| New Entry: FEBRUARY 16, 2015.
I calculated the amount of my "bare bones" austerity budget for the purposes of identifying how much the e-fund should really hold (i.e. what amount I should be using as my bare minimum 'monthly expenses' in case of emergency income loss). I was rather pleased to come up with $3,700 - with additional fat cutting, I could get it down to $3,500. In the interests of being conservative, what I am calling my "BBB" - (bare bones budget) is being set at $4,000. MOST of this is servicing the debt and other direct expenses related to the underwater property. Anyway, that puts the amount I need to save in my 6-Months' Worth of Expenses E-Fund at $24,000. I currently have $19,634, in there, so when I reach $24,000 in about 3 months, I will re-direct that savings snowball to investments and mortgage-pre-payment. At least accelerating pay down to the point where I can re-finance out of the 6.25% to today's rate. That would cut $500 off of my monthly costs in and of itself.
Right, according to Zillow, the house is said to be worth $267K; the total owed from both first and second mortgages is $312K, leaving me at - $44,948 in negative equity. Once the roommates move in and the savings snowball is directed to paying down these two loans, I can get above water in less than 2 years and re-finance.
Wonderfully I did receive a surprise bump up in my pay as a result of a consistent record of 'Outstanding' performance ratings over the past 3 years. So my total salary increase for 2015 goes from 1% to 3.8% - SWEET!!!!! Totally unexpected and really happy about it! The increase will go towards both my 401(k) and the savings/debt reduction snowball.
The kitchen upgrades are almost done, and once some painting is finished upstairs I will (somewhat reluctantly) re-advertise for roommates. I'm telling myself that it will only be temporary until I can re-finance and do the upgrades I want to on the house to improve it's overall value / rentability. I still plan to move out into a smaller space and rent out the whole house to unburden myself from the expense of this place. I guess the timeline on that is up to me. Been saying that for a while. Need to kick into high gear and I intend to. Need to stop being a DIY'er and hire some help to accelerate some of these projects.
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Home value is updated monthly from Zillow.com/Zestimate
(Purchase price was $370K in August 2006).
Other Mortgage = HELOC/2nd Mortgage |