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Browsing posts in: Spending Money

Creating a Five-Year Money Plan

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My husband and I have held ‘quarterly goal meetings’ for years. Every three months, we go out to dinner (kid free) and review our goals for the coming year. We usually spend a couple hours individually preparing/adjusting goals the week before the meeting and talk through them at dinner. I bought a Living Well planner from Living Well Spending Less (LWSL) a couple years back and we have been using those prompts to set annual goals individually and as a couple. We try to include goals like: vacation/travel, fitness, budgeting, community, and spiritual/educational growth. I love the way Ruth/LWSL walks you through how to set and achieve goals and it worked so well for us, we were able to keep this area consistent in our lives. No, LWSL isn’t the perfect solution for everyone, but it has worked well for me (they are not a sponsor/advertiser).

I have felt a bit smug about this habit. I’ve got my ‘stuff’ together!

*sigh*

Here sweetheart, have some humble pie.

Without going too far down the explanation rabbit hole, my kids will go to college for free. We haven’t been as consistent about setting money aside because college is covered! No worries! I was randomly reading through the paperwork this week and there was a very big asterisk on the whole ‘free college’ thing: housing, food, and books aren’t included. Tuition only. Since they can attend any college of their choosing in any state, there is a good possibility they will need all of those things. I feel like a complete idiot for missing this and now I’m way behind the 8 ball.

Wait, it gets better. I was lying awake at 2am, staring at the ceiling trying to figure out how in heaven’s name I’m going to save for college for four kids on an expedited schedule, and it hit me…my son is turning 11. He’ll need a car in 5 years. No, I’m not a fan of giving cars to kids but I’d like to help so they don’t start in a financial bad place like I did. Where will I get the money for that?!?!

Then there is additional car insurance, braces, cell phones, and all the other financial whammy’s that come with teens. Short term goals? I got those in spades. Long term? Uh. I’ll have to get back to you.

Here’s the deal, the planner prompted long term goals, but I distinctly remember looking at those pages, laughing, and saying, ‘That’s cute. I don’t have this month figured out; I’ll focus on that first.’ So here I am, the smug look wiped right off my face, mashing numbers into a calculator so I can back into how much I need to budget for the future. Obviously, if you are carrying debt, FOCUS ON THAT FIRST! But if you are rocking that budget and finished with debt, or getting close, sit down and look at your five-year expenses. It’s REALLY scary, but it’s less scary now that it would have been to hit this wall five years from now.

Excuse me, I’m going to eat some more humble pie.

Good Deals in Real Estate Exist!

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We are in escrow! Sorry, in Texas (and pretty much every other state) terminology, we are under contract!! We landed a house for $60K under budget. Yup, you read that right, $60K UNDER budget in a crazy housing market where houses are gone in days, sometimes hours. How’d we do it? Did we buy a trashed fixer-upper? Did we buy in a bad area of town? Nope. The house only needs moderate updates and it’s in a spectacular neighborhood 15 minutes from my work. We copied the buying method we did 14 years ago; we saw what everyone missed. What was that exactly?

1) We ignored the colors. The outside of the house was stunning but the second I opened the door, I leaned over to my husband and whispered, ‘1980 called and asked for their wall colors back). The colors felt like they were yelling. Bleh. But that’s a very cheap fix.

2) We ignored customization. The homeowner installed 4-foot-tall walls (pony walls) to break up spaces around the house and the garage. Let me be very clear, DO NOT ASSUME YOU CAN MOVE WALLS. My husband is an expert and we walked through with an engineer. These were non-load bearing walls but that isn’t always the case. But homeowners do weird things, if they aren’t permanent, don’t let them scare you away.

3) We brought a tape measure. The house belonged to a ‘collector’. It was FILLED with antiques and bulky furniture. When people have tons of stuff, it’s really hard to gage how big a house is or isn’t. We always bring a tape measure. Trust me, you’d be surprised. We walked into the upstairs playroom and it felt claustrophobically small because it was filled wall to wall. It was 17 feet by 22 feet.

4) We focused on the bones. It’s so hard to focus on the bones of a house. What’s the layout? What’s the condition? What’s the location? Stop being distracted by the paint and the furniture.

5) We consulted with experts. After our offer was accepted, we hired an inspector. Yes, pretty much everyone does that, but my husband walked through the space with him. My husband was doing final measurements around the house and drafting a layout plan while the inspector was doing his thing. Every time the inspector spotted something important, he’d call my husband over and they’d have a chat about it. They were able to bounce repair ideas off each other. We also invited a specialist to join the inspection party. The front windows looked like they may need replacement so we brought a window installer (they’ll usually come for free BTW). General inspectors are great but if you need specific repairs, sometimes it’s nice to bring in someone who can give you exact costs rather than a ballpark. Those floor measurements and layout drafts my husband took? He took those to a carpet installer who gave us a solid estimate. Always talk to real estate experts.  All too often, people buy very pretty houses that are complete money pits. Try to have a very clear picture of what you are buying.

What are your homebuying tips in this crazy market?