I’m sure your life is looking a little different than it did a month ago (I know ours certainly is), but I hope you are well and adjusting to this new (albeit temporary) normal.
I haven’t heard from any you whose health has been directly affected by COVID-19, but I have heard from many of you whose finances have been affected.
In the past few weeks as we’ve considered our own financial situation, we’ve decided to make some major changes. Let me start by giving a little background, then I’ll explain the upcoming changes, both the good and the bad.
Our Income Situation
We feel grateful that Mike’s job with the state of California is secure and not affected at all by the pandemic. He has been completely working from for two and a half weeks now and will continue to do so for as long as is necessary. Since he normally commutes an hour each way to work (and more if traffic is bad), this will save us hundreds of dollars each month on fuel.
I continue to earn income from my blog, though blogging revenue fluctuates. Ads are currently my largest stream of blogging income, but as companies may be drastically altering their spending on advertising in the next quarter, my income could take a big hit. We’ll just have to wait and see.
Our Airbnb income is likely to be almost non-existent for as long as the shelter-in-place order remains. While we ended up with a pretty standard income for our rental in March ($1,600), our April calendar is bare. All of our bookings for April either cancelled or we had to cancel ourselves since our county is restricting short term rentals to only house essential employees, not normal visitors or travelers.
We totally overpaid in taxes last year, so we just got a hefty tax refund.
A Look at Our Current Goals
In addition to meeting all of our regular expenses, putting money into our designated sinking funds, and staying one month ahead, we set a big 5-year goal back in November of 2018. That big goal was to pay off our mortgage (which was then $363,171) in five years. As you have seen in our monthly budget updates, we’ve been slowly falling behind.
Still, we weren’t deterred. We planned to put our tax refund directly toward our mortgage as well as some money that had trickled in from a few final clients in Mike’s private practice.
Those two moves alone would get us a lot closer to where we needed to be to stay on target for our goals.
But the more we thought about it the more we didn’t feel right about it.
Our New Financial Plan
There are three parts to our new financial plan.
1- Hold on to the big chunk of money that we were going to throw at our mortgage principal. With times being as uncertain as they are we want to just sit on this money for a little while. When we make extra mortgage principal payments, there’s no going back and changing our mind if something more pressing comes up. While we do have a six-month emergency fund, in the current economy we would prefer keeping some extra money accessible.
2- After the COVID-19 outbreak passes, our first big financial move will be to use that chunk of money to buy season passes to Disneyland. We’re definitely going for the Signature Plus Passes which include free parking. The kids have been asking us for years why we’ve never gone to Disneyland, and we’re going to surprise them by going every month next year. The passes are $1,449 per person, which brings us to $8,694. That’s kind of a lot, but between our tax refund and a few of Mike’s long-awaited private practice matters ending, we can pay cash and avoid any financing charges. If we waited until the next year, our two-year-old would need his own pass, so we’re actually saving money by buying them this year and getting him in free.
3- Our really big news, though, is that instead of paying off our mortgage early we will just pay the regular payment from here on out. We will be saving our surplus money each month (the money that we previously would have gone to the mortgage) and putting it in a special fund. We’ve had a lot of fun sheltering in place, and we want to save money all year so that we can shelter in place together for at least a couple of months each year. The money saved would cover our expenses during that time because in the future we don’t want Mike to have to work during our voluntary shelter in place months. We’ll be taking the kids out of school and we want him to be able to take the time off work too so we can make the most of our sheltering time together.
One More Thing
Have you checked the calendar today?
Yep, it’s April 1st. Happy April Fools Day!
Did you really believe me?
The first one is true. We are going to wait to put that big chunk of money toward our (real) big goal until after everything with COVID-19 has settled down. We may pay a little more interest by delaying a few extra principal payments, but having extra cash on hand seems prudent right now.
The second one is a complete lie. Do you think we would drop a ton of money on Disney season passes on a whim? Not a chance. I am the only one of the eight of us who has ever even been to Disneyland. No offense to the Disney fanatics out there–personal finance is personal and should reflect your priorities. Disneyland just isn’t on our priority list. The kids do ask about it every time one of their friends goes. If we do ever decide to go, it won’t be on season passes.
And the third one? We DO enjoy spending time together, but we probably won’t schedule time specifically to shelter in place. Maybe we’ll shelter in Costa Rica or something someday, but that won’t be anytime soon.
Thanks for playing along. I enjoy doing this each year. If you’re in the mood for some serious silliness, check some of my April Fools posts from years past (and feel free to share them with your friends or on social media– everyone likes a good joke!):
2015- 5 Genius Ways to Save Money on Toilet Paper (I almost republished this one today as it’s especially relevant this year)
2016- How to Get Meat Free or Cheap
2017- How to Make Money With Your Random Talents
2019- 6 Hacks for Storing Food in Small Spaces
I would love to hear what other April Fools jokes you played or fell for today! Please share so we can all get a good laugh and get some more ideas!
I also came looking for your April Fools joke ( a day late), so I was unprepared for how reasonable you were sounding to begin with! I still love 2019 and have a mental image of your hanging bananas! I was wondering how you would get a good joke in during these times: well done! Enjoy!
Ha ha! Yes– starting out “reasonable” is the secret to a successful April Fools post! 🙂
Thank you for this post! I just paid off a student loan. But will now be saving up.
Congrats Lan!
Bahaha, you almost had me! I was about half-way through the second one when I was like hmmm. The third one gave it away completely though. Well done!
We’re also doing something similar with the money we would normally put toward debt (we’re paying off student loans and not a mortgage). As much as I wish we were using our money to pay it off right now, it makes way more sense to me to sit on that money for the time being. The goal is to send it all to student loans in a few months (our government put an interest-free moratorium on student loans for six months) but for the time being, I just think it makes sense to hang onto it.
And on the April fools front…I didn’t do anything today haha. Honestly, I sort of forgot today was April 1. That’s what happens when you do work from home for going on three weeks in a busy department, apparently.
It will be exciting to make a big payment when all of this is over! But definitely smart to play it safe until then. 🙂
You get me every year! Thanks for the laugh today!
Hooray! 🙂 Thanks Melanie!
Yesterday (April 1 our time) we told the kids that a new groundbreaking study had been released overnight, proving that there was no need to isolate ourselves any longer, and as such schools were re-opening that very day. This is the first week of our (already scheduled) autumn school holidays, but we explained that since they’d lost a few days last week, schools were opening for the rest of this week to make up for it. We almost had them going . . .
We’re also putting more into savings. I have a feeling inflation will get very bad by the time this is over – produce prices here are already through the roof. (On the other hand, it’s not like we can buy anything other than groceries, right?) We’ve taken a hit on the stock market; but we also saved a lot of money there by taking out a big chunk of it right before this hit to buy our second investment property. Alas, it’s highly unlikely we’ll actually put anyone in there before this clears up; but we paid cash, so while we’re not making any money, we’re not really losing any either.
I love this Becca! Why didn’t I think of doing this to my kids!? So funny! The kids and I got each other with lots of other tricks though. 🙂
On Friday the 13th (of March) we got the call that school would be cancelled for a week. That extended to through Spring break and and April 1st (of all days) we got the call that it would be out for the rest of the school year.
I visited today specifically to see your April Fools post. You had me thinking this was a serious post until I got to the cost of the Disney passes Lol!
That makes my day Margaret! 🙂 Thanks for reading!
Love these posts!! Thanks for the laugh.
Thanks Karen! It’s fun to write fiction every now and then! 🙂
Great April Fool’s joke! I wondered for a moment if something had happened and you had lost your mind….i mean $9K on an amusement park?? Whatever!!
We are both (hubby & I) still working as of right now. Hubby is not to certain how much longer he will be working. I work in a clinic setting so I feel that I will be ok during this time.
Right now, it does make you want to stock pile money in the event that something more comes down the pike. We are completing home projects on the weekend while we are practicing social distancing. Projects that we had all the material for before this began. Hoping to get them wrapped up soon and move on the something else.
This is a great time to stay home and finish projects! And hooray for your job security! Stay safe out there!
I’m with you on Disney, nothing against them or other theme parks and attractions but both the cost and the sea of humanity crowded inside them give me the creeps! I think you are doing the right thing, which is basically stick with your plan with some tweaks to account for increased uncertainty. That’s very smart, but then you always are in your posts! I’m not planning on pulling anything special today, and although my guard is up I always get smacked upside the head with at least one. I’ve got “gullible” tattooed on my forehead.
Yes, I always feel so dirty after going on amusement park rides. Just imagine how fast the covid-19 would spread if Disney stayed open! I’m definitely not going to be in a hurry to go anywhere like that any time soon after this passes.