Other values to your home (whether it is an apartment that you are renting or a single-family house that you own or have a mortgage on) that you could consider are the costs you incur or avoid based on proximity to work, entertainment, friends, family, grocery stores, exercise and recreational opportunities, and schools. (Philip covers that regularly but I thought I would mention it again.)
And for those who have children attending school, being able to attend a high quality school in the neighborhood or have public transportation to such as school is another factor that impacts cash flow (and home values), so that you can avoid paying private school tuition, outside tutoring fees, etc.
Right now our mortgage payments (with ins & tax) is less than we could rent even a smaller house for in an ok neighborhood. Rent where we are is really quite high if you want to live somewhere that isn't rundown and crime ridden. So even with maintenance and other homeowner expenses we end up paying less or breaking even.
The real benefit is that if something is broken we can fix it. When we rented we had constant problems, even in nice properties, getting a landlord to fix things.
The one downside I see with owning is that people move around more than they used to. In some circumstances you end up taking a loss if you sell too early in the loan combined with house prices if you catch them on the down trend.
We have had over 20 different people stay with us through CouchSurfing over the past 3 years, from 3 continents. I can honestly say that we have not had a bad experience yet. We have 'clicked' with some more than others, though. Definitely worth-while to give it a try.
Many people assume that renting is worthless. For me, since I can write off my home office, I get a deduction for my taxes, while losing the home interest deduction. So as long as I pay below "market" for a house it is a wash. I think if you can find something to rent you only lose about 10% of the savings and you get the flexibility of being able to move without losing the 6% to a realtor and having to wait around for the house to sell.
Great points Sarah--I help people with financial issues as well, and usually it starts with something as simple and basic as health insurance.
In 11th grade, I took a consumer economics class and we had to do a budget. It was at that point I realized, I could never live like that. So I kept it simple for years and overall it has worked. Spend less than you make, and put some aside. Well, as expenses have shot up in these inflationary times, it's not always as easy.
People have to have health insurance, if they have families they need to add in life insurance. And if you think the government is going to sufficiently take care of you in retirement, ask the tooth fairy for an advance on your dentures--won't be happening. PLEASE access whatever retirement plan options there are for you, whether a 401k or 403b at your job, an IRA or a Roth IRA on your own, a SEP IRA if you are self employed, just do something!
Whether or not you need to replace the refrigerator later, if you fix it yourself (as I have with mine and many other things) you will come away from the experience with more than you thought.
By fixing many things around my house (side-by-side refigerator included), I have discovered that I have a mechanical appitude AND saved many hundreds of dollars.
How about the spouse who dreams of retirement with a diffrent significant other (often years younger) This can really throw a curve in your retirement plans!
I think 10% interest is a thing of the past. I started investing a few years before 9/11/2001 in a highly regarded index fund and it would take a miracle for me to realize a 10% return on my investments in 14 years (25 years from the time I first started investing.) We've got to be realistic here. The best way to get money is to marry rich or get a better paying job.
My 8 and 6 year old daughters and I are raising hens in our backyard as pets and to get fresh eggs. Is this an environmentally sound activity, or should we just buy our eggs at the grocery store...? Maybe the book will answer our questions. We'd love to win a copy.
I'm familiar with couchsurfing.com, but what a great idea to rent an extra bed to people on tour! It must be much better to have a home cooked meal and someone new to talk with than to spend your time cooped up in the same buss all the time.
I took two months off at the end of last year from my daily job in Chicago to come to California and be with my aging grandmother. Because I had nothing saved up but I needed to do it imediately, I found jobs I could do while I was away. Turned into a full-time job when we moved back permenantly to CA.
Sabadicals can frequently open your eyes to new possibilities for your career.
Wow! I can't wait to puruse my copy, whenever I get a chance to pick one up! My boys have really jumped in to being "Eco-Warriors" and it reminded me of when I was in 5th grade in the early 90's writing to the tuna companies to ban nets that trapped dolphins - its amazing what an individual can do and even more amazing what a group of people can accomplish! I commend you for letting the Wisebread readers get a chance to make a eco-impact! Thanks!
Ok, not yet, but the plan is to totally drive my Mitsubuishi until it dies by falling appart at the seams. When I bought it, this was my intention, and it freaked my mother out that at age 20 I wanted a car with childseat anchors and child saftey locks! Now she thinks I might actually use them some day (7 years and 150 thousand miles later)
I've been looking for a recipe for this for a while now, I'll have to try the crockpot version you mentioned- goodness knows I can't continue to afford buying it from Panera Bread!
Other values to your home (whether it is an apartment that you are renting or a single-family house that you own or have a mortgage on) that you could consider are the costs you incur or avoid based on proximity to work, entertainment, friends, family, grocery stores, exercise and recreational opportunities, and schools. (Philip covers that regularly but I thought I would mention it again.)
And for those who have children attending school, being able to attend a high quality school in the neighborhood or have public transportation to such as school is another factor that impacts cash flow (and home values), so that you can avoid paying private school tuition, outside tutoring fees, etc.
Right now our mortgage payments (with ins & tax) is less than we could rent even a smaller house for in an ok neighborhood. Rent where we are is really quite high if you want to live somewhere that isn't rundown and crime ridden. So even with maintenance and other homeowner expenses we end up paying less or breaking even.
The real benefit is that if something is broken we can fix it. When we rented we had constant problems, even in nice properties, getting a landlord to fix things.
The one downside I see with owning is that people move around more than they used to. In some circumstances you end up taking a loss if you sell too early in the loan combined with house prices if you catch them on the down trend.
We have had over 20 different people stay with us through CouchSurfing over the past 3 years, from 3 continents. I can honestly say that we have not had a bad experience yet. We have 'clicked' with some more than others, though. Definitely worth-while to give it a try.
Many people assume that renting is worthless. For me, since I can write off my home office, I get a deduction for my taxes, while losing the home interest deduction. So as long as I pay below "market" for a house it is a wash. I think if you can find something to rent you only lose about 10% of the savings and you get the flexibility of being able to move without losing the 6% to a realtor and having to wait around for the house to sell.
This book looks like a great resource. Thanks for reviewing it!
Great points Sarah--I help people with financial issues as well, and usually it starts with something as simple and basic as health insurance.
In 11th grade, I took a consumer economics class and we had to do a budget. It was at that point I realized, I could never live like that. So I kept it simple for years and overall it has worked. Spend less than you make, and put some aside. Well, as expenses have shot up in these inflationary times, it's not always as easy.
People have to have health insurance, if they have families they need to add in life insurance. And if you think the government is going to sufficiently take care of you in retirement, ask the tooth fairy for an advance on your dentures--won't be happening. PLEASE access whatever retirement plan options there are for you, whether a 401k or 403b at your job, an IRA or a Roth IRA on your own, a SEP IRA if you are self employed, just do something!
Colleen King
http://CKingInsurance.com
Whether or not you need to replace the refrigerator later, if you fix it yourself (as I have with mine and many other things) you will come away from the experience with more than you thought.
By fixing many things around my house (side-by-side refigerator included), I have discovered that I have a mechanical appitude AND saved many hundreds of dollars.
How about the spouse who dreams of retirement with a diffrent significant other (often years younger) This can really throw a curve in your retirement plans!
I think 10% interest is a thing of the past. I started investing a few years before 9/11/2001 in a highly regarded index fund and it would take a miracle for me to realize a 10% return on my investments in 14 years (25 years from the time I first started investing.) We've got to be realistic here. The best way to get money is to marry rich or get a better paying job.
...but I'm willing to win a free copy!
The book looks very interesting. I'm always looking for ways to save money and be more green.
what do you mean by your UAC?
My 8 and 6 year old daughters and I are raising hens in our backyard as pets and to get fresh eggs. Is this an environmentally sound activity, or should we just buy our eggs at the grocery store...? Maybe the book will answer our questions. We'd love to win a copy.
Always looking for more ways to go green! Hope to get the book :)
meechleigh: you have reason to doubt the results of personality tests, check out this article on the Forer effect:
http://en.wikipedia.org/wiki/Forer_effect
There are some links to videos at the bottom of the page for a direct demonstration of the effect :)
This book sounds right up my alley. Please count me in!
Thanks for the contest.
I'm familiar with couchsurfing.com, but what a great idea to rent an extra bed to people on tour! It must be much better to have a home cooked meal and someone new to talk with than to spend your time cooped up in the same buss all the time.
-Suz
Great review. Sounds like an very inspiring book for young families just starting out and for families looking to change. Would love a copy.
Thanks for the review!
I took two months off at the end of last year from my daily job in Chicago to come to California and be with my aging grandmother. Because I had nothing saved up but I needed to do it imediately, I found jobs I could do while I was away. Turned into a full-time job when we moved back permenantly to CA.
Sabadicals can frequently open your eyes to new possibilities for your career.
-Suz
Wow! I can't wait to puruse my copy, whenever I get a chance to pick one up! My boys have really jumped in to being "Eco-Warriors" and it reminded me of when I was in 5th grade in the early 90's writing to the tuna companies to ban nets that trapped dolphins - its amazing what an individual can do and even more amazing what a group of people can accomplish! I commend you for letting the Wisebread readers get a chance to make a eco-impact! Thanks!
Ok, not yet, but the plan is to totally drive my Mitsubuishi until it dies by falling appart at the seams. When I bought it, this was my intention, and it freaked my mother out that at age 20 I wanted a car with childseat anchors and child saftey locks! Now she thinks I might actually use them some day (7 years and 150 thousand miles later)
-Suz
I've been looking for a recipe for this for a while now, I'll have to try the crockpot version you mentioned- goodness knows I can't continue to afford buying it from Panera Bread!
-Suz
Would love to read it and get some tips.