Lots of stuff has happened since my last post way back when…
The first piece of news, I moved! About a month ago I sold my house, bought a new one and hauled all my garbage up into the mountains. The new place is much quieter, you step outside at night and bam, stars in your face, I see at least a few deer everyday… I do need to be aware of bears, though.
The next piece of news – my student loans are completely paid off. I knew I’d get enough equity from my house to cover the loans at 6.55% (with auto-pay discount), but I got enough to pay them all off. Except, I almost didn’t. I did get rid of those higher interest loans at the beginning of the month but then I started deliberating over what to do with the rest. Pay off the loans? Invest? Save it for home improvement expenses? Well, as I already told you I decided to get rid of those last loans. Outstanding balance? $0! Now I just have to decide what to do with the $350 I used to pay each month. Oh, wait, I have a more expensive mortgage now…
According to Mint I’m getting very close to a net worth of 6 figures. Which doesn’t mean much because most of it is home equity and therefore untouchable. Instead I track my cash worth – cash and investments minus debts – and that’s still far in the negatives because of the mortgage. Still, my net worth just a few years ago was only $20,000 so I must be doing something right.
In other news, I recently found out that I tore my ACL last year, which explains why my knee’s been wonkier than usual. That’s right, I’m done with the good news and just dropped the bad news without warning. I had surgery a week and a half ago and am still getting around with the help of crutches. Yet another argument in favor of emergency funds, once I found out I needed surgery I was able to take the next spot without having to figure out how to save for the copay.
I’ve started talking to headhunters when they call instead of just telling them I’m not in the market. There are some changes at my current job that are going in a direction I don’t like, and really, what can it hurt? I don’t know how active I’ll be in this job hunt, but I am worried that I haven’t even been here a year and I’m already looking to leave. Maybe I should just go back into contracting where it’s expected to stay for just 3-6 months. More job musings in another post.
So how am I breaking the rules?
I bought a more expensive house. In the PF world the rule is to keep your living expenses low since it’s often the biggest item in the budget. Which makes sense, but my philosophy has always been to save where you can so you can splurge where it matters. Well, my home matters to me. It’s my home, my refuge, the place where I can go and find peace. If I was a frequent traveler it would make sense to compromise more but I’m not, I’m a homebody. My mortgage is still within reason and even with utilities is less than 30% of my take home so it’s not like I’m being reckless.
Of course, personal finance is just that, it’s finance for your own personal needs. For me it makes sense to pay more for a house and not travel a lot. Others prefer the opposite. Some won’t travel as much but will instead eat out at fine restaurants, or buy more clothes, or work on cars as a hobby, etc etc. Then there are those who will forgo any extraneous spending in favor of increasing the bank balances at any and all costs, but that’s not me.
Another rule I’m breaking – I still have a few thousand left from the sale of my house and I probably won’t handle it “optimally”. I could put it towards the car loan or new mortgage, which are now my only debts. I could stick it in a non-retirement investment account. I could up my 401k contributions to the max temporarily and live on the remaining proceeds instead. I could replace the non-functioning gas fireplace in the family room with a wood or pellet burning appliance and there’s more than enough left to cover that.
The first few options – paying down the debt or investing – might be the smartest but I’m leaning towards the fireplace option. The house has central heating but it runs off of propane and there aren’t enough vents for the larger rooms. After the initial cost a good insert or stove will be cheaper to run and with the wood stove upstairs I might need the furnace on only the coldest days. Also, it’s a mountain property, you have to have a nice fire to sit by while you sip hot cocoa and watch the snow fall. Even if I didn’t have the extra I’d probably take the money out of savings anyway to do this, I think it would enhance the comfort level of the house that much. And did I mention that it’d be cheaper to run than the furnace?
So that’s what’s been going on. Between the move, working on the new house, my job and knee surgery I really haven’t been paying much attention to the blog. But I’m back now!