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How We Used the Proceeds from the Sale of Our House

August 22, 2022 By MelissaB Leave a Comment

 

We Used the Proceeds from the Sale of Our House

This summer has been a crazy one. We found out in May that my husband would likely get a new job 2,200 miles away from our home, and in June, he signed the contract for the new position. We sold our house, bought a new house, and drove four days across the country to settle in our new area. Thanks to the housing shortage due to the pandemic, we made a nice profit on our old home. Here’s how we used the proceeds from the sale of our house.

About Our Old House

Our old house had almost doubled in value from when we bought it eight years ago. When we listed it, the house sold in three days, and we had six offers, two of them for over asking. The couple we picked also waived their right to an inspection, which saved us money.

About Our New House

Our new house is slightly larger than our old house and cost 8% more than our old house sold for. Unfortunately, the property taxes are three times higher. (Yes, property taxes in Arizona, where we moved from, are affordable.)

We wanted to find a smaller house that cost less than our house in Arizona. However, we only had a week to look for a home in our new area. Unfortunately, many of the places on the market were less than desirable, with moldy tubs and awkward layouts. Or, a few were in highly desirable areas and went well over asking; we had no desire to pay that much.

How We Used the Proceeds from the Sale of Our House

I would have liked to have put all of the proceeds from our house into our new home so we would have a smaller monthly payment, which is especially important in this high-interest rate environment. However, both our financial planner and mortgage broker talked us out of this.

Instead, we used the proceeds from the sale of our house this way:

Seventy percent for a 20% down payment on our new house and to cover closing costs.

We Used the Proceeds from the Sale of Our House

Six percent to increase our emergency fund. This allowed us to grow our emergency fund from one month of expenses to 2.5 months.

Four and a half percent for home improvements. While we didn’t pay over asking for this house, we did pay the list price. The house has some issues like mold on the wood window in one of our kids’ bedrooms, which we will need to replace before winter comes. We also need to replace a leaky, cracked sink and a few other items.

Six percent to increase our car replacement fund. We’ll need a new car within the next year or two. (Our current vehicle is 18 years old.) So, we added to this fund.

Two and a half percent to cover moving costs. We had to pay for our hotel rooms and food as we journeyed across the country, as well as other miscellaneous expenses.

The rest is unassigned for now. We’ll see how we need to use the remaining money, whether for college tuition, increasing the emergency fund further, or buying other household needs like a snowblower.

Final Thoughts

We tried to use the proceeds from the sale of our house as responsibly as possible. As a result, we were able to put 20% down on our new house, and we were able to bulk up many budget categories that put us in a more secure financial position.

Read More

3 Lessons I Learned When Looking for a New House

Should You Create Sinking Funds Before You’re Debt Free?

When the More Expensive Option Is the Frugal Choice

MelissaB
MelissaB

Melissa is a writer and virtual assistant. She earned her Master’s from Southern Illinois University, and her Bachelor’s in English from the University of Michigan. When she’s not working, you can find her homeschooling her kids, reading a good book, or cooking. She resides in New York, where she loves the natural beauty of the area.

www.momsplans.com/

Filed Under: budget, Cars, Education, Emergency Fund, Home, Saving Tagged With: college expenses, emergency fund, home improvements, selling a home, selling a house

Is a Side Hustle Worth the Family Sacrifice?

June 20, 2022 By MelissaB Leave a Comment

Side Hustle Worth the Family Sacrifice

When our kids were young, my husband and I struggled financially. My husband was getting his Ph.D. and worked as a graduate assistant. I had just quit my full-time job because the cost of daycare in Chicago for two kids under two plus after-school care for our oldest would cost me as much as I was taking home each week. We survived for three years like this until my husband graduated and started working a regular job and a side hustle. I also worked a part-time job from home. Now that we’re 10 years removed from that situation, we recently discussed if a side hustle is worth the family sacrifice.

Some Times You Have No Choice

I want to acknowledge that sometimes, you have no choice. Sometimes you have to work as much as you can to cover rent, buy groceries, and care for your family. For my husband and I, the first few years after he graduated were like this. We were in debt because we had lived off his graduate assistantship and student loans those last three years, and we needed side hustles to try to get out of the hole we were in. However, we should have set a limit for how long we would work our side hustles.

Dave Ramsey’s Influence

Fifteen years ago, I loved listening to Dave Ramsey, and I bought into the idea that we should “live like no one else so later we can live like no one else.” I accepted the sacrifice that side hustles required because I was sure that if we worked hard, we’d end up on the other side, able to check off the baby steps.

Is A Side Hustle Worth the Family Sacrifice?

We are now at the point where we’ve completed baby steps 1, 2, and are on baby step 3. However, we’re also at the point where our kids are now 18, 13.5, and 12. We lost a lot of our kids’ lives to side hustles.

Is a side hustle worth the family sacrifice? As a parent with older children, I can answer for us, it was not worth it.

What We Sacrificed for the Side Hustle

Side hustles have a dark side that most people don’t talk about. For us, these were the major drawbacks:

We Were Exhausted

Is a Side Hustle Worth the Family Sacrifice?

After my husband got home from his regular job and side hustle, I would start my work after being with the kids all day. I would often work until midnight and get up at 5 or 6 a.m. That was not enough sleep.

My husband and I were both exhausted all the time.

We Were Grouchy

Because we were working so hard and exhausted, we were also grouchy. Raising young children can be challenging under the best circumstances, but when you’re exhausted and grouchy, it’s not good for anyone.

Final Thoughts

Is a side hustle worth the family sacrifice? For us, the answer was no. Rather than following Dave Ramsey’s advice to hustle until you’re completely out of debt, we should have set a limited time frame for our side hustle. We hustled for far too long, and I’m sorry we missed out on some opportunities to spend enjoyable time with our kids when they were little because of that.

Read More

How to Combat Frugal Fatigue When Being Gazelle Intense

How to Get Out of Debt and Stay Out of Debt

4 Side Hustles for Teachers

MelissaB
MelissaB

Melissa is a writer and virtual assistant. She earned her Master’s from Southern Illinois University, and her Bachelor’s in English from the University of Michigan. When she’s not working, you can find her homeschooling her kids, reading a good book, or cooking. She resides in New York, where she loves the natural beauty of the area.

www.momsplans.com/

Filed Under: budget, Children, Debt Reduction, Emergency Fund, Frugality, General Finance, Guru Advice, Married Money, pf books, Saving Tagged With: family, getting out of debt, marriage, side hustle

How YNAB Changed Our Finances

February 21, 2022 By MelissaB Leave a Comment

How YNAB Changed Our Finances

Years ago, when my husband and I were first married, I had a budget binder. It was simply a spiral notebook, and on each page, I put a different budget line item such as “groceries” or “electricity.” Each time we were paid, I put a certain amount in each category. When I paid a bill, I deducted the amount from that category. It was a tedious process, especially in a category that had a lot of deductions, like groceries. In desperation, I started researching budgeting software. I tried several before finally settling on You Need a Budget (YNAB). There are so many ways that YNAB changed our finances!

What Is YNAB?

You Need a Budget (YNAB) is a budgeting software based on the envelope system of budgeting.

The YNAB Principles

The YNAB system has four principles.

Give Every Dollar a Job

Using YNAB, you should budget every single dollar that you receive. Doing this helps you map out how to spend your money. If you have $40 left in your grocery category, you might need to have a small shopping trip and eat up the items in your pantry so you can keep within your budgeted amount.

Embrace Your True Expenses

Your true expenses are not just the ones that are due every month. You also have to budget for those expenses that you only pay once or twice a year like car insurance, property taxes, home insurance, and car registration. You should also budget for irregular expenses such as vet and medical bills.

Roll with the Punches

Your budget is flexible. If you only have $40 left in your grocery budget but your food costs $75, you can move $35 from another category to cover the overage. Things happen—roll with the punches.

Age Your Money

YNAB Changed Our Finances

The age your money principle refers to how long it takes you to use the money that comes in. If you have money coming in that you don’t have to use for 30 days, your money is 30 days old. The longer you use YNAB, usually, the older your age of money is. Currently, our age of money is 73 days.

YNAB Trainings

YNAB has many free training videos, so you can watch those to learn more about the principles in YNAB and budgeting. In addition, the creator of YNAB, Jessie Mecham, wrote a book, You Need a Budget: The Proven System for Breaking the Paycheck-to-Paycheck Cycle, Getting Out of Debt, and Living the Life You Want, that you can also read to learn about the YNAB system in-depth.

How YNAB Changed Our Finances

I started using YNAB over six years ago, and the program has revolutionized how I handle our finances.

Electronic Version of My Budget Binder

How YNAB Changed Our Finances

At its core, YNAB is an electronic version of my old paper budget binder.

Easier to Use than Paper

However, using YNAB is so much easier! All of those calculations I used to do on paper? YNAB does them automatically.

More Flexibility

Plus, when I put in an expense, I have the option to split the cost into several categories. So, if I spend $70 on Amazon, I can split the expenses into separate categories such as $45 for groceries, $15 for toiletries, and $10 for spending. I love that flexibility, and the process is so much easier and quicker than doing it by hand.

YNAB Is Portable

Plus, I can always consult my YNAB budget on my cell phone. I never carried around my budget binder previously, so I would have to guess how much I had left in each category.

Create a Budget Buffer

Besides being easier to use than my clunky budget binder, YNAB taught me new budgeting principles such as creating a buffer. When you first start using YNAB, you’re encouraged to create at least a one-month buffer. That means that slowly you start covering next month’s expenses with this month’s money. Say, at the end of the month you have $150 leftover. You don’t go out to eat to celebrate. Instead, you take that money and put it in some of your categories for next month. Then, slowly, you keep adding until you have all of your categories for next month covered with this month’s money.

Having a buffer gives you an automatic one-month emergency fund and gives you a sense of security. It also makes budgeting easier. You can pay all of your bills at the beginning of the month instead of waiting until you get your paychecks during the month because the money is waiting to do its job.

Can See Your Finances in One Glance

What I love most about YNAB is that my husband and I can see our finances at a glance. Since I do all of the budgeting, YNAB allows my husband and I to sit down every one or two weeks and together look at where we stand financially. My little budget notebook never made much sense to him, especially because he’d have to flip through 20 pages to see the amount of money in each of our categories.

Easy to Track Net Worth

YNAB Improved Our Finances

The best feature is the net worth feature. Often when we feel like we’re not making much progress financially, we look at our net worth and see that we are improving our bottom line. We sit down together at the end of each month to go over our net worth.

YNAB’s Price Increase But We Kept It

Recently, YNAB had a significant price increase. I thought about searching for a cheaper budgeting software. However, my husband said no, he wanted to stick with YNAB. He feels it is a valuable tool that makes budgeting and money management easier for me. In addition, he loves how easily he can keep up to date with our finances thanks to the program. He feels that YNAB is well worth the price, even after the price increase, so we’re staying.

Final Thoughts

YNAB has changed our finances and made them so much easier to manage. If you’re looking for budgeting software, I highly recommend You Need a Budget.

Read More

Feed a Hungry Teenager Without Breaking Your Grocery Budget

6 Unexpected Baby Expenses to Budget For

How to Feed Your Family on a Low Budget

P.s. if you’re looking for a good all around quality site to review while you’re working with YNAB, consider Moneycrashers.com.  I’ve been following them for year – and their advice is generally really solid.

MelissaB
MelissaB

Melissa is a writer and virtual assistant. She earned her Master’s from Southern Illinois University, and her Bachelor’s in English from the University of Michigan. When she’s not working, you can find her homeschooling her kids, reading a good book, or cooking. She resides in New York, where she loves the natural beauty of the area.

www.momsplans.com/

Filed Under: budget, Emergency Fund, Saving Tagged With: budget, budgeting, budgeting software, ynab

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