Emotional Roller Coaster Buying A House (spewing baby rant)

I made a post a few weeks ago how Money is Flowing out of Banks back in May 2016. Since then my lining situation has grown. Which means I have purchase a home. When obtaining a mortgage I was utterly shocked at the percentage rate I received, considering not too long ago we were in one of the illest financial times in recent history. I seriously had a WTF happy moment at the home closing. This should have been nothing new as I saw it coming after applying for a frequent flyer credit card for perks and was floored at the staggering amount of open credit I received. BTW, I cancelled the credit card because they had an annual fee of $99.00. That’s another story of which I blogged about recently.

I found a house suiting my needs.  Notice I said need instead of want. What was amazing to me was how easy the process was actually, considering I was in the financial danger zone a few years ago, but thanks to some diligent positive financial practices, and taking inventory of needs vs wants, the process of getting FICO back to good standing was rather quick.

Let me just say, I am not a fan of the banking system, since I have witnessed it do serious harm to the lives of people in the last 8 years. Nonetheless, I chose a bank that was local to the area, as we say promote and purchase local. For several reasons I almost lost the bid on the house because of the human factors and only communicating via email when changes happen of the bank needed something. It was not for being out bid , it was the initial contract was expiring. What ever happen to let your fingers do the walking and picking up the phone.

Anywho, I got the house, after getting pre-approved some two months earlier.

To those buying a house without some form of financial assistance it can be a daunting task even with the required deposit. Especially if you’re moving from the worry free world of apartment living.

  • Inspection – $500.00
  • Earnest money deposit – $1000.00
  • Inspection – $495
  • Appliances – $5000.00
  • Final down payment – and closing cost $9k -$12K ( I finally was much lower than that but for some time I had no real clue to the exact amount.)
  • Misc fees and charges – $1000.00
  • Actual moving cost $500.00 (DIYer) on the hottest weekend of the year.

The hardest part was not spending any money for almost three months. So I could be prepared for the unexpected. I was a total miser and still racked up some debt. The last homestead I purchased was so much easier. The shocker for me was the 3.25% interest rate, which made me damn near jump out of my skin with blissful joy. My previous homestead was more than 2x that rate being conservative, It made me wonder. If the bank is loaning this money to me at this rate, then the FED is basically giving money away. Considering the last time I purchased a home my credit score was 50 plus point higher.

We I have the home and even though the company who remodeled everything did an awesome job, Home Depot has been my new Pimp. In the scheme of things it was not feasible to rent as the ratio of outgoing payments would have cost me at least $500 – $800 more per month with nothing to show for it years later.

Here is one of the important lessons I have learned about finances and home ownership:

  • If it is not costing you money or a hazard use time to save the money you need to make changes. Yeah you may have a busted looking facility for a while but it saves you from going further into debt.
  • Saving money is a trade-off as there are plenty of little projects to do once you have a house, no time for going out. Now you can invite friends over and have them crash on your comfy couch.
  • There is nothing like cooking in your own kitchen.
  • Nothing says family like a house you where you cut the grass.
  • Every house has its own quiet noise when you wake up at night.
  • If you don’t like your neighbors, too bad they are like family you’re stuck with them for a while.
  • Just because the space is empty, you don’t have to fill it.
  • If you do it correctly, you have an asset in the end.

If you have never purchased a home before, investigate your options and be as smart as possible. Look at paying off your home in less than 15-20 years. The one thing you have to expect is there will be out-of-pocket expense upfront which have nothing to do with down payment and closing cost, and they can be steep. take your time and do it safely.

 

Now go live the billionaire lifestyle.

Emmitt

 

 

 

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Money & Debt = Financial Comfort food = Retail Therapy

debt_comfort_food

Everyone has that thing which brings them to their happy place……. for a short period of time.  If you poll a one thousand people you will find everyone has a comfort vice.  Many people use drugs, some people use work, others use television while many people use consumerism/materialism and the illusion of wealth as their comfort vice. If you wonder where the term retail therapy come from, think comfort debt.

In years past I used money,  consumerism, materialism and debt like a drug.  When my emotional state was down, relief was had by purchasing some truly unnecessary item to divert my attention away from my real life problems and issues.  I have haunting memories of being depressed because I did not have enough cash on hand in my bank account. With my bank account being in the red zone and depression filling my emotional tank, the only relief I could muster was by buying something on credit to make me feel as if financially everything was OK. Let’s face it, being a human being is an exercise in excess and restraint, and I, like many of us humans had far more excess than restraint.

What most wisdom would suggest is life should be is a management of moderation. Realistically, life is more of a roller coaster, and when the sea we are sailing on is to calm, we feel justified to jump in shark infested waters with just a life preserver or knife, just to keep things exciting more often than not.  Our issues are compounded when judgement,  external acceptance and peer pressure come into the fold.

12932990_10208367892530867_1197993098941897_nThink about the majority of the purchases you had made in your life. How many of those purchase were, I want therefore I need? A prime example is purchasing an automobile. Sure, we all understand the purpose of an automobile is to get you from point A to point B safely. Usually when shopping for an automobile the basic premise is a minor considerations. The pressing issue is how the automobile will make us feel, the physically and emotionally comfortable of the vehicle, the emotional safety and how people will judge us as we are associated with the automobile as a status symbol and envy project. Instead of purchasing a Prius which is a safe, economically sleek get it done vehicle, we opt for a Dodge Challenger. I as most of us, have made those purchases.  The bigger issue comes from the fact of most car purchases and many other items are facilitated via a lease or credit terms. Putting you into depreciating debt. the item just purchased, be it a Television at Best Buy, booming car stereo, latest mobile phone (Don’t get me started on those), automobile or just about anything else in this world loses its value the exact moment you take “possession”. I want you to pay attention to the word possession vs ownership, because until you pay the asking price, lease and financial fees of the acquired product technically you are not the owner.

I recently found a purchase/lease agreement for a 1990 Geo Prism I once owned (eventually), the sticker price was $12570.00. If I had not paid the car off early, the car would have cost me something like $20,000. I would have gotten straight pimped. That is why I now purchase cars I can easily have in my possession for a minimum of 10 years.

It all comes down to comfort food, which relates to my earlier post “Are you financially Fat or Obese” . Are you just financially eating yourself into the black hole designed for you to stay in bondage with the chains of comfort holding you down. I wonder how the consumer landscape would appear if we could all remove our emotions from the equation of making purchases.

Let’s make wise choices and be free.

The Billionaire lifestyle Coach

Emmitt Muckles

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Are You Financially Fat or Obese?

FMO =Financially Modified Organism

Are you carrying too much financial weight and don't know it?
Are you carrying too much financial weight and don’t know it?

photo credit: AMURICA via photopin (license)

We all have a favorite pair of pants or a shirt that makes us feel great when we wear them. So we tend to cherish those items and not wear them as often. When we do wear those items it tells us we fit the mold of what we were when we bought them.
I have a pair of pants usually slated for me in the spring, but often a little eye-opening moment happens when I try to put those pants on every few years. They don’t fit any longer. I can’t button them and usually just put a belt on without fastening the pants. The reason for my new found situation, I gained weight, because i let things slide. Over the months of not wearing those pants, I put on somewhat feels like a few tons of butt and belly meat.

The simple act of putting on a pair of jeans has told me I have not been paying attention to my weight and physical condition, and I have work to do. This is actually a post about finances but stay with me here.

The very same thing happens almost by magic to us financially. We start taking on financial weight in the form of small debts which can affect out overall and previous lean financial state. Have you ever done an audit of your credit card or debit card spending and try to shed some financial weight?

Credit cards and debit cards are like a financial buffet VIP pass, allowing the holder of these small densely packed financial calories cards to got wild.  I like to think of credit cards and debit cards as the High Fructose corn syrup in your purse or wallet waiting to enter your financial body. Ewe Financial GMO, or FMO Financially Modified Organism.

Have you ever taken and financial inventory of your spending habits regarding your credit and debit cards. The world is our financial buffet with the membership sitting right in your pocket waiting for you to enter the feast. If you have never taken an inventory, it’s time to do so. Here are the steps for your spending habit inventory.

  1. Gather your credit card statements. 3 months worth
  2. Gather your bank statements attached to your debit card. 3 months worth
  3. Look at each transaction and label it(AN) Absolutely Necessary (example, automobile gas purchase, is absolutely necessary, getting a cheeseburger because you were too lazy to make lunch is not.)
  4. If the purchase was for comfort, entertainment, recurring payments for something you don’t use, or laziness label it (UN) unnecessary

Tally up your unnecessary purchases, particularly the recurring payments. If you are not using the recurring item or service you are being billed, the answer is simple CANCEL IT!

Are you a Debt Slave
Are you a Debt Slave

Performing a routine audit and having an action plan can allow you to maintain a manageable healthy financial weight. One practice I have performed since 2004 has been to find a comfortable level of money to work with per month,  no matter what raises or financial increases I get to spend that Set monetary level. I have based my living expenses of $2800 a month give or take a few bucks for the last 12 years. Anything over that $2800.00 amount is slated for going into savings of some sort. Some of that $2800 right into savings as well.   my income, I increase the amount per month directly to my savings account. Now I will not sit here and say that I am a perfect financial guru, I am a human with emotions and emotions can make us irrational, Sometimes I refer to myself as a recovering debt alcoholic with an infrequent tendency for falling off the wagon from time to time personally. Because I pay attention to my finances overall and frequently, I can get back on the wagon and recover without too much mayhem and destruction in my life.

I know a few people with the mindset who constantly rationalize well I’m broke so might as well spend it while I got it. I experience this from the time I was a child, especially from the various peer groups in my life. I too was there in my young adult life, and I now refer to myself as a former Fat Debt Slave. Financial responsibility is a choice and sometimes the choice is uncomfortable for a defined period.

Financial health is equal to physical health, they both have to be monitored and maintained to make the life trip easier for the long-term. Simply adding debt to your budget unconsciously can and will cause discomfort.

Unless you have a financial generation of unlimited proportions, we have to monitor our financial situation constantly. Purchases we find important today may be just a small or medium burden tomorrow. I am not advocating not living your life and not having awesome experiences, but be mindful of where and how your financial resources are allocated and how the bottom line will be affected.

 

Have an awesome day.

The Billionaire Lifestyle.

 

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