We have now reached our lowest level of debt that we'll have for a long time!
AS's student loan hit, with $137 going to principal. That means $932 went toward debt in July, exceeding the $900 goal.
Debt snapshot at this nice low point:
US Mortgage: $151,955
UK Mortgage 1: $52,239
UK Mortgage 2: $11,013
UK Mortgage 3: $11,595
Total home debt $226,802
AS Student loan $7,382
NT Student loan $3,206
Total student loan debt $10,588
TOTAL HOUSEHOLD DEBT $237,390
It's gonna be a crazy debt ride for the next couple months (or years), but I know I can pull out my bag of tricks and get us to a decent place soon.
Archive for July, 2014
We have now reached our lowest level of debt that we'll have for a long time!
I've been in a terrible mental place ever since our realtor told us we absolutely wouldn't break even on the mortgage if we sold this place. The thought of having to take out some sort of loan just to get out from under this place, on top of all the other nasty financial surprises that have come up during this process, was just one too many bumps in the road for my psyche to really take.
I kept trying to stay positive and focus on the staging and selling, but at the back of my mind was the feeling that we'd be much worse off financially if we DID sell than if we didn't.
I tried working the extra loan payment into our proposed budget and it made me feel even worse. Yes, we'd be able to cover the expected bills, but there would be nothing left for UNexpected expenses. So anything unexpected that happened would result in debt. We wouldn't be able to do a single thing to the new place beyond the absolutely essential. It was exactly where I DIDN'T want us to be, which is why we'd ended up making a lowball offer in the first place. (Thank goodness we did, because if we'd made the higher offer and all this came up, we'd probably have had to back out of this deal and lose our earnest money.)
I finally broke it down to AS and NT, because I didn't want them to think I was stressing over nothing. There are things we'll be able to do to bring our housing costs to a reasonable level eventually, but initially there's just no getting around it: They're crazy high.
Finally AS proposed something I hadn't directly thought of myself: What if we took the condo off the market for the time being? Next year her future income will be more solidified, NT and I will probably both be making more money at our positions, and we won't have his tuition, AS's medical procedure or my tooth implant to pay for. Plus, the condo mortgage would be about $3K lower and the housing market might be a bit stronger.
It immediately appealed to me. Financially it would make so much more sense than selling at a loss, kicking out our upper-unit renters and moving into the new place.
The only things I didn't like about it: constantly worrying about keeping all our renovations pristine during the long and dirty winter months, knowing we would have to start the staging/listing process all over again in the spring, and just basically feeling stuck.
For a second I thought "What if we move into the basement of the new place?" It's got a largish living area, a kitchen space and a 3/4 bath. But I quickly recognized that just wouldn't work for five people and a cat for six months or more, so I dismissed it immediately. (It would be really cheap for us because both units' rental almost cover the housing expenses. But it would make us crazy.)
But that crazy impractical idea did lead to another: What if we do sell the condo this year, but instead of kicking out the renters, we rent an apartment for six months or so?
I did some math, and if we could find a place for $1200 or less, it would basically be the same cost as staying in the condo. I looked around and there are lots of options well within that price range; don't know about month-to-month or 6-month options, but I bet they're there. Heck, we could probably get the seller's agent to find us a place, since he's angling to be our property manager on the new place and/or help the current renters find a new place when we kick them out.
We talked over all the ideas, and agreed that while they all have pros and cons, they are all doable and shouldn't be taken off the table. So for the time being we're keeping the place on the market, but we might not take any super lowball offer that comes along; we now realize that staying here would be smarter financially than doing that.
If the WV money comes in we could probably take a lowball offer, pay off some of the loans that are making housing costs so high, and move into the duplex right away. But if we don't, it's good to know we have other options besides just moving into the duplex and being really really house-poor for an indefinite period of time.
Interior -- General Condition? Good
Exterior -- General Condition? Good
Curb appeal (lot/landscaping)? Good
Staging (cosmetics, updating)? Excellent
If no, what would be appropriate? No Response
This buyer is considering
another showing of this property? No
It showed very nicely my buyer liked it but preferred the view on the other side of the building. Two other units we saw. No where's near the condition of this one but she knows she can fix the interiors. Thank u so much for the showing.
No further interest in our condo from buyers, but there are other positive things happening, so I'm trying to focus on those.
- The HUD finally signed off on everything, so we are officially cleared for the mortgage, and our closing next week is assured. I was starting to sweat the closing date a bit since other people were dragging their feet on providing info, but it all worked out. So glad we started the process ASAP!
- I'd set aside $300 to get our stuff out of storage and into the basement of the new home once we close, and found a mover to do it for $302.50. I didn't do an exhaustive search, but I checked two others and the rates were higher, so I'm cool with this and glad it's close to what I budgeted.
- Tomorrow I find out details of the contractor position that will replace me so I can move into writing. I wonder if I could have a higher paycheck as early as Aug. 15! Still haven't had time to discuss money with anyone, so I'm not sure how much I'll get.
- AS is getting $300 for the small writing job she's doing for my company, and she's heard back from another prospect who sounds like they're going to start sending her work immediately. It would be awesome if we could stockpile some money, or at least be sure it was coming, before her last regular paycheck!
- I spoke with our contractor to see if he handles electrical work (there is some wiring that needs to be fixed as soon as we close on the new place) and he said yes. I'm glad we have someone who is reliable and reasonably priced that we can call on from now on!
- Our DVR has been messing up more and more lately, so we've agreed to get rid of it in a couple weeks (as soon as we can get out there to drop off the box). That will save at least $18 per month, and every dollar is sorely needed, so I'm happy about that!
- My friend's finances are going great, and she has offered free babysitting as payment. Being that we pay $60 a pop for 4 hours of babysitting on a date night, this is no small payment! Not that we have money for a date, but maybe we could take her up on it and just go for a walk together or something.
We already got some feedback from one of the realtors (she's with the same company as ours so maybe they try and make sure to do that?). All good except the fact we don't have a downtown view. Still, it was comforting to think that we've done all we could in terms of staging.
Here it is in full:
Interior -- General Condition? Excellent
Exterior -- General Condition? Excellent
Curb appeal (lot/landscaping)? Excellent
Staging (cosmetics, updating)? Excellent
Appropriately Priced? Yes
This buyer is considering another showing of this property? No
General comments/suggestions: Condo was in perfect showing condition. Well done considering there are 2 cribs! My buyer is still looking. She has decided she prefers the units with DT views. Thanks for the showing. Cute unit.
So, there you have it. There are basically two places with downtown views; neither looks as nice on the inside but it seems like that's the deciding factor for people. We can only hope they sell and no more come on the market until ours gets some interest.
Answers to questions on last post:
- Realtor does seem to be pushing it, since she had a showing before it was on the market! They're not allowed to do open houses in our building though.
- I've got plenty of PTO so taking time for moving won't be a problem.
- AS decided to leave her job back in May or so. She gave them a ton of notice because she felt loyal. Reasons? Way too much work for way way too little money, and a new corrosive co-worker who is making the entire atmosphere toxic. A drastic lessening in diversity (AS is the only holdout in what used to be a very diverse staff, and she's the only one bringing diverse authors to the table too). She's paid at least $10K less than people IN HER OFFICE of the same rank who haven't been there as long. She still doesn't have her own office, as does everyone of her level. She has to share one with the eccentric founder who comes in and out without notice.
Our home was listed Friday night, and it's been worryingly quiet since then. But today, two showings scheduled! I know it can mean absolutely nothing, but I feel encouraged that someone at least wants to look at the place. Fingers crossed!
One is during our usual dinnertime, so I'm going to pick up something cheap and microwavable at Target for the kids, nuke it in the party room of our building, and then us adults can eat later than usual.
My boss has suddenly gotten more urgent in his talk of transitioning me to a writer position! This is good news, but first we need a quality proofer/editor who's willing to take on a part-time, contractor, on-location gig. Got some feelers out! We'll see how easy it is to find that. I've got an email in to a friend who would be a GREAT candidate, but we'll see if she's interested.
Whenever that happens, there should be an immediate boost in pay; how much I'm not sure, but any bit will help at this point.
AS is getting some promising leads for freelance/contract work, so it looks like that may be the direction she takes after her full-time gig ends. She's already working on an article for my company! I'm hoping we can stockpile some freelance income before she leaves at the end of August, since we'll have to replace her take-home pay as well as get her some health insurance.
NT's transition to a new role at his job has already begun; no word on a raise yet, but he's definitely expecting one and will ask if they don't bring it up.
A friend asked me to help with her budget, so I got her set up on (a simplified version of) my system. It's been about a week, and so far we've messaged every day to update the spreadsheets, talk about strategies for not overdrawing and for paying down debt, etc. She says it's stressful to see how tight things are but really empowering to see that she can take actions to change it. I'm trying not to get too excited, but I'm hoping this will be a permanent change for the better for her!
Small positive snowflakes/money matters:
- NT's UK rental income went up a bit as promised, so we'll save a little faster for those renovations.
- Chase SW refunded our $99 annual fee even though the card was open more than 90 days before I canceled it. Got the check in the mail yesterday!
- Was thinking we'd have to pay for our own dinner at our friends' post-wedding celebration last night (since it wasn't a traditional reception), but it was on them. Feels like a bonus that it didn't have to come out of my carefully hoarded spending money!
- I noticed that on AS's $1400 medical bill, there was no line about it being sent to the insurance company. Hoping it was an oversight and that insurance will cover some of that bill! I already have a plan to pay that off this fall, so it would be great if that money could go toward home expenses instead!
NT's UK pensions:
#1: 17,105 pounds ($27,368)
#2: 19,653 pounds ($31,445)
#3: 4,452 pounds ($7,123)
NT's 401(k): $31,196
NT's Roth IRA: $7,373
AS's 401(k): $13,484
AS's trad. IRA: $1,682
AS's Roth IRA: $19,796
CJ's 401(k): $73,696
CJ's Roth IRA: $7,373
NT's flat: 140,000 pounds ($224,000)
CJ & AS's condo: $145,000
House down payment fund (shared): $27,836
Total Assets: $617,372
Total Debt: $237,527
Current Estimated Net Worth: $379,845
June 2014 estimate: $375,997
Change in net worth: +$3,848
Summary: An OK growth month. We would have gone up about $450 more had we made our Roth IRA contributions, but those are on hold until December (we'll do make-up contributions for all the months we miss between now and then).
Next month, expect way bigger debt but also way bigger home value!
I included U.S. savings for a home in our assets, since the money will go toward our down payment on the new home, which will become an asset. I did not include our UK savings, because the UK flat's value listed above is contingent upon the renovations that will wipe out our UK savings.
I'll update the Individual Net Worth page shortly, breaking it out by person.
Notes on the numbers above: House value estimates are approximate. I don't have a way to check NT's UK pensions or flat value, so their values stay static for the purpose of this update (unless I happen to get some info by chance). UK asset values and debt amounts are calculated figuring $1.60 for every British pound.
We came home expecting paper and equipment and half-done floors, but instead we opened the door to a gleaming dream home! I called the guy and asked if he had more to do (he said it would take at least 2 days), and he said nope, he managed to finish all in one day!
There is a definite LINE between the living areas and the bedrooms, so clearly the bedrooms need to be done. But I've asked my realtor if we can just say in the MLS listing notes that the bedrooms will be done exactly like the main floors as soon as we move out. Would be so much easier (and delay the expense) if we could do it that way. So we'll see what she thinks.
The even better news is that this portion cost $1400. We had $2500 budgeted, but we now reckon the bedrooms will only cost about $800, so we'll actually come in about $300 under budget! That's awesome because we needed money for movers to bring our stuff from storage to the basement of the new home once we close.
We can't move our stuff back into the main areas until Saturday since the floors need to cure, so I've asked the realtor if we can list on Friday and be available for viewings on Saturday. I hope that works out.
We're all crammed into our bedrooms for the next two days, but it'll be worth it to make sure the finish on the floors is perfect.
I think my running tally of expenses is pretty accurate, and so far we've spent $8002 (including renting storage and moving van). With $800 for the rest of the floors and $300 to hire movers, we're on track to go just about $100 over budget. I'm sure there are a few piddly things we need to get, but considering our original budget was $13,500, I'm feeling pretty good about an estimated $9102!
Forgive the following little dime-store self-analyzing (not to mention self-aggrandizing) session. I just needed to work something out of my system and get to a happy place.
All of the wrangling that's been going on as a result of the home purchase and attempt to sell the condo is starting to take its toll on me. I've even started resenting a bit how our friends who are moving in are so blissfully happy about moving while I stress and sweat over getting this mortgage deal done and condo reno funded, are going out to eat and drink constantly while we scrimp and break our backs and watch the summer slip by, and who are planning to move in at their leisure in August, when we agreed rent is due Sept. 1. (They couldn't get out of their August rent at the old place and can't afford to pay two rents that month.)
Everything is so easy and there's only upside, whereas I feel like I'm panicking several times a week, constantly getting hit with more financial blows, like $7K in PMI added to the mortgage, potentially $10K-$15K to lose when (if) we sell the condo, and dealing with agents and brokers who, while not bad people, seem to always be asking for more, taking time and money and peace of mind at every turn.
(Granted, our friends have helped a ton: They loaned us $5K to help make the down payment and have said we can pay it back whenever. My friend's lawyering and photography skills have saved us tons of money and/or uncertainty while wading through negotiations and getting the condo staged and photographed. And my other friend helped get the first huge load of things into storage.)
But despite all that help, I started to feel resentful because I felt my share of the stress and work was so high, and I wasn't getting to feel any of the joy of moving into the new home. And I was starting to get a bit worried. Resentment is not a good place to start a new cooperative living situation from. So today I did a little soul searching while I was working, and I decided that the only thing I can change is how *I* choose to view this situation.
So I decided not to externalize my stress, nor resent those who aren't as stressed. I'm doing that by viewing myself as the hero in this situation, vs. the martyr (or victim).
I mean think about it. My friends killed their credit when they walked away from their underwater condo years ago. They've been renting a nice place since then, but starting to feel unmoored, like they wanted a "real" home again, but would not be able to qualify for a new home purchase at least for a while. They wanted kids and were planning to have one with a friend a few years ago, but that fell through; they are our kids' godparents and would love to have more of a role in their lives.
Then we gave them this opportunity: a chance to at least have a rent-controlled space, with the possibility of buying their share if things go well. A chance to see their goddaughters every day and help raise them. A sense of home and a project that we can work on together.
So I may be going through some fiscal pain and anxiety/fear now, but the end result is not just about getting a new home. I hereby declare myself a hero. Heroes have to overcome difficulties, and bear burdens for others, but they don't resent the people they help. I can be this person and kill the seeds of resentment before they grow.
Last night we had to move all the furniture out of our living, dining and hall/foyer areas to clear the floor for refinishing. It wasn't too bad: the dining room table fit on the kitchen island (upside down), the floor lamp and TV table on the balcony, TV on the built-in by the window, couch and rocker in our room, dining room chairs divided between our room and the kids', foyer cabinet in the front hall closet.
Today the floor guy is working on it. Not sure but I think it will take 2 days. I do know he says the floors will be ready for foot traffic by Friday, so that's when our realtor will list our place.
We have $2500 set aside for floors. I didn't get an exact quote from him on how much it will cost to do this; I know his usual rate is $3 per square foot. Our entire condo is 963 or so, but he's not doing the bathroom, kitchen, balcony, closets or (for now) bedrooms. I haven't thought to measure the remaining areas to see how much it is.
He also vaguely said that he'd "give us a good deal" because we had to wait so long for him to fit us into the schedule. No idea what that means either.
I know it sounds shockingly lazy of me, but the truth is, this is the guy my realtor uses for all the units she fixes up, we've seen the work he's done on them and he's very good, and he's familiar with the buildings, the front-desk attendants and the rules. There's just no way I'm going out of that comfort zone to bring in an unknown contractor, so price is really irrelevant. The only thing it will really affect is whether we can afford to get the bedrooms done too, or if we see if someone can just buff and polish them for a lower rate. (They're not nearly as scratched and damaged as the main living area floors.)
I am just trying to cross off tasks and keep things moving, without obsessing or stressing too much. Things will happen, we will survive, eventually (hopefully) our lives will settle down again.
The project I've taken on to distract myself -- helping my friend fix her finances -- is going really well! I've got her started on my spreadsheets and she's excited to see how she can arrange and adjust things to make sure she stays on budget. Right now her account is in overdraft and she's bleeding NSF fees as automatic bill payments post, but tomorrow is her payday and I hope to help her ensure that she never pays another NSF after that.