Author Topic: Not sure where to go from here--feeling stuck (long post)  (Read 1754 times)

WootWoot

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Not sure where to go from here--feeling stuck (long post)
« on: October 30, 2017, 01:10:16 PM »
Hi folks--I haven't been on here in months and months. Some catching up to do.
I'm writing today because I've found myself at a bit of a crossroads. First I will say, I'm not quite ready to do one of those "lay it on the line/scrutinization" things on here (forgot what they are called) . I do want to say that I am proud of myself because compared to a year ago, I have a much better idea of where my money goes. Using Mint was the key. I have also started new IRAs and increased my contribution to my 403(b) at work.

I know I MUST have posted about this a while ago, but I can't find the post (it may be more than a year old).

A couple of years ago, my mother unleashed upon her 3 kids some EE savings bonds, as well as CDs. Until then, I had been pretty broke. I had lost my job in '09, didn't find another till '12 and was forced to borrow from my 403(b). We are a one-income household and I'd prefer not to go into the reasons why my spouse doesn't work. There is a pretty good chance he never will again, nor will he collect disability. I'm hoping he might be able to collect from my social security next year.

That said, here's where I'm at: I make in the mid $30sUSD and I'm able to pay all my monthly bills. I do put aside a bit every month to pay for expenses like car insurance, repairs, etc. But at times, I find myself dipping into Mom's Money. In fact, I'm damn lucky to have it--because without it, should my 20 year old car die, I'd be screwed.

Roughly, here's my assets:

TIAA-CREF 403(b) approximately $81,000 with a personal rate of return of about 10% (according to latest statement)

Savings account at credit union (for emergencies) approx. $5,500 (not sure of interest rate)

I have several Capital One accounts:

1. For new car when needed--balance is $10k, earning .7474%
2. Some of the Mom Money from last year's bond--$6,580 (earning same amount as above)
3. For recurring expenses--$2,189 (same interest as above)
4. For health care--$1,832 (same interest as above)

Vanguard IRAs:
Mine--a. Traditional IRA Brokerage-$4,500; b. Roth IRA Brokerage--$2,000. Both are money market funds.
Spouse--Traditional IRA Brokerage, $3,012--money market fund.

Next month, I will be cashing in another EE bond and getting just under $20K. I don't know if there are any more bonds/CDs in the future.

Hoping you are still with me!

We are in a difficult housing situation. We pay $475 a month for a three-bedroom, one bath home with basement and attic. No, we don't need that much space, but we enjoy having no walls around us and the privacy and really, really don't wanna compromise on that. We also have very little yard space, and a lunatic for a neighbor. Thanks to said loon, we are now in the middle of a lawsuit that has been extremely upsetting to both of us. It keeps getting continued in the court system. In the meantime, we can't have our new washer delivered, for e.g., because the loon has basically commandeered our shared driveway. If we go anywhere near it, he calls the police and makes up lies that we're "coming after him." The cops know he's a nut, the DA knows he's a nut, our lawyer knows he's a nut...but nobody is really willing to put handcuffs on this creep.

Stay with me. It gets weirder. Around 2013, our landlady offered to sell us the house we live in for $25K. At first I said, no, because I did not want to live near the loon, and I don't like the house THAT much (they use it as a cash cow--absentee landlords). But at one point, I figured, I'd take the bait. So they sent us a half-assed sales agreement which we took to our lawyer. He took one look at it and said, "Their lawyer needs to contact me. This thing needs work." We never heard another word about it again--I guess they thought we'd just hand over the cash like a pair of fools or something. Then, at one point when we had neighbor trouble yet again, we asked for their help in going to a magistrate. She screamed at us that she was raising the rent and selling the house that June (the raise happened; the sale never did).

Fast forward to today (and I congratulate you on your patience). I really don't want to live near this crank any longer. However, the rents for single houses in our area are around $800-900 a month. hell, the apartments are almost as bad. Not to mention half the area we live in is a flood zone that got hit several times resulting in massive destruction. I've got family members suggesting we move RIGHT NOW. My sister thinks I should just take Mom's Money and pay the difference between $475 and $800. Well, it doesn't take a mathematician to figure out that the money will run out soon. So my good friend tells me I should "invest" and in a couple of years, I'll have enough for a down payment. She claims she bought stock in Facebook "cause she knew it was gonna be big" (ahem--not sure I believe this). She's telling me I need to hire a broker. My sister recommended someone she trusts (and I trust my sister more than Ms. FB).

Buying a house scares me. Given my low salary, I know we will qualify for first-time home buyer programs and some help. But also, what does one do when the roof or the furnace dies? I do not see a change in salary or career for me in the future (I am 53; spouse is 61).

Also, investing scares me. My retirement investments are modest, moderate growth social choice.

On a side note: A friend has offered us a house to rent for $600, but it's in a part of another town that has 2% more tax than I pay now, on an extremely busy street & in a town that supposedly has a higher crime rate than our state. Spouse does NOT want to live there but is willing to "look at" the house on an interior tour.

Also: I just spoke to a rep from one of the state's first-time homebuyer programs. They have workshops you can attend to learn about options--because really? Buying a home is starting to look like the only option.

So....finally, what is it I want to ask a Mustachian?

What should I be doing with my money, especially the upcoming $20K? I know I will put some of it in the Vanguard accounts, to avoid taxes if necessary. My mother is extremely fond of CDs and she recommended I get one now that the interest rates are over 1%. I'm sorry, but under 2% doesn't sound that great to me.

Where do I go from here?

Thank you for listening, and please be nice. I'm feeling very fragile--had hardly enough sleep and spent the morning in court.

Lady SA

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Re: Not sure where to go from here--feeling stuck (long post)
« Reply #1 on: October 30, 2017, 01:53:42 PM »
I'm sorry for all the rough things that are going on in your life right now. That really sucks.

It sounds like your housing situation is the root of the majority of your woes - more space than you need and shitty neighbor and bad landlords chief among them. The fact that you're really only so-so on the house really leaves me scratching my head why you haven't left yet. I understand the rent is low, and the layout is less crappy, but those are the only upsides you mention compared to some really massive downsides.

Honestly, I know you say that you are unwilling to compromise on the space/walls thing and consequently are artificially restricting your housing search to the most expensive type of rental. Honestly, I know you are feeling fragile right now, but if you are dipping into your mom's money to make ends meet, and your spouse is unable to work, you CAN'T afford to live in/rent a SFH. It sucks, but that's reality. I'm sorry about that.

I also do not think that buying is a good idea. The maintenance would be entirely your responsibility and after putting together a downpayment, you wouldn't have any funds left over to handle any unexpected issues that pop up. Considering that you don't anticipate any sort of change to your financial situation, I think after buying you would be in the same situation as you are now. Perhaps temporarily moving to a less-ideal housing situation is your best bet. No matter where you live there will be things you don't like about it. There are tradeoffs to all decisions. You'll have less space and privacy, but your rent should be cheap and you won't have to maintain a larger space. I personally live in an apartment and I've always said I would never do so, but it has grown on me and now I love it. I like the security of being behind 2 locked doors, I like being on the second floor, I like not having to shovel or rake or mow, I like how little housework I have to do, I like how I haven't tied up a bunch of my wealth into an illiquid asset like a house, I like having less responsibility and having upkeep on property, and I like having attentive landlords who take care of any issues promptly while I'm at work and I don't have to pay for those unexpected costs.

For your money, it sounds like you are cashing out the CD (I'm really not familiar with CDs) because it is mature, or you need the money? I'm not sure. But if you are needing to dip into the money, I'd dip into it for a new security deposit on a new, smaller place that is less ideal but affordable. Then put the rest into Vanguard and then forget about it.

I hope things start looking up for you. But I really think that your housing situation is your biggest impediment, and artificially restricting yourselves based on preference rather than by what you can afford on your income is not doing yourself any favors.

What do you want to do in the future? Do you want to be a homeowner? Do you want to travel? Do you want to live in another country? Do you want to live in an RV and rv around the country? All of those possible outcomes requires different amounts of money. Personally, I would keep renting unless you have been dreaming of owning a home, but you don't sound excited about that possibility, you sound resigned and like that is your last resort. That tells me homeownership would be just another yoke around your necks dragging you down and away from activities that would make you happy.
« Last Edit: October 30, 2017, 01:55:25 PM by Lady SA »

Cranky

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Re: Not sure where to go from here--feeling stuck (long post)
« Reply #2 on: October 30, 2017, 01:56:20 PM »
What jumps out at me is the bad neighbor/bad landlord situation. I understand preferring to live in a house, but this might be a good time to start looking at 2 bedroom apartments.

WootWoot

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Re: Not sure where to go from here--feeling stuck (long post)
« Reply #3 on: October 30, 2017, 02:18:08 PM »
I don't know if I was clear about this, but even a 2-bedroom apartment around here is a couple hundred dollars more than what we pay now. And NO ONE wants any renter to have pets. I am not giving up my rabbit. No way.

Why we haven't left yet: Our neighborhood, except for the jerk neighbor, is safe, close to stores, close to my job (a 5-10 minute drive) and has some nice amenities (nearby stream, parks, etc.)  Funnily enough, all the other neighbors are perfectly pleasant and no problem at all. Like I said, I don't know why action has not been taken against this jerk before. Or his landlord.

Regarding my future: I don't see myself having much of one, at this point. I did want to be a homeowner for a long time, but we were happy enough with our current situation until it became a legal problem. So I stopped looking at houses. I don't think that much into the future, but traveling around after retirement is probably not going to happen. I do take trips by myself and it will probably stay that way. At this point, I feel lucky that I was told that I actually will be able to retire.

I don't really have activities that I feel would make me happy in the future. I don't enjoy my life much now, quite frankly. In fact, I'm pretty depressed about everything and about to go back into counseling. So thinking about life after a retirement that may never happen...I dont' know what to say.

The reason I'm cashing in the EE bond is it has stopped earning interest. That is the reason my mom has given me the CDs. They reached maturity.

Thanks for listening.


ooeei

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Re: Not sure where to go from here--feeling stuck (long post)
« Reply #4 on: October 30, 2017, 02:44:04 PM »
While it does sound like your situation sucks, there's a probably obvious thing I do want to point out to you. You can't always get what you want. You've instantly shot down any options anyone can give you, and so are guaranteeing you'll stay in roughly the same situation for the foreseeable future unless a miracle happens. Life is a game of compromise, sort of like another popular saying around here, "You can have anything you want, but not everything you want."

Your spouse doesn't and won't work. You also don't want to downsize your house. You also don't want to pay more than your seemingly below market price for rent. You also don't want to stay where you are.

Do you see the problem here? There is no solution, you've left no room for creativity or compromise. If you want to vent about being a victim and have people sympathize then that's fine, but around here you can expect to have people trying to move you out of the victim mindset and open yourself to changing things for yourself. I'd love to have my own 2 million dollar home near downtown Austin for the same price as my suburban Houston rental, while finding a job there that pays more than my current one and is easier and less hours, but the reality is that's not going to happen. There's no magic solution someone on the internet can give me to make that happen.

Here are a few solutions to your problem based on the limited information you gave us. Without a breakdown of your current expenses I can't suggest other places to cut money for a new place:

1. Get a higher paying job, or an additional job.

2. Get your spouse a job, even if it's part time or super low stress (I'm not sure of the situation there), or get on some sort of disability if he can't work.

3. Downsize the living space and move somewhere smaller for roughly the same price.

If you post your expenses in more detail someone may be able to come up with the extra few hundred dollars a month. With that being said, you are living in a pretty precarious position right now. Your way of life is based on below market rent that a seemingly unstable landlord has already told you is going to be sold. You have one income stream, and are currently making ends meet through external support from those old bonds. I think it would benefit you to begin moving your life in a direction where you are self sustainable assuming market rent, no external support, and the occasional unexpected expenditure (along with some healthy savings). Until you get to that point you're going to have a lot more worry in your life than you really need to, and it will make everything more difficult. To quote MMM, you're in a "hair on fire" situation as far as I'm concerned, as one of many things out of your control could instantly ruin your finances.

I know this may sound a bit aggressive, and you seem a bit sensitive to criticism, but I do sincerely hope this helps you in some way. I'm sure you're a great person with great intentions, and I'd really like to see you turn it all around and succeed, and be back here in 5 years advising someone else on how you bettered your own life and they can too. I think counseling is a great idea, as it sounds like there is quite a bit going on in yourself and your life way outside of your neighbor and finances. For what it's worth you are still in a pretty great position compared to many people out there, so moving yourself out of this downturn is still very doable. You're a very long way from the point of no return. I do hope you find a solution to your problems.


edit: And as for the investments, I'd keep at least 6-12 months of living expenses in a savings account, and put the rest in VTSAX or something similar. Keep in mind money invested in that way should basically be considered off the table for 5-10+ years. Do not hire a broker. Do not use your sister's referral. Where to invest at this point should be pretty low on your priority list IMO.

edit2: And congratulations on your recent improvements since first finding the forum. You just need to keep the improvement train moving!
« Last Edit: October 30, 2017, 02:52:30 PM by ooeei »

Laura33

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Re: Not sure where to go from here--feeling stuck (long post)
« Reply #5 on: October 30, 2017, 03:49:18 PM »
First, it sounds like you are doing well on a low salary.  That puts you ahead of many, many others.

But I am concerned about the plan to buy a place as your "fix" for your current problems.  If you are currently paying $450 in rent (!!!), where in the world are you going to find a house for that kind of money?  $450/mo. in mortgage is around maybe $120K in home value.  But realize that your budget doesn't just need to cover the mortgage -- it's taxes, and insurance, and short-term and long-term maintenance.  Can you really find a house in the neighborhood you like for @$50-75K??

Also realize that buying a house doesn't fix the neighbor problem.  Yes, it gets you away from this asshole.  But you can't control who moves in next door to your new place -- and worse, now you're locked in, because you actually own the damn place!

Third, ITA that you do not want to use your mom's money to enable a lifestyle that you cannot sustain on your own.  If you do that, you are likely to find yourself 5-10 years down the road, with even higher expenses and no further help from mom, and now what do you do?

So I suggest being very, very realistic with your options here.  How about a 1Br apartment?  The nice thing about an apartment is, if a loon moves in next door, you have a management company to complain to who can boot him out!  Plus no yard to mow, nothing to fix, etc.  You need to figure out whether your quality of life is worth sacrificing size and/or commute and/or neighborhood.*  Or to put it another way:  your current rent is artificially low because you live next door to a loon and have another loon for a landlord!  Therefore, if you want to live somewhere that involves normal people, you need to expect to pay more for it.  That is, unfortunately, just reality.

So maybe think creatively about improving your income.  Can one of you use your free time to pick up a side hustle that you can do in your free time (you) or consistent with whatever your DH's limitations might be?  Have you checked on any other locally-available benefits that might be available to help?  Especially if your DH has some kind of disability, you may have resources that can help things feel a little less tight.

I am sorry you are dealing with this.

*I'd sacrifice size.

Sun Hat

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Re: Not sure where to go from here--feeling stuck (long post)
« Reply #6 on: October 30, 2017, 07:01:53 PM »
I know several people who have rabbits in rented apartments, so if you look around, you may find a place that allows them. Many places allow pets under a certain size (usually 30 or 40 lbs).

I also suggest a rented apartment and additional income because as Laura33 mentioned, you need a place that you can afford without dipping into your limited reserve funds. If you pay your own electricity / heating in your rented house, consider that your bills will likely be a lot lower in an apartment.

I used to have a bias against apartment living too, but having done both apts and houses, I have to say that apartment life is EASY. Rarely have I found the noise from neighbors to be a problem (concrete dividing walls are ideal), and it sounds to me like you could use a hassle-free situation.

Good luck!