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Archive for April, 2017

Second inspection

April 30th, 2017 at 01:06 am

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 28th, 2017 at 04:18 am

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 26th, 2017 at 04:40 am

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 03:32 pm

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 06:07 pm

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 04:06 pm

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 03:23 pm

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 02:19 pm

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 02:52 pm

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 04:02 pm

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?