Dec 21 2011

Highlights and updates from 2011

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Thank you for reading this site this year! I’d like to recap a few things that have happened in my life and offer some updates. Here we go!

We started 2011 with a newborn Vivienne and a 2-year-old Johnny. We were in our lil apartment in Pittsburgh and I researched 529 college savings plans for the kids, and started them out with a few bucks each. The Indiana 529 plan was especially lucrative to us because of the 20% state income tax credit we’ll get on all contributions (Indiana residents, if you are getting a 529, you really should get the Indiana one for this!).

I discussed the impact having good financial behavior can have on changing your family tree. I really liked this post.

I weighed the cost of buying a carpet cleaner vs. renting a Rug Doctor machine, and was glad to purchase my own machine on Amazon for a decent price. At the time, we lived in an apartment with carpet in the dining room and that rug was filthy. Our next apartment was the same setup, and having my own machine and using it occasionally was so helpful. Then, when we moved into our house, our machine helped get our carpets ready without any additional cost. I’ve let my parents and my sister-in-law use it, as well. The machine has more than paid for itself in this short amount of time and keeping carpets cleaner helps our health and helps prolong the carpet’s life.

March brought a series of discussions with my husband and myself about our future in Pittsburgh and his job, and our living situation n’at. I felt like we were stuck in a holding pattern. Then, we thought we might have a chance to move to Louisville, but that door was closed. It was a bummer for a sec, but then turned out to be amazing when we saw the next chapter, how we would move to Indiana.

That previous post right there — that post still gives me chills. And tears. We are so blessed!

From then, we had three weeks to figure out the logistics of moving to Indianapolis. We rented an apartment month-to-month, sight unseen. It was near Shane’s new job and it was near Shane’s brother’s house and we figured it would be fine. It was ok, though we had some annoying neighbors and were going a bit stir-crazy. I’m glad we rented month-t0-month rather than trying to buy a house immediately. We would have bought the wrong house in the wrong area for sure.

We were still a one-car household and we knew we’d want to buy another vehicle. We ended up picking out a low-mile van and wrote a big ol check for it. My dad found it for us in Chicago (in an online listing) and he and Shane went up to purchase it. We think we got a good deal and we hope to keep the van for at least a decade or more.

We were also on the hunt for a house to call our own, and had been actively searching within Indianapolis and some surrounding burbs. We had our price range in mind and our realtor only showed us houses within that target. We found Indiana first-time homebuyer money, and qualified for a Mortgage Credit Certificate because our family of 4 household income was less than $79k/year for 2010.

This MCC cost us something like $600 at closing (I’ll have to look for the exact amount) and every year we hold the mortgage, we will get a 20% tax CREDIT on the amount of mortgage interest we paid in the tax year. This is huge, and we can also claim the mortgage interest deduction in years where we itemize our federal taxes.

For example, we bought our house for $165,000. This price includes $2,000 that the seller paid toward our closing costs. We put 20% down, paid a chunk of our closing costs, and our lender sent us on our way with $132,000 as our mortgage starting balance. Our monthly payment is $847 and that includes property taxes and homeowner’s insurance. The principal + interest portion is roughly $670/month. (I haven’t shared this info here before, but decided, why not? since it’s public record anyway. My friends have my new address and could look this up if they wanted, so whatever).

In 2011, we’ll only have 3 payments, but in 2012, we’ll get almost $1,200 off our federal income taxes thanks to the MCC. Over the 30-year loan period, if we never make an extra payment, we’ll get something like $22k off our taxes thanks to this MCC. The amount decreases each year.  We will have to pay a portion back if we sell soon, but we don’t intend to.

Our mortgage interest rate is 4.5% and our lender lowered it for free because we asked. And, our realtor gave us $1,000 of her commission at closing, and that money went toward our closing costs. Not all realtors will do this and you do need to negotiate it with them.

Along that vein, awhile back I daydreamed about having a paid-for house by the time I was 30. I revisited that thought this year and decided eh, there are other priorities right now (I don’t even think we could pay off $132k in 4 years going hyper-gazelle intense…we’d keel over first). We’re paying a tiny bit extra on the mortgage right now, but we’d rather beef up the kids’ college funds and retirement.

In trying to cut our expenses, we lowered our cell phone plans to the lowest-minute family plan available and added a Magic Jack Plus to our home computer so we could make most of our calls through that. It proved to be a good move financially and the call quality is fine enough for me to want to stay with it. It’s not as crystal-clear as a traditional landline, but for that cheap I don’t care. We’re now shopping our soon-to-expire cell plans around in case a prepaid cell would be a better call for our situation. Lol, better call.

In another money-saving move, we canceled our whole life insurance policies and used the funds to finish out our emergency fund. Our yearly costs are lowered by about $700 now, and we still have term life policies that I hope we never need.

Woosh! The end. Looking forward to 2012 and I’ll share some goals and stuff soon.

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Hey! I'm Kacie, wife and mother of 3. I write about my family's finance: how we save money, improve our spending, and plan for the future.

I hope I can inspire and encourage you to improve your situation. See disclosure.

I'm adopting a much slower-paced posting schedule, and treating this as a hobby blog now.

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