I’m Buying a House

I am in the process of buying the house that you should see pictured to the left of this text. This was somewhat of an impulse decision. There have been several times in the past few years that I considered buying a house, but I decided not to try since I figured I wouldn’t be able to get a mortgage with only having seasonal employment. Now that I have a full-time job that isn’t seasonal that isn’t a problem anymore. I hadn’t really been planning on buying a house this year though. If I had been, I wouldn’t have paid so much towards my student loans and would have delayed contributing to my IRA and 401k. All of that money would have been helpful to have for the down payment and closing costs.

The house I’m buying cost $98,000 and I’m putting 5% down. Since I’m only putting 5% down, I will have to pay PMI and my mortgage rate is a little higher. Unfortunately, 5% is all I can afford to put down since I was paying down my student loan and putting money in retirement savings rather than saving up a down payment. I considered taking $10,000 out of my IRA since I’m allowed to take that amount out penalty free as a first-time homebuyer. I decided against it since I’m 50 years old and I don’t have that much in my retirement savings. I’d rather have a larger mortgage than deplete my retirement savings. Hopefully, this house purchase will prove to be a good financial decision.

I am taking out a 30-year mortgage on the house. That seems like an awfully long time considering I’ll be 80 years old (or more likely dead) by the end of the mortgage term. The lender seemed to think that the payment on a 15 year mortgage would be too high for my income. If rates stay low I’ll consider refinancing in a few years once I’ve built up some equity and/or have a higher income. My monthly payment will be about $660 with insurance and taxes. That is more than I pay for my apartment, but a lot cheaper than it would cost me to rent a house.

The house is rather small at 780 square feet. It has two bedrooms, one bath, living room, dining room, kitchen and an unfinished basement. The bedrooms are pretty small. The dining room is bigger than the bedrooms which seems backwards to me. Unfortunately, I can’t easily turn the dining room into a bedroom. Although the house is perfectly livable as is, there are a lot of things I want to change about it. I’ll worry about those after the home purchase is completed. I’ll be pretty broke once I’ve paid the down payment and closing costs so there won’t be any big changes for a while. Although a 780 square foot house is small, I’m living in a 180 square foot apartment so I’ll need to get some furniture for the house. I’ll probably be spending almost all my money on the house and house related purchases for the rest of the year. Spending all of that money is tough for a tight-fisted miser, but it will be worth it to have my own home.

October 2017 Net Worth Update

penniesIn order to keep track of my financial progress or lack of progress I have decided to calculate my net worth a few times a year. I’ve been doing it every month, but I think after this month I’ll return to doing it quarterly or semi-annually.

My net worth as of 10/1/2017 is as follows.

 

Assets
Cash – $3264
IRA – $29,176
Roth IRA – $1684
Solo 401k – $3165
Car/Stuff – $3200

Liabilities
Student Loan – $115,846

Net Worth = $- 75,357

My net worth improved almost $1000 last month.   This was mainly due to receiving three paychecks from my full-time job. It seems like it should have improved more with the extra paycheck and all my investment accounts making at least a little money. It is better than going backwards so I won’t complain. Hopefully, I can keep the positive trend going the rest of the year.

I’ve been using Personal Capital (affiliate link) to help track my net worth. It keeps track of all of my financial accounts and my student loan making it pretty easy to calculate my net worth each month. It is free to sign up. If you would like to sign up I’d appreciate you using my link. All blog income, including affiliate income, goes to paying down my student loan.

Personal Capital

September Income – $3951.66

Here is a breakdown of my income for September.

Interest $1.30
Amazon FBA $148.07
Cash Back $0
Online $0
Job $3802.29
Total $3951.66

 

September’s income was really good due to having three paychecks during the month. I didn’t make much outside my job. This month will return to normal and I’ll only receive two paychecks. I hope I can increase my other sources of income at least a little this month.  Without the third paycheck this month’s income will be down, but it still should be pretty decent. Now that I’m making almost all of my money from a regular job there isn’t much interesting to read about in the income reports. That won’t change for a while.

 

September Expenses – $1338.01

Here is a breakdown of my expenses for September.

Household $277.44
Rent $435
Entertainment $23.91
Transportation $271.83
Food $108.25
Travel $41.72
Phone $25.61
Health $154.25
Total $1338.01

 

September was an okay month for expenses. My transportation expense was a little high since I paid for six months of insurance on my car. The household category was a little high since I bought a laptop. Health was a little high since I had a dentist appointment.

This month the health category will again be a little high since I’ll have another dentist appointment and possibly a doctor’s appointment as well. Transportation and household will return to normal. My food expense wasn’t terrible in September, but it should be much lower in October.

I expect my other expense categories to remain roughly the same. I should at least get close to meeting my $1000 target this month.

How was your month?

Four Nights in Vegas for $41.62

One of the suggestions last week when I asked for ideas to spend my money on was travel. I didn’t have any travel plans for the rest of the year at that time. Since I go to Vegas almost every year and hadn’t been there yet this year I decided to research the feasibility of a Vegas trip.

Another reason I wanted to go to Las Vegas was that I knew I’d be able to get some great bargain there due to having Diamond status with Caesars Total Rewards. It usually takes a lot gambling to obtain Diamond status, but I acquired the Diamond status when I purchased a one year Founders Card membership. One perk of having Diamond status is that you do not have to pay resort fees on your hotel stays in Vegas. With resort fees of over $30 a night at many properties, this perk alone can save a frequent Vegas traveler a lot of money.

Wanting to see what deals were available I logged into my Total Rewards account and reviewed the nightly rates for Caesars properties in Vegas for October and November. I was pleasantly surprised to see lots of low rates available and quite a few comp (free!) nights available as well. I decided to book four nights at Harrahs, from the Friday after Thanksgiving through the following Monday. The rates were super cheap on Friday and Saturday. Sunday and Monday were completely free. My total for the four nights came to $41.62 with taxes and fees. A nightly rate of just over $10 is a great deal. Friday and Saturday nights rates for Vegas Strip properties are often well over $100 a night even at lower end properties so getting a center Strip property for this low of a price is a super bargain.

Of course, I have to get from Kansas City to Las Vegas as well. I managed to book airfare there and back for free. For the flight to Vegas I will be flying Spirit.  I’ve never flown them before, but they were by far the cheapest option for that day so I’m giving them a chance. The Spirit flight cost about $60. I booked the flight through the Chase Sapphire Reserve travel portal for a little over 4,000 Ultimate Rewards points making the flight free for me. The return trip was booked through Southwest using Rapid Rewards points. I did have to pay the $5.60 security fee for this flight. However, I paid it using a Southwest gift card I received for my birthday. The result is that I have round trip airfare with $0 out of my pocket.

My only expenses in Vegas will be food, transportation to and from the airport, and gambling. The food should be pretty cheap. As a Diamond member I can enjoy free drinks and snacks in the Diamond Lounge. I plan to take advantage of that benefit. I’ll make at least one trip to In-n-Out Burger and probably sample some other local fast food as well. My overall food cost will be pretty low.

It is possible to take a city bus from the airport to Harrahs and I usually do take a bus to my hotel when in Vegas. Since I’ve saved so much money elsewhere I might splurge for an Uber on this trip. Gambling could be a big expense or if I’m lucky it could result in my making a profit for the trip. I’ll set aside $100 or so for gambling and hopefully not use it all.

My Diamond Card also allows me to see two free shows while in Vegas.  If my girlfriend had been able to come with me on this trip I definitely would be using this benefit. Since she isn’t coming, I’ll see what they have available and make up my mind on attending a show at that time. Even if I don’t see a show I will be getting great value.

The Problem of Not Wanting Anything

The fact that I have almost no desire for stuff makes it easy for me to be frugal. It isn’t a sacrifice to not buy stuff that you don’t want in the first place. An example of my lack of desire for stuff is being unable to spend Kohl’s Cash. Last month I had $10 in Kohl’s Cash to spend from buying stuff to resell. The Kohl’s Cash was expiring soon and I couldn’t find anything to resell so I decided I would just buy something for myself. I couldn’t find anything in the store I wanted and ended up letting the Kohl’s Cash expire unused. This month I received another $10 in Kohl’s Cash for my birthday.  There still wasn’t anything I wanted to buy. I ended up buying a pair of pants even though I already had enough pants. I have very little closet place so when I get something new I need to get rid of something old. I did have one pair of pants that are over 10 years old and looking kinda grungy. They weren’t acceptable to wear to work, but I could wear them when I wasn’t concerned about my appearance. (Which is most of the time.) Since I got the new pants, I retired the old pants. Even though the pants were over 10 years old and I only paid about $10 for them it still seemed wasteful to get rid of them.

Although this lack of desire is a positive when it comes to spending money it is a negative when it comes to earning money. Making more money doesn’t seem to have much benefit for me. Last year I made about $20k and this year I will make about $40k. Doubling my income seems like it should lead to a better lifestyle, but I can’t think of anything I can buy now that I wanted to buy before and couldn’t afford.  Most of the additional money I’ve made this year has gone towards paying down my student loans or retirement savings. Those are both things that should benefit me in the future, but they don’t improve my life right now.

I actually think my quality of life was better last year with the lower income. Although I had less money I had a lot more time. Perhaps I put too much value on my time. It isn’t like I am doing much with my free time. Yet, once I have made enough money to pay for what I consider my necessities I have almost no desire to work for more money. During tax season there are plenty of opportunities for overtime and I rarely work overtime since I’d rather have the time off then the extra money. That is basically like paying $30 an hour for my extra free time. Since there isn’t anything I want to buy with that $30 an hour though, using it for more free time seems like a reasonable deal.

I’ve been trying to think of things to spend my additional money on that would improve my quality of life. The additional money has led to me spending a lot more money on restaurants and fast food.  That isn’t really leading to an increase in my quality of life. In fact, eating all of the fast food contributes to health problems that could end up killing me. And once I’m dead my quality of life will be nil. I need to find something else to spend my money on. If you have any ideas I would love to hear them.