Dealing with the Cost of Living...

[Lee Flier]

Great thread.

 

When I was living in my native L.A. I had no idea how I'd ever afford a house, and that was even way back when (80's/early 90's). For that and many other reasons, I moved to Atlanta in '92 and I was like a kid in a candy store. It was ridiculous how low the cost of housing was here. And auto insurance! I was paying a fortune for that in CA; not so here. So the upshot is I lucked out and found a ridiculously cheap house that had everything I needed. And I've stayed here; I didn't "upgrade" when I started making more money. There's just no reason to do that. My house is about 1200 square feet plus it has a full basement (half of which I finished off to become my studio), and if I can't fit all my stuff into this space, I've got too much stuff.

 

My van is paid for and then some, and I have no credit cards. Only debt is the mortgage which is trivial.

 

So... for a couple of years I was seriously short of work for various reasons, and if I'd had any debt it would've completely killed me. And does kill a lot of people - bankruptcies and foreclosures are at record highs, and it's no wonder. People are just buying all the house they can get plus expensive cars, etc. and up to their ass in debt. A few months with no income and they can't hold it together.

 

To me, the important thing is freedom. I want the freedom to not work as much if I don't want to (I'm self employed) and spend more time with my music and other things that make me happy. If that means not having as nice a house or car as the next person, that's not only fine, it's way more than fine. It's amazing how many things you think you "need" that really are irrelevant when you really start breaking down what makes you happy and where your priorities are. My modest home allows me to make music in it, have a garden, do my work, have a place for friends to hang out... it's a sanctuary. Not an albatross. I really do think a lot of this stuff is as simple as figuring out what you really need and discovering that actually it ain't much.

 

I do understand that your situation is way tougher Ernest, because of where you live. But I'll bet if you thought about it there are things that you and your family think you need that you really don't, and the tradeoff in peace of mind would be way worth it.

[jackcheez]

To me, the important thing is freedom. I want the freedom to not work as much if I don't want to (I'm self employed) and spend more time with my music and other things that make me happy.

I have been working so hard to make that happen, but I live in SoCal . I saved 40 grand for a down on a house. I might as well have a fookin nickel. It's not worth anything. By the end of '06 it's going to be decision time. Stay and slave ? Go and live ?

[Will Chen]

Originally posted by jackcheez I have been working so hard to make that happen, but I live in SoCal . I saved 40 grand for a down on a house. I might as well have a fookin nickel. It's not worth anything. By the end of '06 it's going to be decision time. Stay and slave ? Go and live ?

 

You should move to Texas. In Fort Worth, there are some fairly nice brand new neighborhoods with 1500 sq foot homes starting around $90,000. Around Dallas, the same thing around $150,000 (around 25 miles outside of downtown). On the preowned market you could do even better. When my wife and I were looking, we saw a 1500 sq foot with a pool across from an elementary school in a nice neighborhood for 120. 40 down would give you a pretty small mortgage over a 15 year period...

 

No state income tax (but fairly high property/sales tax)...

[Lee Flier]

Originally posted by jackcheez I have been working so hard to make that happen, but I live in SoCal . I saved 40 grand for a down on a house. I might as well have a fookin nickel. It's not worth anything. By the end of '06 it's going to be decision time. Stay and slave ? Go and live ?

 

Yeah, that was what it came down to for me too. I didn't feel like I had a choice by the time I left there; it was just getting too depressing to struggle so much for so little.

[jackcheez]

You should move to Texas. In Fort Worth, there are some fairly nice brand new neighborhoods with 1500 sq foot homes starting around $90,000. Around Dallas, the same thing around $150,000 (around 25 miles outside of downtown).

It's possible. My nephew and his tribe (1 of which is my god-daughter) live in Little Elm, not far from Dallas.

[philbo]

You pays yer money and make yer choices...

 

If you really don't like how your life is moving, you can change it. It's one of the very very few things you actually have control over.

 

There is no reason, with the technology available today, that anyone would *have* to live 'on the grid' unless they choose to.

 

If you've made that choice, enjoy it instead of complaining.

 

Of course, failing to choose means you've decided to let circumstance make your choice for you.... Still, nobody to blame but yourself.

[jackcheez]

You pays yer money and make yer choices...

Some of us like to think and maybe talk about it first. Thanks for the lecture anyways.

[Will Chen]

 

Originally posted by philbo Of course, failing to choose means you've decided to let circumstance make your choice for you.... Still, nobody to blame but yourself.

 

 

Geddy Lee said it best: "If you choose not to decide you still have made a choice..."

 

I guess that was the entire point of this thread. Life is a series of choices and those choices define you.

 

You can choose to attempt to make a living a real estate/stock speculation but should be ready to bare the consequences of that choice.

 

You can choose to buy a $3000 guitar when you're behind on your rent and in serious debt, but should accept with no complaints when you have to sell it to make ends meet.

 

I'm not calling anyone out on this thread, I've made some horrible financial decisions in the past. I was lucky enough to find the inner strength to make a realistic evaluation of my life at an early age and set a goal for my future.

 

There's also something to be said for those of you feeling the crunch now, when you come out the other side, you will be much stronger as a result...

[MarkGifford-1]

Here's how we did it:

 

My wife and I were both raised by Depression Era parents. This meant that you did NOT buy things on credit. You saved up, and then you bought it. If you didn't make enough money to afford it, you did without.

 

When we got married, we borrowed the money from her folks to buy enough materials to build a house. 8 months and MANY long weekends and evenings later, we had a house. We learned a HUGE amount about maintenance/construction, too. Our mortgage is $187.07/mo. for a 1200 sq. ft. house in the country.

 

Other than that small mortgage, we carry no debt.

 

We both drive used cars, which we get for $3-4000. They're trouble-free and last 3-4 years.

 

No cable.

 

A Virgin Mobile cellphone for emergencies - $80/yr.

 

We buy TONS of things at garage/rummage sales. Save thousands of dollars a year by doing this.

 

No kids.

 

The benefits:

 

We have an inordinately large amount in retirement accounts, thanks to some smart investing and some great 401K plans at our jobs.

 

We eat out at least once a week. No drinks, just water.

 

I am able to do recording/live sound/etc. and make enough to pay my bills. No cubicles. Same w/my wife.

 

We've traveled all over the US and Canada and the Caribbean. At least two week-long vacations a year.

 

We've got nice stuff, I have more guitars/amps/recording gear than most people.

 

You can do it, but you've got to be smart, not be afraid of a little hard work, show some self-control and have a long-term plan.

 

MG

[Hanshananigan]

Great thread!

 

I think my definition of the "American Dream" is a bit different than how it's being used here. I think of it as Donald Trump, Linsey Lohan. Or at least having a big house and 2 new cars and a cleaning service and vacations on the Cape or on the Islands. Status. Satisfaction. Security. Doing "better" than your parents did.

 

Lots of folks do have that.

 

Unfortunately, the "middle America" (nice 3 bdrm house, 2 decent cars, cable but no 40" plasma screen) is shrinking. Any married teachers w/kids here living in Northern VA/D.C. area? Unless you bought in before the "boom" or live in a sketchy area, I have known several that couldn't afford to live within driving/train distance of where they worked.

[object.session]

so that's what a flexible spending account is. wish i knew that a month or so ago when we could sign up for those things. medicine is expensive! (and it seems like insurance doesn't help much. at least for me.)

[jackcheez]

I am able to do recording/live sound/etc. and make enough to pay my bills. No cubicles. Same w/my wife.

Another inspiring post. Thank you.

[Will Chen]

Just thought of another financial tip from back when I bought my house.

 

When real estate shopping in Texas, an area that has not seen the real estate boom much of the rest of the coutry has seen, you'll have a better chance of appreciation in the short term (5 to 7 years) by buying the cheapest house in the nicest neighborhood you can afford. Doing it the other way around often results is stagnantion to depreciation when you try to sell.

[PBBPaul]

Originally posted by m15a so that's what a flexible spending account is. wish i knew that a month or so ago when we could sign up for those things. medicine is expensive! (and it seems like insurance doesn't help much. at least for me.)

Talk to your HR folks. You may still be able to enroll.

[Hanshananigan]

Can anyone point me to a "energy savings calculator" on the web?

 

My wife has been bugging me about dropping the temp about 5 degrees during the day when we're at work and at night, and I keep sayin' the savings are minimal. I'd be happier about it if I knew it actually made a difference!

[boosh]

Reading all this makes me ashamed....

 

I often complain about my cashflow,....

 

Our yearly earnings are $60,000 combined

We have a 5 bedroom house,2 cars a musicstudio and go on vacation three times a year.

 

Cars are paid for.

 

No debts except for the mortgage on the house which is aproxx $300,000

 

We can save some money each month,...our doctors and hospital bills are paid by insurance,...dental costs also.

When we lose our job we get 70% of our last earnings from our government.

 

We have legal weed,legal prostitution,..Heineken and Cheese,......

 

Dutch girls are the most beautiful in the world...

 

Only thing we lack of is a tropical climate...... otherwise The whole bible should have been re-written... instead of Heaven it should say : Netherlands

 

I will never complain again.

[doug osborne]

 

Originally posted by PBBPaul ...I can't believe how much STUFF is in our house. It's time to start making trips to Goodwill again.

 

 

Garage Sale/eBay/Craigslist --- sell it all!

 

Save half, donate a percentage to your favorite charity, and spend the rest on something of quality.

 

Life is lighter without so much stuff (guitars don't count...).

[kevinnem]

 

Originally posted by Hanshananigan Can anyone point me to a "energy savings calculator" on the web? My wife has been bugging me about dropping the temp about 5 degrees during the day when we're at work and at night, and I keep sayin' the savings are minimal. I'd be happier about it if I knew it actually made a difference!

 

 

http://www.energystar.gov/ia/business/bulk_purchasing/bpsavings_calc/CalculatorProgrammableThermostat.xls

 

not sure how well it work, and as always crap in = crap out.

[rim]

My tips for buying a home:

 

* Get pre-approved for a loan - not only will you know how much house you can afford, a pre-approved loan is more attractive to a seller. I was able to buy my condo 10 years ago because the current buyer was having problems supplying the necessary paperwork. The seller gave up on that buyer and sold to me because I already had a pre-approved loan.

 

* Find an owner who has a lot of equity already in the home you're interested in buying - these types of owners tend to be more flexible with price because chances are good, they are already making good profit from the sale. The previous owners of my house had lived there over 20 years so they probably spent $100K on it (guessing), maybe less. And they were asking $375K which was a bargain in my area, but to them, it's still a nice $275K profit. Case in point, there was another house on the same street which was similar and they were asking for $400K. I doubt the owners of that house had lived there as long as 20 years.

 

* Be patient - I was actively searching for 6 months before I lucked out with my home. I almost gave up or bought a house I wasn't too thrilled with. I'm glad I didn't

[Mr. Botch]

Originally posted by doug osborne Life is lighter without so much stuff (guitars don't count...).

[Ernest Buckley]

 

I do understand that your situation is way tougher Ernest, because of where you live. But I'll bet if you thought about it there are things that you and your family think you need that you really don't, and the tradeoff in peace of mind would be way worth it.

 

 

I don`t want to shoot down anyones ideas, thats why I came here with this.

 

However, like I said earlier, the only luxuries my wife and I enjoy are cable which runs us about $75 a month and good food. We both enjoy good food. We eat out about once a month.

 

Yes, we could get rid of cable and that would basically mean absolutely no entertainment in our lives with the exception of books which is not so bad but still...

 

I don`t remember the last time we went to a movie. Its sad actually. I don`t even remember the last time we went out!

 

Believe me, I do not feel sorry for myself, I just want to know if anyone else out there is thinking what we`re thinking...

 

HOW THE HELL ARE WE GOING TO GET OUR LIVES STARTED?

 

Yes, we live and enjoy ourselves but we are both in our 30s. We are nowhere near buying a house. The average around here hovers around $900,000.

 

If you do not live in Brooklyn, then you won`t know this but there are only about 5-6 neighborhoods that are "ideal" to raise a family in: Park Slope, Bay Ridge, Mill Basin, Bergen Beach and Brooklyn Heights?

 

The public schools suck and not because the teachers are horrendous but because the kids are coming from bad homes and theres overcrowding!

 

I refuse to put my kids in classrooms where 2-3 kids really should be in Special ED. and are not. However these 2-3 poor souls ruin the entire class!

 

So in another 3 years my wife and I are going to have to pay for our oldest son to attend a private school, where parents are primarily "professional"... (read) they can afford to pay the tuition.

 

Yes, a lot of my frustration comes from the fact that we missed the Real Estate boom. Had we purchased a home in 1998 or `99, our investment would have easily doubled and we would be smiling but we missed it. We`re kicking ourselves. We basically feel fu3ked.

 

A lot of people are in the same situation.

 

Its difficult to hear advice from someone who purchased a home before the real estate boom here in NY.

 

Yesterday I was having this discussion with my mom and I said to her,

 

"If you don`t make $200,000 a year, you cannot afford to buy a house in Brooklyn. You`re basically living on a poverty level."

 

She says, "Oh, I guess I would consider myself poor too because I don`t make $200,000 a year."

 

I said to her, "You own a house that is worth a million dollars and its payed off."

 

Its even hard for my folks to understand the predicament my Generation (X) is living in.

[Hanshananigan]

 

Originally posted by boosh Only thing we lack of is a tropical climate...... otherwise The whole bible should have been re-written... instead of Heaven it should say : Netherlands I will never complain again.

 

 

Hey Boosh, since Katrina did it's damage to New Orleans, etc, there are several TV movies coming out about how NYC, etc could be underwater in an instant. Since the Netherlands are kinda under sea level as well, has there been any recent movies about the Netherlands being wiped out by a tidal wave or something?

[Hanshananigan]

Originally posted by kevinnem http://www.energystar.gov/ia/business/bulk_purchasing/bpsavings_calc/CalculatorProgrammableThermostat.xls not sure how well it work, and as always crap in = crap out.

 

Thanks Kevin! It took me a minute, but figured it out eventually!

[Jimbroni]

quote:Originally posted by m15a

so that's what a flexible spending account is. wish i knew that a month or so ago when we could sign up for those things. medicine is expensive! (and it seems like insurance doesn't help much. at least for me.)

 

 

Talk to your HR folks. You may still be able to enroll.

 

Yeah just be careful, its a use or lose proposition. I did it to get laser eye surgery. Make sure you only put enough in to cover what you'd typically spend, and keep in mind that it can be used for over the counter medication like aspirin, cold medicine, and femine products. Oh if you have kids they may have pretax Day care spending Accounts available as well.

I wish I they would allow flex accounts to be applicable for veterinarian bills, now thats a racket.

[Jimbroni]

 

Originally posted by Ernest Buckley I don`t want to shoot down anyones ideas, thats why I came here with this. However, like I said earlier, the only luxuries my wife and I enjoy are cable which runs us about $75 a month and good food. We both enjoy good food. We eat out about once a month. Yes, we could get rid of cable and that would basically mean absolutely no entertainment in our lives with the exception of books which is not so bad but still... I don`t remember the last time we went to a movie. Its sad actually. I don`t even remember the last time we went out! Believe me, I do not feel sorry for myself, I just want to know if anyone else out there is thinking what we`re thinking... HOW THE HELL ARE WE GOING TO GET OUR LIVES STARTED? Yes, we live and enjoy ourselves but we are both in our 30s. We are nowhere near buying a house. The average around here hovers around $900,000. If you do not live in Brooklyn, then you won`t know this but there are only about 5-6 neighborhoods that are "ideal" to raise a family in: Park Slope, Bay Ridge, Mill Basin, Bergen Beach and Brooklyn Heights? The public schools suck and not because the teachers are horrendous but because the kids are coming from bad homes and theres overcrowding! I refuse to put my kids in classrooms where 2-3 kids really should be in Special ED. and are not. However these 2-3 poor souls ruin the entire class! So in another 3 years my wife and I are going to have to pay for our oldest son to attend a private school, where parents are primarily "professional"... (read) they can afford to pay the tuition. Yes, a lot of my frustration comes from the fact that we missed the Real Estate boom. Had we purchased a home in 1998 or `99, our investment would have easily doubled and we would be smiling but we missed it. We`re kicking ourselves. We basically feel fu3ked. A lot of people are in the same situation. Its difficult to hear advice from someone who purchased a home before the real estate boom here in NY. Yesterday I was having this discussion with my mom and I said to her, "If you don`t make $200,000 a year, you cannot afford to buy a house in Brooklyn. You`re basically living on a poverty level." She says, "Oh, I guess I would consider myself poor too because I don`t make $200,000 a year." I said to her, "You own a house that is worth a million dollars and its payed off." Its even hard for my folks to understand the predicament my Generation (X) is living in.

 

 

Even if you could afford it, it doesn't sound like buying a house in your hood is a good idea. I'm sure you have your reasons for staying in Brooklyn, I understand I did the same here. I didn't get screwed, but I didn't get the best deal. Still I didn't want to uproot myself from my current social life, because well I had spent the previous 5 years moving every 6 months, which meant I only had acquaintances and not many true friends.

 

One thing I wanna say about the So-called boom, if you had bought a house in '98, you would have had a ridiculously high interest rate. The boom is a local thing, not true for most places. You have to think of law of supply and demand. Land has a limited supply, it will always be on the rise as long as we have population growth.