Will the monthly payment be the death of us?

[tryan]

... yeah, keeping up with the gadgets is futile. DW wants to join Napster ($15/mo) so the my 4th grader can load up his MP3 ... and,oh, she'ld be getting one too. HELP!

 

[FinanceDude]

I'm a tyrant..........

I have DSL,because I don't want cable, and apparently you can't get cable modem without having cable..........

I have XM capability in my van but I'm too cheap to pay to listen to the radio...........

I wish I could get rid of my cell phone, but I suppose when I see 7 year olds running around with them, why not me.......

 

[Walt34]

Right, Art.. I hope I didn't hijack your thread but I fear the monthly costs we CAN't avoid.. taxes.. basic utilities.. that are outpacing the semi-optional conveniences like internet and cell phone.

That has crossed my mind more than once too. If I'd known that natural gas was going to go up 100% in 4-5 years we'd probably be in a smaller house and not one with a vaulted ceiling in one room. WV still regulates electric rates but next door in MD they're looking at 70% increases in one year because of deregulation. The county is making noises about raising tax rates, I think they'll have to, they can cut only so much, their expenses are increasing too, and so on.

But, my crystal ball is just as cloudy as the next guy's so we'll just manage like everyone else does. Our income/savings is such that by the time we're really hurting a lot of others will be in food lines. I don't see it getting that bad. Yet.

 

[OAG]

From my perspective, the "monthly payment" will bring down the economy. Think about it....

cable bill
internet bill
satellite radio
cell phone bill
day care
car lease
credit card interest

I'm sure I've forgotten quite a few, but consider it. All these things are small monthly expenses that add up to things we'll never own. We talk about the savings of our parents or grandparents and wonder why they were able to do it on such small incomes? They bought things, paid them off, then needed much less income to survive in retirement. What is going to have to happen to save the economy from a surefire broke economy in our senior years? You may think it won't affect you because you've saved, but we can already see the government's involvement with bailing out people. Is Rome about to burn? Even though you've saved, will you be paying for your neighbors retirement?

Of all of those I only have one which is a consolidated direct debit to the VISA Card for cable phone, cable TV and cable internet. I don't have a mortgage, do not pay CC interest, only pay the RE Taxes once a year via direct debit. For utilities I only have natural gas, electric, and condo fee. The utilities are on a "level pay" program so all of them are paid by direct debit at the same amount every month. Car and Home Contents Insurance are via automatic direct debit to my VISA Card. My Cell phone is on a "friends and family" program for which I give my DD $120 once a year. Retirement pay goes to the Credit Union via a direct credit and pays for everything. I cannot think of any way I can further simplify my life financially.

 

[Art G]

R Wood...the only questionable thing that I can see you have is condo fees. Talk about something that can rise and eat you alive! My father bought his condo for cash, but pays quite a bit more than the condo would have cost him to finance in condo and association dues.

 

[Zoocat]

Well, my cable + Internet bill is $61.25. My cell phone bill is 34.23 this month. I don't need day care, except for my dog which is expensive during vacation times. And car lease? credit card interest? Don't do those.

I think the OP is overstating the issue. Why would total bills of $95.51 bust a retirement?

I would think that utility bills might be a future concern for those who live in big houses in cold climates.

And I don't understand the question, "will you be paying for your neighbor's retirement?" Does this refer to SS, Medicare? Higher taxes? For me, I believe in the social contract our society has agreed to -- keep senior citizens out of poverty. That doesn't mean that I agree that everyone, regardless of how high their income, should pay the same taxes.I think the taxes on these entitlements will necessarily continue to rise for those with middle and upper class incomes, which will unfortunately make my retirement less cushy. But otherwise the system will fail for those less fortunate. So, it is what it is. I'm lucky enough to be financially comfortable and won't be complaining because I have to pay more taxes.

 

[lazygood4nothinbum]

cable bill
internet bill
satellite radio
cell phone bill
day care
car lease
credit card interest

seems to me a lot of that can be controlled:
my cable bill is a basic few bucks because the reception here is terrible without it.
my internet bill is my biggest entertainment cost, likely less than a family of four pays for cokes and candy and the movies.
as to satellite radio, i only pay for tv because the free airwaves have been badly disrupted. once they block radio signals too, i'll consider satellite.
day care n/a
car lease a qualified n/a (current paid for car--considering going carless in the future at least for a few years)
cc interest n/a

I'd get worried about prop. taxes, too.
Even though values (and thus assessments) should be falling.. I've seen people reporting that (for example) some cities have decided to up assessed values of the underlying land to make up for declines in value of the actual bldg.. Many have already gone from a proportional assessment (like 70%) to 100%.. and some are raising the mil rate into the 20s and 30s!

now that we have homestead portability (assuming it passes judicial muster), i've sketched out an insane market timing "plan". seems we will have two years to declare new homestead once selling out from our existing exemption. so since i want to travel long-term anyway, i'm considering selling now, traveling for two years, then buying a downsize, utilizing my save-our-home tax exemption which i'll be harvesting from all these years in my current house. then i hold the new property for two years, sell again, maybe buy a boat this time and sail around for two years while living very far below means (just not below the surface, i hope). then buy another unit before that two years hold expires on my exemption, carrying foward the save-our-home exemption values on my previous two homes to a third home, etc.

possible advantages: holding onto house for two years offers long-term cap gains status (as if there will be cap gains in real estate going forward--i'm an optimist. that though a wash to moving & broker fees); maintaining florida save-our-home homesteaded exemption over decades (which limits taxable assessed values to 3% per year); & every other two years of moving entire home equity into stock market (plan assumes, of course, that the market will only go up in those years :::ducking::: ).

given that fantasy, i'm probably gonna tick-off a lot of floridians who don't as yet have much save-our-home value, but most of them are probably on my permanent ignore list already anyway. so rant away. here's something to scream about: by my quick figuring, on this method, and with continued downsizing over the years, i should be able to keep my property taxes under $1,500/year for the next 30 years.

Well obviously all here are much smarter than the average American, however, no one has addressed how to handle your neighbor's debt. I read yesterday about the need to raise social security deductions in order to avoid the future shortfall. So, while you all are paying your bills and avoiding those "monthlies", there is little you can do to avoid rising taxes which will affect you in the future.

hopefully our neighbors will figure out that they have a lot of control over a lot of that just by adjusting their spending habits. education is key. why just the other night i caught oprah extolling virtues of realizing that you're just poor person and should never have been living like a rich person in the first place. "isn't it wonderful to find out who you really are" she said (or something like that).

it helps to not think in absolute but rather in relative terms. keep living the way you live and you will always be in better financial shape than your neighbor even if both you and your neighbor wind up absolutely worse.

 

[Moemg]

now that we have homestead portability (assuming it passes judicial muster), i've sketched out an insane market timing "plan". seems we will have two years to declare new homestead once selling out from our existing exemption. so since i want to travel long-term anyway, i'm considering selling now, traveling for two years, then buying a downsize, utilizing my save-our-home tax exemption which i'll be harvesting from all these years in my current house. .

That's interesting ! I thought we could only use our homestead portability once . As soon as the market picks up I going to use mine to buy a house a little further from the water .

 

[OAG]

R Wood...the only questionable thing that I can see you have is condo fees. Talk about something that can rise and eat you alive! My father bought his condo for cash, but pays quite a bit more than the condo would have cost him to finance in condo and association dues.

Yes, I gave that a lot of thought, before we bought (current fees are about .75% of market value; I will not worry much until the reach 1%, or more, of market). However, looking over the rules and the type of property we thought it would work out fine. The community we live in is small (20 buildings, 4 units per building, "ranch" style, and we have an end unit). Ohio has pretty strict rules about reserves, and our board has embarked on a program of painting exteriors after about 7 years, and the Property Manager is very responsive. Our reserves currently are growing at about $45K per year. The only major thing I can see is that in about 15 years roofs will have to be replaced - hopefully, the reserves will be over $2MM for that by then. We purchased the least expensive unit at the time so if we have to bail it should be reasonably easy. Actually, we do plan to look at leaving, maybe in 2011 - I think the DW and I have one more move in us (it will be about #21 if we do it).

 

[lazygood4nothinbum]

That's interesting ! I thought we could only use our homestead portability once . As soon as the market picks up I going to use mine to buy a house a little further from the water .

drat, you foiled my odd plan. i didn't realize it is a one time deal. what a rip-off. oh well, that certainly simplifies things. screw the downsize, get a boat, sail off to happiness forever.

i know the previous amendment, thrown out before the vote, gave a one time choice for current owners between soh & superhomestead.

searching web i'm finding conflicting info. everything from--as you say--a one time opportunity (from a bradenton newspaper) and i just found one that says it can be done maximum of once every two years.

neither my county property appraiser's office makes such mention in their synopsis of the amendment nor does a word search within the amendment for "one time" or "one" indicates such a restriction. i will have to either read through the entire amendment or i'll just call the appraiser's office next week.

edit

here is amendment: _s0004Der.html

there no indication of such a restriction on my county's portability application http://www.bcpa.net/Forms/dr501tn0308.pdf

seminole county says: "homeowners may transfer their soh benefit from their most recent homestead to a new homestead anywhere in florida" per The recent passage of Amendment

finding similar on other sites.

 

[Rambler]

[-]cable bill [/-]DON'T HAVE ONE
internet bill - What, and give up my source of education and entertainment? Ditto on eating dogfood first
[-]satellite radio [/-]- XM is in the van but never turned on, never will, no interest
cell phone bill - $100 per year for prepaid, emergencies only, company smartphone won't be needed in ER
[-]day care [/-]- DW is/was homemaker/stay-at-home mom
[-]car lease [/-]- what's that? paid cash or got loan and paid it off in 3 months (to build credit rating only)
[-]credit card interest [/-]- NEVER

But you're right, most people think they need all these things, and to be fair, some are necessary sometimes, given the world we live in (CC interest to pay medical costs not covered by insurance for an accident or illness, internet really is necessary these days but if you can walk to the library it can be had on the cheap, payphones essentially don't exist anymore due to ubiquitous cell phones and thugs who destroy those that remain - so an inexpensive prepaid can me handy in an emergency, single mom = daycare need). However, car leases, XM radio, cable and non-essential credit card interest would be hard to classify as necessities.

R

 

[ziggy29]

cell phone bill - $100 per year for prepaid, emergencies only, company smartphone won't be needed in ER

If you almost never use it, with T-Mobile you can get prepaid cellular for $10 per year after an initial $100 investment in loading the phone with prepaid minutes. Just sayin'.

 

[samclem]

The biggest "pay it a little at a time so the sucker won't see how much he's paying": Federal income taxes. We should dump withholding and we'd all write a check for the amount due. I don't think anything would do more to increase popular pressure to decrease govt spending.

 

[Rivrider]

The biggest "pay it a little at a time so the sucker won't see how much he's paying": Federal income taxes. We should dump withholding and we'd all write a check for the amount due. I don't think anything would do more to increase popular pressure to decrease govt spending.

A lot of folks never really look at their pay stub and think about how much they are actually paying. If we had to write a check every month, and more people actually paid income tax, people might start asking their congressperson "What are you spending my money on?"

 

[OAG]

The biggest "pay it a little at a time so the sucker won't see how much he's paying": Federal income taxes. We should dump withholding and we'd all write a check for the amount due. I don't think anything would do more to increase popular pressure to decrease govt spending.

I currently have that option. However, it would have to be before the due date. As the current system is configured I have not problem paying taxes but try not to do it one day early.

 

[Rambler]

If you almost never use it, with T-Mobile you can get prepaid cellular for $10 per year after an initial $100 investment in loading the phone with prepaid minutes. Just sayin'.

It is T-mobile. That is the one we keep for use when we are back in the US. I thought we had to put $100 on it per year to keep it for the next year...I'll have to check on that next time we are there. Thanks Ziggy.

R

 

[packrat44]

From my perspective, the "monthly payment" will bring down the economy. Think about it....

cable bill
internet bill
satellite radio
cell phone bill
day care
car lease
credit card interest

?

When I first read your post I thought you were being facetious. Now I not so sure. When did those items become "needs"?

 

[Gumby]

I'd get worried about prop. taxes, too.
Even though values (and thus assessments) should be falling.. I've seen people reporting that (for example) some cities have decided to up assessed values of the underlying land to make up for declines in value of the actual bldg.. Many have already gone from a proportional assessment (like 70%) to 100%.. and some are raising the mil rate into the 20s and 30s!

Sis in an avg. suburban CT house is paying $8k or so: almost $700 month.
Longer-term residents complain their taxes are higher than their mortgage.
AND rates are scheduled to increase a further 6.6% this year!!!
Even w/o further increases.. over the time she plans to stay in the house, she'll have paid more than half-again its value in Prop. tax.

Property taxes are a source of major angst for most of the retired people I know. The only way to make it stop is to sell the house -- an unsatisfactory solution at best. After retirement, with a paid off mortgage, property tax will be my single biggest monthly expense. It is currently $729 per month, and I have noticed it never goes down.

 

[Dreamer]

I lived with my aunt and uncle growing up in PA. My aunt was a stay-at-home mom and they rented their houses, at that time. I was thinking of the difference in our bills compared to their bills then. The things that we are paying for that they did not pay for: natural gas (they had free), water (they had a well), trash pickup (they burnt in a barrel), they paid insurance on 1 car (we have 4 vehicles), they did not have property tax or insurance (we have both), daycare (we no longer have) , cable tv, internet, cell phones, blockbuster movie subscription, long term care insurance, prepaid college tuition for children, support a child monthly through World Vision, and I am probably forgetting some other things. I realize that we don't need a lot of the above services and we did not have them when we were making the push to get our home paid for and our retirement savings (we still save for retirement) since my DH is still working. However, if it were just me, I could easily eliminate some of the above services and I would definitely only have 1 vehicle. However, my DH enjoys most of the above and is a car person and we can afford it now, so we endulge ourselves.

 

[UncleHoney]

From my perspective, the "monthly payment" will bring down the economy. Think about it....

cable bill
internet bill
satellite radio
cell phone bill
day care
car lease
credit card interest

In my book all the things on your list are extras and not utilities the way most people consider them today. Right now we don't even have cable TV, but will probably have it soon.

The only thing we currently have is internet service and we use it all the time, it's our form of entertainment for the most part.

The real killer in most of these services is the extras, do you want text messaging with that cell phone, how bout call waiting, or maybe answering service or caller ID?

All the little extras beyond basic services can eat you alive in costs.

A friend of DW's stopped by the house the other day to pick up something. DW told me she and her husband were currently in bankruptcy, a retired couple. When I loaded the stuff in her car I noticed "vanity plates" on her 2005 Mini Cooper and just before she left she called her husband on her cell phone. She was only here for about 10 minutes, but in that time I saw two possible causes for the bankruptcy. I just wonder how many other complications they have in their lives.

 

[Walt34]

A lot of folks never really look at their pay stub and think about how much they are actually paying. If we had to write a check every month, and more people actually paid income tax, people might start asking their congressperson "What are you spending my money on?"

I still remember my shock and dismay when I got my first $17.00 paycheck working in a gas station and asking "What is FICA? Why does a high school guy have to pay income taxes?" and so on. After that I just kind of tuned out the gross number and focused on the net because that was the only one that had any meaning.

 

[Art G]

When I first read your post I thought you were being facetious. Now I not so sure. When did those items become "needs"?

Where did I say any of those were "needs"? I merely pointed out these were a few of the things that are monthly driving people away from retirement.
BTW, I forgot to add Netflix.

 

[d]

i know many people who claim these and similar expenses to be needs ... and the lengths they'll go to justify the "necessity" is close to absurd.

 

[lazygood4nothinbum]

That's interesting ! I thought we could only use our homestead portability once . As soon as the market picks up I going to use mine to buy a house a little further from the water .

hey moemg. a good friend of mine who agrees with me that my plan is crazy must have had his interest peaked because he found the answer for us on portability. of course one of the first things he said was that i'm insane to think of the stock market as a two-year investment. but if my market timing doesn't work, not a big deal; because then i just consider it long-term and kiss florida and my soh value goodbye. however, just in case my timing coincides to both stock & real estate markets (which today will look like: sell fort lauderdale low/buy stocks low/sell stocks high/buy daytona low/etc), who knows, crazy just might work.

anyway, here is the reference i just received from my buddy.

Broward County Property Appraiser's Network

[FONT=Georgia, Times New Roman, Times, serif]The "Save Our Homes" (SOH) Amendment in Florida’s Constitution was intended to prevent homeowners from being taxed out of their homes due to rapidly rising real estate values. It met that goal, but caused many other problems along the way.
That is why Florida voters adopted a "portability" constitutional amendment in January 2008 to allow eligible homesteaded owners to move savings from one property to the next. Homesteaded owners may now move their Save Our Homes (SOH) benefit -- up to $500,000 -- from one homesteaded property to the next within Florida. To be eligible to move these SOH savings, the new Homestead must be purchased within two years of the abandonment of Homestead at the previously Homesteaded property. Owners of Homesteaded properties sold in 2007 will be eligible to move their SOH savings to a newly purchased property so long as it is Homesteaded by January 1, 2009. Portability applies to both upsizing and downsizing in value, based upon specified formulas. Portability may be used an unlimited amount of times and may be used for moves to anywhere within Florida.

[/FONT]

 

[Own2Feet]

I'm in synch with most everybody on this thread, except I use dial-up Internet (free via the county library) which, apparently, makes me equivalent to a dog in some posters' minds. Well, Arf arf!
I'm more patient than some; when I truly need a fast connection--for example, to upload photos to my Webshots site--I take my (free from a computer-store giveaway, and yes, I had it checked for viruses and other nasties) thumb drive to the library and use one of their computers.
I don't have a cell phone, don't even like TV, have always paid cash for cars (spouse and I share one Ford Focus between us), never carried credit card debt, etc. etc.
We're good cooks, so we never eat out; both always toted our lunch to work. We do pay $10.00 per month for movies from Netflix, and spouse subscribes to several periodicals. The rest of our entertainment comes from that good old library, and from watching nature in our big back yard.
The frugality is habitual, yet it's also seen as necessary for me to be able -- some day -- to stop working (spouse is older and has retired). I make a good income, spouse has a pension, but TAXES--income, property, and sales--eat up nearly half our income. And yes, I do see our society as consisting of ants propping up grasshoppers, and myself and spouse as ants. Wonder if that's fair of me, or if I'm being petty and prideful.