Thursday, April 9, 2015

Buying Our First Home: Part 2




This is Part 2 in a series. You can read Part 1 here.

We first began looking at homes online through Zillow (geez, I can lose hours on Zillow) to see what was available, checked out a couple of open houses, and contacted Quicken Loans to get a quote on a mortgage. We pulled our credit reports and checked for errors as well as comparing the debts listed against the debts I track on my spreadsheet. We compared a few loan types including VA, FHA, and Conventional. We began to work with our Realtor and he recommended a local mortgage broker rather than an online mortage broker since the local bank had knowledge of homeowner incentive grant programs in our local parish (that's county for all you non-Louisianians).

We settled on a mortgage broker from a local bank based on a recommendation from our Realtor. We started going through the pre-qualification process with them to find out what we qualified for. We knew that we didn't want to take out a mortgage loan for as much as we could qualify for, since we wanted to be able to comfortably make the payments and not over buy, so we told the mortgage company what range we were looking in and asked them to give us quotes for what a mortgatge for that price range would look like in terms of monthly payments.

We thought we would go for a VA loan because of my husband's prior military service, but we decided against it when we realized that it had higher fees and rates and we didn't really need 100% financing since we had a downpayment. So next we looked at FHA loans since we were looking to put down around 3.5%. Our mortgage broker told us about a parish incentive program for people looking to buy their first home in the parish who made under a certian salary cap. We qualified for the program and I asked about all the strings attached since usually those grants require you to stay in the home a certain number of years, etc. But there were no strings! (I checked and double checked).The FHA with the bond money (grant money) came tied to a 30 year fixed APR at 4.7% which we thought was pretty good and we planned to pay it off in way less than 30 years. When my husband graduates from school and starts working full time again we plan to continue to live off of just my income and chunk his income at his student loans and then at our house payment.

We were excited that we could use the grant money from the parish to pay almost all of our downpayment and keep most of our money for savings and for paying for things we may need to fix or buy for the new home. That was so exciting since I was so nervous about buying a house and totally wiping out our savings since that just seemed like it invited disaster to strike. Plus, I hear callers in to the Dave Ramsey Show calling about just that situation and Dave would talk about how buying a house when you're broke only invites Murphy in. So I really wanted to make sure we were being responsible. Yes, we hadn't followed the baby steps by buying a home while we were still in debt, but I still think he made a good point about making sure to have an emergency fund, especially as a new homeowner because now you are responsible for all repairs and there's no landlord to call.

So with the ball rolling on the mortgage, we asked our Realtor to take us looking at some houses in our neighborhood. We liked our neighborhood for its proximity to my husband's school and my work, as well as its central location to all our friends, shops, and restaurants. We particularly were interested in forclosures since I have had friends in the DC area who have snagged great deals going that route, and because we still had about 6 months on our lease so we had time to wait if we needed to. Our Realtor cautioned against forclosures and short sales since they were a headache, but of course we thought we knew better.

He was a good sport and agreed to take us to look at a few houses we had picked out in our neighborhood, including one that was a foreclosure. We learned a few things on that first house hunting trip:

1. Listen to your realtor when he cautions against foreclosures
Our Realtor agreed that there were some good deals to be had with foreclosures, but that they were often way too much of a hassle for first time homebuyers. He also said that many need a lot of work. In my naiveté, I didn't know what "a lot of work" meant until we saw this first house. This foreclosure was a total wreck. The windows were broken and looked like rocks had been thrown through the glass or they were covered with plywood. The floors had had standing water on then as evidenced by the ring on the baseboards and the completely warped laminate wood flooring. The house smelled terrible, the backyard was just dirt and rocks, and when we turned the corner to walk down the hall there was what looked like blood smeared on the wall. We ran out of there. Perhaps if those were the only issues with the house and we loved it otherwise we could have gotten it at a price low enough to cover the cost of the repairs it needed. But, as our Realtor pointed out, if some bad seed is being foreclosed on and is angry, they may have inflicted damage on the house intentionally or they may have just totally neglected it, so lord knows what other problems may lurk beneath the surface. It reminded me of an episode of Flip or Flop where the former homeowners poured concrete down the toilets when they were foreclosed on. So terrible. No thank you.

2. Small is really small
We were used to living in an apartment and I felt that a 1200 square foot house would give us the room we needed. After all, we didn't need a lot of space and I didn't want to have too big of a house to clean and heat or cool. But after looking at small houses, we realized that small really is small. Sure, a good layout does wonders but if we are looking for a home we can grow into, small isn't it. My husband decided we needed to look for homes over 1600 square feet and while that dramatically cut our options for what was available in our price range, I agreed with him after seeing a few homes that were way too small.

3. You can't change location, but you can change everything else
Location, location, location. Of course we have heard that old adage about real estate but its so true. You can't change the location of the property or the size of the property, but you can change just about everything else. On that first house hunting trip we realized that a lot of the homes in our neighborhood were small and had small yards. Since a yard is really important to us, we realized that that wasn't the right location and looked for other neighborhoods with bigger lot sizes.

4. Weird layouts suck...and you always need a door to a bathroom
Weird layouts that don't make sense are a dealbreaker for me. I do not want to add or remove walls, though if its a simple fix I may be open to it. But completely reconfiguring the plumbing of a bathroom and adding a new wall and door to enclose it? No thank you. Why do people even build bathrooms without doors on them? And by changing the layout I do not mean "oh, I prefer the tub to the left of the shower". No, I mean the tub was in the bedroom (yes, you read that right). That's why you need doors to section off a bathroom. This one house my husband and I looked at ticked all our boxes and was a bit dated (read: popcorn ceiling) and had a small-ish but useable kitchen and was way under our budget (like $15,000 under). Plus it had a garage (albeit a broken door) and a nice sized fenced yard. But we would have had to completely reconfigure the master bath so that the tub was not actually in the bedroom (yup, next to the fireplace...what is this, a romantic ski lodge?). Plus it had a scary shower (see below) that needed to be completely re-done. Despite the low cost we would have had to sink a chunk of change into it. And unlike people on Property Brothers, we don't just have those "savings" lying around (seriously, who has a budget of $250,000 and "saves" $30,000 on a fixer upper so that means they have that money in cash just lying around to pay for renovations?). We were open to a house that needed work which we could do over time, not something that needed to be done just to make it hospitable.

5. Scary Showers
Another thing that we learned was a dealbreaker for us was scary showers. Those are the small tiled in showers that are about 3 square feet large and the ceiling is about three inches above your head. They have no light in them and are these tiny, wretched coffins that spout water onto you. Shudder. I value my shower time and want the shower to be a place where I can relax and be comfortable, not fumbling around in a dark box too small to even bend over to shave my legs. And fixing them means that you have to rip them out and totally replace them with a normal shower. (cash register sound effect) No thank you.

Stay tuned for Part 3.....

Monday, March 16, 2015

If You Don't Have the Money, You Don't Have The Money

There are so many purchases that we make regularly that we often don’t have a line item for in our monthly budgets. Things that occur every few months or bi-annually can be especially tough surprises if we haven’t budgeted for them. Sure it would be great to set aside the money I know I will need the next time both cars need an oil change, but sometimes emergencies come up and you have emergency vet bills, a broken microwave, and a broken cell phone all in the same week. Then I wonder how I will pay for that oil change, haircut, or new pair of black pumps for work. And sometimes what we budgeted for a budget line item (especially groceries and gas but yes, sometimes the cable and phone bill) is much higher than we had planned.

That’s when I have to stop and remember a simple fact: If I don’t have the money, I don’t have the money. If the money I was planning on spending on that haircut has to be spent on a vet bill, then so be it. It can be tempting to dip into that dwindling savings account or swipe that good old American Express to pay for something, but isn’t there another way?

If you can’t afford it now, don’t buy it now. I know, I know, why delay satisfaction when I can just swipe a credit card? I’ll have the money in the future, the next paycheck, or next month’s budget, so I can just pay myself back and make that deposit back into savings or pay back the credit card before the bill comes. But how often do I actually do that? Once it’s swiped, it’s out of my head.

So how can I accept that I can’t pay for something that I had planned on purchasing? Well, first, I ask myself if it is a need or is it a want. When I am honest with myself,  anything that doesn’t shelter me, transport me, feed me, or take care of my health is a want….well maybe my cellphone is a need too. Then, I ask myself if I can do without it until I actually have the money in hand and am not borrowing from next month’s budget or charging it on the credit card. Borrowing from next month’s budget sounds ok, but if you do it enough you will find that you quickly run out of money that next month and have to borrow from the following month too.

Here are some tips for delaying those purchases when you just don’t have the money.

Haircuts
Yes, your ends are dry and splitting and no, you don’t have money for a cut now. Instead, try going to a beauty school rather than a regularly-priced salon to get those tresses tamed. Also try a deep conditioner, wearing topknots or buns, or just try some new hairstyles to keep it looking fresh until the money comes in.

Oil Changes
Are you getting an oil change every 3,000 miles still? Sure, we all remember that Jiffy Lube jingle, but most cars built since 2005 (and some even earlier) can go 6,000 miles between oil changes. Don’t know if your car can? Check the owner’s manual and check the oil indicator light in your dash. Until it’s at 15% or lower, you’re good to go. And if you actually need that oil change but can’t afford it? Look for coupons online to bring the price down or drive as little as possible. Take your significant other’s car to run your errands or ask your friend to swing by and pick you up before girl’s night rather than meeting her there. Maybe even carpool to work with a nearby colleague.

Great Deals at Drugstores
But it’s free with register rewards! This is my favorite kind of toothpaste and it’s only $.50 (after the Target gift card I get with purchase)! We all love deals, otherwise we wouldn’t be Krazy Coupon Ladies. But let’s get real. You probably have tons of toothpaste in your stockpile right now. And if you need that money for something else, like perishable veggies or milk, don’t spend it on adding to your stockpile. It may be a great deal and it’s sad to miss it, but great deals are cyclical and it will come again. The same rule applies to the sale rack at Marshalls. Step away. You can get another skirt when you can actually afford it.

Scuffed Heels
We all have that trusty pair of black pumps that we wear to work every day (and everywhere) and it has seen better days. One day, you look down and realize how scuffed the toe is, the seam is starting to rip, and the heel is almost totally worn off. Is it time to head to the mall for some nice, new, “professional-looking” shoes. Stand in your truth (or your scuffed heels rather). If you can’t afford a new pair of heels, even if there’s a big sale, wait until you can. Get some Kiwi shoe polish and buff out the scuffs. Take those pumps to a cobbler (yes, they are still around) and they can repair the worn heel and ripping seam for just a few bucks, allowing you to get another few month’s of wear out of them. And really, no one is looking that closely at your shoes anyway.

Wednesday, March 4, 2015

Buying Our First Home: Part 1


We are officially homeowners now! My husband and I just closed on our first home and we are beaming with boundless excitement, hope, and possibilities that come with buying a home that we hope to grow into for years to come.

Our home buying story began last spring. My husband and I had been talking about "one day when we buy a house" for a few years, especially since we moved to Baton Rouge from Washington, DC two years ago because home prices here are a quarter of what they are in DC (for serious, a quarter of the cost, we checked). Home prices were low and the market was recovering. We kept hearing about historically low interest rates on mortgages and started thinking that maybe that now was the right time. We knew we were settled into Baton Rouge, had friends, knew the town, and planned to stay even after my husband finished his degree.

I knew that I did not know anything about the home buying process and I wanted to become as informed as possible, so I started researching it. I went to the library and read Ilyce Glink's 100 Questions Every First-Time Home Buyer Should Ask: With Answers from Top Brokers from Around the Country cover to cover. It is a bit dated, but has solid advice and information so I would recommend it to any newbie home buyer. I read other books, blogs, and articles on the current housing market, changes in mortgage rates, and other bloggers' home buying stories. I spoke with my friends and family about their experiences and rounded out my education so that I felt comfortable with my understanding of the process. I wanted to make sure that we knew what we were doing and felt comfortable with the purchase process.

Almost 20 years ago, my parents had bought me and both of my sisters stock with $800 that my grandparents' had given to each of us. My parents being the money savvy people they are, they bought stock in a natural resources company which had historically seen a good return from rising stock prices. Thank god they did not put it in a savings account earning less than 1% interest or took us on vacation with the money. My parents told us about the money and told us that they bought stock with it. As a kid, that is a lame Christmas gift. But my parents are known for fiscally responsible albeit lame gifts, like the year that we all got envelopes with IRA paperwork we needed to sign because my folks were opening IRAs for us in minor trust accounts.

I forgot about the stock until last spring when I did our taxes and was entering in the taxable amount of the dividends earned on the stock (we reinvested the dividends so they just kept buying more shares). I do that every year but this year I realized that the stock value had grown to over $5,000, enough to use for a down payment!

My husband and I had many discussions about what we wanted in a home, mostly a backyard and comfortable space to live in and grow into. We also took a look at our budget to figure out how much we could afford to spend monthly on a mortgage note and used online mortgage calculators to roughly determine our price range. We agreed that we wanted to be able to comfortably afford our mortgage on my income alone so that when my husband graduated from school in a couple years we would be able to pay off his debts and our mortgage without stress. That would also leave breathing room for future costs like children.

We got a referral for a great Realtor from friends of ours who had recently bought a new house near us. We had a few calls and emails with him discussing what we were looking for in a home before we went out looking at homes. We are easy to please, no demand for granite countertops and we like dated kitchens and bathrooms. We don't care if it's pink tile, as long as we can move in and comfortably live without having to knock down structurally deficient walls and in a safe part of town, we are happy.

More on our house hunt in the next installment...

Tuesday, February 24, 2015

I Got Paid!: January 2015



Online surveys and mystery shopping get a bad rap. Many people think that they are just scams but there are really some great (and legitimate) companies out there that will pay you for your time and effort. And to prove it, here's what I earned from online surveys and mystery shopping last month, among other endeavors. I completed these mystery shops and surveys in the previous month (or earlier) and received the payment this month. Some of these mystery shops required me to pay something out of pocket to purchase a good or service (which I get to keep) but I was reimbursed for my purchase and was usually paid an additional fee. The amount I earned from mystery shops includes the reimbursement for my purchases.

Mystery shopping usually requires that you purchase something specific from the store you are evaluating for which you are then reimbursed. I usually charge those purchases onto my credit card so that I get rewards points and so that it does not use up my grocery budget for that month. When I am paid for mystery shopping I pay myself back and transfer the amount of money I spent on those mystery shopping purchases back to the credit card. The remainder is my profit.

January 2015
Freelance Writing- $50.00
Blogging/ Ad Revenue- $15.00
Intellishop- $32.15
Sinclair Customer Metrics- $26.28
About Face- $13.00
Rebates- $20.00
Pact- $15.08
Ibotta- $10.00
Shopmium- $.45 (use referral code HGCCMKWQ for a free Lindt chocolate bar when you sign up!)
Gigwalk- $6.00
Field Agent- $23.50
EasyShift- $21.00

Total: $232.46

What did I do with this extra income?

I used this extra cash to make the last payments to my Mom and sister for the rental houses we stayed in while we were in England over the summer for my other sister's wedding! YAY! I was so excited to write those checks. I have never been so happy to give someone money I owed them. I feels great to know that all this hard work has been paying off and two more debts have been scratched off of my list. On to the next one!


Did you make any extra income last month? What are you using your side hustle money for?

Friday, February 6, 2015

Springboard America Review


If you are looking for a survey site that won't ask you the same old questions about your favorite soda or air freshener, check out Springboard America. Springboard America is a legitimate survey site that offers surveys on topics like politics and current events so its not the same repetitive surveys on advertising and commercial products.

They have a high payout threshold of $50, but each survey pays you between $.50- $5.00 so they can certainly add up. And to prove how much they add up to, in April 2014 alone Springboard America paid out $40,000 to survey takers! Wow! Those survey dollars can be cashed out as Amazon e-gift cards, Paypal payments, a check, or a charitable donation. And if you attempt a survey and don't qualify for it you will get sweepstakes entries into their $750 sweepstakes.

I have taken their surveys before and they are not long or complicated. Their interface is easy to use and understand. Surveys are a great way to make some easy extra cash. Not a ton extra and it won't make you rich, but if you steadily take surveys you can make an extra $25-$50 a month if you qualify for enough surveys. That's no slouch for just answering some questions and that's easy extra cash for debt repayment.

Sunday, January 25, 2015

Catching Up

Well then, happy Halloween, Veteran's Day, Thanksgiving, Merry Christmas, and Happy New Year.

It's been a long time hasn't it?

Where the hell have I been?

Traveling for work, busy as hell, sick, working on buying a house (yay!). SO much going on.

The real deal is that I was traveling for three months for work. Its all good stuff, just kept me really busy. Factor in visiting with family and friends over the holidays, coming home in January and promptly getting laid up with a nasty cough and sinus infection, and now my husband and I found a house we love and are under contract to buy it! Phew!

I promise I will be back to this blogging business now that I am home and normal-ish life is returning. I've still been plugging away at debt, saving money, making money, and loads of mystery shops. I'll be doing some upcoming posts on the progress I've made in 2014 on our debt and mystery shopping companies that I have working a lot for so keep an eye out for that.

If there is anything that you really want me to cover about personal finance, mystery shopping, making money online, or other blogging topics please shoot me an email at earningmytwocents@gmail.com. I want this blog to offer helpful information to help you live your best frugal life and if you need something, let me know!

Monday, December 8, 2014

3 Early Christmas Shopping Budget Pitfalls and How to Avoid Them

Image Source
Black Friday has some great deals! And Cyber Monday’s sales are stupendous! By late November, the deals are all around you and life is awash in blinking “sale” signs. We all love a good deal and have a budget we have to plan around, so shopping these sales seems like the logical choice right? Get a good deal and get the shopping done so we can focus on other things like spending time with family, mailing out greeting cards, and baking delicious holiday treats. But watch out! There are still ways that shopping early can derail your plans for an easy, frugal holiday.

The Sales Keep On Coming
Everywhere you look there are more sales, all December long. Every time you set foot in any store, turn on the television, log into your email, browse online, or even walk down the street in a commercial district, the sales are begging you to shop them. And since retailers really want your cash they are offering some legitimate bargains. “Oh look, little Johnny has been wanting that train set and it’s 50% off now! Mom would love that sweater!” Being constantly bombarded with sales may make you want to buy another gift that the recipient may legitimately really like, but alas, you have already bought them a gift. If you want to keep your budget in check, return the item you already bought or pass up the new sale.

Pre-Purchase Leads to the Illusion of More Available Money
You planned and budgeted your Christmas shopping money, carefully saving all year to be able to afford those special gifts for those special people. Once those gifts have been bought and the savings depleted, we bask in the momentary glory of our budget victory. Our November and December regular monthly budget hasn’t been touched! Then come the remaining weeks before Christmas when we begin to shop again, using our regular monthly budget to add supplemental gifts because we think we can afford it since we weren’t feeling the pinch. Remember, you set a gift budget and saved for a reason. If that reason was to make sure to not overspend so that you can keep paying off debts or save for a family vacation, don’t put those plans in jeopardy just because you’re feeling jolly.

One for You, One for Me
When everyone else has been taken care of, it is quite customary for our minds to drift back to ourselves. That list has everyone and everything checked off, you feel a sense of accomplishment, and when walking out of the mall you spy those shoes that would be a perfect gift for yourself. Self-gifting is a concept that retailers love and are doing a heavy marketing push for this year. After everyone’s gift is bought, don’t fall into the trap that now is the time to buy yourself something shiny and new too.

Just how do you avoid these early shopping budget pitfalls?

Take your Christmas Gift Shopping List with You.
Whenever I see a brilliant gift idea for someone, I look at my list. If that person is crossed out and their gifts have been purchased, then I jot down the idea on the back of the list for next year. Sales are cyclical and that item will be on sale again next year.

Watch Out for the Greed Trap
When shopping for others we can often get greedy and desire new gifts as well and so we go out and buy them for ourselves. But that can lead to budget busting and guilt, especially when we realize we were cheap about a gift we gave someone else and look down at our more expensive new shoes. Remember to enjoy the concept of gift giving for what it is, giving a gift to someone because it will bring them joy or fill a need they have. Side stepping a feeling of entitlement and focusing on the gift giving can allow you to walk out of the store without extra gifts for yourself. Besides, most of us will also be receiving gifts this year and not filling our homes with gifts we bought ourselves will allow us to appreciate the gifts others bought us, and allow us to keep from having to make a lot of returns because they gave us just what we wanted and which we had already bought ourselves. And if that thing we really wanted isn’t under the tree this year? Well, that’s what after Christmas sales are for.

Track Your Spending

On my Christmas shopping gift list I put next to each person’s name what I intend to buy them and how much I intend to spend to stay on budget. When I buy them an item, I jot down what I bought (because sometimes I change my mind and get them something else entirely) and the amount I actually spent (because hopefully it was on sale and under budget!). Then I keep tallying up that total so I can see how much I have spent on each person and as a whole. Seeing the numbers right in front of me helps to curb excess spending.