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Tag: fiscal responsibility

  • House Hunt #2

    Some news today! It’s not exactly the news I dreamed of hearing, but it’s a place to start.

    After MONTHS of back-and-forth with two different mortgage lenders and four different mortgage agents, I have a real starting point for my house hunt. Let’s break down the information I gave to these folks and the numbers they gave back to me:

    My numbers:

    • About $60,000 in my savings account
    • About $40,000 in investments
    • Adjusted Gross Income for 2023: $40,451
    • Adjusted Gross Income for 2022: $35,075

    My income for 2024 is trickier. I haven’t done my taxes yet (and despite my relatively low income, I need to hire an accountant because I was on tour in 2024 and worked in multiple states and countries), but I know that I will have both W2 and 1099 income.

    Mortgage lenders DO NOT LIKE THIS. In fact, the first agent I spoke with informed me that she could not help me unless I got a cosigner or a full-time job. Which, yeah I’d love a full-time job, but I’ve built my career in an industry that doesn’t have many of those!

    Luckily, the second lender I spoke with was willing to work with me and go the extra mile to figure out a solution. That solution came in the form of classifying my income as “Union-Like Income.” I am not currently a member of a union (though I am *really* hoping to change that within the next year or so), but my income functions similarly to someone who is. The major difference is that I am not part of a governing body that can vouch for my ability to work consistently. That means that I will also need to be actively working on a gig when I close on a house. No pressure.

    This classification also means that my mortgage lender can only use my W2 income from 2023 when calculating what I can afford, even though I also had 1099 income in 2023. This definitely doesn’t work in my favor, as I earned a decent amount of 1099 income last year. But until I file my taxes for the year (and I need to make sure I file on a schedule C, which is a whole other conversation), that’s all we have to work with.

    Given all that, here is what my mortgage agent thinks I can afford:

    • $150k price limit
    • 20% down payment ($30,000)
    • Max HOA/condo fee of $150/month
    • Possibility of more if a cosigner is involved

    Woof. If you live in a larger US city and you’ve perused Zillow lately, you probably know that this is a tall order. In my neck of the woods, anything listed for $150k or less tends to have an astronomical HOA/condo fee. It also tends to be TINY. Like, 300-something square feet tiny.

    I’ll make a separate, much more fun post about my wants and needs in a home, but I’m not afraid of living in a small space. What I am afraid of is buying a home I can’t afford. I’m afraid of not being able to go out to dinner with friends on occasion. I’m afraid of having to turn down networking opportunities because I’ve used up my budget for “extras” for the month.

    In so many ways, I am extraordinarily fortunate. If the worst ever happened, my brother lives close to my desired area and would let me sleep on his couch for a while. My parents are moving a few hours away, but they will still be relatively close. I have wonderful friends who would help me in any way they could. But I would strongly prefer to make this happen on my own.

    Sometimes, though, that’s not possible. I talked to my dad today and showed him the numbers I’ve just shown you. He immediately brought up being a cosigner for me, if we can get some more information about what that would look like. Having my parents cosign my home loan is certainly not what I anticipated when I imagined what my first home-buying process would look like. But sometimes, you do need to lean on your community for help.

    Like I said, I’ll make a post soon detailing my wish list for my first house, but until then, always yours,

    The Frugal Girlie

  • Budgeting for a Dummy (it’s me, I’m the dummy)

    I’ve done it. I’ve taken the leap. Despite all odds, I’ve made an attempt to take stock of the money I spend each month. It’s not perfect, and I’m not sure it ever will be, but I now have a visual reference for where and when my money is coming and going.

    And to my great surprise, it really wasn’t that hard. A quick Google search for budget templates and I was on my way! The version I came up with is below. Feel free to steal my template, there’s nothing more complicated here than addition, subtraction, and frozen cells.

    Using my monthly income from the chart I put together here, I input the values to see how I might need to shift money around from month to month. I also haven’t bought a house yet, so I’m not spending anything on housing yet. And my dad buys *most* of my groceries, for which I am eternally grateful.

    This chart, more than any other step I’ve taken so far in my financial journey, has hammered home just how rude of an awakening I’m about to have when it comes time for me to buy a house. The reality is that I may need to reduce how much I am currently putting aside into my investments every month. I may need to reduce my grocery budget and severely limit the number of times I allow myself to get food with friends.

    But most of my money anxiety recently has to do with medical issues. Living in America as a late 20-something, health care is constantly on my mind. Currently I receive free health care through my state’s health care marketplace, but it is limited in its scope. As you can see above, I pay less than $20 a month for dental insurance, but this is the cheapest option and its coverage is also limited.

    Meanwhile, I’m having issues with my vision (no insurance) and my gums (not covered by dental insurance). I would absolutely love to visit a dermatologist (my chin acne is out of control, thanks to the dry winter air), but I would need to get a referral from my Primary Care Physician to do so, and even then I’m not sure it would be covered. The ever-looming spectre of aging is beginning to creep up on me.

    Gloomy, perhaps, but true. Getting older is expensive.

    Which got me thinking this week. As much as owning a home has always been a dream of mine… am I ready for such a big step? I mean, let’s look at the worst case scenario. If I fall behind on rent or have to break a lease, is that going to be easier and cheaper to handle than foreclosing on a home? Maybe next time I will examine the benefits and drawbacks to owning vs. renting and share my findings with you.

    On a lighter note, I’ve submitted all my paperwork to a mortgage lender and should have more information about what they think I can afford by early next week! Hopefully that will help lend some perspective to my worries.

    Until next time!

    The Frugal Girlie

  • Budgeting (as a Freelancer Living Your Dream! Yes, this is your dream! Repeat it over and over so you don’t forget!)

    So, you’re a freelancer! You’re living your dream (as much as we can dream of labor) as an artist! Or a tradesperson! Or you make your living in some other, “nontraditional” way!

    And can we talk about that word, “nontraditional,” for a second? Freelancers have been around way before we ever had a word for them (the first written instance of the word “Free Lance” coming from Sir Walter Scott’s 1819 novel Ivanhoe), bartering their skills for food, shelter, and beer since the beginning of recorded history. So, you’re in proud company!

    But being a freelancer, especially when you’re starting out (or, like me, just beginning a journey of fiscal responsibility), can make it hard to plan your life. Will you have enough money to visit your loved ones for the holidays? Or if they get sick? Will you be able to sleep easy at night, knowing that the roof over your head is secure? If a friend invites you out to dinner, will you have gas or public transit money to get you there and back?

    And unlike with a 9-5 job, budgeting this kind of life is tricky. You never know where and when your next chunk of change is coming from. If you’re anything like me, you might have jobs that pay hourly, weekly, biweekly, or as a flat fee. You may have jobs that last a day, two weeks, or nine months. Don’t even get me started on taxes (if you, like me, also have a mix of W2s and 1099s, my heart goes out to you. Let’s share accountant info).

    So where to begin? On this journey of fiscal awareness?

    I’ll be honest with you; for a very long time, I’ve avoided this question like the plague. It feels like a really, really big ask. Daunting. It’s funny, in real life, I love asking questions and figuring out solutions to problems. It’s a huge reason I work in the business I do.

    But money has always been really intimidating to me. English and social studies and art were always my strong suits. Not that I flunked math or anything. My senior year Calculus teacher once said, “Frugal Girlie, it’s not that you’re bad at math, you just don’t want to do it.” An incredibly astute observation, Jon.

    If you’ve read my other posts, you’ll know that I am now in need of housing for the first time in my life. My dream is to own my own house/condo, and that process has required me to share my entire financial life with a stranger working for a mortgage provider. (It has also granted me a new best friend: the “estimated payment” tool on Zillow, so not all bad!)

    This got me thinking. How sad is it that some stranger at (fake mortgage company name incoming) Jet Mortgage knows more about my financial standing than I do? I’m an independent woman in my late 20’s, how have I let myself stay in the dark about my own money for so long?

    Of course, shame doesn’t need to be the driving force behind getting your sh*t together, money-wise. I’m only just beginning my journey, but I already feel empowered by taking the baby steps I’ve toddled through so far. Speaking of…

    First baby step: catalog the jobs I’m working and planning on working as far in advance as I can. For me, that’s about 6-7 months ahead of time, but your mileage may vary. Time to boot up Excel (or use a cute pen and your bullet journal, we are keeping it cutesy, after all) and just write. the. information. down. Knowing is better than ignorance, I promise.

    Below is my own, very basic breakdown of each job and the approximate income I can expect for every month of 2025. I’ve left some blank because I haven’t secured work for those months yet (insert nail biting emoji).

    No super-fancy Excel formulas here (also I’m using Google Sheets, just so I know I’ll always have access to it), beyond simple addition and subtraction. I’ve also added in a column with my “Desired” annual income (which, yeah, I’d love to make more than $40k this year, but that’s what I made last year and I’d be perfectly happy to just break even!) Keeping this in mind, and subtracting it from the income I’ve already secured, will definitely help me decide which jobs are worth taking in the second half of the year.

    It also helps me decide which companies are worth maintaining relationships with in the future. For example, Company “H” is paying me a one-time flat fee of $1,000 for about three weeks of work. I don’t anticipate that the work will be especially difficult, and they’ve also promised to provide me with one meal a day, so I feel… okay about agreeing to this project.

    Meanwhile, Company “P” is paying me $3,500 for about 2.5 weeks of work. But the commute is rough and I have to pay for my own parking. It’s very much give and take.

    Within the same sheet, I also broke down my income for 2025 by job. This is mostly for tax reasons, so that I know how many W2s and 1099s to expect, but it’s also a handy reference for that odd job posting that asks for my previous job history and payment. (Which, side note, feels like an excuse to pay me less than what I’m worth? Like, how about you tell me what you’re offering and I’ll decide if it makes sense for me!)

    Making these two sheets took me maybe 20 minutes, but I already feel like I’ve got a better handle on what 2025 is going to look like for me, money-wise. Now to figure out how to spend it…

    Next time, I’ll go through my year and figure out the stuff I *need* to buy vs. the stuff I *want* to buy. In other words, I’m gonna start budgeting. Feel free to keep me in your prayers.