Wide Open Wallet

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Archive for September, 2008

The will situation: Almost done!

Ok, so we met with the lawyer last night to discuss our wills.  It was pretty interesting.  It took about an hour, he explained all the different documents we need, and we talked about what we have and what we want.  We had already discussed who would get the kids and who we wanted to be in charge of the money and whatnot so he just went ahead and took that info right then. Now we just have to go back in a few weeks and sign the papers.  He is going to have witnesses and a notary there so everything will be done at that point.  Yay!  He charged us $1,200 which also includes helping us fund the trust.

When we had talked on the phone he had said he didn’t think we needed a trust.  Which I was fine with for two reasons, one is that just wills alone is cheaper, two I really didn’t think that our estate is large enough to require a trust.  When you hear “trust fund” you think millions.

But we ended up getting a trust.  It was the only way to leave my daughter anything if my husband and I were to both die.  With just a will my daughter would get 25% of our estate and if she was a minor that would mean my ex would have control of it.  So basically I would be giving my ex 25% of my estate and I’m just not down with that. There wouldn’t be anything left for her by the time she turned 18.

And with life insurance our estate is about 1.2 million.  (wow)  So we are talking about some actual money that could make a difference in a person’s life.  And hopefully our estate will only grow as time goes on.

Here’s how we divvied it up if we both die:

My son is going to my husband’s brother and my daughter is going to her dad.   Originally, we had thought to give control of the trust to my husband’s brother but at the last second decided to give it to my mom.  Two reasons, one it’s a huge job and we’ve already given a huge job to him, two it creates a check and balance of spending the kid’s money.  Two people have to agree that it’s money worth spending.  The caretaker of the kids (be it my ex or my brother in law) would ask my mom when they need money for the kids.  She could decide to give it to them or not.  If my mom is dead then my husband’s brother would get control of the trust.  The check and balance would be gone.  But I do trust him, so it’s not the end of the world.

The kids get their share of the money when they turn 25.  We split it 25% to my daughter and 75% to my son. I know that sounds unfair but here’s my thinking (and I’ve thought about it a lot).  If you look at our estate as half mine and half my husband’s then I split my half evenly between my two kids and my husband gives all his to his son.  That is a 25/75 split.  And you have to remember that my daughter still has a parent, my son doesn’t.

It’s not perfect.  If only one of us dies the other person gets everything.  Which is fine, but then that person has full control over everything and can change the distrubution how ever they want.  But, I trust my husband to the end of the earth and I know he wouldn’t disinherit my daughter or give my son to someone I don’t trust, and I wouldn’t make any changes that I know he would disagree with, so it’s a risk I’m willing to take.

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  • Filed under: life
  • Ok, I’m just going to suck it up and have a gloom and doom day…

    Shopping to beat inflation?  I just read some advice that said to shop now.  Buy stuff now that you know you will need over the next few years.  Buy clothes for the kids, buy food that will keep, buy anything you know you will need because you will get a better return on your money than investing it. Yikes. You will be putting your money in something that is going to go up in price, rather than something that is going down.  Even earning a small percentage on a savings account is still losing money when inflation is high.


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  • Filed under: recession
  • Thoughts on the economy

    Hey guys.  I don’t know if anyone noticed but I didn’t post on Friday like I normally do.  I was hoping a little hiatus from the blog would clear my head and I could think of something other than the state of the economy to write about.  I can’t.

    What’s worse is that I really don’t even know what I want to say about it.  I usually try to put a positive spin on things, I take the news with a grain of salt, I try to see the silver lining.  I’ve spent time looking at those looming dark clouds and I just can’t pick it out.  Sometimes I see something kind of shiny and I think “there it is!” but then the light shifts and it disappears again.

    I’ve been doing a lot of reading and for the most part I can’t get my head around the situation.  There is quite a bit of uproar about the bailouts.  I’ve already given my thoughts on that topic. But even the proponents of the bailout say that things are still “going to get bad”.

    I guess that is my sticking point.  Define “bad”.  What does that mean for the everyday person?  More importantly, what does that mean for me?  Should we cancel our Disneyland trip?  (We’ve decided on January btw.)  Should we sell the truck while we still can?  Should I get a job now, in case I need one later but the unemployment rate is so high that even one opening at Walmart gets 500 applications?  Is my husband’s overtime going to be nonexistent?  Is he going to lose his jobWhat is going to happen!?

    Out of all those worries, the one I’m most concerned about is my husband’s overtime being cut.  We really depend on him getting a decent amount of overtime, plus it seems like it woud be one of the first things to go.  I don’t know what we will do when/if that happens.  Then of course it depends on how long he is going to go without overtime.  We use our cushion fund when over time is low.  So one, two, three months with none isn’t going to kill us.  But 6 months to a year is going to really be tough.

    As far as his job… it’s a safe as any right now.  He’s the boss, so they would have to be closing down his whole site before he would lose his job.  Which may happen I guess, it’s not outside the realm of possibilities I suppose.  It depends on how bad “bad” is.

    So what are your worries?  How are you feeling about things right now? Do you have any ideas on how bad “bad” is?  Do you have plans for a worst case scenario?

    Pic by: Mike Licht NotionsCapital.com

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    A tale of three mortgages

    I have always wanted to raise my kids in one house.  I wanted to buy a home, plant a small tree, and then take the kids pictures in front of that tree every year.  That way we could look back and see our kids and that tree both growing up and putting down roots together.

    When we bought this house we planned ahead.  We bought a house a little farther out of town than ideal in order to get a bigger home.  One with a bedroom for the baby we hadn’t made yet.  We planned (and still plan) to live here until the kids have moved out.   Then we’ll see.  Maybe we’ll move, maybe we won’t.  We pay extra every month so that we can get the mortgage paid off as quickly as possible.  I want to own this house!  And yes, we planted a tree when we moved in.  Two in fact.

    The Realtor who sold us this house happened to live about 10 houses away.  One day he was talking to us about our mortgage and he said something like “But it’s not like you are going to live here for 30 years.”  And we both responded “Yeah we are!”.  He was shocked.  He sold his house just after the market turned, in about March of ‘06.  He sold it for $50,000 less than the high, which at the time seemed so low, but the house has gone down another $70,000 since then.  So overall he did ok.  I’m assuming he bought another house though.  And the new house is subject to the same downturn in the market, so is he better off over all? Probably not.  And he is out the costs of selling and moving, and the house did sit empty for a few months.  So he is out those mortgage payments too.

    Then a few months after that I was talking to my neighbor.  He liked to talk… a lot.  He was one of those guys who does a lot of talking, and not a lot of listening.  He was going on and on about selling his house because he got some great property across town… blah blah blah.  It’s an equestrian lot (No he doesn’t have horses.) … blah blah blah. And then he asked when we were planning to sell.  I pointed to the tiny bundle in my arms and said “Oh, not until after he graduates from high school.”  His eyes about popped out of his head.  He couldn’t believe it.  I guess because we both still had a ton of equity in our homes.  He thought I was an idiot for not “cashing in”.

    He took an equity loan on the house next door to put down on the property across town, and put the house on the market.  It sat empty for a long time, probably six months or so while property values fell, and fell, and fell.  Then last Christmas he got some renters and that’s who is living in the house now.  I’m fairly certain that he didn’t get enough rent to cover the mortgage.  So he is losing money by the bucket full.  Not does he own two houses in this market, he is still paying part of a mortgage on a house he doesn’t live in.  I don’t know how he’s doing it.  I really don’t.

    Pic by: Mike.Wilson

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  • Filed under: life
  • On our way to getting a will

    You guys will be so proud of me!  In my post, creating wills online, I admitted we don’t have a very important piece of financial planning, a will, and asked for advice in a cheap way to get one.  Most of you said to go to a lawyer.  You reminded me you get what you pay for, and this isn’t something you want want to skimp out on.  I’ve come to agree.

    Seeing it written out in black and white that we don’t have a will really got me motivated.  We talked about how we were going to get the money to do this.  We decided to use some of the money we have set aside for the backyard.  Which stinks cause that means we have the full $7,300 to pay back by making payments, but I think it has to be done.

    So I called some lawyers around here and asked for prices.  The first place I called I was put on hold and then told by the receptionist it would be between $1,500 and $2,500 depending on how complicated I wanted to get.  I would assume that ours would be closer to the $1,500 side.  We just don’t have that much to give away.  But then I called another firm and was put right through to the actual lawyer… which I thought was nice.  He asked me a bunch of questions and said it would be between $650 (no trust) and $1,200 (with trust).  He said we could discuss it more when we meet and decide what is best.  But either way, it’s cheaper than the first place, and more in line with what I was planning on.  And seems like more personal service.

    So I have an appointment on Monday.  Yay!  I’ll let you know how it goes.

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  • Filed under: life
  • Lowering those bills

    I’m not about to cancel my cable any time soon.  But one thing I finally decided I could do was to lower the bill.  I should have done it a long time ago.  I don’t know why I didn’t.  I had my local cable company’s package deal.  The fastest internet, regular cable, and a house phone with the extras.  It’s the package they sell you when you sign up.  If you have all three they give you like $32 off the total.

    What finally prompted us to call was because we realized we do not need the fastest internet available.  I am online quite a bit, but I’m not gaming, or downloading much of anything.  And I don’t know the details but we are paying for some number of speed and we are only getting some lower number so it’s not worth it. We aren’t even getting what we’ve been paying for.

    So we dropped down to the lowest speed they have on the internet.  We also dropped our phone package down to just the basic basic phone plan.  No caller ID, no long distance, nothing but a dial tone.

    These changes dropped our cable bill from $132 to $114.  So I’m pretty excited about that.

    Pic by: HeatedGroundPhotography

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  • Filed under: Budget
  • My thoughts on the bailouts

    Everyone, everyone, everyone has been talking about the bailouts and I’ve been trying to stay out of it.  But the thought of writing about another topic just seems strange.  Everything I think of seems like I’m trying to avoid the bailout topic.  I mean, how can I write a personal finance blog and not talk about this past week? Writing a post about the 5 most expensive cars to maintain seems kinda frivolous right now.  You know what I’m sayin’.

    My thoughts… First off, I try to refrain from feeling to strongly in one direction or the other mostly because I don’t trust the news.  I don’t think I can really get all riled up unless I have all the facts, and I don’t think I’m getting all the facts from the news.  I know what they want me to know, which may or may not be the whole truth.  Or even the truth at all.  So that is my general feelings about everything that is in the news.

    So that said… I’m pretty mad.  I think it’s ridiculous that the government is bailing out private companies.  Why on earth would I want to pay to keep these faulty companies afloat when the exact people who ruined them walk away with millions?  Meanwhile I’m also paying for my healthcare and education.  Are we capitalists or not?  Pick a side already.  (I’m all capitalist by the way.)

    On the other hand… I certainly don’t want total collapse of our financial system.  I like my house, my husband’s job, being able to put food on the table, and I don’t want those things taken away because of stupid decisions other people made.  So if that means bailouts… then by all means, bail them out!

    Yes, I know those feelings contradict themselves.  I’m a complicated person, what can I say.  ;)  That is where my hatred of the news comes in.  If I knew the truth, the whole truth, and nothing but the truth I might be able to pick a side.  Maybe no one knows what will happen if these companies were to fail.  I sure as heck don’t.

    But the bottom line is what’s done is done.  So where does that leave us?  I still have faith in the markets.  I do believe we will get through this time.  In the mean time, it might not be the best time to sell your house, quit your job, start a business, or take on extra debt if you don’t have to.  But definitely keep investing in your retirement accounts, keep paying off that debt, keep saving, keep working, and keep living.  And try to keep in mind that the news loves to scare you, they love impending doom.  Try not to get caught up in it too much.

    Photo: Elsie Esq.

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  • Filed under: economics
  • Round up

    Hello hello!  This week just flew by, even though every morning I woke up and was just sure it was Friday.  This week was the week of our monthly Group Writing Project at the PF Bloggers.  We wrote about our personal experience with loans.  In case you missed it, mine is right here.  If you would like to join in on our group writing project you can submit your article here.

    Here are the rest of the PF Bloggers submissions…

    Master Your Card wrote about student loans.

    Girls Just Wanna Have Funds wrote about her experience with student loans, car loans, mortgages, and credit cards.

    Living Almost Large wrote about buying her house.

    No Debt Plan wrote about how even though he doesn’t like debt, loans do have their place in his life.

    Our Fourpence Worth talked about their first (terrible) car buying experience.

    And for the rest of the blogsphere….

    Blunt Money is tired of the doom and gloom.  So am I!

    Frugal Dad has a guest post about how your retirement account can actually benefit from the market crisis. Hey, I’m trying to stay positive here!

    My Two Dollars suggests investing in sin stocks.  I honestly don’t think that’s a bad idea.

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  • Filed under: roundup
  • Hey guys!  What do bulls, bears, an elliptical machine and dead trees all have in common?  They are all topics in today’s post!  I have some random thoughts that I wanted to share.  None of them really make a whole post individually, so I thought I would just group them all together for some randomness on this great Friday.

    First off, really quick, I wanted to give an easy way to remember what Bull and Bear mean when talking about the stock market.  Bull means the stock market is going up.  Bear means the stock market is going down. Maybe everyone has this down pat already, but when I was taking a class on investing I had the hardest time remembering which was which.   There isn’t anything inherent about a bull that makes you think, “going up”.  And same for a bear.  Maybe they should call it Eagle and Groundhog or something.  That would make more sense.  Anyways, so I started thinking of the L’s in bull like arrows pointing up.  And the R in bear, like an arrow that has curved and is now pointing down.  I made that super awesome graphic to illustrate. (I think I missed my calling in graphic design, don’t you?)  It might be corny, but it works.  So if someone is “feeling bullish” about a stock that means they think it’s going up.  Or if someone is “feeling bearish” about a stock, that means they think it’s going down.  I think everyone is feeling pretty bearish right now.

    The second thing I wanted to talk about was to give you an update on my love affair with Mr. Elliptical.  First off, it’s settled into a slow comfortable desire, rather than an intense “got to have it now” infatuation.  I’ve also devised a two part plan to make him mine.  Part one is that I’m going to save up my online income to pay for him.  That way there isn’t any money coming out of the household budget, which eases my guilt.  I have between $250 and $300 saved up so far.  My goal is to have the full $750 by May.  I would like to have it before next summer.  We’ll see.  The second part is that I’ve started walking every day.  It’s still really hot here, so I’ve been going for walks in the early morning and then again after the kids are in bed.  I was going at about 2 in the afternoon but I got heat exhaustion.  Lesson learned there.  I’m going to wait til it’s under 95 before I go walking during the day again.  If I can walk consistently between now and May and I have the money saved up, I will go ahead and buy him. That way I know I will be able to afford it and I’ll be pretty sure that I will use it.  When it gets too hot to go for walks even at night I will want something to do inside.

    Ok, the last thing is about my homeowners association.  I jokingly threatened earlier that I was going to kill the tree in my front yard and make my association replace it.  Well, it is seriously the most spindly little tree and I’ve always blamed the watering system.  Or even the drainage, maybe the water just runs right off and the tree doesn’t get any?  But I’ve noticed a lot of trees in our subdivision are that way.  Spindly.  Some are growing just fine, but lots of them just don’t seem to grow.  Poor little trees just hanging on for dear life.  Well, I walk with another mom in the neighborhood and she is involved with the association.  All into everyone’s business.  (Wow… so typical, two stay at home moms pushing strollers around the block gossiping about the neighbors and getting riled up about the home owner’s association.  It’s enough to make me puke. lol)  But she was telling me that the landscapers who planted the trees planted them in the boxes they are shipped in.  Dur.  So that explains it.  Our association is suing the landscapers to make them come back and replace the trees that are dying.  I thought that was interesting.  I didn’t really know that associations did that sort of thing.  I thought it was more of a policing system than an actual advocate for the neighborhood kind of thing.

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    Bare Bones Budget

    Tight Fisted Mister lives on $1,000 a month.  He recently laid out the budget of Frugal Freedom who lives on $700 a month.  That is so little!  It makes me wonder what is the minimum we could live on, if we absolutely had to.

    It breaks down like this:

    Rent: $855

    Food:  300

    Electricity: 75

    Phone: 20

    Life Insurance: 100

    Misc. : 100

    Total: $1450

    How I got there:

    If we lived close to my husband’s job we could potentially not have cars.  I really can’t imagine the four of us living in less than a two bedroom apartment and they go for about $855 a month, according to Rentometer.  I think we would need a phone.  Not cell phones but a house phone at least.  I cut our grocery budget down from $500 to $300.  It would be very hard to feed the family on that, but I suppose it’s doable.  Other people do it right?  This is supposed to be a bare bones budget.  The miscellaneous category would cover anything unavoidable the kids need, maybe a cab here and there if we need one, things like that.  I don’t know how much we would need in real life to cover those types of expenses.  I just guessed.

    I’m happy with that number.  I’m not happy with the lifestyle that goes along with that low price tag, but I like knowing I could support our family if I had to.  When I was working I brought home $1,800 a month.  So I don’t see any reason why I couldn’t do that again.  And of course that budget is not using any of our current resources.  For example, we could use the equity in our home as a down payment on a small condo and have a payment less than $855.  So I guess overall I’m pleased.

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  • Filed under: Budget
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