Public Declaration - Getting Certified

Recently, BripBlap challenged a group of us on a new meme - making a public declaration of something you’ve kept private that you are now willing to share with the world.

I like this challenge. It’s something to keep me accountable and honest.

I’ve been telling myself for years that I was going to get a particular certification. This is no ordinary certification, but one of the most difficult to get in my field. It’s not just a written test; it’s also a one day intensive practical evaluation of how well you know the topic. The pass rate for the one day lab has, for first time test takers, something like a 15% pass rate (or so I’m told, and it seems to jive with the folks I know who don’t pass til their second or third time through). That means 85% of people fail their first time taking the test. I really don’t want to be part of that 85% if I can help it.

My goal is to take the written portion of the test in December. The written doesn’t have the same intensity as the lab test, but it will still take some study. I won’t let moving interfere with that.

I plan on taking the one day lab component of my certification by the end of April of next year.

I will do my best to pass the test the first time through, but I won’t get discouraged if I don’t pass it the first time. I hate to fail. I’m sure you do too. But this test is designed to fail people. You almost have to get a chance to do the lab practical before you fully understand what you need in order to get through it. I will pass it the second time I take it if I do not pass it the first.

I need this certification to move up in my career. I only have one more level before this certification is required. To get it now would almost surely bump me up to the next level, and I would have most of the credentials I need for another bump. This would represent an increase in pay for us, and the possibility to save more money, or “loosen the belt” in some areas we have tightened in order to afford the new house.

Well, there it is. Wish me luck!

Our Home Financing Options

Now, if I can only find 6 roommates… Once our builder told us there were only 30 days until closing, we had to jump to it and find ourselves a mortgage.

Because a mortgage is such a large amount of money, we had to shop around to find the best deal we could find. Let me tell you, that was no easy task. I’ll write a post in the future giving a lot more detail to the process we used, but I wanted to cover just one aspect of it now.

We only had enough money to cover a 10% down payment on our house. On top of that, we don’t want to be too heavily invested in just our house as we would prefer to invest any extra money we have in the stock market. We want to pay down the house early, but putting too much money up front was going to hurt us more financially than what it was worth. 10% is the number we agreed to some time back, and was the goal we met with our savings.

The problem is, you have to have 20% equity in your home to avoid paying for Private Mortgage Insurance (PMI). This is essentially another fee you have to pay that, at least in the past, you didn’t get any sort of tax deduction for. It adds up to quite a bit extra each month. We wanted to avoid going to pay PMI.

That left us with two choices - pay 20% down (we couldn’t afford this, and even if we could, it would put too much of our current finances into the house), or get two loans for the house (what is commonly referred to as an 80-10-10 loan). When you get an 80-10-10 loan, you generally have the bulk of the loan (the 80) financed at the going rate for mortgages (which varies from lender to lender). The second loan is normally higher - sometimes 1-2% higher, and is frequently a 15 year loan instead of a 30 year. This makes your monthly payments that much higher (because of the higher rate and the shorter term). You can also ask for the secondary loan to be amoritized over 30 years. This means that you will have lower monthly payments, but will have a “balloon” payment at the end of the loan that will be due all at once. That means you’ll have to be prepared with a wad of cash before the end of the term of the loan.

We thought an 80-10-10 was going to be our only option. However, upon investigating, we found that there were a couple more alternatives.

Some loan companies would let us pay a fee up front to get out of PMI. This wasn’t cheap, but would be cheaper than having to pay PMI for years. We also found a lender that would let us get out of PMI and finance 90% of the loan. We didn’t think this would have been an option, but there it was being offered to us. At a decent rate, too!

I’ll get into the details on the math we did to determine which loan met our needs the best in another post, but I thought this information might be useful to those that are looking to buy a house. If you can afford 20% down that’s great, and a very good way to go. If not, or if you would prefer to have more of your money in investments instead of your house, then financing more of the loan might be a good option. It won’t be right for everyone, but it fits our needs quite well.

The Roundup - Sea of Boxes Edition

A box by the sea… This is the first, of several, packing edition roundups. Most of our spare time is now committed to packing up everything in the house, making a determination on if the items are worth keeping or if we should get rid of them, but also to catalog all the work that will have to be done on the house before it’s ready to be sold.

One thing that’s going to cost me some money is that I’m probably going to have replace many of the light bulbs. To conserve energy, and to reduce our energy bills, we replaced most every light bulb in the house with a CFL. On top of that, we even reduced the number of bulbs in many of our lamps. We didn’t need 4 or 5, just 2, in at least 4 fixtures. So that’s gonna be an unplanned-for cost when we take those CFLs to the new house and still need light bulbs here.

Anyhow, I did get some time to catch up on my reading this week and here are some of my favorite posts:

Pinyo @ Moolanomy writes about his experience switching service providers. I’ve actually called Time Warner about lowering my rates before and was actually told that if I were a new customer, there were things they could do, but not as an existing customer. It just makes no sense to me why they don’t work with their existing customers sometimes.

Trent @ The Simple Dollar writes about how he prefers to give smaller quantities to a large number of charities instead of a large amount to a few. Melissa and I had this same debate and we wound up taking the other path - giving larger amounts to a few charities. We hope to expand the charities we give to in the next year. There are some really good local organizations we’d like to help support.

Lynnae @ BeingFrugal writes about her opinions on re-gifting. I have to say that I’m 100% with her on this one. I think re-gifting is fine, but you can’t let the person who knew about it find out about it. I think that’s just courtesy. Now, the one other caveat I would add is to make sure not to re-gift something that the giver expects you to see when they come to your home.

Glblguy @ Gather Little by Little talks cautions us to think and research the charities we give to. I think this is definitely good advice. I used to give to several charities that telemarketed to me until Melissa told me about where the money goes with many of those. Turns out they weren’t giving nearly enough to charity and I went out in search of alternatives.

Nickel @ Five Cent Nickel talks about some of your other scores that are related to your credit score. I thought this was really interesting, and I wonder if this had any effect when we applied for our mortgage this week.

Silicon Valley Blogger @ The Digerati Life talks about thedifferent kinds of loans and the risks associated with them. For our mortgage, we never even considered any of the exotic mortgages that are available. We knew what we could afford, and we got a 30 year fixed rate loan. There is something to be said for a consistently priced payment.

Generation X Finance talks about the sub-prime meltdown and how just insane the bailout is. This really upset me. I have good credit, pay my bills on time, and am a pretty safe bet for a mortgage. The best rate I found was 5.875%. Granted, that’s a pretty great rate, but according to this article, those with sub-prime mortgages may get refinanced at 5%. If only I were subprime I could be saving thousands on my home!

Brip Blap wrote a great article on high quality vs. high quantity. I completely agree with this philosophy. I don’t mind paying more for something of quality that will last, or is healthier, or is just plain better, rather than saving the maximum amount of money on item (at least in the short term). His example on choosing a nice restaurant vs. the cheapest restaurant was one in particular that really spoke to me. Eating out, at least for me, is as much about a social occasion and good time as it is about just eating. Eating at home is nearly always cheaper and healthier than eating out so if you go out, have a great time, a great experience, and a great meal.

Image source Fuzzhead

Moving Is Helping Us Simplify

Definitely Goodwill We’re excited about moving and have been packing in anticipation. It’s a lot of work, but it’s actually been pretty enjoyable. We’re being very critical of what we decide to keep.

Melissa and I have been part “pack rat” in the past. I think some of this is just part of being human. It’s not like humans always had easy access to whatever we needed historically. That’s a much more modern invention. For centuries, we’ve had to make do with what we had and reuse and store literally everything. You never knew when you might need something, and it’s not as though you could go to the convenient 24-hour Walgreens down the street when that time came. Those who were prepared fared better than those that didn’t. It’s just a leftover ancient human survival mechanism.

So now we’ve been going through each item, and talking about it. We have 4 piles we’re using:

Keep - something we feel strongly about keeping.
Donate - something of sufficient quality and something we think someone could put to good use.
Gifts - we have several items that would make good gifts. We have a pretty good pile for our neighbors, and some for family.
Sell - items we think we can easily sell and help fund part of the move.

We’re definitely leaning more toward the “donate” pile. We do intend to write our donations off, but it’s more about giving than it is about the benefit to us. I’d really like to think that some of the items we’re donating will improve someone’s life.

Each time we talk about an item, we go through a little list :

Is this sentimental in nature? We’re trying to be really honest here. It has to have a true sentimental value to be kept.
Do I really need this? If no, it goes straight into one of the donate, gifts, or sell piles. If yes, we continue.
Am I really going to use this? And we don’t allow “well, if” situations to take too much control. You either have a good reason or you don’t.
If it’s been in storage for X months, do you really need it? It’s surprising how often this makes you realize you can easily live without something.

A big key for us was to not let ourselves get too stuck on the “what ifs” or the “well ifs”. Well, I might need that USB hub. No, I don’t. I have 4 USB ports, and only 2 items that need USB. There will never be a critical need for a USB hub. That goes directly to Goodwill.

Another thing we’ve noticed about ourselves is that we don’t really rewatch many movies now. In the past, when we watched more TV, we might consider rewatching a movie. Now, we hardly ever have the TV on, and the movies sit and collect dust. We’d rather donate, give those away, or sell them. They just take up room.

It’s a great feeling. I think the whole concept of simplifying your life needs more coverage, but maybe in another post. Right now we’re happy to just be reducing what we have, and hopefully helping other people in the process.

Picture by janetmck

I’ll Be Keeping That, Uncle Sam

That’s a lot of junk! Last month, Clever Dude wrote a great post about how to value the clothing you donate to charity. As we’ve been packing up the house we’ve run across literally hundreds of items that we took one look at and decided it would be better to donate. Clever Dude wrote about a couple of IRS publications you can read to help you value your donations. I have to admit, I enjoy reading IRS publications about as much as I would enjoy a colonoscopy (and in case you are wondering, that is not at all).

I remembered when I was using Turbo Tax a couple years back that I had been offered a chance to buy their software, It’s Deductible, for about $30. So I went off in search of it again.

Lo and behold, the software is now free! And it integrates with Turbo Tax! On top of that, I was able to just login to my Intuit account and everything was tied together.

Nearly everything we had donated (with a few exceptions - check out this stink gun Melissa bought me a long time ago as a prank gift) was in the list and had a value.

We were conservative when it came to quality. We chose medium quality for all but a few items that were in near pristine condition.

This should make doing our taxes that much easier this year. And I feel pretty confident that the values they have chosen are pretty accurate. In addition, we are deciding to give more and more rather than try to sell these things at a garage sale where we might make a few bucks. I’d rather help someone in need, and get a little tax credit, than to get a few extra bucks in my pocket.

Picture by Joe Shlabotnik

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