So, a lot of you who comment on my blog have talked about finances lately - okay, maybe it is only two of you, but still... There are only 3-4 of you who comment regularly :)
AJU1 and I were talking on our way home from a meeting with a mortgage broker to refinance our home. We currently are at 6.15%, so when we were able to lock at 4.875% we jumped. Then the question became whether we wanted to pay the closing costs or roll them into the loan. This is where the conversation was interesting. We are not normal people. We freak out when our savings accounts are less than $1000 each (we have two of them). Right now we are building them back up after all of the home remodeling. Our closing costs will be about $5000, and we were willing to pay that up front so we aren't paying for that until we sell this house. It took us a little bit to realize that we aren't normal. Most people don't have that much in savings. Most people don't have that option.
Then, on our way to church yesterday, AJU1 mentioned the number of SUVs on the road. We have been looking at cars a little bit as mine is in need of replacement (1997 economy car). We want something bigger so we aren't trying to find space to stuff everything when we travel to visit family. So, SUVs are on the list (as are crossovers and a few station wagon-type vehicles). The price of some of them is shocking. He was wondering how people afford them. Then I reminded him that most people are up to their ears in debt. They pay the minimum on their cars and houses and credit cards. They are the ones that can't afford to refinance because they don't even have $1000 in savings needed to close most of the time.
This is why I make my students do an amortization schedule in my liberal arts math class. They actually make quite a few of them - 6 for a car and 6 for a house. They look at the effects of interest rates and paying extra. On cars, it isn't a huge deal. But on a house - wow! If you only pay $25 extra a month, you end up saving thousands over the life of the loan!
Okay, so I rambled a lot there... Hopefully it makes some sense... Feel free to share any thoughts on home finances if you would like...
4 comments:
I am also abnormally frugal. My husband is not a big spender, he is actually really smart with money, but he showed me that I was being a big TOO frugal when we got married. Now we live pretty comfortably and still sock away a decent amount in savings. I go into full panic mode if our savings dips under $1000. (I know that's a blessing.)
I cannot believe how expensive cars are. It's kind of ridiculous. My MIL has a Honda CRV and is insane about it. It totes around stuff for 2 babies quite nicely. When I worked in Alaska, the company gave me a Subaru to drive. I don't know what they cost, but if money were no object, I would probably go buy one today. I loved driving that car.
Considering modern-day financial trends, it is better to be "abnormal"! Way to go!
I want to know what the average $ amount in a savings account is. I like to think that "most" people have 6 months living expenses stashed away, but that's not the case, I know.
This is such a great topic and great post. I wish more people exposed the debt that so many people are in to maintain a certain lifetstyle! We both have 2003 vehicles - a Honda Civic with a roof box which is the "big car" for road trips (!) and a Jeep which is Brad's toy.
And we are always saving for the replacements, even though we're hoping to keep driving these cars for at least 5 more years. Who wants debt just to drive a big box? Not me! We always wonder about other people, friends etc who have lavish lifestyles and who we KNOW earn less than we do.
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