Archive | January, 2010

Thanks, But I’d Rather Not Be House Poor

21 Jan

I am not a home owner.  I shouldn’t be a home owner.  I don’t have enough cash in my savings account to be a home owner.

However, everyday I am pestered by people who just love to tell me that I need to buy a house.  They say I am crazy for not buying a house because of these things:

  • $8,000 Tax Credit
  • Buyer’s market
  • Good investment
  • Renting = wasting money

While all of these things may be true, home ownership is not a right – it’s a responsibility and a privilege.

In my article at Money Under 30 this week, I mentioned that buying a house simply to obtain a tax credit is just ludicrous.  Do you know how many tax credits exist?  Many.  There are tax credits for adopting a child, having a child, going back to school, being elderly or disabled, among other things. 

Does that mean I should adopt a child or get all jazzed up about turning 65 so that I can claim a tax credit?  Er, no.  Nor should I jump for joy over a measly $8,000 tax credit which would in turn force me to buy a house before I’m ready;  Thereby, most likely putting me in thousands of dollars of consumer debt.  No thanks.

I think there are certain things you need to accomplish before you are ready to own a home.  Among them are:

  1. 6-12 months of Emergency Fund (I have about 10 months)
  2. At least 20% of the down payment in cash for your house (preferably more)
  3. Several thousand dollars ($15,000 for Lloyd and I) for new home miscellaneous expenditures
  4. Maturity
  5. Stable Full Time Job
  6. Married or buying a house on your own (never buy a house with someone other than your spouse)

From that list, I only have 2 (maybe 3, the jury’s still out on number 4) of those things accomplished.  Survey says:  Carrie is not ready to buy a home.

I would venture to say that premature home ownership is one of the biggest causes of consumer debt problems.

So, there you have it – I am not ready to buy a house;  it’s also pretty likely that those people who are telling me to buy a house really were never ready in the first place.  So, you enjoy your credit card debt and I’ll enjoy my savings and my landlord.

You can bet that I’ll buy a house someday.  Oh yes, I cannot wait for that day!  Trust me though – it won’t be a day sooner than I am financially and mentally ready.

What do you think?  Do you think people buy houses before they’re ready?  For the renters out there – do people pester you to buy, buy, BUY?

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Update On 2010 Goals

12 Jan

I have made progress on two of my goals!

Here’s what I said when I first posted my goals:

  • Make a To-Do List every morning: I love lists.  I love to-dos (when they don’t involve studying).  I know I accomplish so much everyday, but sometimes I feel like I have no idea what I did all day.  I also feel unorganized sometimes and think this might help me prioritize my life.
  • Stretch Every Day: preach the joys of lifting and running, but when it comes to stretching, that’s a big fat epic fail for me.  Which is just silly because I LOoooove stretching.  I used to be on the dance team in high school and could easily do all 3 splits (yes, there are 3).  I just always seem to forget or  just run out of time at the gym.  I don’t even need to stretch for very long – a couple minutes minimum.
  • I hate random lists written on scratch paper, so I wanted to get a notebook I could stash in my purse.  You know what I hate even more: when the papers and sides of the notebook get tattered and gross and wrinkled.  I found the perfect solution:

    A funky green pocket notebook with a hard-outer shell and white crisp center. 😉  It’s small enough so that it won’t weigh me down so I won’t make up an excuse not to take it with me (I hate big bulky planners).

    I’ve also made progress on my stretching and found the perfect time to stretch is while winding down in front of the tube at the end of the night.  Here’s proof (somewhat):

    Nevermind that piece of red lint in the corner.

    Yes, things are looking good for 2010.  Now only if I could find time to fit in 20-25 hours of studying each week so that I could reach my first 2010 goal.

    Riddle Me This

    8 Jan

    “No Dividends Received Deduction is allowed if the dividend paying stock is held less than forty-six days during the ninety-one day period that begins forty-five days before the stock becomes ex-dividend.”  – Wiley CPA, 2010

    Say it with me now: What the ****?!?!

    This is how I’m spending my Friday night (and also why I’ve been so absent from my blog – I’m laying the smack down on my CPA studying!).

    How are you spending YOUR Friday night?  I hope it’s better than mine!

    (source)

    Pssst:  Check out my new header, courtesy of my friend Debt Ninja over at Punch Debt In The Face!

    Save Today For Big Payoffs In The Future

    7 Jan

    A Guest Post by Robert Sommers:

    Robert Sommers is a freelance mortgage and real estate writer based out Baltimore. He has worked for over 25 years as a licensed real estate agent in all areas of commercial and residential real estate.

    A down payment is a huge financial commitment and very often one of the biggest obstacles in buying a home. Not to mention the fact that due to the recent mortgage meltdown, many lenders are now requiring higher down payments on a mortgage loan, making saving up even more of a challenge. If you want to avoid paying private mortgage insurance, you’ll need to make a down payment of at least 20%. For those unfamiliar, PMI stands for Private Mortgage Insurance which is an extra cost required lenders that is built into your monthly payments for a home mortgage loan greater than 80% of the home’s value.

    One of the best ways to save for a down payment is through setting up a savings plan. The first step in doing this is assessing your current financial position. This means taking a look at all of your assets and creating a budget based upon how much you need to save monthly for your down payment. Carefully add up all financial instruments you currently possess- CDs, stocks, bonds, T-Bills, etc. In addition to any mutual funds and even savings/retirement funds- 401K’s, IRA’s, Roth IRA’s, etc., as the proceeds from borrowing against a retirement fund can be used towards making your down payment.

    Once you calculate all of your assets, you can get an idea of how much money you’ll need to save by subtracting the total from the amount needed for your down payment. The outcome will aid you in formulating a budget that will help you determine exactly how much you need to save each month towards your down payment.

    Once you know how much you need to save every month, you might want to consider holding the funds in a high-yield savings or MMDA- money market account. These offer a great deal of security and liquidity and the interest rates the offer are also very attractive. This will allow you to earn interest on the money you save, thus helping you to reach your down payment goal faster while still giving you easy access to your money.

    While the task of saving up for a large down payment may seem daunting, it is definitely doable if you create a budgeting plan and stick with it. While some financial sacrifices may be needed in order to reach your down payment goal, it will all pay off when you purchase your dream home.

    ————

    Note from Carrie: I think it’s great how Robert emphasizes saving, saving, and more saving for your first house.  I’ve stressed before how important it is to wait to buy a house until you’re ready – which includes waiting until you have that 20% saved.  So many of my friends have bought houses before they are truly ready and are now paying the consequences in terms of being strapped for cash and maxed out credit cards for expenses like maintenance and decor.  The message is clear – save, save, save!  Happy saving!

    New Year Reflections On 2009

    2 Jan

    1. What did you do in 2009 that you’d never done before?
    Started a blog!

    2. Did you keep your new year’s resolutions, and will you make more for next year?
    Yes – I kept mine last year! Last year’s resolution had to do with family and I definitely kept it.  I love making resolutions (AKA goals) because personal development makes me happy.

    3. Did anyone close to you give birth?
    Yes, a very close friend gave birth.  It was a wonderful blessing!

    4. Did anyone close to you die?
    Unfortunately, I experienced 2 deaths this year.  They were hard but make you appreciate your life that much more.

    5. What countries did you visit?
    Does Las Vegas count as a country? 😉

    6. What would you like to have in 2010 that you lacked in 2009?
    The letters “CPA” behind my name.  Carrie, CPA.  Catchy, huh?  I’d also like to have a life, which I did not have much of during 2009 due to the aforementioned.

    7. What dates from 2009 will remain etched upon your memory, and why?
    May 12, 2009.  The day I took my first CPA test and quite possibly one of the most stressful days of my life.

    February 13, 2009.  The day I wrote my first post.

    8. What was your biggest achievement of the year?
    Passing two of the tests for the CPA exam and getting my first freelance writing gig!

    9. What was your biggest failure?
    Not passing more CPA tests.  I have learned that I am not a quick studier.  My mind wanders.  It takes me time to absorb material.  However, I suppose that with every failure, you learn something about yourself.

    10. Did you suffer illness or injury?
    Yep, unfortunately.  Nothing major, but still troubling.  I also had my first bout with insomnia back in April.  Horrible!  Luckily, sleep and I – we’re back together and have never been happier.

    11. What was the best thing you bought?
    A trip to Vegas!

    12. Whose behavior merited celebration?
    Everyone.  Pass. 🙂

    13. Whose behavior made you appalled and depressed?
    Lindsay Lohan.  I don’t know why, but her life irritates me to no end.  I want to kidnap her, shove her on a plane, fly her to a different country, get her a desk job, and never allow her back in Hollywood ever again. 

    14. Where did most of your money go?
    Into my savings and retirement accounts!  Outside of that, I spent some money on the CPA exam and study materials, Vegas, and some health stuff.

    15. What did you get really, really, really excited about?
    Moving in with Lloyd, passing the first two parts of the CPA exam, and summer.  I love summer with an undying passion and it makes me so happy.  I loathe winter and would be totally content if the temperature never dropped below 50 degrees ever again.

    16. What song will always remind you of 2009?
    Anything Taylor Swift!  That girl was everywhere this year!

    17. Compared to this time last year, are you:
    a) happier or sadder? Happier!
    b) thinner or fatter? about the same.
    c) richer or poorer? Richer, definitely.  This time last year, I had only $1,000 in the bank.

    18. What do you wish you’d done more of?
    Spent more time with friends and family.  After the CPA, after the CPA.

    19. What do you wish you’d done less of?
    Let my mind wander less… (see #9)

    20. How did you spend Christmas?
    With my family and by eating way too many sweets.

    21. Did you fall in love in 2009?
    Everyday more and more. 😉

    22. What was your favorite TV program?
    Mad Men!  Best show eva!

    23. Do you hate dislike anyone now that you didn’t hate dislike this time last year?
    The occasional co-worker gets to me, but nothing serious.  Oh, and Jon Gosselin.

    24. What was the best book you read?
    I’ll never tell for fear of backlash on my blog. 😉

    25. What was your greatest musical discovery?
    Lloyd’s iTunes collection.  Although he is not hip to the Top 40 stuff, he has amazing taste in music in all other areas.  He is my personal DJ.

    26. What did you want and get?
    A new computer!

    27. What did you want and not get?
    A CPA license.

    28. What was your favorite film of this year?
    I really liked Public Enemies and He’s Just Not That Into You.

    29. What did you do on your birthday, and how old were you?
    I’m veinte-seis and I celebrated with a close group of friends.

    30. What one thing would have made your year immeasurably more satisfying?
    I sound like a broken record: a CPA license.

    31. How would you describe your personal fashion concept in 2009?
    Confused.

    32. What kept you sane?
    The gym (even though I’m becoming ever more short-tempered with the people at said gym…my home gym can’t get here soon enough), coffee, Lloyd, dogs (have I mentioned my infatuation with dogs?  I love them and they are the sweetest creatures on the planet), and my BFF (who I can talk to about anything from completely inappropriate health issues to our obsession with Taylor Lautner’s abs).

    33. Which celebrity/public figure did you fancy the most?
    Don Draper.  Yep.

    34. What political issue stirred you the most?
    The bailout and health care.

    35. Who did you miss?
    My family dog.

    36. Who was the best new person you met?
    All of you bloggers!

    37. Tell us a valuable life lesson you learned in 2009.
    Never take good health for granted.  It is not unlimited.

    38. Quote a song lyric that sums up your year.
    “I’m noddin’ my head like yeah, movin’ my hips like yeah” ?? 😉