While I’m sitting in my car waiting for my kid’s after-school activity to wrap up, I suppose I may as well write a blog post (on my phone), and it may as well focus on our finances, seeing as how this is supposed to be a personal finance blog.
As I think (?) I mentioned in an earlier post, our money situation has improved since last summer. My partner and I both recently received promotions and associated raises. Granted, my raise was more like a “raise,” but still, it boosted our overall income and we were/are thrilled.
With more cash coming in, we started delving into the possibilities:
We can finally buy a house!
Or pay off our student loan!
Or max out our 401k accounts!
Naturally, we hemmed and hawed and deliberated and crunched numbers and ultimately chose option D: NONE OF THE ABOVE.
Because even with more moolah, everything is so expensive right now that it’s hard to make any big financial moves.
Buying a house: I had some hope that we could actually make this happen. We even filled out a pre-approval application for a mortgage. But when we started researching the local housing market, we discovered that even the smallest fixer-uppers in our area are going for $100K-$200K more than they were at the start of the pandemic. Or rather, they’re being LISTED for $100K-$200K more, and they’re SELLING for even more than that.
We realized that, at best, we’d maybe be able to “afford” a $400K-$500K townhouse with a tiny or nonexistent yard (assuming we miraculously won the inevitable bidding war).
We actually did consider it. But if we’re going to go into debt to the tune of nearly half a million dollars, I sure as hell am not sharing walls. I want my own detached turnkey house with a yard and a garage in a quiet neighborhood.
We can’t get what we want, so I guess we’re sticking with our little overpriced rental.
Paying off our one remaining student loan: Turns out that the amount we currently have in savings is roughly equal to our current loan balance. We discussed obliterating the loan so that we can be done with the damn thing once and for all, but then inflation hit, and now draining our reserves doesn’t seem like a good idea. Everything is so expensive right now, especially food, gas, and housing; I’d rather have a nice fluffy little nest egg on hand just in case we need it.
We may revisit this option once we sign a rental renewal next month. Until then, I want to make sure we can score another lease if our landlord pulls anything shady.
Maxing out our employer-sponsored retirement accounts: We had seriously planned to do this in 2022, but again, what with inflation, money just isn’t going as far as it did a couple of years ago. Combine that with recent stock market volatility and investing every available penny isn’t that appealing. My partner is still maxing out his, but I’ve reduced my contribution to $10K a year (still about 20% of my oh-so-enviable salary).
So that’s where we’re at.
Higher income: YAY!
We really know how to time it. Nevertheless, we’re doing just fine, and right now fine feels like a victory.