Yes!!! I was able to shift a full $1,000 to cash savings this month. So psyched!
More money rambling
So major change of plans financially, not so much in what I’m doing short term but in terms of overall big life goals. I hope I’m not give y’all whiplash! And I hope no one feels like they gave me advice for no reason, it’s taken me a lot to think through all this stuff and everything has been so helpful overall even though I’m shifting gears in a pretty major way.
I am still trying to save $30,000 cash from now until 2023 (hence the $1k deposit this month) but now that’s all for an emergency fund. I’ve been keeping a more modest emergency fund ($10k) in order to not lose out on market gains and stuff, but I really don’t like it. I want a bigger cash buffer for peace of mind, especially since we are single income. I’m also going to start keeping $5k in our checking account (which will be achieved by this Friday thanks to paycheck and tax return combo!) because I think the stress release will be worth it. I’m tired of watching the checking get down to like $500. I mean, I know we have other money and are at no real risk, but I just hate it and I’m starting to think that matters too.
I have an additional account that has about $10k in it, and my plan was to use that for possible house repairs if we bought, but now I’m allocating that towards our next vehicle. Our car now is still going strong but it is old with 120k miles or something. Even though I didn’t actually move the $10k I feel an intense sense of relief knowing that whenever our steed goes to the big mechanic in the sky we can replace it easily in cash.
On the housing front I have come to a big realization, which is that I have absolutely no real desire to buy and was wanting to do it purely out of fear that renting will become too expensive. Here’s why I am comfortable being a possible forever renter now.
First, if I buy I will instantly go like ten steps backward in terms of comfort and accessibility. I will have to have tons of stairs, inaccessible storage, a closed floor plan, I won’t be able to do my own laundry anymore, I might not even be able to open the windows myself, and literally half of my friends (the disabled half) wouldn’t even be able to visit because it would be so inaccessible. Could I do it? Yes. Would we probably make money on it? Yes. But thinking about it fills me with dread. All I can picture is navigating narrow stairs on crutches, and explaining to my friends why I’m not having a housewarming (because they can’t even get in the door).
So, will rent keep going up and will I keep “throwing away” money on rent? Probably so! But, my apartment overall is my dream apartment and I spend way more time at home than the average person. Our building is new and has an elevator and there are also lots of new apartment buildings (that rent for similar rates) going up all the time, which is not the case for owner occupied buildings, so this place isn’t a unicorn for renting. Here I have a huge bathroom with a walk in shower, and all of my appliances are out and I can do my own laundry myself. I have PT stuff easily accessible so DH doesn’t have to get it for me, and am in walking distance to a very comfortable commuter train with big cushy seats, and all of my friends can come here. I talked to DH and he is completely willing to work longer and build a bigger nest egg in order for us to rent a nice apartment clear through retirement, rather than buy something that won’t work as well.
What about buying an apartment similar to what I have now? That is possible and I’m not saying never ever, BUT the stock is incredibly low. Most new builds here are multi-floor units, not single floor apartments, and the ones that are as nice as what I’m renting are at the absolute minimum like $600k. Plus, they have HOAs, which at that price range are usually a minimum of $1,200 a month, and that doesn’t count assessments which can happen at any time. And HOA rates can go up. Additionally, even if we saved up a 20% downpayment of $120,000 (which would take 10 years at our current rate), and even if house prices hadn’t gone up at all, our monthly payments for mortgage and HOA would be over double what we are paying now.
There is no way renting will get more expensive than that, especially if we can stay put for 10 years which I think is possible, and the cost of losing out on all those years of investing is not incalculable in reality but is for me, lol, because IDK how you would figure that out but holy hell is it a lot. So I could save painstakingly for 10 years and be house poor in order to eventually have what I already have now, except I’d also be responsible for all the upkeep and costs, and miss out on investing, and have the added risk of tossing a huge amount of money in with a bunch of other people who I don’t even know.
Meanwhile, if I just assume our rent will slowly but steadily climb (I have great luck getting fixed rates by negotiating for longer leases, my rent hasn’t increased since 2018) I don’t see a reality where we can’t keep affording it or where we can’t keep paying what is admittedly high rent (about $2k a month) WHILE ALSO becoming rich because…we’re actually already doing that? I feel like I went from feeling a huge amount of stress for doing the “smart” thing to feeling a massive release doing the “dumb” thing, which is maybe not so dumb in my particular case. I look at it as luxury spending. I am willing to spend more for the luxury of renting.
