Confession: Even if home ownership is more expensive than renting, we’ll most likely still buy.
Not certainly, just probably. We also probably won’t wait to see if T gets tenure. Seven years is a long time to wait, and we may take a gamble. And if he doesn’t get tenure, I’m not so sure we’ll jump up and move wherever in the world he can get a new job. He might be “stuck” looking at his options locally. Maybe not, but I just can’t predict that.
I ran the New York Time’s calculator, and with our current rent and a $750k house (that is just a number, not a plan!), buying is NEVER better than renting. Looking at it more holistically, I compared what I’d expect to pay in rent for a more long term type of place. Still, it will take 11 years for buying to make more sense (without fiddling with the assumptions much).
I’m not sure how taxes are taken into consideration. I know we pay a LOT in taxes, and it is only going to get worse. I’ve heard mixed reviews about whether this is actually a big deal. I’ll eventually run some better numbers to get a handle on how much we’d be paying for the privilege (slash hassle) of owning a home, but for now, we’re just feeling out the options. Our timeline is to start looking more seriously next spring.
EIther way, step 1 is to save a lot of cash. We currently have about $50-$60k (excluding e-fund) that we saved throughout our marriage while T was wrapping up school, $60k as part of the moving package, and hope to save about $30k this year, not including any bonus from my job. In theory, we could buy with 20% down within a year. In reality, $200k might be a nice round goal, which puts us a little later. We could always ramp up savings by decreasing T’s retirement savings a bit, but he’s a bit behind me so dumping the max into tax-sheltered accounts probably smart for the first few years at least.
Next step: Scrub our ridiculous non-budget spending, and see where we could/should cut out things. I can think of two immediate places to cut: restaurants & wine. And clothes, I guess. More to come!
We’re at stage 0 of home buying, and I’m already overwhelmed.
We have approximately 20 neighborhoods we are considering, and we are looking for everything from a duplex (rent out half) to a small condo. I have no idea the lay of the school landscape. I have no idea what our budget should be. OK, that’s not true, but the numbers I’m seeing scare me, a lot. Is it a bubble? Will prices fall or rise? Should we get a sofa that we could use today, or save the money for a house? But where will our guests sit? I don’t like this neighborhood much, should we move, or stick it out in wait of a house?
I don’t even know the PROCESS we are going to use to decide where, when, and what to buy. I think that is what is driving me most nuts. How do people handle this?
I hope to write a new post with more budget-y information in it (not house related), but since it is equally likely I’ll run out of time / not make it a priority, I thought I’d throw out my home buying anxiety and see if anyone has any tips of how to get from step 0 to step 1. (Our timeline is likely at least a year.)
- Get at least an average bonus (this means I’m at least doing an average job). My ultimate goal is to position myself for a promotion, but I think this year will be too soon.
- Initiate at least one work social event
- Host a book club with work related book
- Apply for an exec. MBA, or decide for certain that it is not a good idea. I don’t want to go full time, and if I am going part time, this seems like the better/quicker route. It is earlier than the average for this, but with kids and such, it may be better to start sooner than later. I honestly can’t come up with a good time to do this (aside from 3-4 years ago), but I want this to stay on my radar until I actively decide it is the wrong choice.
- Max out our available retirement vehicles. That’s about $52k pre-tax, nothing post tax. (I’m not doing a back door Roth IRA for a few reasons.)
- Save $27k for a house. I need to revisit this number once I get our second month’s paycheck, but this is our initial target.
- Track all spending and stare it in the face each month! (If we aren’t going to budget, we at least have to be very aware of what we are spending.)
- Run 2 half marathons and have regular running (or other cardio) routine
- Be able to do 10 push-ups
- Incorporate something new into my routine, preferably strength related
- Invest in my mental health
- Plan a vacation to either France, Nepal, or Patagonia. Or Kilimanjaro. Yikes, I need to do some research here and figure out what I want to do!
- Take French class. Even if Spanish or Chinese would be much more practical. Whatever. I am in love with France right now. This is a big time commitment, and I’m on the fence of whether I want it or not. I don’t even know when I’ll be going back to France. But I do want to write this down as a goal.
- Find a volunteer organization and apply. I have a few in mind. I want it to be relevant to my long term goals and something that I believe in.
- Create a reading list for 2014 and read from it. (Substitutions allowed, but i have a zillion books I want to read.)
- Get a couch / loveseat / sofa
- Get out in nature once a month, and do at least one backpacking trip. I love mountains!
I’ll be checking back later! For the goal setters out there, do you have a hard time making short term goals without a long term vision?
Since the beginning of the year started off with a lot of , I made “January / February” goals, so I don’t have any goals to report on. Still, here is how January went.
Budget: I revised our money tracking system into something simple and usable, and I’m back to tracking our expenses. This gives me huge peace of mind, even though the numbers this month were too outrageously embarrassing to share. Let’s just say that there is lots of opportunity for improvement in February, which has the advantage of being the shortest month of the year. Some of it was moving expenses, some of it was really amping up our new wine hobby, and some of it was new job related. The rest was just indulgence. :)
Income: We both got our first paychecks of the year! I think mine is a little smaller than typical since I started a few days into the month, but I haven’t seen the paystub just yet. It was direct deposited yesterday, without the details. We have to set up our pre-tax retirement savings and budgets, and hopefully I’ll have a good feel for our month cash savings potential next month.
Career: The new job is going well, and the career change is still bittersweet. My new coworkers are awesome, it is so fun working in a real city, and I’m staffed to my first client project. The work is very different and I’ll learn a lot, but there are a lot of things I miss about my old job, and about engineering in general.
Not without bias, I think engineering is an inherently rewarding career. I love challenges and problem solving and designing. I like the satisfaction of pointing to something and saying “I designed that useful thing.” My new job has problem solving, but it is very different. I am excited about it, for sure, but I also really enjoyed my previous career. Plus, I was good at it. Now I’m a newbie again.
There was a possibility that I’d have to travel (up to 100%), but for this client, I don’t have to. This is really lucky. If I weren’t married or in a relationship, traveling would be no problem and maybe even fun (at first). Since T and I have already spent enough time apart, I’m thankful that I don’t have to travel yet.
Life: We haven’t done too many interesting things in our new area yet. We’re still settling in a bit, and I haven’t been my usual planner self. Maybe that will be another February goal. :)
My new job is going well, our new home is going well, and I am back in the running game prepping for an April half marathon. I don’t think that I’ll be shooting for a PR this time, but we’ll see how training goes! The dust from our move is settling, and a lot has been going on in our finances.
- This is the longest I’ve gone without a paycheck since I started working in 2006!
- Also, this is the first MLK day I’ve had off since I started working in 2006!
- Due to lack of paychecks (for me at least), we are taking advantage of the float on our credit cards for the first time ever. This isn’t really about necessity, but it helps with immediate cash flow.
- We’ve been doing better at eating in most nights, but worse on lunches. We’ll need to get back in the habit of packing lunch more often.
- Other spending has also been higher than usual. I think that this will relax in February, with the exception of one really really great and expensive meal planned. And probably a bed frame (Ikea, $500 budget).
- Since we recently moved, I’ve been buying a lot of “i want it” items randomly. Most are small, but being in the habit of regularly getting packages is getting a bit daunting. Returning things that don’t work out is also annoying Again, this will be an area for focused improvement in February.
- And less wine spending too. We’ve started a decent collection, but it is definitely time to relax on that!*
- As you can tell, we’re investing time and money to make our place feel like “home”, even though we’ll move out in ~2 years. I miss our old “home” so much, and I’m trying to compensate.
- We are trying to be smart and only buy things that we can take forward with us to other places.
- Our income is crazy high (for us) this year, but I don’t want to get used to having two salaries of this size. I want us to have options.
*We may or may not have pulled out the trash compactor and put in a wine fridge… We have to keep the compactor in order to put it back where we found it when we move out… so it is in our living room under a table cloth. We got a big canvas and T is going to create us some new art to put in front of it. (He’s a great artist, when he has time.) A painting on the floor may be a little odd, but better than an obvious trash compactor. in the living room. Right? Hmm… Yeah, that was T’s “I finally have a real job” present from us both, for us both.
An electrician by trade and a generous and friendly person by nature, my dad is someone who always “knows a guy.”
He did much of the work on the house we had built when I was young. While I’m sure plenty of people were paid in the construction of the house, I have memories of a lot of his friends coming over to help out on weekends. Even I “helped” shingle the roof, much to my mom’s horror. (I was about 9 and playing on a roof…) A few years later, I remember tagging along with my dad as he helped his best friend wire his house.
I didn’t always see this as a positive. When I had car troubles – which was often, as he’d buy cheap old huge Buick’s for is teenage daughters to use until the car died – I’d have to wait around for “his guy” to get around to fixing it at whatever discounted quid-pro-quo arrangement my dad had made. When something needed to be done around the house, it often wouldn’t get done in any reasonable amount of time for similar reasons. Yet, I can’t imagine the money it has saved him, the number of inexpensive cars it showed him ;), and the feelings of connection & humanness it brought my dad and “his guys.”
When it came time for me to go to college, my dad’s “guys” had no connections or advice. That wasn’t their world. I didn’t have close relationships with any adults that were adept in that world, really.
After I’d decided to go to the local state school and major in engineering, the father of a high school acquaintance reached out to me and offered to connect me with the department chair, and tried to get me set up with a position in a research lab. He was a doctor and had a reputation (from his children) of pushing them to succeed. I didn’t know him well, yet he had noticed I was smart and driven, and he did what he could to help out. It was the same thing my dad may have done, but in completely different circle – a circle with department chairs and academics.
I got my first job in college through on-campus interviews. My now-husband passed my resume to someone he’d met at some event for his grad school, which led to my second job. My most recent job was a referral from a friend I met my first year in L.A. Even though I consider myself poor at networking (or ”relationship-building “or “connecting”), networking has led to opportunities. Imagine the opportunities I could have if I was actually good at it!
One of the reasons I pursued my latest career change was because I knew it was a path that would allow (and require) networking. I knew I would learn a lot of hard skills, but I also would have a chance to work on my soft skills. My soft skills are good – for an engineer. In the business world, I have a ways to go. So, this year I’m going to work on my soft skills, on networking, and on building relationships. I’m going to help others when I can, and try to learn from those who can help me. I don’t exactly know HOW to do this, but just committing to doing it is a good first step.