OOO, Scary

Happy, Friday, everyone!

Did you see the comment from Mrs. Butterworth on the post “What’s In a Name? A Whole Lotta Syrup!”.  It really is her, too.  She is so cute. I love her car insurance commercial, too. Don’t forget to enter!

This contest reminds me of a great book, “The Prize Winner of Defiance, Ohio: How My Mother Rasied 10 Kids on 25 Words or Less”.  I love that book.  The movie was ok, but the book is brilliant.  And REALLY relevant to current events.  Talk about spunk (that’s a great word, isn’t it?).

This is why I feel so scared today.  I’m starting to feel the cumulative effect of reading lots of news articles about how people’s lives are completely in the crapper because of this recession. I’m not going to go to the trouble of citing any specific examples, because I don’t really need to.  They’re everywhere.

On the one hand, I enjoy reading these stories because I am nosy and like to (anonymously) peek into other people’s business.  But on the other hand, when the story reveals that the subject is some kind of high-powered business or “money” professional, it leaves me with this feeling: “Yikes! What chance do I, a humble housewife from Texas, have?”

Almost always it seems as if these poor people run into trouble on two fronts: charging up their credit cards and excessive home loans.  This got me thinking about my own situation.  No credit card debt (I do use my credit card, but I pay in full each month), but I do have a mortgage.

Is it excessive?

Well, I’m not going to tell you the amount.  But I will say that PITI is slightly less than 30% of our net  income.  But since we (I) are/(am) frugal, I think that the practice of this philosophy magnifies the effect of the rest of our income (after housing expense).  Or maybe I’m just kidding myself?  Like these high-powered money professionals were kidding themselves?

(Oh, here’s an interesting aside about our mortgage.  It’s a conventional, fixed-rate, 30-year dealio, with the typcial closing costs.  But now that I think about the loan process, I think we may have actually, somehow, gotten one of those liar loans! Except we didn’t lie, of course.  But the loan dude just asked my husband how much he made, and didn’t even ask for tax returns or anything as proof.  We just had to sign a paper saying we hadn’t lied about our income.  The paperwork wasn’t much to speak of  either.  After we left the office that day, I remember telling my husband, “That was weird.”  So there is my little brush with the mortgage crisis.).

So I sat down and thought about what I could do to ease these feelings of distress.  Here’s what I came up with:

1. STOP READING STORIES LIKE THIS!

2  Bite the bullet and send extra money to the mortgage company each month.  A few months ago, I figured out how much extra I would need to send to pay off the house in 15 years.  At the time, it seemed more prudent to build up the six month emergency fund.  That’s done, so I should be bold and send that extra payment.  This extra payment works out to about the monthly payments of 1 1/2 new 2010 Camaros (purchased with no down payment). I guess I need peace of mind more than 1 1/2 new 2010 Camaros.

3.  Look to my Mom &  Dad.  My dad is a retired cement-mason.  He was the sole-breadwinner in our family.  Somehow he managed to put four kids through 12 years of  private Catholic school, pay off a mortgage, help pay for three weddings (my brother’s a happy bachelor), and accumulate significant assets for retirement.  He figured out how to do this without the aid of an ivy-league education.  He was extremely conservative with his income, and now he’s very comfortable.

The truth is that this extremely frugal lifestyle did leave us open to the scorn of lots of people (even family members) who were having a happy time spending every penny they had when times were good. We lived in a very tiny house (Mom and Dad still live there, of course).  My parents drove a 1973 hand-me-down (no AC) station wagon (my dad finally got a “new” 1997 Ford Explorer Sport in about 2000.  Which he paid cash for.  Which he still drives).  We wore thrift-store clothes.  We ate a LOT of hamburger.  Actually, those things were mostly no big deal.  But the meanness of people towards us because of this life-style was hard on us kids at times.

But now I look at some of the situations these good-time Charlies are in and, yikes,  it’s bad.  But there are my mom and dad, not worried that they will lose the roof over their head because they refinanced it during the boom years to take cruises and buy fancy furniture.  Nope, they’re not having to work until they’re 95.  In fact my parents were able to comfortably retire by their late 50’s.  Good for them!

So this makes me think that there is hope for this humble Texas housewife after all! Is it all just down to common sense? I don’t know, maybe that’s too simple.  But it sure seemed to work for Mom & Dad.