We officially bought a house and became homeowners!
It has been a goal of ours for a few years to buy a house. We were pretty dead set on purchasing a house two years ago but didn’t. We met with a few lenders to get prequalified so we could start shopping around. But we couldn’t get qualified because we were both self-employed and you have to jump through a few more hoops in that case.
Last year, we could’ve bought a home in Utah but were planning on moving to Texas so that wouldn’t have worked.
This year, as soon as our lease was up we wanted to purchase a home. And we ended up buying a house five houses down the street from where we live right now.
This is the first post I’ve written about real estate and homeownership. I’ve had a few people ask me to write about buying a house but I haven’t wanted to because I hadn’t bought one myself.
We’ve faced a number of challenges in the past trying to buy a house. We just weren’t ever in a position to do it. Moving around the country for the past few years hasn’t made it any easier.
For any of you that have been following me for some time know that I’m a big fan of Mint.com. I’ve been using it for 5 years and it has always said that my profile is 90% complete. It wanted me to add a house to be 100% complete.
It probably sounds dumb but I was super excited to finally add a house into our financial picture to have a 100% complete profile.
Why we bought a house
I was taught from a young age that it’s important to own real estate.
We decided to buy a house because it’s the American dream, of course. Not really… I’ve run the numbers multiple times and homeownership is not all that it’s cracked up to be. It’s a huge investment and the house starts to own you.
People always say buying a house is the smartest thing you can do and honestly, I don’t always agree. It’s a pretty illiquid “asset” or “liability” depending on how you look at it. There’s multiple rent vs. buy calculators and it’s not totally clear what the best choice is.
We decided to buy it as a long-term investment not just trying to save money on our monthly expenses. Our plan is to rent it out after living in it for about a year.
The area is great and it should rent out easily. We tried to follow the 1% Rule. It should rent out for 1% per month of the purchase price. For example, a house for $145,000 should rent for $1,450 per month.
Being a landlord is a lot of work and most people don’t want the headache of trying to maintain a property. But I’m looking forward to it!
I grew up watching my mom invest in real estate. I helped her mow lawns, clean up and get them ready for new renters, I learned a lot about real estate. I’m excited to be a landlord because someone else is going to pay my mortgage.
What we paid
Lubbock, TX is affordable with a strong job economy and low unemployment. When we starting looking, we wanted an investment property that we weren’t planning to live in. We wanted to buy a house around $80,000 and fix it up to get it rent ready but didn’t want to dump a ton of cash into it.
We realized we were going to have to live in it so we looked at buying a house that was $125,000 and then $145,000 and ultimately paid $152,000 for the house we just bought with a little renovation. It’s a great home that was built in 2016.
Some of you are probably thinking, “how are the houses so cheap?” In Texas, the homes and land are cheaper but we don’t pay income tax so it all gets made up through property taxes. Property taxes in Texas are the second-highest in the country.
The house we bought is 1500 sq ft., 3 bed 2 baths, it has a two-car garage, a big yard, nice area, and our mortgage payment is $668. Our payment is low because mortgage interest rates are really low.
Our Interest Rate
When we got our preapproval letter they quoted us a 4.25% interest rate. But just a couple weeks later when I went to lock in the interest rate it had dropped to 3.75% 30 years fixed interest rate. Literally, the day I called the lender to lock in the rate he told me rates had dropped and this was the lowest interest rate he had done in 2019.
With a 4.25% interest rate, we would pay $117,190 in interest over the life of the loan. But because we locked it in a 3.75% we will pay $101,418 in interest (which is still crazy if you think about it). But that saves us almost $16,000 in interest over the life of the loan! A difference of about $40 a month.
I wanted to make sure we got the lowest interest rate. We considered first-time homebuyers programs but honestly, nothing looked great. I’m going to write a post about the pros and cons of first-time homebuyers programs because there’s a lot to consider there.
We went with a conventional loan and put down 5%. This gave us the lowest interest rate and didn’t require us to live at the house for any specific amount of time. Some FHA loans require you to maintain the property as your primary residence for at least a year.
We’ve already made some mistakes that we wish we could go back and change but hopefully, this is the first house of many and the more experienced real estate investors we will become.
Is it smart to buy a house?
So the big question is… is it smart to buy a house and will that help accelerate your path to financial independence? If you want to maintain flexibility in your life and invest everything in index funds, renting might be for you. That works for a lot of people.
But, if you don’t mind the headaches of homeownership and possibly being a landlord you can build up equity and produce a positive monthly cash flow that could accelerate the amount of time it takes to become financially independent.
We’re excited about the new chapter of our lives and I look forward to building up a real estate empire!
Summer is the time of year when most people spend more. With the warm weather and kids being out of school, we have more time to do stuff and vacation becomes a top priority. Save money this summer by doing these four things.
1) Save money on eating out
We realized we were spending too much on eating out in the month of May. It’s not good for our wallet or our bellies.
The average cost of dinner per individual at a restaurant is around $10–$12. If you go out every day, you’ll spend more than $50 each week. That’s over $200 a month!
Cook dinner at home instead of going to a restaurant every day. Challenge yourself to stick to this all summer, and see how much money you save. Whatever you save from not eating out, throw it into your savings. Who knows? You might even save so much that you’ll stick with it.
Save money on your grocery bill by comparing prices in your area or online to shave down your grocery bill.
2) Turn your air conditioner off when you’re not home
My wife is home all the time and so this is hard for us to do. But just like turning off the lights make sure you turn your air conditioner off or up.
This summer is going to be hot and your electricity bill is guaranteed to rise with the temperature.
According to the U.S. Department of Energy, “You can save as much as 10% a year on heating and cooling by simply turning your thermostat back 7°-10°F for 8 hours a day from its normal setting.”
You can get a programmable thermostat saving you time and money by programming in times when you know you will be away, like during the workday. For the random times when you’re gone, make this an add-on step to turning off the lights. It may seem inconvenient at first but soon will become as natural as flipping that switch.
3) Sign up for price alerts on your travel destinations
Have your next trip destination in mind? Sites like Google Flights let you sign up for price alerts so that you’ll get a notification when ticket costs drop. Just narrow down where you want to go and when, and you’ll receive an email if prices go down.
If you’re not willing to wait, download an app called Hopper that predicts with 95% accuracy the best time of the year for you to book your travel.
Another great way to save money on travel is with an app called Earny. I’ve been using it for about a year to get refunded when the price of something I purchased drops. But they just recently added this feature for hotels. If you book a hotel and the price of the hotel goes down afterward, Earny will get to work for you and get you a refund.
4) Have a garage sale
Last year we were moving and so we decided to have a garage sale. We ended up making almost $700 in one day!
You can tidy up and you’ll end up with less junk around the house. Even better, if the garage sale goes well, you’ll have extra money in your pockets!
Summer is a time when you could be tempted to overspend.
There will be a time in the future when you can splurge on whatever you want. You’ll get there. But this summer, your goal is to stay on track!
Why not start the week off with an extra $5.00? No strings attached. It’s not a lot of money but it could lead to some of the easiest money you’ve ever made.
It’s an app called Dosh that gives you cashback automatically. It’s not points. It’s not coupons. Just cold, hard cash. Today, I’m going to explain what it is, how it works and whether or not you should consider downloading it.
What is Dosh?
Dosh was launched in late 2017, making it fairly new compared to sites like Ebates and Swagbucks. It has received a lot of attention lately for one of the best cashback apps out there.
When I joined in 2017, I was surprised how simple it was to earn money. I simply set it and forgot about it. There were times I would check in on the app and realized I had earned cash back without even trying.
It’s also one of the fastest apps that gives you cashback. A few times after filling up with gas I checked the app and instantaneously it was added to my Dosh Wallet.
It has many different ways to earn cashback and has a great referral bonus when you share it with your friends and family.
My current Dosh lifetime earnings:
With that being said is it legit or is a scam? With so many scams out there it’s important to
Should You Download Dosh?
You could be getting effortless cashback by using this app in four ways.
1. Earn $5.00 by linking your card
Once you link a card watch your balance grow as you spend and once your balance reaches a minimum of $25 you can cash out to PayPal.
2. Online Cashback
If you’re a frequent online shopper you’re really missing out. Here are a few places you can earn cashback.
1-800 Flowers 10%
Pizza Hut 3%
Cost Plus World Market 2%
Sam’s Club 2%
3. In-store Cash Back
If you fill-up with gas at Sam’s Club you can get 2% for that. If you grab a cup of coffee in the morning from Dunkin Donuts get 4% cashback for that. No coupon, no receipts, and no scanning involved.
Dunkin Donuts 4%
Pizza Hut 3%
Sam’s Club 2%
Mattress Firm 3%
4. Referral program
Once you get familiar with the app you can share it with friends and family and make a little extra cash that way. As soon as you sign up, you’ll see the option Refer on the dashboard. Click on it and you’ll be given a referral code. You can then send this code to friends and family through email, text message, or social media channels. If one of the recipients clicks the link, downloads the app, and links his or her credit card, you earn a referral bonus of $5.
How does it work?
1. Connect your card. Securely link your credit and debit cards. Whenever you pay with your linked cards, Dosh gets you cashback.
2. Shop and dine out. Pay with your linked card at 1,000s of stores and restaurants, and get up to 10% cashback automatically in your Dosh Wallet.
3. Get paid to refer. Refer your friends to Dosh and get $5 for each one who signs up and links a verified card.
4. Transfer your cash. Do what you want. Transfer your cash to bank accounts, PayPal, or donate to charity from the app.
Is it safe?
Dosh uses bank-level security and mentions on their website “we’re serious about your security, and we protect every piece of data you share with us.”
SSL EncryptionOur app is secured with 256-bit encryption to ensure your information is protected.
Dosh does not store any credit or banking information. All credit card information is tokenized and vaulted using Braintree, a PayPal service.
Anonymity. Rest assured, Dosh does not sell personally identifiable information to any third party.
We use Multi-Factor and Two-Factor Authentication to prevent unauthorized access.
If you’re a regular shopper, it certainly wouldn’t hurt to get back some of the cash you’ve been spending. It’s even better if you live in an area populated with businesses participating in the program.
The nice thing about Dosh is there are no hoops to jump through in order to get cashback which is really nice. But, don’t let the cashback deals entice you to spend more money than you would normally spend. Remember to be smart with this and only spend money on things you need and or value.
Finally, this is not a scam but a great way to get long-term benefits on a lot of your shopping.
Ages 20-29: Average 401(k) balance: $11,600. Median 401(k) balance: $4,000. Ages 30-39: Average 401(k) balance: $43,600. Median 401(k) balance: $16,500. Ages 40-49: Average 401(k) balance: $106,200. Median 401(k) balance: $36,900. Ages 50-59: Average 401(k) balance: $179,100. Median 401(k) balance: $62,700. Ages 60-69: Average 401(k) balance: $198,600. Median 401(k) balance: $63,000.
This seems to be a little bit low. It’s no wonder people are having a hard time retiring!
“The typical consumer will pay $279,002 over their lifetime in interest payments.” (Credit.com)
This is crazy! And it’s only in interest payments, not even the payments on the money borrowed. Imagine what you could do with nearly 300k!
“Nearly a third (32 percent) of respondents would rather have “excellent” credit than receive one million dollars.” (CapitalOne.com)
We place such a high value on having a great credit score in our society when is all the score is is how good are you at borrowing debt.
“59 percent of Millennials have set aside an average of $9,100 in an emergency fund, more than older generations (Gen X-ers have $8,700, while Boomers have $7,100).” (Fidelity.com)
I would have to say that this is pretty good as far as the amount. But remember that having to much cash in a low-bearing interest savings account is actually a risk in and of itself because you’re losing purchasing power due to inflation. It’s a good idea to learn how to put that money to work.
“Those with a bachelor’s degree make an average of $1,000,000 more than those with just a high school diploma.”(BachelorsDegreeCenter.org)
The value of a four-year education is under scrutiny but I think the numbers speak for themselves that you’re going to make more money in your lifetime you complete a bachelor’s degree. This is not true in all circumstances and you may be doing just fine without a degree. And that’s ok!
Think of how many Americans die each year. That’s a lot of unpaid debt that puts a lot of strain on close family members. I’ve worked with retired individuals before and you’d be surprised to know how many of them are still carrying their student loans with them with no plans to pay them back.
“Women view men as unattractive if they have a lot of debt. For men, physical appearance carries more weight and debt doesn’t play a role.” (LendingTree.com)
It’s unattractive guys if you’re carrying a lot of debt. For the ladies, apparently, it’s ok as long as you’re good looking?
“40% of people who self-identify as very attractive wouldn’t date someone with bad credit; more than 60% wouldn’t walk down the aisle with them.” (LendingTree.com)
Going back to the fact that we place a high value on credit scores, it can be embarrassing if you’re dating someone and they find out that you have a low credit score! If you want to increase your credit score check out this post that I wrote: How to Increase Your Credit Score.
“4 in 5 women think it’s very important to check your partner’s finances before marriage — only 3 in 5 men do.”
Marriage is a big commitment! Make sure you understand what you’re getting yourself into. I probably wouldn’t ask for a credit report on your first date, but finances should definitely be discussed before tying the knot.
“The average American racked up $1,054 of post-holiday credit card debt, which will take the average respondent 10.28 months to repay!” (CNBC.com)
Just in time for the holidays again!
“55% of couples combine their money, up 4% since last year.” (TD Ameritrade)
What do you guys think? Is it better to combine your finances with your significant other or keep them separate?
“27% of the millennials are spending more on coffee each month than saving for retirement.” (LendEDU)
When you learn about the latte factor this can have a huge impact on your retirement!
“49% of millennials were spending more on restaurants and dining out each month than they were saving for retirement.”
I’m not surprised to see this because eating out can get really expensive! And I get the mentality that a lot of millennials have, “why save my money for retirement when that is so far away and I could really go for a nice burger right now.”
“Amongst millennial respondents that were saving for retirement, the average amount saved per month was $480.″
This is good! If you’re saving that amount of money per month starting at age 25 until you retire at 65, you’re going to have over $3,000,000.
I hope this inspires you to stay on top of your finances!
My mission at Simplifinances is to help you master your personal finances by simplifying them. This year I discovered two apps that do just that. I was able to negotiate a few bills and cancel a subscription by just lifting a finger.
I had to do this twice to make sure it actually works. And I’m here to tell you that it works. Is all you have to do is click a button and your personal bill negotiators will do the work for you. No uncomfortable calls with customer service reps and no getting pushed around.
I’m going to share with you how I canceled one subscription and was able to get a discount on one of my bills with very minimal effort.
What is Trim?
Trim is a holistic financial management service that enables you to achieve your financial goals through personalized recommendations and savings opportunities. Trim can: Negotiate your cable, internet and/or phone bill with ANY provider, lowering your bill by up to 30%. It’s actually not an app but a machine-learning personal finance bot that you can only use on your desktop.
What I used Trim for?
My wife and I recently moved to Texas and had to find a new Internet Service Provider (ISP). We could have gone with some alternative low-cost options with lower bandwidth but decided to go with AT&T because that seems to be the most popular around here. So far we have been pretty happy with them. Right now we’ve been paying about $50/month for 100 bps which is maybe more than we need but with my wife’s business and streaming Netflix because of our kid we wanted to make sure we didn’t have to worry about losing a connection.
It’s only been 3 months that we’ve been paying for it and when I linked up my bill to Trim, it asked me if I wanted to negotiate my AT&T bill. I clicked yes, and within a couple of days, I had a $25 discount on my bill. Instead of paying $52.21, my bill was for $27.21 and Trim took a cut of that. Which leads me to the next part.
How much does it cost?
Because Trim saved me $25 on my AT&T bill they take a 25% cut of whatever they save me which I think is reasonable because I’m still able to get a 75% discount on my bill that I would have otherwise not been able to get. So I had a transaction come out of my account for $6.25 so my total bill for that month ended up being $33.46 for a total saving of $18.75. I’m pretty sure the discount was only for the month of November but I will continue to monitor it to see if discounts in the future will continue to be applied.
On a side note, we have very few recurring bills and I’m sure if you’re someone that pays a lot in monthly bills and subscriptions that you would benefit from using the trim services.
It’s like having someone watch your back financially. Clarity Money launched in 2017 and is still growing fast! They were recently acquired by Goldman Sachs online banking arm Marcus, which will make future service rollouts interesting. Clarity claims to offer the following services:
Track bank account activity
Cancel unwanted subscriptions
Create savings goals
Deliver insights to you (Additional services you might not know about plus spending analysis).
To me, Clarity has a more user-friendly platform. If you only want to track spending and cancel unwanted subscriptions, Clarity has a better feel than Trim.
What I used Clarity Money for?
When I took Finance in business school we were required to subscribe to the Wall Street Journal. I believe it was $48 per year when I signed up which came out to $4 a month. I know $4 a month is not that much but after my class, I found myself paying for the Wall Street Journal each month but I hadn’t read an article from it for a while. So even though it was only a small amount each month it wasn’t adding any more value to my life at the time.
So at the beginning of this year, I tried to cancel my subscription online. But by doing so, they told me that I had to call in and talk with one of the customer service reps if I wanted to cancel. And so I did. I got on the phone with a sweet lady who started to explain to me all of the reasons why it’s worth and why I shouldn’t cancel. She said, “if you’re going to be in the industry having a subscription to the Wall Street Journal will be very beneficial in your career on staying up to date on the latest news.” So she ended up talking me into keeping it. Then after a few weeks, I realized I still wasn’t using it.
When I logged in to Clarity Money it asked me if I would like to cancel the Wall Street Journal. I thought, why of course. So I clicked “cancel” and by the next day, my subscription was canceled. No phone call, no uncomfortable conversation.
You can also cancel unwanted subscriptions like Hulu, Pandora, etc. super easy. We really don’t have a lot of subscriptions but who knows, if you connect your bank information they may just tell you about some subscriptions you didn’t even realize you were paying.
How much does it cost?
Clarity Money is completely free. Since they’re owned by Marcus by Goldman Sachs, I’m interested to see if Marcus customers will enjoy exclusive perks. It’s still fairly new and I believe it will continue to catch on with consumers as a smart way to save money.
Like Mint and other free financial apps, Clarity does make money if you sign up for any recommendations including credit cards or the Acorns micro-investing app.
Is Black Friday set up for you to really save money or is it a way for businesses to sell more merchandise and get you to spend more than you planned?
Black Friday is one of the busiest shopping days for a combination of reasons. It marks the unofficial beginning of the Christmas shopping season and between 30 – 40% of annual retail sales occur between Thanksgiving and Christmas. Additionally, many employers give their employees the day off as part of the Thanksgiving holiday weekend. In order to take advantage of this, virtually all retailers in the country, big and small, offer various sales including limited amounts of doorbuster items to entice traffic.
Most people hope to “save money” while shopping but end up spending more. While at the same time there’s an incentive for businesses to clear inventory and generate as much revenue as possible before their accountants close the books on December 31st so they can show shareholders that Q4 was a profitable one.
I’m not against Black Friday and holiday shopping. There are ways to do it right. I simply want to help you create a plan and understand that it’s all set up for you to spend more money than you planned. You have to be aware of that. Maybe you haven’t planned yet and this will help get the most out of Black Friday and save you money.
How to get the most out of it
Even though Black Friday is less and less appealing to me, there are good deals to be had. In the past, we’ve gotten great deals on things such as a TV, workout supplements, and last year we bought our baby crib and car seat and saved a good amount of money. We all love that feeling of getting good deals and feeling like you got away with a steal and that’s why shopping can literally become an addiction for some people because they’re always looking for that next good deal. If you’ve been waiting a long time to buy something this might be the week that you finally make it happen.
Whether you shop online or in-store there are many ways to double your efforts beyond the normal 20 – 50% off. You can save money in the form of discount codes and cashback.
If you’re looking for additional discount codes and cashback online make sure you download these:
Ibotta– This app has helped me earn over $150 in cashback on grocery shopping, online shopping, and travel. If you’re looking to purchase something on Amazon for example, simply go to Amazon through their app and you will earn a percentage of cashback when you make a purchase. Once you reach $20 in cashback you can have it sent directly to your Paypal or Venmo.
Ebates– Similar to Ibotta where you get cashback for online shopping except this one can be automatically added to your internet browser so whenever you go to check out with an Ebates partner, which there are thousands, it will ask you if you would like to activate your cashback. We’ve made over $100 in the past year and we hardly shop online.
Honey– This is also an extension that you can add to your internet browser and whenever you go to check out online it will scan all of the active discount codes for you so you don’t have to waste time looking for codes. This will save you a ton of time and a little bit of money the next time you go shopping.
If you combine all three of these when it comes to your Black Friday you’re sure to get the most out of it.
Why you shouldn’t care
Black Friday can be a fun and exciting time but don’t let that entice you to spent more money than what you have set aside in your budget.
I’ve always found it to be ironic that on Thanksgiving we’re supposed to be grateful for what we have and then we go shopping to fill in the gaps of stuff that we don’t have immediately after. I hope this week is filled with time with loved ones and that you focus on the things that really matter, and hopefully save a little money at the same time.
Hi, I’m Scott. Welcome to my website! I’m an Accredited Financial Counselor, husband, and father. I hope you’ll join me on the journey of reaching financial independence through simplifying how you manage your money.