If this blog is to be useful (even just to me!), there are a few details I would like to share. Here is a long / housekeeping post to capture all of this.
First, our home purchase / mortgage are not gold standard PF choices. They are not high risk options, but I tend to be ultra conservative and would prefer to have bought in all cash if possible. I won’t go into a lot of details for privacy reasons, but ‘ll share a little known fact: many academic jobs in pricey cities have perks related to housing as part of their recruitment packages. My husband’s job came with some of these perks, and we are using them. (The academic job market is like it’s own planet. Or maybe several planets, depending specifically at where in academia you end up falling.)
So, we did not put 20% of our own money down, but we do not have to pay expensive PMI. There are some other benefits and risks that are specific to our situation, and trust me when I say we spent a long time considering the pros and cons. It came down to the fact that 1) we need to live somewhere 2) not buying yet is also a risk and 3) we could afford to do this. Buying wins over renting in a relatively short time frame. Buying is expensive, but so is renting.
Our primary risk reduction strategy was to ensure we could afford this on one salary. We have this covered, albeit it would require more care with our finances. The other important risk reduction plan is to reduce our mortgage balance to the equivalent of 20% down (or more) – I’m working to define our timeline and tactics for that goal.
Second, we have/had $15 – $20k set aside after for repairs and furnishings. (We also have our $27k emergency fund and money for property tax bill set aside.) Here is what we are doing with it.
We bought some furniture:
- We spent $2k on a chair and side table. Yes, this is a huge LOT of money. We bought used (on ebay, local pick up), and it is a classic style we could sell tomorrow (or 5 years from now) and recover our cost. (It is in the MOMA!)
- We bought a sleeper sofa for the guest room, used off craigslist. I was going to buy a second bed (new), but we may turn the room into a nursery within a few years. A sleeper sofa could be moved to the office when time comes.
- We found an area rug for the bedroom for $100, and need one for the living room.
- I bought some crappy bar stools for about $60 for two. They are functional, and for some reason, bar stools are expense.
- We’re in the process of putting up UV window film on several windows. We don’t need blinds for privacy, so the film will protect our floors and belongings while preserving the view.
- I want some new lighting in the living area – the fixtures are ugly. This is a low priority and may not happen.
- We’re on the craigslist lookout for a bench for the entry way and patio furniture on the cheap. I might make my own bench, but this doesn’t actually save all that much money – it is just awesome.
And we scheduled some repairs:
- Furnace / duct work: This is expensive because we have some asbestos on the outside of the duct work. My research says this actually is not a big deal and we could just leave it – but the furnace can’t be worked on. The furnace is approaching the end of its life, and there are some tax incentives for getting a more efficient furnace. Due to climate, we won’t save much on our bill, but I want to get this done anyway.
- Painting: Mostly just the ceilings, because everything else was painted for the staging in colors we are OK with.
- Earthquake retrofitting: We have earthquake safety measures in place already, but we’d like to modernize a few things. We will be doing this within a year. There is a pretty major tax incentive to help with this one. We may wait until May or June to do this one.
In short, there has been a lot going on in our finances in the past two months! Things should be back to normal this month!