Now that I have decided to make paying off my 5th wheel loan a priority, I have been thinking about different strategies to get the job done.
One strategy I intend to pursue is to get a 0% no balance transfer fee credit card loan if I can. I have Googled a bit, and have found a couple of offers for 0% for 15 months, no balance transfer fee. If I were to borrow $4,200, that's a repayment of $300 per month for 14 months (I always plan to pay in full the month before the offer ends). It adds a bit more hassle to juggle both debts, but I would save an additional $334 in interest by paying a lump sum of $4,200 up front vs. paying $300 per month over 14 months.
So I will apply and see if I am approved or not.
A second item is that I have raided my Roth sinking fund. I had been depositing 5% of my gross pay to it each payday, with the intent to contribute the money in 2020 (I had already contributed the max for 2019). I am using part of the money for medical expenses (more on that later), and the remaining balance of $1,130.81 as an additional principal payment. I will schedule the payment as soon as the money hits my checking account.
UPDATE: Additional principal payment of $1,130.81 submitted.
Now that I have decided to make paying off my 5th wheel loan a priority, I have been thinking about different strategies to get the job done.
So early this year, we lost our beloved Nala to laryngeal paralysis. This is a condition in which the nerve controlling the laryngeal flaps stops working, and so the flaps stop moving between the esophagus and the trachea. This was hard on everyone.
After grieving for a few months, SB and I adopted a female 2 year old English bulldog/pit mix. She was being fostered but was the property of the Bradshaw animial shelter in Sacramento. She has quite a personality and has successfully taken charge of SB and I, as we are both besotted with her. Her name was already Bella, and she knows it, so Bella it is.
We have had so much going on, and so much more is on the horizon. My brother and sister in law will be here in two weeks for an overnight visit. My birth mom is coming in late August/early September and will stay for a bit. And then my daughter and son-in-law will be here in late September for a visit.
This September also marks our 10th anniversary. We are planning to take a short trip, possibly to Lake Tahoe.
In financial matters, I have decided to make paying off the 5th wheel a priority. I have re-arranged my budget some and will begin paying the loan aggressively with my next payment. I have cut back my personal allowance, trimmed my travel budget, and will not contribute to my Roth. Instead, all of that money will go to the 5th wheel loan, along with every other dollar I can scrape up.
I will add a Page to my sidebar with the loan amortization to track my progress. I have already made a small amount of progress by making the first 3 payments before the due date (interest accrues daily). If you are interested, take a peak.
I try to prepare for future expenses by saving a bit each payday in various sinking funds. With the recent purchase of a new 5th wheel, they needed some tweaking. I update the balances regularly, which you can view any time you please by clicking on the "Sinking Funds" page link in my sidebar. This is what I am currently doing:
Car Ins & Reg - This is now for both my CR-V and 5th wheel. I am budgeting $2,700 per year for insurance and registration for both. This breaks down to $103.84 per pay period.
Car R & M - This is now for both the CR-V and 5th wheel too. I am budgeting $1,500 per year, which breaks down to $57.69 per paycheck.
Car Replacement - To replace my CR-V when the time comes. I am budgeting $1,500 per year plus my "round out", which breaks down to $64.24 per paycheck. ("Round out") is the amount needed to give my sinking funds transfer a nice rounded number).
Clothing - Current budget is $600 per year. This will change once I am no longer dressing for work. This breaks down to $23.07 per paycheck.
Electronic Gadgets - To replace my phone, laptop, what have you. The budget is $300 per year which breaks down to $11.55 per paycheck.
Emergency Fund - Not a true sinking fund, but here it is. Currently no money is being regularly added.
Gifts/Xmas - The budget here is $1,000 per year, which breaks down to $38.46 per paycheck.
Planners & Goodies - For my fancypants planners and supplies. The budget is $100 per year, which breaks down to $3.85 per paycheck.
Roth - Saving up for next year's contribution as I've already contributed 7k for 2019. The amount is 5% of my gross pay, which works out to $103.15 per paycheck.
Travel/Vacation - I am budgeting $2,500 per year, which breaks down to $96.15 per paycheck.
All together, $500 per paycheck is automatically transferred into these funds a few days after each payday. This method works very well for me. Once set up, it is so very simple and requires no effort on my part.
It would have been more practical to buy the 5th wheel our friends were selling, or some other used 5th wheel. But, I decided that I wanted the beautiful new 5th wheel with extended warranty.
So, I bought it. The same one in the pics I shared in my post "Tow Vehicle Purchased". We have not yet taken delivery. The dealer is installing a tankless hot water heater and slide out "toppers" (covers to protect the roof from leaves and dirt while the slide is out). Plus, we need to have a 5th wheel hitch installed in the truck bed. (Which of course can't happen until we get the truck back from the dealer. Grr!).
I am very pleased and looking forward to living in my new home. We will keep our current travel trailer as a "guest room" so that family & friends can come up and visit us.
My loan payments are $417 for 15 years; the interest rate is 6.74%. I have already found that a lender called Essex Credit, which is funded through Bank of the West, will refi me at 5.15%, dropping my monthly payments to $375. However, I will have to wait as they require copies of both a loan statement and DMV registration; I have not yet received either one. I had checked with Wells Fargo before taking the financing the dealer offered; WF's best rate on an RV loan is 11.59%, and goes up from there. I could not believe it. I think they must be wanting to get out of RV financing altogether.
I think I am just going to pay the loan one payment at a time and direct extra dollars into savings.
Well, this is fun. Tonight is our first overnight in a Walmart parking lot! Several circumstances converging have put us here tonight.
Early last week, a warning light came on in our new truck with only 400 odd miles on it. SB called the dealership and they told him to bring it in (last) Wednesday morning and to drive as little as possible in the meantime. Wednesday arrived, he took it in, and they have had it ever since. They cannot figure out what is wrong with it. They have provided a Ram 1500 rental truck while we wait.
Meanwhile, my grandniece had her baby last Wednesday. After 3 years of infertility, this baby has been much anticipated by my grand niece and her husband. When we heard the news, we took our travel trailer down to my mother's house on Thursday. We visited grandniece, her husband, and beautiful new great-grand niece in the hospital. She was born a little early, weighs 5 1/2 lbs, is healthy, and absolutely gorgeous. We stayed Thursday night in our trailer at my mother's house.
On Friday morning, I commuted two hours to work, then commuted two hours back afterwards. A long time friend was having a birthday party dinner Friday evening. I had not seen this friend in quite a while and had been communicating with another friend who was helping to plan the party. So SB and I strolled in to her party and surprised her. We had a very fun evening catching up with some old friends. Afterwards, we stayed Friday night in our trailer at my mother's house.
On Saturday, my son and daughter-in-law came to my mother's for a visit. My grand niece and her new little family were released from the hospital Saturday afternoon and came for a visit. I got to hold that beautiful baby again, cuddle her, and smell her sweet baby smell. My daughter-in-law said "I am afraid to hold her, I might want one". It was a very happy day. So we stayed Saturday night in our trailer at my mother's house.
Sunday of course was Mother's Day, so I was happy to spend it with my mother. My cousin who lives in San Mateo and her husband came for the day. My daughter called me. My brother called my mom. My cousin in Spokane called my mom. My nephew in Stockton call my mom. My niece in Willits called my mom. My niece in Seattle called my mom. Of course, I got to chat a little with each relative too. So it was a very full day, and we slept Sunday night in our trailer at my mother's house.
This morning, I left my mother's town at 5:30 a.m. to come to work. SB left some hours later, and learned the happy news that our truck is still not ready. In fact, they aren't even sure what to do next. They have been in contact with the factory and have tried multiple fixes. No luck so far. I am very disgruntled about this entire matter and I'm not really certain what is going to happen.
My office, the dealership, and Walmart are all within a mile or so of each other. SB does not want to take the trailer all the way home, and then turn around to come back and pick up the truck. He would rather just camp here at Walmart and wait. So that is what we are doing. My, but don't I have the most thrilling adventures?
I enjoy serendipity so much. Some friends of ours who are close to finishing their new build home have been living in a 5th wheel. They just offered it to us for 5k.
We went to see it. It is not as pretty as the one in the pics I recently shared, but it would be quite an increase in space for us. It is 27 ft with 1 slide and is very clean. It is a 2002 model with worn green carpet which would have to go. It does not have an on-demand hot water heater which is a MUST; those run $1,600 installed. There is more counter space, more living space, and more fridge space. The bathroom is smaller than our bathroom now, but with more storage space. I said I would let them know one way or the other by Tuesday. I am leaning towards "yes".
In other news, SB found a 2006 Toyota Corolla LE with 42k on the odometer, asking price $5,400. He bought it and sold his Acura MDX. It is in excellent condition and gets great mileage. It is now his daily driver in good weather.
On 4-30-19, my Wells Fargo savings account with $10 in it earned a cent of interest. This prompted me to look at the interest rate. It has shot up to 1.22%. This is the highest rate I have seen paid on a regular savings account by a brick-and-mortar bank in a long, long time.
I have continued to refine and update my "if I retire right now" spreadsheet.
I have extended the final line to the month I turn 100. I will tweak my monthly withdrawal to maintain steady income from date of retirement to the month I turn 100. The next month, I will be flat broke.
Extending the time out several more years reduced my beginning monthly withdrawal amount. Good portfolio growth the past two months has increased it.
In addition to my nest egg, I am including the cash value of my pension plan. Because I am not yet vested, if I were to retire now, I would not receive a monthly pension payment. However, I would be entitled to a refund of all I have paid in (but not the amount my employer has paid in on my behalf). I would roll the money into my 457 plan and so it would become part of my little nest egg. Once I vest, I will forfeit the cash value so will no longer include it in this calculation. However, I will receive a monthly pension which will certainly factor in.
My new monthly beginning withdrawal amount is...$1,406.00. (I am sticking with whole dollars).
Nope, not yet. Better keep working.
I am so excited to share that this past Sunday, SB and I purchased our tow vehicle. It is a 2018 Dodge Ram 2500 4x4 with a Cummins Turbo Diesel engine. This baby is made for towing. Here she is:
She is a pricey girl. But after much discussion, we decided that we wanted a reliable workhorse. I admit I am a bit intimidated to drive her. I plan to take some RV driving lessons. You know, how to back up, hitch your trailer, make wide turns, etc.
SB and I have really been feeling the strain of living in such a tiny space. We have been irritable and short with each other. After a couple of argumentative weeks, we have decided to move ahead with purchasing our travel vehicle now. Even though we are not ready to hit the road, we will have more living space now.
We purchased the lowest trim level with no extra options. Even so, the truck is nicely equipped with back up camera, trailer brakes, a jake brake, a nice sound system, power seats doors and locks, tow mirrors, etc. We chose to purchase an extended bumper to bumper warranty which will take us to 8 years or 75k miles. We believe we will hit the 8 years before the 75k miles. The sticker price of the truck was 55k+. With tax, license (expensive on this sort of truck) and the extended warranty, we paid $53,551.85. We split the cost, and the truck is paid for.
It is some major sticker shock. We feel the odds are good that this truck will serve us well for many years to come. Frankly, I fervently hope it is the ONLY tow vehicle I will ever buy.
So now my next decision is which 5th wheel to buy. I could stick with used and pay cash. I believe I could find something which would do. However, I am leaning heavily towards financing a new 5th wheel. I have seen some BEAUTIFUL ones, but I am keeping in mind that I wish to keep the length to no more than 30 ft, and I wish to go with an "ultra lite". This will make towing easier, parking easier, gas cost a bit less, and many parks limit the length of your rig if you want to camp in the park. There are a few models which fit those specs and yet still offer a bit of elbow room.
For example, I LOVE this one:
This beauty is just under 28' in length, and can be had for approximately 40k. It has slide outs on both sides of the living area, so it doesn't feel so claustrophobic. I love the lay out and the decor; I really feel it makes great use of the space. And since the steps up to the bedroom and bath are immediately to your right as you enter the door, you can access both even with the slides in. This is an important feature if you want to travel. Suppose you are driving from Point A to Point B and you wish to pull in to say a Walmart parking lot and sleep. You cannot put out your slides in a Walmart parking lot. So if your floor plan does not allow access to your bed with your slides in, you are out of luck.
With the two slides in, there will be no ability to walk past the kitchen island towards the seating area. However, you would be able to access your refrigerator, stove, sink, and cabinets. So you could also prepare a meal in that Walmart parking lot, even if you do have to eat it standing up. This feature is somewhat less important to me than access to the bed and bathroom, but still very nice when one is on the road.
I love to crunch my numbers this way and that. Recently I have discovered that if I retire right now, it looks like this:
- withdraw $1,400 per month beginning 4/1/19
- give myself a 2% COLA every Jan 1st
- hold off on SS until FRA (67)
- at age 67, reduce monthly withdrawal by $750 (realistic SS benefits estimate)
- assuming 5% IRR, run out of money at age 96
Even though I cannot live my desired lifestyle on $1,400 per month, it is a very liberating feeling to know I can cover my basic needs come what may.
I have built a spreadsheet and will continue to fill in actual numbers and re-calculate each month. At some point, the monthly withdrawal is going to become enticing enough to pull the trigger on retirement.
Just heard about this no hoops money market account, currently paying 2.5%. Their marketing strategy cracks me up.
Thought it might help someone. If you're not shopping for a new online bank, take a peek at their site anyway.