Fast Food Deals

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We stopped at McDonald’s on our way to visit family before Thanksgiving. We sat down at a table where someone had left their receipt. Their total was over $35. This other customer had ordered a 10 piece mcnugget meal for $10.39. We had ordered a 10 piece, a large fry, and a large soda, and we had spent about $2.50.

This thought to share these details was resurrected when my sister complained that she stopped at McDonald’s for two meals and spent $30 to feed just two people. It takes a minute or two of your time, even if you pull into a parking spot and place the order right there, to save a significant amount on your order.

MOBILE APP

Some restaurants only offer earning rewards with each purchase, to then be redeemed at a later date (e.g., I redeemed points earned in the Chick-Fil-A app for a free medium waffle fry). There are others that occasionally send a reward to you with a quick expiration date (e.g., Chick-Fil-A will send a free chicken sandwich if you haven’t ordered recently). While other restaurants may offer deals like coupons within the app (e.g., 50% off a 10 piece nugget).

In the era of scanning your own groceries and placing your own restaurant orders at kiosks instead of a cashier, it’s not surprising that companies are attempting to entice you into mobile ordering with deals. Not all fast food places have as robust of a ‘deals’ section as McDonald’s, which is probably why we almost only stop at McDonald’s on our road trips. However, it’s noteworthy that each McDonald’s restaurant offers different deals. Some may be completely different, while others may just be a different price (e.g., a 40 piece nugget for $9.99, or a 40 piece nugget for $13.99).

THE PROCESS

We typically use my phone and Mr. ODA’s phone to place two orders so we can take advantage of two deals. I fully acknowledge that this is all ‘extra.’ Most of the time, I don’t have the patience to put all that effort in, but Mr. ODA does. He knows the general menu prices so he can quickly evaluate where the best deals are. One time, I was given no instructions on placing my half of the order, and I picked the deal for $1 coke. For a while, that was a big deal because they had raised the price of soda so much (and took away the $1 anytime any size promotion they had run for a long time). It turns out, sodas are now $1.29 on the menu, so the $1 deal isn’t great when there are other deals to be had (like free fries). For McDonald’s, you can only use one deal in a 15 minute span. That means we’ve also placed an order to eat at the restaurant, and then placed another order once we were there and able to on the app.

For my local restaurant, the deals currently offered are:
– Free double cheeseburger or 6 piece nugget when you buy one
– 50% off a 10 piece nugget
– $0 delivery fee with a $15 purchase
– 20% off any purchase of $5 or more
– 30% off any purchase of $5 or more
– Free any size fries with a $1 purchase
– $5 daily double, double cheeseburger, or mcdouble, medium fries, and medium soft drink
– Free 10 piece nugget with a $3 purchase

First, you want to verify that the restaurant address is the correct one you’re going to. You need to utilize the deals of a specific location, and you need to pick up your order at that location.

With a family of 5 (and 3 kids who are 5 and younger…picky eaters), we don’t stray from what we know very much. But let’s delve into the deal options. A large fry is $3.29, a medium fry is $2.99; a McDouble is $2.79; a 6 piece nugget is $3.49, a 10 piece is $4.99, a 20 piece is $6.69, and a 40 piece is $9.49; a small, medium, or large coke is $1.29. McDonalds also has the $1 $2 $3 menu, even though nothing is ever $1 anymore (mine has a McChicken for $2.19, McDouble for $2.79 (glad that’s consistent on the menu), $2.29 small fry, and $2.59 4 piece chicken nugget).

The McDouble deal would be $2.79+2.99+1.29=$7.07. You’re saving $2.07 by utilizing the deal.

The 10 piece nugget meal is $8.39. A la carte, the cost would be $4.99+2.99+1.29=$9.27. You’re saving $0.88 by making it a meal. If I were to use the deals, I could order a medium fry and medium drink for $4.28, hitting the $3 minimum purchase requirement, and get the 10 piece nuggets for free. Then I’m saving $4.11 from the meal price.

We typically will order a large fry and utilize the 10 piece deal on one phone. Then we’ll use my phone to order a coke and use the ‘free any size fry’ deal. Depending on the situation, we may add one or two McDoubles or McChickens to the order. If we order two sandwiches, we’re spending $9 to feed 5 of us.

SUMMARY

We don’t eat from restaurants very often. Sometimes we feel like going out to eat, or running an errand that will include a meal (like a Costco food court meal haha). Most of the time, we’re eating at a restaurant out of necessity (yes, a necessity because I refuse to live off pop tarts and granola bars for a 12 hour drive).

This entire post is a plug to utilize rewards systems and apps to help your money go further. This doesn’t even scratch the surface of mobile ordering, which would include delivery apps like UberEats. Menu prices on these food delivery apps are higher than the restaurant, charge fees, and you have to tip. I don’t think people fully understand how much extra money they’re spending when they use an app like that. But as I said, that’s not the point of this post. If you’re driving to a fast food restaurant (or even a fast casual like Chipotle or Qdoba), join their rewards and take advantage of their app-only deals.

Be strategic and intentional on how you’re spending money. Put the one full minute it takes into placing a mobile order to cut your cost in half!

Rental Cost Changes from One Year Ago

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I keep updating my investment property tracking spreadsheet to reflect the current costs of insurance and taxes. My tracking shows last year’s amount, which I use as an indicator on whether I need to look further into this year’s bill (e.g., is the amount a reasonable increase?). For so many years, most of our insurance policies changed by a few dollars; now, I’m seeing large swings in what’s being charged. Where jurisdictions were slow to change property assessments, they’re now catching up, which increases the taxes.

As a renter, your rent is increasing to cover these costs of the landlord/owner. Here’s a comparison of my fixed cost increases against my rent rate increases. As you’ll see, I’m not trying to get top dollar out of these properties because the market has increased so much (and that leaves me more exposed if someone doesn’t pay their rent on time). My rent increases barely cover the cost increases that are happening on some of these houses. Remember that while I’m showing fixed costs, this isn’t covering the maintenance calls that I receive and how they’re more expensive than they once were also.

ESCROW, CONCEPTUALLY

In most cases, for a traditional mortgage, an escrow account is set up. It calculates your taxes and insurance payments for the year, divides by twelve, and is added to your principal and interest payment for the mortgage. In addition to covering the total payments to be made, there’s also a requirement that the balance of the account never falls below twice the required monthly payment.

If your taxes owed for a year are $1500, and the insurance is $300, then your monthly breakdown is $150 ($1500+$300=$1800; $1800/12=$150). The minimum monthly required balance is $300 (twice the $150).

As taxes and insurance increase each year (typically), there’s an analysis done to ensure the projected monthly balance never falls below that $300 threshold. If the balance is projected to fall below the required minimum amount, then it triggers an increase in your escrow payment. Your escrow payment will increase to cover the shortfall, but also to cover the new projected costs to be paid. So while you may be offered the ability to make a one-time payment to cover the shortfall, your mortgage payment may still increase to cover the projected costs. For example, if last year, your tax payment increased to $1750, and your insurance to $350, then your monthly payment to cover those charges is $175 ($1750+350=$2100; $2100/12=$175). Your mortgage will increase by $25 per month because now your escrow agent knows the projected costs to cover are higher.

The analysis uses the current year’s amounts owed to project the coming year’s monthly balances; it doesn’t account for the probability that these amounts increase each year, which essentially means that there’s perpetually a shortfall. In other words, while in Year3, they know that there was an increase in costs from Year1 to Year2, they don’t inflate the costs of Year2 to cover Year3 projected payments.

I prefer to not have an escrow, but at this point, for any mortgages we have, they’re all escrowed. We have six of thirteen houses with escrow. While I pay more as my mortgage to feed into that escrow account, it means I don’t have to manage the annual or semi-annual payments. On the contrary, this means I need to be managing our finances to prepare for large outlays throughout the year on seven houses (in the last quarter of the year, I’m paying out over $8,000 to cover taxes owed).

ESCROW REANALYSIS

This post was prompted by a notification that an escrow reanalysis was done on a mortgage that was just transferred to a new company. I thought that their break down was the most clear I’ve seen. A quick note – your escrow will pay the bills that come due, regardless of the balance in the account, even if it means it’ll overdraw the account.

They clearly showed that the anticipated property taxes are projected at $199 per month (although, I’ll reiterate that this is based on last year’s actual outlay numbers, which aren’t accurate for the coming year). Then they show that the taxes are $43.08 per month. They then go as far to show the total of these two required outlays. There’s verbiage that explains the required minimum in the account must be twice the total taxes and insurance ($242.08 * 2 = $484.16).

There’s another detailed breakdown of each month’s escrow income and outlay (that I don’t have pictured here) that shows the month that is projected to fall below the required minimum. That month’s account balance is -$136.37. The difference between the required amount of $484.16 and the negative balance of $136.37 is $620.53 (pictured above). When that’s broken down by month, it’s $51.71. Take the total taxes and insurance payments and add the shortage amount to get the new monthly escrow amount of $293.79, a change from $222.25.

Below, they show you that there is no change in the principal and interest payment, then it shows how the current escrow payment is adjusted to the new escrow payment, along with the shortage amount.

I created this table to show the differences between escrow payments over the two years. I kept the houses that don’t have an escrow because it can be compared to a future table in this post. There is no House5 in this table because we sold it several years ago (houses didn’t get renumbered because House5 still exists in terms of tax documentation).

TAX AND INSURANCE UPDATES

Each year, we see an increase in these amounts. Usually it’s across the board, but Kentucky districts had kept the housing assessments the same through the pandemic. As housing prices increase, your property assessment can be increased by your tax jurisdiction. The assessment increasing leads to an increase in taxes. This is why people getting excited that house prices in their neighborhood are selling higher than expected isn’t great if you’re not planning on selling any time soon; those increases in values means you’re paying higher in taxes.

In Richmond, VA, the property taxes are $1.20 per each $100 of the assessed value. In 2022, House2’s value $163,000. In 2023, the value was increased to $203,000. And let’s not forget that we purchased the house for $117,000. While it’s nice that the home values in the neighborhood are increasing significantly (and we knew the area was going to get better and better based on development happening), we can’t realize this gain until (and if) we sell. So in the meantime, we’re paying higher taxes on this amount. Although, I suppose the assessment could be even higher because the actual value of this house is probably more like $260,000.

Among 13 houses (don’t get confused – there’s no House5 up there because we sold it), I need to cover a total cost increase for taxes and insurances of over $4,500. This doesn’t include the higher costs of trades people if there are any maintenance calls, so this increase is the bare minimum for me to keep my same income.

RENT INCREASES

I constantly see complaints about the cost of rent, or that a landlord is increasing rent. Unless we’re looking for a tenant to move, our general philosophy is to increase rent $50 every two years. This worked fine because home assessments increased at a slow, reasonable rate until recent years. Now jurisdictions are capturing these larger increases based on those inflated sale numbers when competition was high in from 2020 through 2022.

In some cases, the rent for the area brought it in a higher amount than compared to our purchase price of a house. In those cases, we went several years without increasing the rent. Looking back, that probably wasn’t the best idea because now we’re behind on capturing how significant these last few year’s fixed costs have increased. However, the trade off to that is that we’ve kept great tenants in the house, haven’t had to pay to turnover the unit, and have minimal maintenance calls.

This table shows the total increase in insurance and tax payments from 2022 to 2023 in the first column. I divided that by 12 to get the monthly amount of that increase (second column). Then, since I said we typically increase our rent by $50 every two years for the same tenant, I multiplied that monthly amount by 2. I’m showing that if we want to only increase rent on long term tenants every other year, then I need to plan ahead on how much my costs are increasing.

This isn’t a perfectly accurate capturing of our cost increases since I’m not going back to 2021 to capture those changes in amounts, but it’s a general estimate. This shows that if I were to increase all houses by only $50 every two years, it’s cutting into my bottom line. Only 6 of the houses have increases less than $50 for two years.

SETTING THE RENTAL RATE

Let’s pause and talk about “bottom line.” Landlords have investment properties to make a profit. They’re looking for an income stream.

I regularly hear people say they can own a house for less than their rent, which is likely if you’re speaking only on principal and interest of a loan. However, you need to qualify for that loan. You may not have 20% down, so you may be required to pay private mortgage insurance (PMI). You may not have good credit, which means you’re probably going to pay a higher interest rate than I’m currently paying. You need to be able to cover taxes and insurance, which means you’ll have an escrow account set up, which increases your monthly mortgage payment. Then there’s all the other costs of home ownership.

That’s where people forget. When your hot water goes out, you call me. I spend $1,500 for about 2 hours worth of someone’s work to replace that. When you have a water leak, I spend $3,000 for a day’s worth of 2 plumbers’ work. When a storm drops a tree on your house, I’m the one spending hours on the phone with insurance, finding a contractor, getting quotes, and paying the contractor $3,700 before I get insurance reimbursement. Those are the big unexpected expenses. That doesn’t include all those smaller plumbing problems that cost $200 or $500 at a time.

Then in some cases, I probably put time and money into the house to even get it ready to rent to you. I didn’t always buy a house that was ready to live in. You may have projects that need to be done when you first move in also, so which costs money. Those are expenses that I’m trying to recoup through my rent rate also.

There may be other costs to my ownership that I’m trying to recoup through the rent, such as property management. I may have to pay someone else 10% of the rent, every month. I am projecting that there are going to be costs that I need to pay for also (e.g., water heater, roof replacement, plumbing issues). When I need to pay a plumber $3,000, I’m not coming to the tenant to say “I now need $3,000 to cover this cost.” Instead, I’ve set my rental rate the expect such a large payout on my part.

Not only am I trying to make sure that my rent is set at the right about to cover the costs that I’m putting into owning and maintaining the house, I’m also hoping that I’m going to make some money off owning this house so that I can live. I don’t get to pay myself for the hours I put into managing the property. Whether or not I have a property manager, there is still time that I put into managing the houses. Would you want to work for free?

BACK TO RENT INCREASES

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), this shows that our monthly income was increased by $475. If you look back at our total monthly increase in expenses of just taxes and insurance, it’s about $375; add in the cost increases for property management (increased rent means increased fees because fees are based on the rent price), and our fixed costs went up $415. On a whole, we’ve offset the increases.

However, you can see if we had one or two houses, some of those increases could be significant. House3 is costing us $64 more for each month, but our increases are typically about $50 at a time. We’ve had the same tenant in this house since we bought it. A $50 increase every two years hasn’t kept up with our costs. Since we have other houses, it helps cover the costs on House3.

House2 and House3 are identical in layout. House2 has been upgraded to all LVP, whereas House3 has carpet everywhere except the kitchen and bathrooms (granted, it’s new carpet two years ago). Since we purchased these two homes with tenants, rent was already set for us. House3 has been the same tenant since we bought the house, and the increases have brought us to $1200 per month in rent. House2 has been turned over 3 times: the first was a divorced lady who moved back in with her ex-husband; the second was there for several years, but we began having a lot of issues with her, and we told her the lease was up; the third was the one who flooded the house in December, and causing the need for the fourth. Now we’re renting that house at its market value of $1600. That means House3 is operating at a much lower rent than we could get if we rented to new tenants. However, the tenants are wonderful, and we’ve purposely not raised the rent on them in significant ways because we don’t want to cause them to move.

SUMMARY

Cost increases in rental properties can be significant over the years. With the rising costs of all goods and services, property values weren’t immune. The increase in property values leads to an increase in an assessment, which means an increase in taxes. That cost is relayed to the tenant, as this is a for-profit business. I’m trying to make an income for my family with rental properties.

I’m not trying to price gouge tenants, but make a fair living based on the costs of owning these houses. My first goal is to not turnover tenants, so I do what I can to make my tenants happy by taking care of the houses and not creating drastic rent increases each year. Secondly, I’m not going to set a price that my tenant can’t afford, thereby putting me in a hard position where I don’t have rent paid. Having multiple properties helps to offset the costs so I don’t have to play catch up on one or two houses worth of higher expenses, by putting my long-term tenants in an uncomfortable position where they can’t afford the rent.

November Financial Update

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A day late, but here we are. The market has gone up a bit, so that helped our net worth increase, even though we had a $10k increase in our credit card balances because we replaced the carpet in our house. Again, we opened a new credit card for this large purchase, which will give us 15 months of 0% interest. While we could pay the balance now, it’s a strategy to allow us to keep more liquid cash and earn interest on the money.

We have a tenant that only recently paid October’s rent, and has paid about $200 towards November rent as of today. I’m frustrated, but I have another post that will go into all the details for that. I can be understanding and work with you, but only if you talk to me. She doesn’t communicate, and she hasn’t upheld any part of what she said she’s going to do about payments.

I had one tenant ask me about moving out early, but we haven’t pursued anything yet. I have another tenant who is under contract on a house, so we’re waiting for notice from them. We knew they were looking for a house to purchase, so we structured our lease to allow them out of the lease at any time. It’s unfortunate for our timing that it’ll probably be a January/February rental now, but I’m happy for them moving on to their next phase of life.

I had to pay two small tax payments to a local jurisdiction this month, and then also paid taxes on one of our properties (luckily they still take credit cards with no fee, so we get rewards for that payment!). I’ve had to pay several medical bills (for myself) over the past month, which has been annoying. All that money to bills, only for there to be no answers.

We went to a local ski mountain to look for ski boots for my new-to-me skis that I purchased. In the process, we ended up buying the two older kids skis and boots, along with season passes for the family. So medical bills, ski equipment and passes, tax payments, and Christmas gifts have our credit cards high now (even without the 10k+ for carpet).

Family Trip

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We went on a trip to Indianapolis last month. We did more activities than we typically would have, so our spending was more than average.

The reason behind the trip was the Children’s Museum. We like visiting zoos around the country, so we used that to fill our other day there. The zoo was $91 for entry for 2 adults and 2 children, while our youngest was free. We had to pay for parking, bought lunch at the cafeteria, two kids rode the carousel, and we all rode the train; that came to $66.70 spent the day of our visit. The Children’s Museum was $90 for entry for the same group of us. It also had a carousel that we let the kids ride, I let them get a flattened penny (they used “their” $1 for it), and we bought lunch (parking in a parking garage was free); that came to an additional $35.88 spent on that day. The zoo’s meals were very reasonably priced, but the Children’s Museum’s meals were ridiculously expensive, so that free parking wasn’t exactly free.

We placed a grocery pick up order when we arrived, and that covered our breakfasts and dinners ($39.10, but we didn’t even use everything we purchased, so that’s inflated). We stopped at McDonald’s on the way there and as we left the city on the last day ($17.68). McDonald’s and Qdoba are sure fire ways to get our kids to eat and eat quickly, so they’re nice when we’re on the road.

On the first day, we went exploring the city. We had to pay to park in a parking garage, which was $5. On the last day, we did a Capitol tour and visited another museum (both of which were free), but we had to pay to park twice ($2.50).

We had booked an AirBnB for the trip. A series of events I won’t get into meant that we received a full refund from the originally booked location, had a coupon code for our inconvenience, and booked a new location right away. We ended up spending $574.32 for our lodging of 3 nights. We specifically didn’t book the cheapest place available because we wanted the comfort of multiple bedrooms for the kids. The two oldest can sleep together, but the youngest needs his own space so that it can be without a night light. We could have managed with two bedrooms because the youngest slept in the master closet, but I can never guarantee that there’s a closet big enough for a pack and play. This place had 4 bedrooms, but we didn’t use one of them. We also wanted a hot tub available, so Mr. ODA and I could hang out and watch tv after the kids went to bed. It’s an amenity we’ve grown fond of, and we even plan to purchase one for ourselves if our deck ever gets replaced.

In total, this trip cost us $922.18 (plus gas) for 3 nights away. This is a higher than normal 3-night trip for us, but we were ok with it since we hadn’t taken our usual amount of trips (newborn life). We could have planned ahead on our two big days to pack a lunch instead of buying there, but we chose the convenience of purchasing the meals over the potential savings, especially knowing that we weren’t spending anything outside the normal realm for our breakfasts (cereal) and dinners (easy, quick pasta meals). Although this wasn’t known at the time of booking, but it was once we started the activities, the concession from AirBnB more than covered our meals and extra activities on each day.

Our kids are 5, 3, and 10 months. The Children’s Museum was great for their ages. There were some exhibits for older kids that we bypassed. I thought the St Louis Science Museum was better at having interactive exhibits throughout (and is free!), but it didn’t mean that this place was bad. The zoo was nice too. There’s a lot of shade, which was appreciated on a very hot day, even in October. It felt smaller than the Cincinnati Zoo, which is where we usually go, but it was clean and the animal exhibits were nice. They had a lot of shows and “ranger talks” included with your admission too. There was a dolphin show that was included with admission that was significantly more than I would have ever expected as a free attraction!

The city of Indianapolis wasn’t great. We didn’t encounter a really nice area of the city; most of it is run down, and there was a lot of homeless downtown. It’s clear that there is a lot of updating underway, and that it’ll probably be a really cool place in a few years. I never felt unsafe, but it was noteworthy that we haven’t visited a city like this since Detroit (although we did find a nice place there, ironically).

All in all, we spent less than we originally projected. A 3 night trip where we were sufficiently entertained, but not overly exhausted (the kids got to bed on time!) for under $1000 was great.

Home Sale Proceeds

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*This post was started in November 2022, but our son was born 3 weeks early (and on Thanksgiving), so it fell off my radar for a long time while I caught back up. Let’s dive in now.

We sold our primary home at the beginning of November to move a half hour away and closer to family. It was a new construction home, and we purposely sold when we did to avoid capital gains taxes. If you call it your primary residence for 2 of the last 5 years, you’re exempt from capital gains. Considering the market over the last two years (2020-2022), we were slated to owe a hefty penny if we sold before that 2 year mark.

Had we sold earlier or perhaps waited for the spring, we could have made more. Instead, we opted to be rid of the home, not try to rent, and be able to have that behind us. We were extremely fortunate that we were under contract by the end of the first weekend we listed. The market had cooled significantly from the multi-bid, exorbitant pricing, with appraisal waiving language days.

We only had 2 showings. The first politely let us know they wanted a walk-out basement. We had an amazing basement with 9′ ceilings and no soffits, but it didn’t have a door due to the floodplain. We don’t really understand why, but the backyard was definitely low enough for it to have been a walk out basement. It was one of the red flags that made me uncomfortable living there, along with a long delay for construction on our lot and a few around us due to extensive sink hole surveying. The second showing made us an offer 10k below asking. We sort of split the difference at $495k, and they accepted.

There were several houses listed in that neighborhood for weeks after we closed, that were listed the same weekend as us, so I am eternally grateful that the stars aligned for what we wanted/needed.

PROCEEDS CALCULATION

We purchased the home for $346,793 in November 2020. The contracted purchase price when we sold was $495,000, which was completed in November 2022. That’s a difference of $148,207, but that’s not “take away” money.

As the seller, you’re typically responsible for paying out the Realtor commissions. They’re typically 6%. We asked our Realtor if she would drop it to 5% (buyers agent gets 3%, sellers agent gets 2%) since we had drawn up our purchase contract sight unseen and this was the 4th commission based transaction she had from us in less than 2 years. She agreed. I truly don’t like asking someone to take a lower commission, but due to there being several transactions in a short period of time, many not even needing much effort (showings, phone calls, etc.), I accepted Mr. ODA’s plea to ask. That comes to $24,750 paid in Realtor commissions.

We then have to pay off any loans that used that property as collateral. We had a mortgage and a Home Equity Line of Credit (HELOC). We had put 20% down on the purchase, so the mortgage had about $266k left as the balance. The HELOC had been used for a couple of other things than just the down payment on a new home, and it didn’t require principal payments on it while we had it, so that balance was about $86k.

We walked away from the closing table with about $117,000 after tax offsets and such.

PAST DETERMINATIONS FOR WHAT TO DO WITH THE PROCEEDS

In July 2012, we purchased our first home for $380,000. We put 20% down; it was a foreclosure, but the only work we had to do was on the main floor bathroom. When we sold that home Fairfax, VA for $442,500 in October 2015, we paid off a car loan and bought our second two rental properties in Richmond, VA. The car loan was only at 0.9% interest, so it didn’t meet Mr. ODA’s requirements to pay down loans with higher interest rates, but it did alleviate one monthly payment I had to manage. The irony of that statement, now that I manage 14 houses worth of payments all year. We also used those proceeds to put 20% down on the purchase of a new primary home outside of Richmond, which had a purchase price of $359,743. We paid off House1’s mortgage because the loan had a balloon payment that we needed to be ahead of.

When we sold that Richmond home for $399,000 in September 2020, we took about $109k away. We used those proceeds to put 20% down on the purchase of our new home, at $346,793, outside of Lexington, KY. We paid off House4, House6, and House13. Since paying towards a mortgage and not paying it off doesn’t change your monthly cash flow, we focused on where we could eliminate a mortgage payment. We’ve since paid off House11 and House12. House12 had a high interest rate, so we were interested in eliminating that as fast as possible, even though we were paying for it with a partner.

WHERE DID THE MONEY GO THIS TIME

We purchased our current primary home last summer and put work into it. Since we purchased it before selling our house, we used a HELOC to pay for the down payment. That meant that when we walked away from the closing table, the money we were putting in our bank account had no distinct purpose (like in the previous cases where we had to use some of the sale proceeds to buy another primary house).

The first thing we did was open a high yield savings account. At the time, it was necessary because our savings account wasn’t paying market rate. I remember Mr. ODA complaining that interest rates on loans were increasing, but it wasn’t being shown on savings interest side. He found a high yield savings account that gave a sign on bonus (we like that ‘free’ money!). We put $50,000 into that account, earning over 4% interest. The money in that account was removed and put into our regular savings account, which is now earning over 4%.

Since the money didn’t have a purpose, we needed to get it into the market. If we put it all in the market at once, then we’re subject to a lot more fluctuation. To hedge our volatility, we planned to schedule regular investments. It seemed crazy to me, but our financial advisor and Mr. ODA decided on $5,000 per week. That would take 20 weeks to accomplish. To my chagrin, this was set up as an auto transfer. Even with a large balance sitting in the account, it didn’t hurt any less watching $5,000 every week be taken out. This plan didn’t last long though because Mr. ODA found Treasury accounts that act as short term certificates of deposit. My next post will go into this in more detail.

Not an immediate need, and we didn’t rush to buy something for the sake of buying it, but we earmarked about $20k for the purchase of a new van. I love the van we bought in 2019 (which was a used 2017), but it had a few kinks in it. I also felt pretty good about the deal I got on it. However, I didn’t put the time into test driving and looking at this van that I really should have because one of us had to stay in the show room with the kids while the other went for a drive. I also know what I’m looking for in a used car now (that was our first used car experience), versus buying a brand new car that hadn’t been driven by others. It helped that I was looking to buy the same exact van, just newer, so I know how it’s supposed to work and what to test. We ended up finding a van about 2 hours away from us in early 2023. We’re almost a year into this van, and I absolutely love it.

In the back of our minds, we’re still looking for another rental property. There’s an area in town near us that would work for short term rentals, which I’d like to dabble in. We have seriously considered a few, but interest rates have shot it down. A 1500 square foot house, with a $200,000 mortgage, comes to a monthly payment (of just principal and interest) of about $1,400. That’s just not good margins with such high interest on it. We’ll keep an open mind, but so far it isn’t panning out.

SUMMARY

Our savings account is currently earning 4.22%. Mr. ODA is also managing that balance by using the short-term Treasury bills. Since we started with the Treasury bills, we’ve made about $500, which is on top of the interest we’ve earned to date on the savings account, which is over $1600.

We started off with paying the mortgage that had a balloon payment. It was a commercial type loan, so it was amortized over 30 years, but was really only a 5 year loan. We decided to pay it off instead of re-mortgaging it at the end of the 5 years. After we took care of the balloon payment approaching, we started paying off mortgages where we could eliminate a payment (we had multiple houses with $30-60k worth of a balance), and then moved onto paying off high interest rate mortgages (for reference, a high interest rate was 5% … which is much different than today’s mortgage rates being “good” at 7.5%). We went through the process to refinance several mortgages, so we’re at a point where we’re happy with the mortgages that are left. If we wanted 100% cash flow, we’d start paying towards principal balances. However, we don’t feel that’s necessary for our current situation. We have 6 mortgages left (including our personal residence) out of 14 houses.

We definitely are more hands on with our money management than most people are going to be interested in. Now that we’re happy with our mortgage situation, we are focused on the interest side of our money working for us. With multiple Treasury bills that are reinvested for short periods of time (4 week and 8 week bills), then we’re able to earn quick interest while we don’t have a purpose for that money.

One of our houses has a balloon payment again (commercial loan). That will come due in about 3.5 years. Considering what current interest rates are, it doesn’t appear that refinancing is as enticing as just paying off the balance or selling the house. We’ll have to keep that in mind as we work on investments and having enough liquid cash over the coming years, because that loan’s balance is going to be about $173k at the end of the 5 year term.

For now, we’re in a good money management state with several short term bills and a savings account rate over 4%.

October Financial Update

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Our net worth took a hit this month, over $96k less than last month. I updated the value of each house we own. I don’t do this regularly anymore because it doesn’t change significantly month-to-month and it’s very time consuming. The market is cooling from the multiple-bid market we were in over the last few years, so home values are starting to come down ever so slightly. They’re still much higher than what they were 3 years ago (and I have tax assessments to prove the pain of that), but it does affect our net worth this month since it’s lower than it had been.

Also affecting our net worth is the market itself. It’s down, which it does around this time every year (confirmed through the history of my financial update posts). Our investment accounts are slightly down, our cash is significantly down because I paid off a large credit card balance and because Mr. ODA has transferred to a Treasury account for some of it, and our investment property values are down.

We opened a new credit card this month because we have purchased new carpet for our house (our entire second floor except 2 bathrooms, the stairs, and the living room all add up very quickly). As I’ve shared numerous times, when we’re about to have a large purchase, we look to open a new credit card that we can use as a loan. Sure, we have the cash available to pay this immediately, but wouldn’t it be nice to earn interest on your cash balance for 12-15 months and get some sort of sign-on bonus from the company?

I paid off our last 0% interest credit card at the end of September. But our credit card balance is still slightly higher than I’d expect because I haven’t paid last month’s statement on one, which is almost $3,000. I used to try to pay off all balances before doing a net worth update so that it was the most accurate, but now that we’re keeping Mr. ODA’s paycheck separate and trying to capitalize on interest to earn, credit cards aren’t paid until the last minute. We’re also still carrying about $30k worth of insurance money that we can’t seem to spend because State Farm is doing their hardest to drag their feet and restart our claims process each week.

I have a house that hasn’t paid a penny towards rent this month. She did let us know that it’ll be paid in October some time (no date or expectation given to me is infuriating). If she doesn’t pay something tomorrow (assuming we’re two Fridays into the month for pay checks), I’ll give a warning about the notice of default being given.

Roofing Lesson

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Today’s post is going to be short and sweet. Well, that’s how I think to start every thought I have to share, and it turns into a novel with research and ‘citations.’ Let’s see how this goes. Update: It’s long, there’s a legal citation, and I ‘teach’ math. Sorry. 😛

We have two houses with flat roofs. They’re a pain. They always seem to leak, and no one wants to work on them.

In 2019, we had issues with a house that had an internal ice dam and gutter system, in addition to a flat roof over an extension. Water kept leaking in the kitchen. After two years of issues, we finally had a roofer respond to our request for help on a flat roof. As soon as a roofer hears “flat roof,” they seem to shut down and say they don’t work on flat roofs. Here was the quote.

So we had this work done for $1,900, and we haven’t heard about the roof since.

We have another house where there was a flat roof added to an addition. In 2017, we had a roofer replace the roof. Somewhere, something was lost in translation of the job. We thought he’d address the flat roof and fix it, incorporating it into the main roof line. He finished the job, and it was clear that was not part of the scope as we thought, even though that was the whole reason we called him out. He simply said “I don’t work on flat roofs.” That wasn’t clear when we asked you to give us a quote, and how do you just ignore that there’s another roof line as a roofer?

The more we spent time and money on this roof, the more it came to light what happened. It appears that there was a deck that eventually was covered with a corrugated metal sheet. Then someone decided they wanted a laundry room, so they built a laundry room under this metal sheet. The roof line wasn’t properly insulated from water infiltration. We had several issues of water leaking into the laundry room. Mr. ODA put silicone and caulk along the roofline as a stopgap because roofers weren’t acknowledging us. We thought we had fixed it, and I had put a lot of effort into fixing the wet drywall and repainting the room. After two years, the silicone finally gave way.

Our property manager was able to get 3-4 roofers to come look at the job, but only 2 gave us a quote (why is it a norm to just ghost customers and not have the decency to close the loop and say you don’t want the job?). One of the contractors didn’t appear to understand the job, and that concerned me. He seemed to want to redo the entire roof, and that was definitely not in our finances for this house because we replaced the roof 3 years ago. Then he also suggested a ‘TPO roof’ for the flat roof. I don’t know what that is, and I didn’t like that the explanation to me started with “it’s a flat roof that…” No. I’m done with “flat.” Did I give it a fair chance? No. Do I care? No. I wanted a pitched roof line. This is important for later in the story.

I had several concerns about the other roofer’s estimate, but they were less fundamental (or so I thought). First, I was concerned about the terminology being used as a porch. Perhaps it’s just me, but I call the open-air overhang on the front of the house the porch, and the open-air part attached to the back of the house a deck. I was concerned that the terminology “pitched roof” was not explicit enough to our end goal. I questioned that his removal of the corrugated metal roof would leave the deck exposed, so the gutters would need to be rerouted and added. I also questioned about how he was going to cover the sides once the pitch was created – would it be just painted or would it be sided, and if sided, how would he match it to look right.

I had my property manager call him, I called him, and I emailed him, but I received no response. I was trying to confirm the scope of work. Mr. ODA told me that these contractors are good at their job, but not good at the administrative side, so just let it go. I was an auditor; accurate documentation for a job is important to me. 🙂

Here’s how it was written:

I decided to try to be easy going. There was a space for comments when I accepted the proposal. I added: I’m accepting this estimate based on the verbal agreement with [property manager] that the scope of work is confirmed as removing the flat roof over the DECK and laundry room (not sure ‘porch’ terminology), that the deck won’t be covered again and a lean-to roof will be put over the laundry room, and that all gutter systems will be appropriately rerouted to divert water from the house.

He gave me the quote on June 23rd. I accepted this work on July 5th. He kept delaying us. He would say “I’m going to get the materials today, so we’ll be there tomorrow.” Tomorrow never came. On August 25, he said he was going to 100% start the following Monday and be done by Wednesday. He finally called on Wednesday, and he said, “I got my guys out there today. I decided to do a TPO roof instead.” You’re kidding me, right? He kept pushing that it’s a “better” roof than a pitched roof, and I should be ok with it. Except, I signed a contract. The contract did not say their job was to install a TPO roof. I said that was unacceptable and I wanted a pitched roof. Here’s the picture that I received at that point. It looks really flat to me, and it has the point where it meets the main house still below the roof line (although you probably can’t tell there as well here).

On September 5th, he said they should be out the following day to finish it as a pitched roof. It took until September 11th for us to be told that the roof was done. As you can see, the gutters were not addressed. Luckily he said he’d get right out to fix that, and he did, which was appreciated.

While you can see that there has been a slight pitch added, it is not a sufficient pitch as required for asphalt shingles. Did I know there was a minimum slope requirement for asphalt shingles before September? Nope. But you bet I read up on it and figured it out as fast as I could. Nearly all manufacturers of asphalt shingles have a minimum requirement of a 2:12 slope. On top of that, Virginia Code has the same slope requirement.

This means that for every foot, the rise of the tallest point must be twice that in inches. A 7 foot long distance from the top of the pitch to the outer wall requires a 14 inch rise at the tallest point. That’s the simplest way I’ve been able to describe it.

While the connection point in the second try is above the wall/roof intersection, and it may have been ‘fine,’ I wasn’t here to spend $3,800 on “fine.” He kept pushing that he guarantees his work for 5 years. He also pointed out that a tropical storm was on its way that coming weekend, so it would essentially be a good stress test. So, he was asking me to pay him for a job that was “good enough” and hope that if there was a problem, he’d come back and fix it. No thanks.

He got up on the roof, held up a piece of metal (with no level), and claimed that his zoomed in distance was 2″ off the roof, so it was 2:12. Once I finally got to the point of saying, “what’s the distance from the house?” He said 7′. I said “so the rise has to be double that, so 14″. Is it 14″?” He said no and that he’d fix it. He finally got it done last week. He took pictures along the way to prove that he did the job correctly since I called him on not doing it correctly (or let’s just do the work right to begin with instead of hoping a homeowner won’t question it – where’s integrity these days).

All that was to share that you should do your due diligence when hiring contractors. Don’t assume that they’re going to do the right thing because they’re probably going to assume you’re not well-educated in their field. By no means am I a roofing expert at this point, but I appreciate knowing something new. I just wish I didn’t have to learn things quickly in order to protect my ‘investments.’ So now you also know that there are manufacturer requirements, in addition to your expected state-wide requirements in most fields. Take the time to be educated just enough or have someone you can trust to point out where it went wrong. In this case, I said “that doesn’t look like what I expected,” and I had our handyman look at it. He said the pitch isn’t enough, and that’s where I learned that there are minimum slope requirements. It’s hard because I didn’t know what I didn’t know, but I appreciated having other trusted people to bounce questions off of.

Vacations & Their Cost

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Here’s an unpopular opinion: you don’t need to buy all the amenities to have a good vacation.

Our financial advisor has a saying in his family, “we can’t afford ice cream.” If they wanted to, they could clearly pay for their family to have an ice cream night on vacation. However, they choose not to spend their money in such a way for the sake of the big picture.

The point I’m trying to make here is that you need to stop and think about an expense. I can’t remember what the item was, but when I went to pay for it, it was $8. It’s not that I couldn’t afford to purchase something at $8. It was simply that this item was worth $2 to me. The value of it was not $6 more of my money.

This post (or rant) started because of this Facebook post that was made in a local mom’s group. Apologies for the large image, but you couldn’t read the numbers until I got it this big.

Quite a few people echoed my point – stop with the add-ons. You can have a great day without the additional amenities/activities, and without the all day dining options. We had a season pass to the Cincinnati Zoo. We ate before we entered, packed snacks, and then ate on the way home if needed – at McDonald’s, with deals (we lived over an hour away from the zoo, so sometimes we couldn’t plan it to have only one meal while out). At a similar place to Kings Island, I know people who have packed coolers and left them in the car because you’re allowed to exit and re-enter.

Not buying extras holds true for any event. Your kid doesn’t need a $20 light up wand, that will be promptly forgotten about at the 48 hour mark, at Disney on Ice. The show itself was exciting and a “treat,” so let it stand alone. Your kid doesn’t need a $15 ice cream at the theme park. Simply let them enjoy the experience without developing a sense of entitlement or expectation that they’re going to get a “treat” every time you’re out.

I completely understand the mentality of “go big” for vacations because it’s a special time. But what is that worth? I know some people spend all year saving up to go to Disney, and they want the “full” experience. Disney itself is very expensive, but then you start spending on gift shop paraphernalia and food in the park, you’ve now spent a small fortune for hours of entertainment.

DISCIPLINE

Instead of only being disciplined for those few days per year, focus on the question: what is each individual dollar worth? I have an entire post where I share the thought process and conundrum I faced for purchasing a $4 weighted tape dispenser. Seriously. While you’ve “saved” for this vacation, what if that saving mentality helped you be able to pay your regular bills along the way? Or what if instead of spending extra money on vacation, that money went towards paying for school supplies? It’s all about creating the mentality and discipline to ask yourself what the value of something is, both to you and to the economy – if you’d pay $2 for a water bottle outside a stadium, is it worth paying $6 inside the stadium? Or could you plan ahead and bring your own water?

This irritation isn’t only for vacations. A friend of mine would leave their house to go to a nearby gas station to buy gatorade and soda bottles. You were at home! If going to the gas station is a regular occurrence, and you enjoy drinking soda out of a bottle, why don’t you get a multi-pack and keep it in your refrigerator? Then there’s the person I used to live across the street from who would order door dash regularly. It probably averaged to once per day; some days there was two deliveries, and some times she may skip a day. Then she posted a GoFundMe for help to pay for her tuition and books to finish her RN. She also posted all the amazing toys (excessive and expensive) she got her kids for Christmas, while also complaining about her son’s behavior being out of control, and that her daughter was being so bad that she got tv in her room taken away – wait, why does a THREE YEAR OLD have a tv in her room? So tell me again how you can’t make ends meet, and how you need help finishing your degree, while you have zero discipline on spending the money you do have. Why is it everyone else’s problem to fix for you when you’re putting no effort yourself? I’ve digressed.

OUR RECENT TRIP

We just went on a trip to Jellystone. My son had asked to go back to a cave since we left a cave last year. He’s obsessed with space and Earth. He was 4 at the time of this trip. For 2 adult tickets, all 5 of us were able to take a 2-hour tour at Mammoth Cave (children 5 and under are free). That was $40 worth of entertainment. I figured it was a good time to take advantage of their pricing structure before it would become $60 next time we’d try to go. While I felt the $40 was worth our time and money, I mildly regret it. His excitement for the caves was worth it, but we missed out on activities at Jellystone that I think they would have enjoyed. At 4 years old, we could have easily skirted the cave desire because he doesn’t know that a cave is 20 minutes away when we’re at this location.

We paid $433 for a 4 bedroom cabin for two nights, and that included a $50 charge for bringing a pet. We packed all our food for all the meals. My choice to allow the kids to stay up way past bedtime and for the two older ones to share a room cost us on day 2; I promised them ice cream if they powered through the cave, so that was $14 for all of us to have ice cream, which wouldn’t typically be an expense we incur. Other than the cost of gas to go 260 miles roundtrip, we spent nothing else.

There were opportunities to pay for things. We could have rented a golf cart for $70 per day. We could have paid for the mining sluice, which didn’t have a price advertised, and would have been 3 minutes of entertainment. We actually did try to do their obstacle course, but none of our kids were tall enough. Instead, we took advantage of their amenities. We drove pedal cars, played at their numerous playgrounds, went swimming, went to their beach to play in the sand and swim, ran around the splash pad, did their craft times, attended their character greetings, played bingo, played minigolf. We probably just sat at the cabin for a total of 3 hours between 3 pm check in on day 1 and 11 am check out on day 3; we even let the kids stay up until 8:30/9 (their usual bed time is 6:30).

UPCHARGES

So let’s look into amenities at GWL. I’m going to look at Mason, OH’s location. First, because it’s the one closest to me, so I’m familiar with it, but also because whenever there’s a Groupon for $99 nights, Mason is always $149. That tells me that Mason’s probably on the middle-to-higher end of amenities and their cost.

For a weekend in October, my room options range from $410 to $1035 per night. They provide a rate calendar option for you to see the rates on other nights because you may feel that $1035 for a night in a water park and hotel is absurd (I hope you do….). I also encourage booking with a code (there’s a Facebook group that shares active codes for deals), using a Groupon, or planning in advance and being flexible on dates.

You select a room option (I picked $410), and then it offers you a late checkout option. Check out is 11 am. For $50, you can stay in the room until 2 pm. What are you going to do with your room between 11 am and 2 pm? When this option is presented to you on the screen, what are you thinking? Are you thinking it must be a necessity because it’s being offered? Are you thinking that it’s needed because you don’t want to “leave” at 11 am? Or are you really thinking about the cost/benefit ratio of this charge? Are you expecting to be done with the water park for the day at 1:30, so you’ll go shower and change before the 2 pm check out? If I’m spending the day at the resort, I don’t see where I need the room between 11 and 2. I have one exception, which is very specific right now. If I hadn’t just paid $400 for a night there, I may consider the upgrade because we still have a napping kid from 11-1, so that could be helpful, but that’s not worth the additional $50 to me, personally.

GWL does a good job at pushing their pass options. There are 3 levels, ranging from $50-70. The options include a variety of: MagiQuest, Build-A-Bear, Mining Sluice, mini golf, bowling, GWL goggles, $5 to the arcade, candy, and an ice cream. Purchased individually, the price for the pass is a better deal by a few dollars than if you purchased these individually. However, do you have the time to do ALL of these activities and enjoy the water park? If you’re staying one or two nights, you likely don’t have the time to get the most out of everything. Don’t forget that they offer several ‘free’ activities (e.g., yoga, character greetings, bed time story, crafts, etc.) each day as well, not to mention that you’ve just spend $400 on the stay to play in the water park.

Don’t forget that on top of the room rate, there are taxes and a resort fee. If I wanted to stay for two nights with 2 adults and 3 kids (even though one is less than a year old), with no extra purchases, my total is $1,023.70. That’s $820 for the room, $124 for taxes, and $80 for resort fee.

These options that are presented don’t even include all the options you can pay for. For instance, you can rent a cabana. You have to call to book it, but I’ve seen it priced at $200 and at $500 for it. It’s not private. It’s not secluded. It’s not secure for your belongings. Make sure you ask yourself what you’re getting for that cost and if that money could be put to better use.

As a kid, we used to go to Lake George. We joked that it was our vacation from our vacation. The point of Lake George was to do nothing. You played in the pool at the hotel, walked the town, and got ice cream each night. It was relaxing. I remember lots of our trips, but Lake George sticks out as a favorite. Even our trips that were busy – it was busy because we were sightseeing and driving far; it wasn’t busy because we were paying for activities and trinkets.

We went to Disney on Ice, and my son still thanks me for the experience; he didn’t get any trinkets while we were there, and he still loved the experience. Your kids will remember the time they spent with you. That’s the point of the vacation – spending uninterrupted time with your family, not making it an exhausting, jam packed few days where kids are overstimulated and sleep deprived.

This isn’t a parenting advice post. It’s simply a moment to stop and think about your spending. Take the time to determine whether a dollar spent on an activity is worth that dollar’s cost in your day’s/week’s/month’s/year’s goals. The tape dispenser. Truthfully, I didn’t know it only cost $4. Regardless, I still took the time to consider whether buying this thing that I need for 1-2 days per year was really worth spending our money on, or could that money be put to better use.

In 2021, we purposefully took trips each month. We had looked into buying a vacation home, and we decided that we’d rather go to different places each trip than the same place over and over. The mortgage was going to be about $1200, so we allocated that much as our trip budgets. In May, we spend $618; June was $200; July was $690; August was $1069. I say this for perspective.

Take the time to analyze the spending that you’re doing, independent of the deals being offered. Will that one trip be worth the cost of it? Will the money spent for that trip be worth anything that you may have to give up to make that trip happen?