As Bryan and I have been looking at our expenses, I’ve been starting big and working my way down. If you have the interest and patience, I think I’ll proceed with this money management topic (see my first post here) by sharing some thoughts about each of our major expense categories. So jump in, and hang on!!
(I’m pulling my stats from Mint.com, which I’ve been using to analyze our spending over the last year.)
The first expense, the biggest one (27% of our annual expenses), is housing.
This summer, we re-financed our home from a 30-year 5.6% fixed mortgage to a 15-year 4.5% fixed mortgage. We’re feeling pretty positive about the switch. In the past, we were paying double monthly mortgage payments in order to eat away a little at our principle (those first 10-years of a 30-year mortgage are almost entirely interest). We liked the fact that we could decrease the amount we were paying if the situation warranted.
However, with the low interest rates, we decided that re-financing with a 15-year mortgage would be a better bet because we’d be paying so much less to the bank and so much more to our own equity.
I like our house. I like that it’s not too big (we think it’s about 1200 sq. feet). It fits our family well and (other than a kinda nasty basement) has good bones, new windows and nice details (I love our hardwood floors, kitchen, and sunroom!). So mortgage payments are a fixed, non-optional cost.
In the “housing” category, I also have a few sub-categories that contain more discretionary spending. These include Home Services (we got the carpet and a sofa steam cleaned last spring), Furnishings (I purchased some new blinds for our bedroom), Lawn and Garden ($200 spent on flowers and plants for our yard this past year), Home Insurance (which I re-bidded last spring and got a less expensive policy), and Home Improvement ($325 spent at Ace Hardware and Menards for things like re-surfacing the driveway, tools, a new dehumidifier for the basement, etc.).
Those expenses (other than Home Insurance) are optional. Looking forward six months (that’s to mid-April!), I can curb expenses by not purchasing a mum for the garden this fall and by cutting out or limiting my spring plant purchases. I sometimes buy pumpkins, gourds, and corn stalks to decorate the porch for halloween, but perhaps this year I’ll limit it to a few pumpkins. Simplify:)
Also, we should limit our trips to Menards and Ace to the essentials (I always buy more than I intend when I go in those stores!). We need to purchase things like water softener salt and solar salt (in the winter), and there’s sometimes a shovel that needs replacing, but for the most part, we can probably make-do!
I’ll continue to hold-off on re-painting our bedroom (that wasn’t a big priority anyway!), and next time we need to clean furniture or rugs, I’ll think about renting the machine rather than paying someone to come in. Either way would cost $$, but I’ll be renting the machine is cheaper.
I’m guessing that if I reign in spending over the next six months, I can probably knock $300-$400 off this category.
When I compared our expenses in the housing category to the average USA or Wisconsin, it looks like we spend far over the average on the rent/mortgage category but far less than the average on all the other home services and expenses. From my perspective, that’s probably a good thing.
OK, so I think we’ve got the housing category covered. Next is a meaty one…food!
So how about you? How do you feel about your home expenses? Any thoughts, suggestions, or tips? Does your house feel like a home? I’m all ears!
Grace Manubayat 8:35pm on September 18th
we are about to refinance for a 15-year mortgage at 4.5%. tim says good for you guys for being able to do this! 🙂 are you planning on fixing your basement at some point? if you're going to generate a list of what to save money for, it would be good to figure out where that might fit in with your priorities. like, in a few years when the kids are bigger and they need more room to play and it's winter… or something like that. or, come to think of it, more basic "emergency" kind of stuff like fixing leaky roofs, etc. is now the time to bring up these types of thoughts? maybe that's where some of the "extra" 300-400 dollars can go…
we are about to refinance for a 15-year mortgage at 4.5%. tim says good for you guys for being able to do this! 🙂 are you planning on fixing your basement at some point? if you're going to generate a list of what to save money for, it would be good to figure out where that might fit in with your priorities. like, in a few years when the kids are bigger and they need more room to play and it's winter… or something like that. or, come to think of it, more basic "emergency" kind of stuff like fixing leaky roofs, etc. is now the time to bring up these types of thoughts? maybe that's where some of the "extra" 300-400 dollars can go…
We’ve refinanced our mortgage once, and tried to do so again this summer, but since I’m self-employed (theoretically), they need to see at least a year’s worth of income before they will refi again. So we’ll have to wait on that. I have no idea what our monthly mortgage payments are, actually, nor what percentage of our overall income they represent. Maybe I should know that, but since there’s nothing to do to change it, I’m happy in my ignorance.
As far as your second category, Stuff Done to and Around the House, we probably spend more than we should but less than is needed. Our roof needs some repair work, but not urgently. Our bathtub needs replacing – the surfacing on it has nearly all peeled off. Several of our windows are leaky sieves (interestingly, the leaky windows are NOT the original ones. About half the windows were replaced at some point and those are the problem ones.). And then there is the garage, which is in imminent danger of collapsing in on itself like a black hole. Which would actually be even worse than first appears, since 1) our bikes are in there, and they are our major mode of transportation, and 2) the most expensive item we own, Daniel’s table saw, is in there. When we first moved in we invested major dollars in finishing the basement into a useable space and painting nearly every room in the house, so interior maintenance is ok. I would love to figure out how to actually use our front porch, but that is not urgent.
But I LOVE LOVE LOVE my gardens, and cannot prevent myself from buying plants and goodies for them. I’ve done well in scrounging plants from friends and neighbors, but there are always some things I end up paying for at Jung’s or Johanssen’s. We did get our first brand new garden hose this year – all previous incarnations were yard sale finds.
Then there is Daniel’s woodworking stuff, which, while technically tools, really should be discussed when we get to “Hobbies: Essential or not?”
And writing the above made me desire mums, so Egon & I walked to the Fair Oaks Nursery and picked out two luscious specimens. And then I spent today noodling around in the various garden patches. Sigh…bliss. (The chickens enjoyed it, too)
One thing you should consider is that the average American/Wisconsin family probably doesn’t pay their mortgage off in 15 years. If you were just comparing current expenses, you may actually be ahead of the game with a fifteen year mortgage. I think that you’ve made a good housing choice for your family.
I think one thing we will be doing eventually is looking for a house that better fits our needs as a young married couple that plans to possibly have children. Not that our first experience in home ownership hasn’t been great, but we are going to do it a little differently the next time around.
we are about to refinance for a 15-year mortgage at 4.5%. tim says good for you guys for being able to do this! 🙂
are you planning on fixing your basement at some point? if you’re going to generate a list of what to save money for, it would be good to figure out where that might fit in with your priorities. like, in a few years when the … Unroll Parchmentkids are bigger and they need more room to play and it’s winter… or something like that.
or, come to think of it, more basic “emergency” kind of stuff like fixing leaky roofs, etc. is now the time to bring up these types of thoughts? maybe that’s where some of the “extra” 300-400 dollars can go…