Hola! My Financial Journal is to sort out my thoughts as I purchase my first home. Any and all advice is welcome. I promise to cool down for five minutes before responding to any criticism.

I'm 24, female, and living in the suburbs of Washington D.C. Its expensive here.

I recently bought a condo. I signed the contract in May of 2007 and question everyday whether I'm making the right decision. I am. Its currently under construction. Closing has been delayed multiple times and I have spent a small fortune on temporary housing. It sucks, but I am doing the best I can. My four month lease runs out on March 31. We are expected to close in April or May so I will just have to tough it out and do the 5 hour commute from my parents' each day until I can move in. Its actually only an hour each way, but with D.C. traffic... yeah. I may be able to adjust my hours some. I've been approved for an 80/15/5 loan.

I went to undergrad on a full scholarship thus graduating debt free. So then I had the bright idea to go to a subpar out of state school to get my Masters in a bs major. Realizing that the work was not at all challenging and that the degree would be no help in landing a job in my chosen field, I dropped out in my second semester. By that point I had racked up over $20K in student loans. Ouch. I hate this debt with a passion.

I do not have a 401K for which I really have no excuse. I do have a Roth IRA with around $12K (market fluctuations) at Vanguard. Most of the money is in a Target Retirement fund with a little in Emerging Markets. I know that seems overly aggressive, but I'm a financial analyst and I need to have a little leeway with my investments. I need to add more to my Target fund to get the EM to a lower percentage of my portfolio. I'm debating making a 2007 contribution. My parents match whatever I put in the Roth. This may be the last year of that super sweet deal. I'm not eligible for a 401K until mid-summer (new job). I will definitely take advantage of at least the employer match.

After reading my post, one may not believe it, but I am actually pretty thrifty. I grew up poor. I have a wonderful stepdad who made things a lot easier for us, but I've never been able to let go of certain habits. In the 22 months since I've started working full-time, I've paid off $10K in student loans and $16K in car loans. I do not have any credit card debt. I've never carried a balance. Never been late on a payment or on a loan.

My next post will detail the specifics of my financial situation.

Monday, January 21, 2008

Checking Account: $646
Down Payment Savings: $6467 or 3.39% of Mortgage

Discover: $200 (mortgage application fee)
Banana Republic: $176 (went from casual to formal workplace)
Sallie Mae: $81.59 (due by mid Feb)
Rent: $1620 (Ouch. Ouch. Ouch... due by the 1st)
Food/Gas/Living: $150 (for half a month.)

I won't be including things like the value of my other assets because they are not really relevant. The retirement fluctuates too much and I'm working on leaving it alone and the car is just a depreciating means of transportation.

I switched jobs last week. My last day was on Wednesday and I started the new job on Thursday. I had some PTO from the old job that I am due to receive soon. My old job is also due to pay me a bonus this week. I wasn't going to receive it, but I convinced HR to give it to me since I had all the unused PTO. The bonus has been pending since last July and the payout date was only determined last week so I couldn't plan my start date around the payout date. (I'm bad at speaking up for myself so this was a major victory for me! Holding my breath until I physically have the check in hand...) Depending on how much is taken out for taxes these pending inflows should take me over the minimum 5% down payment threshold. Then I have to decide whether to save more for the down payment or to pay down my student loan. My heart says student loan. My head says down payment. And then there is the matter of the Roth Contribution...

I have a few other inflows. Of course there is my salary from my new job. It is more than my old job, but won't include the entire pay period. Its also being paid every two weeks instead of bi-monthly so I have to get used to that. My goal is to get my mortgage, condo fee, escrow taxes, and insurance payments down to one paycheck.

Oh yeah and I estimated my taxes based on my actual W-2 and my estimated student loan interest payments. $700 refund.

Hi, Leila. I look forward to keeping tabs on your adventures. There are at least a couple other D.C. area forum members here who may be able to provide you tips along the way...

Good luck with the new adventure! Be glad to offer any assistance I can.

For starters, what is your current or expected income, and do you have an emergency fund?

Thanks for the welcomes! (Edited to take out salary details ).

I do not have a seperate emergency fund. I've had a lot of car repairs lately, but I am always able to pay for those with cash and not raid my savings. I do need to build up some emergency savings. [My work offers Aflac, but I'm not sure if I should enroll.] I've been so focused on paying down the debt. A couple of months ago, I took a large sum out of my downpayment fund to pay off my car. Thats the problem. I'm always changing my mind about what I want to do with my extra money.

I should mention that my PITI payment (including the condo fee which includes utilities) will be a couple hundred less than my current rent. The builder is paying most of my closing costs and my earnest deposit will cover the rest.

What a good start! Begin putting money into emergency savings. Right now, in a pinch, you could use your downpayment savings, I suppose.

Ditto. Build up that fund first, then focus on the rest of the goals.

Thanks for the advice everyone!

My unpaid vacation and bonus from my old job hit my account this week. I was taxed at a much higher rate on the bonus but I planned on that and will see the money come 2009. So now the only unknown is how much my new net paycheck will be. I won't find out until the middle of February because my first one will be prorated. I can estimate, but I plan everything to the dollar.

1/26 Down Payment Savings: 4.921%

I'm paying Feb's rent with the unpaid vacation money so I will treat next Friday's paycheck like a windfall. It will go straight into my downpayment fund.

February Goal: 6% downpayment saved.

So Friday's prorated paycheck came and so did a few bills. I wasn't able to put as much into my downpayment fund as I wanted to. At least I am over the mandatory minimum now.

Almost all of February's inflows will be spent on rent, utilities, living expenses, student loan, banana payment and one discretionary purchase ($450). I will be able to save a little bit of the tax return, but not much. I'm a little disappointed, but am looking forward to making my last rent payment!

I'm still debating where to put the excess funds. I will save some for an emergency fund. But then I have to decide between the Roth, the downpayment, and the student loans... So right now it is going to sit until I decide.

Here's the numbers...

Checking Account: $150-$200**
Down Payment Savings: $9756 (5.12%)

Banana Republic: $176
Sallie Mae: $81.59 (due by mid March)
Rent: $1620 (due in March)
Utilities: $100 (due mid March)


** Exact amount unknown due to a bank error. Spent the day on the phone with them today and should be fixed by tomorrow.

So my first paycheck came and I believe I really need to adjust my withholdings. I'm a bit scared to because I don't want to owe in 2009, but I could really use the money every month instead of the windfall come next April. Getting used to biweekly pay versus monthly pay is going to be hard. I will have to look for some sort of calculator to investigate further.

I'm not making a whole lot of progress. I have a bit more in my downpayment savings. I got the hair thing done yesterday and paid cash for it for the first time. I've learned a few expensive lessons. The main one being banks and credit unions have very different time horizons for processing checks, the same doctor can be both in and out of network, and the speed limit is still 25 mph when the lights are NOT flashing. Needless to say I've been a bit frustrated, but at least I've had the money to cover the mistakes.

On the condo front I found out I'm eligible for either a 5.5% fixed 30 year rate or a 3.9% first year, 4.9% second year and 5.9% (fixed!) loan for years 3-30 thanks to the Socialist Republic of Maryland. The second option makes more sense if I make a few extra payments in years 1 and 2. Plus I'll have to pay PMI which I didn't have to on the other loan. So I need to think about things.

As of now the plan is to put $2K in my Roth for 2007 to match my parent's $2K. Put down 5% on the condo. And lastly build up the emergency fund. I need about $3K more to do all three. I'm on track to save about $4K to $5K before settlement. (My housing expense is going to $0 for the next few months as I move home.)

Looking forward to my last rent payment and getting back on track with the savings.

As of April I have moved back home and am starting to save. My only expense right now is gas money. My car is not fuel efficient so that comes out to about $135 a pay period. Not good. I met with my mortgage broker and went with the 5.5% fixed 30 year loan for simplicity's sake. I've had to pay a few closing costs out of pocket, but I will be reimbursed for those at closing. I'm really happy to be able to lock in at such a low rate. Right now I have the downpayment saved up and with next week's paycheck will be able to fully fund my Roth. I will also have a little bit left over for an emergency fund. Still no credit card debt. The emergency fund is moving higher up on my list of priorties. Which I guess is a good thing. I'm crossing my fingers that I will close on the condo in May. I'll have to redo my budget and establish some new goals come then as well. I'm also going to want to spend a bit on furnishing the place.

Savings: 10666
Checking: 513
Student Loan: 9675

Looking forward to making the Roth contribution.

5.5 fixed for 30 years is a great rate!!

Made my contribution in time for 2007. It is going to be tight until the next paycheck unless I dip into savings. The next goal is to save for emergencies, and furniture. I'd also like to pay off my student loan by the end of the year.

I recommend you browse Craigslist.org before you make any furniture 'investments'. Understand that no matter how inexpensive or chi-chi your furniture is, it retains very little value.

I've had tremendous success shopping on Craigslist and garage sales for my entire house (however, I recommend purchasing mattresses and major appliances new). It gives me great satisfaction to be able to furnish a beautiful home and pay no more than 150$ on any item, sofas, antique tables and dining room table and chairs included. Second-hand furniture is a very smart way to furnish your home without sacrificing retirement, travel, or emergency fund goals.

Good luck, Leila. I think it is great you funded your Roth this year.

Its been a long time since I have updated my post. I've actually been a bit leery of updating because I am so far behind on my goals. I now realize they were pretty much impossible. Home ownership is expensive! The good news is that I'm all moved in and very happy with my new place. My paychecks covers all of my expenses. I've also started 401K contributions. The bad news is that I only have $265 a month to throw at (extra) student loan repayment and savings. More bad news is that I'm not eligible for the new home buyer "tax credit" because of the type of loan program I went through. We also had layoffs at work which sucked. I still have a job but I really need to get started on the Emergency Fund. Things have also been a bit tough because I've been waiting on tuition reimbursement from work for a couple of months. I finally got some of it on Monday, but I had to carry a balance on my credit card for the first time ever. (Paid off completely now!) I'm hoping to get the rest next Monday.

Here is my new budget....

1298 Mortgage & Property Taxes
256 Condo Fee
100 Utilities (High Estimate... only pay for electric and internet)
82 Student Loan
300 Miscellaneous* (Food, Gas, Fun)
265 Extra

I also work a bit part time on the Internet for some extra cash ( ~ $300 a month) which I don't include in my budget. I hope to earn enough to pay for xmas presents and car insurance this month. I have a small family so I'm only buying three this year. After that I'll put it towards the Emergency Fund if it is still coming in.

* I've been writing down every thing I buy that goes in this category to track. I may have to adjust up a bit, but I am trying to stay under.