If you make it to the bottom of today’s post, there is a reward for you! True story.
My wife and I are in the process of refinancing our house. When we bought the home a year ago, it was about as painless of a process as buying a home can be. There was some grunt work on our parts, but by and large it was what you would expect; chasing down bank ledgers, getting statements, providing numbers, signing papers, etc.
This year we wanted to refinance. It has only been a year, but the interest rates have dropped enough that it meant freeing up some cash each month that we could then focus on debt in the short term, which was critical given our situation.
What we have found is that the process of refinancing has been FAR more imposing than the original purchase. Not only has it taken months of work to make it happen, but it has also required me to provide what seems to be the same information several times over.
At a certain point in the refinance process, I was also working on getting some debts consolidated at a much lower interest rate (%29.99 > %13.99), but before I did this I asked our loan officer if this would affect anything. I was told it would be fine, since my credit rating was already verified and the interest rate of the refinance was locked.
Smash cut to Thursday morning when I got a call from the same loan officer asking me why there was brand new debt on my profile. I remined her that it was the consolidation loan, and here response was, “Well, Dave, you personally took this debt consolidation loan out, and when you had originally asked me about it, I thought it was to consolidate your own debt. Instead you used it to pay off debt that was in your wife’s name, hence it now shows as new debt on you, and thus we probably can’t secure the loan for you at this time.”
But the really killer thing is that you can do it! No matter how bad off you think you might be, there are ways to dig out. Seek guidance, ask for support, read and learn, and find ways to solve your financial problems. The sacrifices to do so might sting quite a bit, but they’re only temporary, and then you’ll have the life you want to live.
For the most part, I would say that anyone I’ve let in on my personal financial crisis and efforts to remedy that crisis have been wildly positive. Close friends and family have told us they are proud of our efforts, some have told us we’re finally “adulting,” and still others have said we have inspired them to get their own financial lives in order. All of this is GREAT!
But there’s always one…
There’s always the butthole in the crowd who has to throw shade. I borrowed that term from my dear, personal friend, TayTay, or as she’s commonly known, Taylor Swift.
So in our case, it was one person who just had to make a comment about how much money I bring in from my job. It went something like this:
“Well sure, it’s easy for you to project paying off $50,000 this year. We don’t all get bonuses and stock vests that we can just throw around.”
I distinctly remember the “throw around” part, and while it initially made my blood boil, after I had calmed down a bit, I realized I may be causing folks to have a skewed perspective of me.
So here goes…
Let me begin by saying that I make a great living, and I feel incredibly fortunate. As a guy who spent the first part of his young adult life working an insanely difficult manual labor job on a cattle farm, I understand that I have very little to complain about both when it comes to my income and the environment that I now work in.
The next thing I’ll say is that I do make more than the average person, and I also have more debt that the average person.
So instead of focusing on dollar amounts, let’s talk in percentages so that nobody focuses on income or anything like that.Read More »
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I drove a muscle car for a long time because it fed my ego. I liked how people turned to watch as I drove by. I liked people (usually dudes) commenting on it when I was fueling up. I liked feeling powerful stomping on that pedal. So you would think I would regret a decision like this one.
I didn’t wake up Wednesday morning and think to myself, “Hey, Dave ol’ buddy ol’ pal, you know that hot and totally rad Dodge Challenger you’ve got sitting in your driveway? You know the one with the 392 Hemi and that awesome shaker hood with the blower? Yeah that’s the one! Whadda’ ya’ say we trade that sucker in on the most practical daily driver we can possibly fine. Something like say… A USED TOYOTA COROLLA!”
And yet that’s exactly what I did.
I wouldn’t say it was a total spur of the moment decision. I’ve been knee-deep in financial independence books, blogs and Facebook groups, so I had slowly been coming around to the idea of buying something more practical for what is essentially a shuttle for me to and from work.
Yet when I arrived at work Wednesday of this week, I had no clue that by day’s end I would have traded the face-melting monster machine in on the face-massaging safety wagon.
We are in the midst of refinancing our house, because we could use the extra bit of change it will provide each month. (Don’t bother debating on whether or not that’s a sound decision. It’s already done, short of signing in two weeks.)
Our home loan agent called with closing costs, and I freaked out because they were more than we were originally quoted. Things escalated quickly, and before I knew it, I was chatting with an agent at a reputable Toyota dealer here in my neck of the woods about trading my car in.
I had just reached my breaking point in terms of being stressed about my finances constantly, and yet driving around in a car that costs me $40-$60 bucks a week in gas alone. Plus I didn’t actually go anywhere with it. 99% of my car’s use is driving me to and from work. That’s it. On weekends we mostly drive my wife’s vehicle. So why did I need a gas-guzzling, high insurance, high payment vehicle to do that?
The truth of the matter is that if we are being honest, we knew we purchased too much home before they could tack the “SOLD!” tag onto the sign in front of the new home. However in practical terms it took us about 7 months to fully comprehend.
Starting Credit Card Debt (01.01.19): $126,310.77 Current Credit Card Debt: $109,570.87 Total Paid Off: $16,739.90 Income Going to Savings: 2%
My wife and I bought a house in June of 2018. We actually bought our 3rd home to be exact. Now before you think I’m some well-to-do, let me tell you a bit about my first two houses…
Our first home was a very modest rambler that was located just a stone’s throw from a Federal Correctional Institution, or in other words… a prison. It was close enough to our home that we could hear the prisoners playing softball on warm summer evenings, and I often took advantage of the way the yard lights illuminated my darkened house to navigate to the bathroom in the middle of the night.
Long before “Orange is the New Black” made prisons chic and hip, people would often asked us, “Aren’t you worried about living that close to a prison? What if someone breaks out?”
My response was always that if someone was going to break out, they sure as hell weren’t going head to the modest rambler a few blocks away and hang out for a month. At most they were going to steal one of our cars to get as far away as possible as quickly as possible.
When we moved into that home, we had a nice retired couple living on one side of us and a young family on the other. Across from us were some well maintained and relatively new duplex apartments, and all of this combined to make our dead-end street a pretty great place for a first home.
Within 3 years however, the retired couple moved to Arizona and sold their home to a rental agency. That agency in turn rented the home to a man who (get this) worked on race cars that he raced at the local race track on weekends. Apparently when you work on race cars, it requires that you rev them up to deafening volumes at all hours of the morning and night, usually while blaring Megadeth or Iron Maiden.
Within a month of this happening, the married couple with the kids on the other side got a divorce, and things went really sideways for the dad. The mom moved out, leaving the teenage kids behind, and the dad began drinking heavily. I know this because he offered to drink with me at least 5 times a week. His 15 year-old son held parties almost every weekend, usually with dad partaking, and we had the pleasure of catching young men standing on his roof peeing on to our roof next door on more than one occasion.
Starting Debt (01.01.19): $126,310.77 Current Debt: $110,408.18 Total Paid Off: $15,902.59 Income Going to Savings: 1%
[Side note: I have adjusted my starting debt and current debt slightly. I made a dumb mistake in my spreadsheet. These kinds of dumb mistakes are probably part of the reason I’m in debt in the first place…]
Growing up I was told many times to buy the best of whatever you were looking for, because if it’s the most expensive [insert item here], you’ll never think to yourself, “Well my [insert item here] is nice and all, but it kills me to know that there is a better model out there.”
This was engrained in me at a young age by the people that I knew.
My Grandfather, had lots of amazing things and always lavished us with crazy presents. Great house on a nice chunk of land, lots of vehicles and equipment, the latest “as seen on TV” gadgets in his house, everything. Then he went bankrupt, or maybe it was that he got in trouble with the IRS. I can’t remember as it was so long ago, but in any case I chose to ignore that part of the story.
I operated that way for a long time, often with my wife by my side saying level-headed things like, “Do you really need that one? The one next to it looks just as good, and it’s a lot less expensive.” I chose to ignore her as well.
See a pattern here?
The simple fact of the matter is that this “buy the best” line is all a load of horse dung. Or I guess bull dung if I’m trying to remain consistent with my post title.
Really what this is all about is ego. It’s fear of having someone have a something that is better than your something. It’s having the house on the highest hill because new hills don’t just pop up randomly, so you’re pretty safe in knowing you’ll always be on the highest one. It’s purely about status, and if you believe otherwise you are kidding yourself.
And the top of the line car, or TV, or appliance you bought? It will probably last even less time than the cheaper knock-off version.
Case in point:
My wife loves her coffee. I think if I was dangling from a bridge over a pit of alligators and there was a Starbucks within walking distance, the best I could hope for is that my wife made it back just in time to throw an egg bite in my mouth as the final rope snapped. At least I stayed keto-friendly until the very end.
Why in the hell was I on that bridge in the first place? My analogies are as stupid as my past financial decisions!
So she loves coffee, and we got a well-known brand of coffee maker that you put the little cups in and it spits out your java one lightning-quick serving at a time. Given what I called out above about my spending habits and the fact that my wife holds tremendous value on her go-go juice, I bought her the most expensive one they had.
We had a couple over one day that I would refer to as “fiscally responsible,” and they inquired about the coffee maker. The next day they went out and bought the cheapest model they could find.
Smash cut to almost 2 years later. Our coffee maker had been returned on warranty twice for breaking down, replaced both times at no cost, and eventually replaced with the brand new top-of-the-line latest and greatest model of coffee maker from the company. That one died six months later.
That cheap one our friends bought? They still use it to this day. Sure it doesn’t have the fancy touch screen, and the water reservoir is a bit smaller, but it still works and the coffee still tastes just like the coffee that came out of any of the 4 coffee makers I had.
We live in a day and age where things are made to start falling apart the moment you get them home (except for their stupid cheap coffee maker.) They’re made of plastic and can be quite flimsy and the companies bank on the fact that you’re going to just go ahead and buy a new one when that thing breaks in a year or two. So buying the best doesn’t get you much at all.
One thing that buying the best does get you? All the best bills that go along with it. You want a Lamborghini? Rad! You’re going to pay a monthly Lamborghini-sized bill. Want to change the oil in your Lamborghini? Hell yes you do! But a Lamborghini isn’t getting an oil change at a Jiffy-Lube. Oh no! It needs to be taken to an authorized Lamborghini shop where they replace the oil with the tears of the less fortunate people who work at the Jiffy Lube down the street while you eat really fancy cheese. Did your Lamborghini break down? Sweet! Lamborghini parts are super expensive. Enjoy!
I’ve never driven a Lamborghini… come to think of it, I’ve never even touched a Lamborghini, but I’m pretty sure I still nailed the paragraph above.
I think that there are certain times where you want to buy the best. I go with the nice toilet paper as an example. That region of your body is something you want to take care of. That’s a good purchase.
Premium ice-cream is another one for me. I rarely eat it (keto until the alligators get me!), but when I do don’t even try to give me a scoop of that store-brand slop. I want the good stuff. I’m looking right at you, Tillamook.
You pick your battles.
What it all boils down to is that buying the best won’t always make you happy. Buying the best will get you higher bills, just as many headaches, and the reassurance that even if you buy the best, a newer model is probably already out by the time you get your [insert item here] home.
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