Do you Save for the things you Want?

SavingWe all want things whether it is to travel, a home, a car, etc. How many people do you know who actually save to buy the things that they want?

Homes

A couple of weeks ago I wrote about a couple who is now selling their home after owning it for just one year.  I’m really not sure if they saved or not to purchase the home but I know they only put 5% down to purchase it.  In the end, that couple started to hate their high mortgage payment and ended up with buyer’s remorse.  I know it’s hard to give up a lump sum of cash when buying a home.  It was hard for me to see that 20% come out of my bank account when I bought my house.  But that was the purpose of that money and I knew it was the best decision financially for me.

Cars

I recently helped a friend with the purchase of a car.  Unfortunately, the car broke down and was really not worth repairing it.  After owning it for 12 years her mechanic told her she would be better off buying a new car.  She freaked out a bit and then we put our thinking heads together to figure out her next steps.  Unfortunately, she had not saved for this emergency.  Sure, she could finance it.  I’ve done that before and I don’t see anything wrong with it especially if you can get a low interest rate and many dealers are offering excellent rates right now (0.9 to 1.9%).  My other requirement if I’m financing a car is to keep it at 3 years or less.  My friend wanted an SUV because that’s what she was driving before and she was used to it.  But because she had not saved any money to put down the only way she could afford it would be to take out a 6 year loan.  Now that is crazy to me. Who wants a $400 car payment for 6 years?  In the end, she settled for a small sedan which is much more in tune with what she could afford.

Weddings

It’s crazy how expensive weddings are getting.  I don’t know how people can afford them any more but some how they are hosting lavish weddings.  I know that when I was planning my wedding over 10 years ago I used to receive targeted bank loan offers in the mail where they would offer me $25k to finance the wedding of my dreams.   Is this how some people are financing their weddings?  I hope not. Who want’s to be in debt after getting married?  I didn’t have much money when I got married but I also never dreamed of a lavish wedding.  I was very happy with a small wedding at the cost of $10k including my honeymoon.

Travel

Who doesn’t love to travel?  I know people who are always dreaming of traveling but I don’t see them saving to make those dreams come true.  The minute I mention I’m going on vacation they start getting nostalgic about how they wish they could travel too.  I love to travel and I’ve done quite a bit of it but this year we’re taking a little break.  We have a few home projects to work on and we still have some home renovation debt to pay off.   In the meantime, we’re planning and saving for some travel next year. Now that I’ve learned more about travel hacking I’m planning ahead to save some money.

Are you saving for the things that you want?  

Photo by: Flickr

Car Insurance: How I’m Saving $428

GeicoA couple months ago I finally had it with my car insurance bill from State Farm.  In the past year my bill had gone up by $300 and for no good reason.  We are safe drivers with no driving violations ever and we don’t put very much mileage on our cars.  So I decided to call my agent.

Dealing with State Farm

When I spoke to my State Farm agent he didn’t have much to say other than, “oh rates have gone up in the state and there is really nothing I can do. If you want you can install the Drive Safe and Save in your cars”.  This is a program where they collect data about your driving then use that information to calculate your discount which can be up to 50%. However, you have to sign up for or have one of these already in your car, OnStar, In-Drive or SYNC.  My vehicles do not have any of these programs so I would have to sign up for In-Drive, which is free for the first year and then $6.99/month after that.  This sounded like to many hoops to jump through just to see if I would get a discount.  I was not feeling it.  I mean, isn’t our driving records enough now a days?

I decided not to sign up for the program and so I increased my deductibles to lower my rates.  I wasn’t happy about it and was ready to look elsewhere.  I felt like State Farm wasn’t really doing much to keep me as a customer even though I have had a clean driving record my whole driving life.

My Switch to Geico

A couple weeks ago my sister told me she got an excellent  car insurance rate from Geico. Of course I had seen all the commercials promoting the save 15% on car insurance in 15 minutes but I had never seriously considered them. So, I headed over to their website and got my quote.  I ended up getting my car insurance policies with more coverage and lower deductibles at a 36% discount compared to State Farm.  Wow, can’t beat that deal!  I jumped right into transferring my policy with them.

My 6 months savings with Geico will be $428.  I guess I can now say that phrase, “I just saved a bunch of money on my car insurance by switching to Geico”.  :) They also told me if my driving record remains the same then my policy rate will not go up.  We’ll see about that, but for now I’m feeling pretty happy about my savings.

I plan on using that money to replace the tires on my car which I noticed this weekend are pretty much done.  It’s been 4 years since I last replaced them so it’s definitely time.  I was thinking of checking out the tire shop at Sam’s club since I read that they have good prices.

I still have my home insurance with State Farm so we’ll see how it goes with the rates now that I switched my car insurance and no longer qualify for the discounts I was getting for bundling up.  I’ll definitely consider Geico if my rate goes up too high with State Farm.

Have you ever tried Geico? Do you have any recommendations on where I can buy my tires?  

Photo by: Flickr

Home Buyers Remorse: Selling after one year

HomeownersA few weeks ago I heard that a couple I know put their home up for sale after just one year of becoming homeowners. They bought a home in the same town as me a few months after I did. They were first time home buyers as well. Their home was a short sale and had several offers on the table but they were still able to buy it at a low price which appeared to be a great deal for them.   I started wondering what happened? Why are they selling so soon?  I found out later that they have encountered several issues that many first time homeowners sometimes don’t realize.

 

Flood Zone

Their home is in a flood zone and their home insurance is very expensive, about $2,000/year.  This is a big issue and I don’t know why they didn’t back away from this home when they found out about this.  If you’re in the market for a home make sure you know if the home is in a flood zone.  When I bought my home this was one of the first things my real estate lawyer made sure to check and we had a clause in the contract to protect us where we could back out of the deal if the home was in a flood zone.

Home Maintenance and Related Costs

The harsh winter was another issue that pushed them to sell so soon.  They were not really expecting so many snowstorms and the constant shoveling of snow really put a toll on them.  This couple is in their late 40s so I can see how this could be an issue and the husband travels a lot so the wife was the one constantly shoveling snow alone. The very cold weather conditions and the Polar Vortex added to their heating costs as well.  Many of us suffered from this this winter season.  It was no joke.

They also felt that the house was eating up a lot their monthly income.  After putting in a new bathroom and a fence around the property they really fell out of love with the home.  They felt it was just too much money being pulled out of savings and they didn’t want to continue down that path by upgrading the rest of the home. They are also not big DIYers and really don’t enjoy the constant maintenance work on the home. They were just not fans of spending so much time and money on home updates and maintenance.  It’s not easy going from calling your landlord for repairs to being in charge of all the maintenance yourself.

High Mortgage Payments

Though they bought the house at a low price they only put a 5% down payment.  So, with the extra costs for PMI and the high cost of home insurance, add to that the property taxes, I can see how they probably are not seeing much of an advantage to owning in their case.  In addition, the wife is now only working part-time after loosing her job at the end of last year.  I’m sure this has made it more difficult to keep up the mortgage payments and maintenance costs.

All of these issues have caused them to have home buyers remorse after one year.  It’s unfortunate, but it happens to many people.  Probably the biggest issue this couple had was buying a home when they were not ready to be homeowners.  Perhaps they were lured in by a low price and probably low-interest rates at the time.  I’m assuming they did not have much knowledge about the issues involved when buying a home in a flood zone either.

Being a first time homeowner comes with a big learning curve for many, myself included.  I hope this couple is able to sell their home soon without losing too much on the deal.   So far they have had to drop the selling price by $6,000. Now that the prime season for selling real estate is here they may find a buyer before having to drop the price again.

Have you ever had buyers remorse after making a large purchase such as a home or a car? 

Photo by: Flickr

 

The Perks of Homeownership

homeI’ve written a few post lately about things that I’m not too fond of when it comes to being a homeowner.  Writing about the realities of home renovations and surprise repairs can be a little pessimistic though I like sharing my experiences so that others can do better and gain some knowledge from what I have gone through.  But today I want to share the things that I love about having my own home. :)

More Space

Ah, this one is really the main reason we bought our home in the first place.  We had been renting a one bedroom apartment and we were frankly running out of space.  There was nowhere to escape for alone time.  We were either in the living room or the bedroom.  We also wanted a second bathroom.  I was sure I didn’t want a huge home.  I’ve always been a fan of smaller homes because they require less cleaning time and lower heating/cooling costs. Another item on our list was having a finished basement where we could setup a lounging area or home theater as we enjoy watching movies.  Our home is a ranch style with 800 sq. ft in the first floor and 800 sq. ft in the finished basement with a bathroom in each floor. There’s actually a kitchen in the basement but we don’t use it.  It’s like having two one bedroom apartments for the price of one.  We each get our own space.  My husband gets to escape to the man cave and home theater he always wanted.  I get the first floor and everyone is happy.

Our own laundry room

One of the things I really hated about apartment living was having to share the laundry facilities.  We would never be able to do laundry on the weekends because everyone was doing laundry then.  I always did it on weeknights.  Then we had to deal with people not remembering to get their clothes out of the machines in time.  So, their they were hogging up the machines.  Ugh, It was so annoying!  I always thought it was rude to take people’s clothes out of the washer or dryer.  My husband on the other hand did not hesitate and he would take it right out and dump it on top of the machine or if they left a basket he would put it in there.  I guess it’s fair to do that especially when we were all sharing facilities and honestly nobody has time for that nonsense.  Now I do laundry whenever I want. I don’t have to be aggravated by anyone forgetting to pick up their laundry and hogging up my machines and my time.

Peace and Quiet

We were lucky to live on the top floor in our old apartment so we never really had much noise from upstairs but we would sometimes hear our neighbor’s music downstairs or outside in the parking lot.  Now, I enjoy music and I usually have my Pandora playing in the background but I don’t like disturbing others or to be disturbed myself.  When you share walls that is difficult to avoid.  One time in my old apartment we were woken up by loud hammering at 8:00 am on a Saturday morning.  It was my new neighbor installing curtains.  Ugh, how rude! Really lady, you couldn’t do that later in the day?  Well, she later apologized and told us she was sorry that it was the only time her friend was available to help her.  She didn’t cause much disturbance after that but it was enough.

Parking

We now have our own garages and don’t have to worry about digging out the cars after a big snow storm.  In my old apartment building parking could be difficult sometimes if you got home too late at night especially on weekends.  I remember living in another apartment where we had street parking and that was a nightmare.  I vowed never to put up with that again.

Freedom to Renovate

I enjoyed renovating our home to our taste.  One of the things I didn’t like about are old apartment was the carpets. They always seem dirty to me.  I feel like you can never really get them as clean and you can get hardwood or tile floors.  Plus they create a lot of dust in my opinion. In our home we installed hardwood floors and tile.  We knocked down walls and added new ones.  We painted as we wished.

Building Home Equity

Let’s talk about the financial perks.  After purchasing this home we ended up having $93k in equity. That was really great.  What helped us here was that we put a 20% down payment and we bought at the bottom of the market. To make things easier we also bought a home we could afford on one income and we had additional funds saved to make the renovations we wanted, though they were not enough but it was helpful.  Since we have made so many upgrades to this home, we probably still have that same amount of equity or close to it.  We don’t plan on selling any time soon.  That equity will continue to grow as we pay down our mortgage and hopefully be much higher by the time we are ready to sell.

Tax Deductions

We didn’t have many tax deductions when we where renting.  Now we can take advantage of tax benefits such as deductions on our mortgage interest and property taxes.  If you have a home equity loan you can deduct the interest paid on that too.

What are some of the perks you love about homeownership?

Photo by: Flickr

Foreign Film Fridays: Mar Adentro

Happy Friday!  I feel like this week flew by for me.  Hope you had a good week.

Well, this week I had the chance to rewatch my Foreign Film pick for today, which is:

Mar Adentro (The Sea Inside)

This is another Oscar winner for Best Foreign Language Film in 2004 representing Spain.  It tells the true life story of Ramon Sampedro.  At 20 years old Ramon became a quadriplegic after suffering a terrible accident while diving in the Ocean.   Twenty-eight years after his accident we find Ramon fighting the Spanish government for his right to end his life through euthanasia.  Assisted suicide is a very controversial topic but for Ramon it is very simple.  He does not feel his life is in balance and he wants to die with dignity.  This film is deep and thought provoking, especially because Ramon’s family is against his choice and the lawyer who takes on his case is also struggling with a debilitating disease, which could lead her to wanting assisted suicide herself.  

When Ramon goes public with his choice he finds himself dealing with people who are for and against euthanasia.  He also attracts the attention of a young mother who feels compelled to help him feel better about life and the will to live.  They actually become close friends during his battle with the court system.

The role of Ramon is portrayed by 2007 Oscar winner Javier Bardem (No Country for Old Men).  It is currently available on Netflix and Amazon Instant Video.  You can watch the trailer here.

Enjoy the film and Have a great weekend!