Even though we have no intention of moving anytime soon, I know there are many people out there that want to take advantage of the depressed housing market.  Therefore, I thought I would share some  tips to follow when considering buying a new home, based on my own experience:

1. Don’t buy a giant house just because it is a perceived deal.  Buy only what you think you truly need.  No reason to pay for a bunch of rooms you won’t use.
2. On the other hand, do consider resale value.  For instance, a 3 bedroom home will sell faster and at a higher price than a 2 bedroom home.  Most people want at least 3 bedrooms, and more than 1 bathroom.
3. Consider the school district your prospective home will be in, even if you do not have children.   People will pay a premium to live within the boundaries of a good school district, which again, affects resale.  Also note that just because a home is in a particular city, it doesn’t guarantee that the home resides within that city’s school district.  For example, the city I live in has one of the best school districts in the state.  However, the city itself feeds 6 different school districts, all with varying degrees of quality.  I have met so many people that moved to this city for the schools, only to realize as they had kids hit school age that they couldn’t actually use the school district they thought.  (Which is probably why their house was cheaper in the first place.)
4. Use the internet to the fullest for information.  Realtor.com is a great resource just to see what houses are available.  Zillow.com is a good website to use to get estimates of home values, and the site also displays how much  homes recently sold for in the area specified.
5. If you are married, base your mortgage payment on one salary.  If you are single, reduce your salary by 25 percent and base your mortgage off that amount.   Do NOT let a mortgage broker determine how much house you can afford (unless it is less than what you estimated).  Also, consider the cost of taxes, as some cities are taxed much higher than others.   With layoffs and pay cuts being so prevalent, you don’t want to work solely for your house.
6. Consider a 15 year loan.  Interest rates are lower with a 15 year loan than a 30 year loan, and cutting that mortgage by 15 years will really pay off.  Not to mention how happy you will be to be free from that debt in half the time.
7. If you are handy, or know people who are, consider buying a foreclosure property.  I am not an expert on the foreclosure market, but if the house is in decent shape and not stripped bare, then it may be a fantastic deal.
8. Get to know the market months before you consider making an offer on a house.  If you take your time and research prices in-depth ahead of time, you will know a deal when you see it.
9. Do not think of a home as an investment, but a place to live.  You should never count on your home providing money for retirement or anything else.  The market is incredibly unpredictable, and a house is not a liquid asset.  Obviously, you want to pay the lowest price you can, but do not plan on the home providing you with money in the future.
10. Go through your current home and clean it as though you were putting it up for sale.  After seeing your house clean and clutter-free, you may realize you don’t need to move at all!

Do you have any tips you would like to share?  If so, please leave a comment!

So, how does the Government decide who exactly to help?  From what I understand, this government assistance is aimed at those that aren’t even struggling yet, but may in the future.  What about the people that have suffered real losses?  I know someone that lost a substantial amount of money because of Lehman Brothers, but the government has not reimbursed them a penny.  What about the money my 401k has lost because the stock market has gone down?  My retirement is at risk now- should the government give me some money just in case I won’t have enough for retirement?  What about my kid’s college funds, they also have dropped.  What if my kids can’t go to college now because I won’t have enough money saved?

I am all for people to get help that are truly struggling.  However, there are so many segments of the population that could use assistance, how does the administration decide who to help?  All investments have inherent risk, whether it is a home or mutual funds.  You accept that risk when you sign the paperwork on your house or hit ‘enter’ when you make a stock trade.  So how come Obama hasn’t come to the rescue of those that lost money with Lehman and others?   Apparently only those that overspent on their houses are worthy of government aid?

It will be interesting to see in 10 years where these plans have gotten our economy.  Maybe allowing people to spend more than they can afford and taxing the ‘rich’ will save the country, but I don’t think that is the answer.

I am listing some posts I liked from this past week, although these links do not include ALL the posts I enjoyed.  So, grab a cup of coffee and click on some of the links listed below:

Barb Friedberg Personal Finance discusses handling your finances during times of stress, and also includes a cute picture of penguins.

Biz of Life writes about the effects of extended unemployment, and wonders if unemployment benefits makes it easier to just not look for a job.

Budgeting In The Fun Stuff asks what you would do with an extra 500 dollars. The answer jumped out to me immediately as my home computer just blew up. So what would you do with the extra cash?

Financial Samurai discloses his recent overspending, and shares what he learned from his 3 months of spending more than usual.

Invest It Wisely writes a very interesting post about animals, and how they are regarded differently throughout the world. For instance, we will eat a cute baby cow, but that would be abhorred in other parts of the world…

Little House In The Valley has great advice for college students on how to manage finances.

Money Reasons shares ideas about how ‘less is more’ when it comes to saving money and accumulating wealth.

Squirrelers discusses what type of car a teenager should be driving, and made me think of my first couple of cars. This post came at the perfect time for me as my son just got his driver’s license.

Wealth Informatics writes a very good and informational post about how the expiration of the Bush tax cuts will affect Americans.

Enjoy the rest of your weekend!!!

However, there is one project that is being undertaken in Detroit, that is a very interesting idea – urban farming.

When you think of Detroit, the last thing you think of is agriculture.  Most people would associate cars, or crime with Detroit, even though the city’s roots are in agriculture.  However, there are 40,000 acres of vacant land in Detroit right now, which equates to 40 square miles.  Volunteers are making the most of this space by planting gardens in this vacant space.  Some of the vegetables in the gardens are free to those who live nearby, and some is sold to markets or are used in soup kitchens.

However, it isn’t just volunteers that are interested in developing land in Detroit for farming.  Financier John Hantz has already committed $30 million toward his plan, which is to develop 5,000 acres for agriculture.  It is Hantz’s goal to create the largest urban farm in the world, as stated on his website.

Considering the fact that experts call Detroit a ‘food desert’, only good can come of providing more fresh produce to the city.  The number of liquor stores way outnumber the grocery stores in the neighborhoods (one area is stated to have 26 liquor stores and one grocery store), and so it is not surprising that obesity is an issue in the city.  Perhaps as people have greater access to produce, they will be motivated to create their own gardens and take a step toward healthier eating.

I have been thinking for awhile now that something has to replace the industry/manufacturing that has left the area.  I admit that I never thought agriculture would be what would return to the city, I was thinking more along the lines of biotech or something more ‘cutting edge’ than farming.  However, I find it interesting that Detroit may actually come full circle and return to agriculture.

It will be very fascinating to watch how this idea develops, and  I am hoping farming in Detroit really takes off.  Perhaps the plan will a success, and will be an example to other cities that have similar problems.

When people think of Michigan, they usually don’t think of blistering heat and droughts.

However, that is exactly what this summer has been.  It was in the 90s on my kid’s first day of school, which was August 30th.  To make matters worse, the humidity is high too.  It has just been oppressive.  You know it is bad when the weather forecasters issue the millionth ‘ozone action day’, and asthmatics are told to stay in the house.

Sounds fun…

I don’t like heat.  I like warm.  The average high temperature for this time of year is supposed to be the mid 70s, not the low 90s.    We haven’t had any rain either.  I believe the total for August was around half an inch.  The grass in the park that backs up to my house is so dry, it is like walking on little needles.  Brown, frail, dry needles.

Many of you may be saying ‘well, just wait until it is snowing and cold in January’.  Well, I like snow!  Part of the reason I never wanted to move to the south is because I didn’t want to feel trapped in my house for months because of the heat.  Unfortunately, that is what it has been like for the month of August up here.

Rumor has it that we are supposed to get a cold front this weekend, with highs being only in the upper 60s.  I do feel bad for all of those that have Labor Day plans.  However, for me personally, I welcome the break.  (Plus, my only plan is to watch soccer, which I can do perfectly well while wearing a sweater.)  The heat is just making me plain crabby.  I will say though that I have obviously turned into a big baby in adulthood because I remember many hot summers as a child, and we did not have air conditioning back then either.  I guess people are right, kids must be resilient because I handled the heat much better at the age of 10 than I do at the age of 43.

How was your summer?  As much as I hate that the kids are back in school, I welcome the fall weather.  I think I will go get some cider and doughnuts this weekend to welcome the cooler weather!

Here is the breakdown:

The family has 2 children.  Dad makes $78,000 and mom would be reduced to $32,600 annually.  That would make a combined income of $110,600.  On the surface, it certainly doesn’t seem like it would be too hard to get by on over 100k per year.  Not to mention, their day care expenses would be reduced by $500 per month if mom works part-time.  However, it may not be so easy…

The reason it may be difficult to live off  that sum of money is stated in this quote from the article:   “Her employer will let her go half-time for half pay: $32,600. But is that enough — along with the $78,000 that Shawn, 33, earns as an assistant principal — to support their lifestyle?”

What jumped out at me was the ‘support their lifestyle’ comment.

In my opinion, it is the ‘lifestyle’ that is harming our economy.  The family in this article has the typical debts, home, car, credit card.  However, they also have a home-equity loan that is at a ridiculous 7.8 percent interest rate.  Plus, the loan is for $63,000, which is quite a large amount.  Now, I have no idea what they used this money for, but it seems like perhaps they fell into the same trap that many have by over-tapping the ‘equity’ in their home.   They are now paying the piper by being strangled by this debt.

The author of the article then stated the family would need to reduce their debt by $500 a month and cut their expenses by $1300 per month for the ‘part time’ plan to work, which is more than the family ‘bargained for’.  The mom stated  they will have to ‘really think about it’.  Well, to me, it is shocking that a family of four cannot make it on $111,000 per year.  Perhaps they should have ‘really thought about it’ before they bought their current home, or took out a large home equity loan?

I don’t mean to be so critical, but this family is really bringing in a lot of money.   However, the issue appears to be that they dug themselves into a hole and overspent in the first place.   Now they are stuck with possibly not being able to live the life they wanted (with mom spending more time with the kids) because of their life choices.  That is the point – decisions have consequences, some good, some bad.

So, am I being overly critical of this family?   Are you as surprised as I am that a family of four would struggle to live on $111,000 a year?

According to the article, heavy drinkers have a lower risk of death than non-drinkers.

What??

So those that drink excessively are expected to live longer than I am?   I would think that the increased chances of cirrhosis, having an accident while drunk driving, etc would make a heavy-drinking lifestyle much more risky.  Apparently, I am wrong.

According to the study, people should have 1-3 drinks per day, which I have heard about for some time.   (With red wine being the drink of choice.)   I have to say though that I am shocked that studies have shown that the highest risk group for dying were those that did not drink at all.  Part of the theory is that drinking is connected with socializing, and being social is thought to stave off depression.  However, I always thought that many people drank a lot because there were depressed and needed to escape.

So, the good news for people who enjoy drinking moderately is that they live the longest.  I personally do not drink much because I feel so awful the next day.  Even one beer gives me a major headache, so the trade-off is not worth it to me.  However, maybe I need to find an alcohol that agrees with my system.  Even better, I can sit and drink every night, while enjoying a hunk of dark chocolate.

That doesn’t sound so bad after all…

Weekend one, the team was on fire.  We never lost a game, we won the tournament, and everyone was happy.  (We will ignore the fact we were playing weaker teams.)  This past weekend, we soundly beat the first team.  Again, the sidelines were all chipper and upbeat.   Game 2 was against the second best team in the state, and we were destroyed.  Suddenly, the happiness is gone.  The frustration on the sidelines is palpable, and there is obvious discontent.

I started thinking about how the same group of people could go from completely happy to very angry in the span of a 60 minute game.  Keep in mind, this is a game being played by a bunch of middle schoolers, and the result really doesn’t impact anything one way or the other.  But it really affected many people, even though it was just a game.

The reaction of the parents on the soccer sidelines made me understand the continued negativity of our economy.  If the emotions of people can be so affected by a child’s soccer game, imagine how deeply job loss, foreclosure, etc must affect people.  I know many people that live in despair because our local economy is suffering more than most, and it is just plain difficult to get a job.   Many people that have ‘secure’ employment are afraid to invest their money in the stock market, so imagine how scary this economy must be for those that are really in desperate straits.

As was shown this past weekend, fear and negativity are both contagious.  I watched the negativity spread like wildfire during something as benign as a child’s soccer game.   Now think about all the negativity in the workplace from pay cuts, lay-offs and reduced benefits.  I can see why consumer sentiment is down.  There just isn’t a whole lot to cheer about yet, and it seems that good news never spreads as quickly as bad news.

I can only hope for our economy’s sake that we can get some positive news and that companies can start to reward employees like they deserve to be.  Negativity can be so poisonous, and it seems to be human nature to focus on the bad instead of the good.   It just seems like we need a whole lot of good to dig the economy out of the hole it is in.  The American mindset has a lot to do with the state of the economy, as when people are scared, they don’t spend or invest.   However, it is incredibly understandable why people are scared.  I just look forward to the time when Americans can be excited for the future instead of worrying about where the next mortgage payment is going to come from.

But that is ok.

I came to this realization while taking a walk.  I was having a fantastic day.   I spent some time with my kids in the morning, had lunch with a friend, played games with my daughter in the afternoon, and then went for my walk.  The afternoon was slightly cool and the leaves were just starting to fall off the trees.  It was actually an ordinary day, but I felt total contentment.

While I was walking, the yacht and the island both popped into my mind.  I thought owning either one of those items would be quite the burden, and I don’t know that they would bring me huge amounts of happiness.  Actually,  I can’t imagine feeling any happier than I already do, and it is just life in general that brings me happiness.  My family is healthy, my summer taxes are paid – what more could I want?   Sure, my house isn’t paid off, but so what?  Yes, I would feel more secure if the mortgage was completely paid and we had more money saved for retirement and such.   However, my happiness level probably would not increase dramatically because of it.  (Although I may throw a fun party when I finally make that last mortgage payment.)   Overall, I am just pretty darn happy with how things are.  Having a billion dollars would allow me to travel more and such, but would also introduce some headaches too (or at least I tell myself that).

I guess the point in all of this is that happiness can be found in many small things that are completely free, like spending time with family or sitting in the sun.   I know that my ‘lifestyle’ would not make everyone happy, as I am sure that my  life as a stay-at-home-mom (and blogger) may seem mundane to some.  But, it is perfect for me, at least for now, and I am grateful for what I have.

Well yesterday, I saw something that makes even less sense than owning a private island.

I was driving home from my son’s soccer game and a woman crossed the street in front of my car, pushing a stroller.  I peered out the car window to glimpse at what I thought was going to be a cute baby.  Instead, it was a dog!  A dog!

I was shaking my head and laughing at the same time.  Why in the world does a pet need a stroller?  I thought that one way to lose weight was to get a dog because you need to walk them everyday.  Now, I assumed that weight loss tip was because the dog itself needed exercise, but I guess I was wrong.  (Although I know the dogs we owned growing up all loved to go on walks, and I had a hard time keeping up with them.)   I just cannot get over the thought of putting your dog (not a puppy, but a dog) in a little stroller and then going for a walk.

No wonder people are drowning in credit card debt.  If our society is going to spend money on dog strollers (and designer diapers), then people will spend money on anything.   They aren’t cheap either.  One pet stroller I saw on the internet was called an ‘SUV Pet Stroller’ that you could buy for $299.95.   The cheapest pet stroller on the website I looked at was a ‘lite’ stroller that was only $59.95.  Maybe I will invent a plant stroller.  I am sure the Venus Flytrap I have on my kitchen windowsill would love to get out and go for a walk with me.

All you pet owners out there – am I being overly judgmental?  Is there a real purpose for a dog stroller?  Doesn’t a leash make a lot more sense?