When we bought our first house, I was shocked at all the things I found myself buying. Our landlord had provided us with a garbage can at our old apartment, but now trash day was coming up and we had no can. Our old tomato-red towels looked terrible against the light yellow tile in the new bathroom. We had 1700 square feet of hardwood floors, and only a few small area rugs. We had so many more windows, and only a few pre-fab curtains that didn't fit anywhere.
But for some reason, I thought with our second house, this wouldn't happen. We already had everything, and the new house is only 500 square feet bigger than the old. Except I forgot to account for my own urge to buy my dream furnishings now that I'm in my dream house.
I am trying to keep myself in check. I really am. But there is so much I want, and so much I need, for the new house. And I'm not always sure whether something is a want or a need.
Example:
I've spent about $200 on perennials, edging material, and tools for the new yard. Of course that's a want. But when I talked my spouse into agreeing to move, and doubled our monthly mortgage payments, all because I wanted a yard big enough for a vegetable garden, it seems silly not to get the stuff I need to start the garden, right?
And now we have two bathrooms. The old towels look fine in either bathroom, but we all tend to use both bathrooms. It sucks to get in the shower and realize my towel is upstairs in the other bathroom. So I bought a second set of towels.
And the furniture! In most cases, the old stuff is just fine. But in some places we have nothing that will fit. And now that I have a beautiful new dining room with high ceilings, I am tired of that old flimsy hollow-core Ikea dining table. It cost us $80 almost 8 years ago. I want grown-up furniture. And our bed is still just a mattress and box spring resting on the floor--the newly refinished 100-year-old pine floor that is getting scratched by the staples in the bottom of the box spring. I want/need a real bed frame.
All this is adding up to a lot of money. So far, we have only spent a few hundred dollars on new stuff for the house, but we're up late at night shopping for furniture online, and we've made scouting trips to Ikea and to a place that sells imported antique furniture from Asia. We're getting close to pulling the trigger on a $1000 dining room table.
How much is a reasonable amount to spend to furnish our new house? I really have no idea. I just know that this time I don't want to buy anything that is just "good enough for now." I'd rather wait until I can get what I'm going to want for the long haul, even if it means I have to sleep on the floor a little bit longer.
24 August 2009
26 June 2009
The recession hits my family
Not my tiny three-person family, not the family I have to feed and clothe. We're still fine. My spouse still has his job. I still have my three jobs.
It's the rest of my family that's hurting.
One relative owns her own business. Thankfully, it seems to be pretty recession-proof, because the services she offers can save people money. So her income is okay. But she has an albatross of a house she can't sell, and that's having a really big impact on her life. She's having some health problems, and the house takes a lot of work to maintain, especially to keep it pristine for the few potential buyers who come to see it. She is also hoping to relocate to a less expensive area, but she can't do that til her house sells.
Another relative is a salesman. His income is commission-based, and he has had no commissions so far in 2009. Zero. Meanwhile, his company pays him a salary based on expected future commissions, so he's essentially going into debt to his company every month as they pay him for commissions he has not yet earned. He has worked for the company for decades, and this is the first time he has ever been behind like this. He has suffered some big investment losses, and is also living in an expensive area, trapped in a too-big house.
A third relative, also in sales, has just been fired. Although he's been in the job for many years, and had several years in there where he's helped triple the company's sales in one year, the recession has taken such a big bite out of revenue that the sales organization needed a fall guy. That's him. He's got a kid in private college, and another one approaching college age. Fortunately he's got another job lined up, but it's a temporary position.
And then there are the friends, the one who was laid off and is the sole earner for a family of four. There is the friend who took a much lower-paying job he hates rather than stay unemployed. There are the stay-at-home mothers who are going back to work much earlier than they hoped, or at least looking in vain for jobs. And in my area there are a lot of families pulling kids out of private schools because of money, or sending the youngest kids to public school while the older ones stay in their private prep schools.
I know all signs point to the end of the recession being closer, but it seems to be hitting my friends and family more and more all the time.
Anybody else noticing this? I feel very lucky not to be directly effected, but this is very hard to watch.
It's the rest of my family that's hurting.
One relative owns her own business. Thankfully, it seems to be pretty recession-proof, because the services she offers can save people money. So her income is okay. But she has an albatross of a house she can't sell, and that's having a really big impact on her life. She's having some health problems, and the house takes a lot of work to maintain, especially to keep it pristine for the few potential buyers who come to see it. She is also hoping to relocate to a less expensive area, but she can't do that til her house sells.
Another relative is a salesman. His income is commission-based, and he has had no commissions so far in 2009. Zero. Meanwhile, his company pays him a salary based on expected future commissions, so he's essentially going into debt to his company every month as they pay him for commissions he has not yet earned. He has worked for the company for decades, and this is the first time he has ever been behind like this. He has suffered some big investment losses, and is also living in an expensive area, trapped in a too-big house.
A third relative, also in sales, has just been fired. Although he's been in the job for many years, and had several years in there where he's helped triple the company's sales in one year, the recession has taken such a big bite out of revenue that the sales organization needed a fall guy. That's him. He's got a kid in private college, and another one approaching college age. Fortunately he's got another job lined up, but it's a temporary position.
And then there are the friends, the one who was laid off and is the sole earner for a family of four. There is the friend who took a much lower-paying job he hates rather than stay unemployed. There are the stay-at-home mothers who are going back to work much earlier than they hoped, or at least looking in vain for jobs. And in my area there are a lot of families pulling kids out of private schools because of money, or sending the youngest kids to public school while the older ones stay in their private prep schools.
I know all signs point to the end of the recession being closer, but it seems to be hitting my friends and family more and more all the time.
Anybody else noticing this? I feel very lucky not to be directly effected, but this is very hard to watch.
08 June 2009
House sale update
Our enormous gamble paid off.
We found a new house to purchase, went under contract, went to settlement, and only then did we put our old house on the market. Fortunately we got multiple offers within a week and we are now living in the old house until it sells and fixing up the new house.
Now we just have to keep our fingers crossed that the sale on the old house will go through without a hitch. And we have to fix up the new house quickly so we can move in. And we have to adjust to heating and maintaining a larger house. And we have to adjust a larger mortgage payment. The old house has a payment of $585 per month. The new house has a payment of $1320 per month. Ack! But much of the difference will be made up by not having to pay preschool tuition any more, since our son will be in public school in the fall.
Fortunately, we're still employed, although one of my employers has been trimming hours a bit. So far I've lost only a little bit of work.
And now I'll subside back into defunct-ness. I hope the recession isn't hitting any of you too badly.
We found a new house to purchase, went under contract, went to settlement, and only then did we put our old house on the market. Fortunately we got multiple offers within a week and we are now living in the old house until it sells and fixing up the new house.
Now we just have to keep our fingers crossed that the sale on the old house will go through without a hitch. And we have to fix up the new house quickly so we can move in. And we have to adjust to heating and maintaining a larger house. And we have to adjust a larger mortgage payment. The old house has a payment of $585 per month. The new house has a payment of $1320 per month. Ack! But much of the difference will be made up by not having to pay preschool tuition any more, since our son will be in public school in the fall.
Fortunately, we're still employed, although one of my employers has been trimming hours a bit. So far I've lost only a little bit of work.
And now I'll subside back into defunct-ness. I hope the recession isn't hitting any of you too badly.
19 February 2009
Psychologically important, and a bit of rambling
The Dow closed below 7500 today. I am so not logging into my retirement accounts. But who cares about retirement accounts right now, anyway? I am just glad to be employed.
In other news, I am not busier this week, really, but for some reason I am feeling more underwater than usual. There was some unexpected extra work that cropped up on one of my projects, and I finished another project on Sunday that I've been working on for about six weeks, but other than that it's all business as usual. Why the perpetual stress-headache?
Probably the holiday on Monday (President's Day) threw me off. I did a bit of freelance work but not much, and worked at my moonlighting gig in the evening, but my spouse and my kid were home that day so it felt like a play day. Also, I took most of the day off today to spend time with my sister, which was long-scheduled and totally enjoyable. And tomorrow I'm knocking off work early to go on a weekend trip. So there has been less time in which to do the same amount of work. Oh, and I had to run around picking up medical results and getting blood tests and so on, nothing major, just putting in the extra time it takes to be a responsible cancer survivor. Having health issues can really be like having another part-time job. And I'm taking a class this semester and I'm trying to stay caught up with that. Also, this blog, which I neglect terribly, has seen some activity lately--a new advertiser, and a few other inquiries.
Okay, that's a long list. I'm allowed to feel a bit overwhelmed. I'm pretty much caught up now, though, and I am looking forward to seeing some old friends this weekend. One is a friend I've known since I was a kid. The other one I've known since 1996. So it will be nice to catch up, meet one friend's new fiancee, see the other friend's little boy.
Have a good weekend, everybody.
In other news, I am not busier this week, really, but for some reason I am feeling more underwater than usual. There was some unexpected extra work that cropped up on one of my projects, and I finished another project on Sunday that I've been working on for about six weeks, but other than that it's all business as usual. Why the perpetual stress-headache?
Probably the holiday on Monday (President's Day) threw me off. I did a bit of freelance work but not much, and worked at my moonlighting gig in the evening, but my spouse and my kid were home that day so it felt like a play day. Also, I took most of the day off today to spend time with my sister, which was long-scheduled and totally enjoyable. And tomorrow I'm knocking off work early to go on a weekend trip. So there has been less time in which to do the same amount of work. Oh, and I had to run around picking up medical results and getting blood tests and so on, nothing major, just putting in the extra time it takes to be a responsible cancer survivor. Having health issues can really be like having another part-time job. And I'm taking a class this semester and I'm trying to stay caught up with that. Also, this blog, which I neglect terribly, has seen some activity lately--a new advertiser, and a few other inquiries.
Okay, that's a long list. I'm allowed to feel a bit overwhelmed. I'm pretty much caught up now, though, and I am looking forward to seeing some old friends this weekend. One is a friend I've known since I was a kid. The other one I've known since 1996. So it will be nice to catch up, meet one friend's new fiancee, see the other friend's little boy.
Have a good weekend, everybody.
17 February 2009
House hunt update
We are super discouraged. The first couple houses we liked turned out to have insurmountable problems. One was the right size, but the layout was really weird and couldn't be fixed easily. Also, we both hated the kitchen for different reasons. No matter, this is all part of getting clearer about what we want. I can't live without a bedroom that DOESN'T open into my son's room. My spouse can't live without an eat-in kitchen because he cooks a lot and likes to have company while he cooks.
The next house was much better. It had great flow. I loved the way it looked outside and in. It had a nice yard that backed up on some other nice well-kept yards that had gardens and toys, so we anticipated lots of neighborly playdates where the kids could just climb the fences to play in each other's sand boxes. But it is not much bigger than our current house, although it has 5 bedrooms instead of 3. Also, the basement seemed chronically musty and damp, and there were only a few tiny closets in the whole house. Conclusion: We'd have to use at least one bedroom as a large walk-in closet. We'd be shoehorned into that house from day one. That house was eliminated.
Then we found a house with a nice big yard, gorgeous Victorian woodwork everywhere. Love love love that house. The problem? It is really enormous. I have sort of gotten used to the idea of heating, maintaining, and cleaning all that space, but my partner is adamant that he doesn't want a house that big. We agreed that it would work if we could rent part of the house out. That may be feasible but we're still trying to figure out how to get around the zoning board. Major headache. Meanwhile, we have been trying to decide on this one particular house for several weeks now. Nothing else in our price range is coming on the market. Eventually someone else will buy the house from under us if we don't make a decision. In some ways it would be a relief if it sold to someone else. That's probably a sign that we shouldn't buy it, but we don't see anything else we like.
We are talking about ways to rearrange our current house to make it more livable. I am sad about that. I have been wanting to move for the entire 5 years we've been in this house and I finally finally got M to agree. Now we can't find a house.
I am trying to save money, trying to make a decision about the big house, and hoping more things come on the market soon. Meanwhile I'm starting to get worried that if the economy drops even further, even our very secure jobs will become less secure. And if we did buy a house with a rental unit, what if rents dropped significantly? What if we get a tenant and that tenant loses his/her job? There are many things to be anxious about.
Luckily, work is going well, and we are still employed. We still have an affordable place to live for as long as it takes for us to find something else. We have agreed we're not going to put this house on the market until we're under contract somewhere else, and in the meantime we are slowly getting this house ready to sell.
I'll let you know when we have some movement on the house situation.
The next house was much better. It had great flow. I loved the way it looked outside and in. It had a nice yard that backed up on some other nice well-kept yards that had gardens and toys, so we anticipated lots of neighborly playdates where the kids could just climb the fences to play in each other's sand boxes. But it is not much bigger than our current house, although it has 5 bedrooms instead of 3. Also, the basement seemed chronically musty and damp, and there were only a few tiny closets in the whole house. Conclusion: We'd have to use at least one bedroom as a large walk-in closet. We'd be shoehorned into that house from day one. That house was eliminated.
Then we found a house with a nice big yard, gorgeous Victorian woodwork everywhere. Love love love that house. The problem? It is really enormous. I have sort of gotten used to the idea of heating, maintaining, and cleaning all that space, but my partner is adamant that he doesn't want a house that big. We agreed that it would work if we could rent part of the house out. That may be feasible but we're still trying to figure out how to get around the zoning board. Major headache. Meanwhile, we have been trying to decide on this one particular house for several weeks now. Nothing else in our price range is coming on the market. Eventually someone else will buy the house from under us if we don't make a decision. In some ways it would be a relief if it sold to someone else. That's probably a sign that we shouldn't buy it, but we don't see anything else we like.
We are talking about ways to rearrange our current house to make it more livable. I am sad about that. I have been wanting to move for the entire 5 years we've been in this house and I finally finally got M to agree. Now we can't find a house.
I am trying to save money, trying to make a decision about the big house, and hoping more things come on the market soon. Meanwhile I'm starting to get worried that if the economy drops even further, even our very secure jobs will become less secure. And if we did buy a house with a rental unit, what if rents dropped significantly? What if we get a tenant and that tenant loses his/her job? There are many things to be anxious about.
Luckily, work is going well, and we are still employed. We still have an affordable place to live for as long as it takes for us to find something else. We have agreed we're not going to put this house on the market until we're under contract somewhere else, and in the meantime we are slowly getting this house ready to sell.
I'll let you know when we have some movement on the house situation.
11 January 2009
Mortgage shopping then and now
We are looking for a new house. Our current house lacks a yard and a home office, and the lower house prices around here are really tempting. We're not totally positive yet that we'll be moving, but it's changed from "possibly" to "probably."
And so we're also shopping for a mortgage. I've been struck by the differences in our situation now versus when we bought our current house in 2004. And I've been struck by the differences in the responses we're getting from mortgage providers.
Then:
We had a new baby. I had a new part-time job which the mortgage company wouldn't consider because I hadn't been working there very long. My spouse was working full time and earning $37,000 per year. On that $37,000 household income our lender said we could borrow up to $300,000. We told the bank's agent that there was no way we could afford to buy a house that cost that much. She was offended. I will never forget this. She said, "We would never approve you for a house you couldn't afford." They were pushing us toward an 80-10-10 loan, where we'd put 10 percent down, have an 80 percent first mortgage and a ten percent second mortgage. We had the down payment but knew we couldn't make the payments. We decided we could buy a house costing $130,000, max. We were delighted to find one that cost only $70,000, and we were able fix it up right away because the down payment and monthly payments were low.
Now:
We have a five-year-old. I have the same part time job, and I'm also doing a lot of freelance writing now, partly as a result of finding clients through writing this blog. My spouse is working 4/5 time for his same old employer. Our annual income fluctuates a lot but is around $75,000-85,000. Taking that lower number of $75,000, a mortgage broker told us that we could borrow up to $200,000. She is urging us to go with an FHA loan, which requires a very small down payment (I think it's 3 percent). She said it's easier to get financing with an FHA loan right now. We're unwilling to put less than 20 percent down, even though we'll have to use a home equity loan on our current house to do that. We're hopeful that this house will sell easily because it's a good starter home.
We'll see what happens. It's certainly more fun looking for a house in a buyer's market, but when we are the sellers this might be a painful process.
And so we're also shopping for a mortgage. I've been struck by the differences in our situation now versus when we bought our current house in 2004. And I've been struck by the differences in the responses we're getting from mortgage providers.
Then:
We had a new baby. I had a new part-time job which the mortgage company wouldn't consider because I hadn't been working there very long. My spouse was working full time and earning $37,000 per year. On that $37,000 household income our lender said we could borrow up to $300,000. We told the bank's agent that there was no way we could afford to buy a house that cost that much. She was offended. I will never forget this. She said, "We would never approve you for a house you couldn't afford." They were pushing us toward an 80-10-10 loan, where we'd put 10 percent down, have an 80 percent first mortgage and a ten percent second mortgage. We had the down payment but knew we couldn't make the payments. We decided we could buy a house costing $130,000, max. We were delighted to find one that cost only $70,000, and we were able fix it up right away because the down payment and monthly payments were low.
Now:
We have a five-year-old. I have the same part time job, and I'm also doing a lot of freelance writing now, partly as a result of finding clients through writing this blog. My spouse is working 4/5 time for his same old employer. Our annual income fluctuates a lot but is around $75,000-85,000. Taking that lower number of $75,000, a mortgage broker told us that we could borrow up to $200,000. She is urging us to go with an FHA loan, which requires a very small down payment (I think it's 3 percent). She said it's easier to get financing with an FHA loan right now. We're unwilling to put less than 20 percent down, even though we'll have to use a home equity loan on our current house to do that. We're hopeful that this house will sell easily because it's a good starter home.
We'll see what happens. It's certainly more fun looking for a house in a buyer's market, but when we are the sellers this might be a painful process.
04 December 2008
Net worth report for December 2008
Our household net worth is slipping, of course, but not plunging.
As of Dec 1, we were at about $223,000. Retirement accounts and college accounts are in the toilet. Cash is holding steady but will go down when I pay taxes in a couple months. I save 35% of my freelance income in a special account set aside for taxes, and that will be depleted if not wiped out when I pay my 2008 taxes. I recently paid all the back taxes I owed the City of Philadelphia because I didn't know I was supposed to be paying the Business Privilege Tax and the Net Profit Tax on my self-employed income. I learned about it a few months ago and just submitted tax returns to the city for 2004, 2005, 2006 and 2007. Maybe they should publicize those taxes better....
I'm rambling a bit. Must be bedtime. Long, long day.
Complete net worth report is here:
https://www.networthiq.com/people/TBH
As of Dec 1, we were at about $223,000. Retirement accounts and college accounts are in the toilet. Cash is holding steady but will go down when I pay taxes in a couple months. I save 35% of my freelance income in a special account set aside for taxes, and that will be depleted if not wiped out when I pay my 2008 taxes. I recently paid all the back taxes I owed the City of Philadelphia because I didn't know I was supposed to be paying the Business Privilege Tax and the Net Profit Tax on my self-employed income. I learned about it a few months ago and just submitted tax returns to the city for 2004, 2005, 2006 and 2007. Maybe they should publicize those taxes better....
I'm rambling a bit. Must be bedtime. Long, long day.
Complete net worth report is here:
https://www.networthiq.com/people/TBH
Giving thanks
Around thanksgiving I always get a sappy phone call from my mother saying she's thankful to have me. Shucks, mom. And this year on Facebook I got a few nice "I'm thankful for you" messages and wall posts. I'm thankful for my family and friends too, believe me, but you know what I have been feeling really thankful about?
I'M EMPLOYED.
These are scary times. I am so, so glad that I have a steady job. My freelance gig is not set in stone, but my part-time job is very secure because a.) it's a union gig and I have a decent amount of seniority and b.) it's in higher education and people tend to flock to college during tough economic times to improve their job prospects.
I'm not so thankful about the state of my retirement accounts, but at least I have them. I was at a conference a few weeks ago and someone said he was glad he hadn't contributed much to his retirement account because he didn't have a lot to lose in that case. I know many people who have locked in their losses by "going to cash", that is, selling securities and keeping the money in savings or money market accounts. I have one colleague who told me she and her husband are planning to liquidate his 401k after January first and use the money to pay down their HELOC. I tried, gently, to talk her out of it, but I didn't want to be too bossy.
Me? I'm steadily putting money in, trying to ignore the wild gyrations of the market, and trying to rebuild my emergency fund now that I've paid for my new roof and decided not to replace my car.
Oh, and thanking my lucky stars every single day for my good job.
I'M EMPLOYED.
These are scary times. I am so, so glad that I have a steady job. My freelance gig is not set in stone, but my part-time job is very secure because a.) it's a union gig and I have a decent amount of seniority and b.) it's in higher education and people tend to flock to college during tough economic times to improve their job prospects.
I'm not so thankful about the state of my retirement accounts, but at least I have them. I was at a conference a few weeks ago and someone said he was glad he hadn't contributed much to his retirement account because he didn't have a lot to lose in that case. I know many people who have locked in their losses by "going to cash", that is, selling securities and keeping the money in savings or money market accounts. I have one colleague who told me she and her husband are planning to liquidate his 401k after January first and use the money to pay down their HELOC. I tried, gently, to talk her out of it, but I didn't want to be too bossy.
Me? I'm steadily putting money in, trying to ignore the wild gyrations of the market, and trying to rebuild my emergency fund now that I've paid for my new roof and decided not to replace my car.
Oh, and thanking my lucky stars every single day for my good job.
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