As of this writing, June has one more day left in her before she dies, and I've already spent $7698. The good news is that I will still put about $3,000 in my savings account after it's said and done, because I just sold my car. Oh yeah, and two weeks ago we became truly debt free (more on that if you read on).
Since I last wrote, we've been completely consumed with moving, packing, cancelling, selling, wrapping, taping, crying, more selling, all to go from a 2200 square foot home with enough closet space for a troupe of dancing bears to an 1100 square foot townhouse with one less bedroom and quite a few less closets. We've been in our new space for about two weeks, and it's just now starting to feel like something is coming together.
To downsize, we started out by selling things. This included two couches and a massive sectional, our large dining room table and six chairs, a bed, a desk, a patio set, a garden hose and reel, a ladder, a vacuum cleaner, and a kitchen's worth of bowls and pans and other detritus. I've talked a lot before about my car, including whether I could sell it as a source of emergency cash, and I'm happy to report that we are now a one car family. I put in on Craigslist, marked it down for a broken A/C, and sold it for $200 less than I was asking, and to the first person who emailed me.
HOW I SPENT $7,700 IN ONE MONTH
In my monthly budgeting, this month of June is what I refer to as a Missing Month. It is one of those sets of 30 or 31 days that kicks you in the shins repeatedly, daily, and sometimes more than once per day. Like the month of January, when many of us are recovering from a binge of generosity, both to ourselves and to others, we allow ourselves to slack. But in our case, it isn't really slacking because our Missing Month is due to a job move.
Let's take a look at how I spent $7,700 in one month. To keep things in perspective, we normally spend on average $4,500 each month to live. This covered the mortgage, rent, groceries, utilities, childcare, and other living expenses.
Here are the “extra” expenditures we had this month to prepare for the move:
$1,600 = Radon remediation, pest control, electrician, driveway repair,
$500 = Security deposit at new home
$1,200 = New bookcase, bunk beds, kitchen table in chairs (and we haven't even bought a couch or coffee table yet)
$375 = U-Haul rental truck and gas
$160 = New Roku player and wireless router (allowed us to cancel cable)
$300 = Friend's wedding (not moving related)
TRULY DEBT FREE
Becoming truly debt free, as opposed to saying “debt free minus the house,” didn't hit me like a ton of joyful bricks like last year, when we finally made the last payment on nearly $100,000 in car, student loans and credit card debt. That is because I had been diligently tracking that debt payoff for about 7 years, and because on that first day of “debt freedom,” my wife and I were boarding a plane for a paid-for vacation to Croatia and London.
As we left the title company parking lot shortly after signing our house over to another, it dawned on me that for the first time since I was 18, I didn't owe anyone a dime on loan. We don't have a car payment. We don't have a student loan payment. We don't carry a balance on credit cards. All the payments we make, like rent, utilities, mass transit, car insurance, are now just expenses that we can control. Yes, housing costs are almost unavoidable, but I'm sure if I put my mind to it I could buy an acre of land somewhere for cash and camp for free if I truly wanted to prove a point (I do not).
This home sale we just made also made me think of how my home equity was merely shadow equity. On paper, we had about $15,000 in equity, but after selling it for a few thousand less than we bought it for, and paying the real estate brokers a nice commission, also counting the expenses of negotiated repairs and remediation, I left $2,000 poorer than I came.
This has all got me thinking of the rent vs. buy debate, and maybe it's because I've been paying attention to the topic more lately for obvious reasons, I've been reading some unique perspectives and rationales defending either side. All I can say is that it all comes down to personal preference. I'm tired of mowing the lawn and making the trips to the home improvement stores, and worrying when the water heater is going to crap out. I've come to view rent vs. buy as an argument over a fixed expense. Yes there are variables like mortgage tax deductions and home equity loans and value of having a place that can't be taken away (unless you decided to stop paying your property taxes, another expense associated with ownership).
Gone is the notion that homes double in value after ten years, or that you can flip a house quickly for an easy profit, but maybe I'm wrong, as it seems like housing fever is heating up around the country and a new crop of wannabe gardeners and carpenters spread their wings from their post-college apartment to a picket fence made out of sensible vinyl.
LETTING GO OF MONEY
Since becoming debt free, I've saved up about $25,000 in cash and generally began some type of process of letting go of money. That means I haven't been balancing my checkbook regularly anymore (I still do it once a month, but keep enough cash in the account that I know I won't overdraft the account).
Which brings me to how I overdrafted my account, which means that my letting go of money experiment has impacted me to the tune of $7.50 fee. In my defense, I overdrafted because I sent too much money to my SmartyPig account at the end of the month, forgetting that I had just created a monthly pull from my checking account that was to happen three days later (yes, I overdrafted my account and had plenty of money on hand to avoid it).
I've also tried lately to be more generous, to buy someone a coffee when they are having a bad morning, little things that Debt Payoff John would never do. I had always been the type to avoid buying a round of drinks because I feel that everyone should just pay their own way because inevitably four extra people will join the drink circle, four that will certainly never have to fulfill their end of the bargain, but letting go of money means that I no longer care so much.
As I said in my last post, “It's only money. You can always get more money.”
You can always get more money because money is a game. Capitalism is a game. It's the same as socialism because it is mainly an social apparatus built to force people to fit into a society and have something to work for and something to lose. Capitalism is preferable to socialism because it is a game, meaning almost all of us have a chance to win, or to at least get by doing what we want to do. Unless you make $200,000 per year, you are never going to get ahead.
Might as well focus on staying on track, budgeting for the fun stuff, and respecting each other.