Archive for December, 2011
In my last post, I talked about how I’ve used a gazillion spreadsheets in my analysis of the costs. Today, I’m going to talk about my “Source of funds” spreadsheet.
I have plenty of spreadsheets that list my Net Worth in various ways, but I found that I was having troubles remembering where exactly the money was coming from for each piece of buying my condo. Solution? Make a spreadsheet!
In the far left column, I have the use of the funds:
- Earnest money (A)
- Down payment (B)
- Closing and moving costs (C)
- Other cash funds (for completeness, not being used)
- Retirement funds (for completeness as well)
The next column describes where the funds came from. Here are some examples:
- Down payment savings account at credit union
- Proceeds from selling stocks
- Car replacement funds in certificate at Ally
- Down payment savings account at Ally
- Down payment certificates at Ally
- Taxable money market fund
- Emergency reserves (partial)
I found numbers (including partial balances on a particular source) that added up to the amount necessary for the earnest money, for the down payment, and for closing and moving costs. I took the leftover funds from the accounts used for A and B and added those the account with my emergency reserves. So when I go over the leftover amount for closing and moving costs, I will dip into my $18,000 or 6 month emergency fund.
For good measure, I followed the same method of describing the source for all of my other cash and retirement funds that I’m not touching, so that I have a complete picture of my finances in this spreadsheet.
In another spreadsheet, I have a plan for how I will pay back the various savings buckets next year, monthly and with my bonuses.
I plan on putting exactly 20% down on my place, so I may have some funds leftover at closing that will leave my emergency fund at a reasonably healthy level.
I received a notice from my landlord indicating the new rent schedule if I choose to re-sign my lease. It is going up an insane amount, which has validated my decision to buy. When I moved to this city, I picked this apartment with the intention of staying here for a few years, until I had the funds to buy a place. Thanks to my savings level over the last few years and an early inheritance gift from my parents, I do now have enough funds. I want to do as much of this as I can on my own, but I am very grateful for the funds that my parents are gifting me.
I’ve run a lot of numbers and determined that I can afford total monthly housing costs (mortgage payment, property taxes, and maintenance/HOA fees) between $1,400 and $2,400 comfortably, with a preference for keeping the total under $2,000.
I’ve been quiet here because I found a place. It’s in a safe neighborhood with stuff around and within a reasonable bus commute of downtown. It’s a 2 bedroom, 2 bathroom condo. I have put in an offer and now I’m sitting, waiting, wondering. This is incredibly nerve-wracking!
Looking at Craigslist, I think I could easily rent the condo out for $2,500 to $3,000, which would cover my mortgage payment, property taxes, and HOA dues with a $500 to $1,000 profit.
Looking at how much my property taxes and mortgage interest will add up to for the first year, I will save almost $2,000 in federal income tax next year, which is insane.
I have estimates from a few credit unions and am pre-approved from one, with a good feeling from another.
Tomorrow, I will make contact with some inspectors. There are a few things that the place is missing and I will need to buy, so I’ve started investigating those.
I have a gazillion spreadsheets, which I will talk about later.
I think I need to find a way to make this less stressful or at the very least, shift my focus away so I can sleep better. One method that I am working on right now is reading trashy romance novels as I try to sleep – those totally distract me from finance spreadsheets, numbers, and moving.
On top of buying, I have forgotten how complicated moving is! I’m trying to make a list of all of the places that have my address and I’m sure I’m forgetting something. And I’m going to have to pack everything! I have acquired so much stuff over the last few years. I suppose that makes this a doubly good time to donate some old clothes.
I still haven’t met my net worth goal of $100,000. The numbers went down this month because I spent a lot of money. I emptied out most of my vacation savings account booking a trip for part of next winter and I bought a new laptop. I budgeted for both of these, so I’m not upset about not meeting the goal, but it does hurt a bit to see my overall net worth go down for the first month since I bought my car. The investment losses certainly didn’t help, but what I can control is the spending and that was all budgeted for.
In October’s update, I commented on the fact that the dividends on the bond fund in my 401(k) have been going up slowly each month since June and contemplated whether the dividends for the fund in November would surpass $10 and they did! I like those small excitements :) I think that’s also partially why I’m so good at saving – somehow $0.50 of interest can still excite me, no matter how much money I have.
I am getting excited (yes, I’m crazy!) watching my 401(k) get closer and closer to being maxed out for the year! I only have about 30 days to wait for that to come true :) Sometimes I can change the Plan too often when I get anxious, so I am really proud of myself for making this goal a priority. It has been amazing to watch the balance year-to-date grow on the Vanguard website, even though I’ve seen investment losses most months this year.
Due to the laptop purchase, I didn’t put as much into my down payment savings fund as I had hoped this month, but it’s still moving along slowly. I’m pretty confident that I will reach the $27,000 goal that I had set for myself at the beginning of the year.
I am not a big eater, so being single, I think I actually save quite a bit on eating out and groceries. It’s difficult to compare the numbers exactly and do a good A/B analysis to determine a specific dollar amount that I save, but it’s definitely something and noticeable in my spending analysis, which is interesting. Other people have suggested that it’s cheaper when you’re not single, but I think that only would apply to housing expenses for me.
I’ve been wondering whether or not I would qualify for a mortgage when I wanted one based on my small credit history report, but I did in fact qualify for pretty good rates and at the purchase/loan amount that I’m looking at. I’m still in the process of looking for a particular place that I want to buy and live in.