Saturday, April 9, 2011

"Baaaaa...."

Wednesday morning I had read an article about checking your banks/credit unions "health". 

I did a search and found various sites that offer a breakdown of information on the requested bank/CU.  (I liked this one the best.  Bank Rate / Safe and Sound but there are a lot of sites you can look at.) 

*Back story.  The bank that we've been with for the last ten years, closed their branches locally a few years ago.  We kept the bulk of our financial dealings with them because we liked them, even though they were now "out of town".  We did open up another (smaller) account with a different bank locally for small stuff like cash.

Long story short.  I really didn't like some of the reports that I was reading on our "main" bank.  Actually...I was very pissed off.  I expressed my opinion to SM, called into work and told them I'd be late, and stomped off to the bank in town (whose "health" was listed as better) and transferred the bulk of our money into our other account.

It's hard to put into words the "vibe" that's out there in the world right now.  Insecurity, loss of confidence...whatever.  Who can you trust?  I trust my gut.

I hate the fact that I can't trust my bank anymore.  It's a "funny money" world out there now.  Everything feels like it's a gamble.  And I don't gamble.

Me  "Let's just pay off the house...please."  (My insecurity is talking.)

For the last 1-2 years I've been pushing hard asking SM if we could pay off the house.  It would take everything we've got, but it could be done.

SM  "I know it's the right thing to do, but we'd basically be starting over."

Me  "Not really...You just need to change your mindset.  The house is ours.  Paid off.  A tangible asset.  Money that's going to pay the mortgage would be going into our savings instead.  And we could rapidly rebuild our savings account."

SM  "What if there's an emergency?  What if one of the cars dies?  What if one of us gets sick?  What do we do then?  We can't eat the bushes."

Me  "We can get a home equity loan."

SM  "And if we can't pay or fall behind?...The bank can take the house."

Me  ...silence.

I don't want a mortgage.  Period. End of story.  As much as I love this house, I feel it's chain around my neck every day.  Dragging me down. 

On the other hand, paying it off makes me feel in control.  I feel accomplished.  I feel that now I'm working for me.   And that the house is now my security. 

But that's silly in a way.  A tornado could take it all away. (No chance of a tsunami here.)  But doesn't everyone live with a certain confidence that nothing will happen to their home.  And if it does...then what's left?  Just you, just me.  Starting over.

Sm points out that "cash is king".  Very true.  We have flexibility now. 

But what do I want more?  Flexibility or freedom?  Or is the freedom an illusion? 

The house will still require care.  One of us will get sick.  Maybe not tomorrow, but someday.

But what is it that's different today that's making me feel this urgency? 

Fear? 

Sure.  But I could have been just as afraid 5 years ago.  Why wasn't I afraid then?  Was I just one of the happy sheep (no offense to sheep) plodding
along in life, not asking too many questions, not looking too far down the road?  I feel an increase of fear in the world right now.  Everybody is nervous.

I do know one thing.  There is no certainty.  Never has been, never will.  All you can do is make the best choice you can and hope for the best.

Will we pay off the house?  Someday.  I'd rather it be sooner than later.

Will my bank be open on Monday?  Probably.  The FDIC says that I'm covered.

Who's covering the FDIC?  The government?

The same government that can't make a budget?  (I have to make a budget.)

The same government that can't pay it's bills?  (I have to pay my bills.)

(Sigh.)   It was so much easier when I was ignorant.  When I was a sheep, pulling the wool over my own eyes.

"Baaaaa..."

7 comments:

  1. Cash isn't going to be "King" much longer. At least not the paper ones with dead presidents printed on them. And even now, as I'm sure you've noticed, it takes more & more of a "King's Randsom" to buy even the smallest of things.

    Personally, I'd keep trying for paying off the mortgage. What IF it gets blown away by a tornado? If you had a mortgage, you'd have NO house, but STILL have a mortgage payment. If you owned it outwright, you'd still be without a house, but wouldn't be paying for a non-existant home. (Not considering homeowner's insurance in this instance).

    Pay off debt and buy tangible items. We've been doing that for years now and don't regret it one bit.

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  2. When things just started to get hairy years ago, we drained every penny from our accounts and paid everything off. You are right, It was very scary. Hundreds of the same thoughts went through my head too, like even an unexpected vet bill would kill us. But when your not making those payments, you can build yourself up a cushion quickly. You also will be eating lots of beans and looking for ways to save even a quarter. But the piece of mind you have is priceless. And it makes budgeting so much easier.

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  3. Ah yes, ignorance can indeed be bliss...But it seems you are too pragmatic for that.

    Is there any way you can make 1 extra mortgage payment a month(or part of it) and still put some away in savings? That would pay the mortgage down a bit faster, but not affect your savings. Suze Ormond has some great tips for money management.

    It's a difficult time in our history, but we'll get through it.
    Stay strong...

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  4. Great post Tami, great minds do think alike. ;) I think about security too, and as you point out, even paid off something could happen and we could lose what we have anyway. OTOH, money in the bank as security doesn't make us feel secure either. In the end, it turns out to be just one day at a time.

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  5. Hi Tami!
    We are struggling with the same feelings and issues too. These are such strange times we are living in.... never in a million years would I have believed our generation would be at this point in how we view our government.... our financial institutions... our real estate markets.... gasoline.... food.... the list goes on.... but then again, maybe we were also simply one of the sheep too. Thanks for writing this great post.
    Lisa

    P.S. And I LOVE the title of your blog!!! Oh so true!!!

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  6. Thanks for commenting Lisa - Yes, very strange times indeed!

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  7. I definitely understand what you're going through. Both you and Leigh made mortgage-esque posts after my rant, so I'm wondering if I stirred something up? I hope it didn't cause problems! =P

    We're concerned about the long term viability of cash as it's purchasing power continues to decrease. I read somewhere yesterday that purchasing power has decreased 37% since 1995. In 15 years!?! Kinda scary, especially since we don't know what the government will do with all the debt mess.

    Since we have to carry PMI insurance for the first two years once we purchase the house, we're planning on stashing the 20% needed to pay it down to drop PMI over the next year but not actually pay it down. Keep the savings in hand until making the payment will actually matter. And it'll provide me with more confidence. Dropping that $50 / month will only increase our payoff quicker.

    Our plan is to have 6 months of expenses covered in savings, save up that 20%, and then drop everything else into preps and gardening and food storage. Realistically, we'd like to get the house paid off in the next 5 years but depending on when we decide we want to build out in Wildwood, we'll probably save the money instead so we'll have the cash to build instead of getting (another) mortgage.

    Not having any debt is a long term goal, but it's not the highest priority for us right now.

    Good luck working out a plan!

    Emma
    City Roots, Country Life

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