One Dollar Allowance

January Financial Update

January 16, 2025mrsonedollarallowanceLeave a comment

We’ve done a good job at enjoying time together this past month. We haven’t had a lot of expenses pop up, which was a nice reprieve. However, the market is much lower at this time this month than it was last month, so our net worth actually decreased. I keep focusing on the long term picture though, and our net worth is much higher than a year ago.

RENTALS

We have 13 rental properties. They were mostly purchased in 2016-2019, with one purchased in 2022. Most of them have sustained very little tenant turnover.

I had 4 houses not pay their full rent on time this month. As of this post, only 1 is still outstanding. They’ve had car troubles and have communicated regularly with me. While I’d prefer to see at least something paid towards rent by now, they’ve been with us for 8 years, and I know they’ll eventually be whole. They never take more than the month to get rent fully paid. Of the other 3 that were late, I only charged one a late fee. The others aren’t usual offenders and communicate up front, but this one has been more difficult to get rent paid from the time we purchased the house.

While looking back at last year’s January post, I must note that this past year has been fairly easy on the rental front. We’ve had a lot of frustrations and things to manage, but it hasn’t been as time consuming in the “people management” side of things. We had a few issues with a tenant that first moved in last winter, but they’ve been quiet since. We had 4 houses turnover tenants in 2024, with fairly little loss of rent.

PERSONAL

We have been battling snow for almost two weeks now, which is very unusual in Central KY. We’ve already taken the kids skiing twice this year. Even the baby got on skis! He’s 2, so I guess he isn’t such a baby anymore, but that’s the earliest we’ve put a kid on skis. He’ll slide down the mountain, but he doesn’t stand on the skis; he’s just squatting the whole way.

NET WORTH

Last year at this time, I was sharing that our goal was to reach $4 million. We were at $3.869 million.

Our net worth is about $66k less than last month. I don’t always update the value of our assets, so that’s a fairly static number. Everyone few months, I’ll check on the ‘zestimates’ though. Typically, we expect to see the total decrease in the winter months because there are less sales and less activity to raise the sale prices like you see in the Spring months. On top of that, all of our investment accounts (except one that increased by $22) decreased a bit.

We have a 0% interest credit card that has a balance over $12k on it. We also added a car payment, which we haven’t had since about 2015. Tesla was offering a 0% interest loan, so that monthly payment isn’t going away for nearly 5 years. Overall, our credit cards balances total more than $3k less than last month’s, which makes me happy to see.

Additional Annual Income

January 9, 2025December 31, 2024mrsonedollarallowanceLeave a comment

Every year, I like to look back at ways we earned income outside of a W-2 or our rental properties. These things include interest earned, dividends paid, and bonuses received on credit cards.

CREDIT CARDS

We opened a new credit card to give ourselves a 0% interest loan when we purchased the hot tub. I’m a broken record on this, but I’ll keep pointing out the availability of this option. Yes, we made this purchase because we could pay for the item outright, but it would be nice to pay for the hot tub over time while letting our money earn more money in other accounts. A sign-on bonus for that credit card and the immediate high purchase led us to $489 earned for doing nothing expect spending money and opening that new card.

Outside of that credit card reward, we deposited almost $1,200 worth of rewards from other cards into our checking accounts. Then we have some cards that earn points instead of cash. These are kept in that credit card’s “bank” of points because they can be worth more if they’re used within the rewards portal (e.g., booking a hotel). Essentially, 100 points equates to a dollar, but it’s not always that because of the bonuses available. With that said: we earned 18,683 points between 3 cards and $73 on another card.

INTEREST & INVESTMENTS

We have two accounts that pay out dividends in December of each year. This year that totaled over $4k. Between two savings accounts, we earned $2,500 of interest payments.

Mr. ODA invests in Treasury bonds. Instead of withdrawing the money after each 4-6 week period, he rolls it over and the interest earned gets deposited into our account. That’s paid us $2k this year.

ODD JOBS & RANDOM INCOME

On top of the things I can project like interest earned and rewards, I also do a few odd jobs throughout the year. Between a part time substitute teacher position, doing surveys, and selling kids clothing and toys to second hand shops, I brought in another $1600. I use this concept as an ‘offset’ in my mind to cover gift giving throughout the year. Mr. ODA brought in nearly $1,000 doing mystery shopper activities for restaurants. Betting on games and doing fantasy football brought in another $700.

SUMMARY

So with minimal effort, we brought in about an additional $14,000 in the past year! That more than pays for our hot tub purchase. It more than pays for our Christmas gifts, and even birthday gifts paid for through the year.

When I consign, it takes several hours to prepare. But I do those items that way because I can earn more money with less stress. For consignment, I’m preparing my items, logging them, printing labels, and then dropping off. Once I drop off, all I do is watch my sales. If I try to sell these items on mom-to-mom type forums, then I have to manage each individual item, follow up on people who need to pay/pick up, and then set out my items and wait for them to actually follow through. It’s just a lot more mental energy even if it may be less physical hours of work.

Outside of the consignment effort and my very part-time job, everything else was fairly passive. We earned a lot of money just by buying other things. We earned a lot of money by just having a savings account with a decent yield. We earned a lot by Mr. ODA investing in Treasury bonds, which takes a few clicks every few months.

The first step should be to ensure your money that’s not in use is in a saving account and earning interest. After that, a credit card with rewards earned should be used. Teach yourself discipline to count your credit card swipes the same as swiping that debit card in your checking account. You’d be amazed at how much those small bits add up.

Year in Review

January 2, 2025January 1, 2025mrsonedollarallowanceLeave a comment

This was a good year. We took a lot of trips, made some good memories, and purchased some fun things. While day to day life has been hard with 3 little kids and managing some of my own interests, it really was a fun and rewarding year when I look at the big picture.

PERSONAL: MY YEAR

I went through a lot of growth in this year. I started the year with a girls trip, which was really healing in my mom-of-3 world. After that trip, I hunkered down on my diet and exercise. Over 10 months, I lost 22 pounds. Each kid added about 10 pounds to my body’s desired size (where I just plateau unless I put a lot of effort in). It’s not something that I regularly discussed with people or mentioned, but it is something that I’m pretty proud of and took effort. I ran a 5k in August, where I beat my time from the year before, and it didn’t feel like it took any effort to beat that, which was nice.

But then my oldest started kindergarten, which was a surprisingly hard adjustment in my schedule. He was completely ready for school, and him going wasn’t the hard part. I welcome new phases of life and mostly don’t dwell on the losses that those mean. However, the schedule of the year took me two or three months to get used to. He gets on the bus at 7, #2 gets dropped off at 9, she gets picked up at 12, baby takes a nap from 1:30-3:15, oldest gets off the bus at 2:45. It was just a lot of broken up time in my day, and it took so much out of me each day. I finally feel like I’m used to it and can be productive in those short periods in between.

We were told that our preschool will be changing ownership next school year, which threw a wrench in my plans. Sure, things will work out. But it doesn’t change that I had a plan that didn’t need to be thought about. I had a financial expectation that didn’t need to be budgeted for or considered any further. It was another thing that took mental energy from me. I had originally thought I’d not send the 3rd kid to a 2s year like the other two kids. I spent some days mourning that alone time I was giving up by keeping him home. But I toured a preschool, and that’s my wish list for next year. If we don’t get into that preschool, I’ll likely just keep him home with me and try for the 3s year there. It’s just a socializing desire. I don’t work and need child care, so it’s a privilege to send him if it works out.

On top of all the parenting jobs I have, my job managing our rental properties is another job that takes a ton of time and mental energy, but no one really sees the fruit of that labor. May was the only month this past year where everyone paid rent on time. While I’m pretty lenient on that, that’s still time that I’m taking to manage and keep up with. I have one tenant who hasn’t put the water bill in her name yet. Supposedly it’s a city issue, and she always pays when I send her a picture of the bill, but it’s still a time sucker that I have. Then add in that we have several maintenance requests that come up, and a few big projects that were needed.

Related to the rentals, I made 44 posts on this blog. I set a goal to post once per week, preferably on Thursdays, for the year. I fell short by 8 weeks, and I wasn’t consistent with the Thursday post each week. I did well when I had inspiration, and I always did the monthly updates, but I didn’t meet my goal. I’ll keep the same goal of once per week, preferably on Thursdays, for this year. While my reach isn’t far, I do hope that someone will find this little corner and gain a new perspective on their finances. Plus, I appreciate being able to go back to our monthly updates to see how things have changed. It’s hard to see it when you’re looking month-to-month, but to see a drastic jump in numbers from a year ago is nice.

PERSONAL: THE FAMILY

We made it to 12 states this year, and that’s pretty cool. The kids got to see a lot, and they’re really interested in different states and their stats. I appreciate that curiosity and the ability to learn while traveling. Only one trip was on a plane, which was to Colorado. We did a 2-week long trip to New York and Michigan, with a few stops in there. We went to Chicago for a wedding and explored the area, took the kids to Gatlinburg for Fall Break, went to Ohio to watch the eclipse in totality, and tagged along on Mr. ODA’s work trip to South Carolina.

Mr. ODA sold his 15 year old vehicle, and we purchased a Tesla. I didn’t have a great experience with one in Colorado, but I think that was more related to the circumstances than actual electric vehicle ownership. I had a great experience with the test drive, and we picked one up by the end of that week. We took advantage of their 0% interest and 3 months of free charging. We also referred a friend of ours, so we received $1000 in Tesla credits that we’ll use for charging after the free period.

We bought a hot tub. That was a purchase that was about a year in the making, so it wasn’t made lightly. There hasn’t been two days in a row where someone didn’t get in it, until we just left for a week (hoping that the water is in good shape when I get back!). Our deck was crushed by a tree in July 2023, and it wasn’t rebuilt until May 2024. Then we had to take the time to make the decisions on what we wanted, get it ordered, and wait for delivery. It was delivered in November, and it’s been a great purchase thus far. We haven’t done such a splurge before, and it’s nice to give ourselves something that we can enjoy.

The kids are doing their activities. We’ve been in a nice lull, but I recently saw our March calendar from this past year and was reminded of all those hours! Our oldest is doing t-ball for a second year. Our second is regularly doing gymnastics, but we’re also letting her do t-ball this spring. Our oldest is also doing an after school activity for checkers, but supposedly it’s in a fun way, so that’ll be interesting to see pan out. He was accepted into an advanced program for his 99th percentile state testing scores, which was a really exciting moment as parents. Our second will finish out her preschool year and go to kindergarten next year. And we hope to have another fun season over the next two months with everyone on skis!

RENTAL PROPERTIES

Besides the management of late rent payments, I had to put a lot of hours into these houses this year. We took a trip to Richmond, VA to work on quite a few of these houses. On top of that, there were several other activities that were needed, management of tenant turnover, and management of rental income, but I’ll save that for a future post so this doesn’t grow too long.

FINANCES

Our net worth increased by $745,000. We started the year with a goal of hitting $4 million net worth, and that was achieved in a short time. Month to month feels like we’re barely moving the needle, but it’s amazing to see that number over the course of a year.

We paid off one 0% interest credit card from our carpet replacement in our personal home, and then we opened a new 0% interest credit card to pay for the hot tub. That new card gets 2% cash back, so it’s being used more than we usually use a 0% interest card. Typically, we just pay for the major purchase and then pay it down over the 0% interest period. This time around, it’s being used for every day purchases so the monthly payment I’m making is more than I’d usually see.

I have a separate post that goes into our extra income that we brought in over the last year, which is related to earned credit card rewards and interest on savings accounts and bonds. That’s even cooler to see the total ($14k!) because that was actual cash that went into our account and was used.

In the last year, I only officially worked 11 days, which is crazy to think about. But I’ve been doing random other jobs to help others out. I’m on our homeowners association board of directors, and I’ve been helping a new school get their financials up and running. I’m ready to take a step back from the finance work because my commitment to the HOA feels more pressing, but we’ll see how the next couple of months progress. It’s just really hard to get things done when I’m rarely without a toddler who wants my attention (unless I get up at 4:30 or 5 am).

SUMMARY

This year has felt like it took a lot more hours from me for work and management of things. But I also feel like I have more energy now that I’m two years from having our last baby. We have lots of other things planned for this coming year, and I hope to take some even bigger trips to see more of the country now that we have a bit less baggage coming out of the baby years. We have no plans to make any big purchases at this time (although there are new windows needed on our house in the next couple of years), and I really hope this year is lots of fun with the family more than anything else.

December Financial Update

December 12, 2024December 14, 2024mrsonedollarallowanceLeave a comment

We bought an electric vehicle. Honestly, I didn’t see this coming. Since our trip in July, Mr. ODA has been reading about them. He decided he wanted a Tesla for numerous reasons. We test drove one in mid-November, and we picked up our new car order by the end of that week. Tesla was offering 0% financing, if we put $3,999 down. The purchasing process was as easy as buying something off Amazon. I’m still in awe over it. We’ve now added a $589 payment into our monthly finances, but it was worth it for the trade off of interest earned by keeping the balance in our savings account. As part of this purchase, we sold Mr. ODA’s vehicle. It was 15 years old and in relatively great condition. We got much more out of that than we expected, and that check helped cover a gap I had in our checking account (yes, I could have transferred from savings).

I’ve continued to monitor the status of our insurance woes. Luckily everything is complete. I was able to get the new policy executed (after about a weeks worth of work) on the house with the roof that was too old, which meant I had to manage the cash flow between us and a partner. I had to answer a couple more questions on executing a new policy, and we received all the reimbursements from the old policy that was cancelled. I’m happy that’s behind us now.

We have a tenant who hasn’t paid anything towards December rent. Honestly, it’s expected each year. But they seem like good people, and they always work really hard to get things situated, so I’m always lenient with them.

NET WORTH

Well, we bought a new car, paid off a credit card with a $6,500 balance since the 0% interest expired, and added a hot tub purchase to a different credit card, so there was some big swings in our net worth this month. With the hot tub added, our credit card balance went up $6k. Our cash only went down about $600, which was interesting to see. Our liabilities increased with the car purchase, but with our investments, our net worth increased by over $30k.

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.

EV vs Gas

November 21, 2024November 14, 2024mrsonedollarallowanceLeave a comment

I’m late to this comparison, but I didn’t have a reason to pay attention to electric vehicles (EVs) until our trip to Denver in July. As seems to be the case regularly there, the rental car company didn’t have any available inventory of gas vehicles, even though that’s what we booked. I’m actually starting to wonder if they have any gas vehicles because it’s suspicious that they thrust these EVs on customers so consistently. Here are some quick thoughts on an EV after experiencing it, but also the gas usage versus electricity usage math comparison we did while there.

EV EXPERIENCE: THE NEGATIVE

It started out stressful. Had we been given a tutorial or any guidance at all, it may have started out easier. However, we started the trip by having to wait in a 90 minute line to even get the car. Then we were greeted by a disgruntled employee who had no intention of helping us. Then when Mr. ODA tried to talk to a manager, she just kept saying “we don’t have any gas vehicles. I can’t do anything for you.” Well ma’am, you could maybe take 2.5 minutes and quell all our fears of the unknown, in a foreign place, while traveling with 3 kids that are 5 and younger.

The biggest issue was our timing. We arrived later in the day, needed to get the kids fed and their bedrooms set up, while also allocating enough time for them to just play and have fun since we’ve been traveling all day. The next morning, we planned to get out of the house and head to the mountains. That’s the problem. We don’t know our range. We don’t know where to fill up or how to fill up. We do know that charging it is not a 4-5 minute process like filling up a tank of gas. We do know that there aren’t super chargers everywhere. There was a lot of “I don’t know what I don’t know.”

Luckily, a friend of ours recently had a similar experience, and she shared some tidbits with us. For instance, there are multiple charger apps you need to download. Then once you download all of them and use the map to figure out where in town the closest one is to what you’re doing, you have to figure out what the data means. “6.6,” $ vs. $$$, “fast charging.” There were different filter options in different apps, but no legend on what these terms mean.

The first charge came while Mr. ODA dropped us off at McDonald’s, drove down the block to a “fast charger,” ran down to eat with us, then ran back to get the car and pick us up. This wasn’t ideal. This was really affecting our trip with this dark cloud hanging over us trying to figure out how to efficiently charge this thing. Plugging a car in while trying to entertain 3 kids for 45 minutes wasn’t how I expected our trip to go.

EV EXPERIENCE: FIGURING IT OUT

ChargePoint ended up being the easiest to use. They have a lot of stations around Denver, especially free ones. We looked for places to eat a meal where we could utilize a free charger and take advantage of the “down” time. It involved walking a block or two each time, but it gave us the peace of mind to get through the next phase.

One morning, we went to Red Rocks. There were a few free charging stations in the parking lot. We plugged in, spent two hours exploring the place, and received about 80 miles on our range, which was plenty for the next day of our trip. That night, we went to a concert at Ball Arena. Instead of parking where most of the other concert-goers parked, we went one block further and parked a well-lit, clean garage. We had to pay to park in the garage, but the charging station was free.

We also learned how to utilize the charging available within the car itself. EVs don’t “coast.” They have regenerative braking. You basically drive the car only using the accelerator, and don’t use the brake. You slightly hold down the accelerator to keep the car moving as you approached a stop, and it charges as that happens. There were different levels you could put the car at to take advantage of this charging process.

GAS VS ELECTRIC COSTS

We spent time figuring out the apps and the types of chargers. We avoided the chargers that had flat fees on top of the kwh charge cost. Almost all of the chargers had a “parking fee,” which meant that if you remained plugged in after the car was fully charged, they’d charge you by the minute for taking up that space. It makes a lot of sense since charging spots are limited, and you want to disincentivize people just walking away from their car for hours.

After we figured out the process of how to use the vehicle and the charging locations, we were able to do some math on the cost per mile. We specifically charged the vehicle either at free locations or in off-peak charging time (there is variable pricing on some chargers). We calculated that the cost per mile came about a few cents higher than if we were in a gas vehicle. However, that could be higher if you were charging during peak time or you needed to use the fast charging locations more often based on your vehicle distance/use. Gas prices in the Denver area were in the high $3.20s to low $3.30s, and we calculated a charge equivalent of $3.34.

There is the opportunity cost of your time. It only takes a few minutes to fill your car with gas. You’re not walking away from an EV charging location in less than 20, and it’ll likely be longer. If you have the ability to charge at your house, while the car is in the driveway, then it changes the equation. Since we were at a rental, that wasn’t an option available to us.

EV EXPERIENCE: END RESULT THOUGHTS

After the initial anger and fear of the unknown subsided, I’m not against EVs. If you can charge them at your own home, they’re great. They’ll get you around town just fine, and you’ll have the convenience of it charging while you’re home and comfortable. Your home charger won’t be a fast charger, but having it plugged in overnight for that 10-14 hour charge wouldn’t be an inconvenience.

I wouldn’t take them on long road trips. There would need to be careful planning of your charge range compared to where charging stations are. Unless it’s a truly a fast charger (15-20 minutes, and more expensive), you’ll need to plan to be somewhere for hours to get a charge. Then there’s the fear of availability when you arrive there, and whether you’ll get a spot because it’s not likely you can just travel down the road a few miles to find another station.

I wrote the initial draft of this in August. So it’s interesting to say – we bought an EV.

November Financial Update

November 14, 2024November 20, 2024mrsonedollarallowanceLeave a comment

We bought a hot tub! It’s something that we’ve been talking about for almost a year, went looking at in May, and then finally ordered it last month. It was delivered and set up this week.

RENTALS

We replaced the roof on one of the houses. I go into that a little more in the ‘insurance’ section, but that was a $6,300 payment that was made.

INSURANCE

The fact that I have a separate category to cover my insurance efforts is just frustrating.

Last month, I complained that we were threatened with our liability policy being dropped because we didn’t provide the necessary documentation … that. we. were. never. asked. for. So I dropped everything and got the documentation as fast as I could, while being praised for my organization and response time as usual. Then a few weeks later, I was told that our policy has expired because they couldn’t get to our documentation review fast enough. Awesome. I love the one way street. We were finally informed that everything was reviewed and our policy was reinstated with no lapse in coverage. I paid that policy.

During that process, we were informed that one of our policy providers does not qualify to be covered under our liability policy because their company rating fell below A. Ironically, we had already pulled all but this one policy from this company. We requested a quote from another agent, but she said they couldn’t write a policy on the account at this time. It’s frustrating to me that once you file claims on your insurance (which it’s there for), you’re blacklisted. There were no claims for 8 years of rental properties and 12 years of homeownership, but that doesn’t matter. Since 3/4 of our claims in the last year are all in the same location … all those houses were hit by the same wind storms to cause damage. I certainly didn’t request trees to fall on two houses. Add in that the damage to our house was severe, making our policy pay out high for the last year, so getting new insurance policies where necessary (and on houses with no claims) has been difficult. There’s nothing to say we can’t keep this policy on this house even though the rating declined (which I would have never even known about), so we’re not stressing about it.

One of the wind damaged houses with a claim caused that company to drop us. That’s fine. I have been working on this replacement since September 23rd and finally got everything squared away on October 31st. One of the frustrations on that was that I’d ask multiple questions, and this guy would either not respond to an email or respond to half of it. One of my complaints was that my original request was for $500k of liability coverage (which is higher than offered on most policies I’ve had written, but is the minimum required for our liability policy), but he wrote it at $1 million. I asked for it to be lowered no less than 4 times. He finally responded when I got stern and called out the lack of action; he said that since it’s only about $25-30, they just go ahead and do it. I finally said (again) that I have liability policies that give me extra coverage, so I don’t want my individual ones to give extra coverage “just because,” and that it’s up to me to decide whether that $30 is worth it. He finally reduced it. The new policies are $510 more than the policy we were covered with that got dropped.

Oh – the original policy that we got dropped from included two houses. It wasn’t clear whether the company was dropping both houses, but I went ahead and switched both. I was hoping that the new policies would be written like all my other houses – individually. Unfortunately, it’s under one company and they handle things the same way, so both houses are tied together under one policy number again. I have multiple houses covered by Travelers, and they’re each on their own policy. I don’t understand why these houses get lumped together.

Another house of ours was given “high risk” insurance because of our roof condition. Our partner didn’t tell us about the transfer of insurance or the reason why. I discovered it when I received weird paperwork for our liability policy (which, ironically, now that I think of it, my liability coverage didn’t call out as odd, but they weren’t happy about that company getting downgraded…hmm). I discovered this on September 6th. I started getting quotes for roofers immediately, but that process took forever. I finally got the roof replaced on October 18th, and then I requested her to find us new insurance on October 31st. We have a new policy being issued effective November 15th, which will cancel the higher insurance. The total savings equates to about $450, but it’s still over $300 more expensive than the original one that we walked away from.

TAXES

Central KY taxes were due this past month. I paid 4 houses worth of taxes. 3 were cashed immediately. I pay via online bill pay, where they send the check on my behalf, instead of online because there are fees associated with that. Well, now one of them is floating out there without my knowing what to do next. There’s a 2% discount if you pay before 11/2, and that check didn’t get cashed by that deadline. So now I have to make phone calls to track down why the check I sent via bill pay didn’t arrive, even though another one arrived just fine. I also have a city that I have to pay a small amount of taxes to, and I’m waiting for those two checks to cash as well.

NET WORTH

Our net worth is almost $100k over last month’s. Not reflected in the credit card yet is the payment for the hot tub that just happened this week. By next month’s update, I’ll have to pay off the 0% interest credit card, so the total credit card number probably won’t change drastically.

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.

October Financial Update

October 17, 2024November 20, 2024mrsonedollarallowanceLeave a comment

I feel like I have a lot of balls in the air right now, but looking at our finances, they don’t say that there have been a lot of charges. However, this post sure says that I’ve been juggling a good amount of things over this last month, and most of the issues are related to insurance in some way (and I despise insurance!).

Last month, I mentioned that we had two large charges hit our credit card. One that I purposely held off until the new credit card cycle (an insurance charge) so that the previous month’s credit card was lower than average (psychological play for myself). Then we had the electrical work completed on our deck rebuild, and that was another significant balance that needed to be paid. After that, we just had a a few medium-sized, if you will, charges that hit. I paid an extra payment to keep the balance closer to the $3000-3500 range. Well, it didn’t work. Another two service calls to rental properties and the dog’s annual vet appointment, and we were back up to $6k. We have the cash to pay it off every month; it’s just not something I want to see!

When we have a large purchase, we open a new credit card. The new credit card gives us some sort of bonus, and we get 0% interest for 12-15 months, typically. Last Fall, we replaced the carpet on the first and second floor of the house for over $10k. I paid $500 per month up until last month’s payment. The balance wasn’t a round number, so I went ahead and paid that little bit while also upping the payment to $1000. That balance is at $7,000 now and will need to be paid by December 13th. The new credit card will be used to purchase a hot tub and pay for the electric work associated with that (as well as an electrical panel upgrade).

INSURANCE CLAIM

Since our deck work is now complete, we submitted a request for additional funds. The concrete replacement was controversial in the claims process. They eventually agreed to pay for it, but they held back a significant amount of depreciation on it. We submitted the final work order showing the concrete costs and that the job was complete, and they sent us a check for about $6,550. Additionally, the electrical work was projected to cost about $1,700, but it actually was about $3,500. Luckily, we submitted the invoice and, with no questions asked, they cut us a check for the difference.

Just for the record, the job was never fully completed. Mr. ODA pulled up deck boards and retrofitted the waterproofing. We never paid out the final payment. The City’s inspector came out and started asking a bunch of questions, and the foreman finally acknowledged that they hadn’t completed the waterproofing. We didn’t tell them we fixed it, but we have no intention of being in touch with them again. Outside of the waterproofing and concrete subcontractor issues, the contractor was great at the work he does – but they should stick to simple deck construction.

PERSONAL CHARGES

We actually had a low number of transactions over this past month. We took a trip, which I covered in my last post. Mr. ODA negotiated a refund of some of the cabin charge since we booked it with a hot tub and discovered at 8 pm that there was no water in the hot tub. They refunded 10%! We had our typical charges that occur monthly, and I paid several health insurance bills for various reasons.

RENTALS

Luckily, everyone has paid their rent this month. We have $750 outstanding, but it’s not technically due until the 19th with how I’ve structured their lease. One person did pay half her rent late (on the 15th), but I didn’t charge a late fee since she actually paid when she said she would this month (always a gamble). We had a few smaller maintenance issues come up in the last month, as well as a range replacement at a property that will be installed this Saturday.

INSURANCE

Due to a claim on one of our properties, that insurance found a reason to drop us. They notified us that we have a couple of months to find new insurance. I’ve been working on that for the last 3 weeks. It hasn’t been easy. They want pictures and then want all different angles, as if it’s my home and I can just take these pictures on a whim. Then for some reason, the agent I found through a local real estate group is great about answering questions on one property, but won’t answer questions on the other. It’s pretty frustrating. As of 10 minutes ago, I at least got the policy executed on the one he hadn’t been responding on. I started this process on September 23rd and got this run-of-the-mill policy executed today – ugh. So that’s over $900 going on the credit card today.

We have a roof replacement occurring on a property in VA tomorrow. I found out that our partner switched insurance companies without us knowing. That seems fine, except that I discovered our policy went from $600 to $1400. It turns out, he switched because that original insurance company was requiring a roof replacement. Conceptually, that’s annoying because they find some action for us every year with no warning or previous mention of something being on a watch list. However, it turns out that the roof was bad enough that no one would insure us. Again, I’m finding all this out after the fact. Our agent found someone to cover us for short term, and we’re paying a hefty premium on that. As soon as I found out, I requested quotes from roofers. I signed a contract 3 weeks ago, and that’s finally under way with materials dropped off this morning. As soon as the roof is done, I plan on sending documentation to our agent to get us switched to a “regular” insurance company and hopefully reduce that premium substantially.

We had issues with our Commercial Liability Umbrella Policy issuance this year. It was all due to the company’s poor communication. They asked for a new document to be completed, which I did in less than a day. Then I heard nothing from them until a cancellation notice for not providing supporting documentation. I had to scramble to gather all the documents, only for them to not even review my information timely and cancel the policy. They reissued with no lapse in coverage, but goodness that’s so frustrating that they can do whatever they want with no repercussions. In that process, we learned that one of our houses isn’t included in the CLUP because that insurance company’s rating fell below a reasonable threshold. So now I’m shopping for insurance for that house.

I had to pay one property’s insurance of $270 (it’s a townhouse with HOA insurance also). I also had to contact one of my escrow accounts to find out why they didn’t pay on time, which is so much fun (and I still don’t have that resolved).

TAXES

It’s that time of year again where I have to pay out on KY taxes. Relatively, they’re low amounts, but they add up to a decent amount when you have 4 to pay at once. I’ve issued payment on these, but they haven’t cashed the checks yet (it would be nice if businesses would allow electronic payments without exorbitant fees!).

NET WORTH

We’re over $800k over this time last year. It’s crazy to see that number because I don’t feel comfortable with our finances. I can’t put my finger on it, but I just don’t like how often I need to transfer money out of a savings account to cover obligations in the checking account. It’s just a psychological thing for me. I can’t figure out why I can’t get past it, when I know for sure that we have 18 safety nets out there if we were in a bind.

Last year’s update mentioned that our finances took a big hit between September and October, but this year, we’ve recovered a good bit and increased over $115k from last month. It appears last year I paid off a large credit card balance this month, whereas the large credit card balance pay-off will be December this year. I’ll also have additional charges when the hot tub gets delivered in a few weeks, which will increase our debt.

Fall Break: Smoky Mountains and Gatlinburg

October 4, 2024November 20, 2024mrsonedollarallowanceLeave a comment

We’re now on school schedules with our oldest starting kindergarten. We wouldn’t have typically taken an October trip without such prompting, but we decided to take advantage of the “down time.” We also became a Central KY cliche, and went down to Gatlinburg.

We aren’t the type who save up for years to go to Disney. We prefer exploring different trails and different towns around the country. We’ve dabbled a bit more in theme park type adventures as the kids are getting older. I had planned to visit Ober. Their ticket prices start at 5 year olds, so we’d only have to pay for 3 out of 5 us. Of all the bigger attraction places there, Ober seemed to give you the most for your money, and I thought it would be entertaining to see the kids attempt ice skating again.

But then with all the hikes we wanted to do, and the National Park Service opening up a main road in Great Smoky Mountains National Park, we decided to skip that. I really wanted time to explore the town itself, and it didn’t seem we’d have time to do Ober and the town. The kids enjoyed walking through the town because there were a ton of pumpkin-head-people, so it became a game to find the next one and get your picture taken.

I was surprised to see that the town’s main road was mostly restaurants and hotels. I thought we’d run into more activities along the way. By the time we found a mini golf place, I didn’t trust that the kids would have held their emotions together to make it enjoyable. We got some ice cream for a job well done and went back into the park for a short hike to a waterfall.

TRIP COST: $656

Our lodging was the east of Gatlinburg in a cabin community. It was $541 for two nights. I’m still at a phase where the kids need a decent bed time, and the baby is still in the high maintenance (needs to be pitch black) phase of sleep. When we book a place, I’m looking for a room that the kids can go to sleep in while Mr. ODA and I aren’t ready for bed, and then a place (closet or extra bathroom, ideally) where I can put the baby. This was a two bedroom, two bathroom cabin.

I brought all our meals with us. So we paid $10 to be in the park for 3 days, $45 for food (treats and travel day food stops), and filled up our gas tank twice while traveling ($60).

GREAT SMOKY MOUNTAINS NATIONAL PARK

In case anyone’s interested in a similar trip, here’s what we did.

We traveled from central KY, so our first stop before we got to Gatlinburg was the Foothills Parkway. Mr. ODA actually worked on the Foothills Parkway when we were first dating (14 years ago – yikes!). We ended up going the wrong direction to see the bridges he worked on, but we did find a nice little hike. We went up to Look Rock. It was a quiet trail that wasn’t too long, but it was a nice stretch of our legs. The fog was thick, so we couldn’t see much in the observation platform.

Then we drove to Cade’s Cove Loop in the park. I have zero pictures of this because it was not interesting whatsoever. It was prairies and zero animals except two turkeys. People praise it on all the travel blogs, and we couldn’t figure out the hype. We were hopeful when we reached a choke point that the backup of cars was because we’d see something up ahead, but nothing came to fruition. It was just a waste of over an hour to go 11 miles.

Next we traveled to the Sinks. It was a cool waterfall that you could park right next to, so no hiking necessary.

To finish up the day, we hiked the Laurel Falls Trail. It was really pretty, and I thought it was cool that you could walk right up to the waterfall based on how the water flowed. The trail was 1.2 miles one way, with an elevation gain of 420+ feet. The trail was well traveled. It claimed to be “asphalt.” At some point, it was probably all asphalt, but there have been a lot of washouts. Either all of the trail is missing in some places, or just half the trail in other places. I wouldn’t go into this trail thinking it’ll be easier because it’s paved. Look up a video of what the falls looked like during Hurricane Helene because it’s crazy to see just how much water was flowing only a few days prior to us seeing it. It took us about 90 minutes to do it with 2 little kids walking.

On day 2, we went to Cataract Falls because it was a short walk off the parking lot and we had a little extra time to kill. The kids liked this one too because they could play in the water and rocks at the base of the falls.

The hurricane had closed one of the main roads in the park, but it opened up the second day we were there. It was a nice surprise, so we were able to do Clingman’s Dome. This was a wide, paved trail in great condition. The leaves were starting to change colors, and it was pretty on the bottom half. Near the top of the hike, we were hardly able to see anything because the fog was rolling in and really thick. It was cool to see the clouds float right by you though. It’s 1 mile, round trip. It being relatively short and fully paved is misleading though because it’s basically a hill straight up for a half mile (332 foot elevation gain; their website says it’s about a 13% grade). There are multiple benches along the way for plenty of rests. We made it to the top in about 20 minutes. We then spent about 20 minutes at the top of the tower before heading down. It took us about 20 minutes to get down too. We stopped at a pull out with a NC/TN line marker and explored there for a little while too.

On Day 3, we did Grotto Falls. You take a one lane road to the parking lot, where there are about 10 parking spaces, and they were all full. Since it’s a one lane loop road, there was no waiting for something to open up. We kept driving and parked about 0.4 miles down the road in a pull out. The trail itself was 1.4 miles to the waterfall, so the kids hiked with us for a total of about 3.6 miles. They did awesome and didn’t complain once about the distance. We took our time on the trail and stopped for a while at the top to eat lunch and explore. From the time we left our car to getting back to it was about two hours, so not bad at all.

During our drive back, we drove the other end of the Foothills Parkway and saw all the bridges that Mr. ODA was part of building. No hiking around there, and the pullouts were nice, but didn’t take much time to explore the view.