Frugal Boy had his 9 month checkup today. Besides a cold he is doing well and received a couple of vaccinations as well as a lead test (toe prick).
He weighed in at 22 lbs 6 oz (89%), measured 29.25″ long (86%), and had a head circumference of 18.25″ (82%).
Here are some more recent picts for the grandparents.
And a video:
You can read part 1 here.
I was very relieved to finish insulating the dormer/turret because it was a very labor intensive job. Not only were the rafter cavities oddly shaped, you also had to crawl through a narrow hole on your hands and knees, and then sit or lay in an uncomfortable position while you worked. With that said, I am satisfied with the end result.
The bathroom below feels noticeably warmer. It use to be one of the coldest rooms in the house and down right miserable to visit at 4 or 5 in the morning.
With the dormer finished and a pile of extra foam board I decided to expand the scope of the project and redo the insulation of the spare attic room (connected to the dormer). The previous wall/ceiling assembly was this:
Where the black line was the roof deck (plywood), the gray line below that were battens (1×6) for the original cedar shingles, then the brown 2x4s with the lavender being the old rock wool insulation. Finally the blue layer was some type of sheet rock shown in the picture below and covering all of that up was a flimsy panel veneer (pink layer – bottom).
After clearing away all of the old material I had a clean palette to work with.
Along the walls I insulated between the joists.
Filling the cavities between studs and rafters was simply a matter of measuring
Cutting
Fitting into place and foaming along the edges.
Here is the end result.
This room went much faster than the dormer. I spent a few mornings and a Saturday working on it. I had just enough foam board to do this room. Eventually, I would like to double the R value of this room by installing an additional 2″ of foam board on the underside of the rafters. That would bring this room up to an R 20-25, still well below the recommend value of 30-38 for a cathedral ceiling in zone 5.
Materials cost around $220. Assuming it will cost $700/year to heat our house (based off last years bills) we can make some predictions about the payback period. If we save 5% a year, $700 x 0.05 = $35, then it will take about 6 years to make up the material cost.
A different way to think about it is that we may be able to raise our thermostat by 5% and pay the same amount per year. Last year we kept the temperature at 62°. This year we have raised it up to 65° (about a 5% increase). I do not think that temperature and bills scale linearly though because a larger difference in internal/external temperatures would likely result in a nonlinear amount of heat loss. Anyway, in six months time, I will have another set of bills to add as a second data point in this little experiment.
It is time to harvest! No, not agricultural harvesting, that is almost done. I am talking about capital gains harvesting. What is gains harvesting you ask? Well, I am glad you asked.
Normally when you invest money in the stock market through a brokerage company such as Vanguard, Sharebuilder, E*Trade, Fidelity, etc. you will end up paying taxes on any extra money you get out. How much you pay depends on a number of factors including how long you held onto the security (stock, mutual fund, index fund, bond, etc), how much of a gain you had, and your ordinary tax rate.
Generally you will want to hold onto securities for at least one year. By doing so they will be classified as “long term” capital gains and be taxed at 15%. Any profit you make by selling a stock before the first year of ownership is a “short” term capital gain and is taxed at your ordinary tax rate. For most married single income families that will also be 15%, but it may be higher as the next tax bracket starts at around $72k of income and jumps to 25% tax rate.
Making a profit on a stock sale will count towards your taxable income. For example, if you owned XYZ for 9 months and made $5k by selling it and your day job brings in $68k after exemptions and deductions then you would fall into the 25% tax bracket.
A common misconception with taxes is that moving up in tax brackets because of an increased income will result in less take home money. That is completely false. If your boss offers you a raise, TAKE THE RAISE! Even if it puts you into a higher tax bracket. The United States uses a marginal tax rate system, meaning if you move into a higher tax bracket, only the money in the higher bracket is taxed at the higher rate. Investopedia explains the system well.
Getting back to the topic on hand, there exists a ‘loop hole’ of sorts that lets you sell long term capital gains and pay NO tax on it! There are of course some rules.
This is the first year that we are taking advantage of gains harvesting. We’ve been in the stock market for about eight years now and we have a buy and hold mentality, so the field is ripe for harvesting.
The first step is to do some back of the envelope calculations and figure out how much wiggle room we have in the 15% tax bracket. With the end of the year close by, you should have a pretty good idea of what your 2014 numbers will be. We used Turbo Tax’s free Taxcaster website to come up with some rough calculations.
Once you know your taxable income, you can figure out your current tax bracket. If you are above 15% you may be able to squeeze down by contributing to a 401k, IRA, HSA, or other tax advantaged account. If you are in or below the 15% tax bracket you can figure out how much capital gains you can reap while staying in the 15% bracket.
Knowing the above information, we sold and then immediately repurchased shares of stocks that had long term capital gains. We spent:
$7 to sell stock (brokerage commission fee)
$7 to buy stock (brokerage commission fee)
and there was a price difference from when we sold to when we bought (within a minute) that ended up costing us $15.
So for about $29 we harvested long term capital gains and saved around $1500 in taxes.
Besides saving taxes, this strategy also pays off down the road. Two examples would be.
1.) Next year the stock market tanks. Our cost basis, what we paid for the stock, would be more than what the stock is worth and it would be a loss. We could sell that loss and count it against our income, lowering our tax bill. This is called loss harvesting and has some extra rules that apply to it.
OR
2.) Next year the stock market goes up and we want to sell and lock in our gains. Instead of a giant gain that could easily bump us up into a higher tax bracket, it would be smaller because we have already harvested some of those gains.
For another explanation of Gains Harvesting, check out this blog.
If you haven’t started investing in the stock market yet and don’t know where to start, then Betterment.com might be a good place to get going. They offer plenty of hand holding (I haven’t personally used them and don’t benefit from promoting them).
If you want more control over your investments and haven’t started yet, then Vanguard.com is a safe bet. Betterment just uses Vanguard funds and charges a little extra on top to cover their middle man status.
Frugal Boy is eating more and more ‘solids’ and to keep pace we have been making our own baby food. A recent acquisition of a $5 blender makes short work of pureeing solids down to something a six tooth digestive track can handle.
We saved some of the store containers to reuse.
The economics of making our own baby food varies wildly with what we use. We try to buy what is in season as that is the cheapest. However you can always pick up family sized bags of frozen veggies and steam them for a cheap, but nutritious meal.
Ultimately we would like to get him eating what we eat, but he just isn’t ready for veal, spinach, and cheese stuffed manicotti with vodka sauce (a meal we made this past Saturday for $4/serving).
Until then, we’ll stick with simpler foods like pureed veggies and wheat circles.
It is hard to believe that it is almost Thanksgiving. What happened to 2014? I haven’t done any big home improvement projects for some time so there was an itch that needed scratching.
Secret Entrance
That looks like a rather innocuous attic wall. I wonder if there is something behind it? It would be a dull blog post if there wasn’t!
Our 2nd floor bathroom is part of a dormer/turret and this is the unfinished attic portion. Some sort of rodent had made a nest up here but I didn’t find any signs of recent activity.
I had several goals for this space.
#1 wasn’t very difficult. Wearing a respirator, long sleeves, and gloves I carted out seven trash bags full of crud. Whenever you are working in an unfinished attic, you will want to pay special attention not to step through the ceiling. To that end, I laid down a scrap piece of plywood so I could crawl around without falling through into the bathroom.
With the space ‘cleaned’ up I was able to inspect the exposed electrical.
109 year old wiring
Given its age, it looked to be in good shape. There are some spots that I may want to address in the future (receptacle wired in with a light switch). Eventually we will hire out an electrician to redo the whole house, but until then the plan is to leave well enough alone.
#3 goal of re-insulating the space took some consideration. Fiberglass rolls and blown in cellulose would not make the space air tight (both of these types of insulation are air permeable). I knew that I wanted to insulate against the rafters, not along the floor joists because the existing electrical was in the floor joists and because the finished attic space connected with this unfinished space.
The only insulating products that I know of that are air impermeable are foam based. You can either go with a spray foam or a rigid foam board product. Spray foam is not for DIYers. There are kits that are sold for DIYers but they start at around $600. Foam board is best applied in continuous sheets on the underside of rafters or even better yet on the roof deck itself (outside of house). Seeing as we just had a new roof put on, and a curved turret makes it almost impossible to hang straight boards, I chose to use a hybrid approach.
Cut & Cobble is an insulating technique where you cut pieces of rigid foam board to fit in-between joists or rafters. Then you use canned spray foam to seal the edges. Here is an example of where I have insulated using cut and cobble.
The foam board should have about a half an inch gap to allow the spray foam nozzle to fit. While you could fit the boards snugly against the wood you would have a hard time sealing the edges because you would either have to caulk or tape them.
Ideally, an air gap would be left between the insulation and roof deck to allow air to circulate from the soffits to the ridge vent. This helps keep the roof cool in the winter and prevents ice dams from forming.
Yet another reason why I wanted to redo the insulation in the attic is because last year when our roof was redone, the roofers correctly installed a ridge vent. The pre-existing fiberglass bats did very little to keep air from moving from the ridge vent/soffit system to the conditioned space. In fact, in some spaces you can see the ridge vent while standing in the attic!
nada insulation 🙁
Cut & Cobble is meant as derogatory name because it has many critics. For starters, it isn’t exactly pretty to look at.
About 60% done with dormer
The process of measuring, cutting, fitting, and installing tens or even hundreds of panels is very time consuming. C&C allows thermal bridging. Thermal bridging is where heat moves through a less insulating material, such as a 2×4. After a frost or light snowfall, thermal bridging may be visible from the outside.
guess where the rafters are
Not many studies have been done on C&C, but there are many anecdotal stories of premature failure where the edge sealing fails either immediately or after some time has passed. Finally, the cost of C&C is questionable compared to hiring out a professional spray foam contractor.
I have thought about these negatives and believe that C&C is still the right option in our circumstance.
For $80 + $20 delivery I bought approximately 25 panels of 4’x4′ x assorted thickness (between 1 1/2″ to 4″) of polyisocyanurate (polyiso) rigid foam board off a guy on craigslist.
If I had to guess, I would say the retail value of this insulation would be around $500. Polyiso has one of the highest R values per inch of any insulation at 6.5. 
I only need a small fraction of that bundle to finish the dormer. In the meantime, I moved the extra from the garage to the attic so it can ‘work’ while it is being stored.
When I get this project wrapped up I’ll post a followup with pictures and any final thoughts that I had on doing the project. So far, I can attest to the length of time required to C&C. It will be interesting if there are any noticeable differences in temperatures when it is all done.