Temporary parsimony: the prelude

Thank you thesaurus! A great word for thriftiness that I rarely see or think to use.

I’ve been on a bit of a hiatus with this blog, and the main reason is that I typically only blog here when I feel like I’ve figured something out and want to share what I’ve come up with. But basically since March, I haven’t felt at all sure of myself, so I don’t feel I have any valuable insights to impart. My wife has told me several times that I should go ahead and blog in the midst of it; that people would probably be able to still learn from my confusion. But I felt so muddled and insecure that I wasn’t sure where to begin.

Well, I feel we’re moving to a period of more certainty, so I’m ready to start blogging about my financial life again. And it’s a much different financial picture than I had even five months ago!

A number of things have happened since March:

– My wife came back from the London Book Fair with a clarity about her future: She didn’t want to be in publishing in England, and she didn’t want to be in publishing full-time at all anymore.

– We had been in a holding pattern for several years while we waited to see if there was a chance we could move to England or if we should make our permanent home here in the Twin Cities. So once this last possible avenue to the UK was closed off, our path was clear: Stay in Minneapolis.

– We had already been saving for a move/new home regardless, so we planned to keep doing that. But then we got another interesting piece of news that month: A large windfall might be headed my way soon. This would speed up our timeline considerably. (For the record, said windfall has yet to materialize, but it did cause us to take moving more seriously, and probably put us in more of a mindset to buy sooner than we otherwise would have.)

– For a long time we’d had it in the back of our heads that we’d love to get some sort of duplex or multifamily home for our next one. We had a friend in mind who we thought would be a perfect person to live with, and share pets, children and some living expenses with. We happened to bring this up to a couple of other friends, and they leapt on the idea. As our children’s godfathers, we could think of no better match for someone to share our home with.

– We began planning renovations on our current condo to get it in selling condition, and we also decided to check out the multifamily market in our desired neighborhoods to see if it was even feasible — if we could get the amount of space in the right neighborhood for the right price.

– The first day we set out with our real estate agent, the third home we found was eerily perfect for us. And unlike most of the other places we were seeing on the market, let alone what we’d seen that day.

– With some creative wrangling, months of stress,  a loan from our friends and a clear-out of our emergency fund, we were able to purchase said home in late July. The home cost much more than we expected, both in additional debt we took on and in monthly housing costs. This probably deserves its own entry at some point, but for now let’s just say the budget I foresaw when we made the initial offer was much different from the budget we ended up with when all was said and done.

– The duplex, purchased from an investor-type owner, already had tenants in the upper unit. We could kick them out with 45 days’ notice — but then we’d lose income that covered over half the new housing costs. We’d already promised the lower unit to our friends and they’d given notice at their old place, so they needed to be able to move in Sept. 1. We still hadn’t sold our condo, so we thought we should probably stay there and keep the upper unit rented.

– We found out that even if we sold our condo for what we owed on it (doubtful), we’d still end up at a loss because of realtor fees and other selling costs.

– I started to think that even if we did sell our condo, we would struggle with our budget once we kicked the tenants out and lost that income. I cast about for other possible solutions. I came up with two cheaper but much more disruptive options: renting an apartment for a short time, or squeezing with our friends into the small lower unit of the duplex.

– One element kept stressing me out: We had an FHA loan, so not moving in within 60 days and making the duplex our primary home would violate the requirements of the loan.

– Living in a staged condo and chasing after two preschoolers and a cat, trying to maintain a pristine appearance in the face of their natural chaos, was a strain on all of us. As was knowing we had a beautiful new home but not knowing when we’d actually be able to inhabit it.

– A final straw was finding out we need to have a change-of-ownership inspection and renewal of the rental license. The confusion of which unit(s) to get inspected, and figuring out how much of a story we’d have to maintain about not moving into the place despite the FHA rules, was overwhelming.

– We decided to go with the most expensive option of all, one I’d never seriously considered before. We decided to kick the tenants out and move in Oct. 1, regardless of whether we’d sold the condo, and to just carry two mortgages indefinitely if we had to.

– We had to do some wrangling and moving around of expenses, and planned a severely curtailed budget. Then the renters threw an unexpected but somewhat welcome curveball: They said they wanted to move at the end of August instead of the end of September.

– We did some more mental gymnastics and figured out a way we could afford that. It was even tighter, a much tighter budget than we’d had in years, and much much tighter than I thought I’d be comfortable with. But the lure of getting out of our staged condo and into our already beloved new home was greater than any worries about being on a shoestring budget.

– We told the renters they could move out early if they found a place. We’re still waiting to hear if they have, though a glance at Craigslist revealed that there are still lots of places available for a 9/1 move-in. So we think they will.

– That means we need to be completely disciplined, creative and tight-fisted with our money for at least the next five months. That definitely deserves its own entry, so I’ll save the details of what we plan to do for my next post.

onepenny

Image courtesy of James Barker at FreeDigitalPhotos.net

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