Is Our Mortgage Payoff Too Aggressive?

Four years ago, we made the decision to refinance our mortgage.  We hit the time when rates were about the lowest they’ve ever been, and decided to get into a 15-year mortgage.  This would increase our payments but lower our total interest.  It would also move forward our mortgage payoff date.

From a financial perspective, the move has been a big win so far.

The Benefits Of Our 15 Year Mortgage

  • Low rate – We got a 3.375% rate, if memory serves, so we are paying very little in interest and more toward principle.
  • Modestly higher payments – Our payments went up a bit from our previous 30-year mortgage
  • Getting in line my payoff date objective – I’ve always said that in an ideal situation, the mortgage would be paid off before our kids started college.  This timing would actually have the payoff occur during senior year of high school for our oldest.  I’d be 52 which is a pretty good target age to be mortgage free, all things considered!

However, with everything positive, there is a downside.  It’s only one item, but it’s definitely a noticeable one.

The Drawbacks

The payment takes a big percentage of our take-home pay.  Between the mortgage payment, and our tax and insurance payments, the payments take away about 33% of our take home pay.  I learned by example (from my parents) the benefits that a 15-year payoff can have and have applied it via re-finances for my condo (back in my single days) and our current home.

I’ve read that the ideal number is around 25%, with the target range that most would suggest going no higher than 35%.

So, we’re on the upper end and we definitely can feel the pinch at times.  As I look back at the application of the lesson I learned from my parents, I realize that in principle, applying the practice is a no brainer, but from a situational standpoint, we have one big difference: Right now, we’re a single income family.  We made the choice for my wife to stay at home  when we had kids, and we have no regrets on that, but we always knew there would be tradeoffs involved from a financial perspective. We’re fine with that, but it does mean that we have to approach things from different angles.

Home Vs. Car

The reason I’m noticing this is that I’m starting to pay close attention toward our New Car Savings Fund.  We save what we can toward new cars, and as our cars are 8 and 9 years old, the time is coming faster and faster that we’ll need to address this.  Over the years, the amount we’ve added toward this fund hasn’t kept up with the combined cost of depreciation on our current cars plus the overall rise in cost as prices have gone up.

This means that if we were to buy a new car today, we wouldn’t be able to meet the objective of being able to do so without taking on a new loan.  And if we look at both cars, then we’re definitely nowhere close.

Will The Mortgage Payoff Be Worth It?

So, I guess the question to ask is has it been worth it over the last four years, and will it be worth it over the next eleven years to have this situation?  Some of the variables to consider:

  • Income – We counted on our income to go up.  This would lower our percentage of payment vs. income.  With the recent economic slowdown, this hasn’t happened to my projections.mb-2015-11-checkbook
  • Other costs – In truth, the squeeze has been felt not so much from the mortgage, but simply because of the rise in other costs.  Grocery bills have gone up as a lot of food costs have risen, plus our kids are getting older and eating more.
  • Side income– My wife has a nice side gig that she’s dedicated toward paying for a Disney World trip that we’ll soon be taking, that is definitely a luxury.  However, it’s a trip that is a once-in-a-few year type thing, and now that the costs will largely be done, her income could help supplement other things….like bolstering the car fund!
  • Money chunks – Tax refunds are always a good way to address big ticket items.  They’ve helped us fund a new roof, landscaping, and other things we’ve looked to do.  We need a new furnace.  Plus, we’ll have new cars to pay for eventually. The current ones won’t last forever!
  • Another refinance – One option would could certainly consider is refinancing again to another 15-year mortgage.  The rates are higher and we’d be adding years back onto the end, but it would free up cash flow, and we could always pay the same amount as we were anyway.

Staying The Course (For Now)

As of right now, we’re staying the course and I’m not looking into refinance options.  I like the rate at which we’re paying things down.  I’d certainly love the flexibility in our cash flow.  However, I want to make sure to look at all of our available options.   Our family does a good job of balancing present needs with saving for the future.

Even though we do things like plan trips to Disney and camp frequently, we’re not living on Easy Street.  We aren’t rolling in the dough, and with only one full-time income, we don’t make decisions without careful consideration.  Every decision we make includes a lot of potential trade-offs and variables that come into play.

Readers, how do you approach housing costs as a percentage of your take home pay?  How does this play into other decisions on big-cost items like travel and automobiles?  

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

Mystery Solved: Dilbert Works At Volkswagen!

If you work in an office, chances are you’ve run into one comparison between your office and the Dilbert comic strip.  I love Dilbert, and ever since the stopped making new Far Side strips, it’s my desk calendar of choice.  One of the things I’ve often wondered is what company Dilbert would work for in real life.  Well, after reading the news this week, I think the answer is pretty clear.  Dilbert must work at Volkswagen!

Liars, Cheats, Polluters

One of the top stories, and I think it will only keep gaining momentum, is how Volkswagen got caught and fully admitted to lying about their diesel cars.  They made hundreds of thousands of diesel cars, and it turns out, had a computer software program that blatantly worked so that they were lying about emissions and polluting the enviornment.  And, this was all intentional!

They had software that controlled emissions, and it could be set to have certain systems bypassed in normal use, and only be activated during testing.  What this meant is that a car being tested for emissions would report everything just fine, but during everyday driving, would be putting out lots more (up to 40 times more, to be exact) harmful emissions.


I never really read too much about why they would do this, but I’m assuming that if the emissions were ‘as they should be’ all the time, that the mileage would be significantly worse or the car would not function as well or that repair costs would be higher.

But, honestly, does it really matter?


So Why Does Dilbert Work At Volkswagen

Dilbert, in his comic strip, has a whole slew of scenarios in which he or his co-workers are featured.  They all focus on the absurdities of daily interactions, often around dating or relationships with family members, but most of the time, it’s focused on where he works.

His boss ‘The Pointy-Haired Boss’ and his bosses boss ‘The C.E.O.’ are two of the most wicked characters, but now that you read about the VW scandal, you realize that they’d fit right in there!  Let’s look at some of their common behaviors:

They Lie All The Time

Both of the bosses lie all the time, right to the faces of their employees, vendors, and yes, their customers, and then even laugh about it behind their backs.   Sound like something that might have happened at VW?

They Act Above The Law

Little things like laws and regulations matter not to Dilbert’s bosses, and it’s evident that such trivial things like rules don’t matter at all to those at VW.  Something like this had to go all the way or pretty near the top.

They Mock The Intelligence of Others

In Dilbert, the bosses will purposefully send a product to market that could harm consumers or simply wouldn’t work, but they don’t mind because they assume that nobody will ever figure it out.  With hundreds of thousands of diesel VW cars on the road, you’d think that it would occur to someone that it’d all get figured out someday, but apparently they really didn’t care or think that anybody would ever uncover what they were doing.

They’re Driven By Money At All Other Costs

Dilbert’s bosses will cut corners, fire employees, and do a whole mess of other actions.  All they care about are their bonuses.  Something so ridiculous as this VW scandal can only be driven by one thing: Greed.

The Big Difference

The one big difference between Dilbert and VW is that Dilbert is funny. You’re supposed to laugh at the sheer absurdity of what they present.  But, what’s happening at VW is not funny at all.  A company that’s spent decades building a reputation is now going to see it tarnished.  Stockholders have already lost over 20% of their holdings since the scandal was uncovered.

mb-2015-09-pumpYou have to wonder how this started, but I have an idea.  Just imagine, somehwere in the VW headquarters: Someone or a bunch of someones were one day reading Dilbert, and instead of laughing and putting the comic aside, they said “Hey, that’s not a half bad idea….”

And, voila, a $7 billion scandal was born!

Side note: I really think that Dilbert is in good fun.   I know that the author writes it with that intent.  This post is in jest, but the similarities are pretty hard to ignore, no?

What’s Next At Volkswagen?  Can They Recover?

But at VW, it’ll probably get worse.  Many times when something like this happens, then other things magically start bubbling to the surface.  Does anybody really believe that this is the only shady thing that VW has been up to?  On top of that, a diminished reputation leads to lower sales. This  could send things spiraling down and down.  Eventually the $7 billion that they’ve estimated will be just the tip of the iceberg.

Smart, eh?

Readers, anybody out there drive a VW or have any feelings about the scandal?  What do you think inspires something like this?

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

Car Dealership Repair Shops Are A Ripoff!

Do you use dealership repair shops for your service needs?  I often have but am reconsidering.

A Design Flaw In Our Rainier

I take pride in the fact that we have two older cars that are fully paid off.  In the long run, avoiding car payments has saved us tens of thousands of dollars over the time that we’ve owned the cars.  With my 2006 Pontiac and my wife’s 2007 Buick, things work well, but there are costs involved with having older cars.

Most of the time, when an issue comes up, we wince and shake our heads at the cost, but go ahead and pay it knowing that we’re still coming out ahead in the end.

But, there was one cost that we’ve had with my wife’s car that we never liked, but until recently, we just put up with.

The car door handles.

Since we’ve owned the car, we’ve had three of the exterior door handles fail, and we recently had another failure, this time one that we’ve already repaired.  And it all became too much!

GM Engineers Failed This Design

The ultimate problem with the handles isn’t in how we use them.  They were simply poorly designed.

Go outside and look at most door handles, and you’ll notice two things.

First, most handles pull straight out from the door.  Second, the handles that you pull on have some thickness to them.

GM decided to abandon this design for the door handles on our Buick Rainier.

Instead, the door handle pulls upward, and it’s a flimsy thin piece of plastic.

Combine this with the fact that all of the clips and such that attach it to the rods are plastic, and they simply don’t last.  The first time we had one fail and I took it into the dealership, the guy showed it to me and explained the whole thing, and indicated that they replace handles like these all the time.

Yes, a GM employee admitted that their design…sucked.

I guess I sort of knew, based on this, that it would be an ongoing problem, and when another handle failed, then another, we grudgingly took it in and paid for the repair, but it irked us.

Finally, while on a recent camping trip, the driver door handle started failing for a second time, we had enough.

My wife exclaimed that there was no way we were paying to get that fixed again.  I think she was trying to will the thing to get back to working, but eventually realized that having to open the door from the inside was not going to work for her.

Still, her words set with me, and I started thinking about it.   While we couldn’t get away with not paying for the repair, I started questioning the cost of the repair.

Dealer Cost To Get It Fixed

Everybody knows that dealerships overcharge.  I guess I just never realized how much.

I don’t have the paperwork in hand, but I’m pretty sure that my memory is pretty close.  There are three elements to the repair:

  • The part – The genuine part replacement is around $60
  • Labor to uninstall and re-install – One hour, around $85
  • Labor to paint the trim to match the car – One hour, around $85

With taxes and everything else, it works out to around $240.

This repair, being the fourth, would put the total cost so far at nearly $1,000 on door handles.  This made my wife livid and me sick to my stomach.  See, I can handle spending money on the car for things that make sense.  We’ve replaced the tires twice because tires wear out.  Same with the battery.  One time the alternator failed because, hey, it happens.  We got all the brakes redone.  All of those costs together have totaled well over $1,000 but they never bothered me because the issues made sense.  (And for the record, I don’t use the dealer for any of these tasks).

This doesn’t and spending another $240 was something I just couldn’t justify any longer.

Alternatives To The Dealer Repair Shop

So, I started looking around.

First, I looked up the part.  Turns out as it’s a fairly common issue and it affected other cars that were built on the same model type (e.g. Chevy Trail Blazer), they can be found just about anywhere.  And, while it’s not a genuine GM part, reviews on the OEM parts indicate they’re just fine.  Cost: $18

Second, I looked up the install.  A YouTube video showed the entire process of removing the old handle and installing the new one.  My father-in-law is great with cars and offered to help.  At no charge.  Cost: $0

Third, I needed to look at getting it painted.  I called a body shop that I pass by on my way home from work every day and explained that I would be getting the part and could they paint it (thankfully, the color is easy: black).  They said they could and that it was not a big deal.  Cost: $25

Saving A Bundle

All told, if these costs hold, my total cost will be $43, as opposed to $240.  That is a savings of 82%.  Or another way, I can install this handle and have five more failures and it will come out to the cost of one replacement at the dealer.

So, next time you wonder just how much of a markup you might be paying at the dealer, think that it’s not just a little bit.  Even adding in around $40 for labor costs would still put this at around a 300% mark up.

That’s crazy.

So far, we have the part ordered.  I’ll circle back on the actual cost, as it could be a bit more or a bit less once I take it in, as well as the install process.

Either way, I’m looking forward to having use of the door handle again, and having a couple hundred extra bucks in our pocket as well!

Readers, do you do any repairs at the dealer if they’re out of pocket?

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

How I Used Logic To Fix My Remote Keyless Entry

My Pontiac G6 is nearly 10 years old.  So, it stands to reason that things might start to wear out.  This started to happen to the remote keyless entry fob.

The Steady Decline Of The Remote Keyless Entry Fob

Over the past winter, things weren’t working right on it at all, which was a pretty big problem because I used the remote start to warm the car up on cold days.  That was a pretty easy fix: The battery needed to be changed.  Changing the battery is a simple task, basically prying open the two halves of the plastic cover, sliding out the old battery and replacing it with a new one.  The biggest task there was actually going out and getting a replacement battery first.

That took care of the problem, but lately a new problem cropped up:  The unlock button started to have problems.  At first, I noticed that it just didn’t work unless you were closer to the car.  Then, you had to be even closer, then you had to be practically standing on top of it, and eventually you had to press the button furiously and have a slight chance of it actually working.  It was pretty frustrating, but I figured there had to be a fix.

My wife borrowed the car a couple of times and complained about it, and told me that I should change the battery.  I explained that I just had, and also logic told me that it wasn’t the battery by virtue of the fact that every other button worked just fine.  The lock, trunk open, and panic button all worked from long distances.

If it were the battery again, I knew that none of those would work right.

So, I decided to give a further look.


I popped open the plastic housing, and this time took the entire circuit board out, battery mb-2015-06-keysand all.  As I flipped it over, I could immediately see what the problem was.

When you press the button, that presses a small pin which is surrounded by a circle of rubber.  The pin touches against a contact point on the board, and that activates the control.  It looks like somewhere along the way, a little moisture must have gotten in, and some of the rubber piece had broken down and had formed a film of residue over the contact point on the circuit board.

It looked like all it needed was a little cleaning.

I’ve cleaned things with contact points before.   I knew that I just needed to gently scrape off the residue from the area.  Taking care only to touch the contact point and not the board itself, I gently scraped it until the residue was gone.

I popped everything back into place, walked over to the window where the car was parked outside and hit the unlock button.  The lights flashed and the doors unlocked!


By using a little bit of logic, I was able to figure out where the problem was and fix it.

I’m sure that many people would have taken it to the dealer or a repair shop.  For this they would have paid handsomely.  All I needed was five minutes and a paper clip.  Not bad, eh?

Readers, what tasks have you taken upon yourself lately that have saved you money?

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.