Monthly Archives: October 2014

FML, Honda Fit issues!

I just took my car in to get serviced 3 weekends ago (it had hit over 90k miles and I’ve been driving it a lot for work). Over $900 for the maintenance + brake fluid replacement, but the car needed some TLC. It was feeling great, smooth, pretty amazing. Went on a short girls’ weekend road trip a couple weekends ago, and it was feeling super smooth.

To cap off what would’ve been a great and relaxing 3-day weekend, the check engine light came on yesterday afternoon, the D for drive kept flashing on and off (even if the car was in Park, Reverse, or Neutral) and it made this Ka-CHUNK sound every time the car shifted (it’s an automatic transmission).

ARGH! Took it in to the dealer immediately and they were able to diagnose it as a transmission “clutch pressure” switch that needed to be replaced, for $700. But it was able to be done last night. Fine…but when I went to pick it up right before closing, they had realized it might be something MORE…. so they immediately refunded my $700 and now I’m on standby until later this morning when they call and tell me what’s really wrong. One guy mentioned they might need to replace the whole transmission.

NOOOOO! At which point, Mr. Bacon thinks it’s time to trade the car in. NOOOOO! Hondas are supposed to last forever! It’s a 2007 Honda Fit Sport with 92,000+ miles on it. It’s paid off and I like not having a car payment every month. But I’m afraid to dump $3,000+ into a car that may end up having more problems. Is it too much ask for it to last 3-5 more years? Just give me more time to pay off my student loans, pay for a wedding and buy a house, please!

speeding tickets, and a tentative home savings plan…

I’m really ashamed to confess that I’ve apparently gotten two speed camera speeding tickets in the last month. So embarassing! What’s extra embarassing is that my car is still registered under the parents’ names in California, so the camera snaps a photo of the CA license plate and sends it to Mom & Pop Bacon. D’oh. I’ve had red light violations go to them too. (I swear I’m not a horrible driver! Just always in a hurry! Ok, I’ll be more careful!)

So the first one got sent to Mom right before I flew home. She called me about it, laughed, and said “I’ll just give it to you in person.” It was $40, not too bad, I guess. When I finally went to pay for it online today, they pulled up TWO speeding tickets under the license plate. NOOOOOOOOO! $80 down the drain! The second one is just 3 blocks from where I work…since when did they put speed cameras there?!

Anyway, in semi-related news (as I mentioned the parents above, and the potential for living with them to save money in my previous post), I’ve been trying to craft a plan for the House Fund. Inspired in part by Erika’s old post on her “five-step five-year buying a house plan,” I’ve come up with a 3-step plan for…well, actually, the next 3 years.

Step 1. Pay off the student loan with the higher interest rate. This should be done sometime around when we get married (end of next September), and leave me with just one student loan payment a month, which is $242, instead of a combined $558.

Step 2. For the next 6 months, send the extra money that would’ve been going to student loans ($1,800 to $2,000) into the House Fund. That’s $10,800 to $12,000! (I would still send the $242 minimum payment over to the last student loan, obviously.)

Step 3. Move back to CA, and save a whopping $4,500 to $5,000 per month for 10-12 months by living with the parents. That’s $45,000 to $60,000 more, for a grand total of $54,800 to $72,000!

Holy crap, that is much more than the $50k to $60k that I projected we would need for a 10% down payment and makes it seem like such a great deal. We really do pay a lot in housing! And we do have a pretty good combined household income, it’s just that I pay a bunch of it towards my loans and we don’t live like rich people.

Of course, the numbers are also assuming many big things…for example, that we both find jobs with similar salaries that we will get to start fairly immediately…hmm, yeah, big assumptions. But do-able. If anything, the first part of the House Fund (from the first six months of savings) may end up going to moving expenses or “emergency fund” expenses as we transition to our new living situation, and the non-employment gap that exists in that space.

But it’s all very tentative at this point. Heck, it’s also only a 2.5-year span at most, I imagine the time periods won’t be so exact, so giving us 3 years from now is a good start. What do you think?

Oh yeah, after the savings plan, there’s also:

Step 4. Buy a house.

Step 5. Pay off the rest of the student loans while living in said house, paying mortgage and not rent! 😀

On second thought, moving back in with the parents may be a good idea?!

After two days of perusing housing prices in the SF Bay Area, we realized we’d have to save at least $50k to $60k to afford a 10% down payment on a place in a decent location. At least 2 bedrooms. Condo or townhouse would be ok, single family home–better. Holy crap.

My mom’s always had a standing offer for us to move back home and save money for a house (she reminds us at least once a month), and I’ve been against it for so long. Because who wants to be in their 30’s and just married and living with their parents?

But after realizing what kind of down payment we needed…and crunching the ridiculous numbers (the housing fund being nonexistent at the moment)…hey, we could just put all my income to the housing fund for a solid 12 months and have what we need! And use Mr. Bacon’s income for spending. WOW!!!

Anyone else save a butt-load of money living with their parents at an awkward age and stage of your life? I know a ton of friends that did this post-college (their early 20’s) but not too many over 30.

September: Under $74k to go! Over $21k paid off!

Huzzah! In this month’s report we hit a few milestones. Officially under the $75k mark, actually under $74k as well. A couple months ago, one of my minimum loan payments went up from $224 to $315 (that was with the “graduated payment plan” and I was actually so far ahead I got kicked up to the higher payment), so with an extra $1500 thrown at the loans each month, I actually contribute a total of $2,057.14 (same as my August payments, minus the bonus). With $207.87 going to interest, that was a whopping $1,849.27 going to principal…

For a new grand total of $73,669.03!

That’s a total decrease of $21,357.84 paid off since the blog birth, or 22.5%. Almost to the quarter mark!

September was pretty awesome, and I’m sad it’s already October now. We stayed pretty much in budget, other than our California vacation for 5 days–not nearly enough time! I got to meet my 2-week-old baby nephew, went wedding dress shopping with my mom and sister, and we took our engagement photo session with my brother’s fraternity brother (gifted to us, PF win!). We also watched the 49ers vs. Eagles game (Mr. Bacon is a huge Eagles fan), and also went to a SF Giants game. Yay! For an almost-week-long vacation, we kept our costs pretty reasonable. We stayed at my parents’ house, borrowed one of their extra cars, and hardly paid for any dining out (since most people were happy to see us and treated us…thank you!!!). The only major expenses then were the flights (still under $1000 for both of us) and the NFL tickets (just under $200 for two). Both the football and baseball tickets were bought 2-4 hours before the games on as we’ve learned it’s way cheaper that way! The baseball tix were under $17 each for mid-level seats.

Of course with seeing my family, planning our wedding, and my first nephew popping out, it’s really made us think about where we want to live long-term. Which is…back to California! I don’t think the two of us had really thought seriously about starting a family until just recently, and we both want to be closer to my family when it happens in the next few years. (My mom is definitely more nurturing and LOVES babies…while his parents are a bit older and have their own health issues.) Even though Mr. Bacon is a born-and-bred East Coast boy, he falls more in love with California each time he goes! (This was his second trip. Can you blame him? No snow or frigid winters???)

Which brings me to some research we’ve been doing recently and a potential alteration of the “Student Loans Game Plan”. We contemplated just making the move out west in the next year or so, and renting a place–but apparently there are many cheaper options renting a safe place just outside of the Washington, DC area (where we are now) than there are in the SF Bay Area. Even though the cost of living seems comparably high in both places. Emphasis on the SAFE vs. sketchy places! In fact, it seems that it’s cheaper to actually buy a place than rent it back in SF. So that realization, along with the fact that there’s no way we would move back in with my mom to save money (NO. just no!) and we really don’t want to move twice in a 2-year span, means we probably need to start saving for a down payment.

Now, I’ve been hell-bent on paying off these loans, and haven’t saved much for anything (no hefty emergency fund, retirements savings or house fund). I’ve been wanting to pay off the loans first, then save for a house, then move…before we even think about having kids. I’m 32 now…and all that might take a while! The current Game Plan would see me done with the student loans in the Spring of 2017 (when I’m 35), and then another year of saving for a house would put me at 36.

CRAP. Apparently holding your younger brother’s newborn does kick your biological clock into gear!

Well. Now my loans are still pretty hefty, and interest will accumulate hugely on a loan that’s over $70k. So what I’ve been contemplating is: paying off the higher interest federal loan (there’s still about $35k left at 4.62% interest). Which would get me down to just the private loan ($36k at 3.25%) by January of 2016–just a few months after the wedding. At that point, it’d be similar to the terms of a car loan and we could start throwing huge amounts at the currently non-existent housing fund. (Yes, I had to change “I” to “we” as we’ll be married by then!)

That would get us to where we want to go (physically) probably 2 years quicker, and financially I know I can wipe out that last student loan in 12 months–it would probably be under $35k by the time we do move. Of course as a married unit, we would have to start lumping all the different debts together, but all Mr. Bacon has now is his car loan, which would be half paid off by then. A little weird to start thinking of us merging our finances together and the long-term plans, but exciting!

Anybody have experience or opinions with the whole “Save for a house” vs. “Pay off student loans” conundrum? Or renting vs. buying in a place you know you’ll want to settle down in?