Thursday, January 3, 2008

money money money

So I got a step towards my financial resolution done last night. I met with my Aunt who is our Investor's Group chick. wow do we have a plan...

First I gotta say, hubby and I are making oodles of money. Our combined income is like $100,000 a year. Every month after bills and everything we have about $2000 that just disappears. Poof. It's all spending where we don't need to, in the bar, on clothes, I really don't know where it all goes. Hubby admits it's mostly him. (I really can't fathom that we just blow that much money each month, I always sooo cheap!) Anyway, in the next little while we want to finish the basement ($12000?) buy an SUV, pay off the little bit of debt we have ($3000) and then think about kids. So she suggested we rework our mortgage. We bought our house 2 years ago, just a month before the market exploded here. So in 2 years our house has doubled in value. So it's like we got it on sale! ;)

Anyway, she suggested we increase our mortgage by like $50,000 (or whatever number we come up with). Use it to finish the basement and pay of the debt maybe. Then take the rest ($35,000) and invest it. It will increase our mortgage payment by a couple hundred bucks so it'll be the same as just investing that much every month, only we'll already have a large amount invested so the interest will work out much higher all the time. Get it? Seems so scary though. It makes sense as long as we're earning interest at a higher rate than our mortgage is charging us. The SUV (and maybe the little debt as well) will just be a regular bank loan since you don't want to pay for your car for 25 years. but the basement is part of the house so it makes sense to be on the mortgage. Any financial people out there want to weigh in?

So if we do that and buy our SUV, we're looking at increasing our bills by $1000 each month. If we've really got $2000 that we just blow all the time, then it should be no problem. However, we blow it so fast, it feels like we don't even have it. (I have got to check up on hubby's spending a little more, I swear I only "burn" like $100 max each month on make up or clothes or whatever). Anyway, we're supposed to think it over, figure out just what we can afford our monthly payments to be and decide if we want to do this. It's exciting.

In other news. I'm going swimming today. I didn't say that as a resolution, but I'm sort of leaning towards that triathalon thing, just a sprint distance or something. But that means getting back into swimming! I used to be a lifeguard, so the training for that involved a lot of swimming (duh) so I used to be quite pro at it. But not for ages. So my sister and I are going today after work. While I love swimming, I can't stand getting out of the pool all stinky and my eyes are so sensitive they're purple, and my skin is just itchy and yucky. Plus then you're half wet trying to put your clothes back on and go home. Just gross. So hopefully I'll enjoy the swimming part enough to counter that yucky stuff.

Also, I returned a present from my MIL (didn't tell her, shh) to Costco and got a cookbook. The Jerry Seinfeld's wife one. About hiding vegetable puree in your food. Pretty good. I like the idea. It's not to hard, just a little preplanning. So last night I made a spaghetti sauce from scratch (first that was pretty cool, only took like 1/2 an hour) with all these veggies and ground chicken and then added sweet potato puree. You can't even tell, it just made it more like regular pasta sauce (thicker). Even hubby liked it. He wasn't a big fan to begin with because it was mostly veggies plus he likes plain pasta. But it didn't gross him out at least! That's my lunch today too. Pretty good.

Hubby is not doing that great on his whole "diet". I think it might just start with me telling him every time he's eating something bad. I told him it was important to eat breakfast, so he went and bought poptarts. I just laughed. I explained to him at McDonalds how the muffins had the most fat of anythign there and that shocked him. and how his salad with ranch dressing had just as much fat as a big mac. So he sorta feels like he's screwed now, the things he thought he should eat aren't right. Oh well. He'll get it. It's going to be a tough turnaround though. I think he was still gaining, so if he decreases a little bit, he'll just maintain, so he'll have to decrease even more to lose. It's just going to take a bit of time for him I think. He is doing some small things and seems really gung ho about it. Like he decided to wrestle with the dog for 10 minutes every day. and he wants to get on the elliptical more often. we'll see.

Anyway, I'm still not caught up on all of your blogs and lunch is almost over!


Vanessa aka Wheebs said...

Sounds like you've got some great plans for your finances this year! I had to giggle when I saw that you and your hubby's income is easily 5x more what Lucas and I bring in...haha! I'll get there someday I suppose ;).

Good luck with the swimming!

sherijung said...

Borrowing in order to invest is just never ever a good idea. I wouldn't use a long term mortgage for anything other than putting money back into your house. If you only have $3000 in debt, you should be able to pay it off pretty quickly with just a little bit of discipline.

Are you having cash with-held for retirement? I have no idea what the tax strategy is for you Canada, but it is usually imperative that you put money aside pre tax when you're young to take advantage of all the time you'll have before you need the money. Also, if you save a little at a time that way, you take advantage of dollar cost averaging (you buy more stock when it's cheap, and less when it's expensive). It is less risky than putting a big chunk of money in the market all at once. You can check out the website, as they have oodles of investment education resources.

You will congratulate yourself later if you keep your debt load (and monthly payments) as low as possible (which is another reason not to borrow money to invest). It leaves you more breathing room in case of job loss, or when you want to start a family and your income/expenses change.

I had to laugh at the thought of adding poptarts for breakfast--every time I ever thought about eating one (as a teen I ate them all the time) I just read the nutritional info, that cures me every time! Those things have crazy fat in them. But they are so good...

I just took a look at Jessica Seinfeld's book at Costco--I was disappointed that there was no nutritional info for the recipes, otherwise I probably would have bought it.

This comment is so long, can you tell I haven't blogged in a while? My last day at work was yesterday, so now I have to get my oldy moldy laptop up and running again. Today I'm using hubby's PC, and I ABSOLUTELY HATE his keyboard.

Sonya said...

try writing down everything you buy. It's amazing how a cup of coffee here and a lipstick there can add up! Good luck!

Colette said...

Thanks for the beautiful Christmas card...I just got it Wenesday!! Dang the mail must be slow from Canada to here huh? My daughter wanted to know if you really made it and I said yep she did....she thought it was so cool that one of my blogging buddies sent me a card from so far away!! LOL....

As for the investemnt thing I agree with sheri...borrowing to invest is NEVER a good idea. I came into a LARGE amount of money over the last few years because of the hurricane katrina and the first thing I did was pay off my house, then all my credit cards and bills, then rolled the rest into 7 month cd's...heck they are paying very well here!
I say write up a buget...journal where you spend every like mad for 2-3 months and pay all your credit cards and misc bills off! You can do it. Then I would pay extra "principal" on the house mortgage.... that will save you tons in the long run!
by paying my house off in 7 years instead of 30 years..I save 100k in just interest!! No lie!!!
Good luck'll make the right decision I am sure!!