Category Archives: home ownership

And hemorrhaging money begins

I received a bad news from my home warranty company on the washer. Although the repair company had noted “gasket broken” on the receipt, it is actually a plastic tub that is not covered by the warranty that is the issue.

This means I have spent $100 and juggled my work schedule for nothing. The plastic tub is apparently very expensive and, with the washer and dryer being older than I am, I think I should just bite the bullet and buy a new set.  Yes, I said “a new set”. This is because my current washer and dryer are those single unit things where the dryer is up at the top. I have taken a quick gander online and to replace with a similar unit it will be around $1299 + tax + installation. Buying two separate front-load units will be around $1600.

I will be behaved, though. Instead of just sinking the money now, we will use the washer and dryer on the floor that takes coins (exact amount, I am not sure). Who knows, maybe we will even decide that we don’t need a washer and dryer in the unit.  But most likely, this will just buy me more time and keep my eye out for a really good sale.

And this is how the money pit hemorrhaging begins…

First appliance down — Dishwasher

It’s only been a week since we have moved into the new condo and we already have our first casualty — the dishwasher! Since we are still unpacking I have been loading the dishwasher at least 1x a day to wash everything before putting them away. Today I heard the door make a funny sound and, when I went to close it, found it to stick to the bottom lip of the dishwasher and not close.

Luckily for us, we knew that the appliances were past their life expectancy (most dishwashers last 10 years and ours is from 1985) and we had the seller purchase a 2 year appliance warranty. This means that I pay $100 per incident or the cost, whichever is lower. $100 is still a lot of money for me but, it does give me some reassurance to know that this is the most this issue could cost me. And? I am hoping that this is some big issue and they will need to replace the entire dishwasher altogether. Again, based on the age of the dishwasher, I would be surprised if they still made parts for this thing.

It will be interesting to see how many appliances break in the next two years while our warranty is active. I have a feeling that the seller (a single man in his early 30s) didn’t really use appliances so they might be in shock with my family’s constant use…

Love,

C

Operation: Home Purchase

As mentioned previously I have resorted to various tools and tricks in my attempt to decrease expenditures and increase savings, which will ultimately increase the cash on hand for my home purchase. Some of these were no-brainer but some tricks, I am sure many will oppose. In the end, I view all of these in terms of risks and benefits and I have determined that I am comfortable making these changes for the short term.

  1. Get a part-time job. My line of work makes it difficult to get part time jobs since I may have to travel at any point for work, which only leaves weekends available. I have gone through the application process for a test prep company to tutor GMAT (similar to the company that No More Harvard Debt went through), and start training in July. I am hoping to bring in at least $500/month after taxes through this.
  2. Sell stuff. I am starting to comb through my apartment to find items that I can sell. I have already taken two big bags of clothing to eDrop Off that have sold and I have another bag to take for my next visit.  I had to part with some beautiful items that I worshiped but never wore. I sold my Wii which was being used only to stream Netflix. All those MBA textbooks that I’ve held on to but never opened since graduating? I will sell those too. Whatever I do not use but has a value will be sold.
  3. Cash out rewards. I cashed $727 worth of various credit card points for gift cards (GC). I am sitting on a ton of miles and hotel points with various airlines and hotels and will look at cashing out those, as well.  I will keep the miles at my favorite airline and free hotel nights, but I will cash out everything else for cash or GC. If I can’t find any GC I like, I will most likely keep the points until after the house purchase and cash out for an item. The goal is to use these GCs rather than cash.
  4. Decrease my spending budget. A follow up post to come on my new budget for July.
  5. Stop Roth IRA contribution. I still fully intend to contribute the max amount for 2012 but I will hold off until after the house purchase to ensure I have the most amount of cash possible.
  6. Stop student loan payments.  My 0% loan contribution will continue but I have been overpaying on my federal loan for the last several months, which has been enough not to make any payments until next year.  I also have a habit of putting my bonus money to my student loans, which will stop. Same as with #5, I will hold off on making payments until the house purchase, then I will attack this aggressively again.
  7. Surveys. I have been doing surveys off and on, and I think it is time for me to start again.  It’s never a lot of money and there are payout delays, but money is money.

Those are all the tricks I can think of to increase my cash hoard. Do you have any suggestions or recommendations that could help me increase my cash? If so, I’d love to hear it!

Love,

C

When my mind starts wandering…

… boy does it wander.

The post that was published yesterday was actually written a week ago. Since I put that budget together, a few things have changed. I have found out that $150 for Personal Spending was too low and upped it to $300. That wasn’t so hard…

But that high rental cost really bothered me. I kept on thinking about it. Then the toilet leaked. This is the second time in the last 6 months that it has happened. The condo was built 10 years ago and 10 years is about the time when the appliances begin to fall apart. The landlord pays for the plumber but it always means some damage (however small) to my items and annoyance of working from home to meet with the plumber, etc.

That made me begin to wonder if it was worth it. Out of pure curiosity, I started to look at the condos available for sale in my neighborhood. I saw units that were nicer than mine obtainable with monthly mortgages less than my current rent. Then I became obsessed.

I always wanted to own some rental properties in my investment portfolio. Since there are numerous tax breaks for your primary residence, I always thought I’d live in a property for two years, make whatever changes needed to increase the value, then rent it out. I thought that I’d begin looking maybe in a year or two, but the real estate market in Chicago finally seems to be picking up and I am expecting the prices to start to rise.

Conclusion? Now I am shopping for my very first property. I have been preapproved by a bank, have started to work with a realtor, and have identified target neighborhoods. The assumptions the mortgage lender and I used is to keep my monthly mortgage+tax+insurance the close as possible to my rent. Now the tough part is waiting for the “perfect” property for me to become available and not get caught up in the outside activities (investors snatching up properties before I have a chance) and let that rush me into something that is not “perfect”.

This also means I need to redo my budget ASAP. Even though the mortgage preapproval was very favorable, I want to have enough cash to make any updates, especially if I end up purchasing a fixer upper (preferred).  I already have taken some actions to reduce the future expenditures and to increase income, which will all hopefully increase my savings. I will share some of those activities with you tomorrow.

Love,

C