Tag Archives: home insurance

DUI Depression 10 Years Later

The day I got my DUI seems like a million years ago. In fact, it was about 9 years and a month ago. While I don’t remember much of my 20s, I do remember that night all too clearly. All the bad decisions I made. The reckoning of my entire self identify as a “good girl” all lost in one evening of drinking too much wine at a networking event and, in the days before uber, driving home after waiting what I thought was long enough to sober up — when it clearly wasn’t.

What followed my DUI was deserved, but that doesn’t negate how horrible it was. A night at the jail handcuffed to a chair. Six weekends of “community service,” the classes, the  $10k+ in costs… or more, I stopped counting. Years later, I just want to forget about it. I made a commitment to myself that night that if I was ever to drink again, I would take public transport or uber to get home. And since then I haven’t received a DUI, nor have I had any reason to get one — because I don’t drive after drinking. Ever.

This doesn’t stop my past from haunting me. In applying for home insurance, it has come up that purchasing car insurance alongside it as a bundle could save on our total rate. Well–guess what? These companies immediately ask me if I had a DUI in the last 10 years. Sadly, my conviction was in November 2011, which is still under 10 years ago. Many companies said they won’t insure me at all. One said they might be able to get an override, but I wouldn’t qualify for a good driver discount.

Luckily I have car insurance now and it’s a fair rate so it’s not the end of the world, but it really feels like a sharp gutting of my heart in being reminded of the horrible mistake in my past. I don’t want to forget about it, but I also don’t want to be reminded of it anymore. I was 25 then. I’m 36 now. I’m just in a different place in my life.

The only good news is that this reminded me that in one year I won’t have the DUI on my motor vehicles report anymore. It will still show up when employers search my records — and will still make it hard to get into Canada — but at least, soon, I can kind of move on. I though I had moved on. But clearly I haven’t. So I’m a bit depressed this evening. Embarrassed of my former self. Acknowledging I am the same hot mess I was then, only a little better when it comes to decision making.

This comes on top of an incredible amount of stress (probably too much) in trying to figure out home insurance. I don’t get what we are supposed to be covered for and I don’t know how much we should be covered for. The replacement costs all the agencies are providing seem way too low given I’m told in the Bay Area it costs $500-$600+ per square foot to build. I thought the home insurance part of home buying would be straight forward (bank wants you to be covered for the cost of the loan, you get covered for the cost of the loan, and you’re good.)

I’m stressed out because I’m in the middle of this closing process and we’re still awaiting the appraisal and we’re still waiting to find out if we can get the property insured (or maybe we already have a policy we haven’t paid for — I’m confused) — and one company that was high rated said they may not insure us because there are galvanized pipes and every company is asking me how old the roof is and I don’t have any idea as the seller’s report does not say and our landlord doesn’t know. And this insurance agent I spoke with kind of freaked me out about the galvanized pipe issue. So there’s another thing we’ll have to fix when we move in, possibly. So many things.

I just want to be happy right now. I want to feel like this is an accomplishment and I want this opportunity to feel good just for a few minutes, you know? But at the moment I feel like absolute shit. Scared. Ashamed of my past. And just trying to get through this process to buy the house and figure out what really needs to be fixed and how much it will cost to make it safe and reduce risk as much as possible.

New pipes, huh?

Figuring Out How Much House We Can Afford with RSUs

We are going to buy a house. It is not the most financially wise decision, but life isn’t about always being financially wise–sometimes you have to splurge (within reason) and take risks. I accept that buying a house will reduce our total networth in the future, and I’m ok with that. After all, what is the point of making money if you can’t enjoy it, and what would I enjoy more than having a home of my own to raise my kids in? Sure I’d love to take lots of international trips and such, but with a toddler and one on the way (and maybe one more in 2-3 years), that’s not happening for a while. My house will be my Paris and Prague and Tokyo.

But one thing has been very difficult to figure out — how much we can afford. All home buying calculators assume you have a fairly consistent income that goes up by a consistent percentage every year. That isn’t reality for us. There are many ways to figure out how much you can afford, but one model that I’ve decided I like is 28% of pre-tax income (I’d prefer to do post-tax but if I do that I’ll never afford a home here.)

I worked out the chart below, which shows potential annual income (pre tax) with the amount of mortgage (PITI total) we can afford per month (on the right) and then on the let, I have the house price and the total amount of PITI with a 3.5% 30 year fixed loan. Our goal would be to afford a $1.7M home with an in-law, where my father-in-law would pay some rent. This means based on the chart below we need to make $320,000 per year, consistently, to afford a home at this price point. (*my insurance estimates are probably way off but I tried to figure out what home insurance would cost in California with earthquake insurance tacked on — if these numbers look wrong please let me know in a comment.)

Total Year Total Month Mortgage Max (28%) Total Monthly House Price Mortgage (3.5) Taxes Insurance Earthquake
$210,000 $17,500 $4,900 $4,872 $1,000,000 $3,412 $933 $167 $360
$255,000 $21,250 $5,950 $5,957 $1,200,000 $4,310 $1,120 $167 $360
$300,000 $25,000 $7,000 $6,862 $1,400,000 $5,029 $1,307 $167 $360
$320,000 $26,667 $7,467 $7,767 $1,600,000 $5,747 $1,493 $167 $360
$400,000 $33,333 $9,333 $9,936 $2,000,000 $7,543 $1,867 $167 $360
$500,000 $41,667 $11,667 $11,381 $2,200,000 $8,801 $2,053 $167 $360

 

Right now, I’m earning $170,000 in base income, and my husband makes $85,000. Based on our minimum income, that gets us to $1.2M of house… which isn’t enough here. To get to that $1.6M target (which is still a small house and a fixer upper), we need $320k in annual income. So either I need to consistently make $235k, or my husband needs to increase his income, or some combination of both.

What the above does not account for is that my annual bonus is $34,000. I have no idea if I will get a bonus this year or how much of it I will get. I have received my full bonus every year for the past 3 years BUT there is no guarantee I will receive a bonus in the future, or that future jobs will pay such a sizable amount in bonus. I’m not sure if I should include my bonus in my calculations or not. I’d rather not, because a bonus is nice to have for an extra vacation or gift for the kids vs worked into our planned home expenses. It would be nice if my base was $200k, so I could actually include that in the calculations. If I could get my base to $200k and my husband could figure out how to make $120k, we’d be in pretty good shape.

In addition to the base and bonus, I also receive a large amount of my income in RSUs. My refreshes have not been great, though. And if I lose my job, then I will not be able to obtain the same amount in RSU.

When I joined my company, my total compensation was as follows:

  • $165k (base)
  • $33 (bonus)
  • $56k (RSU/yr for 4 years) (*currently worth ~$350k+/yr)
  • TOTAL = ~$254k

My current compensation once I fully vest my first grant is:

  • $170k (base)
  • $34k (bonus)
  • $12k (RSU/yr)
  • TOTAL = $216k

So, that’s good, with bonus and RSU I’m still getting close to the $235k I need to make to afford a $1.6M home, but not quite, and that’s including bonus and RSU which are all variable.

What’s scarier is that if I lose this job, I have no idea if I will be able to do better than $150k salary with no bonus or RSU (I feel fairly confident I can find a job with $150k salary since before I started this job I had a few offers for that amount at startups that I turned down as they were way too low.) So do I base my home purchase off of $150k (me) + $85k (husband) = $235k/yr of income? Then we a afford a $1M house… so we can’t afford any house here and we’ll just continue renting. However, with my RSU growth, my income this year and next year are very high, and it “feels” like I should be able to afford more house. But can I?