A lesson learned

I’m having a problem and you’re all to blame! I’m reading so many great posts each day I’m having a hard time choosing what I want to write about myself because a new idea comes to me every single day 🙂 So this is my transition post. From condo to house!

Tomorrow is moving day so tonight will be a big mess of getting everything into the truck and cleaning, cleaning, cleaning! Packing was a great lesson in realizing what we had and what we actually needed. I am happy to say that we gave away a big dresser that sat empty the entire time we lived there, two garbage bags worth of clothes and a multitude of DVD’s. Along with that there was a lot we threw away in the way of papers and other garbage.

I’m proud to say that BF and I have come a long way since we’ve moved into the condo. We understand our need to budget and I think we value things more than we used to. I see it in the number of things we have. I am almost positive that even before the purge we had less things than when we moved into the condo (from a 700 square foot apartment into a 1200 square foot condo no less!) This tells me we value our purchases more and really decide what’s important to us and what just isn’t necessary. We’re certainly not minimalists (you should see all the boxes!) and we are absolutely not patient people (still have the “why wait” mentality) but I think we recognize it in ourselves and manage it much better.

I’m excited to step down this new road of becoming a landlord and owning a detatched property and I can’t wait for all the new things that we’ll learn along the way. I wonder how I’ll feel tomorrow afternoon. I think I might be a bit sad and happy at the same time. We put a lot of ourselves into the condo so I’m a bit sad to leave it.

Have you ever felt nostalgic about a previous home even though you knew what you were moving to was better in the long run?

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The House Budget!

I had been dreading doing this budget because I was worried about the increase in some bills and insurance along with a higher mortgage payment. I was however pleasantly surprised last night when I did a budget with rough numbers. We can EASILY cover everything! I was so excited I couldn’t sleep haha. This is my official descent into Personal Finance 🙂 Below is the budget I roughed in. I budget on a bi-weekly basis because our mortgage is paid that way and I like to keep everything together. It’s a bit strange I know but it works for me 🙂

Bi-weekly Bills
Mortgage $1,200.00
Car Payment $50.00
Cable/Internet $45.50 *
Cell Phone $65.00
Gas $80.00
Home Insurance $62.50 **
Electricity $44.25
Line of Credit $225.00
VISA $50.00
Parents Loan $100.00
TFSA $75.00 ***
TOTAL $1,978.75

Bi-weekly Budget
Savings for car insurance $80.00 ****
Groceries $250.00
Dining Out $0.00
Entertainment $80.00
Clothes $0.00
Home Repair/Goods $0.00
Gifts $0.00
Other $0.00
TOTAL $410.00
TOTAL BILLS + BUDGET $2,388.75

* We are discussing whether or not we need cable and so if we go without this item will change to $18.50
** This will likely not change but this is a higher quote than what we changed to but includes earthquake insurance and given where we live it’s probably a good idea!
*** I suppose you could call this our “savings” account we don’t currently have a plan for this money but once we learn a bit more about investments etc. we’ll be able to make a decision about where this goes.
**** One of my goals this year is to save up for our entire car insurance payment prior to that wonderful (not) day and I believe we will contribute our tax return to this fund (which will hopefully cover about half) so I’m pretty dedicated to this line item.

As you can see this is a fairly extreme budget  with not a lot of room for entertainment and fun. But as our debt gets smaller our budget will include some money in the fun sections. I also hope to earn some side income working as a marketing consultant which I’m currently doing now and I see this as discretionary funds, not necessarily spent on clothes or frivolous things but discretionary in that maybe I’ll make an extra debt payment or perhaps something towards car insurance or maybe an occasional dinner out. I like the thought that I’ll be getting “bonus money” every few weeks it keeps things fresh.

So you tell me? Extreme budget or balanced budget?

Clothing 180

I’ve noticed that in 2011 a lot of PF bloggers out there put themselves on a voluntary shopping ban as a way to challenge themselves on their discretionary spending. I think its fantastic! What a great way to recycle your current closet of goodies and maybe wear some things that were just collecting dust before. All in all it’s a great challenge.

I myself have been on a shopping ban since 2008, though the conditions weren’t quite as strict nor was it voluntary. You see, BF had a workplace injury that prevented him from working for about 2 years. It’s a long story that will be told in another post. The injury couldn’t have happened at a worse time it was quite literally weeks before we closed on our condo so there was the stress of wondering if we could make payments, pay our bills etc. etc. etc. BF immediately went onto medical EI and we assumed WCB would kick in right away and all would be well. This was not the case.

So in a short period of time we had to learn the difference between NEEDS and WANTS. I’m proud to say that we came together and made the best of a sad little budget. It turns out that maybe I am a saver and not a spender. I found it surprisingly easy to deny myself the things that I thought I needed in the past. A coffee here, dinner out there, a new shirt, pair of shoes (or 3), no hesitation. At first denying myself felt good, I was surviving in this bad situation, I was helping provide for my family, making sure BF had the things that he needed (because I felt so bad for him feeling bad that he couldn’t contribute as much). But after a while it became almost an obsession. BF: “Should we grab appies and watch the hockey game tonight?” CnC: “Are you crazy? How will we pay for all the bills?!” While fully knowing one small treat for ourselves wasn’t going to bankrupt us, not even close. I morphed into a budget nazi and there were several months where we did not spend one penny on ANYTHING for ourselves other than necessities.

The months continued along slowly and I became more and more obsessed. There would be days I would come home from work nearly hysterical because I was convinced I was going to be let go from my job. And then a miracle. 1.5 years after the injury, and many hours on the telephone fighting for what was right BF was accepted for WCB.  Since that day he’s had surgery & rehab and gone back to work at a different job but some of my obsessive budgeting has stayed with me. We are by no means rolling in dough but we certainly live more comfortably than before. I still find it extremely difficult to purchase clothing. I’m not even tempted to shop anymore and when I’m in a store it is a rare occasion for me to even see something that I like. Since the “incident” as we’ll call it, I think I purchased a couple of pairs of jeans, two work blazers, a pair of work pants and a handful of t-shirts. ALL out of dire necessity because things were worn thread bare and getting too holey to fix.

As budget friendly as this may be I don’t really like feeling this way. I don’t want to start shopping again like I used to but I would like to enjoy the experience and not feel the stabs of guilt every time I step into a dressing room. Not only that, let’s be serious here, fashion changes and even though it’s only 2.5 years fashion has changed and I am out of the loop! I want to regain my personal style but I’m afraid my love of shoes and clothing has disappeared forever.

So what happens now, does the spending guilt ever go away or will I have to re-teach myself that responsible spending is ok? Has anyone else experienced this?

Buying a house part 1

This weekend my boyfriend and I bought a house. It’s thrilling to make this kind of commitment to each other all the while recognizing all the milestones that come with it. However, I’m not feeling the giddy glow of being a first time home buyer. How do I know? I’m NOT a first time home buyer.

Two and a half years ago at the age of 23 we made our first home purchase. A 2 bed 2 bath condo. We made the decision on a summer afternoon, and chose to take a calculated financial risk. 40 year amortization, 0% down payment. In the two and half years that followed we saved up enough equity to buy our new house. If I had one regret about that experience it would be the condo that we chose but I would not for a second regret the financial decision that we made.

To me this is an important conversation because after the economic crisis I read article after article putting down those of us who chose to go down that road. I’m here to say that for some people it worked. I absolutely agree that there were people out there who went this route and failed but this is my success story. To BF and I real estate is a business and we treated our condo as a stepping stone to get to this house. This house becomes the next stone to the next house. In a market like Victoria this is the only way a young person can perhaps own their dream home one day. House prices will go down with these tighter rules and rising interest rates, but we shouldn’t expect to see a dramatic decrease either.

So what do you think? Good move or idiotic? Part 2 will take a look at the new house and the financial decisions we reached to get it.