Fiscal Cliff

OK, I simply can’t resist the urge anymore.  I have to comment on the “fiscal cliff” situation in America.   I will make it a point to keep it very brief and not to get political.  Republican or Democrat (or somewhere in between), we have an obligation to get our federal budget under control.  As a U.S. Citizen and a mother of two very young children, I feel strongly about our current deficit situation and securing a sound financial plan for our current and future expenditures.

You don’t need to be a CPA or a college graduate to figure out how to decrease a deficit.  You can either increase revenue or decrease expense.  Ideally, you can do both.  It really is that simple. 

Or is it that simple?   In an effort to follow my own advice, I set out in October of last year to focus on decreasing the Dwyer’s monthly expenses.  With the best intentions at heart, I actually did just the opposite, but in the best way possible.  We refinanced our house from a 30yr to a 15yr and dropped two whole % points. Even though our actual monthly mortgage increased 16%, the amount allocated to principal (within the monthly payment) increased 188%.  So we increased current expense to decrease future expense.  Assuming we don't take on any more future expenses, I would say it is a good deal.

I got multiple quotes from different banks and ended up going with Costco’s mortgage company that gave me an extra ½% point with substantially reduced closing costs.  We also have our homeowners insurance and car insurance with Costco.  My love affair with them continues.

Throughout the whole refinance process, and it was a process, I kept feeling for the average American.  I mean I enjoy finance and most of the details that go along with it. But even with a simple residential refi, the process was confusing and frustrating.   Starting with the quotes, you have to consider each piece of information and weigh it correctly.  I mean a reduced interest rate is attractive but not always at the expense of higher closing costs.   Brian and I had to do a triple take to tick and tie all the details in our HUD statement because it changed so many times before closing. This part was not simple, but rather a bit complicated.

So if refinancing a house is this cumbersome, how is our government going to figure out how to refinance and reduce on a national level?  Honestly, I do not know, but I hope and pray that our leaders in Washington figure out a way to stop bickering and start leading.  I too should probably follow this advice!

L&C are tired of hearing mom ramble on about this...