Month: January 2017

Fighting back against Jewelry Judgment

Hubs and I got married before we had our financial game tuned in. We were trying to be good with our money, but we didn’t exactly know what the heck we were doing.

If we were to get married today, with our current financial awareness, we would have done a lot of things differently. We don’t have regrets, but we could have been much better with our funds.

Our old way of spending is most obvious in one shiny area. Shimmering! Sparkling, even!

My wedding ring.

My ring has a history. The design means something. The setting means something. Both of these things are incredibly important to me.

We tried to be frugal with the purchase. Hubs knows a lot of people in the pawn industry and we put them to work looking for a ring that matched my criteria. They searched high and low but couldn’t find what I was looking for. Correction: They found it, but all of the settings they found were for diamonds 5+ carats. I don’t need a 5 carat rock on my hand.

After stumbling through the pawn world and coming up empty handed, we found the ring of my dreams at a jewelry store chain. I didn’t want to buy a ring from a chain. I couldn’t help but focus on the mark up. We walked away and went home.

However, no matter how hard I tried, I couldn’t stop thinking about the ring. I’m not supposed to be emotionally attached to things, but I was. I broke down to Hubs. It was more than we wanted to spend, but he’s Hubs and he saves the day.

He went back to the store, and my glorious ring had been discontinued. It was now at a clearance price. He offered to pay cash and they gave him a further discount. The ring was still spendy, but after all the discounts, it was around 60% off. Take that, retail mark up.

But here is where things get tricky.

He only bought the actual ring. It came with a Cubic Zirconium stone as a place holder. The stone is 1 carat and to get a real diamond would be incredibly expensive.

The sales women tried to get us to buy the diamond, but we played the broke young love card and said we’d upgrade later.

We never did upgrade.

For the first few years of our marriage, I was self conscious. I LOVED the ring, but I was worried I’d be caught in my frugal fraud. Surely, someone would notice that its not a real diamond. Heck, I hang out with jewelry people all the time. Would they know that my finger is a poser? No one said a thing.

It wasn’t until this last month that I realized how silly I was in my own insecurity. I went to the jewelry store chain for my ring inspection. I’m diligent about keeping the ring in tip top shape because I love it and its my favorite.

At the inspection, the tech threw a wave of compliments my way. I know this is part of a sales pitch, but I like the reminder that my ring is in fact 17 shades of amazing. While looking through a microscope, she inspected the ring and told me my diamond was loose.

She continued chatting about my diamond as she typed up the ticket. What state did we buy the ring? Do we know what store? She was looking for something, but I wasn’t paying attention.

Then she turned around with a squished look on her face and said in a hushed tone… “Is it a CZ?”

Yes.

Yes it is.

She couldn’t tell while looking through a microscope or while it was in her hand. No one could tell over the last 4 years I’ve proudly  worn it.

Why I chose a 30 year Mortgage

The whole mortgage process can be a little daunting. There are so many steps. Pre-approvals. Actual Approvals. Providing all the documentation under the sun. (Pro tip:  Underwriting is relatively easy when you are a neurotic financial nerd like me 🙂 )

One piece that didn’t get much attention was WHAT kind of loan.

I don’t remember anyone talking to us about it. Maybe because I said with conviction that we had 20% and that I wanted a conventional mortgage. Why would they talk us into anything different?

I do remember a few comments about loan options. “We could do this if you want to put 3.5% down.” No thanks. We’ll put the full 20% down. PMI is no joke.

The biggest question I had internally was whether it was better to have a 15 or 30 year fixed rate mortgage. There is so much out there about why a 15 year is better. We chose the 30 year for one simple word.

Flexibility. 

We wanted the ability to chose when and how much extra we were putting on the mortgage. We can choose to pay at the 15 year amount or we can choose the 30 year amount. If one of us faces a job loss or chooses to Nope out of our employment, a 30 year payment gives us more options.

This is a similar approach to how I paid off my student loans. I chose to switch to graduated repayment and lowered my monthly obligation. By lowering my payment, I had the flexibility to choose where I paid extra or even if I paid extra (of course I paid extra. You know how that went!).

Going with a 15 year loan would have given us a slightly better interest rate. That was tempting. But at 3.375 over 30 years, we aren’t paying that much in interest. The 15 year rate was like 3%. The biggest interest saver between the loans was the length of the loan, not the interest rate.

I fully expect to get mad at the mortgage eventually and kill it with a vengeance.

I’ve proven with my student loans that when I set my mind to debt slaying, I can do it.

For now, I’m loving the flexibility to make the smaller payment each month. In this loan, I can always pay more, but with the 15 year mortgage, I never would have been able to less.

Did you choose a 15 or 3o year mortgage? Why?

Back In Debt

The last 3 months have been a whirlwind of new.

New House. New Job (woot! New job!)

While all of that is super excellent, that first one came with a big piece I wasn’t so excited about.

New Debt.

It has been nearly 2 years since I paid off my student loans. That’s a feat I still can’t fully wrap my head around. I still have my car loan but it’s chugging away at 1% and the balance is under $4000!

Now I have an additional $172,000 worth of debt.

*shudders*

I knew we were going to have a mortgage on our house. That was inevitable. I certainly wasn’t going to save forever to buy a house in cash. Who has time for that?

I thought I was okay with the mortgage. For 90% of me, I am. I’m cool. The mortgage is reasonable. Our payment is less than we pay in rent. We put 20% down. The interest rate is awesome (3.375%!) All of that screams “Let it ride!”

The payment is great. Adjusting for inflation, it will look even better as the years pass. It’s also pretty cool that it’ll be paid off before I’m traditional retirement age. That’s the goal right?

For the past few years when I read about people paying off their mortgage aggressively, I didn’t get it. If I can get better returns in the stock market, and I’m sure I can beat 3.375%, shouldn’t I be investing? That’s what my brain says.

But my heart is starting to disagree.

Having a mortgage until 2047 is kind of ugly. I’ll be 60. That’s twice my age from now. I have been on the planet only 3 months longer than the amortization schedule of my mortgage! My mom had a 3 month old me 30 years ago and I just signed up for debt that long.

I’m going to say No to that option.

I’m not jumping on the KILL IT IMMEDIATELY train. I have investing to do.

I’m sure I’ll come up with some crazy game to play to pay it off early.

For now I say…

SUB-2047 OR BUST