Tag Archives: house

A Loose 5 Year Plan

The whole “being pregnant” and going into “nesting” mode is real. I’ve been spending way too many hours scouring Redfin and Zillow despite knowing that I can’t afford a home here, other than maybe a 1 bed, 1 bath in a really bad part of the bad part of town.

So. I’m trying to focus my energy on longer-term, more realistic goals, while also ensuring that I keep my job in order to hit them.

2018

  • Age: I turn 35(!)
  • Networth: Close out the year at $645k-$650k
  • Housing: Live in 1 bedroom / 1 bath apartment (50% = $14.1k yr)
  • 401k: invest $22.5k
  • Stocks: invest $30k 
  • Baby #1: born, 0 – 5 mo
  • Baby #2: not born yet

Continue reading

moving-boxes-things-forget

To Move or Not To Move… That is the Question

7 months, 3 weeks in counting until the arrival of baby “E” (we have two names picked out for girl or boy child, both start with E, so calling it baby E .) 7 months, 3 weeks is not that much time before our lives change forever.

Outside of finally figuring out how to keep my apartment clean, focusing on obtaining stability at my job, and trying to eat healthy and exercise and such, I’m perturbed  by our housing situation and whether or not we should move or stay put. The general consensus until my anxiety attack of this last week was stay put until kid is 1, then figure it out / move to a two bedroom / etc. Continue reading

Lessons in Adulting: How Much Should Living Room Furniture Cost?

When we moved in together two years ago, my Craigslist-purchased couch with ripped cushions and protruding feathers, along with my once-glued together, now peeling-apart IKEA coffee table and self-desctructive Tar-gey bookshelves which are not safe to be around a small child, seemed perfectly fine for a trancient space. With barren white walls and a few half-filled and altogether empty frames scattered about the floor, this now-married couple is trying to figure out how to create a place that feels like “home” without overdoing it (you know, like we (…ahem… I) overdid our wedding.)

Right now, we really can’t have guests over because the place is embarrassing, even on its good days when I’ve cleaned up the piles of mess. Our lease is up in May, but it is doubtful we will move next year or anytime soon (the only real reasons for us to move is 1 – rents going up an unreasonable amount, 2 – we have a child and said child turns 2, or 3, one of us gets a job super far away, like, in another state, and we need to move.) Otherwise, it looks like we’re hunkered down for a few more years in our 800-square foot, overpriced-due-to-Silicon-Valley-rental-costs abode.

This furniture has got to go. Continue reading

No Cable TV for Now, Fast Internet Instead

Since I’m determined to read more, get out of the house more to see friends and exercise, and generally not be a lazy couch potato, I decided to avoid getting cable for the time being. Instead, we’re getting 50MB internet and skipping cable altogether.

The cable bill for the first year wouldn’t be that bad, but then I’d get used to it and have to pay the ridiculous fees charged after the first 12 month rates expire. It really is ridiculous to pay $100+ per month for cable television when most of the shows are available through other means. I even already have Amazon prime which offers many shows and movies as part of the membership. There’s also the option to buy Hulu Plus or Netflix if this isn’t enough.

Instead of the cable membership, I splurged on a waterproof case for my Kindle ($70) so I can come home after work, fill up the tub, and read myself silly. Better that then starting mindlessly at the screen. I figure if I’m desperate for television I can sign up for the local gym, which offers tv screens in every cardio machine… at least then I’ll be able to get healthy while watching television instead of the opposite.

My Parents Spent $300k to Add On to a $400k House

After I left home 10 years ago, my parents decided to build a add-on to our house, and redo the entire kitchen. The add on was not decided on to add to the value of the house — it was purely because my parents wanted more space. They wanted a family room which would be open to the kitchen, making the entire area more open and inviting.

Today my dad told me that during the years he was making the most money, was also the years he lost the most wealth. Why? The $150k add on for the house ended up costing somewhere around $300k (he isn’t really sure how much it cost) and then spending elsewhere also added up. He was making $200k + per year, but losing even more than that.

He constantly talks about how he wants to re-do the other rooms in the house. He has grand plans for remaking the master bedroom to have a walk-in closet that would reduce the space in the room, and breaking down the walls of two bathrooms to make one master bath. I asked him if he thinks that would add to the value of the house and he doesn’t care. He just wants to make it look the way he wants. Even though, with only about a million left in the bank, the value of the house should play into some consideration when making changes.

Not that he cares, or should care — as I’ve mentioned before, he’s sick with terminal cancer, and all he wants to do is spend money on the house — on expensive constructive changes, and less expensive decorative costs that still add up. Meanwhile, my mother, who has no concept of the value of money, is likely going to run out of money some point down the line.

I asked my dad — why didn’t you just move to a larger house, if you were going to spend $300k on the addition? You could have sold this house and moved to a $700k house, which in this area gets you a fairly large house. And it would have been probably worth more later because it would have been a newer construction. Not that I’d want them to sell my childhood home, but still, financially that might have made more sense.

That sort of logic doesn’t matter to them, though. It’s not really any of my business, except for worrying about my mother running out of money later in life, and given that my sister is going into a lower-paying field than I am, I’ll likely be footing that bill. I would, of course, help her out if she needs it — but I’d rather help her make smart financial decisions NOW so it doesn’t have to come to that. It’s too bad neither her or my father would ever take any of my advice on these matters.

Savings 2009 Update

Since I don’t have a 401k, I’m always paranoid about not having enough saved for retirement. I know they advise workers to put at least the % match in their 401k above and beyond their Roth, but without a 401k, I’m still at a loss for where to save my money. Also, with grad school in the future (2-5 years away) I don’t know how much to save for retirement vs. that. Oy.

To be honest, beyond my Roth IRA, which I max out at $5000 each year, I don’t keep great track of what money goes into my other savings accounts. I save, I probably save quite a bit all things considered, but I haven’t really looked at what that means until today.

This year, so far, I’ve put $4850 in my Roth IRA. I have invested $5000 in ETFs and stock purchases in my Sharebuilder account. Plus, there’s about $600 in my 529 plan. Ok, so I think I stashed away $10k this year, or more. That’s not too bad. Then again, I know people who are saving 30% or more of their after-tax income. Which would be probably more like $20k.

Granted, I lie to my net worth spreadsheet and tell it to deduct more taxes then I will need to in order to have a fiscal boost come April 15. But that usually goes straight to next year’s Roth IRA. I always like to start it out with a $3000 one-time investment in April, then add in for the rest of the year until I hit the $5000.

I really wish I could buy a house right now, but besides not having the money to do that (I only have $30k saved, and much of it is in retirement accounts) it just wouldn’t make sense. So I’ll keep throwing away $600/month on rent. I was at my friend’s house yesterday — the one she bought with her engineer fiancee — and I’ll admit, I’m a bit jealous. But then I remember I don’t NEED a house right now. What would I do with a giant house besides pay a lot in bills and make a mess of it?

I’ve Got $7 in my pocket…

I’m a person of extremes. I eat basically nothing, or, alternately, everything in site. I work my ass off and stay up all night to get projects done, perfectly, or I barely lift a finger. Same goes for my finances. It’s not the healthiest way of living, but it sure works a charm when I’m on the more positive end of it.

This month, I’ve been extremely frugal. Well, not in the sense of purchasing two pairs of jeans. One, my favorite brand, was on sale at the local mall for $100 and I couldn’t resist. I actually thought it was another style, which I realized it wasn’t, so I promptly went on eBay and bought a “slightly damaged” pair of the ones I actually wanted for $70. Given that the original pair I bought last year cost me $170 for one, I felt good about setting up this two-for-one designer jeans deal.

Regardless, that was really my only big spend in the past month. I’ve also been frugal about eating, in ways I probably shouldn’t be. I tend to go for as long as possible without buying food. Around the house, that’s fine, I still have some random frozen things and tuna. But I’m never home. At work, sometimes I’ll work straight through lunch, and live off the various snacks in the office. Lucky for me, at least my work provides some granola bar-type things. Still, not healthy for mealtime, but I survive.

I’ll be posting my January spending charts soon. Lately, I thought about making a goal to reach $50k in Net Worth by the end of the year. I’m still trying to figure out if that’s obtainable. I need to see what my Net Worth is after taxes this year, and then make a plan. I may not be in debt, but I can still live like I’m getting out of debt, so I can one day buy a house.

My Dream House

When I was a little girl, I dreamed of one day living in a house with a big backyard, a view of the ocean (or at least twinkling lights), a heated pool, hot tub, a grande foyer, marble, a mix of contemporary architecture and classic detailing, each room decorated and designed to perfection. These days, I’m a bit more reasonable when it comes to contemplating a home purchase, but my irrationality is kick-starting my savings for a down payment.

Actually buying a house may be years off, but one day I hope to do it. I have friends (who live in more affordable areas, and who generally are engaged or married) already taking the mortgage plunge. I’ll admit my jealousy, a bit, but I feel much better about it when I pay my $632 rent and have the rest of my money to save.

I can deal with living in cramped quarters for cheap rent, but I’m not sure I’ll be willing to make such a compromise when it comes time to seriously think about buying a house. I grew up in a mid-size home. It had a downstairs, an upstairs, 3 nice sized bedrooms (large by modern constructions standards), a master bedroom, a den, a kitchen, a living room and 3 bathrooms, not to mention an incredible, grassy backyard. Growing up in such middle-class luxury, it’s tough to think about raising a family in any place smaller than that.

But, as it goes, my dream house will likely be well out of reach.

A quick peak at any local real estate guide showcases my dream house for, at minimum, $1.5 mil. That is, in the Bay Area (San Mateo County), even a tiny house goes for $800k. You’re lucky to get a decent studio for $500k.

Back home in New Jersey, my parents nice house that I spent my entire childhood in isn’t even worth that! So it seems if I ever hope to own the house of my dreams, or anything close to it, the Bay Area is out of that picture.

Living in the Bay Area for the past three years has made me realize just how important it is to live a place that makes you happy, beyond just an apartment or house. Here, I have so much natural beauty around me I could live in a (waterproof) cardboard box and be happy (assuming I have gym access for a shower every so often).

But then there’s my hope to raise a family, two or three kids, and that takes a house big enough to fit those kids. That takes a lot of money. I don’t think it will come from my won’t-ask-for-a-raise boyfriend. So that means I need to start saving for a down payment, and also forcing myself to think realistically about what sort of house I will be able to afford.

For starters, I’m going to try to save $300 a month towards my down payent fund. The question is, where do I save this money? The stock market is probably a bad place for it, though it’s possible this is a good time to invest the cash if I hope to put a down payment on a house in 5 to 10 years. Or maybe that’s an awful idea. Maybe it should just go in an ING CD and stay there until I’m read to spend it.

The other issue is graduate school. If I decide to go, there goes my down payment, and then some. My lifetime earnings may increase, but not my purchasing power in 5 years.

I just can’t fathom saving $200k for the downpayment on a $1M home. Even half of that seems impossible. Not to mention that someone making $60k is not supposed to buy a home that costs that much. What’s the rule… no more than 4 times your income? Uh, I can’t get ANYTHING for $240k in this area.

I could probably borrow the money from my dad’s 401k once he has access to it, but as I’ve written before, I want to try my best to be financially independent from my parents, as I have been since graduating college. Being a spoiled kid is one thing, but you can’t really be an adult until… you go into debt buying something you really want, and need, and that will make you money in the long run.

My Friend’s Giant Brick House

When I went back home over the Thanksgiving Holiday, I spent a little bit of time with my childhood friend, Sara*, who always had a bit of competition going with me. We were frienemies for much of our adolescent years, but as we got older we started to get along again.

This trip home I got to see her brand new house. While she’s still in school, she’s engaged to an engineer who seems to be footing most of the bill for the residence. To give Sara credit, she’s also working full time while studying full time. She’s also terribly judgmental and seems to think that if one is renting it’s silly because you should just buy a house. She also thinks her house isn’t big enough, despite that only two people will be living there and it has four bedrooms (two will be used for offices, one for a guest room.)

The other thing is, back on the east coast, you can get a lot more for your money. Her house, which cost about $475k, costs as much as a studio does out here in The Bay Area. Nuts. So she’s living an hour from NYC and can get a damn house for that. A nice house. With a pool in the backyard.

She is doing tons of renovations to the house (well, her fiance is… he’s redoing the entire inside.) She’s in charge of the design. He does the work. They both seem fairly happy about it. They own a home. Sara owns a home. She’s 25. Like me.

I got back to California a few days ago. The bright winter sun warmed my skin as I stepped out the door in the morning. I took my daily drive down 280, a highway which has a beauty that never grows old despite how often I drive it. I smiled because here I feel so happy, and what makes me happy here is entirely free. The nature, my boyfriend, the sun. Even my job – for the most part – makes me happy here. So I figure back east people need huge houses to decorate because everything else is so fugly. Or at least in Jersey, where I grew up.

Still, I’d like to own a house. At least, I think I would. But I’m not dating an engineer. I’m dating a guy who makes $17 an hour and refuses to ask for a raise. It makes me nervous that who I’m with defines partly what my life will be. When, or if I’ll ever be able to afford a house. And I’m jealous of my friend who is marrying a very charming engineer. And I wonder if I ought to be strategic when it comes to love over the long term. Or if I should just deal with the fact that I’ll be part of the disappearing middle class, able to rent but probably not to own. These sorts of things have me rather attracted to any men I meet who have that breadwinner sort of vibe. That’s a dangerous thing to feel… especially when there are so many men out there who take pride in making money. My boyfriend, on the other hand, would be more than content living in a cardboard box… as long as he had access to a daily shower.

So with him, it’s up to me to make my fortune. To earn it. And I don’t trust that I’m the type who can make that kind of money. I mean, enough to buy a house. A house in the bay area. With a view of something other than another house. And a little bit of land. And such.

What is my American Dream? Do I need to date someone different to achieve it? Should I be envious of my friend… or just determined to prove I can make enough money to support myself and live a life of relative luxury?

Forbes Billionaire’s List and How Rich is Rich Enough to Give to Charity?

A few days ago Forbes posted its annual list of the world’s richest people. While the billionaires gracing the normal list were mostly obvious — Warren Buffett, Bill Gates, etc, the list that I found more interesting was the sidebar “World’s Youngest Billionaires.”

Many of the world’s youngest rich inherited their wealth. Some, like Facebook’s Mark Zuckerberg, are self-made billionaires. At just 23 (he’s only a year younger than me) he’s set for life. And a few other lives, as long as he can reincarnate and claim his savings on his return to earth.

As I’ve been figuring out my budget upon my upcoming raise, I noted that I feel like I’m almost making too much money, and I don’t know what to do with it all.

Of course, that’s not true. Now that I actually have money to put into savings, I can start seriously saving for things I want, like for the down payment on a house.

The other day as I was driving I was thinking about how nice it would be to make enough money that I could donate a substantial chunk of it to charity. Then greed clouded my head and I thought – why donate money when I can save the money? My Roth IRA isn’t maxed out yet, and even then the extra cash put into a SEP Ira, a high interest savings account for the house down payment, a CD or some other saving mechanism would probably be a wiser move.

I always thought that charity should be given in time, not money. If you’re going to be charitable, go do some volunteer work, help build a house with Habitat for Humanity, or volunteer to mentor in-need kids in a local town.

Then I got into the “real world” where I realized time is money and I have more money than time. Yet I still don’t feel like I have enough money to donate yet.

Obviously, given my pay bump I could donate $100 a month instead of putting that to my investments and just pretend it never happened. It would probably make me feel all warm and fuzzy inside, but I don’t know how warm and fuzzy I’ll feel when I retire and the government has run out of money for social security.

At what point in one’s wealth-building career does charity become a necessity? Does everyone donate to charity? How much is the proper amount to donate, percentage wise, of one’s income? What if one’s job is unstable and while he or she is making a good amount of money now (in the $55-$70k range, dependent on how many freelance projects are completed), but in a few months she might be unemployed? What if, as a freelancer, my entire life is lived like that? And then what if I have kids and more than just myself to worry about one day, financially speaking? When do I give to charity and when do I just be selfish and keep all my money?