Learning from New Barriers

I’ve been lucky when it comes to savings and investing. Lucky and without barriers. I didn’t realize how lucky until recently.

I’ve always been a saver. I’ve had role models in saving and frugality. I’ve also had incredible motivation. In high school, I only worked during the summer. I had to make my money last!

I opened my first savings account when I was very young. I stashed away any dollars I got my hands on, so the minimum opening balance was never a problem. Most banks are lenient with minimum balances for youngsters anyways.

After a few summers of working, I started my first investment account. The $3000 minimum wasn’t a problem. I was so good at making my money last through the years that it piled up. I had the cash sitting in my savings account. At least this would allow it to grow.

When I started my IRA, I was consolidating bank accounts. One happened to have exactly $5500. I had no other plans for the money. An IRA felt like destiny.

My 401k didn’t offer any barriers to entry either. I could put in 1% of my salary. I was just starting my student loan destruction journey and I wanted as much as possible going to my loans. 1% was the minimum I could invest without unenrolling from my 401k. Unenrolling felt like a barrier, so I did what I could to avoid it.

Now that is all well and good. I’m 30 and I’ve planted several solid investment seeds. Each of these accounts are easy now. I add to them when I want with an amount I want.

Starting my taxable investment account has been a different story.

We bought a house and that’s priority #1. It needs work. We knew that. I knew that. Taking care of the things we need to do has been expensive, much more expensive that I could have anticipated pre-move.

With that said, I don’t want to get behind on my goals. I’ve set and accomplished a major money goal each year for the last few years. Opening a taxable account is the next step. I don’t want to put it off. However, having nearly all of our money going to house projects has left little for investing.

I want to stay with Vanguard. $3000 is the minimum for most of their funds. I can’t come up with that right now. I’m staying true to my priorities, and there isn’t $3000 to spare after everything else. I lowered my hope to $1000.

I’m struggling to come up with $1000. My saving plan has me getting there in August. That’s what I’m comfortable setting aside. I don’t have the time, energy or resources (still no internet!) to hustle right now. That’s all I can spare.

I’ve never felt a barrier to saving or investing like this before. Most of it is artificially imposed, but I’m true to the jobs I’ve given my money. This isn’t an emergency. It is not a car. It is nothing I’d attempt to justify for the travel fund.

But what if this scarcity was reality?

What if the emergency fund was my rent money? My travel fund was all I had to buy groceries and my car fund had to cover gas until next payday? I can’t set aside any of that money because I need it. I can’t make it unavailable because it is my lifeline until the next payday.

I hate to admit that I’ve never really understood Dave Ramsey’s 1st Baby Step. Whenever someone calls into the show and says they are on BS 1, I didn’t get it. Really, it takes you awhile to set aside $1000? Stop going out to eat! Put down the Starbucks!

Until now, I’ve been blinded by my own privilege to never know what it feels like for it to take a few months to come up with $1000. This whole process of evaluating where I can squeeze out a few extra dollars has been a lesson in empathy.

I may not get it yet, but I’m a few steps closer to understanding.

Do you have the Vision? Buying a House that needs love.

When Hubs and I set out to buy our first house, I had strict criteria. The most important of them was NOT UPDATED.

If I could write that on my list 3 times, I would bold the first, underline the second and italicize the third. I might even throw it on there a fourth time so I could make sure it really was NOT UPDATED!

This was critical for my home search because I didn’t want to overpay for my house. I didn’t want to pay for someone to throw some sloppy cosmetic updates that look nice today, but will completely fall apart before too long. Sure, cosmetic updates are nice when you walk into a home, but in my hot selling market, these updates were done on the cheap to exponentially increase the asking price. I also didn’t want to pay for updates that I may want to change. In the name of efficiency, I didn’t want to update twice.

I didn’t want to play the update game. I’ve been a renter for a long time and I knew I couldn’t tell the difference between cheap and quality craftsmanship. I stuck to what I knew I could rely on: Good bones. How is the foundation? How is the layout (reasonably speaking)? How is the construction? How is the house holding up?

We found what we were looking for.

The house we bought needs love. It was a single owner 1960s house. We got a deal on it because they needed to sell it and they didn’t want to update it. I’m being kind when I say it was ugly. I bought Grandma’s house with its green carpet throughout, 1 blue bathroom and 1 green bathroom! So much tile!

The best thing about this house is that it didn’t show well at all. Grandma died and the house hadn’t been cleaned in a long time. There were cobwebs everywhere. The cabinets were grimy. I’m thankful I didn’t have to take my shoes off when we entered.

This all sounds horrible to someone without vision. Those without a vision are overwhelmed by it all. One visitor (who may have visited too soon) could barely hold back their distaste. “You have a lot of projects ahead of you.” Others, I specifically told not to visit because I knew they wouldn’t be able to handle it. These are the people that buy move-in ready houses and pay the premium for it.  Move-in ready houses are fine for other people to buy, but this was my house and I didn’t want that.

I had the vision.

I could see beyond the house today and imagine it as the house it would be.

The house has a lot going for it. The layout is great. The location is even better. The neighborhood is established, quiet and safe. The house is on a dead end street. The bones of the house are solid. There is so much potential.

In only 3 short months, Hubs and I have made incredible progress. We cleaned, cleaned and cleaned some more. Then we:

  •  Installed new toilet seats
  •  Painted the ceilings
  •  Painted the walls
  •  Replaced most of the flooring ($$$) – Carpet for the main living areas, hard surface in the kitchen and family room.
  •  Replaced all the outlets, changing them to white (and some to USB!)
  •  Rejuvenated the shower experience! New shower head, fixtures, and a curved shower curtain rod.
  •  Replaced the vertical blinds with double rod curtains.
  •  Painted the bathroom cabinet, replaced the hardware.
  •  Replaced our front and garage entry door. Both were non-compliant. ($)

This house has been a team effort for us. Hubs and I shed equal blood, sweat and tears during this labor of love.  I wouldn’t recommend this to everyone, but if you have the vision, buying a house that needs love can be incredibly rewarding.

After 3 short months, you don’t need a vision to love this house anymore. The house looks great. I can’t wait to start inviting people over.

… Maybe I should get a living room couch first.

House Hunting – GND Style

We bought a house!

After 6.5 years of renting, it was time. Going into the process we built out our must have list.

3 Bedrooms

The plan was 1 bedroom for us plus an office for each of us.  Work from home FTW!

2 Bathrooms

When you gotta go, you gotta go. We’ve been incredibly spoiled with 2 bathrooms for 6 years and it wasn’t something we were willing to compromise on.

2 car garage

We live in the tundra and we both drive to work. I flirted with the idea of going to a 1 car household but Hubs brought me back to reality. We don’t live in a walkeable area and our schedules are completely incompatible.  2 cars it is!

Low Maintenance (read: Short driveway, small lawn)

We wanted to minimize the impact of the outside on our lives. As I said before, we’ve been incredibly spoiled by apartment living for the last 6 years. We love not having to mow or shovel and wanted to keep as much of that as possible.

TV Room

We don’t watch a ton of TV, but when we do, we don’t mess around. Hubs is a movie buff and having a good room for cinematic adventures was key.  I also enjoy the dark loud room as an excellent place to fall asleep 17 minutes into a flick J

A little bit more space

Our apartment is 1100 sq ft. Our storage unit (free – calm down don’t worry) is an extra 25 feet. Our living spaces are relatively clutter free, but the storage spaces are jammed packed. We wanted enough space to spread out and give our things a home.  We set our sights on 1500-2000 sq feet.  We were hoping for the smaller side, but the layouts for the smaller homes in our area weren’t good uses of space. We stayed relatively open when it came to square footage.

Same Neighborhood

We happened into our neighborhood 6 years ago and we completely fell in love. The town is great, the proximity to everything we could ever want is fantastic and magically we are just far enough from everything that most people forget the town exists. We initially set out looking outside of our town, but it wasn’t working. When we re-focused our search, we focused in on our town and only our town. We were prepared to wait for a property within our price range, even if that took a while.

Not Updated

We also didn’t want to pay for someone to update the house for us. In so many of the homes we’ve toured, sellers claim a room or a house is updated, but they used the crappiest materials. Even if they don’t install crap, people make these updates because they can charge more for the house than the upgrades cost to install. I wanted to buy an outdated home and do the updates myself. Even if we hire out the jobs, it should be net positive in the long run. That allows us to make the house our own and not pay an extra premium for it!

Right Price

We’ve been told for years that you make money on a house when you buy it. We wanted a deal. This sounds horrible, but we were hoping to capitalize on a little desperation.

In addition, we didn’t want to over extend ourselves. I drafted up a comparison between what we are paying currently for everything it takes to sustain us (rent, insurance, utilities not covered by our rent) and what we would need to pay for with a house (mortgage, taxes, insurance, all the utilities – electric, gas, trash, water). We wanted to maintain our current outflow.  My rough estimate: $215,000 was just the right price for us to pay the same on housing.

What did we buy?

  •  3 bedrooms
  •  2 bathrooms
  •  2 car garage
  •  Short, concrete driveway
  •  < 0.25 acre flat lot, while not on top of our neighbors.
  •  1800 sq ft
  •  2 blocks outside of our town proper, 6 minutes from where we rent.
  •  Outdated, but completely functional.
  •  Cheapest house in the neighborhood
  •  Seller was handling the estate for his late ex-wife. It was priced competitively and we asked for a discount.
  •  Final price: $215,000 on the nose.

 

Jordan fades back, SWISH! And that’s the game!