Net Worth Week 66 – It’s Hot in Here Edition

Gentle Readers,
My city is experiencing a heat wave, and I may need more bandelettes to continue the good fight against friction.
I’m a bit frustrated with my teeth. I take good care of them, but they cause me enormous bills. I’ve been in constant tooth pain since last summer when my final wisdom tooth came in. It came in such a way to alter the position of my other teeth. That process was painful. Unfortunately, the new position also means that my night-guard which prevents my TMJ from making my pain unbearable is no longer fitted to my teeth as they are. My dentist is aware, but told me that we can’t do anything until 7 + months after my wisdom tooth removal, because my jaw and teeth will still be settling. Then she wants me to do braces and force my teeth into healthier positions to ease some of the pain and tension. For now, I just wait in pain. Wearing the guard causes deep pain in all of my teeth, but not wearing it allows me to grind my teeth causing damage. It’s an expensive and painful position to be in.
I’m really enjoying my tutoring. I am definitely learning a ton, but it is eating in to my sleeping time so I’m extra tired. There will be three more weeks of this, and then I’ll reassess to see if I need to purchase some more. Or if my body can take more, we’ll see what wins out. My progress has definitely kicked up a notch.
Today I’m off work to attend a training for young professionals in my field. I won’t be paid for these hours, but I think I will be much more confident in my business. Definitely worth it.
In more happy news, a potential client contacted my business. He’s been a bit flaky before, but it would be nice to add to my client-base now that I cannot do overtime.
I’m happy to see my debt go down. This is the first time I’ve been under -$140000!

This week’s net worth numbers

7/7/2017 7/14/2017
 Joy 1107 1107
 Travel 1  1
 Down Payment 19 19
 Retirement 21 21
 Health 46 46
 Moving 285 285
 EF 11 11
Business 1004 1004
Life 500  508
 IRA  13085  13304
 Brokerage 700  817
 Rewards Card 2 -2121 -1693
 CC (largest) 0  0
 CC (longest) 0  0
 Rewards Card 0  0
SL 1 -105242 -105098
SL 2 -46372 -46306
 Earnest -4008 -4016
 Net Worth -140964 -139990
 Percentage Change .02% .69%

How are you handling your heat wave?

Preparing to Buy a Place – 1 Year Out

Gentle Readers,

In April 2016  – I made the decision to get my financial house in order, because it is time for them to become my erstwhile roommates. This is the true reason I started this blog. I know that I work best under “pressure,” which is where putting my financial mess out in public comes in. This is a space for me to learn and grow.

I know a few things. I need great credit so that I can get a favorable rate on my mortgage and I need a down payment.

My Fico Score was 732 when I made this decision. This is essentially what it was before I opened my business two years ago.  It was great, but not excellent. By most reckonings, the bottom end of excellent is 750. I was close. That 18 point difference will make a difference on the APR I’m offered on my mortgage, and thus on the amount of interest I will pay over the life of my loan.

Once I made this decision I began making calculations.  How long to pay off my CC debt.  How long to save up a deposit. How to get my credit score up.

I’m on track to pay off my credit card debt by October or November, barring new expenses. I have an upcoming dentist visit and I think it will be time for adult braces due to some bad changes in my mouth. Expensive. I’ll see if they have a payment plan.

I’m glad to report that my credit score is now 787 as of May. HAPPY DANCE!

I did this by paying off two of my three credit cards. I took out a loan through earnest to do this.  I learned that the right type of credit (the earnest loan) looks more like a mini-mortgage and makes me look more responsible. I also kept the amount of credit utilized on the other card low because I learned that having less than 30% of your available credit utilized makes a difference in your credit score. This is why I did not close those cards, but continue to use them for tiny purchases each month. 

I did all this in April. More than 6 months before I would approach a lender to see what I could get pre-approved for.  It worked. All of this concentrated effort paid off. I’m firmly in the excellent credit category and can keep improving.

I also put more of my expenses on auto-debit so that I won’t accidentally miss them.

I learned that a mortgage should not be more than 2.5 times your annual salary. I had never heard this rule, but it makes sense to me. Helps me to plan. Thanks to Freedom is Groovy for linking here to Fritz Gilbert’s Retirement Manifesto, which is available here.

I do not consider the place I live to be an investment since I need to live somewhere. I do not want to tie up too much of my capital in my mortgage and other housing costs. That means I’m looking to pay little. I don’t want to live in a dump, but I don’t want something incredibly nice.

Things I need to learn:

  • What the heck is a basis point?
  • Will I even be able to get a mortgage without a cosigner since I have years of contingency work?
  • FHA loan rules.
  • HOA rules.
  • The differences between condos and coops.
  • If I want a coop, learn about the coop mortgage rules.
  • How much of an emergency fund will make me feel secure?

Things I need to do:

  • Pay off the rest of my credit card debt.
  • Get into no more credit card debt
  • Save a down payment.
  • Save enough money to actually move.
  • Prepare my financial documents so I’m ready to talk to a lender.
  • Find a realtor I respect
  • Decide what I want versus what I need in a home.
  • Monitor the local market.
  • Buy a home.
  • Take advantage of my access to a garage to paint and/or build the furniture I want for the new space.
  • Move.
  • Unpack.
  • Not share my shower with people I’m not in love with.

How did you prepare when you wanted to buy a home? Am I missing anything?