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change in plans

May 25th, 2017 at 11:49 pm

Interesting change in plans. We are no longer closing on June 9th instead we negotiated a closing of June 7th. In return we got possession of the house June 24th instead of June 30th. This all came about on Tuesday. It's been a crazy few days. It actually worked out greatly in our favor.

I won't tell our realtor this she'll be pissed and honestly I don't think she's working in our best interest. But heck it's not her money and not her house. I sucked it up and worked with her mortgage guy but only by forcing him to match our deal with capital one.

Our landlord was very accepting and is allowing us to get out of our lease June 30th. Fantastic. We are out a month early. Today I showed the house to a woman and her daughter who are very interested and turns out renting another property managed by my property manager. They are being kicked out of their rental because their landlord is selling. Our PM turned them onto our house so it appears to be a match made in heaven. I hope she gets it.

Anyway we save $1200 because we were going to move over fourth of July and keep our rental until July 15th. Being out by June 30th saves us enough to makes the hassle worth it.

I got an estimate of $1100 to pay movers, and $1100 extra for them to pack. So $2200 to pay full service movers. Instead however my DH and I are leaning to the hourly company we used when we moved 2 years ago. They charge $79/hr for packing and $95/hr for moving.

I think that 11 hours of moving is more than enough. So I'm leaning toward that. Especially since we also have a 22 hour budget to have them pack up the house as well. I'm not sure how it'll work out and we could afford the full service. But I'm a little nervous about timing the packing plus moving.

penny wise, pound foolish

May 21st, 2017 at 08:44 am

So we're moving out of our place. I negotiated moving out 2 weeks early and not losing our deposit. Saving us $1200. Our plan is to have it cleaned July 1st. Then move in a mix of us and movers July 2nd-5th. Then be out by the 5th and let our property manager clean and the new tenants in by the 15th. 10 days should be enough to have it cleaned and repaired. The property manager agreed and I agreed to show the house as needed.

Now I had friends who were interested in the place. They are a family of 5 with a parent staying with them so 6 people. They live 5 minutes from me in a townhouse complex where they rent a 2 bed/1 bath townhouse with 1 car garage for $2275/month. Their lease is up end of May. They can resign for $2275 (it was $2200) or they can pay month to month for $2775. The lease breakage is 3 months or $6825 if they break their lease. I told the mom (my friend) she's better off going month to month because the $500 works out cheaper than signing a lease. They are house hunting and the realtor told them they are likely to be able to buy in November/December when there is less people looking.

However I don't think they are in a position to buy since they were approved for less than the mom hoped. She initially thought they'd get approved for $600k. But the bank told them $450k. This puts a big damper on their house hunt. She said they don't have more than $30-35k to put down and she needed help selling her jewlery to get more. I told her don't sell her jewelry. But that will bring in $10k for closing costs she thinks. I have no idea how selling jewelry works except I feel like you don't get much.

They have a house from where they moved that they could sell and it would help with the downpayment. Currently it's rented out. I told her that would really help them with the downpayment and minimize risk in buying. She said they have to think about it. They want to try to be "rich" by being landlords.

Anyway I told my property manager about them and gave them his contact info. They offered him $2275 a month to rent. I slapped my head. Seriously? Less than I'm paying they thought was a good idea? It was ridiculous and he said he didn't get back to them. They asked me to inquire if he had gotten the email and that's when he told me what they offered. I told him just tell them no. It wasn't feasible.

Oh well. Since he has 8 offers now for showings on Tuesday 4-6 pm I guess we'll be fine. It's for $2500/month and I am guessing that it'll be taken on Tuesday. So we are set to save money.

As for my friends? They lost out on renting a bigger house for $125/month more. Maybe $125/month is a lot but at the same time they would have had space for 6 people better than in a 2 bedroom townhouse. It's cheaper than a 3 bedroom townhouse in their complex which was $2500/month. Sometimes people are penny wise, pound foolish. In trying to score a deal and be cheap they lost out I think on a better house and a better flexible rental agreement. I sent them a copy of mine so they could read it for lease breakage. Oh well. Say La Vie.

we're set

May 16th, 2017 at 09:49 pm

So the appraisal came through and we are set for closing on June 9th. We actually were already done with our mortgage and cleared to close sans appraisal. I'm very excited and happy. It's a relief. We know we are set to close and no longer waiting on an appraisal and worrying what happens during negotiations with the sellers.

That being said now my DH is ready to talk moving. We have decided we're buying the king size bed we've desired for years. Until we moved two years ago we didn't have a choice since it wouldn't fit up the stairs to our bedroom.

We also have to decide what to do about the kid's beds. They both have queen size beds, one we got for free and the other is our old bed from when we got a memory foam. I think we should do twin beds but let one keep a queen? We don't have a guest bedroom.

That's the other thing. We have to decide how to manage the renovations we are planning. We need to replace the windows, ceiling, and paneling on the 1st floor but the question is do we do an extension/bump out or do we just reconfigure the space we have? We have 700 sq ft but it's poorly laid out. We could probably create a bedroom downstairs if we got rid of the laundry room.

But of course this is something we have to consider carefully so we don't do something stupid and overspend or not do something that doesn't cost much more to improve the house.

This is stressful. Plus we are nervous about movers and planning since the sellers are living in the house supposedly until June 30th. But what if they aren't out? Or if they move sooner? These are all questions swirling about.

Now that we know we are closing I feel like I next will contact the school and register the kids. I also need to determine if we are doing private school as well for the DK2. I think she's a bit young for kindergarten and was considering private school so she'll have extra help for the 1st year and more attention. So much to do and so little time.

Renting can beat homeownership

May 10th, 2017 at 08:38 am

I was thinking a lot about friends discussing how renting is throwing away money. It's really, really not. I can see how people think buying a home builds wealth. It's an enforced savings plan. Every month you build up savings by paying down the principal of your house.

But here's the truth! If you saved that principal payment and invested it, as well as invested the entire down payment of your home I'm pretty sure you'd come out ahead of the home owner. But the reality is three-fold.

One how many people would actually save the principal difference between renting and owning? So in that sense yes homeowners do tend to build wealth faster because they are forced to. And typically renters don't have the discipline to save. This is usually true as well because renters often times lack the discipline to save the principal for a down payment on a house. So home buying will build wealth but renting often doesn't because of lack of discipline. I see it too often with most of my long term renter friends they say "i could afford the same monthly payment as rent but I have no down payment." My point to them is then why aren't you saving?

Second, usually people's mortgages are more than rent. Renting often is less perhaps due to the fact that many people will rent the minimum space needed but buy a home much bigger because they are stretching the budget. I can attest to that. Our townhouse we sold was 3bd/2.5 bath townhouse 1500 sq ft. We were DINKS without kids. We didn't need that much space but we bought 5 years before kids to "grow" into to. Probably would have been smarter to rent a 1 bd apartment (like we had just sold) and then moved into something bigger 5-6 years later when we had kiddo #1. So for sure we were pretty dumb, but we liked owning and having dogs. I'm sure our rent would have been something like $1600/month (it was $1400 for a month to month studio at the time) instead of our $3k/month mortgage. But we could afford it and enjoyed the space. So if we had invested the $1400/month difference? We'd likely have made more money. Granted out of the $3k we were paying down I think $700/month principal so we were saving about half the difference. But still $700/month = $8400/year for 10 years is $84k and we could have invested that. So renting would have built up our wealth just as well.

Third I've noticed and perhaps I'm wrong when you renter you get a better location than when you buy. Most people have to compromise on something. So everyone I know compromises and has long commutes of 1-2 hours to get a "big" house. This means if they rented they could usually get something closer to where they needed to be but to afford to buy?

Right now if we wanted to save money DH and I could buy the place we're in for $600k. Instead we're buying something closer and more expensive but about the same size. So we compromised on size of home instead of location. We are paying for location. Also the $600k home would probably break even with our rent which we are overpaying because we had a dog. It should have been $2k/month we paid $2400/month for a dog. Our mortgage now is quite a bit more. But we also could have tried to rent in the same neighborhood we bought at it would have started at $3500 and we probably couldn't have a dog. So to us it's a wash.

But I don't think renting is losing money. I actually think to buy a home many times you are paying a premium to own. I think that many renters don't take advantage of the financial side to keep up with savings and match a homeowner. I think if they did it would become clearer how renting can be financial advantageous.

Have you ever considered renting if you own? And have you ever considered buying if you rent? Did you run the numbers?

For us we banked the extra money so renting we easily matched a homeowner. But I like owning with the stability and I like having a dog. I like feeling like we can do something to the house and not worry. Will we be paying a premium? Absolutely but it's one that my DH and I are willing to make because we want to. We know the financial disadvantages and advantages but still want to.

FWIW I think buying property and being a landlord is different. I think it's different numbers and cash flow and it's an investment not a primary residence you live in. I think it's something that can match stocks easily but you have to know what you are doing for arguments sake we aren't talking about RE investing.

Owe our kids?

May 9th, 2017 at 09:48 pm

I've heard twice today from friends that they owe their kids a certain quality of life. One was the friend who is about to have a lifestyle change. She said she was struggling with the realization she can't give her kids the lifestyle they have now. I said that's not true. The lifestyle they have now is funded by debt so it's not real. You can't compete with that. Even staying married you'd be cutting back and "decreasing" their "quality of life" anyway. She thought about it and agreed. But said it still sucks because this is all they've know. I agree.

Then at lunch another friend was discussing about how she is desperate to buy a house because renting is throwing away money. That renting is making their life unstable and shouldn't they buy because it would stabilize their life for their kids? I mean they are rushing to buy a house with less than a 10% DP and she was talking about pawning her jewelry to get more money together. I wanted to shake her and say no you don't need a house to be stable. The kids are okay. But I get it. I get the feeling of instability. I asked her if they were preparing for retirement and she said no. They are struggling to save for the house.

But that got me thinking. I've never felt we owe our kids anything. I feel like we need to be responsible adults and making good decisions about our financial future is being good parents. I don't think we had to buy a house for our kids. We bought it because we wanted a house. We also don't think that we have to provide x, y, or z.

But I'm realizing that parents of all different economic levels feel this pressure to provide everything. We're expected to provide a nice home, college, car, house down payment, wedding. It's insane. Don't get me wrong I get wanting to give your kids everything. But I'm still firmly in the camp that you take care of yourself and everything else will fall into place. I see these parents giving EVERYTHING of themselves and their money for their kids. What happens when it's time for them to retire or not have a job? How will their kids manage if everything is handed to them? Or worse will their kids be able to turn the tables and support them if these parents give anything for them.

Are we doomed to failure if we continue down this path? What do we really owe our kids?

$5k loan followup

May 8th, 2017 at 11:00 pm

I told DH full disclosure. I ended up showing him a few emails and photos and he agreed she needed the money. She retained a lawyer today and was advised not to wait to file for divorce but most as quickly as possible.

Well things are worse than she thought. So she thought it was just cheating Nope. Well she went into their garage and started opening up all the mail they've been ignoring for years. She hasn't paid a bill since 2007 when they got married. They had separate checking and savings accounts and he paid all the bills. So she never bothered to open a bill or inquire how things were going.

Her husband has played her and everyone for a fool. He's built a house of cards spending money he makes as fast as he can and then some. As I've helped organize the paperwork and explained some of the debts I said to her it's time to cut her losses and pray she can get out of this without declaring bankruptcy. But it might already be too late. She is so far in the hole.

The lifestyle she's become accustomed to is too champagne taste for her beer budget. How will she go back and change her mindset? I can see it in the way she handles money now? I can't tell her right now but she needs to realize that the house of cards money even after the divorce won't cut it. Maybe the sale of the house will wipe the slate clean of debts. But the days of going to the grocery store and buying whatever she wants is probably over. I asked her once before how much they spend on groceries and she guessed for a family of 5 about $3k/month. She put down in the budget $2k/month on groceries. That's not counting the eating out, starbucks, take out. We've found receipts for an average of $600/month lunch at her husband's club. That's on top of his eating out daily.

I dare not say the truth, but perhaps she had a suspicion that the lifestyle they were leading was way more than $200k/year. That the spending was so over the top, but she thought they were making enough to cover it. Yes she was saving for retirement but she made much less money. I really wonder how she had no idea they were living an unsustainable lifestyle. Or maybe he has been burning through his inheritance faster than even he imagined.

I don't know but the unpleasantness of the money situation I think will be hard. I can't even fathom how hard this fall will be. Tougher still to realize that he dug them into a deep hole and if not for the hole she might have a chance. I know BK seems irresponsible, but I wonder if it's not the best option in this case? How do you live on a $50k salary when you've been used to 5x that or more?

We'll see how this all plays out. But it turns out that more people than you can imagine are living lifestyles they can't afford. I never dreamed that she would be one of those people.

Shopping my rate

May 4th, 2017 at 08:24 am

I spent yesterday shopping around for the best deal and rate. So what did I end up with and how? Well my agent said we could shop the rate but had to the use the lender she suggested because the seller's would feel betrayed. They had talked to our lender and asked questions. But at the end of the day I said no way. I said if he can't match the deal we're moving on.

I got from Capital One no fees everything waived from their end. Also $1300 towards 3rd party fees like title insurance, appraisal, deed, sales tax, etc. Finally $500 for having a checking/savings account. Of course the rate we locked was 3% for 7/1 Arm. Very solid deal.

Chase initially offered me $995 in fees, 3.25% 7/1 Arm. Of course I said no go too much in fees around $2800 which is a lot of money and .25% which on our loan was around $125/month. Over the life of the loan that's substantial since it's $1500/year. No go. I would have walked over the interest rate a loan but to add in $2800 in fees I wasn't about to tolerate it and the seller's could try to get out of our contract.

Chase agreed to all terms and matched it. They agreed to 3%, $0 fees, and $1300 towards 3rd party fees. I also got $595 for having a checking with them, I now need to open one to get that final bonus. So I got what I wanted.

Don't let people push you around. Further my DH has/had no idea. Everyone who thinks women are the ones who are dependent are crazy. Even my realtor called me a shark and said it's really unusual for a stay at home mom to do the financials. Really? If anything I almost think a stay at home should be more involved because we have the time to do it.

Next up? Getting our home insurance in place. Deciding how to approach our landlord to get out of our lease early by a month. If not we'll eat the cost.

i didn't use redfin

May 3rd, 2017 at 08:37 am

I didn't use a redfin broker. If I had I'd get back 15% of the buying commission 3%. Of course I could have negotiated with a full price broker more say 2% of purchase price or at least 1%. With redfin I'd have gotten back $5500 or so. My current realtor offered us a rebate of $4000. I went with the full service realtor and I have to say I am satisfied.

I'm happy because I feel I got my money's worth using someone who knew the market and could explain the nuances of location. I had been looking for a long time and found someone who sold a lot and for a long time the area I was interested in. I also think she helped us win the home over using a redfin agent. I think she better strategized and wrote a better offer. You are probably sighing going really?

No seriously we beat out someone by $7500 who waived their financing contingency and their inspection contingency. We did a pre-inspection before our offer and we didn't waive our finance contigency or appraisal clause. LOL. The competing offer did. So I think I paid for someone to help me buy a house in the market we're in but minimize our risk. We still won when other people are doing things like no pre-inspection and no finance contingency. Our agent said she never does without finance contingency because anyone can lose a job and though she's sold for 30 years and it's only happened once during a home purchase it can easily happen. And she thinks she can usually win without it.

Besides since I got to see the competing offer they qualified like we did up to the same approximate number, but had way less money to put down barely 10%. We didn't strike our finance contingency/low appraisal but had offered up 40% cash down. I'm going to guess it was a hard decision since our offers were pretty much a wash. They could easily lose $7500 in a low appraisal. But I would have picked us too even with the finance contingency since the other offer had only 10% down even though they were risking the low appraisal and no finance contingency. Maybe also the banks we went with Chase and they were using So-fi which uses a lot of company stock in loan requirements.

FWIW it's 23% of our base, the bank because of DH's 1 year lack of income wouldn't allow us to borrow up to other people's limits. They wouldn't consider his bonuses so our income is solely on base salary. Considering 1/3 of his income (potentially more) is bonus we're pretty comfortable. Plus his base is less than what we were making in 2015 when due to his 10 year tenure at his job we were making "more" money with base and bonus so if we had applied for a mortgage we'd have qualified to borrow more.

So the way we look at it, we get a nice rental for a few years. We'll sit tight and see if the perfect home comes up and in 12 months they'll start counting all his base and bonus income. After which we plan on banking all his bonus anyway. So we are putting less money 20% down than we made on our last house but decided we're investing the rest. Although we are talking about using some cash to renovate the bottom floor. We can put down 20% cash DP, 1 year EF (will keep 6 months), and invest the rest. If we had bought up to the top of what they lent us now we'd still be under 30% but our cash would be capped out at 6 month EF. So I guess it's for the best.

I'll figure out what the cost of renovating is and then decide. I'm a lot more relaxed knowing how much play we have financially. We're closer to where we were when we last left our mortgage at 23% PITI. Of course because of our deductions it's closer to 50% of our monthly take home after savings. But this should be an interesting ride.

Accepted offer

May 2nd, 2017 at 07:51 pm

Our offer was accepted on the house. I am very excited. It's a bit surreal. So did we compromise? A LOT. Was it worth it? I hope so. Am I happy? Yes. Nothing in life is perfect. We just have to make the best decision we can with the information at hand.

Last week we made an offer on another home for the exact same price. This week it was accepted on a much smaller home. How much smaller? The house last week was 3500 sq ft with every detail we wanted in a house. 4 bedrooms, playroom, den, 3 car garage, small yard and relatively new 2004. But the house we bought? Amazing location, 2040 sq ft, 3 bedrooms, 1966 built, and great yard and deck. Truthfully?

We compromised on the house. The house is a little bigger than what we live in. It lacks a lot of what we wanted including the fourth bedroom and or den. We have a flex space that can be a playroom for the kids. We have to renovate the downstairs and fix the windows, ceiling, and walls. But I love the character. Maybe it's a mistake.

But the plan is to live in the neighborhood we love and watch for the right house to pop up. We were looking at rentals anyway in this location and this popped up. So we decided to jump on it.

Cross your fingers it closes cleanly.

$5k gift

May 1st, 2017 at 08:01 pm

I'm pretty sure I'm gifting a friend $5k. I haven't discussed this with my DH and I'm not sure how to bring it up. I'm not even sure when. I've never before kept a secret from DH but this is not exactly my secret to share but at the same time it's our money.

It's a $5k retainer for a divorce lawyer for a friend. NO there will be absolutely no reconciliation. There is no possibility of it. The reason is because she has no money. They have money as a couple. But she works part-time and the money goes into the joint account. She can swipe her debit card and pay for stuff but no way can she siphon off $5k by thursday and pay the lawyer to be retained.

She found out on Saturday that he's been paying for escorts for years. It's why he tells her they have no money. She found out last week because she tested positive for HPV. She is going in to test for other STDs and to test for cancer from HPV. A supposedly devoted father and family man? This is my 3rd friend this year getting divorced. The others have separated and it's mutual. She's the only one who is going to slam him with the divorce out of the "blue". Hence the money for retainer is needed.

They have 3 kids and are 6 months shy of their 10th wedding anniversary. She's never snooped on his phone when she found his old phone and looked. There is no going back. She's done but she can't tell him yet. He's too much of a liar and he's been siphoning off money from them into other accounts she didn't know about.

He also hasn't filed taxes and she has no idea about the real truth of their financial status. She acknowledges this is all her fault. She didn't take an active part in their finances. She trusted him. A boy she knew from high school. Yes they meet 10 years later and dated and got married. She'll be 40 in September so maybe it's a good time for a new leaf.

I can't tell DH because they are our couple friends. I am having a hard time swallowing that I need to pretend everything is great and invite them over. I can't tell DH because I don't want him to have to pretend to get along.

This is eye opening in so many ways. Financial for sure. I feel a bit like cynical now because I always ask friends especially after doing people's taxes do you know how much money you have? And I have yet to meet a female friend working or not who has been able to answer my question. I have yet to meet someone who knows who holds their mortgage. Or how much they have in savings and which bank accounts they have.

I realize the women reading this blog and on the forum are extremely financially astute. They are the money managers in the family. But is it really such a small percentage of women who really know what is going on? I wonder if I could ever relinquish that much control to my DH?

Could you? Did you? Would you? Is it possible to not be the money manager and still be aware?

Second inspection

April 29th, 2017 at 06:06 pm

So we're paying for another inspection on another potential house. Going to play again. Roulette. We'll see how this pans out.

The house we last inspected a week ago and offered on came back on the market. Maybe the buyers did an inspection and had remorse. Maybe the seller wouldn't negotiate. Whatever happens it's just a house. Can't get caught up in the emotion.

The main thing is we stay the course and know what we are getting into. Whether we overpay is not the question. The real question is are we doing it knowingly with our eyes wide open. Last time we definitely knew what we were getting into. I hope this time we are just as enlightened.

Further note I do feel we are being really indulgent. Many of our friends don't bother paying for an inspection. I do feel like it's helping us make a better decision of course it's quite expensive each time. Oh well maybe it is a lot of money but I feel like we're just investing in knowledge. And is it really wrong to do that?

Coveting what others have

April 27th, 2017 at 09:18 pm

I wanted to write about sometimes wanting what others have. I covet it too. I admit it. I'm only human. I feel bad that other bloggers feel bad about wanting what others have. Who doesn't? I feel we'd all have to be saints if we didn't.

I'm okay with most things. I hate cleaning so a big house isn't my thing. I am not a clothes horse or into fashion so that's not a big deal. We eat out enough and love cooking so I don't feel that either. But I admit I covet other people's cars. It's only happened more recently.

I've been lusting after other people's minivans or 3rd row suv. I think about how nice it would be to have a car with the extra space. I debate internally is it worth it. I know it's not practical. I know it doesn't make sense, but I still want it.

It's also possibly something I'll do even if it doesn't make sense. However I realize that I'm only human. I'm not perfect and most people as humans can't be satisfied with everything. I also think it's not a bad thing to want something. But maybe it is.

I think we just need a bit of perspective. That it's okay to want things others have. But realize that there are trade offs and are we willing to do it? it's not wrong to have the big house or fancy car. Maybe the trade off is never eating out or traveling. Maybe the trade off is not saving as much.

But whatever it is, it's okay. We aren't meant to always lived deprived. It's okay to not always be frugal and stretch every dollar. I repeat that to myself. It's okay. If we save 20% it's not the end of the world to not be saving 40%. At least we're saving something.

I may end up "gifting" myself a minivan or suv eventually. Even though I don't run my ridiculously reliable subaru into the ground. After all I've been coveting it for quite awhile.

nope, not yet

April 25th, 2017 at 09:40 pm

Nope not yet. No house. Offer way, way too low. But my realtor said a sucker born everyday. Apparently they had multiple offers and ended up about 10% above asking price without a home inspection or mortgage/appraisal contingency. No getting out of this for the suckers/buyers. Trust me if they need these buyers to close because now they know there is a roof leak and I believe they'd have to disclose if the deal falls apart. But I doubt it will. It would be really interesting to see what happens.

On another note, I spoke to a friend who is in over her head with her house. I made a lot of financial suggestions and I think she really shared with me all the details because she lives where we used to live and it's easier to talk/chat with someone who doesn't judge and can't see you face to face. It's easier than admitting you made a mistake to a friend you see all the time in person. Truth is it's easy to get into financial trouble even though you know better.

So what happened? Well when we moved two years ago they had just bought a massive fixer house for $1.2M. They are planning on moving in this Friday about 2 years later. The renovations initially budgeted at $600-800k turned into $1.6-$1.8m so they are into the house for $3M. Yes those are real numbers where I used to live.

Anyway the monthly note on the place hasn't been too bad since they didn't finance the entire renovation but paid a lot of cash out of pocket. They are out $8k/month. The problem? Her husband switched jobs last year into a commission only job and hasn't made an income in a year because he hasn't closed any deals. Now the income they were counting on hasn't appeared and they have been burning through savings.

She's stayed at home with their 3 kids but isn't sure what to do. She's been at home for 7 years now. And she realizes it's not so easy to find a job. But it's a difficult position to be in because her husband could take a salary position but it might not be enough to keep up with the lifestyle they have. Or she could go back to work but it might not be at the salary they hope. He also could find a job that could support their lifestyle but it would likely mean moving. She isn't sure what to do. Without income it could be difficult to qualify for a conventional mortgage since right now they have a construction loan. They became aware of this yesterday. They have savings but the bank isn't counting only on their equities.

They could rent out the house I suggested but she isn't sure where they would live since they are moving out of their rental. I also suggested looking for any high paying job. I think a dream house can come and go. Maybe it wasn't meant to be.

Going through this right now I'm really talking myself into accepting and understanding that no house is perfect. There is not only 1 dream house in the world. And it's super easy to get caught up in a dream. Even the most financially savvy people can get caught up in emotion over logic.

we're making a house offer

April 25th, 2017 at 08:32 am

Our agent is submitting an offer on the house today at 2 pm. I'm not sure if I'm excited or not. It's a good house with everything we wanted and a decent location. In the area we wanted but not quite middle of city more like edge. Still in the school district but DH's commute is longer than I would have liked. But otherwise the location works. It works for us weekend commute wise to where we like to go. It works for schools. It works for quiet. The house is a good layout and a good size.

So any hang ups? Well we are coming in under asking by a lot. And we do have an escalation in case there is another offer. We decided this because we had a home inspection yesterday because our realtor felt something was off about the house but couldn't pinpoint it. She said the preinspection the seller did didn't feel right to her so she asked us to get one. Turns out she was right. Best $675 we ever spent. Over 4 hours and we now know that the roof is leaking in multiple places including a couple of skylights. The siding has problems and needs repair that will cause the house to need to be painted. The backyard has to be regraded with the sitting water and side of driveway recemented. We also need to replace the water heater and piping, and the a/c that they once had obviously broke and they hauled it away so they wouldn't need to replace it. It's something we'd like to replace as well. So hence our below ask offer. They may laugh us off but at least we did our due diligence and will accept the house for less.

Our plan initially before the inspection was to put wood throughout the entire house and paint it. The house is 2004 built and quite dirty. The roof leak was probably due to the owner power washing it and probably the builder being cheap when installing it. The siding was due to improper installation. But this is all fixable. Inside was okay but normal wear and tear of carpet all over the house from 13 years and probably never replaced. And never painted so marks all over the wall.

Interestingly their inspection report did not find the roof leaks. Nor the siding issue. It also said "owner has a lot of personal effects making evaluating the house difficult." And yes they have A LOT of stuff. Nice, expensive stuff, but OMG it was really crammed into the house. I say that not as someone trying to minimize but really as someone just house hunting. Seriously they should have rented a storage because a couple of the rooms you couldn't really see the floor it was packed full of boxes and stuff.

Anyway we'll see what they even say or respond.

miles to burn

April 18th, 2017 at 11:07 am

Trying to iron out the days we want to travel is stressful. I'm not sure hawaii will work out this summer because of timing and costs.

I've got $100 credit for me and the two kids. DH has $50 credit from late flights. We also have a travel companion certificate we can use as well as miles. I typically hate miles because I'm particular about not having connections and flight times.

But lately I've been talking with friends. I wonder if it would be better to focus on flights that we pay for and instead use miles to book hotel rooms and save money that way? I say that because I'm considering switching to the Marriott rewards card I think Creditcardfree and Disney Steve have. I'm just struggling to redeem airline miles with trips that work.

I mean honestly we also aren't airline loyal so we have a bunch of miles spread across whatever is the cheapest and I can get a deal on.

This whole figure out how to use miles is stressful. Do you use airline miles on flights? Have you had a lot of success? Or do you find it easier to use it on hotel rooms?

saving is a priority

April 13th, 2017 at 09:06 am

People don't save period. They barely save for retirement. They barely save for an emergency. Many use a tax return as enforced savings. But many really couldn't tell you what they are spending their money on. Nor do they see it as important to start saving.

One could argue that it's because they don't make enough. The truth? That saving is a priority. People make a conscious decision to not save. They also make a conscious decision to live day by day and paycheck to paycheck. I understand people who make below the poverty line struggling or around the median salary for the US. But at the same time perhaps it's time to look at your expenses and see if it's worth living where you do if you can't afford it.

I'm not a huge latte factor fan. I don't see how $5 a day works when you make $4k/month and pay $2k/month rent. It just won't work to survive without going into debt. Or $500 car payment. A lot of times just the basic outflow is to high to even pay for groceries or utilities and that's how the CC debt starts. So $5 coffee isn't going to make a difference if you start out the month in the hole. It just make the hole $5 deeper.

I'm not sure how to make people realize it might be a good idea just to save?

itinerary planning

April 11th, 2017 at 08:23 am

So I've pretty much finalized my parents crazy tickets. I spent some time and I think I got it for $1100 which is a good deal. Way better than expected considering they are also flying multi-city with us and another island connection in hawaii.

I'm researching for a deal to hawaii this summer and next February.

Right now I'm debating between VRBO and hotels. VRBOs seem to make sense when we stay put for like 4 to 5 days in a city. But I'm not sure it makes sense for 1-2 days in a city to pay a cleaning fee on top of the cost of the rental.

I'm also debating our mode of transit between cities. Obviously train is the first option but buses are often used as well. Did I forget to mention we're doing Japan and Hong Kong? I've finalized the airfare but not the details. Now I'm working on the cities and plans.

Right now I only know Tokyo Disney and Hong Kong Disney. Onwards to planning.

$6500 tax bill

April 11th, 2017 at 07:19 am

We owed $6500 this year. Sounds like lot? It is. We actually would have been okay if we hadn't rolled $60k from a 401k into a Roth IRA for my DH and paid the taxes on it.

We did this to fill the 25% bracket we are in and tax advantage of being here for this year. I'm not sure where we will be in the future but I think it's reasonable to guess we might not be able to take advantage of it again for awhile.

That being said we rolled DH's old 401k to new 401k and took a $60k distribution. This way we aren't holding a rollover IRA and that will prevent us from doing a clean back door roth ira annually. Otherwise we have to calculate across all pre-tax IRA dollars the amount we are rolling over. We can now contribute to a non-deductible IRA and roll it to a Roth IRA every year still.

I have to say I'm hoping they streamline the tax laws. I'm curious if the breaks will only be for the rich.

I'm crazy busy working nightly right now and loving it. I will admit it is fun to do taxes.

crazy good travel deal

April 9th, 2017 at 07:52 am

OMG I scored an insane, did I mention INSANELY good deal on our asia trip this summer? $762 round trip for 3 weeks and 3 cities? Yes that's per person from Stateside to asia then 2nd country then back again. Woot woot! We're going and it was $2853 for 4 of us. 8/8 to 8/29. Yeah I'll post pictures.

Now onto booking hotels and figuring out what we are going to do. I've picked cities but I'm not much of a planner type.

I'm going to guess that hotels will run us around $100-150/night depending on exchange rates. So for our 20 days I am guessing $2500 to be conservative. that means we are at $5k for basics not counting train tickets or meals. Another $1k in train tickets and meals solid $2k at $100/day for a family of 4 and treating people. I think my parents and in-laws are joining us at certain stops.

This does not include fees for any touristy things we do. I am thinking $12k for entire almost 3 week trip for a family of four. That is phenomenal deal. And I couldn't get miles to work so whatever. This deal was so cheap it'll earn us a ton of miles way below 2 cents a mile.

Now onto the planning. I'm so psyched because for the rest of the summer we have a ton of other small trips planned. Now that i've ironed out part of it i'm super excited.

college savings

April 6th, 2017 at 09:02 am

We just contributed our $2k to our kiddos college fund a bit late for 2016. We're still in flux trying to buy a house but decided to go ahead and do it. We're invested for both of them in VTI and that's it. I guess in about 10 years we'll consider moving them to something more conservative but I figure at 4 and 7 we're better off taking the risk since the goal is to not draw on it for anther 11 and 13-14 years.

So I hadn't realized but DK1 has $19,398 and DK2 has $12,778. It's pretty good I think. Continuing on this track we should definitely have $50k by the time they hit college each. Stretch goal? $100k which I hope by that point will cover 4 years at a state school which is our goal as parents to give to them as a gift.

Now doing taxes I see a lot of people saving nothing for retirement. Saving nothing for college. But stressing out about how will they pay for college. I hate to say it but I suggest they instead focus on maxing out a 401k and IRA before worrying about college. And inevitably the words come out "but I have to pay for college. How else will they go? They need to go."

I don't know what to say. Since most are white collar professionals I would have to say not going to is not an option and I understand. It's not an option for my DH. And truthfully these people make more than enough money that college shouldn't have been a problem. But neither should saving for retirement.

But instead they are in their 40s/50s and basically bupkis for retirement or college. I have to say something has to give. And using their free cash flow for $100k towards college seems like a bad idea.

I'm not sure how we change this as society? I mean the obvious is to educate people about saving for retirement earlier. Saving for college earlier. Have less debt.

But what about this feeling that we have to pay for college? That we owe our kids a college education? We have to help them? Are we obligated? Is there an income obligation? If you make over $100k then you should be helping your kids because you make enough that you should have been able to save for retirement and college?

I'm not at that stage but seeing this make me wonder. Yes DH and I are being responsible but we're being overall responsible like others on this site and saving for retirement and college is secondary. Right now as it stands I think we are pretty close to having enough in taxable accounts that we could fund college now. But we aren't quite ready to commit to "earmarking" and putting that much into a 529.

But are we supposed to? Should we feel obligated? That we do well enough that we can afford to save for retirement early so instead we should focus on college? That we should delay ER for fully funding college 100%? I always have said our goal is FIRE and looking at our numbers we are there.

But DH is not about to give up his new career anytime soon he loves it. I love working part-time. I can't see myself volunteering and I love getting out of the house. So right now it's not on our radar. We have a slower pace of life since I stay at home for the most part and are more relaxed than most of our contemporaries. So we can fund college more but are we obligated too?

Can't break frugality

March 30th, 2017 at 08:31 am

I thought I'd post a funny conversation between my DH and myself as we drove to see an open house.

DH - I really love this new coffee from starbucks. We should start buying it.

LAL - Um okay it's expensive. (it was a gift from a friend a bag of beans blonde).

DH - How expensive can it be? We can afford it.

LAL - Okay I'll make a note next time we get low and buy a bag.

Driving a bit further...

DH - Okay so much is the bag?

LAL - $15 for the bag.

DH - WTF. No I don't need it. A 1 lb bag cost $15? I thought maybe $7-8. Forget it costco is good.

LAL - It's fine we can afford the indulgence. You're right it's $15 in the grand scheme of things.

DH - NO way. I didn't get my money by spending foolishly. Costco is good.

LAL - well costco beans are made by starbucks.

DH - the reject beans. Maybe in 10 years.

LAL - in 10 years the bag will be $20 and you'll freak out again.

DH - well i'm not made of money you know.

Kids are sitting in the back listening for a teachable moment. DK1 "if we can't afford coffee how are we buying a house?"

LAL "we're choosing to buy a house and we can buy the coffee. But dad doesn't want to spend extra on the coffee right now. He may change his mind in the future."

DK1 "okay like me choosing to save my money to spend on a toy I really want?"

LAL "exactly."

So being raised by frugal parents (both of us) it's hard to break the mindset. I am going to guess we're raising our kids that way too.

Just a very funny conversation. I haven't decided yet to buy my DH the bag of starbucks coffee. Right now we have so many bags of Kona Coffee and couple of starbucks gifts that I'm probably okay for the rest of the year at the rate he drinks.

two sides of the coin

March 16th, 2017 at 09:08 am

I find it odd. I appear to have two different sets of friends. Both are great but ones are savers and others are spenders. The savers are two other families whose kids go to piano with our kids. They both have two DK same age as our two and all 6 kids are in 2 classes of 3. We were with them last year as well and will be with them next year too. The kids love each other.

Parents #1 quit his job last May because he didn't agree with management. They are doing great and paying for private school and have a huge safety net. The Dad is deciding what he wants to do with his life. They keep up with all activities and I know live modestly. You can tell with the cars they drive and they still travel and eat out and live comfortably. The mom has said they probably have another 1-2 years expenses.

Parents #2 the mom just quit her job over the treatment from management. She applied for her own job it turns out they have been trying to hire since January. Well she tells me that they have a year of savings comfortably without worrying. The Dad owns his own business and has been the primary caregiver of the kids while she went out and was the breadwinner. She's going to take some time and reflect on what she really wants to do. Her goal is to find a job after the summer.

I gotta say it's refreshing to hear from friends that they are secure without jobs and not worried about the future.

On the other hand since I'm doing taxes, I got a chance to look a 3 different friends tax returns for free. Just in case they missed something. They all made $160k-$200k and all have some credit card debt, minimal retirement savings, and just spending everything that comes in. Making that much and saving $5k/year for retirement seemed nuts. And not having an Emergency Fund or down payment for a home. I did suggest they try to divert 5% of income into a saving account. But they said it was impossible. Where would they get the money from?

Truth is that finances no matter what you make is a mindset. You can make a lot and spend it all. You can make a lot and save a lot. I think that part of it is being satisfied with what you make and spending it wisely. The first sets of parents I think live simply and are happy. The second sets are constantly buying things, eating out, and spending on everything. Does it make them happier? I'm not sure but I know if they lost their jobs they would not be calm and happy the way the first set of parents are. Able to walk away because the job sucks. I wonder if people realize that sometimes the savings gives you the freedom of not worrying. It's not just about the money.

good news and bad news

March 13th, 2017 at 11:44 pm

Good news is DH's eyesight is stable. He still has his driver's license. Two years ago did I mention that our optometrist said he didn't pass his driver's test. He agreed to let my DH continue driving and instead let his specialist determine my DH's condition. In April 2 years ago he got tested and passed. He has blank spots in his vision and while he would fail a normal peripheral vision test he is okay enough to drive.

Does this mean he should drive? Well I drive him quite a bit. He can drive to and from the bus station. He can drive a familiar route at night but honestly he's better off not driving at night, not new areas, and nowhere with pedestrians. He hit 2 pedestrians 2 years ago where we used to live. It was another impetus for us moving. We are better off now. Right now we are looking for houses and I realized I need to tell the agent some extra criteria.

Anyway good news besides the fact that his medications are working and his vision loss has appeared to stabilize is great. The really interesting part is 2 years he gave blood. He signed a consent to participate in a clinical trial. After a grant came through the dr ran his blood and identified the mutation on a gene for rhodopsin. This dr had only guesses and they had tested in vitro (in cells) these mutations. My DH proved them correct in their identification. His test results however were done in trial but now we have to see if the insurance company will allow it to be done and covered. Cross your fingers.

Bad news? Well I found out today my cousin has stage 4 colon cancer. It's actually my mom's first cousin and she lives nearby and we've gotten to know each other well. My mom is traveling abroad so I can't tell her right now. I also don't want to call my grandmother or my aunts because I don't want to upset them. My cousin sent me message saying to go ahead and tell them. She isn't up for spreading the word to the family. I am hoping maybe my grandmother will make it up here in the next 6 months to see us once in our new house and see my cousin. She's the daughter of my grandmother's closest sister who passed years ago. My grandmother's family didn't approve of her marriage and her sister was the only one who came to the wedding and stood outside the chapel while my grandmother got married. My aunt helped her sew the gown and always talked to her and wrote letter and years later my cousin visited and stayed with my grandmother and mom. So now what? I am going to make some food and drop it off tomorrow. And wait for my mom to touch base.

I'm getting an ulcer

February 7th, 2017 at 01:42 pm

I'm getting an ulcer I swear it. I feel my anxiety getting worse as we look for a house. The market has slim pickings and I'm worried we should just move into another rental. My DH says not to worry that we should let this season play out and see what happens. The kids asked for a dog but I said not until we buy a house. I am still missing not having one but I feel like this is something that needs to wait until we settle down. Finding this rental with a dog was hard. Doing it again? I think would stress me out.

We also had some issues with the mortgage. The year of no income hurt us and we had to explain it. Due to this we also qualified for less money because of it. We aren't so happy about having to potentially put more money down on the house. I'm stressed because our realtor wants us to work with her guy so she can say we're qualified with a reputable broker she knows instead of us getting the best deal. This makes me leery and upset.

I know I shouldn't stress out. But I can't help it. I don't know if we should shelve buying a house another 1-2 years. We can move into another rental and save money. I mean also I worry because if they take away the mortgage deduction on taxes I think it'll impact home prices. It certainly influences our decision. We'd spend less significantly and I think we might choose to pay cash. I can't imagine that others in our bracket might not be forced as well to spend less.

Also DH will have 2 years of income if we wait which since they aren't counting his entire income right now might make a difference. Strangely if he had been working his last job we'd qualify for more than we do now even though we make more money now.

I am also embarrassed IRL to talk about our 1st world problems. So it's only here I can really express how I feel.

Plus our DK1 is being tested again. She's got an anxiety disorder. Big surprise. Trust me with her behavior we've had multiple tests for autism or spectrum and that's not it. Nor is it sensory processing. It really is an anxiety disorder that has come on early. And yes I feel guilty and more anxious because I worry about her. So I'm not sleeping well and I have TMJ even with my night guard. My mom is anxious and on medications. I only used them pregnancy/PPD, but I do wonder if I shouldn't get back on them.

Anyway maybe everything will work out. Let's see what happens by May.

another one bites the dust

January 20th, 2017 at 01:33 pm

So I've been mostly using redfin to find a house. It's slow going, but it is really picking up. I met a realtor I like and she appears to really know the area I am interested in buying. She's been buying and selling since the 90s in the area and can easily name streets and values and locations. Even gave me an honest opinion about schools/location/value and how it affects home prices. We haven't meet yet and are meeting tomorrow in person.

She insisted on showing us 3 homes to see how we react. And she wanted to meet DH and I both. She's basically going to evaluate how we react.

Unfortunately a couple of red flags went up. Sigh. I am probably going to get a lot of hate from realtors from saying this but I have the emails between this realtor and myself proving it.

She suggested that we use her mortgage person because they will help us win in a bidding war situation. She is doubtful we'll be able to be picky because we are only putting down 25-30% cash and to be really competitive we need to be at 50% down or all cash. She said she usually waives the inspection and mortgage contingencies.

These things has already brought out the worse in my DH. I'm wavering. We might have to step back out of this market and rent for a number of years just because we can't afford to do these things. We discussed it last night and the truth is that my DH says we're being responsible by not letting go of things we think protect us. I think we need to hear her explanations of why she suggests these things to people and it's possible we won't work with her. Solely because we can't stomach the terms.

Right now I shudder at the thought of renting for another few years. I already miss having a dog and want another but we had made an agreement that we would wait until after we moved into out house so we wouldn't have to deal with our landlord and another pet deposit. Or finding another rental that takes dogs. And I don't really want to move the kids.

But what should we do? Just look and see if we can win something? Do it our way and hope we can buy and still stick to our terms? How much do we risk? These next six months is going to be stressful.

Spend everything you make

January 19th, 2017 at 08:59 am

Okay people really do spend everything they make. You think they don't. Or at least I thought they didn't. Turns out people really do spend everything they make and then more.

I've now seen people making incredible salaries, still working, and drawing from a 401k. Paying 30% tax on their 401k withdrawal based on their income and somehow not saving. Being in their 60s and still have a mortgage with interest. I am floored.

It explains a lot about people talking about how will they retire? I mean I work in a tax office where one of the other tax people has admitted to it being too hard to save. So she gets a $8k tax refund to help them through the year make ends meet. She said it was too hard to save for college so they meant to but they never got around to it. Her kids have $8k saved at 16 and 14 and most of it was from her dad's initial contribution into a 529 of $2500. She said everything else just seemed more important.

Or another one said there's no way we'll retire before 65. My husband was hoping 60 but we have so many expenses. Apparently they have a couple of rentals that aren't really breaking even. I wanted to point out that perhaps they should cash in and buy rentals that actually produce income. But they see it as a long term investment of price appreciation. I'm not RE savvy enough but I can't help but wonder if this is a losing proposition? Sure you can write off depreciation and other stuff on rentals, but if you can't cover the mortgage with rent, I wonder if you shouldn't buy a different property?

These are supposedly financially savvy people and the clients who come in are in the top 2-3% of earners in the US. But they have very little savings. They spend it as soon as they make it.

I know we chose to live without income. But I have to wonder don't these people worry? Do they even have 3 months saved in an EF? From what I can the answer is no.

Life is busy

January 13th, 2017 at 11:15 am

Since I started working part-time things have been crazy. I enjoy it. I love getting away from the kids. But the truth is that the money is good too. I haven't done anything with it but put into our account. But it's nice to be having adult interaction and identity away from the kids.

Next step realtor license. I want to work for redfin doing tours. All this is a long term plan after we buy the house.

a new part-time job

January 3rd, 2017 at 01:22 pm

I did it. I started doing taxes for HR Block part-time. I'm not sure if i'll do this long term. I think I'd like something year round. But this was a break into working again after not working since June 2010. It's minimum wage and I'd have to work next year in order to be able to get the minimum wage and then commission on number of returns done. Thus the high turnover rate of 1st year tax preparers. But with the continuing education prep I've at least made $250 and it's paid for the $149 course.

My next step? I am thinking of studying online to get a realtor license and hopefully landing a job as a redfin touring agent. I prefer doing that sort of realtor work than selling or buying homes.

Perhaps i'll end up doing what I trained for again one day. But for right now I'm liking this part-time gigs. The only problem is I'm trading babysitting since I'm working nights from 5-9 and DH has trouble getting home by 4:45 so a friend is watching the kids for an hour and I'm watching hers during the day. Phew.

2016 Wrap up and 2017 Goals

January 3rd, 2017 at 01:15 pm

So we ended 2016 pretty good. How good? Our NW went up $41k. We are still down from our peak NW $120k, I'm still happy where we are. Our retirement contributions were $29k plus $2552 employer match into the 401k and we ended the year up $73k so we doubled our investment. We maxed out our 401k in 4 months. With income and savings we only "spent" $30k in cash from January to August, we didn't get our first paycheck till August 12th.

Our average spending was $80k for the year. $6500k/month including $2400/month rent. Not terrible to live on $4000/month for a family of 4. It was front loaded that we had a lot more expenses without employer provided health insurance. So we spent more on essentials till August then we splurged a lot more on eating out and stuff since we suddenly had more money. NOT perfect but we were okay.

Anyway our 2017? Save $100k and increase NW $150k. Big stretch goals.

Investments out of control

December 30th, 2016 at 12:59 pm

I've allowed our investments to get out of hand and out of control. Because of our move and rolling into a Roth IRA and 401ks and just starting new funds and being concerned about just our overall cash I've allowed our investments to get out of control. How out of control? I have no idea what we're invested in right now.

DH just took his 401k and dumped it into whatever we chose years ago. I didn't pick his new 401k instead he just dumped it into a couple of funds but told me the other day they told him it was super risky. I haven't done a comprehensive overlook at what we should do in about 2 years.

The kids are left in VTI for college. Boring but what else to do? I'm feeling pretty stressed out right now. I started my spreadsheet with dollar amounts and choices.

I think we've been a little to risky because my DH was allowed a lot of leeway in investing in individual stocks for fun. We rarely touch any of this even in taxable accounts we've got invested in stuff. We need to sit and make a better plan.

Goal - streamline and properly invest our accounts.


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