Cut in Pay

In the upcoming months, I'll likely be asked to start taking furlough days. In my case, the furlough days will be unpaid days, sort of like a temporary layoff, but will probably be structured as a day off every so many work days.

I don't yet know the details, but it'll most likely represent at least a 20% pay cut. And realistically, it'll be closer to 30%, because I'll lose overtime pay as well.

We're trying to watch our spending a bit more, cutting back on things we don't really need. On the home improvement front, we'll only be spending money to complete projects that we've already started, or critical maintenance items - but no new projects.

Paying in Cash?

Over the past few years, we've asked for a cash discount on a few larger purchases.

1. A local building supply store offered us a 4% discount on vinyl siding for paying in cash (which is probably pretty close to the amount they would have had to pay in credit card processing fees).
2. A well repair company gave us I think a 3% discount for paying in cash (paying by personal or certified check was the quoted price, cash was a 3% discount, credit was a 3% surcharge).
3. A gutter company gave us a 30% discount for paying in cash.
4. A landscape company did some tree trimming, and they gave us a 10% cash discount.

We're currently in the process of getting estimates for a major project, and I've been inquiring what sort of cash discount they each offer. I don't want to hire someone that's trying to get around paying insurance, taxes, workers comp, etc. - but I think a cash discount is a legitimate thing. It costs companies money to pay credit/debit card processing fees, they are accepting a risk for chargebacks/reversals on credit cards (for fraudulent use on stolen cards), on insufficient funds or stop-payments on personal checks, forged checks, etc. Paying in cash on completion gets the money in their hands, and eliminates the need to potentially send out invoices or spend time on collections.

But it's a risk for the homeowner, certainly. On the job where we hired the gutter company, we made sure that everything was on paper. We had an official estimate/quote, we didn't make payment until the work was completed to our satisfaction, we got a receipt and an unconditional waiver of lien. We didn't exchange funds in front of a notary or banker, and we didn't have the waiver of lien notarized, but we also weren't talking about a lot of money either.

Now that we're looking at some major work items, I'm not sure whether I want to pay in cash. Truthfully, I hate that the credit card companies make so much money off each time I swipe a card, and ultimately I'm paying for it with higher prices. I'm okay with paying taxes, because the money we pay in taxes means more money spent on public services that ultimately pay our salaries (education, public safety, infrastructure, etc).

I'll take a risk on small jobs, but I don't want a shady contractor to try and come back after us for more money down the road. I'm not hiring anyone that I don't trust, but you never really know either. I'm also not entirely sure what the legal ramifications of paying in cash are - cash is legal tender, but I don't know if I would need to get into issuing a 1099-MISC or various IRS forms once I exceed a certain dollar amount. I always get receipts, and once went so far as to get a signed waiver/release of lien, but I don't want to deal with finding a notary and having everything witnessed & notarized. I've also heard conflicting statements on whether paying by check is sufficient to get a cash discount (since they don't have to pay the card processing fees), or if it has to be greenbacks (since checks take longer to clear, and have a greater chance of being fraudulent). And certified checks are somewhere in the middle - but on at least two occasions, certified and personal checks were not accepted for the cash discount price. (At the time, both places told me that there was a cost of doing business for them to accept checks: recording relevant information, bank fees for handling/cashing checks, the time to clear, and the time for an employee to go physically deposit & then withdraw the money)

Does anyone have experience with cash discounts for home renovations or other projects? I'd love to hear about your experiences.

Wiping out Savings?

My credit cards are finally paid off, completely! Hubby owes about $14,000 on his, but he's making progress on 'em. I had hoped that his would be less than $5k by the new year, but I think a more realistic number will end up being $8k.

One of the first things I did when my card was paid off was to take care of some much-needed house/lawn maintenance. Cost so far is over $800, but I'm glad we did it. I took the money from our emergency savings to cover that, but will replenish it by the end of this month.

The problem is that we now would like to redo our driveway, as it's in poor shape and is a bit of an eyesore. When we bought the house, our home inspector told us a new driveway (asphalt) would be about $8000. We'd like concrete, which would be even more.

We've debated attempting the driveway as a DIY project, and enlisting the help of some friends/family. Removing our current driveway would be the most difficult part, we're still trying to figure out the best way to dispose of all that material. Neither of us has a CDL, so we'd have to hire a dump truck with driver for probably two full days. I think we could form and pour/finish the concrete without too much difficulty. We might hire out the removal, if we can find someone reputable to do it cheap enough.

I will only do the driveway if we can afford to do it cash, I will not go in debt for it. I'd rather not wipe out all of our cash savings, but it is really tempting to get it done so that our house will look nicer though. We can't decide if we should get estimates and just go for it, or if we should hold off (and if so, what's the minimum amount that we need to keep in the emergency fund immediately AFTER making a large purchase/expenditure?)

Anyone have experience with replacing a driveway, to know how much it costs? If not, what's your thought on the money side of it?

Almost There!

Although we currently owe a combined total of $16,950 on our credit cards, we're almost to a big milestone! By the end of this month, I will have paid off all of my credit card debt, leaving only Hubby's debt left!

My current credit card debt is $2858, while Hubby's is $14,092.

Of mine, $482 is for work-related expenses that I will be getting reimbursed for. I've already paid my regular bills this month (student loans, car loan, etc.), so I can use everything that's left in my bank account to pay towards this debt... and I can pay it off completely!!!

SmartyPig

I finally signed up for an account with SmartyPig. I heard about it when they first came into existence, but I didn't like some of their terms & conditions. Then they changed their policies, but I was actively in debt-reduction mode and didn't have any extra money to set aside towards savings goals or expenditures.

Now I'm nearing the point of being able to really start saving aggressively. My credit card will be paid off by July 1st, and Hubby's credit cards will be paid off within a year (hopefully sooner!). We delayed some home improvement projects that we had planned on doing this year, to give us more time and money to devote towards other things.

I'm sort of testing the waters with SmartyPig, so I only set up one goal initially. Once I get comfortable, and my last credit card is fully paid off, I'll set up a few other goals.

Here are our goals for this year:

1. Vacations/Travel: $3,000.
2. Home Improvement: $2,000.
3. Fun Money (for big-ticket items): $750
4. Car Insurance Renewal: $750
5. Savings/2nd Mortgage debt reduction: $7,000

So has anyone else tried out SmartyPig? Any opinions, reviews, likes/dislikes?

Updated Progress Bars

I updated all of our debts today, including the progress bars on the right side of the page.

Car Loans: $10,725

Credit Cards: $17,671

Student Loans: $49,575

Mortgage: $164,077

That means we paid off $2053 in debt principal (including $171 on the mortgage) during the month of April... which doesn't seem too bad.

It's hard to imagine having that much extra money in our bank account each month, if we didn't have to make nearly $800 in car payments, $300+ in student loan payments, etc.

Status Report, as of 4/30

We made a small dent in credit cards this month:

His: $13,634

Hers: $3,899

TOTAL: $17,533

We're waiting on a few refund checks to come - our state income taxes (just over $400), and a refund of overpayment to our mortgage escrow account ($1375). Those will be put straight towards credit cards, and we don't have any major expenses this month - so by early June, we will probably be able to knock out my credit card completely, and have Hubby's paid down to around $12,500!

I went on Kelly Blue Book this week to find out how much our cars are worth. One is worth about $6k, the other is around $9k. We currently owe $3k & $8k - so we actually have a tiny bit of equity in each car! We have absolutely no plans to sell either car anytime soon, but it's nice to know that we could get rid of either one and still come out ahead.