I’ve Paid For This Twice Already…

Archive for the ‘savings’ Category

I just wrote about my budget busters, just in time for something completely different to waltz right in and bust my budget wide open. It is related to one of the things I mentioned, the lack of experience budgeting - but it isn’t something I was thinking about when I wrote that post.

Argh! Well, now that that is out of my system, on to the explanation.

Wednesday night we had the blower in our furnace running to circulate some air throughout the house. When my spouse turned it off (at the thermostat) before bed, it didn’t turn off. Not being the technically savvy type, we hypothesized it was the thermostat going bad, and went to bed. Yesterday morning, I called our service company and they came out to check things out.

The technician came, and while he was troubleshooting the furnace, the fan turned itself off. Nice timing. The good news is that the technician says the thermostat is fine. The bad news is, he thinks the board in our furnace is going bad. What he said is that he thinks the relay that turns the fan on and off got stuck. The technician said he thought it would be okay until the fall, because it was the heat relay and not the cold relay. But the fan mysteriously came on again last night, so it probably isn’t okay. The only way to completely fix it is to replace the board, or replace the furnace.

The furnace is 22 years old. It has already outlasted its typical lifespan by 2 years and making a big investment of a new board in it would not be a smart long term move. Basically, this is a sign of things to come. A warning, if you will. Hey, I really wanted a more energy-efficient furnace, after all…

Coupled with the fact that I had a medical procedure on Tuesday that is sure to be expensive, we’ve decided to be proactive and shift the priority from debt repayment to saving for a short while until we get some things worked out. At this point, unless we find out the furnace needs to be replaced immediately, the debt snowball or $810.40 will continue to go towards debt repayment, plus a small bit so that we can make double payments to the spouse’s student loan (the debt snowball has $437.59 per month toward the student loan and we will up that to about $470) but all other snowflakes will be going into our savings account for a new furnace plus medical expenses. We’ll know more about the medical expense part after next week when I talk to my doctor about the results of the tests I had. But just the tests will cost money that we would rather save now versus take out of our emergency fund if we don’t have to.

This is all up for adjustment, and we may end up saving everything past the minimum debt payments if we need to of course, especially if the furnace continues to misbehave. It would be nice to continue the debt reduction in some fashion and continue to make the student loan double payments, but I am okay with not doing that if our finances warrant it. Dependent on the results of the tests I had, and our research into a new furnace, we may up the amount we need to save even more. But right now, we are guessing we’ll need about $5000 for the furnace and my tests. Once we put our economic stimulus check into savings, as well as my spouse’s additional paycheck in May (he is paid biweekly and May is a three paycheck month), plus what we have in savings already, we need to save about another $1000 to $1500. If we haven’t replaced the furnace by then, (and that number remains appropriate), we can shift back into significant debt overpayment and slay the student loan. We managed the huge car repair, we’ll manage this too. I knew things were sailing along too smoothly, and there were bound to be more bumps in the road. I was just hoping to get rid of the spouse’s student loan before we hit another one. So it turns out we may become consumers with the economic stimulus check after all, because it seems it will ultimately go towards a new furnace. The world has a funny idea of irony, that’s for sure.

Roll with the punches, I keep telling myself. This whole debt repayment thing is a huge game of adaptation. But, once more… Argh!

The technician who came for the furnace call checked my a/c unit as well and called the whole trip my yearly a/c service, so that was nice. At least I didn’t have to pay anything for that. However, the call I make this morning to have them come back… I assume I will have to pay for. But something better actually be completely diagnosed and fixed this time. Or something.

Argh!

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We’re In Debt is holding a group writing project this week talking about savings and encouraging saving.

I’ve always been a little wary of making things automated. Ever since I had an automatic debit to AT&T for my phone bill that even though I canceled it, restarted itself and started billing me for the next people that had my old phone number (which got sorted out but was a huge pain) I’ve felt irrationally biased against anything automatic. That isn’t so say I don’t have anything on automatic debit ever, but it just makes me a little more nervous than it should.

That, combined with the fact that we’re still in debt, and that my spouse gets paid on an irregular schedule in respect to what day of the month he gets paid, has made me hesitant about putting our current savings objectives on automated debits. Which is silly, because something that is forcing us to save is not that same as a bill that may or may not be ours to pay. But hesitant I am, and I’m working on talking myself into setting up automated savings through my ING account.

Every month, I save only $75 right now (excluding the 401K contribution, which is automatically deducted from my spouse’s paycheck). I put $25 in each of my two children’s college funds, and $25 into my “long term” savings fund that will eventually form the base of savings for things like replacing our car and necessary home improvements. Not a whole lot of savings, and when we are out of non-mortgage debt, I will be upping all three of those as well as adding an emergency fund savings (our emergency fund is $1000 right now and already fully funded). And of course, if I set up automated savings now, I can change it in the future to reflect our new savings goals.

Which I guess is the key to the matter for me. I’m afraid that changing it will be difficult and it won’t work correctly and it will cause a huge mess. But that is silly - I am sure it will be fine and not hugely difficult to change once I want to increase them, but the irrational voice in my head says to hold off and wait until we’re saving the “goal” amount every month.

Even without an automated plan I have been consistently saving these amounts every month - I do like the hands-on-ness of doing it myself. But it would certainly be easier to have it done for me.

So what’s your experience? Do automated savings plans make saving easier for you? Do you end up saving more using methods such as these?

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With all of the rate dropping on savings accounts in general, and specifically for ING Direct, I am starting to wonder if the ING Direct Savings account has lost its appeal compared to other internet savings accounts or even brick and mortar ones. Or is the market now just oversaturated and everyone and their brother already has an ING account?

My evidence for this is that in the past, even a few short months ago, when I posted my ING referral links, they were snapped up in a matter of days, sometimes hours. I quickly ran out of my own referrals, but was asked by readers for referrals so they could get their $25 bonus, so I started soliciting my friends to give me their unused referrals to post on my site. They were snapped up with equal fervor, until about two weeks ago. Suddenly, the referrals stopped being used very often and I stopped getting emails asking me for them.

I do still use my ING Direct account, mostly for the ease of use and the fact that it is still a much higher percentage rate than my primary brick and mortar bank. But I must admit even I, a fervent and dedicated ING user, has pondered the idea of looking for a new home for my emergency fund. I do not consider myself a rate-chaser, but I am starting to get a wee bit frustrated with the steady decline in the interest rate on my savings account.

However, if I had it to do all over again, I would still open the account, because I got a $25 bonus for opening the account with an initial $250 deposit, no strings attached except that I had to wait 30 days to withdraw that $25 bonus, so it was a very good return on my money. But now I think I might be looking for a new savings account possibly. Maybe. I’m not sure if changing banks will really matter in the long term, except that ING does seem consistently lower than many of the other bigger internet banks, so I ponder. I don’t want to be a rate chaser. But I guess I am tempted to chase rates a little.

What’s your take? Are less people opening new accounts because of the lower interest rates? Or is it simply that everyone who surfs the internet already has an ING account and has taken advantage of the $25 bonus? Weigh in with your opinion!

(As a note, I am not in any way, shape, or form compensated for the ING Direct Savings referrals I host for other people. They get the bonus. I just host them so that I always have some available for my readers or any people who find my referral page via a search. I do like ING Direct and their new customer bonus is still awesome and I see it as spreading the free money love.)

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The deed is done. The car is fixed, it is currently sitting in our garage, and a extremely large portion of what we had available in cash funds only a few days ago has been electronically zapped over to our local Saturn dealer.

We paid the dealer $2781.94. We put $800.00 on the 90 days same as cash credit offer from the dealership. Saturn Corporation has declined to accept any responsibility for the poor craftsmanship of their vehicle, so they paid nothing.

On the one hand, I’m fine. More than fine. We did it! We managed a crisis in a responsible manner and we will be more than okay. It feels accomplished. We had an emergency fund, and it did what it was supposed to do.

On the other hand, I’m overwhelmed. We just spent more than I could imagine spending on anything, in cash, on this car repair, and took on more debt besides. In a way, it feels like we just wiped out our progress. I know that we did not - we have made much more progress than this in the past year - but this is still sending shockwaves through me. I’ll adjust eventually. Maybe tomorrow.

We used to have a safety net, and we do still, but it is very very small. Since the car wasn’t ready until my spouse got paid after all, I left $300 in our emergency savings account and took that amount out of my spouse’s paycheck instead to get to $2781.94 paid. If all goes well for the next two weeks, we should be okay with that, but we still have that $300 if we need it, because I am cutting that *extremely* close to the wire. This avoids us having to pay a low balance fee on our savings account this month unless we end up using it. I wouldn’t have been comfortable sending that last $300 from the paycheck to Saturn anyhow, because if *anything* unexpected happened, and I mean anything, even a sick visit for a kid to the doctor or gas prices going up $0.10 a gallon, we’d be in trouble for the next two weeks, and with no emergency fund, we can’t afford trouble. This way, we have a little bit of wiggle room, it is just working for us a wee bit instead of sitting in our checking account, and hopefully ends up the seed money for our new emergency fund.

As for emergency funds - I have a lot of thoughts about that, but they are still forming in my brain. Until we’re back to $1000, there isn’t pressure to formally decide if we’ll save more than $1000 at this time, so I have some space to think about it. But it is percolating.

Out priorities? Leave the $300 in the emergency fund. Pay off the $800 that remains of the repair bill. Pay the last $175.17 of the credit card. Get the emergency fund back to $1000. Then consider possible next steps, and move forward. On to debt freedom.

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Trisha at Blogging Away Debt is hosting some of my ING Direct Savings $25 referral links for me!  If you want to open an ING Savings account with an initial deposit of $250 or more, pop on over and use a referral link and you will receive a $25 bonus!  I receive a $10 bonus when anyone uses one which gets deposited into one of my kids’ college savings accounts.  The links up right now are son (used, thanks!), daughter, son as far as whose account gets the bonus.

You must be a new customer of ING to use one and your initial deposit must be $250 or more.   Follow the instructions in Trisha’s message to make sure the link has not already been used.  I email Trisha as soon as I find out one has been used and she updates them but sometimes I don’t find out right away.  I just learned the first link up right now has been used (thank you!) but the other two are still valid.

Thanks so much for hosting my links Trisha!!

If you’re here looking for my weekly grocery roundup we had a taekwondo function this morning so the grocery shopping is delayed.  I’m not sure if I am going tonight or tomorrow afternoon but there will be an update this weekend :).

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