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The other day a reader emailed me this:

i would love for you to do a post on what you think about real estate – your blog seems to announce that you do not ever want to be in debt, and i was wondering what your future plans for renting/buying are!

That is an excellent question. Honestly I haven’t put too much thought into it because I probably won’t buy a house for years. My financial priorities go like this:

  1. Save $10,000 in an Emergency Fund (circa Dec 2010)
  2. Max out Retirement Accounts (2011 and on)
  3. Save for a Wedding (2011)
  4. Save for a New car (2011/2012)
  5. Save for a House Deposit (2012-??)

Man! That seems like a loooong time! :( Perhaps I can knock out the first goals faster than expected? Hmm. But back to the question at hand: While I am very much against debt, I do plan to take out a mortgage when I buy a house. I’d love to buy a home with cash only (can you imagine?!) but realistically that probably won’t happen unless I win the lottery or marry rich.

I’ve got a little time before I will be saving for the deposit, but here are my debt-free thoughts on mortgages for when that time comes.

1. Rent Cheap
A lot of people have the mentality that renting is wasting money because you are throwing away cash that could be put towards equity. Well, that is technically true, but it can be a dangerous mentality if it rushes you into buying a house you can’t afford. It is, however, a good motivator to save faster and the easiest way to save faster is to rent cheap. I think that monthly housing costs should be no more than 35% of your paycheck. My rent right now is 26% of my paycheck (33% if you count bills) and I hope to stay around that no matter where I live. You don’t have to live in the ghetto to rent cheap, but some ways to save on rent include splitting rent with a roommate, renting away from city life (make sure to factor transportation costs), and sacrificing amenities like washer/dryer, dishwasher, etc. That topic really could be a whole post in itself.

2. Save 20% Down Payment
Mortgage lenders vary on the amount of cash they require for down payments, but I plan to save for a 20% deposit when I buy.  It is so hard to imagine saving that much money! But like I said in an earlier post, buying a house really intimidates me, so I want to make sure I have enough money up front to cover house expenses as well as a good deposit. This amount depends on the location, but for example, if I buy a house that is $250,000, I plan to save $50,000 to put down. (Yowser!! That’s a ton of money! Hopefully by then I’ll have a husband to help me save.)

3. Buy a house with a 15-year mortgage
I am sure many may disagree with me, but I plan to buy a house with a 15-year mortgage rather than a 30-year. The amount of interest saved between those 15 years is huge! The payments each month may be significantly larger, but if I’m unable to afford them with a 15-year mortgage, then the house is either too expensive or I’m not ready to buy one. If I purchase a home at the age 30 then I could be 100% debt-free by the age of 45 as opposed to 60. Can you imagine not having any housing payments at the age of 45?! That would be AMAZING!


So those are my very high-level thoughts on real estate. Dave Ramsey is my go-to man for most of my real estate questions and advice, so I encourage anyone looking to buy a house to check out his website. I don’t agree 100% with everything he says, but I did follow his example for this one. :)

What about you? What are your thoughts on buying a house?
If any of you are saving for a house, do you have a different strategy? If any of you have bought a house, would you recommend a different approach? Suggestions welcome!

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Apartment Updates

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My Current Apartment Timeline:

  • August 1, 2008: Move to current apartment with a one-month lease with Roommate A.
  • April 2008: New Roommate D moves in and we rearrange the place to fit her for two months and an extra $400/month.
  • June 2008: Roommate A moves out and D takes over the lease.
  • July 31, 2009: I negotiate with the landlord and switch to a 6-month lease at the same price.
  • January 31, 2010: My 6-month apartment lease runs out.

Being the responsible adult that I am, I didn’t realize that the end of this month is the end of my lease until about a week ago. Oops! I contacted my landlord and have some exciting news… I can move to a month-to-month lease now!!!

My Future with this Apartment:
Apartment Cons:

  • No dishwasher
  • No washer/dryer (in basement)
  • No garbage disposal
  • One mile from metro=not the most convenient
  • Could be a safer neighborhood
  • There are AC units in the apt, but not my room

Apartment Pros:

  • I pay $660/month + electric = unheard of in this area
  • Takes me 20 minutes to get to work
  • Free parking for me plus any visitors
  • Although we’re not friends, my neighbors are all nice
  • It’s sooo cute!

Right now my plan is to not do anything until J either moves up here or gets a full-time job in the south. His parents told him he has to move out by the summer, so that’s a good deadline to find something.

Aside from J, I have mixed feelings about moving. First, I hate moving: it’s expensive and stressful and messy. I am so comfortable and lazy with where I live now so I’m in no rush. Second, this apartment is sooo cheap for this area, I will have to shop around for a really good deal to justify paying more. But depending on J’s situation (and wanting all of the things this apt can’t offer) I can see myself moving in the next year.

Anyway, this is just me over-planning things… hooray for the flexibility and freedom of month-to-month lease!

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Thanksgiving Highlights:

  • Eating my body weight in turkey, stuffing, gravy, mashed potatoes, pumpkin pie, etc.
  • Sleeping in on Black Friday.
  • Not checking facebook, email or blogs for four days.
  • Hosting 20+ family members at my parent’s house.
  • Creating silly videos with all of my cousins.
  • Attending my first NHL game.
  • Sharing leftovers with my parents and J’s parents.
  • Blasting Christmas music on my 6+hour drive.

Spending Report:

Beginning Balance: $144.42

Deposit: +$40 babysitting
Cable: $50
Gas: $31.76
Target: $38.33 food, gifts
Gas: $28.63
Starbucks: $10 (two $5 gift cards)
Chickfila: $7.98
Panera: $4.99
Wendy’s: $3.88

Ending Balance: $38.48


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Country Music & Money

I love me some country music in the summer. There’s just something about rolling down your windows, getting that car into fifth gear, and blasting Brad Paisley’s “Mud on the Tires” as you watch the sun set on the horizon at 8:45 pm. Since we are in the heart of summer, I’ve already listened to my fair share of country tunes already. It’s funny to me how so many of the songs’ lyrics revolve around money–or rather the unimportance of money.

Seriously, listen to read some of the lyrics:
“And there are fancy cars and diamond rings, but you know that they don’t mean a thing. They all add up to nothin’ compared to you.” –-Baby Girl, Sugarland

“I got no money in my pockets, I got a hole in my jeans. I had a job and I lost it, but it won’t get to me ’cause I’m riding with my baby and it’s a brand new day. We’re on the wheels of an angel flyin’ away.” —Who Wouldn’t Wanna Be Me, Keith Urban

“My hotel in Manhattan holds more people than our town, and what I just paid for dinner, would be a down payment on a house. I’d rather be tipping cows in Tulsa, than hailing cabs here in New York, but I ain’t in Checotah anymore.” —I Aint in Checota Anymore, Carrie Underwood

“It’s funny how it’s the simple things in life that mean the most. Not where you live or what you drive or the price tag on your clothes.There’s no dollar sign on a peace of mind this I’ve come to know. So if you agree have a drink with me, raise your glasses for a toast. To a little bit of chicken fried, cold beer on a Friday night, a pair of jeans that fit just right, and the radio up.” —Chicken Fried, Zac Brown Band

I was looking at my almost-empty budget the other day and wondering where exactly I spent all my money this month. I noticed that I was waaaaay over budget on gifts.

I’ve heard it said that you can tell a person’s values by looking at their receipts. Well, the $100 I spent on wedding gifts for college friends were totally worth it. And I wouldn’t go back and trade the $80 I spent on J’s birthday for anything. The same goes for the $25 on a Father’s Day gift. As well as the $20 on DVDs for my mom to watch as she’s going through chemo. And the $30 international shipping fee to send a gift abroad. And the little costs accrued by helping A move out. All of those purchases were worth going overbudget for because they are investments in relationships. And you just can’t put a price tag on that.

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I mentioned a while back that my older sister lost her job in New York. What I didn’t mention was that her rent was $1300 a month (by herself) on a $40k salary. Needless to say she needed to find a job or a subleaser fast. She found a subleaser last week and in two days moved back home to figure out her life and take care of my mom. My younger sister also lives at home as she is beginning her photography business in our hometown.

My family is really close and it is so strange to be the only one not at home right now. I am going home this weekend for Mother’s Day and considering surprising my mom and taking tomorrow’s workday off. In the next few months I have at least five trips to NC planned. And it could be more than that. My sister wants to find a job in Charlotte. My roommate A will be moving to Atlanta come July. My boyfriend J lives in NC seven hours away. My closest friends live within two hours of each other in the South. If these are the people that mean the most to me, what is keeping me here?

I initially moved to DC for the post-graduate experience of a big-city life. Granted, it’s not that big of a city, but the traffic alone makes you feel like you’re surrounded by millions. I do love the area so much, but really the only thing keeping me here is my job. It’s a great first job and I know that with two years’ experience I will have the skills to take me pretty far in my field. Plus they’ve hinted at a possible promotion in the next six months. But is a secure job reason enough to stay somewhere that I’m not vested in?

I think so. But then sometimes I wonder. If I am wishing for this next year to fly by, am I just wasting a year? And why wait after two years of my job to start what I want to do in my career; I should be actively looking for positions I want right now. And am I holding on to old relationships so much that I am closed off to making new friends here?

I didn’t mean to ramble so much about this. I am just feeling a little overwhelmed and a bit burnt out with traveling south so often.

Why can’t I just be content with where I am?

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tableI feel like I need a weekend to recover from this past weekend. What a crazy few days I just had! I hung out with so many old, wonderful friends and had such a lovely time at both of the bridal showers. We even had perfect 70-degree spring weather and all of the trees in full bloom.

The one I hosted in Charlotte was a little stressful at the beginning because the restaurant was not prepared for us (even though we booked the room in January and called three times in the past week). However, to make up for its tardiness, they provided mimosas on the house for the guests at the bar while my frazzled sister and I set up the table. Everyone just thought the pre-shower beverage was all apart of it, so it turned out pretty awesome in the end.

Weekend Budget: I was over budget by $11, which I am fine with.

Dining
Projected: $15 | Actual: $7
Yay! I was under-budget. We stopped by Panera on our way Friday night.

Shower
Projected: $100 | Actual: $116
This included $21 for party favors, $10 for flowers for the table, and $85 for the meal, all split with my older sister.

Gas
Projected: $60 | Actual: $63
Not bad, considering I drove a total of 16 hours this past weekend. 2665_609703587258_29708868_36212022_6347362_s1

I also got to meet my newest little sister: Biscuit! As soon as my mom found out she has breast cancer, she decided she needed a little furry friend to keep her company while she goes through chemo. She’s four years old and just the sweetest little thing ever. I’m going home again this weekend for Easter and cannot wait to spend more time with her.

Driving home last night I had that Sunday night sadness that you get after a wonderful weekend. After you’ve been planning and looking forward to something for months, it just goes by so quickly once it arrives. But I’m pretty confident there will be more fun, exciting and just as exhausting weekends ahead.

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Apartment Renewals

Ever since I started college, the springtime brings up a host of housing questions. Will I stay in my apartment? Will I move? Do I look for a cheaper place? Who will I live with? My current roommate is my best friend who is getting married in the summer (bittersweet) so I will need to find a new roommate or move somewhere cheaper. I started in my current full-time position in June ’08 and want to give the company at least one more year. Plus, I have a lot of furniture and the price for the location is pretty good.

My apartment lease runs out on July 31st. I live in a six-apartment duplex and I know that my landlord has three vacant apartments in my building and many others on my street that he owns.

I am wondering if I can bargain with my landlord for a rent decrease. It’s not really my style because I hate confrontation, but I also hate to waste opportunities to save a little cash. I know that he wouldn’t want to lose a perfectly good tenant (me) and I don’t really want to move either, but given the right spin in this tight economy, I wonder if a rent-decrease would be possible. Or some kind of bargain, like instead of a 12-month contract, a six-month with no rent increase.

Has anyone asked for a rent decrease or bargained with their landlord before?

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