Considering Options

I’ve been doing a lot of considering of my options, because I do have options.

My main priority right now is still paying off my Lasik surgery and my credit card. If I am diligent I can pay both off by April of 2018. February I am up for a raise, which might be nice, though I haven’t done a whole lot to earn it. I should start stepping up my game at work.

But, after those are paid off I’ll be back to having around $1000 extra a month, and the way I see it I’ve got 4 options in how to spend that for my life moving forward. Once my lasik and credit card are paid off, the next months money will go to paying off my iphone and ipad. I should only owe a couple hundred bucks on each by then, and be able to pay them off, making my cell phone bill actually less than the $75 work gives me towards my bill. So my only bills with be car insurance ($70) and student loan ($400) and what I pay mom ($350). However, once I move out I will only need to pay mom $120 (the amount of the monthly payment for the small bit of student loan in my parent’s name).

That will leave me around $1600. Factor out gas and groceries, round down, and I’m probably still looking at $1200 or more a month to play with.

So, what options do I have?

Option 1:
I could go the route that gets me my own place the fastest: an apartment.  I could get a small apartment, something around $600-$800 a month. I’m not entirely sure on what utilities would be on top of that, but it would severely limit my ability to save for any kind of future plans. As such, I think though I really want to get out, this option is not one I would take.

For the other options they would requiring saving up at least around $8-$10k before I can do anything, which means no actually taking any kind of action until around the end of 2018 early 2019.

Option 2:
Get a home loan around $80-$100k for a house & land.
This I think would be the standard option most people would take. It means a mortgage, and the handy google mortgage calculator says a $100k home loan, 30 year mortgage with 7% interest would be $665 a month. That’s about what I could spend on an apartment, and I’d have a legit house I’d be working on paying.

There are reasons I am not keen on this option. Firstly, that’s 30 years I’d be paying a mortgage. I’ll be in my 60s before it’s paid off. And what happens if I lose my job in that time? I lose my house and have nothing. People say I can’t think like that or I’ll never have anything and they are right, but I worry. Also, by the end of that 30 years I won’t have paid $100k for that house, I’d have paid around $240k. And THAT is the major reason why I would prefer to not have a mortgage at all, or to have one that is more like 10 years, because paying almost one and a half times the amount something is worth seems terrible to me.

Option 3:
Get a smaller mortgage for around $30k and use it to be 4-5 acres of land. I would get a 10 year mortgage, and even with 7% interest (which is really high which is why I am using it, I always like to use the worst case scenario so I’m never surprised when things are more than I expect) the payments will be less than $350 a month.

I am strongly considering this option because I do dream of someday having horses. I would also like enough land to be able to kind of be a bit of a hermit, build my house where it can’t really be seen from the road, not be able to look out my window and see the neighbors, etc.  This is the only way I could get more than half an acre (aside from living with my parents for the next 10 years while I save up to buy outright).

Once I’ve got the land, the plan will be to build my own house over time.

Option 4:
This is the option that was the one I had intended and described before. Save up around $12k and buy about an acre flat out, no mortgage, then start building.  This option has the bonus of being the only one that will mean I am mortgage free for life, and that any extra money once the house is built can go into paying off my student loans as soon as possible.

I am mostly considering between options 3 and 4, because both have pros and cons.

On the one hand, option 3 would give me the ability to someday have a horse or two. But on the other hand that is assuming that I’ll ever be in a financial position to buy and maintain a horse or two. With option 3 I would still have a fair amount of extra money after my bills, because a $350 mortgage aint much. But it adds up with utilities and other expenses of owning and maintaining a home. It also hinges on the hope that I’ll continue to make more money as time goes on. But what if I lose my job?

Option 4 is the one that is the safest bet in some ways. I wont have a mortgage, and once I buy the land it will be my land, I wont be at risk for losing it if I lose my job. It’ll mean I’ve got more money to build with and can build my house sooner, which means moving out sooner. But it also means probably less than an acre of land. No room for horses, no room to be secluded. Probably neighbors to either side. Just not ideal.

However, I am leaning more towards option 3. It’s not a bad thing to dream. I could get 5 acres and then never be able to own a horse or keep a horse on it. But I’d still have that space, the solitude. And less than $400 mortgage isn’t bad. Hell, if I only limited myself to $30k ($20k if you minus the $10k down payment ill save up) the mortgage payment will only be $232. I’m not sure if I am able to pay down more sooner or if you’re locked in, but if you can pay it sooner, I could try to pay it faster than the 10 years.

It’s looking like option 3 may be the one I go with.

So, that said, here is the revised plan.

Step one: Pay off Lasik & CC by April 2018
Step 2: Pay off my ipad/iphone in May 2018
Step 3: From June start saving up at least $1k a month for the next 10 months.
Step 4: In March 2019 for my 35th Bday present I get a loan and buy myself around 5 acres of land.
Step 5: Start building my house!

Step 5 of course needs more work. Over the next couple years while Steps 1 through 4 work themselves though I’ll be designing the house I want to build, and trying to price out what materials I’ll need to buy and what they will cost, and what I can try to salvage. I’m thinking I’ll need to save up a few months and purchase the initial wood for framing.

I’d also like a basement so my water heater and washer/dryer and AC can go down there. So I’ll need to either pay someone to dig the basement out or rent something to do it myself, but I would have to pay someone to lay the foundation. So while I get my land in March 2019 I may not be able to take any big steps towards building until later that year.

Right now, however, my focus is paying off my lasik and CC, and designing my dream home and pricing it out.  This is the worst part. Come March 2019 I can be excited and be actively working towards stuff. Once I’ve got my land I can start collecting stuff I could use.  Right now it’s just the waiting game while I struggle to not spend money.

I’ll try to amuse myself and distract myself with World of Warcraft and designing my house.

 

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