Tuesday, June 3, 2014

Our Financial Past

Hi Everyone,

Summer is bearing down on us quickly and my fiancé and I are in for a wild ride.  We have 3 weddings to attend in June, plus a graduation party.  In July we have Bachelor/ette parties every weekend, August is our wedding and then 3 more weddings to attend after ours.  With such a busy schedule, it will be nice to have a 9 day honeymoon to really relax and recuperate before getting back to our busy lives. 

More on our financial situation:

Both of us have normal 8-5 jobs making an average salary.  I am a Project Management Analyst for a government contractor and my fiancé is a Social Worker for the state. 
You can say that we live a pretty normal life.  We enjoy hanging out with friends, going out for the occasional nice dinner when we have a stressful week, and watching Redbox movies since we do not have cable…   More on that later.

I started reading other blogs on here, especially Dividend Mantra who continues to inspire me, and that has made me want to start a blog of my own.  Roughly three years ago, before I bought my house, I started to track most of my expenses to first and foremost; determine if I could afford the house I was about to buy and secondly to get a better handle on extra savings to invest.  In these past three years, I bought a house, a used truck, an engagement ring, a new roof for the house and finally new pipes (toilet, sinks, showers) for the house.  Needless to say, my savings have not been quite as good as what it could have been.  Even though this is an investing blog and savings are the utmost importance to invest and retire comfortably, I am not upset at these purchases at all.

The House:    I bought the house in February 2012 and it has a mortgage rate of 4.125% which is pretty good.  Had I bought the house 6 months later, that rate might have been 3.5% but hindsight is 20/20.  When I bought the house, it was appraised for 10% more than what I bought it for and other houses in the neighborhood are selling for 20% more now…  with the economy improving.  The house is 10 min from my work, a mile from some of the best public schools in the county and every store you could possibly think of is within a 5 min drive.   Another perk...  my parents are only 2 houses away…  free daycare when the fiancé and I have kids!!

The Truck:  The previous truck I had, 2000 Dodge Dakota, I pretty much drove the thing into the ground before I sold it.  It needed new tires, air conditioning, exhaust, radiator, and a few other things that I cannot remember.  I had the truck for 8 years..  Since I was 16.  I was sad to see it go, but it was time.  The truck I bought and that I currently still have is a 2004 Chevy Silverado which was purchased for $6,500.  A fair purchase for the amount of miles and I plan to have it for 2 more years.  I have this idea that every 4 years, unless the truck continues to run well, I will buy another used truck.  The plan is to buy a 2008 truck (model TBD) in 2016.  You can get somewhat decent trucks at a low price right around the 8 year old mark and still get a fair amount when you trade or sell the old one.  At least that’s my idea, feel free to weigh in below if you think I should do something different.  Keep in mind that I need a truck for work though.  Thanks!

The engagement ring is beautiful (completely worth the purchase and won’t have to ever buy another! haha).  My roof had a massive leak in it about 6 months after I bought the house so that’s good for another 30 years now.  The pipes were old steel pipes that were clogged all the time and my parents pipes started leaking about 5 years ago, so I figured I’d get them all fixed now and never worry about them again. 

Overall, even after all of these purchases, I was still able to save roughly 20% of my income and if you add in my fiancé, 40% of our income and put it towards investing.  Hopefully the latter half of this year and into next year, we will be able to save over 50% of our income in order to invest. 

Sorry this post ran so long, but I realized I had left out a decent amount of information from the first post.  Hopefully this post will give you a better understanding of where our financial situation stands. 

The next post will be all about our savings rate this year and the amounts that we are roughly investing every month so stay tuned.

Leave a comment below to let us know how we are doing!