Wednesday, September 2, 2009

End of summer.

I had a river rafter guy in yesterday who was headed out of town. "When the rafting season ends, it just ends," he said.

I know what he means. I can always feel that first nip in the air, the first smell of fall, the hazy fall glow, and know that summer is over. Customer counts drop, regulars become the majority of my sales again. I have quiet hours at the store.

Which by this time of year, I'm looking forward to. I can't wait for summer to start, and I usually am more than ready for it to end.

What this year has reinforced is that it isn't what I make, it's what I spend.

I've more or less had six set goals I've wanted to accomplish over the last 2 years.

1.) Eliminate debt, especially credit card debt.
2.) Get current on taxes. We always seem to be playing catchup on our taxes.
3.) Make IRA contributions.
4.) Put enough into savings to cover cash flow and emergencies.
5.) Start saving up for the ARM second mortgage, (once our Home Equity Loan), which is interest only for five years, and then kicks in. Yes, I got caught by a sleazy loan (damn Countrywide), but it's my own fault for not walking out of the loan office. We put most of the money into new decking and stairs, which had to be done since the wood had rotted. I set aside about 20% into savings, which I still have, and Linda has been making double the minimum payments. (Linda say, never less than triple payments, and usually quadruple....)

Still in a couple of years, we are going to want to pay off as much of the loan as possible.

6. Make another year or so of double payments on my main mortgage, so that we pay off the house in 15 years instead of 30, and have it paid for about the time I retire.

We accomplished the first two goals last year. I've managed to catch up on one half year of IRA contributions I missed, one year we'll probably never replace, and we're well on the way toward making the third year (due in April). We'll have 12 years of full IRA contributions by the time I retire, which isn't much but better than nothing and better late than never.

I've also managed to accomplish the savings for cash flow, with the thought that this money can also be plunked into the ARM payment when the time comes.

I managed to save as much in August as I had saved up through the end of July, which was my goal. I'm hoping to save a bit over the next three months, though that really depends on sales NOT dropping much below last years levels. And I can save August type levels at Christmas.

Which would comfortably accomplish the first four goals, and give me a good start on the fifth goal.

All in all, a successful summer.

Tomorrow, I'll talk about the specifics of the store, and which products sold best, and overhead and the rest. Suffice to say for now, August was the best month of the year both in overall sales, but even more importantly for future trends, also the lowest decline from the previous year. (still a decline though.)


Jeff said...

Ahh, that perpetual question... If I have an extra dollar to spare, should I pay off the mortgage, or put it into an IRA?

Somehow, paying off debt is more satisfying. Gives a sense of control. The market, she has no master.

RDC said...


Part of the answer to that question is what happens once the debt is paid off. If you then take all of what you were paying on the debt and start saving/investing it then that is fine. However, what most people do when they retire debt is to go take out a new loan and incur more debt. In that case you are better off putting the money into investments and take longer to pay off the debt.

Its like they cannot live without debt or feel that if it is retired it is a signal that their budget allows them to spend more.

Unfortunately, People think about their finances in terms of cash flow, not wealth accumulation and creation.

Jeff said...

"Its like they cannot live without debt."

Very true. This is my own downfall. I've been paying down my mortgage pretty fast. However, I couldn't resist taking on more debt -- I just bought a new car, getting $4500 for my $1600 clunker, as well as getting 24% off MSRP.

I may be a debt slave, but at least I can look forward to paying back my debt with deflated dollars, right? ;)

blackdog said...

Jeez, Dunc, we didn't get decent weather until the middle of frickin' JUNE and you're already happy to see summer (or what passes for it here) end??? Two and a half months of summer is too much for you?

Damn, you definitely ARE a Bend "lifer."

It must make you real cheerful that we're supposed to have shitty weather for the Memorial Day weekend.

blackdog said...

Duh ... make that "Labor Day weekend."