Last year I did something that’s both dumb and smart. Last year I moved into the house my brother bought. This was done mostly to be helpful, but also to save money. But I’m barely being helpful and I only saved the minimum amount of money.
Let me explain.
My baby brother is a military man. (BTW, “baby brother” is a six-foot, linebacker-looking 27-year-old.) Over the last 18 months he spent 15 months in Afghanistan, got engaged, bought a house he’d never seen, convinced me to move into said house with his now fiancÃ©e, and took a job in Virginia. (This whole paragraph equals approximately a dozen separate posts, so I’m not going to go into the details here. I’m just setting the stage.)
“You can save money for a down payment,” he told me when he was talking me into moving into the house he was about to purchase. And that made sense. As I’ve pointed out before, I seem to be incapable to save money, so the help helps.
I estimated that I could save $12,000 in a year by not having to pay rent and economizing a little. Even with the increases in my monthly gas budget I knew I could probably hit that (my commute went from 10 minutes to 45, in “good” traffic).
I made an excel spreadsheet and put in where I needed to be at each payday so I could meet my goal. And I tracked it. Some months I did better than others, but I met my yearly goal.
I could have done better.
I saved my money. I did. I really did.
But I had all those out-of-pocket expenses for the surgery and the preparation. My wonderful insurance covered almost everything, but I still had about $1,500 in surgery-related expenses that I paid for myself. (Did you note that I wasn’t being sarcastic when I typed “wonderful”?)
And I had a root canal plus new crown, which equalled nearly another $1,000 over three visits.
My truck broke down at least twice, with repairs at nearly $1,000 each time. And that doesn’t take into account regular maintenance and the new tires.
I went with my family to New Orleans over Thanksgiving weekend. I’m estimating that I spent about $800-$900 for those four days.
I bought an iPad. Yes, the deluxe version, with mobile internet access and a monthly bill. I’ll let you fill in amounts for that.
And I have no idea how much money I overspent on gifts, lunches out, celebratory dinners and other “special”-day related expenses. I have found that this is a big money drain, since I have no restraint.
I could have saved much more.
Now I am looking at having to buy a new car this year. My truck has reached that point where I’m almost paying as much to keep it running as I would to pay off another vehicle. It’s time. Which means that I need at least $5,000 for a down payment, and I need to budget to pay $12,000-$15,000 overall for a decent used vehicle. Even with a good loan, I will be paying this down the next two years or so.
So that wipes out nearly half what I saved over the last year, and makes it nearly impossible for me to save money in the next few years.
Median home prices in Houston have new homes at $127,000. If I need to save 20% for a down payment, that means I need approximatly $25,000. I have $12,000 saved up, so if I don’t have to use that money for the new car, I almost have half what I need.
I need to make more money. I need to spend a lot less.
It will be another three years before I can buy a house, if everything I’m anticipating happens as planned. And by then home prices will have gone up, home loan interest rates will have increased, and my situation will have changed at least a dozen times.