This isn’t the actual “sold” sign from my new townhouse, but you get the point

The common theme, though, was the unstable relationship between my finances and my housing situation. What I mean by this is that by not owning the different locations where I’ve lived over the years I was at the mercy of externalities that could (and did) have a direct impact on both my housing stability and my personal finances. For example, if one of my roommates decided to (or had to) leave in the middle of a lease, then their leaving would increase my monthly expenses by a factor based on how many other roommates I had at the time. In other words, an expense that should have been “fixed” in my personal budget was always at risk of increasing based on externalities that were outside of my control.

As a guy who works in finance and who is a maniacal manager of my personal finances, I don’t like it when I’m not in control of my long-term fixed costs and, by consequence, other financial stability-related issues.

At the end of February 2014, my now-former roommate told me that he was finally hired by a group that he had been hoping to get a job with for the past few years. This was a tremendous success for him and a really good, positive moment. This was also a good moment for me because I had been searching the “for sale” listings for a few months at the time that this news came around. In a different scenario, I would have been at my wits’ end trying to find a way to piece together a new living situation. However, after paying off my student loans and feeling financially free since August 2013, I was ready to purchase a home.

The stability that I received in my personal finances from paying off those student loans was great. Yet, it also made it abundantly apparent that I needed to stop renting and buy a home sooner rather than later. Given the high cost of owning a home in New Jersey (if you’re reading this from a state other than New Jersey, you don’t want me to start going into our property taxes), it was always a smarter move for me to live with at least one roommate instead of buying a home of my own. Over the years, though, certain things change. One example of the things that changed is that I’ve gotten older over the years and with that age has come a certain rigidness in what I want in my home. I like what I like and don’t want to be bothered with whatever annoys me! When you live with a roommate, you have to share space and sometimes you can get annoyed by what your roommate does without even thinking about it. Maybe you don’t want to watch the same show on the television or maybe you don’t want to wait for your roommate to finish making breakfast/lunch/dinner so you can get into the kitchen to fix yourself some food. Perhaps you’re not a fan of the state that your roommate leaves the kitchen in when they’re done making their food. The list can go on and on.

This isn’t to say that I haven’t had a wonderful group of roommates over the years. Rather, this is all to reiterate the point that as you get older you change. And as I got older I slowly segregated myself from the entire townhouse that I lived in to just living out of my bedroom. Imagine a very dorm-like situation – I would wake up, shower, and prepare for work all in the same room. When I got home from work, I grabbed a bottle of water from the refrigerator and then headed to my room to catch up on the day’s news, do some work for my small businesses, and then eventually go to bed… just to perform a very similar routine the next day.

I won’t get too deep into the process of buying a house here, but suffice to say that I found a place nearby where I live now that I felt was priced right. I struck a deal with the owner for a few thousand less than the townhouse was on the market for and we’ve were out of attorney review quickly. The home inspection was done and came back stellar, the appraisal was completed and the value is right where I thought it would be and my mortgage company was lined up and ready to fund me. In the space of about a month, I was able to go through the entire searching and closing process. Not too bad.

For the few weeks that I worked through this process, I had a chance to consider how I want to arrange the 3 bedroom, 2.5 bath townhouse that I bought. I had a chance to consider what I want to do with the garage that is attached to it, what I want to do with the living room, dining room, and eat-in kitchen. I also had a chance to think about which family events I want to host on an annual basis and which events I want to host for my friends in the area. Another aspect that I considered is how I wanted to furnish the place and that’s another aspect of the townhouse that I thought about during the closing process. Luckily, my sister-in-law’s twin sister is an interior designer and she came in to help me choose colors, textures, furniture, and more!

Buying a house was a fun time and not such a bad idea. Plus, I now get to write these blog entries from the comfort of my personal home office – which is fully separate and apart from my bedroom and living space!

1. The Overall Setting. More than anything else, I like the setting of my new home and the layout of the structure. In truth, the “setting” of the new house isn’t that much different than the old house. It’s still a townhouse and it’s still in the same development. However, where my old rental used to be an end unit right on the major road going through this development, my new home is the second to last unit in the building and I like that better. In addition, the new place is situated far off of the main road and at the end of a cul-de-sac. It’s much quieter than my previous place, which brings me to my next point.

 

2. Kids… Kids All Over! Look, I’m a fan of kids getting up off their butts, getting out of the house, and running around outside playing. How many more studies do we have to read talking about childhood obesity dooming future generations? When it comes to kids and their health, I think that video games have generally done us wrong as a society. And you might be reading these comments thinking, “What’s the point here, Joe?” Well, the point is that the kids who used to live on my old block were not obese because they were constantly outside playing! And it was annoying!
    
   Let me be clear, though – I’m not contradicting myself with this statement. Yes, the kids who lived on my old block were outside playing and getting their energy out in a healthy and productive way. The issue was that they were always outside and they had that weird thing that kids have in their heads that tells them it’s okay to scream at the top of their lungs any time they’re outside of their houses. That includes the minute that the step off of the bus in the afternoon and, more importantly, the few minutes that they spend waiting for the bus every morning. I don’t have any kids, but I can tell you that the school bus stops on my old street (directly in front of my old end unit, by the way) at 7:57am every morning. I know that time because that’s when the morning screaming would end (and, presumably, start up again on the school bus, but who knows). Suffice to say that one of the best parts of the new house is that there aren’t that many screeching kids running around on my end of the block. It’s… peaceful.

 

3. Arrogant, Entitled People. Everyone has a version of this story. You know how the story goes: you live in a small neighborhood or on a block where the neighbors all know each other and there’s always that one neighbor. The one who thinks that they are entitled to something a little bit more than the rest. On the block where my old rental unit is located that person lived on the other end of the street. How did her entitlement manifest itself? In general, she believed that she was more important than anyone else. The best example I can give was during one of the major snowstorms that we had a few years ago. Everyone who lived on our side of the block moved their cars to visitor parking so that the snow plows could come through and clear out our spots. That process worked well until Madam Entitlement moved her car into our spots (I write “our” spots because at the time I had roommates)! We left a note on her car asking her not to do that because we needed our spots cleared out as much as she needed hers cleared out. Of course, like the Empress of the Street that she believed herself to be, she left a note back to us explaining that we don’t own those spots and that she has important work to do and needs access to the main road.
    
   I was waiting to read the line in her note saying, “And in case you were wondering, the answer is yes – my feces do smell like the Queen’s roses.” That’s how full of it that woman was – and still is, I’m sure. Getting away from a self-absorbed, self-obsessed fool like that was an added bonus for my move.

 

4. People With Too Much Free Time.

A closely related type of neighbor to the entitled kind is the neighbor who just has a little bit too much free time on their hands. Granted, I didn’t have many of these folks living on the old block. There was one person, though, who seemed to fit this bill. Whenever there was a bad snowstorm or whenever we had the parking area repaved and had to park on the main road for a few days, she would stand outside of her house and encourage people to call the homeowners’ association to complain. I don’t have a great deal of angst or anger towards someone like that, but I do think that they need to understand reality a little bit better. What constitutes a major crisis in their eyes may just be a minor inconvenience in my eyes. In fact, it may not be a problem at all in the eyes of someone else. It’s all a matter of perspective and people with too much time on their hands have a very bizarre perspective sometimes.
 

5. The New Place Is Newer! This may seem a little obvious, but the new place is newer than my old rental. It was built almost 20 years after the townhouse that I was renting was built. That means that I have different, better perks over here than I had in the old place. For example, while the old place had one assigned parking spot, my new house has a garage with a driveway that I park in. Another example – the old place had a standard, wood burning fireplace that worked relatively well, but was a filthy mess to clean up. The new place has a gas fireplace. It’s incredible.

 

6. It’s Mine! It’s pretty cool that I own this place. And yes, I understand that I own everything on the inside of the townhouse and my homeowners’ association owns everything outside of the walls. I’m cool with that arrangement because I get to customize the inside of this place and make it my own. And that’s just what I’ve been doing since I moved in. For example, I’m writing this blog entry from my new home office and I’m putting this office together the way that I want. Before I came upstairs to write in this office, I was downstairs in my living room that is furnished with brand new furniture that I bought and sits in a room with walls that I painted with colors that I chose (okay, my designer chose the colors – I just approved them). When you’ve rented for the better part of the last 15 years, having the freedom and mobility to do whatever you want inside of your own home is pretty great.

There you have it – 6 reasons why I’m glad to live in a house I call my own. In the future I’ll write about the financial impact of the purchase and why last spring was the right time to buy for me. Stay tuned!

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The update from the other day was based on the premise that my roommate was leaving to take a job in another state and that I needed to find a new place to live. That update also noted that I’ve been holding back the excessive additional student loan payments so I can use those funds to purchase a home in the next few weeks.

Could this all be over soon?

It turns out that the organization that was going to hire my roommate has decided to cancel all hirings for the time being. The next possible time that they’ll be bringing in new hires is this October… maybe. This is another topic entirely, but I’ve been telling my roommate for a few years that he needs to diversify his career prospects. He’s in the process of doing so right now, but let’s not digress from the purpose of this entry.

With the change in my roommate’s career switch I’ve been presented with a unique opportunity. Clearly, I’m going to push back my plans to purchase a home for a few more months. It just makes sense to rent the townhouse that I’m in through at least October, if not through next spring (I would stay through next spring in the event that my roommate doesn’t make/isn’t offered the career change in October). The unique opportunity that I now find myself in is that through saving to increase the size of my down payment, I’ve been able to put away more than the $17 thousand that I need to eliminate the remaining balance of my student loans. Most folks would make the quick decision that since I’ll be staying in my rental for a few more months, if not longer, then I should some of these funds that I’ve saved up to retire the student loan debt once and for all.

After all the aggravation that I’ve been through with my student loans, that’s an extremely appealing option!

However, as a guy who tries to be reasonable and thoughtful on issues of money and personal finance I can’t help but think that I should just save this money and use it to increase the amount of my down payment when I do eventually purchase a home. Retire the remaining balance of my student loan debt or keep hording money for an eventual down payment? It’s an interesting dilemma to consider.

Trust me, I’ve been giving this issue some deep consideration.

I think the benefits of saving the money for a future down payment are obvious. The total amount of the mortgage is reduced and since I didn’t plan on putting 20% down for the new home, by increasing my eventual down payment I’ll be able to put down 20% and avoid having to pay private mortgage insurance. Further, the more you put down, the better rate you can demand (even in a world of low rates). As a guy with near-perfect credit, increasing the amount of my down payment would be an ideal use of these funds.

And yet… I can’t shake the idea from my head that if I decide to use these funds to retire my loans, then I’m literally about two weeks away from having absolutely no student loan debt, period. Gone. Done. Eliminated. Game over.

The benefit of repaying my student loan debt? In financial terms I’d be retiring debt that is currently accruing interest at 4.25% and (when I purchase a home) replacing it with a mortgage at a lower interest rate. That’s good for my financial health over the long-term. The bigger benefit to retiring my student loans, though, isn’t something that you can easily quantify. The bigger benefit is the combination of financial freedom and the incredible feeling of accomplishment that comes with repaying such an immense amount of debt. The benefits of saving this money aside, I just can’t shake the idea of how awesome it would feel to know that I repaid $121 thousand in student loan principal and another $30 something thousand in interest in under 7 years.

For those of you who are analyzing whether or not I would suffer from using $17 thousand to retire my student loans, here’s some information for you. If I wait until November or December to buy a home, I can pretty much replace that entire $17 thousand with new income from the summer months. In essence, I’d net out even and wind up in a state of stasis, but with one less bill each month. My minimum student loan repayment is $333.50 per month – so that amount would be put towards my future down payment, too.

What to do… decision, decisions… What do you think? If you were in this situation – what would you do?

I’ve paid SO much more than this in student loans over the last six and a half years!

Sometime towards the end of January/early February, my roommate told me that he finally received a call back for a job that he’s been waiting to hear from for several years. He said that if he passed the different qualification rounds (he did and there was never a question on whether he would) and the agency offered him a position (which was and remains likely), then he would have to move out at some point in the middle of May.

Just like any sane person, I reacted to this news by weighing my future housing options. Through this process, I realized very quickly that my options for selecting a living situation in 2013 are much different than they were 5 or 10 years ago. Today, I don’t really need a roommate to pay for the too-high rent required for the three bedroom, two and a half bath townhouse that I currently live in. However, only having to pay half of the rent and half of the utilities obviously makes my financial life easier and I can’t complain about the roommates that I’ve had over the years – they’ve all been great with paying their share of the costs. And they’ve been good guys, too.

However, I’ve gotten a bit older and what I’ll accept for living space today is different than what I would have accepted 5 or 10 years ago. For example, I could very easily continue life as a renter and move into a less expensive condo or apartment that is much closer to the beaches and the bars that I go to (on those rare occasions when I actually go out to the beach or bar). But not only would continuing to be a single renter be a poor use of my income, living in those areas is not really where I want to be at this point in my life. Granted, “those areas” are only minutes from where I live now, but as a guy with an aggravating commute I’d rather be as close to the main highways as possible. The area that I live in right now is less than a mile from the Garden State Parkway and less than 5 minutes to other major highways in the area. It’s nice to have that type of access to main highways.

I’ve quickly gotten off topic here. The point of this entry is to provide a brief student loan update! I’m in an awkward position right now with my students loans. For the first time in years, I haven’t made any extra, excessive payments to the USED / MOHELA loan because I’ve been saving my money to buy a new home. Of course, as you might imagine there are two aggravating items that I have to report on about this situation.

First, I have $17 thousand still outstanding on my student loans. What is aggravating about the outstanding balance is that I have the entire amount (and then some) sitting in a savings account right now. Why not use the money in the savings account to pay off the balance of the loans, you ask? Simple. I’m saving those funds to buy a house. Just like the detour I had to take last year when my Honda Civic crapped out and I bought a brand new Ford Escape, I’ve been presented with a situation that requires me to change my financial goals.

Second, between principal payments and interest over the last nearly 7 years that I’ve been repaying my students loans, I’ve given private entities like NJHESAA and MOHELA and government agencies like the USED some $104 thousand in principal payments and some $35 thousand in interest payments for a combined nearly $140 thousand no longer in my possession. Just to give you a perspective on how that type of repayment has had a lasting, real impact on my life – the $140 thousand from the repayment could have easily combined with the $17 thousand that I’m sitting on to allow me to buy the condo that I’m considering purchasing – with absolutely no mortgage.

No mortgage.

Of course, that’s not the situation that I’m in and that’s not the way my financial life has progressed. And I’m not mad… Am I aggravated about it all sometimes? Yes. But definitely not mad. In fact, I’m grateful that I’ve been able to position myself such that I can buy a home at 32 years old when there are so many people in my generation that just aren’t able to do so yet. And the path that I’ve taken to get here will allow me to decorate the walls in my soon-to-exist-home-office with various degrees and professional commendations. Not such a bad outcome, really. Does buying a home mean that my plan to retire my student loan debt by this summer is going to change? Yes. Unfortunately, I’m going to have to push that repayment plan out a little bit longer. But pushing the repayment plan out a little bit longer because I’m buying a home isn’t so bad!

So instead of reading about how I retired my student loan debt in the summer of 2013 you’re probably going to have to wait a few extra months – possibly a full year – to read that update. In any event… stay tuned!

When I write “lack of ownership” what I mean is that owners have a different approach to their living space than renters. Owners want to improve or stabilize their living space in an effort to increase the value of their homes. Renters, on the other hand, by and large don’t care about increasing the value of the property (in some respects, they are against the value of the property increasing because it forces a higher rent on them). What I’ve noticed, though, is that people living in rental situations actually accept a lower standard of living. Let me explain with a visual example.

The picture below is what my rug looks like in the living room of my apartment:

Some spots on the rug before OxiClean

No, that’s not some weird modern art pattern on the rug – that’s filthy dirt and stains. It’s disgusting. It looks like they purchased this rug from a battlefield hospital during the Civil War. It’s gross. Now most folks would look at this and think, “Just clean your rug, Joe. Stop being a pig.” And those people would be morons.

The rugs were like this when my roommates and I moved into this place a few years ago. After a few years of complaining, our landlord paid for the rugs to be professionally cleaned. Like most professional cleanings, the rugs looked amazing when the job was done… and then a few weeks later they attracted an incredible amount of dirt and filth like magnets.

But my roommates and I are trying to take the typical property owner mindset and fight back a little bit. Below is a picture of what the same spot on the rug looks like after we hit it with some OxiClean.

Rug after OxiClean

Not too bad, right? Sure, there are dozens of disgusting stains all over the rug, but hitting them with OxiClean and getting this result is a good use of our time because it improves the feel of the living room. Who knows? Maybe after two or three applications of this stuff the stains will actually be gone.

Note: The pictures above were taken over a month and a half ago and the stain is still gone. I’m beginning to think that OxiClean can actually clean the rug and keep it clean for good. That would be a nice change from the “professional cleaner” that the landlord spent several hundred bucks on last summer.

Anyway, I don’t have to write too much more about the topic because you have this half finished entry to read. Enjoy!

However, with this article, I decided to write something a little bit different – how my housing situation impacts my student loan repayment schedule.

On the surface, some people might not see the very real relationship between paying where I live and how that impacts my ability to repay my student loans. The truth, though, is that aside from my self-prescribed huge payments to the student loan companies each month, my next biggest expense is rent. Ever since I started renting in the Monmouth County area, I’ve been lucky enough to share the rent expenses with roommates. Since I’ve been able to share the rent costs, my monthly rent expense has ranged from $500 per month up to what it will be come this July – $893 per month. In the grand scheme of things, that’s not so bad.

Down to $84 thousand...

However, if I had to take a guess at how much money I’ve spent on rent since I began renting in the Monmouth County area, I’d estimate that I’ve spent about $80,000 on rent. That’s a lot of money, huh? In fact, now that I owe about $84,000 in student loans, you could see how there might be some connection there… But focusing on what I’ve already spent in rent isn’t worth the aggravation. That’s in the past and, frankly, I make a decent enough annual salary where I can afford to pay a good rent to live in a good place.

There was probably some potential in that entry, but it’s over now!

New Jersey seems to be ready to confront that problem head on. Last week, the New Jersey State Senate passed a bill that would require the equivalent of Finance 101 for New Jersey’s students. As reported on the Asbury Park Press website:

High school seniors would be taught how to write a check, manage credit card debt and obtain a mortgage under a bill advanced in the New Jersey Senate.

The Senate Education Committee approved a pilot program in personal financial education despite concerns about overloading the high school curriculum.

I often draw on my experience in advising college students, but one of my previous jobs was working for a real estate management company. One of our core businesses was renting houses to college students. We used to have college kids (majoring in business and finance, no less) walk into our offices to pay rent and hand us blank checks because they didn’t know how to fill them out. Really!

The mortgage portion of the new Finance 101 course will be interesting to watch unfold. I can almost hear the banks salivating at the idea of young, unworldly individuals becoming “pre-certified” in their first-time home buyer’s program – before even stepping foot into college. I’m a major proponent of First-Time Home Buyer’s workshops because they are effective in weeding out problem borrowers. In fact, I was at an event last week where the attendees were talking about how the studies are all showing that the mortgage meltdown mess is not hitting the first-time home buyers and those who have graduated from first-time home buyer programs. Talk about a good investment in the future, huh?

The Finance 101 course could be great. I hope that it succeeds as a pilot program and quickly spreads around the rest of the state and the nation. The more people know about money, the better off they’ll be in this world.

This guy tried to bribe my former boss (who was also a dolt). He wrote down a number on a napkin, passed it to my boss, and after my boss told him to shove his napkin up his ass Weldon ordered his henchmen to make life a living hell for my former company. I used to work in the rental business and we couldn’t get Certificates of Occupancy without threatening a lawsuit. Our college houses were put at the top of some indefensible “list” created by Weldon and his former Chief of Police. Our tenants received citation after citation. We would have tenants receive parking violation citations while the house NEXT DOOR would not receive them.

Terry Weldon is the epitome of a scumbag and I’m glad that the FBI stung his ass. I only hope that they keep digging deeper and go after the rotten bastards that worked underneath him and acted as his henchmen. Slimy, scuzzy, no good idiots.

And now many of you see where my disgust for Ocean Township stems from…

What do I mean? As one of my old college professors used to say, “You don’t live next to the community pool and complain about the swimming!” I’ve been in and around the Monmouth University area for some 9 years now and each Fall semester the same mind-boggling phenomenon takes place: the people who live in the area around the school year-round are amazed that college students are moving into the same rental house that has been used for college housing for the last 25 years. And “it” begins. What is “it?” This is when the otherwise normal local people start calling the police for everything under the sun.

Last September I had friends moving into a house with their parents present helping to move furniture and the cops were called because the family car was idling on the street as the family moved boxes out of the car. Think about that. Some complete low-life is sitting in his or her house (in this case “her”) and watching every move you make – even the simple act of taking a box out of a car!!! Talk about creepy. And since some of you might be wondering, that house never had the police come back to it because there was never a need (no wild and crazy parties, kids pissing on the front lawn, loud noise, or any other stereotypical BS nonsense). So I hope that neighbor was happy with themselves – they called the police to tell their “neighbors” to move their car because, frankly, they would have looked like complete assholes if they asked this kid’s parents to move the car.

If you’re going to Monmouth University next week…get ready for it. The locals around here love stirring the pot. At the same time, don’t be a moron and be a bad neighbor. No one wants you moving into their neighborhood for 9 months if you’re going to be out of control mental patients. Act like normal human beings and then when these crazy locals treat you like LESS than a human being, you can call them out for it (which I’ve done on a few occasions). And don’t expect logic to play a role in their arguments, either. I went back and forth with a local guy via the local newspaper’s Op-Ed page once. My argument was based around the fact that the university has been in existence since 1933 and this guy knew what he was getting into when he moved directly down the street from it. Do you know what his cockamamie response was?

He bought his house is the 1980’s and the school only “officially” became a university in 1994 – so he has been in the area longer. Think about this – the buildings, professors, students, curriculum, etc. was all the same on one day…then the “college” became a “university” and apparently that reset the clock in this bozo’s head. Moron.

Well, now that I’m completely off track it’s probably a good time to end! Here’s hoping that the incoming college students don’t have to deal with insanity at the local level and that the local people act in good faith, so long as their new neighbors act in good faith.