Financial freedom?

Financial freedom?

So as you all know, a large part of my Tiny House journey has been about finding my way financially in life. My ultimate goal is to live on the income from one job without sacrificing things that are important to me. I don’t want to have to give up all of my worldly possessions to live in a huge empty house, right?

So I have been keeping track of the things I’ve bought so far for Tilly. I’m going to give you a run-down of what I’ve gotten so far as well as costs associated and pictures, if I have them.

KitchenSo here is what I’ve spent on my kitchen so far. I’m not completely done, but there are some amazing things to note here!

I got some items for FREE! I got my cabinets and countertop from a friend who was tearing out his kitchen.

Nearly everything else I’ve bought so far has come from Craigslist or eBay. I negotiated WAY more than I could at a big box store or even some specialty shops. I still have a couple of big appliances to get, but this is a great start!

I had to make a really painful decision regarding my appliances. I bought a beautiful stove and microwave set from my friend but ultimately they were just too big. I had to sell them and settle on smaller appliances. I’ve decided my best bet now is to go with a cooktop and large toaster oven rather than a traditional range.

Living Room

 

Next up is the living room… Originally I wanted to purchase a brand new couch from Ikea immediately. It has a chaise lounge and pulls out into a full queen mattress for company. But after crunching some numbers I decided to wait. I’m going to keep my almost-new sofa a while longer and use an old brown leather ottoman as a table/footrest.

I’ve been searching Craigslist for a couple of months now and I bargain for everything I want. For example, I got two antique sconces for just $15 after they were originally listed for $65. When I got there to pick them up I realized what bad shape they were in and he just wanted rid of them. SCORE! I also picked up free white shelves/cubbies from my old job and a brand new ceiling fan (with a remote) for $40.

I purchased some plywood to build a desk/table and I’ll jazz it up with some stain and metal details. I also bought a brand new fireplace from Wayfair when it was 20% off.

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So many of my plans changed from my original bathroom layout. In fact, most ALL of my layout has changed. More on that later. But for the purpose of this financial post, I must address the bathroom. I nixed the idea of a smaller-than-normal shower and opted for a smaller-than-average bathtub. How much smaller you ask? It’s 46″ long. Here it is:

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Bathroom

I picked this pretty puppy up on Craigslist brand new for $125. As it turns out there is a local warehouse that gets lots of run-off from Home Depot. While I was there I also picked up an American Standard toilet, the most beautiful vanity light (below), a kitchen faucet (also below), and a sink. Now I’m returning the sink in order to get my dream antique sink (below), but it was still a great find!

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Now for the big category. This last category includes everything from exterior stain to my water heater to my contractor who’s doing the electrical and plumbing installations.

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The items in red are items that I’ve budgeted for but haven’t bought yet. Since the plumbing and electrical are set to be done by the end of this weekend and the insulation is next, there’s no sense in buying the walls, ceiling, and flooring until I’m ready.

The big ticket item on this list is my radiant heat floors from Thermosoft. I couldn’t be more pleased with the experience thus far! I wasn’t sure exactly what I needed to I called their Customer Service. They had me send them a layout of my floorplan so they could work up a quote for me. The representative called 4 or 5 times to get it all right and still got me a quote the same day! The price above got me my heated floors, underlayment, thermostat, and extra floor sensor. As if that wasn’t enough shipping was free!

So there you have it. I’m trying to be as frugal as possible so as not to break the bank. I took a pay cut to work for a local non-profit and I love my new job. I am also only working on job right now, so money is tight. I will pick up a second job again soon, but for now I’m just enjoying my summer with Tilly.

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The Millennial generation: Entitled or just different?

The Millennial generation: Entitled or just different?

You can hardly peruse Facebook or news sites these days without finding some commentary on Millennials. Some articles insinuate that Gen-Y is entitled and lazy, while others delve a little deeper to look into the challenges many in this generation face.

I recently read an article about how Millennials spend their money titled “Pets, debts and e-cigarettes: how millennials spend their paychecks”. Now I wouldn’t consider myself part of this so-called Me Me Me Generation but according to Wikipedia’s age range I am smack in the middle of it. (Okay, so maybe being born in 1986 puts me about 1/4 of the way in, but I look younger than I am… Right? Right?!?) In case you don’t have time to read the article, here is an overview:

  • A non-scientific case study of six Millennials ranging in age from 23 to 29 was completed to see how they spend their money and how much they earn.
  • Salaries ranged from $0 (one young lady was unemployed) to $130,000 annually, with a median income range of $30,000-$33,000 a year.
  • Each person spent their money in different ways, but both income and spending were self-reported. Their expenses were then broken down into the top five categories.
  • The highest reported expenses were typically rent, food, and student loans, closely followed by things like medications, daycare, and car payments.
  • Of their top expense categories only one person listed hair appointments, one listed cigarettes, two listed gym memberships, and one listed travel.

The question I’m left with after reading this article is:

If we’re spending money on the same things as other generations, why are we being labeled as entitled?

Now let me jump to my own life; if I were to be included in that article, what would my “Top 5” look like?

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Now let’s see how my income stacks up:

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Assuming everyone in the article works an average of 40 hours per week, the average hourly rate would be $21.31. In comparison mine is $20.24. With my second job and working about 65 hours per week, my income per hour drops to $19.55.

It looks like I am right in line with others in my generation. I know there are a few in the higher echelon and many more making less than I am, but for ease let’s just go with the numbers we have here. With the average monthly rent payment of $790 and a mean net income of $2,770.83 per month (if we are all in the 25% tax bracket), this means that Millennials, on average, are spending about 28.5% of their income on rent. Completing the same calculation for student loans, Millennials spend an additional  24% on college debt each month.

When other generations describe Millennials as being lazy or extravagant spenders I get a little riled up. In fact, one of the issues my own parents have when it comes to my spending is that they “don’t know where all my money goes”. Even when I break everything down, showing them my budget, they don’t believe me. It seems like a lot of people from Generation X are wearing the same blinders. After all, they paid rent (or a mortgage) and made much less money than we’re making now. So why can’t we save like they did?

There are a myriad of possible answers to this question, not the least of which is inflation, but I’m not going to get into that right now. What I’d like to focus on is student debt. This 2013 article featured in The Huffington Post goes over some of the numbers haunting Millennials. The most relevant point to me is that the average student loan debt of Millennials graduating with a 4-year degree is around $26,600. The article points out:

This can be contrasted to 1993, when less than half of students graduated with debt, and those who did had an average of $9,350 in loans. Maybe we are just bad with our money?

This writer echoes what I’ve heard so many Baby Boomers say: “You’re just bad with your money.” I think all Millennials everywhere throw our hands up and retort right back with me: “Fuck off.” Because it’s not just the fact that we have student loans. It’s the inflation of the cost of a college education that’s really killing us.

I started college in 2004; the tuition there at that time was about $34,000. The tuition at that same school today, 12 years after I started, is just under $55,000. The same education now costs 62% than it did when I started college.

You read that correctly – 62% percent.

In comparison, let’s look at U.S. inflation over the same period of time:

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Calculated by http://www.usinflationcalculator.com

 

I’ll just come right out and say it. $42,700 is nowhere near $55,000, and 25.5% is nowhere near 61%.

So the added burden of student loan payments, is it any wonder why Millennials can’t save for a mortgage, pay for a new car with hard-earned cash, or deposit more into their 401k each month?

I think this is part of the reason people my age (or younger) get excited when they hear me talk about buying a Tiny House. They struggle with the same financial burdens that I do. Even if they can’t see themselves living in a Tiny House, it inspires them to think outside the box in terms of living situations and expenses. The people that balk at this idea are primarily members of older generations who do not understand the weight that is student loan debt.

We can’t buy huge houses then pay them off in 10 years (like you did) because we’re paying the amount of your mortgage in student loan debt every month.

I can’t keep banging my head against the wall to conform to what one group of people thinks of as “normal”. My circumstances are different than yours were at my age. My priorities, therefore, must be different.

It’s time for our parents and grandparents to look at us in a new light. It’s time for Generation X to give Generation Y a little break. It’s time for us to look at our futures differently. Because we are different. And like you taught us Mom and Dad,  different just ain’t so bad.

Let us become the swans you always said we could be.

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People don’t suck?

People don’t suck?

So yesterday I posted about the terrible happenings of this past weekend. (If you missed it, read the last post here.) I also posted a link to my GoFundMe page asking for donations to help me get back some of the money lost in the burglary and to replace the window. I didn’t expect much… maybe $100 or so to help me pay back some of the ensuing credit card charge. But you guys have been very generous and I thank you from the bottom of my heart for it. So far you’ve raised $350 in less than 24 hours.

You are amazing.

I negotiated my bill with the auto glass company down to $300 including tax, so this has already been covered. I thank you so much! The money left to raise will go toward the cash that was stolen. I’m almost tempted to take the GoFundMe page down, but then I remember how much my feet hurt after working from 8:00 Friday morning until 1:00AM Friday night and I resolved myself to leave it up. Plus, the kindness and support and messages I’ve received are wonderful. You are wonderful. Thank you.

Now I turn to the real reason for this post, which is to take a moment and reflect on this situation in its entirety. To start, one person sucked, and sucked big time; he took my money and wrecked my car window. Then, people hugged me, bought me drinks, and sat with me while I was in a bit of shock. Yesterday, people started donating to help me recoup some of this money; people who couldn’t donate sent notes of encouragement.

So how can I look at this situation and conclude that people suck?

That night, after my money was stolen and I’d had a drink (or three), I started talking to one of my friends about the situation. (Mind you this was before I’d considered the cost of the window repair. I was only thinking about the stolen cash at this point.) In my slightly tipsy and ever-pensive state, I started talking about the nature of human beings and my relationship with them in the world.

There have been many times in my life when people have tried to break me. I assume everyone reading this has been in at least one similar circumstance. Just a few examples: My purse was once stolen out of the trunk of my car at a football game. I was once stalked and forced to quit my job because a co-worker was upset and decided revenge was the ticket. (She even wrote, “I’m going to rape and kill Rachel” on the door of the building I worked in. Fun, right?) There have been countless occasions of bad friends letting me down amidst the depths of my depression. And after each bad interaction I think to myself, “I should just stop trusting people. People hurt people. I’m sick of being the nice guy while everyone else shits on my life.”

But after this situation, in that moment, with the people around me being so kind as to make me cry, I didn’t think that. Instead I said to my friend:

I’m not going to let this break me. I am not going to allow some lowlife junkie to determine how I’m going to feel. So my tips were stolen… No one was hurt. I’m not going to allow this one awful person to make me a worse person. I’m going to continue to try and do good. I’m going to be the person I am. I’m not going to let this jade me.

And in that moment I felt what I was saying with my whole heart. While it should be noted that the next day I had other (angry) thoughts, nonetheless I’m back to feeling this way now. And the reason I feel this way again is because of the people who have reached out. It’s because of those who are determined to prove that not everyone sucks; not everyone is out for only themselves. There are still people out there who have sympathy, empathy, or compassion.

I’m lucky in this life to have even a few of those people around me, and I can’t thank you enough.

And now you:

What have you overcome in your quest for goodness? What is the worst thing someone has done to you that has made you question your intentions?

It was all going well until…

It was all going well until…

..there were some major setbacks this weekend.

Most importantly, my builder had some unexpected things come up and he was not able to deliver my THOW shell on Sunday. We are rescheduled for this coming weekend, on Easter Sunday to be exact. And that turned out to be all well and good considering what happened Saturday night…

As most of you know I have been working two jobs since November to try to save for my Tiny House. As some of you know, I have been working 70-80 hours/week to save as much as possible before the THOW arrives. As a few of you know, 80 hours/week is my cut-off for losing my mind. I need at least one day off a week to rest and recoup.

There was no resting or recouping this Sunday. Only anger, a sense of betrayal, and the ensuing depression.

My car was broken into at some point Saturday night. All of my tips from Friday were stolen. The money was hidden in my car as I was going to deposit it that night after work. I checked it between 4:00-5:00PM when there was a slight lull in my shift.

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When I came out after midnight (after having been there since 9:30AM), I went in my car to change my shirt and have one post-shift drink. That’s when I noticed the glass in the back of my car. Nothing else was stolen even though my purse was in my car. All of my debit cards, credit cards, and keys were still there. The only thing missing was my cash.

We called the police and they say they’re going to pull the camera footage from neighboring businesses. They say they’re going to look for this guy. They say with any luck they’ll find something in the footage. They say, they say, they say. I’ve had my car broken into before. I know how this works. I’m out the money the thief stole as well as the money to fix the broken window. The person won’t get caught and, since I think it someone I work with at the restaurant, I have to either quit or feel uncomfortable for the rest of my time there.

Now I usually work Monday thru Friday (8:00-4:30) at my day job. I then work Wednesday, Thursday, and Friday nights and all day Saturday. I have one bank account where my main job’s paycheck is deposited and another just for my tips and other income. This helps me to keep things straight and not spend what I’m making at either job.

As of Thursday when I updated my budget, I only needed about $65 to hit my income goal for the restaurant this month. Then I made $315 on Friday night, which is a very large amount of money for 7 hours or so of work. One of my regulars gave me a very generous tip for which I was beyond grateful, and all because he sees me working hard and wants to help me achieve my goals. He tells me this every time he sees me. It is encouraging.

Not only has this thief robbed me, but he has robbed others of their good intentions toward me and my life. He has robbed me of my sense of security and made me more than a little vexed with my car. He’s robbed me of the $315 in hard-earned tips and the $300+ it will cost to fix the window he broke.

For the record, if you ever have to break into your SUV, the vent window is the most expensive window to break. This isn’t a picture of my car but another one similar to it, and I’ve circled the vent window in red:

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Even though it is the smallest window, it is permanent and considered part of the door, so it must be sealed differently. For my SUV with the privacy tint, I got quotes ranging from $305-$499 for this window alone. Never break this window if you can avoid it.

Now I’ve said before that I don’t want to ask anyone for money for my Tiny House project because I am fully capable of doing this alone. I can work hard for this and wear my body out every week until I have everything paid for. I can do whatever it takes. But this was such a blow, both mentally and financially.

For this reason, I’ve decided for the first time to ask for a little bit of help. I have to write two very big checks in the next week (one for the down payment on my land the other for the remaining balance for my THOW shell) and this $600+ swing is coming at exactly the wrong time. If you can, please considering sending just a few dollars to help me recoup this loss. It would be more appreciated than you know.

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Go to: http://www.gofundme.com/rachelsbrokenjeep to help me recoup my THOW money. Anything is appreciated!

Here is my GoFundMe link. Click here: Bum Thief Broke My Jeep Window fund or go to: https://www.gofundme.com/rachelsbrokenjeep. PLEASE share it as well. I am not asking for more than I lost in this fiasco. Thank you all for your continued love and support.

 

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An extra special thank you to those who have already helped me deal with all of this over the past weekend. Thank you to those who drank with me afterward to numb myself, let me crash with you, taped my window up like surgeons, and continued to text me to make sure I was okay. You are wonderful friends and you know who you are. I won’t embarrass you by calling you out by name, but I owe you more than you know. Thank you.

Designing My Life

Designing My Life

I have my delivery date nailed down for my Tiny House and I have some great news to share as well! My builder is delivering the shell himself on March 13th to surprise me. YAY! But the biggest news is the best surprise. My parents have reconsidered their position and are allowing me to store my Tiny House on their property until it’s almost finished.

This makes me feel better since I’ll only be able to get out to my land once a week or so to do the demo. This makes my future home safe, secure, and protected.

Sure, I’ll have to endure endless suggestions from my dad, but honestly suggestions are pouring in from all angles now. That’s part of the problem of going public and of documenting your journey; everyone has an opinion. But it’s also very cool. Some people are pointing me in directions I’ve never thought about before. I’ve talked to a guy building a yurt and a gal who is funding her trailer in a creative way. (BTW, that gal’s name is Melanie and you should read her blog too. It’s called Little House in the Steel City. She is offering to paint small portraits for $15 to help fund her trailer – click here to order yours! She’s an amazing artist. I’ve ordered three!)

Now I’m making decisions about super-fun things, like drywall and insulation. I hate it. I want to keep looking at tile and flooring and paint colors and shiplap (damn you Joanna Gaines…). But instead I’m looking at cement board and radiant heat flooring mats and trying to nail down a budget.

I did make my first fun purchase though. I bought this fireplace from Wayfair.com to heat my Tiny Home. The flames change colors and so do the ambient lights. This won’t be my only source of heat but it will certainly be a fun addition!

I also did a 3D creation of what I think my Tiny House layout will be. I’ve never done one of these before so keep that in mind…

The stairs are all individual cabinets that will open in different directions. Those will have to be custom-made. I also changed my mind for the size of the vanity and shower, but that won’t change the picture much. Here are some of the materials and furnishings I’m thinking of using:

There’s one thorn in my side right now – no news on the land front. The loan is still going through the process so I’m just waiting to hear back.

Giant Leaps

Giant Leaps

I mentioned in my last post that I put an offer in on a piece of land. Yes – it was the land that I’d mentioned previously. (If you missed it, read about it here.) I have good news to share and bad news to share.

The good news is that the sellers accepted my offer!

The bad news is that the sellers accepted my offer…

So I now have the very interesting task of tearing down the structure that is on the property. I wanted to share a few pictures before I begin the process. I will try and get to the property soon to take some more pictures since I don’t have any of the view, which is the best part.

WARNING: They are not pretty!

I also went to the bank to set up my loan and payments, and since I’m documenting my process I will share with you the strange way I’ve had to go about my financing.

First I got a personal loan to pay my builder, Tiny House Squared, and pay for some immediate upgrades to the property. I paid my builder a down payment, plus paid for the order of building materials. (He chose the materials but we worked collaboratively on the layout of windows, the door, walls, etc.) In lieu of a traditional personal loan, I went the route of refinancing my car. This made it a secured auto loan, which gave me a much lower interest rate. I highly recommend it if this is an option for you.

I knew if I bought this property that I would need to pay for some things immediately, like fixing the driveway and renting a dumpster to haul away the trash. (I also need to hire a company to haul away a car that is on the property, but I have to get a abandonment title first since I don’t know who owned it.) Additionally I’ll need to buy some tools I don’t currently have, like a reciprocating saw. I don’t think I’ll need the entire amount of the loan I took out, but I figured it was better to be safe than sorry in this situation.

My next step was to find a bank that would lend on a piece of land. The trouble I ran into was twofold. First, most banks will not give you a mortgage for less than $50,000; the risk-reward is just not in their favor on these loans, I’m told. Second, few banks will give a land loan, which is what I need. The suggestion I ran into again and again was to take out an additional personal loan. With a 4-5% difference between a personal loan and a land loan, I continued to pursue the latter. I was finally referred to a small bank about an hour away from where I live for my land loan. To save yourself a lot of time and a migraine or two, I suggest starting with smaller banks and credit unions if you need this type of loan.

Now that the loan is in process, I have to focus on tedious tasks, such as getting the aforementioned abandonment title and calling electricians to get a quote on temporary electric service. I am also getting a quote from a demolition company just to see if it would be worth my money for someone else to tear the modular home down. I’m currently doubling my income with my second job, so I think about one month of my second income is my cut-off amount for the demolition. I’ve also left messages for the Fire Marshall to see if the volunteer fire department would come and do a controlled burn. That would be ideal!

Either way, once the structure is down I will need to get someone to take the I-beams that the house is resting on. They are very long and obviously heavy, but I have a few options.

The most exciting part so far is that my trailer is finished and my build has begun! Here are some pictures of that as well!

Thank you for continuing to follow my journey! More exciting updates to come!

My First Step – Finances

My First Step – Finances

Good evening!

I thought I should take a step back tonight and start at the beginning of my Tiny House journey. Way back to the very beginning, back before I knew what a Tiny House was and before I had this dream. Yes folks, it’s that time. It’s time to talk about money.

So I’ll admit I used to be bad with my finances. One doctor even tried to diagnose me as bipolar because I spent too much money shopping. (Okay, okay – in my defense I was 19 then and had attended a private Catholic school my entire life. I’d always worn uniforms! At 18 or 19 I finally got into clothes and started buying a lot of them. Sue me.) But it went much farther than clothes. I inevitably had student loans (and no degree to show for it), got into super fun credit card debt, and spent tons of money I didn’t have. I even had a car repossessed. I eventually had to move back home with Mom and Dad for a year to get myself back together.

I moved back out of my parents’ house for the final time about 5-6 years ago. I moved in with my (then) boyfriend into a townhouse we could (sort of) afford and started (what I thought would be) the rest of our lives together. I never thought money would be an issue since we were both equally bad with it.

Wrong. So wrong!

Fast forward 3 years: I’d gone back to school and finally received 2 degrees. I was accomplishing goals, was excited for the future, and my credit had risen about 100 points. He… hadn’t done those things. Suffice it to say things ended.

That was almost 3 years ago now. I was left with a $695 per month rent payment for a 3-bedroom house with 2 cats. My gas bill in the winter months often exceeded $300 per month. I had to find roommates… I had to use [shiver] craigslist. (I actually met someone who has become a very good friend this way, but I had to put up with 3 VERY bad roommates to find her.)

While I was straddled with bills (and more bills, and then some more bills) I had to find ways to cut costs. I want to give anyone who reads this my very own “Idiot’s Guide to Eventually Sorting Out What Money You Sort Of Have”. Catchy, eh? So here are my first nuggets of advice:

  • Cut whatever bills you can in whatever ways you can.
    • I couldn’t cancel my Dish subscription, so I called to haggle. Before I called my bill was around $85/month for TV only. With a few phone calls to customer service and a promise not to break my contract for the final year, I got my bill down to $19.10/month. (I get fewer channels but I kept my DVR!)
    • Another idea is to combine your cell phone bill with friends or family members. This saved me about $30/month.
  • Take advantage of special offers through work or online.
    • I get a 20% discount on my cell phone service through my job, but they don’t tell you that when you hire you. You have to ask. Always ask.
    • I use a website called The Penny Hoarder to find ways to save on groceries, dining out, and even credit cards!
  • Save money on things you already do.
    • Do you clip coupons? Subscribing to the paper is often cheaper than paying $2.00 on Sundays.
    • Do you like to eat out? Search for discounts before you go, then decide where to eat. Base these decisions on financial goals, not your growling tummy.
    • Do you like to go on special dates with that special someone? Check out Groupon or LivingSocial for ideas and cheaper ways to go out.
  • Consider getting a second job. Even if it’s one day a week, maybe that keeps you from spending loads on a Friday night and puts $50 in your pocket.
  • For the love of everything Tiny, keep a budget!!!

I’d like to share with you a sample of my budget sheet. I’ve left in some examples for you to see even though I’ve deleted most of the figures. It only takes around 2 minutes each morning to update my budget sheet and check registers. Please note that you can easily adapt this to Microsoft Excel, but I simply like the tediousness of updating it in Microsoft Word; it reminds me how much I hate spending money!

Using this budget sheet or some modified version has helped me pay off credit card debt, get through Christmas in one piece, and save for my Tiny. Hopefully it may help some of you as well!

Budget Worksheet Template