LivingAlmostLarge's Personal Finance Blog

So we're doing our ESA at $2k/year for each kid. We have mentioned adding to that around $2k/year each kid into a 529.

Right now we are positioning ourselves to be financially independent soon enough not including college. DH will be 52 and I will be 50 when our youngest goes to college. I always had it as a goal that we would be Financially independent by 45 and I think it'll happen. But realistically I think we may have to wait until age 55 for DH to "retire" so that we could cash flow college.

But reading more about investing in real estate and I think in 2 years we could save enough to perhaps consider investing in it. I wonder if it would make sense to do a rental property for each child and use that instead of 529?

There are a lot of negatives including we're starting late, they won't be paid off and the cash flow might not work. Plus we'd need at least 2 homes for each child. But I wonder if this would make sense?

I can't do it for something that generates $100/month cash flow even with the depreciation tax break. I think that means we'll have to invest in something away and be an absentee landlord to make it happen.

Plus I need DH to get on board. I know he'll be anti-real estate. So anything I find has to make a lot of financial sense.

Any thoughts or experiences? Do you think this is a good idea? This is a long term play so I think with our financial situation we need at least 2 years of stability right now and planning. I need time to research to present my report to DH about where and how we will invest and who will manage the property for us. This is not something I feel we can jump into since we'll be needing to foot most of the cash down payment, emergency fund at first.

Stuff costs a lot. I mean buying yes costs money. Sure you can save money buying it used. Thrift store or garage sale shopping. But even if you buy everything used and cheaper it's still stuff. You need somewhere to store it. You need to move it. You need to organize it.

I saw this as we are about to move and everyone asks me how the packing is going and I say it's not. I say I am throwing things out and I'm trying to organize what I have so that I don't move it. They nod and look really confused.

I say that I think I need to purge more than pay movers to move unnecessary stuff. I've got friends seriously on both sides of the spectrum. Those who buy new and have tons of stuff. They tend to have big homes and lots of space.

The idea that we are moving to a smaller house that cost more seems well ridiculous and in some ways it is. But then we also have friends who buy second hand everything but also have tons of stuff. They are in their home and paying for a storage unit for 5 years because they can't fit everything into their house but they shop all garage sales, craigslist, thrift stores. I get it they probably don't spend as much but I really question that. I mean 5 years of a storage unit?

I don't say this but I'm thinking this in my head. Either way the things in your house costs a lot. I'm not perfect, not by a long shot. I have a lot of junk in my house that I am struggling to downsize and be motivated to get rid of it.

I write this because I am panicking that we are moving into a really small house compared to what we were hoping for and I know there isn't storage. So I am trying to come to terms that I may have to purge more upon moving.

But ever item I look at and ask "does it make me happy" I tell myself it's just stuff. Yes it cost money to buy. But it costs just as much to store. And my life can't be ruled by things.

I need to live comfortably and having less stuff to fit into the house we bought is a priority. The answer is not make more money and buy a bigger house. The answer is make your space work for what you can afford. Maybe if you can't fit your stuff then stop buying things is the answer.

Today's mini goal purge 1 box from the garage. Go through it and sort what I keep and I was discard.

We can't unfortunately make it to my cousin's wedding. I'm not sure how much to give in "gift" value. Culturally my mom has always said you give the value of your meal if you go. This is pretty much true and usually it's cash. It also increases if family. However we aren't going.

I'm sad to not be going but with everything the way it is, we just couldn't have gone. It's a super busy time for us with moving that it wouldn't have made sense.

That being said I was thinking from their registry a $39.99 gift from bed bath and beyond with a 20% off coupon so still free shipping at $32.00. Then use a BBB gift card I bought on Giftcardgranny which I save 10% on so $22.50 for $25. And that will bring my spending to around $30? Is this ridiculously cheap? Do I seem cheap?

I know it's the thought that counts. If it were a friend I might have just sent a nice card. But I usually send gift cards to target when other relatives haven't registered.

I guess I don't want to look too cheap. But at the same time I wonder if I have to give $100-200 gift since we aren't going? UGH. I hate this social etiquette thing.

So we bought our house. We still have about 1.5-2 years of living expenses in cash. But we are planning on doing some extensive remodeling of the basement. We also have to stash another $15k for 2017 Roth IRAs and college savings. I'm thinking also that we should start $2k for each DK into a 529. That would take our savings to $19k plus $18k into the 401k.

I find myself hesitating because I don't want to not enough cash on hand to do a remodel cash. But it's a strange feeling after sitting on so much cash to be down to a more reasonable number and still hesitating to invest it.

Plus I feel like we have a tentative spending budget but there are a lot of variables we can't account for yet. Maybe by the end of the year I'll feel comfortable enough to invest some of our cash.

What about everyone else? My goal is 6 months cash on hand and the rest is invested. We used to live like this but when we moved without income we bumped it up to as much as possible.

I see a lot of gofundme pages for people. I get it that people are not financially prepared for something to happen to them. It's always unexpected.

I've never donated but now a friend has been diagnosed with cancer. And is really pushing donations because they are out of work. Being self-employed they don't work they don't make income. I haven't donated yet.

Do most people donate? If so how much? I have dropped off food every 3-4 weeks for the past 5 months instead. I felt it more personal it has certainly cost me more than $100. Should I have just donated cash?

I guess I get uncomfortable donating to all these things. I don't mind donating to organizations and I do. I also don't mind people's fundraisers. But this more personal donating to someone feels strange.

Do people really do it?

No way will my DH go along with paying down the mortgage early. It goes against all his brain power. It's an emotional thing and I get it. Paying down the mortgage isn't logical nor mathematically correct. But it feels good emotionally. It makes you mentally happier I think personally. But he's data driven so no way am I getting around him on this.

But being 38 and 39 and starting a 30 year mortgage is annoying. I don't care that it makes sense. I don't care that even after retiring it makes sense to draw from a portfolio and pay our mortgage. I like the idea of not owing anyone on our house when we retire. But marriage is a compromise.

So instead I'm going to track our progress to having enough money in our taxable accounts to pay our mortgage in full. Since every penny and bonus we don't spend we invest/save it's reasonable to assume I might be able to talk him through cashing out and paying the mortgage when we retire.

I also think at that point we'll be really FI. Right now we are can pay off 18.93% of our mortgage.

Do I have any goals? I'd like to have 10% of our mortgage a year saved. That is a very big stretch goal. We are on track with principal paydown to paydown about 2% a year in the beginning. Adding another 10% seems like a lot. That would put us at 10 years until we have enough to pay off our house. Life has a way of happening. Plus having enough to pay off our house isn't enough to retire on. That's just a start.

So I wanted to see how compounding has worked for LAL and DH. DH started saving in 2005 when he got his 1st job and LAL started probably in 2001 but didn't save much! I have never had a 401k so my entire retirement account has been in Roth IRA. Here are my balances on the first of the year. In 2005 was the first time I contributed the maximum of $4000. The total contributions for 2005-2016 is $59,000.

1/1/2003 $1,604.43
1/1/2004 $1,649.98
1/1/2005 $1,523.08
1/1/2006 $5,797.28
1/1/2007 $6,055.02
1/1/2008 $11,247.42
1/1/2009 $11,964.48
1/1/2010 $18,810.28
1/1/2011 $21,820.45
1/1/2012 $29,829.13
1/1/2013 $39,922.18
1/1/2014 $62,515.36
1/1/2015 $77,467.00
1/1/2016 $83,467.30
1/1/2017 $93,054.38

On January 1st, 2017 I would have contributed at total of $59,000. But in reality I only contributed $53,500 since I didn't make my 2016 contribution till 4/1/17. So based on compounding I made $39,554. ($39,554/53,500)/12 for a rough estimate return of 6.16% return. The proper way would be to calculate each year but I'm tired.

Currently though with my $5500 2016 contribution I have $104,926.89 in my Roth IRA. Not to shabby considering I have now contributed $59,000 and still have to do 2017 $5500 contributions.

DH is a lot more impressive but he's had a 401k with match.

DH Roll DH IRA 401k B 401k V 401k F


$0
$4,000 $0 $4,871
$4,148 $24,581
$8,322 $9,351 $38,895
$27,149 $13,642 $21,491
$18,497 $38,484 $59,763
$74,170 $100,378
$81,580 $121,116
$97,781 $165,139
$134,170 $247,078
$148,742 $288,367
$148,993 $320,533
$228,543 $304,448

Starting with zero in 2005 he contributed in 2005 the maximum IRA $4000 and $4871 to a 401k. Not bad considering he worked 2 months out of the year. As of January 1, 2017 he has a total $532,991 for retirement in 12 years. He also did not contribute for 2016 IRA but did max out the 401k for 2016 so we didn't miss a year. He contributed $251,000 so an approximate return of 9.36%. Not too shabby. Plus with the $5500 2016 contributions and 401k this year he's at $598,962. We broke the $700k retirement savings mark combined.

I'm not sure where we are heading but we are up $77,840 for the YTD and 2016 we went up with contributions and returns $73,501. 2015 we made $40,157, 2014 we went up $73,151.

I am going to guess we're getting over the hump where our returns will be more than our contributions annually. Which is $29k/year.

While not fantastic or super exciting I'm thinking that overall we're average boring investors in index funds now. Before DH would try to pick stocks which might explain why our returns are poor compared to the market. It also could be we had a few bad years in 2008-2010. But overall I think in another 10 years we'll see around average 8% returns.

We closed on our house yesterday. Nothing different. Didn't even move. Just said thanks and ate dinner. Little less than 2 years.

Someone said to me "buying a home is the road to being wealthy." I said "I feel more poor because our mortgage is way more expensive than renting." The person rolled their eyes at me.

I said it doesn't matter whether you rent or buy. The person who becomes wealthy is one who can save in either situation. If you can save the difference between the rent and mortgage then you'll become wealthy. Truth is that anyone who saves the difference and invests it will come out ahead.

But owning is nice stability. FWIW renting probably put us behind because of the appreciation of homes in the areas we sold and bought in. But at the same time we did bank all the extra money and in 1 year we're back to where we should have been financially before we took a sabbatical.

So owning is NOT the end all be all to becoming wealth. Saving money is.

There was an article I read recently that saving $2000/year per year your child is will allow you save half the cost of a public university cost in state.

$2k rule

The article says if you save $2000/year for a child that you will have $36k after 18 years. Pretty obvious statement. The article says most people don't save for college because they have no guidelines and think it unachievable. But if people followed this guideline it would seem more reasonable goal.

I figure anything you save like retirement will help. I just checked and DK1 has $19,976 and is 7 years old. We haven't contributed this year so we've contributed $12k. And DK2 is 4 and we haven't contributed this year so $8k contributions but has $13,024. Granted the markets have been good to the kids. But I'm just investing in VTI and being boring.

I will contribute after we buy the house each another $2k this year. I'm thinking maybe by 18 each kid could have $50k? Definitely about 50% of the cost of public school tuition. Also assuming we don't save any more.

I'll keep everyone posted as we go along. Since we really did start when they were born and are saving $2k into a ESA it'll be a good litmus.

I can honestly say I laughed when I read this article about this women who spent

$41,000 on Amazon

She realized that she bought 427 items in 2014 or more items than days in the year. She makes a lot of money (I think $170k/year) and works for google. But she talks about how easy it is to mindlessly spend online.

I agree 100%. I know MANY people who spend thousands of dollars a month online shopping. I am friends with tons of them. I hear things like I just spent $1000/month on Amazon. I buy everything on Amazon. When I ask what do you spend, it's shocking.

I've spent $79.74 all year on amazon on 4 items. I am spending another $89 on 2 book collections this weekend Roald Dahl 15 book $48.99 and Laura Ingalls Wilder $33.99 9 book set. We do go to the library weekly but I try to buy books that are classics for my kids. I am not sure where my books went but these we'll keep and we love going to the library otherwise.

I bought ada twist scientist 10.99, usually I don't buy these sort of new books, desk chair 44.99, face ski mask 9.99, and pencil sharpener 13.79. Yep 4 items. Before buying I tend to shop around even online.

But what's worse? How many people are mindless drones and they shop on amazon though the prices are not the best. I have a friend who has laundry detergent, soap, etc all delivered for the convenience. But I pointed out she's a member of costco and shops there anyway why not buy the stuff in bulk cheaper. Her answer is that it's easier to have it delivered instead of shopping sales at costco and waiting for deals. The true irony is she wonders why they can't afford to buy a house or save money?

Probably because when I make a suggestion like shopping at costco and watching deals the answer is it's not worth their time. And pointing out that online shopping can easily lead to overspending. The answer is that it doesn't it saves money because it's cheaper.

I would have to guess that the truth is overspending is overspending whether you do it online or in stores. I actually think it's easier online because you are so disconnected from the feeling of spending that you click and buy it charged to a debit or credit card.

The woman in the article talks about it. I have to admit I try to not online shop because I think I spend more online. I think I lose track of my spending. But maybe I'm in the minority if so many people do it.

Do you shop online a lot? Does it save you money? Or do you spend more? Are you sure it's cheaper?

I just spent an hour pricing out boxes from amazon versus uhaul. Yes I have to go to uhaul but most packing supplies are cheaper at uhaul except tape, and they have an better return policy. Of course I have to go to uhaul but it's worth it.

This is the first time we are moving into a place and having a list of things we have and want to buy. Usually we move in and make do with what we have. I guess because this feels more permanent, and we have money we are making a list of items we want.

We are buying the king size bed we've wanted for 10+ years but never gotten. Just the mattress, we have to figure out the frame later. Also a tv and grill are on the list. 2 years when we moved we didn't have any income so it didn't make sense to spend money when we had none coming in.

We are also replacing the kids beds. They are both in queens and we want to move them to smaller beds and get them desks. For now the DK1 will get a twin bunk bed and the DK2 will keep twin until we figure out our guest room situation. So we are able to sell/recycle two queen size beds. The truth is one is our old bed which we handed down when we bought a foam mattress. The other a friend gave us and so we didn't pay for it.

Right now we are looking at $1150 for a king size purple mattress for us. Two twin mattresses for the bunk bed.

We also need stools for our island. But since I can't recall if it's extra tall or regular counter height i'll buy them asap when we move in.

We also shopped playsets but they are so expensive that DH instead wants to try and buy a used one on craigslist because it appears that many people just try to get rid of it after their kids outgrow it. So though we budgeted $2000 we're going to see if instead we can spend $500 and get something better quality.

Interestingly we bought a lawn mower and seeder from our sellers. We were driving by their house yesterday and they were having a garage sale. DH and I were going to drive by when he sees the lawn mower. He stops and hops out and offers them money because hey we need it. So for $25 we got a mower and seeder.

As far as packing? Right now we are starting to sell and purge what we don't need. I think more than packing selling and getting rid of stuff we don't need will probably help more in the long run. We have quite a few items we are looking at and will start selling or donating.

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.

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.

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.

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.

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?

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.

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 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.

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.

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?

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?

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. 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.

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.

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?

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?

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.

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.

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.