Here's my New Year's gift to all of you $20 challengers ... My results ought to make all of you feel GREAT, because there is no way anyone did worse than I did.
My challenge was to take my first-ever stab at gardening, limiting my start up budget to $20. I measured my results by estimating the store-bought value of what I harvested.
End result? $19.06 ... 94 cents less than what I started with! Is this perhaps the first time in the history of the $20 challenge that someone ends up with less than what they start out with?
So there, do you all feel even better about your outstanding results now? Happy New Year!!!
P.S. - In case you're wondering, I am REALLY glad that I did the $20 Garden Challenge in spite of the end result, because I learned so much, mainly that even a brown thumb like me can garden. And believe it or not, I do plan on trying gardening again, after we have bought our house.
Archive for December, 2007
Here's my New Year's gift to all of you $20 challengers ... My results ought to make all of you feel GREAT, because there is no way anyone did worse than I did.
There's quite a bit of advice out there about how to avoid buying too much house.
But what I've been pondering lately is whether you can buy too LITTLE house? By little, I'm referring to house value, not size.
There are no "rule of thumb" answers to this question that I'm aware of, and as far as I know none of the mainstream PF writers have written about it. So, this is a "think outside the box" question. Any thoughts or opinions any of you can offer, no matter how off the wall, would be very much appreciated!
As I have pondered this question so far, my answer wavers between "a qualified no" and "well, maybe yes."
I say "qualified no" because there are a few situations where the answer would in my eyes obviously be yes:
- If you are living in a house that is a health or safety hazard (a rat-infested firetrap, for example) and you can clearly afford to buy a better house, then yes, I think you have too little house.
- If you are horribly miserable in your house (family of 8 crammed in to a 1-bedroom house, for example) but you could easily afford a more comfortable house, then yes, I think you have too little house.
- If you buy a house that is very poorly constructed and corners have been cut to bring the house price down, then yes, I think you are buying too little house short-term (tho' given what you will end up paying in repairs, you may be buying too much house long term).
But beyond these fairly obvious (in my eyes) and extreme examples, can you buy a house that is too low in value? As long as the house is safe, comfortable, and well-constructed, does it matter? If I ended the discussion here, it may seem that the answer is "well, no, duh, you can't buy too little house."
But ... Then I start thinking ... Is it possible to have too LITTLE of your net worth tied up in your primary residence?
Historically, house values have kept pace with inflation. You can get better returns than that with almost any other investment, even extremely conservative ones such as TIPS or MMAs. But on the other hand, house value increase does have the advantage of being tax-exempt in many (most?) cases. So this is why I say "well, maybe yes" you can spend too little on a house. Perhaps there is a minimum percentage of net worth you should consider not going below when buying a house?
I'm relying on my memory so this may not be 100% accurate, but I read some Census Bureau data that said the average American household has about 40% of it's net worth in home equity, and the highest wealth households have a bit less than 20% of their net worth in home equity. Does this data mean anything???
And ... When will I stop grinding my teeth when I start pondering how much to spend on a house? Please don't suggest that I stop thinking about it so much. I just can't conceive of making the single-largest purchase of my life without thinking about it from every conceivable angle!
Since I don't have kids, I've never caught the scrapbooking bug. I've thought it would be fun to do a small scrapbook of my dog, but didn't want to: 1) put the effort in to learning how to scrapbook, and 2) invest in all of the tools and cute doodads that seem to be required to scrapbook well.
Now, Costco Online is offering a "complete" kit for making a small dog scrapbook for $12.99 including shipping & handling. That seems like a very reasonable price to pay if that's really all I'll need. However, I'm skeptical that the kit is really all I will need, so before I spend my money I'd be grateful if any of you experienced scrapbookers could tell me:
1. The kit includes brads & charms. Will I need special tools to use those?
2. If I get the kit and check out a couple books on scrapbooking from the library, will I have what I need to make a fairly decent looking scrapbook? Or, is this something that takes classes and lots of experience to master?
Today DH & I threw out a lowball verbal offer on a house we like. We were pretty sure we wouldn't get the house (we didn't), but we finally decided that we had nothing to lose by making the offer. To tell you the truth, I was more than a bit nervous about giving the builder's rep the offer. After giving myself a little pep talk and summoning my courage, I walked in to the sales office and presented the offer in a straightforward and respectful way, and the rep returned the favor by replying in an equally respectful way why the offer wouldn't fly. He filled me in on some recent sales prices in the area. I left the house feeling better informed about the market than I was when I went in.[In case you're wondering where my Prince Charming was all this time, he turned chicken and decided to wait in the car!]
I guess you could call this "strike one" in our house hunt, but I actually feel fine about it because it was such a good learning experience. And it was a good reminder that it never hurts to ask!
We'll just keep looking and know that eventually we'll find a house that we like where the seller is willing to sell for what we are willing to pay. [The last house we bought, it was the fourth house we made an offer on. How long will we keep looking? As long as it takes.]
"Courage and perseverance have a magical talisman, before which difficulties disappear and obstacles vanish into air." - John Quincy Adams
Housing market ... blah ... blah ... blah!
I'm sure many of you sick to death of hearing about the housing market, right? If so, I understand. However, as I am "on the ground" right now in the market (house hunting), it's on my mind almost constantly, and so I'm gonna keep blogging about it. Sorry.
So much going on since my last update.
1. Went back & looked at the "more than we originally wanted to spend" house that DH was getting dreamy-eyed about. Had a serious talk, and reconfirmed that it is indeed more than we want to spend. It's out of the picture for now.
2. A couple of houses we've been looking at have taken one or two price drops, and still have not sold.
3. We have expanded our search to include not only Austin but also San Antonio and all points in between.
4. A small to mid-size builder whose homes we had looked at and liked stopped all operations last week. Still uncertain whether they will declare bankruptcy or what. They have quite a few homes under construction, some under contract to buyers and some are spec homes. I feel incredibly sorry for those buyers whose homes are sitting there half-finished. What happens in a situation like that? And I feel sorry for the people who live next to half-finished homes when construction ceases; I am guessing that most of them haven't yet figured out what is going on. DH & I had thought we might consider buying a house that was almost finished, but now we are committed to not making an offer until the last nail has been pounded in!
5. We both have a list of our "top 3 houses we have seen so far" and we have 1 house in common. However, we don't feel we have a clear enough grasp of the market yet to make an offer.
6. DH & I have had some disagreements about how far we think the market will fall. But Suze Orman said something on her show about a week ago that we could both agree with: She said that if you could buy a house at 2002 prices, you are getting a good deal. The question for us is how to determine what 2002 prices were. Sales prices are not published here in Texas, and we haven't yet figured out a way to get the hard data we need. Back in good old King County (Seattle), you could find data on what every single home sold for, although you knew there was a bit of fudging because of buyer's bonuses, mortgage point pay-downs, throwing in the appliances, etc, etc. But at least you could get a decent general idea. [Note to Texas Realtors: If you would cease your lobbying against making house prices public record, maybe some of us fence-sitting buyers would climb off the fence and buy that house you are so eager to sell! Since when did non-transparency make a housing market better?]
7. Speaking of realtors ... It boggles my mind when they do not return calls from potential buyers. Two homes we wanted to see, the agents never called back. [In one case I was so interested in the house that I actually called twice.] In a third case, the agents called back 3 days later explaining they had been out of town ... Don't they know how to retrieve their voice mail? [Note to sellers: If your house is priced right and houses in your area are selling while yours is not, take a long hard look at your agent.]
DH had a cute "Aha!" moment last night.
We both like to watch Suze Orman once in a while, since we do learn from her, and usually (not always, but usually) agree with what she has to say. However, DH has expressed that he sometimes finds her style a bit ... shall we say ... abrasive? I felt that way at first, but have come to realize that it's probably in part because she is a very smart / confident / outspoken woman, and in part it's just her schtick (did I spell that right?), her amped-up-for-TV persona.
Yesterday evening we were driving home and discussing a friend who just got laid off, has 4 kids & a wife to support, who has lived a pretty comfortable lifestyle, and yet apparently has almost no savings. My DH (who comes from a culture where saving is more ingrained than it is here) said, "American people spend too much. They need to save more." Then he was quiet for about half a minute, and suddenly his head popped up and his eyes widened a bit and he turned to me and said in a confident voice of realization: "Now I understand why Suze has to scream at them!"
Monday I'll be joining the hoardes at the Post Office, getting my holiday gifts mailed off. Today I got my gifts wrapped. I've been done with my shopping for awhile, but I waited to get the gifts wrapped until today. A dog rescue organization was doing gift wrapping as a fund-raiser at a nearby store, and I decided to take the 2 gifts that needed to be wrapped in there. I've always done my own wrapping, but I sold my wrapping paper at our pre-move garage sale and am waiting to buy any new until we are out of our tiny apartment and in to a house. I gave them 2 dollars ($1 per gift seemed to be the going rate), and that included gift tag & bow. Sure, I could have bought the wrapping supplies for the same or cheaper, but I'm avoiding purchasing anything other than essentials until we have a house, and it was an organization I was more than happy to support.
So, my holiday shopping & wrapping is done. Yea! I spent $175 on gifts this year, $2 on wrapping, plus whatever I spend on postage.
Within my family we have mutually agreed to really limit our gift-giving.
1. DH & I have no children. This is of course the biggest reason why our holiday spending is so low.
2. DH & I don't exchange gifts with each other. Back when we were saving for a house, we decided to save more for the down payment instead of buying gifts. We realized we weren't missing anything, and not exchanging gifts has become a tradition. [Today I was talking with a couple that has been married for 30+ years about holiday gifts. They also don't exchange. The man said that their present to each other is that they are PRESENT for each other. I loved that.]
3. My sisters & I decided several years back that we would stop exchanging gifts, except from time to time if we found something we thought the other(s) would really love. But there is no keeping score, and no "obligation" to give.
4. When my sisters & I had the "let's stop gifting" discussion, we also discussed with our mom. She said that it means a lot to her to buy us gifts, so she continues to give us a gift each year (but she usually spends much less than what she used to). But she said that since she doesn't need anything, there's no need to buy anything for her. I do buy her a gift about once every 2 years (and that includes birthdays and mother's day, so not much gift-buying for her). I only buy when I find something that I think she will REALLY love and use.
5. My younger brother is DD, and he gets a real kick out of exchanging gifts. So, we all buy gifts (both Chirstmas and birthday) for him every year.
6. I have a young niece and nephew here in the USA. They get gifts... of course! My sister has specifically requested donations to their college funds, and I am tickled to honor her request. [My overseas niece and nephew get gifts too, but not at Christmas.]
So, here is a rundown of the gifts I'm giving this year:
- Brother joined me on my recent trip to DC. We agreed to skip birthday & Christmas presents this year, and make the trip together our gift to each other.
- My mom did get a gift this year, a 2-lb basket of assorted organic gourmet mushrooms, ordered through Costco for $45 including shipping. Mom has a major mushroom obsession, so when I saw this gift I knew it would make her very happy. And it did --- She called me all excited right after it arrived!
- Older sister is getting a handmade bracelet, purchased at the Smithsonian Museum of African Art in DC for $21. Sis loves African jewelry, and she will appreciate that it was made by a South African group that allows woman to make jewelry while staying home with their children. This will be a surprise for her, since I usually don't buy her anything. She wanted to go to DC, but decided to stay home and fund her EF instead. (I have written in the past about her messed-up finances.) I was really proud of her decision, and thought a little gift from DC would be a way to show my support.
- Niece & nephew are getting $50 each for their college funds. I also purchased a gift for their whole family to share (and so they'd have something to unwrap), a book that I purchased new through Ebay for 35% of retail, including shipping.
And that's it! Some mushrooms, a bracelet, a book, a check, and happy memories of a shared vacation. No shopping frenzy, no spending hangover, no credit card interest, no hit to the net worth. And no unwanted gifts that end up collecting dust or getting tossed or donated.
Here's a tip I just learned on how you might be able to cut the premium on your car insurance: Take a defensive driving course. You can take it ON-LINE ... Pretty neat, huh?
My DH (who is the primary driver on our one & only car) is going to complete an on-line course that our insurance company (GEICO) offers. The cost of the course is $19.95. When he completes the course, we will get a 10% discount on our automobile insurance for the next 3 years. At our current level of coverage, that equates to a gross savings of $124.80 and a net savings (after deducting the cost of the course) of $104.85 over 3 years.
We only have one car, and it is not worth a lot so we don't have very expensive coverage. If we had more than one or more expensive cars, our savings would be even more.
At this link, you can see each state listed with how much of a discount you can expect to receive and if there are any age requirements. In some states the discount is only for drivers 55 or older, and in some states the discount is voluntary. But in my state, Texas, there is a 10% mandatory discount and all licensed drivers are eligible.
As you can see, this link is for Costco members. But I found out when I called Geico to verify that it is cheaper if I take the course through them.
If any of you are insured with Geico, here is the link to their course:
Hope some of you can use this tip to save on your car insurance!
Yesterday evening we went to the Luminations Winter Celebration at the Lady Bird Johnson Wildflower Center here in Austin. The "price" of admission was a donation of 2 cans of food each for a local food bank.
It's hard to capture the magical effect of over 3,000 luminarias, 5,000 twinkle lights, and strands of gorgeous white & copper lights strung across a Texas stone courtyard where a steel drum band dressed in Hawaiian shirts was drumming carols. And it's hard to not get a blurry picture when you are photographing lights at night without a tripod! But here's a little bit of Texas Hill Country holiday cheer for all of you:
Frugality has crept in to so many areas of my life that I don't even think about it. Yesterday when I was opening the mail, it dawned on me that even the way I open the mail could be considered frugal.
I open the mail standing up, with the following within arms length: shredder, paper recycling bin, my "desk" (it's actually just a folding table right now due to our recent relocation).
Unsolicited credit card offers go straight in to the shredder without being opened.
Any catalogs that made it past my "do not mail list" efforts go straight in to the recycling bin. [Exception: There are 2 companies whose catalogs I will peruse once or twice a year, but they send them out more frequently than that so they usually go in to recycling.] When I do look through a catalog, I'll mark something I might be interested in, then put the catalog aside for several days (or even a week). If, when some time has passed, I still think the purchase is a good idea, then I go ahead. But often the catalog just goes to the recycling bin and the purchase does not get made.
Bills get put in the "To Pay" file in order of due date. (Paying bills on time is so important.) If a credit card statement has checks attached, those are immediately torn off and put in to the shredder. If advertisements are included with bills, they go directly to the recycling bin.
In contrast, I know someone who makes opening the mail almost a form of daily entertainment. She makes herself a cup of tea and then sits down with her stack of mail which usually includes a ton of mail order catalogs. She flips through the catalogs with great pleasure. As you can probably guess, she often ends up ordering from those catalogs, and as a result her house if literally filled to the rafters with "stuff" and her bank account is practically empty. I feel so sorry for her. But who knows ... she probably feels sorry for me since to her my life may seem pretty spare since it's not filled with knicknacks and closets stuffed to overflowing with clothes.
On Saturday we took a day trip down to San Antonio to do some househunting (more on that later, in another blog entry ...) so I waited until Sunday to do my monthly Net Worth calculation. It was down a bit from a month ago; not a lot, just a bit. It didn't bother me because I knew what the reasons were, and in the grand scheme of things they just don't matter. For example, I paid and recorded our December rent payment at the end of November instead of the 1st of the month. Also, my retirement funds were down a bit, but they had been up freakishly the month before, so I wasn't concerned.
But I was worried about my DH's reaction. I knew he might have a little freak out and would want to start moving money around (he just can't stand to see any sort of dip, even if it's just one month), so I did some pre-emptive strategizing. No, I did not do any "creative accounting" ... No money secrets in our house. Instead, before showing him the monthly figures, I looked up what our NW was 3 months ago and one year ago. Then, when he saw the monthly figures and he said "What?!?" with that "here-comes-trouble" tone of voice, I just calmly explained why, and then said "But look at the change from 3 months ago ... And look at the change from a year ago!" And you know what ... He got it! He looked at the big picture, and saw that a one month dip is not the end of the world! Over-reacting was averted ...
I was inspired to take that approach (using what I know about how my DH thinks and staying one step ahead of him) by Ima_saver ... It makes me chuckle how she takes out a loan to buy a car even tho' she could pay cash, because it keeps her car-crazy husband from buying a new car every year!