Monday, January 5, 2015

What would you do?

Now that my credit cards are paid off, a new question has popped into my head and I'm looking for advice.

I currently rent a room in a duplex with 2 other roommates. The location is great and the rent is roughly $500, which is fairly cheap for this area. Our lease is up at the end of April, both roommates are moving out and I find myself at a crossroads.

Do I use these next few months to save for a downpayment and buy a house? The housing market is still good and interest rates will only be getting higher by next year. I would find a 3 bedroom with 2 roommates to pay the mortgage for me. My current $500/month would go into savings/home maintenance expenses.


Do I find 2 new roommates and stay where I am. Continue to pay $500/month and continue to pay off debt for at least another year? I may miss out on equity on a house and cheaper housing costs down the road but I avoid unexpected expenses that come with home ownership and I would have more time to save for a stronger down payment maybe next year.

What would you do?
December 1st Balances
Amex: $1,545.79 $0
Mastercard: $5,714.27 $3,646.73
Sallie Mae: $14,123.57 $11,451.11
Chase: $19,907.33 $19,723.04
Sallie Mae: $24,754.52

January 1st Balances
Amex: $1,545.79 $0
Mastercard: $5,714.27 $0
Sallie Mae: $14,123.57 $11,410
Chase: $19,658.65
Sallie Mae: $24,735.87

That's a total of $3686.73 this month.

Thanks to my 401K learning experience, I was able to pay off my credit cards fully, which feels great. And I won't be using those again for a very long time. However, the rest of December was a wash and if I'm being honest, I'm ok with that.

The hardest part about the challenge this month was: 
The holidays. Hands down. Between presents and holiday parties and going away parties etc, I couldn't do the spending challenge. I felt guilty about it for a while but eventually I forgave myself. It's the holidays and despite my goals, spending time with loved ones is more important than money. Sure, I could have asked to adjust plans that were more affordable, but I didn't.

Instead I soaked up time with my favorite people and was nice to myself during a challenging time. My parents moved to South Carolina on December 22nd, leaving me to be without family in my home state anymore. It was a tough transition but now I'll have a warmer place to visit.

What I learned from the challenge this month was:
I have so many people to love in my life! That probably sounds ridiculous and obvious but it's apparently something I learned. When I started the challenge, I didn't factor in holiday expenses or Christmas presents for anyone. In August I bought my family their Christmas present, a family photography session since we were all in the same state at the same time, a rare occurrence. And with that, I thought I could get away with a skimpy Christmas.

Last year at this time, I was living alone, working from home, and didn't have too many friends nearby. So this year I told myself I could skip all the hoopla and be a bit of a scrooge. I was so wrong. Since last year I now have roommates, a job full of wonderful people I love, a great book club, and an amazing group of friends. There was no way I was going to skip out on giving presents and getting into the holiday spirit with them, just because of money. I didn't go all out on anyone's present but doing something small to show I care really added up. There were Secret Santas, Favorite Thing parties, cookie exchanges, and presents for the family that took me in for Christmas after my family left. Sure, I could have skipped presents this year or found ways to make presents for cheap/free, but I didn't. None of them needed a present from me to know how much I care but I didn't want to skimp on others just because I wanted to focus on my selfish goal.

Being ok with adjusting the challenge to work for me was another great lesson. I didn't beat myself up over not saving anything extra in December. It was actually a good break for me. And now I'm ready to bounce back and get intense with my finances over the next 8 months!

The best part about the challenge this month was:
Paying off my credit cards! Seeing a $0 balance and knowing that the only debt I have is from student loans and my new car loan feels great. It was just the push I need to kick off the new year with a strong foot. And let me tell you, it's going to be a good year! 

4 months down, 8 to go!