Wednesday, February 13, 2008

Cutting our monthly expenses

We still own two houses, which is costing us an extra $3200 per month of unnecesary expense. Very unfortunate. Overall we're in the red each month which is very stressful, fortunately, it's not by much. I expect pay increases combined with cost savings to help bring us to a neutral position.

Here are some recent cost savings:

1. I liquidated some mutual funds $83k and will apply it against our HELOC on new house. This should save us $650 per month - since the interest rate is about 8.5%.
2. We let the nanny go and instead increased the time the cleaning lady spends with us. This will save us $960 per month.
3. We restructured my wife's cell phone plan, which should save us $40 - $60 per month
4. We changed my mother in law's health insurance, which sho. uld save $225 per month (she's eligible to join my father in law's plan)
5. We bought an Reverse Osmosis multi-stage water purifier, which should save $40 in bottle water

Overall this represents $1915 in savings.

I'm investigating whether we can refinance any of our mortgages on new or old house to save further. I think it will be difficult:

a. most banks won't refinance houses on the market (old house)
b. new house first mortgage has a interest rate that isn't too far from current jumbo rates

The best approach seems to be to sit and wait.

We've lowered the asking price on the old house and made sure the realtor listed it on the internet. We'll see what happens next.

If anyone has any good ideas to reduce expenses further I'd be very interested.

The lease on my wife's car expires this month. I'm going to investigate refinancing it since the car is now worth 50% - 60% of what the original lease principal was. Alternatively we may lease a new car.

Regards, makingourway

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