Comments on: Growing Up http://thebudgetingbabe.com/2004/12/26/growing-up/ A personal finance blog for career minded women with small budgets and big dreams. Wed, 09 May 2012 23:42:27 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Anonymous http://thebudgetingbabe.com/2004/12/26/growing-up/#comment-3248 Anonymous Fri, 06 Feb 2009 01:20:00 +0000 http://thebudgetingbabe.com/?p=26#comment-3248 Babe, I like to offer some creative advice for someone starting out and wanting to purchase a house sometime in the future. If you are willing to make a few sacrifices for a few years you can buy/build a house in cash and not inslave yourself for 30 years. One friend of mine went online at a local school website and bought one of those portable classrooms at auction for $500. He already had some land in the country so he had it moved out there. The classroom already is wired and has plumbing. He just built some walls to make bedrooms, a kitchen, & living room, He did this over the course of about 6 months. He did it as his budget allowed and never went into debt to finance this project. He's moving in next week. He plans to make "mortgage" payments to himself for the next 5 - 10 years to save for a house that he will have built with the cash he's saved up. I did something similar. I found a nice used mobile home for $15,000 that I bought with cash. I had it moved out to the country where I had land. I spent the next 4 years making repairs, installing a water well and septic system and had electricity brought in. I did this as my budget allowed and didn't go into debt. I sold my city house last month and move out to the country. I now have a 2 year emergency fund and we're also making "mortgage payments" to our savings account for the day we have our dream house built. In the meantime we live mortgage free and only have utitliy bills for the electricity and phone. We have no city taxes to pay only county taxes ($86!) <br/>You can do some other things like live with your parents or something like that and save, save like there's no tomorrow. The concept is similar to how to buy a car for cash. Start with a beater for a $1000 or so. Make car payments to yourself for a few years then when the beater is run to the ground you'll have enough for a better used or cheap new car. The only differance is the amount and length of time. But if you have the decipline it can be done. All the best. - Money_Illusion Babe, I like to offer some creative advice for someone starting out and wanting to purchase a house sometime in the future. If you are willing to make a few sacrifices for a few years you can buy/build a house in cash and not inslave yourself for 30 years. One friend of mine went online at a local school website and bought one of those portable classrooms at auction for $500. He already had some land in the country so he had it moved out there. The classroom already is wired and has plumbing. He just built some walls to make bedrooms, a kitchen, & living room, He did this over the course of about 6 months. He did it as his budget allowed and never went into debt to finance this project. He's moving in next week. He plans to make "mortgage" payments to himself for the next 5 – 10 years to save for a house that he will have built with the cash he's saved up. I did something similar. I found a nice used mobile home for $15,000 that I bought with cash. I had it moved out to the country where I had land. I spent the next 4 years making repairs, installing a water well and septic system and had electricity brought in. I did this as my budget allowed and didn't go into debt. I sold my city house last month and move out to the country. I now have a 2 year emergency fund and we're also making "mortgage payments" to our savings account for the day we have our dream house built. In the meantime we live mortgage free and only have utitliy bills for the electricity and phone. We have no city taxes to pay only county taxes ($86!)
You can do some other things like live with your parents or something like that and save, save like there's no tomorrow. The concept is similar to how to buy a car for cash. Start with a beater for a $1000 or so. Make car payments to yourself for a few years then when the beater is run to the ground you'll have enough for a better used or cheap new car. The only differance is the amount and length of time. But if you have the decipline it can be done. All the best. – Money_Illusion

]]> By: Anonymous http://thebudgetingbabe.com/2004/12/26/growing-up/#comment-33 Anonymous Tue, 25 Jan 2005 21:10:00 +0000 http://thebudgetingbabe.com/?p=26#comment-33 People often try to shoot down other people when they are doing better, or try to discourage others from doing something that may make them more successful than the critic. Bah!<br /><br />As for saving money for a down payment, don't pay rent for 10 years for it! You'll lose all the benefits of the tax deduction for 10 years. Make sure you don't borrow more than the purchase price though; have enough cash for the closing costs.<br /><br />Houses/condos are great. You get all sorts of tax deductions (interest, personal property taxes, etc.), you have your own private place to live (much better than apartment living, IMO), a 2-car garage (for me anyway), and eventually equity. After you have equity, all new loans get rolled up into the house so you get the tax break on it (but only if you really *need* what you're getting the loan for, such as a car).<br /><br />If you can get around without a car, don't get one. If you're going to have 2 cars, *never* have 2 car payments. It's a depreciating asset.<br /><br />As for all the tv's, furniture, etc., that is always paid in cash or I pay by the time the interest-free period is up. If the company really wants to give me 6-12 months float on a large purchase, I'll take it. People often try to shoot down other people when they are doing better, or try to discourage others from doing something that may make them more successful than the critic. Bah!

As for saving money for a down payment, don’t pay rent for 10 years for it! You’ll lose all the benefits of the tax deduction for 10 years. Make sure you don’t borrow more than the purchase price though; have enough cash for the closing costs.

Houses/condos are great. You get all sorts of tax deductions (interest, personal property taxes, etc.), you have your own private place to live (much better than apartment living, IMO), a 2-car garage (for me anyway), and eventually equity. After you have equity, all new loans get rolled up into the house so you get the tax break on it (but only if you really *need* what you’re getting the loan for, such as a car).

If you can get around without a car, don’t get one. If you’re going to have 2 cars, *never* have 2 car payments. It’s a depreciating asset.

As for all the tv’s, furniture, etc., that is always paid in cash or I pay by the time the interest-free period is up. If the company really wants to give me 6-12 months float on a large purchase, I’ll take it.

]]> By: Michael http://thebudgetingbabe.com/2004/12/26/growing-up/#comment-15 Michael Tue, 28 Dec 2004 05:39:00 +0000 http://thebudgetingbabe.com/?p=26#comment-15 And why is debt a way of life for many (most) Americans? Because they've been sold a lot of mistruths; because our financial education is fairly ineffective, if not nonexistent; and because ours is a consumer-centric economy. And perhaps the biggest kicker: because many of us feel we are entitled to "the good life," no matter what. Even if we can't truly live the good life, we can at least look like we're doing so.<br /><br />Your friend is travelling a common road of belief. She knows her family's position is tenuous and worsening, and to counter this, she tells herself (and you) that it is not really her fauly -- that life is just harder now. She probably honestly believes that once anyone has kids and a family, then debt is simply something they will always have. No matter what you do, you cannot avoid debt.<br /><br />It's a nice, clean way of avoiding the responsibility for managing one's money affairs correctly and doing the dirty work to fix the mess. <br /><br />I promise you that I see this same attitude in many of my coworkers and friends every single day.<br /><br />It is a sad point, but the statistics show that "growing up" probably isn't going to happen for your friend until Life somehow knocks the denial smooth out of her. And why is debt a way of life for many (most) Americans? Because they’ve been sold a lot of mistruths; because our financial education is fairly ineffective, if not nonexistent; and because ours is a consumer-centric economy. And perhaps the biggest kicker: because many of us feel we are entitled to “the good life,” no matter what. Even if we can’t truly live the good life, we can at least look like we’re doing so.

Your friend is travelling a common road of belief. She knows her family’s position is tenuous and worsening, and to counter this, she tells herself (and you) that it is not really her fauly — that life is just harder now. She probably honestly believes that once anyone has kids and a family, then debt is simply something they will always have. No matter what you do, you cannot avoid debt.

It’s a nice, clean way of avoiding the responsibility for managing one’s money affairs correctly and doing the dirty work to fix the mess.

I promise you that I see this same attitude in many of my coworkers and friends every single day.

It is a sad point, but the statistics show that “growing up” probably isn’t going to happen for your friend until Life somehow knocks the denial smooth out of her.

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