Teaching – One Dollar Allowance

“Afford”

June 27, 2025June 23, 2025mrsonedollarallowanceLeave a comment

I had an “ah-ha” moment the other day about this word. There’s a difference between being able to afford something and wanting to afford it. So many times, we focus heavily on what people see on the outside. I hear it at work lately – I work with agents, and there are comments made about how people spend their money. Now, I agree with the “I just handed you a check for $20,000, what do you mean you have no money?” However, there’s a flip side. Just because someone pulls up in a Tesla doesn’t mean they want to throw money around.

TRADE OFFS

Mr. ODA and I have money. We can go out to dinner, go on a vacation and stay in a fancy hotel, pay for flights across the country for all 5 of us, buy another house, splurge on a vacation house and a boat. If we wanted to. We don’t.

Instead, we want to look into the future. We decided that the ability to spend time as a family, being there for the kids’ activities, and going on different kinds of trips throughout the year to give the kids experiences is more valuable.

I talk about this concept often in this blog. Every dollar spent has an opportunity cost. Every dollar spent should cause the question, “is this the best use of this dollar?” We joke about how we hesitate to buy a $30 pair of shorts, which you wear for years, yet we’ll spend $30 to eat one meal. Of course, we do have those instances where we go out to eat, but they’re not a constant staple of our household. We know that the instant gratification of that one meal isn’t going to get us to our long term goals. It’s the same concept with the $5/day coffee purchase. It’s not about the literal $5 that’s going to get you on your way to financial freedom; it’s the mentality that comes with making better financial decisions.

HOUSE POOR

When we were shopping for our first house in 2012, the bank pre-approved us for $750,000. We set our limit at $350,000. Why? Because we felt we could scrape together 20% down payment and closing costs for a $350,000 home. If we were under a $750,000 mortgage, we’d have to pay a higher monthly payment and private mortgage insurance (PMI) as a penalty for not having 20% down. At $350,000, our mortgage payment was about $2,000. At $750,000, the mortgage payment with PMI would have been about $3,500. That’s an extra $18,000 per year we would have been spending on a house instead of investments, trips, a new car, etc.

If I said to you, “pay $2000 to your mortgage, and at the very same time, put $1500 into a savings account that you can’t touch,” what would your reaction be? You’d find every excuse not to do that. You may do it for a month or two, but there would be an emergency or large purchase that comes up and you’d justify using that money for that instead.

CAR DECISIONS

While we can “afford” the Tesla, we didn’t buy it to be showy. We bought it to serve a purpose. Unfortunately, the concept of Tesla comes with pre-conceived notions for people. We didn’t pay for an extra color. We bought the base model because we weighed our expectations of using it versus the cost of extra charging needed and such. With the tax credit, our net was $38,000. I’d venture to say your car was about that price or more if you bought it new. So while we can afford the Tesla, that’s what we chose for our family because it met our needs. We didn’t buy an $80,000 BMW just for the name when a $40,000 car meets our needs.

GADGETS & TRINKETS

Maybe your spending is at the hundreds of thousands level. Maybe you’re buying the new Nintendo Switch that just came out. Maybe you’re buying each new game for your gaming system. Maybe you have bought into the influencers that are constantly jamming the latest mop and vacuum down your throat. Do you need 4 mops? Do you realize that you probably just need to actually use the one you already have and that this new gadget isn’t a miracle worker?

Everyone has their thing. There’s something that brings you joy and you’re going to be drawn to purchasing new iterations of it. I get that. But have you stopped and really considered the purchase?

This is where I don’t like the “envelope” method. People who use this concept, whether it’s literal envelopes or separate accounts, tend to overspend. They see there’s money left in an envelope and it goes into “extra” immediately in your head. “I saved this month, so I can buy myself something fun!”

This month, I replaced my favorite earrings because the originals were worn out ($12), bought a pair of black shorts because I had none ($14), bought a dress because Mr. ODA needed free shipping 😉 ($20), and two books I really want to read and aren’t available at the library ($20). Before this month’s Amazon order, my previous one was for kids summer pajamas in April. I buy filters for my vacuum instead of replacing it (although I’ll admit that I’ve had my eye on a new vacuum cleaner for about a year, but it’s been sitting at $80 and I know I’ve seen it for less than that). My mom bought me my steam cleaner mop several years ago, and I have a Bona that I bought for myself in 2016. The point here being that I’m stopping and thinking before making decisions, regardless of the amount of money I have available to me.

EDUCATION

It comes down to being an informed consumer. While you can rely on the experts, understand your own goals. When that relationship banker ran our numbers for a house purchase, all he did was ask us our fixed monthly expenses and income (debt to income ratio). Note that our approval was after the changes on how mortgages were approved from the 2008 crisis. It’s a flawed system. But we knew our limits and what our goals were. He didn’t ask us our goals outside of “so you want to buy a house.” At the same time, we were paying towards a wedding. So on top of needing to come to the table with about $80,000, we also needed $12,000 to go towards that wedding. We closed on our house on July 17th and were married on August 4.

We have money in many locations. Currently, in our main checking account, I’m projected to fall below $0 if I don’t have any income before the end of the week. I have a bank account with more than enough money in it, but it just pains me to move money out of that account. I don’t want to set the precedent. I bet if I had kept my business money separate from my personal money, it wouldn’t be as obvious. But we don’t keep things separate because the business income is our family income. So when I had to pay out over $3000 for a repair on a rental house, that ate into my personal checking account balance, so I’ll need to make that transfer.

I listened to the young receptionist at work bark about people spending their money and how someone showed up in a Tesla but can’t pay their $75 office bill. However, I’m observant. I saw that she complained to me that the money in her account showed up on the wrong day so her card was declined at Hobby Lobby. I saw that she regularly came in with a new outfit from TJ Maxx. I’m sure she got a deal, but is a new outfit twice a week a necessity? When she was let go from the job, she turned to “retail therapy.” It’s hard for me to help walk you through the loss of income while you are actively spending.

Personally, I worry, “what if the ability to transfer from our special savings account isn’t there one day?” That’s because I’m looking at the big, big, big picture of our lives, and not what happens today, this week, or this month when it comes to our finances. So that’s why I don’t buy the kids all the cute outfits I see and I don’t buy myself the latest gadget. I’d rather have the ability to go on a trip and do activities with the kids that build memories.

Rental Options

March 20, 2025mrsonedollarallowanceLeave a comment

There are options that give the tenant flexibility, while protecting your financial interests in a rental property. I talk about this in some fashion about once per year, but I like to give the reminder.

In January, I ran all my usual numbers to determine if any properties needed a rent increase. The last few years have really hit our margins – insurance has drastically increased, taxes have increased significantly, and the regular trades costs have increased over time as well. During this process, I determined that 5 houses needed some sort of increase in their rent. One was the responsibility of my property manager, and the other four I wrote up the notifications, put them in the mail, and then emailed them also.

I’ve had two tenants respond back that they intend to move in the next year, and they wanted month to month. We don’t agree to month to month options. Well, I should point out that for significant financial compensation, we would consider month to month. However, the expectation is that having a long term tenant renew their lease is less work month over month. If they’re on month to month, I’m constantly watching and waiting for their 30 day notice. Additionally, there’s a concern that their 30 day notice comes in October or November, leaving me with a mid-winter lease that I’m trying to get filled.

Instead, I provide a few options that protect me. I’ve done the “buy out” or “penalty” option multiple times in the past, and that has served me well. I haven’t needed a short term lease option, but since there are certain circumstances with these houses, I put that offer out there.

In both cases, the tenant said she wants to be able to leave sometime in July/August. This is manageable to me because I can likely rent it under a fairly quick turnaround.

Short-term lease
While I would typically require an increase in rent to cover a short term lease, I was already in conversation about rent increases, so I let it be. I offered a July 31st or August 15th move out. In both cases, I know the house is going to require work. I’d like to have the last two weeks of August available to me for construction activities, instead of going into September and trying for an October 1 lease start date.
“Buy out” options (e.g., penalty payments)
In this case, I have the tenant sign a year lease. However, the lease comes with “lease break clauses.” The penalty for breaking the lease ranges based on the time of year. In all cases, I require 30 days notice and full payment of rent through the date given as notice. If the tenant wants to leave before 8/15, then there’s no penalty.

If they want to leave between 8/15 and 9/30, then they have to pay the equivalent of one-month’s rent.

If they want to leave between 10/1 and 1/31, there’s a two month penalty. This is because finding a renter during this period is difficult. There aren’t as many people looking during the winter because most leases are spring to spring, so the turnover is fairly cyclical, and because most people are distracted with starting school and all the holidays happening during that time rather than looking to rent (or even buy) a house.

If they want to leave between 2/1 and 3/31, there’s a one-month penalty. Again, this is to cover the longer time it will take me to find someone to take over the lease period, and it provides me with a year-long lease (which most people are looking for) that ends at another inconvenient time for turnover in the next year.

If they want to leave between 4/1 and 5/31 (which is the end of their lease term), then there’s again no penalty just as there wasn’t for the first few months of the lease term. I’ll be able to get work done on the house and list it for rent, expecting a decent pool of people interested in a rental.
Lease transfer option
As a final option, which was offered to us when we lived in an apartment building, a tenant can agree to a year-long lease with no extra terms. They then have the knowledge that if they want to “break” the lease agreement at any time in the next year, they are responsible for paying rent until a new tenant is found. They can move out, but they’re on the hook for paying rent until a new tenant has sign a lease.

This is risk on their end. In some cases, I may be able to get someone in just a week or two. However, if it’s the winter, it could mean that they’re paying a month or two months worth of rent while they’re also living and paying rent somewhere else.

The only time that I’ve used this option, the tenant provided notice on December 1st, which as I’ve pointed out is not a great time to be searching for a new tenant. Since he was already not living in the house (he had moved back in with his parents), he agreed to empty the house of his furniture so that we could still show it during that time. He paid rent on January 1st per our agreement, and luckily we found someone to take over the lease as of January 7th or 8th, so I refunded him the prorated amount of rent.

The “lease take over” concept was done by a management company in a fancy apartment building outside Washington D.C. It never hurts to ask for options if you’re the tenant. Just understand that managing the rental is work that the landlord has to do, and their “profit” is how they’re paying themselves for that. Especially in today’s environment, that margin is quite small. So when they tell you they don’t want to have a lease fall through in the Fall or Winter, understand how this is their investment and their income, so they need to protect themselves, even if it’s not necessarily what works for you or is your preference. And as for landlords, treat your tenants nicely and be as flexible as you can; it always pays off for me.

Organization Push

January 30, 2025mrsonedollarallowanceLeave a comment

It’s the new year, so that means everyone’s pushing to “start fresh” and “get organized.” Someone I follow on Instagram talks about “getting organized” at least once per month. This month, she bought a new electronic tool that her husband hung on the wall to get her organized. Here’s my unpopular opinion: organization happens in your consistency, not in a new gadget or container.

This electronic calendar costs $300, unless you want the biggest one, then it’s $630. I bought a $14 chalk board with calendar boxes on it. Each month, I write the month’s agenda day by day. Then at the end of the month, I erase it and put the next month’s activities on it. It requires about 10 minutes of my time each month, which I acknowledge is more effort than an automatically synced electronic calendar (if you’re even using your electronic calendar), but I believe those 10 minutes per month are worth keeping that $300 in my bank account to use on something else that brings me joy.

Here’s the thing: the $300 calendar is only as good as your commitment to using it. This isn’t a special robot that keeps your life organized and calendar up to date. You still need to input data. Then you need to create an expectation and routine where you check that data. If you can commit to putting items on your electronic calendar that syncs with the system, why can’t you make the commitment to consistency in other areas? That’s all it comes down to – consistency.

I don’t disagree that there are some people who benefit from this product. But I’d venture to say those are the people and families that are already organized and already have systems in place to provide a well-oiled-machine type household.

STRESS AND MESS

I haven’t delved into the topic in detail, but the blurbs I’ve seen have stuck with me. I think they ring true. “A 2009 study found that mothers with cluttered homes had higher levels of the stress hormone, cortisol.”

The people I know who have high levels of stress and anxiety are also the people who have a lot of clutter in their home and office. They’re surrounded by a lot of distractions and don’t keep a routine, have systems, or make an effort to eliminate the mess. Less things to tidy up, means less time putting things away or finding a home for things. Everything having a home and putting things in their home as soon as possible are good first steps.

MY KEYS TO SUCCESS

Everyone has a different way of thinking, so this isn’t a one-size fits all situation. However, I do have a few things that I do that could be little nuggets into improvements in your day.

Room “Sweeping”

Another thing I’ve seen on social media is that expectation that things are put where they belong in one action. The concept seems like a good idea, but to me, it provides for inefficiencies and everything taking longer. If it takes longer to complete a task, then I don’t think it’s something you’d keep up with.

The idea is that instead of placing your keys on the counter, which then need to go on a key rack or in a drawer, you just put them there to begin with.

Where I see a flaw come in, is that when I’m tidying after my family, if I pick up one item that goes to the basement and put it away, then come upstairs and find another item that needs to go to the basement, I’ve waste that time walking up and down the stairs. Instead, I move room to room.

I usually start in the living room. I move items to where they belong. If they go in the living room, they get put away right away. If they go to another room, they just get placed on a surface (e.g., cups and bowls are placed on the kitchen counter, basement toys are placed at the top of the basement stairs). Then once that room is tidy, I move on to the next, which is probably the kitchen table. The table gets cleared and items get placed in the room they belong in, unless it’s the living room, then it gets put away since I already cleared that room.

I do my best to complete this task all at once. I do the kitchen last because I know an unkept kitchen drives me crazy, so it motivates me to complete the other rooms so that I can get the kitchen cleaned up.

I’ve seen basket concepts too. I haven’t tried this out, but it seems to be generally the same concept. The only issue I’ve noticed is that there’s no expectation that it’s cleared out daily. Once the items are in a basket, it doesn’t seem the room is cluttered anymore, so it doesn’t motivate the final step of clearing out the baskets and putting the items away.

Resets

My days are significantly better if I wake up to a clean kitchen and house. If I need to clear dishes from the sink, pick up toys in the living room, and wipe off the table and counters, then I’ve put my ‘morning chores’ 15-20 minutes behind. I learned that I appreciate focusing only on morning chores in the morning, so I make sure I tidy up the house before I go to bed.

My morning routine is simple, but I know it takes at least a half hour. I empty the dishwasher (which is essentially ran every other night), make the kids’ snacks and lunches for school, get their water bottles filled and set on the table, lay out their vitamins, start my coffee, and get the dog ready for the day. It’s the same thing every school day morning.

I also know that I much prefer to have it all done before any children wake up. They create a distraction. Tasks that take me 3 minutes now take me 8 minutes because I’ve been interrupted several times. While I’m trying to empty the dishwasher, they can now see a plate or cup they want, and then they start asking for these things. While I’m trying to make someone’s lunch for school, they’re asking me what I’m giving them and now having an opinion on whether they want it or not. If everything is done and out of sight before they wake up, it eliminates those distractions and I can accomplish tasks quicker and more efficiently. It also gives me the ability to give them attention for their stories and their breakfasts requests once they start waking up, so I’m not flustered or forgetting steps of the morning that make the rest of my day feel successful.

I used to require all dishes be put immediately into the dishwasher. There was no reason to set a cup in the sink when it could have easily been placed in the dishwasher without having it sit in the sink first. Then I had 3 kids. There’s no way I can keep on top of the dishes, and the fact that they even clear the table and put things in the sink at their ages is a huge win. Instead, I just make sure that before I start any meal, the sink is emptied. One, it allows for no distractions in my own head (because I know that I will see dishes and keep thinking about them being there when they shouldn’t be). Two, it clears out the sink so that I have room to fill pots with water or dump dirty things into the drain (I can’t stand when plates are rinsed off on top of other plates, leaving those plates with a greasy film that I then need to touch). Keeping up with a reset before each meal means that it doesn’t get to an overwhelming point at the end of the day that’s taking a lot of focus and time.

SYSTEMS

Organization comes down to systems. You don’t need to spend a fortune to create organization in your life. Sure, bins here and there create a distraction-free, clutter-free environment. But having an aesthetic container that you pour a box of cereal into creates another step for you to be successful, and it doesn’t gain you anything in the organization realm.

My pantry isn’t organized with perfectly matched bins or containers, but it’s organized. I have all our cereal boxes on one shelf. I expect those boxes to go back on that shelf, not left on the counter and not just put anywhere in the pantry. Cereal has a home. Pasta has a home. Appliances have a home. Every once in a while I realize that we could benefit from having a container, and I’ll get a bin to house several tiny things that kept falling on the floor when someone touched something else. Overall, everything has a home in its original container.

Don’t get me wrong, there are clean ups that need to happen in my life. There are 5 of us touching things in that pantry and this house, so things aren’t perfect. However, everything has a home. There’s a well-known expectation that things are put where they belong (especially since mom answers enough “where is…” questions here).

SUMMARY

The general concept is that your desire to get organized is fueled by your own actions and thoughts. It’s not going to be ‘fixed’ with expensive gadgets if you’re not willing to put the effort into the follow through.

Don’t take this as I’m perfectly organized and have everything under control. I cheat. The last load of laundry is in the dryer. If it stays in there instead of on my bed, then I don’t have to deal with it until I really need or want to. This happens about 75% of the time I do laundry… that last load just lays in there until the next time I do laundry and need to move things along. I also have learned that if I fold the clothes during the day, then I can put them away right away. If I fold clothes after the kids go to bed, then they sit on my dresser for days because I couldn’t immediately put them away while they were sleeping, and I’m typically only seeing them and being reminded while I’m in the middle of another task.

So on top of creating systems and expectations for your household, it’s a matter of finding what makes you tick. When you’re successful at keeping the kitchen clean, does it make you feel like you have better control over the rest of the day? Find these little items that you can be successful at so that they snowball into bigger actions – all of which can be done for free.

Rental Profit Calculations

January 23, 2025January 7, 2025mrsonedollarallowanceLeave a comment

When we consider purchasing a house to be used as a long term rental unit, we perform a “cash on cash” analysis. I’ve discussed this in the past, and I regularly share this with other people for their use. The gist of this calculation is to determine whether we would get a return on the cash put into the house.

The calculation considers the cost of taxes, insurance, homeowners association fees, vacancy expectation, maintenance expectation, costs to get the place rented, property management, etc. This is compared to the projected rental income. The upfront costs are compared to the annual cash flow projection. That ratio is hopefully in the 8%-10% range to be considered a reasonable cash flow to look further into the purchase.

Since we’re not really looking to purchase properties these days, I use this spreadsheet to consider changes in a tenant’s rent when it’s time for renewal. I kept all the original cash flow amounts to see how things change over the years. As I sat down to determine what changes, if any, are needed in the rents I charge, it was disheartening to see how our portfolio has dwindled in profitability over the years.

A few years back, housing prices skyrocketed, which drastically increased our taxes owed. Unfortunately, I hadn’t increased everyone’s rent consistently. I kept many people level or did small increases every two years, but that means I’m now “behind the 8 ball” in trying to make up for those drastic increases that happened in 2021-2022. In addition to tax increases, we’ve also seen huge insurance premium increases that weren’t projected in our portfolio.

Our total “cash on cash” started at 11.42%. It’s now projected to be 7.58% – if the increases I project actually go into effect over the next few months.

We historically increased long term tenant’s rent by $50 every two years. Some of these tenants have been with us for over 5 years, and the $100-200 changes in their rent have not covered the increases we’ve seen. I hadn’t worried too much about it because the losses on those houses were offset by houses where we saw greater margins. Now, everything has leveled out, so those losses are felt harder.

The table above shows the change from our original “cash on cash” to our current status. In some instances, we’ve been able to increase our margins. But there are 8 instances our margins decreased, with some being drastic. Even though some are drastic decreases, there are only 5 properties that fall below the 8% goal we have.

For Property2, the projection shows that rent would need to be at $2,500 for us to hit our cash flow goal. The rent is currently at $1,600. The neighborhood doesn’t call for $2,500. I also don’t want to be in a position where I’m floating someone’s rent at that price. From the time we bought the house to now, our taxes and insurance have increased by $1575. That number only continues to grow. Our insurance started at $390 and is now at $765. Our taxes started at $1,500 and are now at $2,700.

On top of the obvious ones like that, our maintenance costs have also increased. As one example, our HVAC technician first was charging $125 per site visit. He now charges $325 just to show up. I’ve found someone who charges $200, so I’ve been going with that guy, but just knowing that there’s been such a change in pricing structure needs to be factored into our costs.

These are really big affects on our houses that a tenant and the average public opinion don’t seem to grasp. I don’t get paid hourly or per transaction I perform to manage these properties, so that decrease of 3.8% in our cash-on-cash analysis is actually a net loss in my “income.” In many cases, we catch up when there’s tenant turnover, but watching the rent compared to our expenses are things that I need to be more on top of year-to-year.

Interest Rates & Value of Money

December 5, 2024November 20, 2024mrsonedollarallowanceLeave a comment

We bought a Tesla. In the process, they’re offering a 0% APR promotion. They let you see how your credit rating affects your monthly payment (through different APRs). The final column in the table below shows the increase each level adds from the previous level.

This is based on a 60 month term. So, ignoring the promotional option available, between the ‘>720’ and ‘680-720’ would cost you $39 per month. That’s a total of $2,340 over the loan term. By using the promotional rate, that’s $88 per month “saved,” which is $5,280. Don’t let it be lost that working on your credit history and credit worthiness is something that pays off into the future.

When we look into a large sum of money leaving our account, we consider the “net present value” of the dollars. The net present value is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. Investopedia uses the following over-simplified example. “An investor could receive $100 today or a year from now. Most investors would not be willing to postpone receiving $100 today. However, what if an investor could choose to receive $100 today or $105 in one year? The 5% rate of return might be worthwhile if comparable investments of equal risk offered less over the same period.”

The 0% interest loan through Tesla is for about $40,000. Mr. ODA calculated that our net present value of money, based on our approximately 4% savings interest rate, is $36,017. Taking nearly $40k out of our savings account wouldn’t be a financial problem, but it’s not the smartest financial move in our portfolio. Instead, we’re going to pay about $580 per month, while the “balance” of that $40k earns interest. At 4% interest, the balance of $40k earns nearly $1,000 in a year. That balance will continue to dwindle, therefore lowering the interest earned each year, but it’s still a significant sum of money. In the first few years, the interest earned is essentially paying a couple of months worth of the car payment.

By being conscious of our financial standing in the world, we’ve set ourselves up for earning these promotions. Had our credit worthiness been below a score of 720, it would have cost us over $5k more over those 5 years of the loan. While I understand that purchasing a Tesla may be considered a luxury, this concept and awareness can be applied across all financial decisions, which is why I wanted to highlight it here.

New Credit Card

November 7, 2024mrsonedollarallowanceLeave a comment

Over a year ago, we opened a new credit card because we replaced the carpet in our house. This year, we finally were able to make a purchase we’ve been waiting for: a hot tub.

Mr. ODA has wanted a hot tub for a while. We did some exploratory searching in May, thinking our deck project was nearly over. Then the waterproofing was never waterproofed. The contractor ghosted us on it. Mr. ODA bought his own supplies, but it was never enticing to tear up our brand new deck boards in 95 degrees to diagnose and fix the problem. We finally got around to that project in August. Once that was done and life calmed down a little bit, we decided to put more effort into the search. We went to 3 different places one day to get information. Then we sat on that for a week and decided on which one we liked the best and ordered. They told us 3 weeks, and it’s expected to be delivered and installed this coming Tuesday, which is over 5 weeks from our down payment, but such is life.

WHAT WAS THE BACKGROUND?

When we were in the process of IVF to have our first child, Mr. ODA was discouraged by the lack of financing availability. We could either take out an outrageous personal loan, or we could pay it in cash. Their “guarantee” program was $22,000. Up front. That didn’t include the medications that were bought separately.

We never like the idea of paying large sums of money out at once if we can help it. We make our money work for us.. meaning money is constantly moving and being invested in short term securities for us to earn interest on it. Mr. ODA had the idea to open a 0% interest credit card for the IVF payment, and this idea has carried us through several large purchases now.

WHY A CREDIT CARD?

By opening a new credit card, which we strategically pick, we give ourselves a personal loan for 0% interest.

A personal loan averages 12% at the moment. Since we have the cash available to pay for a hot tub outright, paying any percentage of interest to a bank is not something we’re interested in. We could just pull about $10k out of our savings account, our short term securities, or cash out a taxable investment. However, that costs us interest that we’d be paying ourselves. In our savings account, our current balance yields us about $120/month in interest earned. If we reduce that by about $10k, we’d lose about $30/month in interest payments. Instead, a new credit card is opened. It gives us the ability to pay the minimum balance (or more if we want) each month, leaving that cash in our account to earn interest or be invested.

WHICH CREDIT CARD?

When we search for a new credit card, not only are we looking for 0% interest rate for an introductory period of at least 12 months, but we’re looking for another incentive. Many people were talking about “credit card hacking” a few years back, where they’d open a new credit card to get the bonuses and then render that card obsolete (not close it). There are negatives to opening too many credit cards that I’ll get into later.

Not only are we looking for 0% interest, we also would prefer to receive another incentive for the credit hit. This new card gives us $200 cash back for spending $500 in purchases in the first 3 months, which we’ve done without any problem. This particular company has other options on the market. One card gives you 4% back on certain purchases, but there was no introductory rate on purchases. Other cards have an annual fee, which we try to avoid unless it’s glaringly obvious that you’re going to make that fee back in rewards you can’t get elsewhere (e.g., I’m not going to pay a $99 fee to get 2% cash back when I have a credit card that gives me 2% cash back without a fee).

Typically, these credit cards don’t offer us a better incentive than other cards already in our portfolio. However, this new card actually gives us 2% cash back, which is the same as the Citi Double Cash card. This will change our equation of managing the balance a little. Historically, I’ve had a balance on the new credit card, paid $500 per month towards it, and then paid it off before our introductory interest rate period expired. The balance almost always was decreasing, so I knew what I was working with. This card is being used more often, with 4 transactions in the last 3 weeks already on it. I’ll be interested to see if that changes how I manage the balance.

WHAT ARE THE CAUTIONS TO CONSIDER?

First of all, the most important thing to consider is where this purchase is something that you can and want to afford. When your money goes towards one thing, you’re taking it from something else. Weigh whether that’s worth it. In the case of IVF, having a child was more important than any other place those dollars could have gone. In the case of the new carpet, all of the carpet in the house was old and, frankly, disgustingly stained; I wanted the carpet replaced as soon as possible so that I could enjoy what I was living in. And now, the hot tub. This is one of the few splurge purchases we’ve made. We have gotten to a point on making decisions that bring us joy. We were also gifted money over the last year or so that was earmarked for this.

When putting a large sum of money on a credit card, you can’t forget about it. You still have to make the monthly minimum payments. If you don’t, you could have to pay back all the free interest you’ve received thus far and/or start paying interest (to the tune of 22%…so that’s $2,200 in interest on a $10k balance) on the balance immediately. You also need to be able to pay the entire sum by the end of the introductory interest period (or, again, you’ll be paying interest on the balance).

For the credit card that we used to pay for new carpet and new windows on a rental, we put nearly $12,000 on the card in October to December of 2023. We also used it to make 2-3 more relatively smaller purchases. I paid $500 every month towards it. The minimum payment was typically around $100, but I wanted to see the balance dwindle a bit faster than just the minimum. My current balance is $6,500. I’ve been been monitoring our money movement for a month or so, preparing to pay off this balance no later than December 13th (I appreciate this company explicitly listing the date of the introductory rate expiration because they don’t always do that). A balance of $6,500 is obviously less than needing to outlay the full $10k-12k last Fall, but it’s still not a small chunk of change that needs to be fit into our cash flow right now.

Opening a credit card will affect your credit score and history. This may not matter to you if you don’t have any large purchases (e.g., buying a home) on the horizon where you’ll want the highest credit score you can get yourself. However, if you believe there will be large loan-seeking opportunities in the next 1-2 years, opening a new credit card should be carefully considered.
– It’ll count as a hard pull on your credit, which degrades your credit score for one-two years. Credit Karma says the “ding” on your credit lasts only about 3 months, but too many at one time could cause a bigger drop in your score.
– Opening a new card lowers your average credit history. This is why people say not to close any accounts. If you close an older account, it brings your average down. My average is currently 6.5 years, and it’s listed as “fair.” If you have old cards that you’ve kept open, you may need to use it for a transaction to keep it active and open.
– If you’re adding a large sum on the credit card, your credit utilization could be higher than preferred for your credit score calculation. According to Credit Karma, you should be below 30% credit utilization, and being below 10% is even better.

SUMMARY

If you’re about to make a large purchase that you’ve considered carefully and have decided is worth the cost, then opening a new credit card with a 0% interest for an introductory period could be a beneficial option. It’s a way to give yourself a personal loan for no interest. Be sure that you have projected the cost over the course of the introductory interest period so that you know you’ll be able to pay off the balance in time, and that you make all minimum payments on time.

School Lunch

September 19, 2024November 20, 2024mrsonedollarallowanceLeave a comment

I grew up in a private school setting, and we didn’t have a cafeteria that made us food to purchase. Everyone once in a while, we’d have “pizza day,” where we could bring in a dollar or two and buy pizza that they had delivered from somewhere. My high school had a full cafeteria that prepared breakfast and lunch to purchase. It was a private school, so there weren’t any state subsidies. All that to say, bringing my lunch to school wasn’t even a thought. I packed a lunch and a snack every morning. In 2nd grade, I started doing that for myself and my sisters because my mom was really sick, and it just stuck as a chore I did.

I have a child who just started Kindergarten last month. Since my background was bringing my lunch to school, I expected to pack his lunch too. He’s bought school lunch just once so far, and it was for his birthday. I figure there will be a few days throughout the year that he’ll want to buy lunch, but so far he’s content with my packing it.

Last week, I was volunteering at the school, and another mom said “I don’t bother packing anything. For $2 they get breakfast and $2.75 they get lunch; I can’t make meals for that little.” And so, this post was born. Now, I don’t know the outcome, but my hypothesis is that what I pack for his meal is less than that. So let’s dive in.

BREAKFAST

First, breakfast for my kids nearly every day is cereal. That’s their preference. For all the things we don’t buy name brand, cereal is one we keep name brand. We buy it on sale on Kroger. Mr. ODA likes to stock up, even though he admits that the sales are every other week and we may not need 5 boxes of Honey Nut Cheerios in our pantry at any given time. 🙂

We paid $2 per regular-sized box. The box says a kids serving size will get 12 servings per box. That would come to $0.17 per bowl. Regardless, I do know that $2 per box is less than $2 for one breakfast though.

My kids don’t eat much for breakfast. At home, they have a snack around 10, a hearty lunch, another snack, and then dinner. They’re really good about eating when they’re hungry and not eating when they’re not. Even when my son got free breakfast at the orientation events, he ate a partial bowl of cereal and some fruit. We go through a lot of fruit in this house. But mornings before school don’t have the time to get fruit and cereal into him. I forced it on testing mornings, but he still wanted to eat just the fruit and nothing of more substance, so I had to bribe him.

LUNCH

This is where fruit comes in. We also have fruit as part of the after school snack.

Here are some options that I mix and match throughout the week (though not exhaustive). I’m also taking suggestions!

Yogurt Covered Raisins: $2.97/pack, 6 in a pack = $0.50 each.
Clementines: $3.50 per bag. I’m estimating there’s about 20 in a 3 lb bag. $0.18 each.
Grapes: We purchase these at $0.98-1.98 per pound. At the high end, for what I pack, I’m going to assume $0.20 per serving I give.
Oreos: Family size is $5.28 with maybe 48 cookies (that was a quick google). I put two in his lunch box if I put any at all, so that’s $0.22.
Fruit snacks: Honestly, we have a gigantic box that was given to us at some event, and that’s lasted us since the end of last year’s school year. But I’ll include this cost anyway because eventually I’ll buy more. $15.99 at Costco for 90 = $0.18.
Applesauce pouches: I buy Walmart’s version of this. $5.68 for 12 pouches = $0.47 each.
Peanut butter and jelly sandwich: A jar of peanut butter is $1.94, jelly is $2.74, and bread is $1.42 for 20 slices. The bread is $0.14 per sandwich clearly. The other two are harder to quantify, but both are minimally used per sandwich I make, so let’s say $0.15 total for those, bringing a sandwich to $0.19.
Chicken nuggets: $5.97 for a 32 ounce bag. I have no idea how many are in there. The package says 4 nuggets are a serving and there are 12 servings in the bag, so let’s say there are 48 nuggets. That seems low though. That means each nugget is $0.12.
Pizza: We seem to have pizza once per week, and there always seems to be 1 or 2 slices left over. $4.97 for the pizza, where we get 8 slices, so $0.62.

If I pack a peanut butter and jelly sandwich, grapes, clementine, and oreos, that’s a total of $0.79. Today I put a PBJ, raisins, grapes, and oreos. He actually got 3 oreos because there were only 3 left in the package; that total came to $1.22. Yesterday’s lunch was 7 nuggets, an applesauce pouch, grapes, and a clementine; that came to $1.69 (actually, that doesn’t include the bit of ranch I put in there, so perhaps add a few cents).

The first few weeks of school, I had been putting more food than this in his lunch box. He had told me he was eating everything, but grandparents day had grandma eating with him so she saw he was throwing some things away. I had asked him repeatedly to tell me what he likes or doesn’t, or if there’s not enough or too much food so that we can make adjustments.

There are other things like puffed corn, chips, and cheez-its that I buy for his snack. He eats lunch at 10:30, so they give him a snack in the classroom at 1:30. There’s no option to buy a snack at the school at this time, so everyone needs to pack their own snack.

SUMMARY

By the time my child gets home from school, I’ve spent approximately $1.80 to feed him for breakfast, lunch, and snack. On the high end, it may be about $2.25. This also assumes that the child is happy to eat all the options presented for the meal. When my son bought his lunch, he ate the orange slices, bread, and half the spaghetti. He didn’t touch the broccoli (that I put on his tray for myself), and he didn’t even pick from all the options presented in the cafeteria line. Whereas I know what I’m packing includes things that he eats regularly at home.

While I agree that $2.75 for a meal is cheap relative to buying at a restaurant or fast food, the assumption that it’s cheaper than what you could pack a lunch for doesn’t appear accurate.

Buying versus Renting

August 22, 2024mrsonedollarallowanceLeave a comment

I have a tenant who, in the same day, told me that she couldn’t pay rent on time and asked whether she could buy the house. She said she paid $60,000 to me and that could have gone towards owning a house. While I understand the lump sum of what you paid being a pain point, owning a house isn’t that simple. I thought I’d break down a comparison of what she would have done to own this house versus her renting it over the last several years.

RENT HISTORY

Based on the proximity to Main St and the comps in the area, we went into the purchase expecting about $1,000 per month in rent. At the 1% Rule (where you set monthly rent at 1% of your purchase price), we should have been at $1,020. Knowing that it was October/November by the time we would get it rented (there aren’t as many people looking for a new rental in the Fall, after school has started and holiday activities are ramping up) we chose to list it at $975 and keep it below that 4 digit threshold. It sat for 3.5 weeks with hardly any activity, and we dropped it to $875. We found a tenant in under 2 weeks then, but we weren’t thrilled amount our cash flow on it.

The tenant’s lease started on November 1, 2019. Her rent was $875. My property manager incorrectly established a one-year term lease instead of an 18-month lease like she was supposed to, so we had to do a 6-month extension after the first year. Then in March 2021, we tried to increase the rent to $900, and she complained that due to the pandemic, she couldn’t afford that. We let it go and she renewed a year lease at $875.

Come February 2022, we were significantly under market value for rent and she hadn’t been a friendly tenant, so we were content pushing a raise to $950. If she didn’t want to pay that, she was free to leave and we would take the vacancy hit to fix it up and get it re-rented. She complained about the increase, and our property manager told her to take a few days to look around to see if she could find somewhere to rent that was at a price she would feel more comfortable with. She came back and said she couldn’t find anything and accepted the increase to $950.

Not including a few late fees she has owed over the last nearly-five-years, she’s paid us $52,850. While in total that appears to be a significant number, that number does not mean that you’d have $52k in equity in a home had you paid towards a mortgage.

OUR PURCHASE INFORMATION

We paid $102,000 for the house in 2019. We asked for several options for the loan structure. We asked about putting 20% versus 25% down, and whether the rate for a 15 year, 20 year, or 30 year loan would have the best rate. Going through those details is something I’ve done in the past, so for this purpose I’ll just note that we chose to put 25% down because then we didn’t need to “buy down” the rate. The rate for each loan length was 4.55%. With no incentive to do a shorter loan term (and therefore increase our monthly payment), we chose the 30 year term. I do want to note that our interest rate is higher than the average for 2019 (3.9%) because it was an investment property and not a loan for a primary residence.

Based on the 25% down and the closing costs, we had to come to the table with $26,589.12.

Our mortgage was $538.46, which includes escrow. We paid off this loan fairly soon after we closed on it, so we don’t have a monthly mortgage payment. However, I do need to plan for our current mortgage and insurance payments each year, which is currently over $2,000.

FACTORS TO CONSIDER

To keep this more consistent in the message, note that the loan discussed will be based on the purchase price of $102,000.

First, you need to have favorable credit to qualify for the mortgage. In an example, the lowest credit score I could plug in was 620. However, in much of what I’ve read, anything below 680 is questionable on qualification. Our requirement to rent a property is to have a credit score of 600. Perhaps there are lenders that will process a mortgage if your credit score is below 620, but you’re going to pay a premium via the interest rate.

With a credit score of 780, say you’ll have a rate of 6%. But then with a score of 680, you’re looking at 6.5%. At 6%, your principal and interest payment (doesn’t include the escrow required) would be $599.19. At 6.5%, it goes to $631.69. That’s only $32.50 per month extra; over 30 years, that’s an extra $11,700 paid to the bank. I have some tenants where an extra $32 per month is a big deal.

Without at least 20% down on a loan, you’ll likely have to pay private mortgage insurance (PMI). This amount could add a monthly premium to your mortgage payment anywhere from 0.2% to 6%. I did a quick calculator with the example of $102,000 purchase price, $3,060 down (typically the lowest available without any special loan structures is 3%), and a credit score of 620 (lowest it allowed). The PMI was calculated as $187 each month.

I mentioned that our final closing costs were over $26k. If I remove our down payment, that leaves $1,089 in closing costs. I will note though, that our contract had $2,000 in seller subsidy (a credit). Without that purchase agreement structure, that means your closing costs are actually $3,089. This means that you need to come to the table with $6,149. Buying a house is not like buying a car where you can roll all the costs into the loan, and I feel like people don’t realize this.

Your debt to income ratio also plays a factor in whether you can qualify and what your interest rate would be. So even with a decent credit score, you need to show a low debt-to-income ratio, meaning you can’t have your credit cards maxed out. The lender wants to see that you don’t have high monthly costs that would prevent you from paying your mortgage.

That brings me to the flexibility of paying rent. She paid $475 worth of August rent (due August 1st, with a grace period to August 5th before a late fee is owed) on August 20th. If you pay your mortgage late, there’s a late fee and it gets reported to the credit bureaus. Your late payment of rent doesn’t get reported to anyone. She also has the extra advantage that I’m willing to work with her on late payments. An apartment complex type owner is going to immediately file for eviction on the 6th without full rent payment, regardless of your story.

SUMMARY

While a mortgage payment of $538.46 looks favorable against a rent payment of $950, it’s not that simple. I was able to qualify for the mortgage, qualify for a favorable interest rate, and put significant money down.

If I add a premium to the rate we were able to get, assuming my tenant’s credit score is similar to what it was when she rented our house, and then add the PMI that would be applied by not having 20% down, then the mortgage payment (including escrow) would have been $903.02. PMI stays on the mortgage until you reach 78% loan to value ratio (unless you pay for an appraisal and can prove 80% earlier than that). That threshold in this example is $79,560. That principal balance would be achieved in over 11 years, which means you’ve paid $25,058 for essentially nothing.

Then on top of paying these premiums for the mortgage, she would need to pay for the maintenance of the property herself, which is included in my rent factors. I’ve paid over $3,000 for repairs and maintenance on the house over the last 5 years (which is fairly low). However, that includes a deck replacement that we did ourselves and probably would have cost $4,000 instead of the $400 we paid in materials.

So the next time you think that you could be paying half of your rent with a loan, know that you’re not looking at the whole story. There are many factors that go into a mortgage, especially the initial ability to qualify for such loan.

5% Rent Cap

August 8, 2024August 2, 2024mrsonedollarallowanceLeave a comment

The President issued a statement calling on Congress to cap rent increases at 5%, specifically for corporate landlords. The statement appears to define corporate landlords as those owning over 50 units in their portfolio. This was not an executive action that is implemented. And while my numbers are different than the numbers of a “corporate landlord,” I do think it’s worth hearing a landlord’s side. I feel that there’s a lot of spite against landlords without a lot of knowledge about their actual financials.

I admit that there is a possibility that some of these companies with large complexes could be raking in on the fees or “utilities” that are in the unit, without actually providing a properly maintained building, but that’s not the case for everyone that’s labeled as a landlord. No one seems to step back and see that this is a business model for landlords, and while everything else around us is increasing in costs, rent needs to as well.

No one predicted such a significant rise in product costs or housing costs in such a short period of time, but here we are. And landlords aren’t in the business to graciously eat the costs of homeownership for renters.

LANDLORD COST INCREASES

The Presidential statement released refers to a press release that starts with, “Today’s U.S. Labor Department Consumer Price Index (CPI) report revealed costs remained largely unchanged in May, with overall inflation cooling faster than economists expected as the Fed considers finally reducing interest rates below a 23-year high.” Is there a comparison to costs that landlords had to take on because the costs of everything increased faster than expected back in 2020-2022? Increases have been seen on small things like a maintenance call for a technician, but also big things like property taxes and insurance.

That same article goes on to state, “Since 2019, the cost of rent has risen 31.4%, with wages only increasing 23%, as tenants on average need to earn nearly $80,000 to not spend 30% or more of their income on rent.” In 2019, on one of my properties, the taxable assessment was $95,000, which equated to about $1,200 per year in taxes. In 2024, the taxable assessment was $242,000, which equates to about $3,000 per year in taxes. That’s a 61% increase in just my taxes over that same period of time where they’re complaining that the cost of rent increased by 31.4%. If rent had been set based on the 1% rule in 2019, rent would have been $950 per month. Had I increased 5% each year from 2019, it would be $1,212 in 2024. If I set rent based on the 1% rule now, it would be $2,420. However, the rent on the property is $1,750. So while it’s more than 5% each year since 2019 (the baseline the government is using), it’s set at an amount where I capture my expenses for owning the house, while also turning a small profit.

It’s taboo for a landlord to turn a profit, but that’s why we’re here. It’s an income stream that we’re establishing for profit. I don’t get to pay myself an hourly rate for managing the property. So this “profit” can actually be looked at like a salary. Every time I need to show the property to a prospective tenant, the lease signing, the walk through, every call or text you make, every trade that I need to schedule and coordinate with the tenant on, any fixes or improvements that I do myself. All of these minutes in a day add up, and I’m not directly paid for any of them.

On the particular house that I’m using for the example, we are assuming $300 per month in profit, which comes to $3,600 per year. Would you work as a manager of a company (e.g., hiring trades to fix things, performing maintenance, making sure all bills are paid timely, general management of having liabilities), for only $3,600 per year?

I wrote a post last Fall about the changes in my rental fixed costs from a year prior. I plan on doing the same this fall when more tax information comes due. The house I’m referring to has been at $1,750 for the past two years. However, between 2022 and 2023, my taxes and insurance have increased by $255 per year. That’s a cost that I’ve “eaten” from my “profits.” I could have said that equates to $22 per month increase, and I could have projected a similar increase for the year coming. I could change their monthly rent to be $1,790-$1,800 to keep my profits on a similar path. However, I didn’t, because they’re good tenants that haven’t had many maintenance calls.

However, if I don’t increase every year, then I could find myself in a sudden deficit like I did during the pandemic because costs increased faster than projected. A 5% cap could actually incentivize annual increases because I wouldn’t want to be caught behind and not able to catch up down the road.

LEASE TERMS

The Federal Housing Finance Agency announced protections for renters in multifamily properties that are financed with loans backed by Fannie Mae and Freddie Mac. The protections include: (a) requiring 30 day notice before rent increases; (b) requiring 30 day notice on lease expirations; and (c) providing a 5 day grace period before imposing late fees on rentals. I know for a fact that every single lease I’ve executed personally already has all of these requirements in it, at a minimum. In many cases, there’s a clause for 60 day notice of a potential rate increase, with negotiations being completed before 30 days from lease expiration.

Some states already have this codified. Other jurisdictions have landlord/tenant agreements that give the tenants rights (and awareness of rights) that can be lobbied against if the landlord is noncompliant.

There’s a clause that I’ve seen that requires expired leases to auto-renew on a month-to-month basis instead of for another year. I would argue that a requirement to renew a lease month-to-month instead of annually actually hurts a tenant. A landlord then only needs to give 30 days notice of a rent increase, and they could technically increase it month after month.

SUMMARY

If the ‘cap’ were to apply to me, then I’d be more inclined to increase rent every year. As a general rule, I increase rent for long term renters by $50 every two years. When we turnover a property, we will evaluate market rent in the area and set the monthly rent at what we see (which could be more than $50). In some cases, the evaluation ends up being too high, and we set the rent at something we think more people can afford. For example, there were comparable houses renting at $2,200 near a house we had listed. We’d rather get the property rented than shoot for top dollar, so we listed it at $1,600. While lower than “market value” probably called for, it was $400 higher than what we had it previously rented at, which covered cost increases that weren’t previously covered.

In the post that I previously linked, I highlight that our standard for increases barely offsets our increase in expenses. While we manage each house individually on setting the rates (asking ourselves: do we think the tenant can absorb the increase, do we have to increase to cover actual costs now), our monthly income among all houses was increased by $475. If you add up the cost increases for taxes, insurance, and property management (increased rent means increased fees because fees are based on the rent price), our costs went up $415 (and that’s before any service calls). On a whole, we’ve offset the ‘fixed cost’ increases. We’re taking ‘losses’ on houses where our routine for increases is slower. Therefore, having 13 properties affords us the ability to be more lenient with tenants and to keep good tenants in the house instead of forcing them out with hgher rent increases.

I support having protections in place for tenants. I’m sure there are landlords out there that aren’t interested in playing ‘by the book’ and just being decent human beings like I intend to. However, landlords are people too, and they’re running a business. Creating boundaries without fully understanding both sides of the situation and focusing on data points that only support your theory is unfair. I’ve joined the Landlord/Tenant Advisory Committee in my city. I hope to bring more awareness to the landlord side of things and bridge the gap between landlords and tenants when it comes to responsibilities.

Thermostats and Finances

July 25, 2024July 11, 2024mrsonedollarallowanceLeave a comment

There has been a lot of talk about thermostat temperatures recently because of how hot it has been where I live. There are Department of Energy images circulating that say keep your home at 78 when you’re home, 82 when sleeping, and 85 when away from home. Personally, I need it colder at night than during the day, but that’s not the point. My goal here is to make you stop and think about your actions. This applies to several areas of your financial life, but this post specifically will be regarding your heating and cooling process.

THERMOSTAT SETTINGS

In our house in the summer, we keep the thermostat at 75 or 76 during the day on the 1st floor. It usually starts at 76 and then if someone feels hot, they bump it down to 75. Upstairs, it sits at 77 for the day, is put at 76 for when the kids go to bed, and then 74 when we go to bed. When we leave the house, the thermostats are at 78; if we leave for extended periods of time, it’s set in the 80s. In the winter, the heat is set at 65 during our waking hours and 64 or 63 at night.

As a quick aside, our third son was born early and was having trouble breathing and regulating his temperature those first few weeks. We were told to keep the house at 70 or greater for him. We struggled! We made it to 69, but everyone was uncomfortable and hot. I mentioned this to the doctor and he said it was fine to be at 68 if that’s what everyone felt more comfortable at.

While we know these numbers now, we spent a lot of years working on different settings. We didn’t just assume that these were the numbers we wanted to be at. There were winter months where we set it at 63, but my fingers were hurting because they were so cold while I typed on my keyboard, working from home. I was at a friend’s house recently; they had it set at 70, and I was cold.

That brings me to another point. What’s the thermostat temperature where you’re comfortable in the summer while wearing shorts and a tshirt? If you’re wearing a sweatshirt and have the temperature set at 70, is that worth the extra cost to run the air conditioning at that temperature?

TIPS TO SAVE MONEY

This image was shared by a local meteorologist, but a citation wasn’t given, and it differs slightly from the numbers that the Department of Energy published. According to this, we’re saving 19% in the winter by keeping our heat at 65, but then we’re spending 32% more in the summer based on the recommended setting.

While you may have your expected temperature setting, you may want to consider is how hot (or cold) it is outside. If it’s going to be 100 degrees, maybe set the thermostat slightly higher on those days. It’ll feel comfortable at a higher temperature because the unit is going to be running more, therefore pumping more air into the room than on an 80 degree day.

In the summer, another option is to keep the blinds closed. If you keep the sun from peering into the house, especially during the heat of the day, it’ll help keep the temperature lower so the unit won’t want to kick on as often.

My local electricity company provided suggestions to keep your bill lower. Their article said to grill, use a slow cooker, and make sandwiches instead of using the oven and stove, which create more heat for the air conditioner to have to counteract. You can also use fans in rooms where you’re sitting so that you feel cooler while the thermostat is kept a degree or two higher. Make sure your filters are changed regularly so that your unit is working efficiently.

I implore you to increase your cooling temperature by one and see how that feels. Live with that for a week and see if going one more degree helps too. It could be that the cost to run your heating/cooling is worth the level of comfort you feel, but it could be that you find a setting that is still comfortable and it’s worth the savings you reap.