My First Big Decision!

Remember when the Internet led you to my blog and I told you that I purchased my first home when I was 22 years old? It’s time for us to take a trip down memory lane to discuss why I made that decision, what I didn’t know, and what I learned as I navigated through that process.

After living in that mouse infested dump for over a year, I decided that we needed to make a move, fast! It was an unhealthy environment for everyone involved so I took it upon myself to go house hunting. I was accompanied by my dad for support; however, he wasn’t too savvy in the housing business himself. He called a realtor whom he knew and trusted. We learned that not everyone is looking out for your best interest. I didn’t tell my children’s father that I was looking for a house because I felt as though he wouldn’t have an opinion either way. He would just go along with the flow.  Another thing you want to consider when you think about making a big decision with your partner is whether or not he or she is going to be involved in the process. I believe the answer should be “yes” if you plan on living together. We were not married so I thought it was okay to go at this alone.

Movin’ On Up to the East Side

After looking at a few houses, I settled on a house a few doors down from the apartment complex. I had no down payment. This was mistake number one.  Had I saved for a down payment, my mortgage wouldn’t have been so expensive. I didn’t take advantage of programs that were offered by my job because I was in such a hurry to get the hell out of the apartment. I was encouraged to get a home inspection, but I couldn’t afford it at the time. This was another mistake. A first time home buyer should never be in a rush and should always get an inspection. After I signed my life away and moved in, I found out that the last owner died in the house. Can you imagine how difficult it was to sleep there for the first few months? Other than that, things were great!

The Calm Before the Storm

The first rain storm caused a major flood in the basement. All important documents including birth certificates, the deed to the house, insurance paperwork, and family pictures were destroyed. Insurance didn’t cover it because it wasn’t considered a natural disaster. The house did not have a sump pump. We cleaned up, disinfected, then it stormed again.

I decided to take out a deed of trust loan, had the sump pump installed and the walls rebuilt to get rid of the mold.  After all was said and done, it rained again, the power went out and the sump pump turned off! Son of a bitch! After cleaning up again, I had a battery backup installed to avoid that issue again.

On My Own

 After living in the house for two years, my children’s father and I decided to go our separate ways, so he moved out and I stayed. All bills are now on me and I was not prepared. The house repairs, mortgage, and child care expenses were coming full force. I had not established an emergency fund. I managed for a while until I lost control. I had a decent income, but it wasn’t managed properly. Eventually, I filed for Chapter 13 bankruptcy to reorganize my life.

Lessons Learned

Please don’t forgo your home inspection before purchasing a house. I know that everything will not be discovered until after you move in, but it helps. Make sure you have the appropriate insurance coverage for your home for flooding and natural disasters. Save for a down payment for a home! It will benefit you in the end. Establish an emergency fund for unforeseen circumstances. Learn how to budget. It’s okay to say no to things that you really can’t afford. Live within your means. Sounds easy, doesn’t it?

Recommendations (Moe’s Tips)

I recently read a book called The One Week Budget by Tiffany Aliche. She is known as “The Budgetnista”. The book is about how to start a simple budget for everyday expenses. It’s an easy read and it’s great for people who don’t know where to start. It will also help you to jump-start that savings account. In addition, she is a co-host of the podcast “Brown Ambition.” She and Mandi Woodruff talk about everything from retirement plans and careers to everyday finances and student loans. I listen every Tuesday! Soon, they will air on Wednesday mornings. Lastly, she has an established Facebook page called “Dream Catchers”. Ordinary working women are paying off debt, buying homes, and sharing financial success stories while encouraging others to do the same. I wish these resources were available 20 years ago. I’d be rich by now; probably not.

In addition, the “Paychecks and Balances” podcast Episode #52 titled I Ain’t Too Proud to Budget provides a wealth of information about different methods used to budget for everyday expenses and retirement. How is your retirement savings looking these days reader?

Personally, I like the Mint App for personal finances and a good old-fashioned check register book! What budgeting tools do you use?

My son will be starting a full-time job soon and he is my money project! I’m going to make him rich or die trying! Yes, I saw the movie in case you’re wondering.