• Almost all of this month’s decline can be attributed to investment loss.  The market as a whole was down about 4% over the month and we beat that (at least in our Roth IRAs) by a fair amount.  I’ll go over the results in more detail when I post the monthly investment report.
• $1,850 went towards installing a water line at the house.  I put this money directly towards the value of the home, which I think is a fair accounting adjustment.  We’ve never increased the value of our home on these reports, and given the market that we live in has seen a small increase over the past 4 years in home prices, I’m comfortable with putting this money directly towards the house’s reported value.  The next major phase of this project will probably occur next summer when we have to pay about $2,300 to connect to the water authority’s line.
• Our home refinance closed on Aug. 31st.  I’m looking forward to paying the same monthly mortgage amount, but having an extra $200+ going toward principal!
• We had all 3 kids going to day care over the entire month of August, resulting in weekly $280 bills.  However, this week our oldest child went to 2nd grade and our middle one started kindergarten!  I’m extremely excited about this, as we’ll be able to put that money towards their college education rather than putting it in somebody else’s pocket.
• Another piece of good news is that I was able to go back and pay back the retirement payment that I had missed earlier in the month, thus keeping with our goal of saving at least 15% of my salary.

We are struggling to get over the $230,00 hump once again though.  If you take a look at our NetWorthIQ line graph, you’ll see that we stalled out the last time we were at this level, and it seems to have happened again.  Hopefully, we’ll be able to make some good progress now that our expenses should decrease from here on out as well as the aid we’ll see from the refinance.

We’ve been faithfully saving 15% of my paycheck each month, but I’m afraid that I’m going to have to pause that plan for at least this pay period to get caught back up with things.

There is some light at the end of the tunnel though.  In 3 weeks, our middle child will begin full-day kindergarten, which means that we’ll have only one child in daycare, which hasn’t been the case in nearly 7 years.  I also finally installed an outdoor clothes line which will hopefully significantly decrease the amount of electricity we are using to do our laundry.  I’ve been trying hard to exclusively use our debit card in order to keep our credit card debt to less than $1,000 for the September billing cycle, at which point we should be pretty good shape again.

As of right now, our August investment performance is outperforming the index by well over 1%, hopefully that can continue.  It will be even nicer if we can get a gain out of the month.

We are moving forward with the refinance plan and hope to close at some point this month.  This plan will knock our interest rate from 5.75% to 5.15% without incurring any closing costs.  We will continue to pay what we are currently paying monthly against our mortgage, will will result in an extra $200/month going towards principle on the loan.

My biggest concern financially for the immediate future the lingering water connection situation.  We have enough cash to pay for the actual connection and hookup, but I’m not confident that we have quite enough readily available cash to pay for a plumber to do the inside connection to our water system.  My philosophy on the matter has been that I’ll hold out on the connection as long as possible, and the township has yet to force the matter.

June was the first month that our investment portfolio beat our benchmark of VTI.  Unfortunately, it was a very down market and we lost 4.13% in value throughout the month, but that was better than VTI’s performance of -6.29%.

Our current mortgage rate is 5.75%.  We’ve lived in the house for slightly over 4 years and have no intention of moving in the foreseeable future (hopefully until after the kids are grown).  The new offer is a “no fee” refinance at 5.125%. While this is a higher rate than I was shooting for, the fact that there are absolutely no fees and the process shouldn’t be too much of a hassle, this seems like a no-brainer to me.  I could get the rate down to 4.75%, but I’d pay about $3,000 in closing costs to get that.

So, basically, I’d be lowering my monthly payments by $174, but increasing the term of the loan another four years.

If we do this, my plan would be to continue paying what we are currently paying on the mortgage and have the difference applied directly to the principal, thus getting us back down to paying the loan off well before the full 30 years expire.

Am I missing something here?  Does this sound like a no-brainer to anyone else?  Please use the comments to post your thoughts.

One interesting site that I’ve added to our portfolio is SmartyPig.  You basically use the site to create an automated savings goal and earn a decent amount of interest in any money that you move there.  As a test, I setup a savings goal for a planned iPad purchase in late September.  Every 2 weeks, SmartyPig will pull about $60 from our checking account to apply to saving for the iPad.  If all goes well, I may use this site by saving for next year’s vacation through it.

We are again actively contributing to our Roth IRAs and will likely be making some stock purchases again in July.

We have also entered the phase of our savings plan in which we will contribute 15% of my salary to our Roth IRAs as well as begin making regular contributions to our childrens’ education funds.  I’ve taken the first step of opening Coverdell IRAs for each of our 3 children.  Our goal is to save $150 monthly for each child in these accounts.

Unfortunately, there is some bad news on the financial horizon.  Last summer, we were informed that we are required by township ordinance to connect our house to a new extension of the city’s water line.  The cost of just the “tap in” fee is going to be around $2,500.  I had budgeted and saved for this amount last year.  In addition, I had saved about $800 earmarked for the cost of having a plumber come in and connect our house to the water line.  In April, we received a second letter informing us that the township is ready to make the water connection and that we should begin making plans to connect with the water main.  I’ve brought in two plumbing companies to give me a quote, and have received the first quote at a whopping $2,200!  I’m hoping the second quote is much lower, but I suspect it is still going to be well above my initial $800 estimate.  As such, I’m going to hold off on this project as long as I can before the township starts to come down on us.  We really don’t need the water connection, as our well water is just fine and suffice to say, I’m not happy about being mandated to purchase this non essential service.

In June, I suspect that we’ll begin contributing to our Roth IRA again, which means that we need to take a good look at our investment performance.  I believe that we’ll start out by investing in several shares of Berkshire Hathaway, which is fund that I’ve been very interested in joining for years, but haven’t been able to until their split.  Over the past 5 months, Berkshire Hathaway has significantly outperformed VTI, and I’m hoping that trend continues.  Following the old creed of “If you can’t beat them, join them”, I may also put some money in VTI directly.