saving money Archives - Slipcovers by Shelley

Starter home to dream home

May 16, 2016 by Shelley

We wanted to turn our starter home into our dream home.

Here’s our story. We met December of 1995, after months of my sister trying to “set” us up. Once we did meet it was like magic! We then dated for 1 year and 8 months, until we finally got married in August of 1997. It took a bit of convincing on my part. Heber was stressed about the financial part, and taking care of a new wife. Ha! Little did he know that was the least of his worries. Finances are my thing, but I didn’t know that yet and neither did he.

About 6 months after we were married, Heber hired on with the Fire Department in Salt Lake. At that point I convinced Heber we could live off his income and we’d save all of mine for a down payment for a house. I started saving all my tips from waiting tables, and working retail at Eddie Bauer. At this point I had graduated from BYU with a degree in business management, but I still hadn’t landed a “real job” yet.

1 year after we were married we signed papers to build a house in the middle of nowhere! Eagle Mountain had great prices on starter homes, and it was a new community. I didn’t really care that it was in the middle of nowhere, I just wanted a house.

This was the most exciting day of the whole build–seeing the foundation poured.

Heber convinced me that we should spend a little more to make sure we had room to grow into the house. You know…”if we want 4 kids we need at least 5 bedrooms”. So we spent $135,000 instead of $100,000.

Anyhow we’ve committed to staying here as our “forever” house, so we’ve had to remodel a bit along the way to accommodate our family. We now have 3 boys 15,13,and 11 years old. Our house has had to change with us. We finished the bonus room, we finished the basement, and we converted the garage to my work studio. We also started taking out some walls to make a dining room.

BEFORE–wall behind the front door (guest bedroom was on the other side).

AFTER#1–We opened it up and turned it into an office about 2years ago.

AFTER#2 ! We took out the next wall and eliminated the guest bedroom again, and turned this space into a dining room with a 10′ table. Our master bedroom is the only bedroom left on the main level. All the boys still have their own bedrooms in the basement.

Heber was a little leary about this idea, because we were eliminating some closets, I told him I’d figure it out. We moved the guest bed up to the bonus room where we were storing a treadmill we never used and some other crap. Then we framed in the closet down at the end of the dining room with built in shelves. It’s perfect, we still have a guest room and a closet.

I know this may change our home value, because we’ve eliminated 2 bedrooms, but it works better for our family. Plus, we really are staying forever, so it doesn’t really matter. I want the space to have other families over for dinner, and I want the boys to come back home for Sunday dinners after they get married and leave.

I threw out my idea to Heber, and after 3 or 4 days he agreed. So we planned on starting the demo as soon as he got off his next shift (Thursday morning).

Wednesday night, the boys were chomping at the bit! I let them have at it. I let them shoot arrows at the walls and kick through them, and cut them up with the hack saw. It was a PARTY!
DEMO-
It was so exciting to see the walls out! The space was HUGE!

We decided while we were at it, we’d redo all the flooring on the main level. The carpet was 17 years old, and the dark walnut laminate was 10 years old. Got it all loaded in the trailer, and Heber needed me to take it to the dump while he finished laying the floors with his dad and brother. So I called up my bestie and told her to wear her rain boots. It was crazy wind, snow, and mud!
I am in love with the floors. They are Kingmen Alpine Grey 12mm handscraped laminate flooring.

I was even more excited to have the floors continue into our master bedroom! It feels much more fancy now.

I needed a 10′ dining table. I had this old desk a neighbor gave me for free that came out of BYU back in the day. I started looking at it and realized I could unscrew the top, which would make it the perfect base. I love industrial metal stuff and rustic wood. I decided to spray paint the base white, but leave the silver feet and then plank the top with 2×10’s.

Camille is a WAY better spray painter than me…so I had her do the honors.

I got my rug off Target.com it’s basically like a flat weave, but doesn’t roll up or shift on the corners and has bits of soft chenille strands woven through it for texture. I was nervous about it, but it came and it was everything I’d hoped for.

I obsessed over chairs forever! I Finally committed and ordered these from a random event furniture site. I need to get some more photos on the wire in the frame…but for now it’s fine.

We made the barn sliding doors to hide the closet. Rough and rustic. They aren’t perfect, but I love rustic stuff. Imperfectly, perfect is what I always say. I had someone custom build the two 8′ tall book shelves to flank both sides to hold up the header above for the barn door hardware.

I added some old stuff to the shelves. I LOVE old stuff! This whole vignette was $5 from the thrift store.

I also love old metal boxes. My mom gave me a few from Grandpa Keiths stuff. The colors were perfect, and I love that they have sentimental value.

To sum it up…BEFORE

AFTER! All in all, it cost about $6,000 to remove wall, replace drywall, paint, install new floors on whole main level, replace all trim, new rug, table, chairs, and new light fixtures.

Some may argue, it’d be cheaper to sell and move. $6,000 wouldn’t even cover the realtor fee is my reply. We love our house, and that it has changed with our family and our needs. It’s our first home and our last home.

What I want my kids to know about finances.

April 15, 2016 by Shelley

This is a list of what I want my kids to know about finances before they move out on their own. I wish I would’ve had a list from someone who’d made a bunch of financial mistakes and learned from them. Here’s to hoping my kids learn something from me. A mom can dream right?

1. Make a budget and spend less than you make! Know how much it costs for you to “live” each month. What’s that number?

I was helping a friend a few weeks ago, with some financial stuff. This was one of my questions (How much does it cost for you to live each month). Then I realized, I didn’t know the answer for my own household! I came home and figured it out. It makes a difference when you know that number and know how much extra you have left over. It keeps your daily spending in check.

2. Save at least 10% of your income.

3. Don’t buy a timeshare from the company. Buy second hand and save 50-75%. Timeshares will ALWAYS cost you $ even after they are paid off. There’s a thing called maintenance dues, that you get billed quarterly whether you use your weeks or not. Then if you’ve used up your few cleaning tokens for the year, you have to pay $90 cleaning fee on top of using your credits.

Usually it’s a better deal to rent the week you want from another owner and skip the dues. We pay over $1200/ year in dues. But since my husband is a fireman with lots of days off, we actually use our timeshare and it’s worth it to us in the end.

4. Don’t roll your debt (car, credit card debt, etc.) into your home loan. You lose your freedom to leave, sell, refinance, etc. Plus who wants to pay more for something than you have to. There’s a reason car loans are 5-6 years vs. a 30 yr loan. Cars don’t last that long, you don’t want to still be paying for it long after it’s gone.

5. Never let a bank tell you how much you can afford to spend on a house. You should be spending WAY less than what they qualify you for. Housing should be about 25% of your income.

6. ALWAYS pay attention to the price NOT the payment. Everyone thinks they can afford another $140/month payment, and that gets to be a slippery slope.

When I was 6 months pregnant with our first baby, we went to a timeshare presentation for the “free trip to Vegas”, We had no intention of buying…but guess what? $140/month we can do that! ok lets buy and make memories with our new little family! What were we thinking? $11,000 of debt! I was going back to work only part time after the baby, and we were already tight with my full time income.

7. Never get a 30 yr mortgage! Ideally get a 15 yr, 20 yr max. If you get a 30 yr mortgage, you will pay 2.5 times what your house is worth. How is that an investment?

We got a 30 year mortgage when we built our first house in the middle of nowhere when we were just kids back in 1999. We didn’t know any different. That was the standard. No one gave us a different option. I didn’t know enough to ask for anything different. Play with mortgage calculators online and see what the difference would be to get a 20 yr instead. You would be shocked by the small amount.

8. Quickest way to get ahead if you have a dual income household, is to live off one income and either save the other or apply the other to your debt until it’s gone. That’s what we did, and by the time I turned 34 our house, cars, and basement were paid for.

9. Pay off your credit card EVERY month. NEVER pay interest.

When we first got married, we kept our accounts separate and one time I happened to open Heber’s credit card bill, 28% interest!!! He had no idea it was that high. There wasn’t a huge balance on the card, but there was a balance, and I don’t like to throw money away.

10. Don’t get sucked into the idea that paying off your house isn’t a good idea because you need a write off. Way more $ stays in your pocket after your house is paid off than any write off you’d get.

11. If you pay an extra payment on your mortgage every year, you will cut 7 years off the life of the loan.

12. When you get your mortgage statement each month. LOOK at it. Realize how much is going to interest. On our first mortgage our payment was $1,035. $900 of that went to interest. HOLY CRAP! Once I understood what a crappy deal that was, I started putting any extra $ I had to pay it off faster. In the end we paid off our primary residence in 10 years. I was 34 years old.

13. Whole life insurance isn’t an investment/retirement strategy. Buy term instead. We just cashed out a policy we had been paying into for 9 years ($675/month). Guess how much we earned in 9 years…$0. Actually we lost about $4,500 once it was all said and done. Granted some of that paid our premiums for life insurance ($110/month premium). Which is great if our intent was to have coverage, but our goal was retirement. We already had some other term insurance through Heber’s work, so this was wasting our $.

I decided to take the $65,000 and pay it toward our investment condo. Which means I’ll only have $12,000 left till it’s paid for! Once it’s paid for we will cashflow about $700/month after expenses EACH month. That’s $8,400/yr profit compared to $0. I didn’t feel bad cashing it out. Yes, we had to pay a $1,500 surrender charge–but with saving $200/month on the interest on the condo it made sense not to hold out another year for $0 surrender charge. These policies always have a HUGE surrender charges which can be $7- $10,000 in the early years.

14. If your car isn’t paid for, that’s debt. If your house isn’t paid for, that’s debt. You aren’t debt free if you owe on your car or house. Those are the only things that you should go into debt for.

15. Don’t finance your toys. These are wants, not needs. If you want these things, then save up and pay cash. If you choose to afford these things, pay for them outright. The more you finance, the less freedom you have to make choices later.

16. Don’t finance trips. IF you can’t afford a trip, then get creative. Use reward cards for sky miles, car rentals, hotels, etc. but be disciplined enough to make sure you don’t pay interest on these cards.

17. Don’t eat out regularly. This gets expensive. If you are leaving the house and know you’ll be gone for 3-4 hours, pack a lunch, pack some snacks. No reason to waste all your hard earned money on something that is consumable.

Every time I do appointments out for work, I pack a lunch. It saves time and $. I don’t have to drive around for 10-15 min in some neighborhood I’m not familiar with trying to find something to eat.

18. When you refinance a house, you are starting over and adding $3-$5,000 to the principal for closing costs. So unless rates have dropped a significant amount at least 1.5%, it’s not worth it. Never get an ARM (adjustable rate mortgage), always get a fixed rate. If you do refinance to a lower rate keep paying your old payment to pay the house off quicker.

The first time we refinanced, we did so because we were told we’d save $100/month. Great! Then we went to closing to sign all the documents after the appraisal was already paid for ($500), and I noticed the balance we owed was about $3,500 more and we were at 30 years again instead of 29 years. I didn’t know there were such huge fees associated with a refi.

19. Use mint.com. It’s a free online service were you can upload all your accounts. Banking, investments, credit cards, retirement accounts, etc. You can create budgets for different categories (gas, groceries, shopping, home), and you can see how much you’ve spent through out the month at any point in time with a simple few clicks of the mouse. This way both spouses can login at any time and be in the know.

Ignorance isn’t bliss forever. It’s your responsibility to know what’s going on with your money.

Making correct choices with your finances is like making correct choices in life. I know it feels more restricting, but in the end you actually have more freedom. The freedom to take a trip last minute, the freedom to switch jobs, the freedom to buy a second property, the freedom to become an entrepreneur, the freedom to choose to work less hours. You’ll have less stress when your car breaks down, less stress when you are waiting 3 weeks for a client to mail a check. It frees up your headspace to think about life instead of $.

Here are some other financial posts I’ve written in the past.

Christmas isn’t an excuse for a free for all

Christmas Isn’t an Excuse for a Free for All

November 23, 2015 by Shelley

Ok–I’ve been called a scrooge in the past, because I don’t enjoy the commercialization of Christmas. Here are my thoughts on the whole Christmas thing…Heber and I haven’t bought gifts for each other for years–In the early years of our marriage we just did stalkings for each other, now we forego all gifts and go on a couples trip every January together instead. I’d rather put $ into making memories than filling up our house with more stuff.

Christmas isn’t an excuse for a free for all! Just because it’s Christmas, doesn’t mean you should spend $ you DON’T have on gifts.

If you don’t have much $ and are feeling pressure to put gifts on credit cards, because you feel obligated. This is WRONG! It is not a NEED to give gifts! No one wants you to go into debt to give them a gift they didn’t know they needed or even wanted. To be honest in years past, we have bought the kids random trinkets and gifts and they always end up lost/broken by the end of January–we should’ve saved our $!

Just because it’s Christmas, doesn’t mean we are entitled to buying more stuff! Somehow the following answer is always accepted, “Oh, we are getting that for Christmas”–like that makes the $ magically appear that you didn’t have. We need to change this upcoming generation to be more grateful than entitled. Ask them, “What are you giving for Christmas?” instead of “What do you want for Christmas?”

How many times have people asked you what you want for Christmas or a birthday? And you answer “nothing” because you really don’t NEED anything. Why are we all scurrying around buying stuff that isn’t needed or wanted?

I am not saying to cancel Christmas, just be more creative/frugal in the gift giving. Our kids don’t need $500 worth of stuff each to feel the Christmas spirit. “If you can’t find the Christmas spirit in your heart, you aren’t going to find it under the tree” said one of my son’s friends. Here are some of my favorite ideas for Christmas.

–Free Christmas-Name of the game for the whole family, $0 gifts. It’s a fun game. Find stuff you have and “gift” it. Maybe it’s a jewelry box you’ve had kicking around that you don’t super love, but you know your niece would LOVE it. Maybe it’s an old soccer jersey that you wore a ton and have outgrown, but know it would be your younger brothers new prized possession if you gave it to him.

–Homemade Christmas–I love making/receiving homemade gifts, I always feel like they mean more. Baked goods, sew a purse, make a knife (my sons latest obsession), tie a quilt, repurpose stuff you have around the house, etc. There are always tons of ideas online.

wallet made out of grandpa’s old shirts

apron made out of grandma’s old table cloth

–Sentimental gifts–I love these the most! I’ve cut up my grandma and grandpas old clothes and have made the grandkids aprons, wallets, teddy bears, etc. I’ve put old letters in a photo box for my mom. I’ve made stuff out of Heber’s Grandma’s old linens (turned a table cloth into an apron for his sister). Memory jars were a HUGE hit with my parents–all the kids wrote down funny memories or stories from when we were growing up and put them in a jar. My parents relished these for the whole afternoon, reading them and laughing and crying, and learning about all the naughty things us kids did. Much more heart warming than a new set of knives!

–needs–stuff you’d buy anyways! Socks, underwear, a new coat, etc.

–Thrift Store christmas– My kids and I love shopping thrift stores. Look for the good, quality brands. I can always find something anytime I stop in. Eddie Bauer Sorel boots $6. REI outdoor shirt $5. Rubbish brand jacket $6. Spider brand ski pants $20. You’d be surprised with what you find and how little you spend!

Christmas at a beach house in California

–Trip–One of my favorite Christmas’s was when we decided to make memories instead of give gifts. It was MAGIC, we rented a beach house in California for the week with my sister’s family. We did stockings for the kids and that was it. We went for walks every morning and collected shells, watched the dolphins, went to the tide pools, made cinnamon rolls, hot tubbed 3 times/day, and had campfires. Yes, I understand this isn’t cheap–but I’d rather spend $ on a trip than buy extra clutter and stuff for the kids that they don’t need.

Sledding the driveway at the cabin

–Gift of time together–with extended family, plan a day to be together and eliminate the unnecessary gift giving. Sledding, movies, stories, dance party, crafts, card games, etc.