously the 400, but we have lived to be debt free and underbudget these past months and have enjoyed what money CANT buy. Should we go into debt if we know we can pay a higher mortgage and because we are infact "young"? Moneymonk states that it would be good for us to stay where we are. Its so hard being in a spot where you can plan ahead for bigger purchases. End diatribe.

Secondly I want to talk about bettering our situation career wise. I'm putting in place some goals at work as well, perhaps a 4-5 year plan. I have been lucky enough to be introduced to fellow employees making more than $125k annually easy, however they are not in my department or related field. I have the patience and time to go back to school or go through whichever necessary programs needed to get to that point. A few years ago, I couldnt dream of having the job that I have now and now I have it yet dreaming of higher goals. Sheesh, will I ever be satisfied? :) Money isnt everything, i guess.