M is for Money

I’m tired of our neighborhood. I’m tired of the parking wars, the drive-bys and the police helicopter circling my house every night. I never thought we’d live here for more than a few years, it’s a starter home in a sketchy neighborhood. But we recently passed the 5 year mark with no end in sight because like every other underwater homeowner, moving isn’t easy.

I want a home in a safe, quiet neighborhood with good schools for the future munchkins. In fact I know just the place, one town over, but it’s out of our price range. Prices have come down in the last few years, meaning a crummy starter home is no longer a million dollars, it’s a mere $800,000! I’m really hoping prices there continue to fall to a more reasonable $500,000 - $600,000. Then at least we’d have a hope and a prayer of buying there. In the meanwhile I have started planning for a new home and adjusting our budget to meet new goals.

A $150,000 Down Payment

Last year our financial goals centered on paying off debt, merging our money and starting a nest egg. The plan for this year, and for every year hereafter, was to focus on early retirement. Our early retirement goals are a combination of savings, taxable investments, retirement funds and real estate, all of which we’re working on simultaneously. But my overwhelming desire to get the hell out of our current neighborhood has me questioning priorities. I’ve started playing with a budget that increases our savings for a down payment, while reducing the monthly savings and investments earmarked for retirement. Unfortunately, to live in the area we want we will need a lot of money for a down payment, at least $150,000. Since we don’t have any equity in our house to draw from, we will need to save up every dime.

Like many of my goals, it is unlikely we will achieve this one in my preferred timeframe. We spent much of our savings repairing our house this winter, so we are starting from zero. The size of our goal makes it difficult as well, in many parts of the country $150,000 would buy an entire house, not just the downpayment! But the difficulty of the task won’t stop me from trying, we will save as much as we can and keep an eye out for opportunities. With a little luck, we can make it out of the ghetto before I hit 40!