State of my Debts: November Check in

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How is it November already?

October was spent a lot closer to home (minus Sausage fest!) but it wasn’t quiet. Sure, there was plenty of time for reflection, but that was amid the parties, the wedding, and the dancing. I also got to hang out with my favorite little dog for about ten days. He left a lot of fur, and I realized that while I am not ready for a dog of my own to visit at lunch every day for over a decade, I was happy to have the company (and the responsibility!) while my friends were on vacation.

Financially, October hurt. I had to buy new tires (fun fact: tires are expensive and not that fun to buy!) and somehow, through a glitch in the system*, I overpaid my credit card bill. So I was left with hardly any money, and had completely wiped out my emergency fund.

Also, I started thinking about buying a house. So I didn’t make any additional payments to my student loan. This is fine, because I am prepaid for at least two years, and I will need any additional (ha!) money that comes in to go directly toward paying for a home. If I decide to do that. If not, I can resume rapid payback momentum after I rebuild my emergency fund.

Here are the charts, though, they don’t look very different than last month:

 

November liabilities chart

November’s liabilities look a lot like October’s

The slope of the line is flattening, right? The part of me that really wanted all of this gone as soon as possible is disappointed in my progress, but the other part of me is more rational.

I need more cash on hand than I have. Both of these debts are on pace to be paid off, so I don’t have to worry. Going farther into debt with a mortgage sounds really scary, but it’s mostly that my parents are being so dang generous that makes me the most nervous.

Kids, right? Even when they’re past 30 they’re a money pit. But I know that their kindness will be repaid, and if I do find something I want to buy, then they’ll gift me the down payment. Now, even though it’s legally a gift, I will absolutely pay them back in five years. Hopefully less. I guess the part that scares me the most is that the chart above? The way it looks now? Is the best it will look for the foreseeable future.

But that’s okay. I have to pay each month for housing anyway. So if I find the right something, then it makes sense. And when I get a roommate, my parents will be repaid more quickly. These graphs will never be the same. On the other hand, I’ll get to create more charts in Google Drive, which is clearly something that tickles my pickle.

Want to see the silly net worth chart again? Me too.

Silly net worth chart

Silly net worth chart — up 221% since January!

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Comments

  1. Sustainable Life blo says

    Looks like you're making good progress. Even though buying a house is a lot of debt to take on and it will make your graph look much worse, it's usually a solid move. You've got to live somewhere right?

  2. says

    Kathleen, I'm curious about the state of the housing market in Portland. Did it crash dramatically in 2008-09? If so, has it come back strong and are prices now rising? Just questions…

    That you'll get a phenomenally low mortgage rate surely argues for buying sooner rather than later…good luck!

  3. says

    you have been doing phenomenal with paying off your debt! so you shouldn't feel guilty at all…buuuuttt I would seriously consider holding off on buying the house until the debt is paid off…it looks like you were able to pay off half your debt in the past six months or so…what's another six months to be debt free (besides a mortgage)? just my two cents, although i get the rationale for buying now…

  4. Liquid_Independence says

    Nice job on the debt repayment. Try to hit 250% net worth increase by end of December :0) If you're currently renting I would buy a place right away. House prices are starting to go back up in the US. Not sure about Portland specifically though, you'll need to do some research. But real estate has always been a good investment in the long run.

  5. Rob says

    Speaking as someone who has bought and eventually fully paid off the mortgage on a house (some years ago), here's my take on things that you should first consider before buying your first house.

    Owning a house over time is usually better than renting because house equity is thus achieved. Over the years this can result in 1000's of $$$.

    That said, however, you should first do extensive research as to how much house that you can afford – on an "ongoing" basis. Buying a house doesn't just involve having the required down payment.

    Set up a draft budget and "guestimate" how much $$$ will be needed for both one-time costs as well as ongoing monthly costs. Will you income support these numbers?

    Some One Time costs: home inspection fees, moving fees, legal fees, down payment fees, other misc. adjustment fees (and, yes, there will be some).

    Some On Going monthly costs: mortgage principle and interest payments, insurance costs, utility costs, heating costs, taxes, house maintenance costs, plus provision for a variety of other small miscellaneous costs.

    Talk to you parents. Find out what they had to shell out when they bought their first house. Talk to others who own a house and get ideas from them. After doing that remember that inflation has increased those numbers,

    Also one important thing to consider is whether the house that you finally do purchase is a house that you can later easily sell (and eventually you will as you upgrade as you can afford it).

    All of the above is not meant to discourage or scare you from buying a house. Just go into it with your eyes wide open based on your current economic status and what the real estate market is in your area. Good luck and go for it if you can!

  6. says

    I have to say, if I had been you, I would have been really tempted to throw a little extra at that car loan for the psychological win of seeing it under $4000. We made a payment on my wife's loan this morning and it just broke the $2000 barrier. That was such a good feeling.

  7. Amy says

    Ned says he's sorry about the fur!

    You're doing great. The fact that you're making much thought-out, considered decisions is what's most important.

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