As some background for you, we bought our home in DC for about $400,000 back in 2004. We had a combination of a 5/1 interest-only loan (80%) and 15 year balloon (20%), which meant a lower payment, but 100% financing and a big risk to the bank and us if either of us lost our job. We also had over $115,000 in debt outside of the home back then too.

As of today, we’ve paid off all our debt (the last one being my student loan in Nov 2009), have a good 5 figures in cash savings, 6 figures in retirement (but nowhere near what we’ll really need), and our 2nd mortgage paid off and a small chunk of our primary mortgage paid down. Overall, we’re closing in fast on a half-million dollar net worth, counting home equity (but that’s always a hedgy calculation). Life has been good for us financially.

But it’s decision time. We thought this house would be good for 5 years; basically a starter home. We’ve been in it for over 7. We’ve gotten to be good friends with our neighbors, we like the local area and are learning to love it more. But we have to ask…

- Should we stay or
- Should we go?

(yes, that was from a song)

There’s a lot that we have to consider and I won’t list everything here, but lets consider the financials:

- We might break even on the sale of the house, minus realtor fees
- We need to consider WHY we would move (bigger, newer, smaller, etc. house…new jobs…change of life?).
- Should we refinance? Should we go short-term (another variable mortgage like a 5/5) or longer-term (15, 20 or 30 years)?

That last question has a lot of impact because it implies how long we stay here, when can I close some credit cards (cause it’ll hit our credit scores) and, maybe if the wife lets me and I can find the right one, when I can replace my truck (another hit on credit scores and our piggy bank).

Refinancing

Ok, so let’s assume we stay. We have to decide on:

• Stay with our current mortgage: We have a variable rate (5/1), interest-only mortgage (for only 3 more years) that has saved us tons of money since the rate went to variable in 2009 (it’s under 3% right now). BUT, the 6-month LIBOR rate, which is our prime rate, has been going up recently. It went from .40 to .80, but now it’s at .70, so I don’t know what to think. We have a couple more months until the next reset though…
• Another variable rate mortgage: We’ve been lucky with our current mortgage, but Pentagon Federal Credit Union is advertising a 5/5 loan (not interest-only) in the low 3% range AND they pay your closing costs. That’s the biggest reason I’m looking at that loan option. You can spend thousands in closing costs, not counting the escrow that you get back.
• 30 year mortgage:Ok, here’s where we decide on staying in our home for a while. If we’re paying closing costs and committing to a higher mortgage payment, then we need to stick around for a few years for that payback period on the costs.
• 15 year mortgage:  Same as the 30-year (gotta stay in the house, etc.), but with a lower rate and higher payment (because it’s shorter-term).

Ok, so what do we do? I know you all can’t help with our decision of whether to stay in the home or not, but what have your experiences been on refinancing, including something like the PenFed 5/5 loan with no closing costs? Keep in mind we have A-rating credit scores (I’ve checked).

I used to be a Vonage customer for about 6 years, but after a couple years of not using many minutes, I decided to just cancel it.

Fast forward to now where I’ve been working from home almost every day for the last 6 months. Without a home phone, and only my work cellphone, I’ve been using twice as many minutes allotted per month. I needed a home phone.

I checked with Comcast for a Triple Play deal, but to keep my same channels and get unlimited phone calls, I would have to upgrade to a more expensive cable plan. In the end, with Vonage, I’m saving about $75 in the first year, and $120 for each subsequent year compared to their best deal. And Verizon Fios wasn’t any better unless I wanted to sign a contract for 2 years. There’s no contract with Vonage.

Why not just Skype?

Ok, I’ve never Skyped and being in the IT field, you would think I would know more about it, but honestly I don’t know anything about Skyping. Plus, I don’t want to bother setting up a time to call someone else who uses Skype just to get a free call or whatever. Plus, this is work, not play, and I need something more professional, so I opted for VOIP (i.e. Vonage).

The Often Unrealized Benefit of Vonage

When we visited friends in Germany last year, they had brought their Vonage box over with them. Because it just uses the internet for calls, you can make calls from your Vonage box anywhere that has a LAN line. There are some exceptions I heard about such as some countries in the Middle East where they’ve blocked Vonage. But for Europe, it works beautifully.

Here’s a quick story: On the way to the airport for our Germany flight, we were rear-ended. The guy wouldn’t give over his insurance info and caused us to almost miss our flight (by mere seconds!). On the way to the airport, we started the claim process, but couldn’t finish it before we left the country. Thanks to our friends’ Vonage line, we were able to call in the claim from overseas (often on hold for 10-15 minutes) for free (to us). In contrast, my cellphone plan would have cost 25 cents per minute, thus Vonage saved us a lot of stress and money.

Not many people realize this benefit of taking their Vonage line with them during travel. First, though, I will say that I’m glad Vonage switched from their Linksys router to a much more compact design. They probably realized that people were using their own wireless routers and just needed to hook in their Vonage line rather than have multiple modems.

If you’re just traveling in the US, you can use your cellphone for the most part. But, for international trips, whether vacation or work, being able to take your Vonage box with you (and a phone in case the hotel’s phone isn’t a normal, compatible phone) is much cheaper and easier than using Skype, cell plans or calling cards. If your company is paying for the internet, or the hotel’s internet is free, then bonus!

Recently, I tested Vonage by taking it and an old-school corded phone with me to London. I hooked up the LAN line to the box, then the box to my computer (because I had to pay for the internet first) and sure enough, it worked instantly. Being able to call my wife and family (especially during some tough times with a family member’s health), was great, in addition to calling into afternoon meetings in the US (evening for me in the UK).

While I wasn’t limited to making calls from my cell, I was able to not stress about longer calls because I had Vonage. I didn’t have to remind my mom or wife that every 4 minutes was another dollar…I just talked.

What do you think? Give me your opinion on Skype and how it would work out in my travel situations for work. I’d like to know more, as well as your own Vonage or cable/fios stories!

Why would I say that? Well, there’s some particulars to our home, but in general there’s a lifetime to certain appliances, etc. such as:

• Water Heaters: 10-11 years. We have 2 water heaters. One (gas) is about 15 years old and the electric one is about 13. Both are well past their lifespan.
• Dishwashers: 9-10 years. Ours is about 9 years old now.
• Carpet: 10 years. We have 3 rooms where we haven’t replaced yet and all are at least 14 years old and have had pets and most likely smokers on them. Two rooms have original hardwood underneath, but we don’t know the quality and I’d rather just replace with the same Pergo floor as the rest of the house.
• Fridge: about 13 years. Ours is about 9 years, but I’ve already replaced a lot of parts on it myself so I’m not sure how long it will last ultimately. I know it was an expensive fridge when they bought it based on the receipt, but that doesn’t mean it’s reliable.
• Clothes washer: 10 years. Ours is probably 14 years or older. The knob broke off years ago, but we’ve been resourceful and use pliers to start it up.
• Clothes dryer: 13 years. We’re actually on our 3rd dryer. The first came with the house and the next two (counting our current one) came for free from our friend.
• Furnace and Air Conditioner: 15-20 years. Ours is about 16 years old, but it’s a high-efficiency unit. We’ve spent about $1000 over the years on repairs, but it just takes one crack in the heat exchange unit to jack up the cost of repair to the point of replacement.
• Roof: It varies, but our shingles are 20 year warrantied. I was just up on our roof recently and the roof looks good, but there’s a bit of buckling in one spot (I noticed it a few years ago) and it appears they just put the new layer of shingles over the original on the old part of the house. That could cause problems.
• Pool Plaster Lining: Ours is supposed to last 15-20 years, but we’re noticing it thinning and lots more “blue stuff” in the cleaner than 8 years ago. We spent $7000 just 2 years ago on brick and tile-work, and I expect to spend another $7000 on replastering the pool in the next 3-4 years (it’s quartz plaster, not the regular stuff that would cost $4-5k).

Tick Tick…

So what kind of bomb are we sitting on? A big financial bomb!

All of our appliances are at the end of their lifespan right about now and we’re just waiting for stuff to fail. I added up over $30,000 if everything hits at once (maybe even over $40k). We have a nice savings account set up for the home and emergencies, but not THAT much. The good thing: it won’t all hit at once and we can start planning repairs and replacements now.

But the question is how much longer do we want to stay in this home? Do we want to stay in this house till we die, upgrade, rent something smaller or move away entirely? There’s more to this question than just dying appliances such as our mortgage rate increasing (it’s variable) and needing to refinance. We have been questioning our careers, traffic, cost of living, proximity to family (or lack of) and much more.

The question is do we stick it out, spend the money on maintenance (that won’t significantly increase house value) and live through the payback period or dump it now and cut any losses? Granted, since we have a pool, we wouldn’t sell during the winter, but we need to do some heavy thinking very soon.

What would you do?

You may also recall that we each have “our own” bathrooms. The gas-heated one is mine and the electric one is hers.

When my wife started to seriously complain that her showers weren’t staying hot, then I started to listen. I knew the heater was going on 13 years old, but I didn’t know how long water heaters lasted. Well I do now.

Luckily, we have an expert handyman in our family (her father), and he told me what to check on the heater to see if something what broken.

Some basics about your electric water heater

I’m not going to try to come across as any expert, but here’s what I was instructed about our water heater plus some things I learned later:

• It has 2 heating elements: one on top and one on the bottom
• If you want to check whether the heating element is broken, you need an Ohm reader (Multimeter) to test the current. Multimeters are also good to test electrical sockets, such as voltage, whether they’re alive or not, etc.
• Water heaters generally come with warranties of 6, 9 or 12 years. Based on that, even if the last owners bought the best one, we’re past the warranty, but I’m guessing they have a 6 year. Why? Because I can’t find 30 gallon electric tanks with more than 6 year warranties.
• 12 year warrantied heaters seem to have steel heating elements rather than copper (or vice versa). 9 year have one of each.

How to test whether the heating element is still working:

1. Turn off the breaker to the water heater
2. Open up the plate to access the element. There may be plastic and insulation covering it. It’s the thing with the large hexagonal nut behind it (if there’s another unit, it’s probably the thermostat).
3. Use your multimeter to test whether there is voltage going to the red and black wires. If so, you didn’t turn off the power properly.
4. Once power is confirmed off, remove the red and black wires from the element.
5. Switch your multimeter to read Ohms and touch the red point to the red terminal (screw) and the black to the black.
6. If the reading is very low or nothing, then the element is not working. It means it’s rotted and the U-shaped element is no longer U-shaped and thus not sending a current properly. If you get a reading, then the element is good.
7. Test the other element in the same way, but don’t forget to hook the red and black wires back up properly and replace the insulation and cover on the other element.

If it’s not the heating elements, well then I can’t help any more.

The quick way I found out our heater was dying:

The first element I went to test was the bottom one since that’s where all the sediment ends up and corrodes the element faster. When I took off the outer cover and removed the fiberglass insulation, I found it was damp on the inside and soaked on the bottom inch. I thought “UH OH!”. I put my finger down in the pan under the heater and felt water. Just a little bit, but enough to tell me it’s time to get a new water heater.

The final nail in the coffin? The severe amount of corrosion around the element showed we didn’t even have the option to replace the element. If it wasn’t corroded, we could have drained the tank and replaced it for $20-30. But not now. We’re lucky my wife noticed a difference, her dad was experienced enough to figure it out and that the tank didn’t rupture (yet).

I did end up buying a new 9 year, 40 gallon water heater which we’ll install very soon. Unfortunately, our state has a new code that requires an expansion tank be installed, so that was an extra cost. Plus, you need to have a building permit to install the tank, at least in our county in Maryland. Overall, the tank I chose and the expansion tank cost about $425, but if I wanted to be sneaky and cheap, I could have done it for half the price myself. I don’t recommend going cheap or against the law.

Tithe Definition from Dictionary.com:

tithe   [tahyth] noun, verb, tithed, tith·ing.

I like to spread the wealth

While at year-end when I do taxes, I see that I haven’t given close to 10% of our income (pre- or post-tax) to charity, I think we’re doing pretty darn good. And each year we give out more and more. But I don’t like to just give to one place. I like to give to my church, to animal shelters, to rebuilding efforts, and also to friends and family (discussed in a bit).

I have a friend who insists he is a good Christian because he tithes 10% of his income before spending on anything. Good for him. However, I also know about his financial situation outside of his charitable donations and I also know about his charitable WORK because he’s told me directly…

It’s not all about the money

This friend of mine thinks that he’s following “the law” and giving his money, so he’s saved (well, in addition to going to church and not swearing or drinking. That’s about it in his mind). But let’s focus on “the law”. It’s great to give up a good chunk of your pay to your church, or anywhere, but to me, giving away money is the easy part. I want to know WHAT ARE YOU DOING for your fellow man? I’m a leader in a charitable organization associated with our church, and in that capacity, just this year, I’ve spent over 100 hours of my time rebuilding a home for a needy woman, unloading and selling hundreds of Christmas trees for our church, running charity dinners and more. When a neighbor asked for help to disassemble a weight machine and deliver it to a local Hispanic shelter for their gym, I was right on board. I even stayed overtime to put it all back together, although I crushed my hands in the process.

While I don’t like leading, when someone asks or I see someone in need, I will jump in. Recently another neighbor’s church adopted a family. They were calling for toys for the kids, but what the family needed most was rent money. I contributed 25% of their large rent bill and got the fellow neighbors to kick in for the rest. The kids got toys for Christmas, but more importantly, the family didn’t get evicted (for at least one more month).

So my question is when it’s time for action, what do you do? Are you the type to just throw money at it and walk away or do you jump in and see how you can do more? It’s not just about money. Tithing is just one part of the equation, and in my opinion, a very small part. I think DOING makes much more of a difference.

And where do you think your money goes? Ok, put it in the collection basket or mail it in, but do you follow up to see how it’s being used? Do you see it’s going to help support a soup kitchen? If so, do you offer up your TIME to serve at that soup kitchen? Follow the money and you’ll find there has to be someone at the end volunteering their time and they always need more volunteers.

When it’s hurting you financially…

Let’s get back to my friend. I already cracked down on his lack of DOING (because he thinks the financial donation is enough), but I also mentioned I know more about his financial situation. Sure, 10% “goes to God”, but what about his other 90%? They make good money, have 2 kids and a nice house in a outer suburbs of the D.C. region. The problem has always been, though, that he loves spending. They are so jacked up in debt, they can barely breathe! Now, I’ll put this out there that if they weren’t the tithing type, they would still be swimming in debt, so if they wanted to help themselves, they would have to pair up stopping tithing and enforcing control and discipline to reduce their debt.

Why am I picking on them? They make almost as much as my wife and I combined, but he has no college degree and he’s 9 years older than me. He cares more about shopping for deals at work than working, even though he works for a university AND SHOULD BE GETTING HIS DEGREE! (his boss and boss’ boss are pushing him to do it now). He’s still paying the minimum on his one car (Acura) and they bought a shiny, new Acura MDX last year. And, of course, they’re paying the minimum on that. They’re not really saving up for their kids’ college education because he assumes he’ll stay at the university and get a cheap education for them…but we all know that might not work out. What if he loses his job, what if they want to go elsewhere, etc. Lastly, they keep refinancing their house to use the home equity to pay down their credit cards and then rack up more debt! (And it costs money to refinance too, remember?).

Dumb. Just dumb.

Contrast that now with my wife and I. We have no kids. Our house is half the size, but twice as costly, but we have 25% of it paid off already in just 7 years (I’d do more, but I’d rather invest than sink it into a stagnant housing market). We have no credit card debt. We have no card loan debt. We have no student loan debt or personal loan debts. Just one mortgage and that’s it.

Does that mean we should be giving even more than 10%? In my opinion, and to close the article, I think we’re doing just fine with the combination of money, gifts AND time we donate to various organizations and individuals around us. I always feel guilty that I should do more, but I live with that and work with it. I do more when I can and pull back when I feel overloaded. I don’t and won’t just throw money at a problem and walk away. I dig into it and find out how I can do more.

So, tithe if you want and/or feel obligated to, but don’t just toss the money in the collection plate and walk away. Spend your time too. Do, don’t just pay.

If you’ve been wondering where I’ve been lately, I’ve been to Germany, working, been very sick and watching a lot of TV. You’ll be hearing about a few of them in my upcoming articles because, regardless of their “reality show” genre, I’ve really learned some good lessons from each.

The show Parking Wars airs on A&E and centers around the Philadelphia Parking Authority’s ticketing, booting and impounding divisions. Every episode has some type of drama, and it’s usually some citizen blaming the city, God, or just anyone except themselves for not following clear rules. However, not all the rules are logical or well-known, so I can’t blame some of them for their reactions.

Here’s just a few tips I’ve learned:

Learn to Read FOOL!

I know from living in the D.C. area that finding legal parking can be tough, especially when you’re not sure if you’re allowed to park somewhere, there’s a line of cars honking behind you and you have to pee like nobody’s business (ok, I threw in that last one). But when you find a spot and there are other cars parked right around you, don’t assume you can park there! Look around for ALL signs: on parking meters, on lightposts and poles, and walk up and down the street to make sure there’s no extra surprises. Sometimes you’ll find a sign 3 cars back with an arrow saying “No parking from x to y” pointing right up where you’re parking.

Sometimes the instructions are written right on the parking meter (e.g. you’re parking after 7 on a Saturday, but it charges till 10pm, so you still have to pay my friend). Also watch out for time limits. “Meter Maids” will either mark your tires with chalk or, if they’ve upgraded to handhelds units, they’ll punch in your license plate and time you that way. At the end of 20 minutes or 2 hours or whatever, and they show up, you’re getting a ticket.

So ultimately, you need to learn to read and pay attention. But here’s my next rant…

Don’t try to blame anyone other than yourself!

If you parked in a spot, and you get a ticket, don’t blow your top, especially if the “meter maid” is standing right there. They’re doing their job. And your job was to make sure you’re parking legally. If you need a permit, have one. If there’s a time limit, get out of the spot in time (and park on the other side of the street, which most people wouldn’t know unless they watch Parking Wars or read their city parking laws). Don’t park near a fire hydrant, don’t park too close to the curb (especially don’t block wheelchair access) and so on and so on.

There are tons of rules, but ignorance of the law is not an excuse to ignore it! Just because a street doesn’t have a speed limit sign, does not mean you can go 100mph. There’s laws covering that too, and it’s YOUR responsibility as a citizen to learn them. That’s why they give you things like a driver’s exam, right? Well, when you live somewhere, you have access to go to city hall and get copies of the laws and do some reading (not that I’ve done that myself, but I don’t live IN the city).

And if you find yourself with a bunch of unpaid tickets over a length of time (like more than 6 months each), don’t be surprised if you come out one day with a boot on your wheel OR your car towed away! And don’t be surprised if you have to pay over $100 just for the towing fee. And don’t even try to remove the boot or drive away with the boot. The boot will rip your car up!

Just don’t be stupid. Learn the law, and if you’re visiting somewhere else, read everything closely and don’t trust anyone’s answer whether you can park somewhere except for the city’s parking authority. The police don’t enforce parking, so don’t bother asking them, and don’t ask shopowners either.

Don’t act like a child

When I watch Parking Wars, it amazes me the idiocy of people when they know they’re going to be on national TV. They throw tantrums like little kids, or they threaten like common thugs. Either way, they’re being recorded and they know it! FOOLS!

When you have to pay a fine, go to traffic court or go pick up your impounded car, please act like a grown-up. Respect will be given to you if you give respect first. Granted, some people just have bad days, or maybe there was a line of harsh customers before you, but act civilized and don’t get frustrated by “the system”. It’s just like calling into customer service for your bank, credit card or the cable company; if you’re nice to them, they might cut you some slack. They’re real people too, but they have jobs to keep and won’t bend the rules for one person and risk that job.

If there was no parking enforcement, you would get NOWHERE in a city!

I know there seems to be no logical reason for some of the parking rules, especially when there are 3-4 signs piled on top of each other on a pole with seemingly conflicting information, but ultimately you need to think about the bigger picture. There WAS a time before parking enforcement. And you know what happened? Traffic jams all over the place. Horses and cars and carts and buggies just piled up on each other like some 4-year-old’s Matchbox car collection thrown in a ziplock bag. Just chaos.

By telling people where they can park, when they can park there and for how long, that you can’t just stop in the street “to run into the shop for a second” and block a lane of traffic, and so on, the city has done the first step to laying down some order to the madness. The next step is enforcing it, and that’s where ticketing, towing and booting come into play. It sucks when it happens to you, but think of the greater good! You wouldn’t even be able to drive in that area if people could just park anywhere. You would find a sweet spot, then come out and see you’re double or triple parked into your spot and can’t get out. Then who’s to blame. That’s right…the city, for not having parking laws

My own history of parking violations

I have 3 incidents that come to mind in my own life, and I recognize that all 3 were my fault, even though I’m still jacked about one of them:

1. When I was dating my wife and I was visiting her in college, she had her own parking spot at her building and I parked there (her car was somewhere else). It was summer and the windows were open and I hear a tow truck backing up. I look out the window and it’s hooking up my car! (It was my newly-purchased Acura, so I was livid). How dare they tow me from HER spot!?! Well, it turns out you needed a parking badge, even if it’s your spot, because that’s all the contracted towing company looks for. I had to pay $40 just for the tow operator to let my car back down.

2. In our current house, during an upcoming ice storm, I parked on the street, away from power lines and trees, and up a bit too far onto the grass (no sidewalks on this street). I got a ticket for about $40 for parking on the curb. I was upset and still suspect one of my neighbors for calling me in, but I recognize and accept I was in the wrong. I was just trying to keep my truck safe and make it safe for other drivers as it’s on a hill.

3. Back in 2002, when a friend and I visited Ireland for 10 days, we rented a tiny little car (aren’t they all over there?). This was a Fiat Seicento. It was a smaller than small car (for 2 fat guys), but I digress. We were in Sligo city and wanted to get lunch or something, so I parked in what I thought was a legal spot. Granted, I didn’t look around for any signs, nor did I wonder why no one else was parked there. Turns out it was a bus lane. We got back and there was a 19 Euro fine on the car (luckily they didn’t tow it!). In that year, 19 Euro was more like $15 US, but we had little cash on us as we were just out of college, saddled with debt (especially me). We could have just left the country without paying, but good thing we paid because I came back with my wife for our honeymoon a year later.

So there, I’m not squeaky clean myself. I’ve learned to read, to accept responsibility, and to understand why the laws are in place (with some exceptions). And I hope you do the same.

A few weeks ago, I was let go from my job. Since then, my wife and I have kicked into ultra frugal mode. If we do not need it, we simply do not buy it. While we have seen cuts in all areas, the place where we really noticed the cut was in our food spending. I was balancing my checkbook this past weekend and noticed just how fewer debits there were than only a few weeks back when I was working. I started investigating a bit and realized, all these cuts were primarily on convenience food spending.

A long time ago (about the time I had my first child) my wife and I stopped most fancy restaurant dining (as in anything more expensive than $5 footlongs). The dining experience was simply too expensive, the food generally too greasy or salty, and the effort of dragging a baby into a restaurant way too stressful. So we started eating in a bit more. Instantly, all that cash I had previously worried about finding to pay for diapers and other baby stuff emerged from the savings of not eating out!

But eventually, we started eating in more and more. The shift was partly due to the stress of dealing with our two young children after long days at work, and partly just laziness. While we were definitely not spending as much dining in on subs and sandwiches, carry out BBQ, or “Take and Bake” pizzas from Costco, we were spending more than we needed on convenience food.

Since cutting out the carry out restaurant and convenience foods, I have made some great realizations and changes. Meals do take more time to prepare (but I’m unemployed so I don’t care!), and I have discovered a few other nice side effects.

My Meals are Healthier

When I make a pot of chili, I drain all the fat off the ground beef before adding it to the mix. When I cook a pizza, I opt for lower fat cheese or turkey pepperoni. When I make my own sandwiches, I go light on the mayo and eat whole grain wheat bread that my local sub-shop doesn’t offer. When I cook for myself, I can also throw in more veggies, more chicken, and less crap.

Think of all the calories I’m saving. I am also burning quite a few calories in the process of preparing the meal while simultaneously keeping my three year old from killing the baby too.

My Meals lead to More Meals

Some people are picky about left-overs, but I think they are awesome. I’ve found a new love for meals that I can eat for days, especially meals cooked in slow cookers. When you buy prepared convenience food, you’re typically buying one meal at a time, which is one of the less obvious reasons why it is so expensive.

I also learned a neat trick of using leftovers in stews and soups later. A plate of delicious leftover turkey/hamburgers makes a great base for soup later on and leftover chicken breast makes awesome chicken salad for the next evening.

Meal Preparing Time is Family Time

Cooking with my three year old is not exactly akin to taking the path of least resistance, but it really does provide a rewarding and fun experience for both my daughter and me. Since I have started cooking with her, I have quickly become the good parent in the house and eating our creations is always a ton of fun.

With any luck, by the time my little girl is eight, I’ll have her trained up well enough so that she can handle cooking all the meals while I take it easy and watch my afternoon reruns of Seinfeld.

Cooking Can Easily Double as a Hobby or Passion

I would never consider eating out a hobby or passion, but cooking has quickly become both for me. Once you take the dive into the culinary arts, you realize just how much technique, art, and science is involved. My new favorite chef is Alton Brown. I love his mix of science with Good Eats!

And while most hobbies cost you money and give you little to walk away with after the fact, you actually benefit greatly from this hobby. Plus, you have to eat anyway, might as well make it delicious and fun.

Being a Good Cook Makes for a Sexy Guy

Since really learning to cook and fine tuning my skills, I have noticed every woman who dines on one of my delicious creations instantly wants my body. It is no joke. Men who are genuinely good cooks are sexy. My sister in law swoons over me, my wife’s friend’s giggle with joy as they subconsciously touch my arm lightly every time they taste one of my delectable sauces, and my relationship with my wife has been completely reinvigorated since I started becoming a ninja in the kitchen.

Being a good cook is sexy, and women love it- so learn to cook.

Conclusion

Why not make the effort become a master chef in your own right? You’ll be eating better, endlessly learning, building stronger relationships with your family or maybe even helping out your sex life in the process. You will also be saving tons of cash not eating out! So get in that kitchen and get to work.

Have any tips or comments of your own? Let’s hear them in the comments!

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Shane writes for www.WeWearKhakis.com – a site about life at work, personal finance, self improvement projects, and how to have a fulfilling life on a budget.  Check out his site and learn how you can be an awesome guy or gal in Khakis too!

However, after a few phone calls, I found out that we were in an excellent position for this trip because of the following:

Our “Big Bank”

I’ve been a Bank of America member for about a decade now, and while I was very close to killing my account recently from their attempt at a $5 fee for debit card transactions, I decided it wasn’t worth the bother. I’m glad I didn’t because one of the major banks in Germany, Deutsche Bank, is part of the “Global ATM Alliance“, and thus we didn’t have any ATM fees.

One thing when you’re dealing with foreign currency is to make sure you don’t withdraw too much because you might get stuck having to exchange it back to US dollars and paying another fee.

Your best bet is to use a credit card…

Our Credit Union

While we have a number of credit cards, they all had foreign transaction fees (FTF’s), which can range from 1%-3% (or more for some seedy credit companies).  But while calling through our credit card companies to find out the best option, I found out that recently our Pentagon Federal Platinum Rewards Card dropped the foreign transaction fee! Not only that, but I learned that the card also offers 5% cash back on gas all the time. When I first got the card, it was 3%, but I hadn’t checked up on it until I heard a radio ad for the card and heard 5%.

So with a combination of a big bank and a credit union, we were able to avoid a chunk of fees during our stay overseas. Capital One and AmEx used to be your only choices for cards with no foreign transaction fees, but now Pentagon Federal Credit Union has joined the mix

When I was growing up (haha!), my mom would constantly tell me “money burns a hole in your pocket! You’ll never be able to save for anything”, and she was right. After a birthday party or Christmas or graduation, I just had to go spend that money on ANYTHING! If I could get my money back on all that crap I bought, I’d be, well, not rich but at least have a nice savings. The thing is I can’t remember a single thing I bought which shows that it was all for instant gratification and fleeting emotions. Actually, I think a few of my purchases were probably books, and books are good, so they weren’t all bad, but that’s besides the point.

Back to the topic: Emergency Funds. Why are they important? Well I have two real-life examples for you. Luckily neither affected me directly, but both are close to me.

The Curse of the Bad Plumbing

I won’t try to pretend I know this whole story, but what it boils down to is a friend of mine in my hometown was required to redo sewer lines that led into the house (thus, their property) from the street because it was causing leaking and other junk. On my friend’s part, they’ve had flooding in the basement for decades and, personally, I think this was a good thing that finally forced them to do something about the moldy carpeting and old furniture in the basement, but at a high cost.

After getting a number of quotes, they went with a reputable company who had a better plan that meant less destruction (i.e. didn’t require tearing up the entire driveway, just part of the basement floor).

The cost: $8000

Problem is this isn’t my friend’s house. It’s her mom’s house and they’ve been co-habitating families for years. The mom has absolutely no savings, is on fixed income and is actually way over her head in debt, while my friend had been working for years to build up a savings account of, well, just about $8000 which is an amazing amount for my friend (whose husband’s pockets also burn when cash is in them).

Their options were either

1. The mom get into even more debt (if the bank even allowed it) or
2. The friend use her savings for the work and hope she’ll get paid back somehow

They opted for option #2 because there was no way the bank would, or should, give more debt to the mom in her current financial situation, age and physical condition (she simply can’t work). This means that my friend’s emergency fund came in handy at a much-needed time, as she also couldn’t get a loan for various reasons.

Let’s just hope she can get her money back!

The Bad Furnace

This is a much more common occurrence. You own a home and your furnace dies. But do you know how expensive a new heating system is? Well, for one friend, it’s $9000!

I’ve known this friend for 10 years, and he’s actually almost 10 years older than me. He has 2 kids, bought his house at a good time before the peak of the market, but he has a couple issues:

1. A mortgage AND a maxed-out home equity line of credit (HELOC) used to finance improvements and whatever.
2. A good bit of credit card debt
3. A brand new luxury SUV loan
4. A nearly paid-off luxury sedan loan
5. Only part-time income from his wife
6. A love for gadgets and electronics, and generally just browsing the internet for deals (usually during work hours)

I think he’s at a point in his life where I was when I was 9; money just burns a hole in his pocket.

His biggest problem though? He only has cash savings of $2000. Seriously, you’re in your 40s and all you have in cash is less than your net bi-weekly paycheck? Come on man! And this guy makes 6-figures PLUS his wife’s income!

So he was telling me this week that he could he doesn’t know where to get the extra money, especially since the old furnace is dead and winter is coming on soon. He thought of the following options:

1. Pulling from his retirement accounts (e.g. 401k)
2. Going with a contractor who offers a payment plan
3. Getting more, if possible, out of his HELOC

No matter what, all three of the options are going to cost him much more than $9000 in interest, and he’s the type who only pays the minimum on his debts (yet he insists on 10% tithing even when the same Good Book looks down very strongly on those who do not repay their debts in a timely manner and to not needlessly accrue more, but I’m not one to judge…much).

Where do we stand in comparison?

It’s taken a ton of self-restraint, some heavy frugal living and debt paydown, but we’re finally at a point with no debt except our first mortgage (no 2nd mortgage, HELOC, student loans, credit card debt, personal loans, etc.). We no longer live paycheck-to-paycheck and I’ve actually found it a problem to try to figure out what to do with our extra cash each month (savings, investments, paying down mortgage, charity, etc.). We’re not rolling in dough by any means, but we’re not the struggling newlyweds of 8 years ago!

I won’t say how much total we have in cash savings (different than money in investment accounts), but it’s close enough to mid-five figures that I’m pretty confident that we can handle many emergencies as needed, outside of some major health issue or accident, but that’s what insurance is for up front.

But I actually have our savings separated out into multiple accounts: emergency (like a dead furnace or major auto failure), home (such as improvements), travel (which we’re using for a European trip), and auto (either for an eventual replacement to one of our cars or a “fun car” for me). But combine all of these accounts and the sum is amazing compared to where I was at age 9, 19 or 29. I’m 33 now (if I did my math right) and could definitely be much further along with our financial planning, but we’re doing well for ourselves.

But then again, we don’t have kids or pets or any other dependents. And as long as I can hold in my urge to buy a car, we don’t have any other financial fetishes to fulfill.

And that, my friends, is why you need an emergency fund. It’s not just for when you need it, but also for the peace of mind it gives you.

I got married when I was 25, still living off my junky college furniture or even free furniture we got from near the dumpster, and, for many in their early- to mid-twenties, you’re in the same boat. You have junky dining utensils, plates, etc., small appliances, towels, etc., especially if you’re a guy. In my opinion, married life generally is the main impetus for getting rid of the junk and bringing in nicer replacements in part as an upgrade but also most definitely as a bonding exercise with your mate. When my wife and I picked our dining room furniture together (a set we stained ourselves), it was a momentous occasion and we still love what we chose. It was a lot better than the folding table I had in college!

But now I’m in my early/mid 30′s and so are most of our friends. And some of those friends are just getting married now (I’m not even going to bring up gifts for 2nd/3rd marriages!). They’re ecstatic about getting married and expect to go through the same process as many of us did 5-10 years ago. However, they’re in a much different place in their lives and I think they should have different expectations.

Should “older adults” register for wedding gifts?

Granted, some of you had your lives in order when you were 15, but from what I’ve observed, you don’t start hitting your stride in the professional world until around age 25-27. That’s when you start getting better tastes for design, electronics, appliances, and in general want to “nest” and make a place your own. Again, just my observation and your experience WILL vary.

But when you hit 30, society thinks you should start settling down in your career because you’ve had almost a decade out of college to figure out what the heck you should be doing with your life. You’ve had a decade+ to find a soulmate, and a decade to get situated where you live to the point of having a support network of friends and colleagues. Some of us are late bloomers and don’t find “the one” until long after our “prime” (aka our 20s), but regardless, the norm in society expects young adults (those in their 30s) to be stable and situated in life…and be married and probably have a few kids.

So, when a couple, both in their 30s, announces their engagement, then sends out the wedding invitations, replete with a list of cheap or expensive registry locations, are you obligated to buy them an expensive gift?

In all of the cases we’ve experienced over the last few years, the registries were just full of “fluff” meaning stuff you would never buy yourself, probably never use, but feel obligated to register for because you think your guests would feel obligated to buy you a gift. This is the one chance most people take to get a complete china set they’ll never use, or that matching towel set that will be thrown in the closet with all the others.

But ultimately, what do you get for someone who already has what they need? You can get them money, but when they make a good living wage, it just seems tacky. Same goes for a gift card, but at least you can give them a Home Depot, Lowes or Bed Bath & Beyond card because they’ll most likely use it and it’s more specific than cash.

Your thoughts? Should “professional” couples be registering for gifts for their wedding? Should they expect to be given much? Where do you draw the line? Or am I just being cheap?

I expect those who are younger won’t have experienced this situation, but those of you in your 30s and older most likely will have been invited to at least one “professional couple” wedding, so I’d like your feedback (especially since I have a feeling we’ll have a few more of these coming).