The Dream of Owning a Home

It's no wonder that home ownership can become a burden in the US: stagant salaries, the burst of the housing market, foreclosures, changes in loan approval, rising energy prices, the value of mobility.

Despite the turmoil of said markets, Mike and I still want a house one day.  I've never thought of renting as "throwing money away," especially now that we have a wonderful place to rent with no headaches.  However, a home provides a certain level of permanency that a rental contract does not. 
I'm not here today to talk about the intracacies of buying a house, something we condo-dwelling leasees have no experience in.

Instead, I want to talk about whether the benefits of a home outweigh the disadvantages.

When I look at our finances, I see no room for saving for a down payment.  We're still struggling to clear off some older debts and not use our credit cards for gas and groceries each month.  At this point, the discussion of a home is more of a philosophical one, even though it's on our minds as we think about the future.

But I increasingly wonder whether owning a home is really worth it.  

We have friends whose children are our age and have happily rented their whole lives.  People abroad live like this. Virtually everyone our age rents. Turn back the clock some and you'll find it was trendy to live out of a hotel.  

On the other hand, we know people who feel saddled by their homes.  Empty nests once perfect for multiple children now too large to take care of, mortgages out of control, property taxes doubled, great houses untouched on a dismal market. 

When I look at the advantages of owning our own place, I see:

• A place that isn't subject to the rules of a lease, such as the number of nail holes put into the wall or how many pets we can have.
• Having a space that can be modified if we wish - walls taken out, upgraded appliances, colorful paint, different or no carpet.
• The advantages of better controlling our energy consumption, such as programmable thermostats, dimmable light switches, and maybe renewable energy.
• The potential for more square footage and storage space.
• The ability to pay a mortgage that's lower than our currently monthly rent.

However, I see some drawbacks that make me wonder:

• A house means lost mobility - you can't just pick up and move anymore.  In this economy, being mobile is a huge boom and I'm not sure if I'm ready to lose that.
• Maintenance costs are higher - no landlord to take care of it.  
• Same with updates, both cosmetic and structural.  A roof replacement, for example, will easily set you back thousands of dollars
• You have property taxes to deal with.
• You're investing in something that you may not see a return on.
• Rent doesn't have interest - mortgages do.

Right now, it's hard for me to look at these lists and think that owning a home is worth it.  Maybe it would be more attractive if we were in a better financial situation.  All I know is that owning a home is a major expense - one that should never been taken lightly.  We could never swing it as is.   

Perhaps it wouldn't be such a bad thing to rent into our late 30s - the time frame I imagine it will take for us to stabilize our income and save for a down payment.

What are your thoughts on home ownerships -- thumbs up or thumbs down?  What are your housing plans for the future?

Lowering Our Utility Bill by 20%

Back in April, I wrote about our utility bill and peak hours.

Since then, we've lowered our energy usage by over 20%.

Here's what our electricity consumption has been:

May - 693 kwh / 28 days = 24.750 kwh per day
June - 681 kwh / 32 days = 21.281 kwh per day
July - 539 kwh / 30 days = 17.967 kwh per day

How'd we do it?  One simple trick.

We only ran the laundry machines and dish washer on the weekends or after 8pm during the week.

(source)

Seriously, that's it.  It's all about the peak hours, man.  Ours run from 7am-8pm, so it doesn't make sense to pay more to do laundry doing those hours when you can do it for cheaper in the evening or on weekends.

Now, this isn't a hard and fast rule.  A handful of loads totally sneak in during the day once in a while, but we still lowered our energy use by a respectable amount.

I'll be interested to see how the next few months go.  With Mike not at home all day and I only run the air for a short period at night on miserably hot days, our kilowatts should continue to fall.

The savings to our actual utility bill, however, are not so straight forward.

Read Date	Total Usage (kWh)	Billed Amount†	Days Billing Period	Average Cost per Day	Average Use per Day
06/11	539	$87.95	30	$2.93	17.97
05/11	681	$106.94	32	$3.34	21.28
04/11	693	$89.05	28	$3.18	24.75

What happened here is that we voluntarily changed our utility rate to be higher. 

You've probably picked up on our whole "Go Green" thing.  Well, Alliant (our energy company) just started a renewable energy program called Second Nature.  

You can select to have 20, 50, or 100% of your power come from renewable energy sources.  The catch is that you have to pay a slightly higher rate because harvesting clean energy is more costly (at this point in time).

(source)

I was super excited about this opportunity.  For commercial buildings, these are called Renewable Energy Credits and help a business to offset their carbon footprint.  Now it's available to the residential market.

We selected the 100% option.  As renters, we don't have the opportunity to install geothermal or throw up solar panels.  This is the easiest way for us to support clean energy.

The price tag?

A whopping $0.02 cents extra per kilowatt.

Before, we were averaging about 12.7 cents per kilowatt.  Now, it's about 15.7 cents per kilowatt.

That's why you see a jump from the April to May bills, as May was the first month with the new rate structure.

What this means is that from here on out, we'll be paying $20 extra a month to have clean energy.  

End result - we lowered our energy consumption by 20% only to raise our bill by 20%.

To some, this may seem odd to deliberately lower your usage just so you can afford to increase your bill.  But to us, it's all about the kind of impact you can make with a meager dollar.  $20, in this case.   

Would you ever volunteer to raise your energy bill to support renewable energy?

Saving Up for Bikes

Hubby and I hit up the local bike shop yesterday to check out some options.  The sales guy was super helpful and I not only learned a ton, but have a good idea of what we need.

See, we recently lost a car in an accident (long story, not my fault, overpass still destroyed the car, only liability insurance).  So we had to suddenly evaluate our car situation.  There is no way we could add another loan payment to our monthly obligations.  Second, we're tired of getting used cars that don't last long or come with hidden problems.

Luckily enough, we're in a position to only need one car right now.  Though Mike will be starting up classes, they're either at night or on the weekend.  Second, we live right on a bike trail, which not only goes downtown where Jennie works, but literally right behind her building.

So bikes it is (with careful planning until then so Mike isn't stuck home every day...).

Like most people, we've gone the cheap route on Wally World bikes.  Twice.  I estimate we've probably spent $500 on bikes in the past 8 years.  Cheap bikes are exactly that: cheap.  They'd break, be uncomfortable, or be easy to abandon.  Which I shamefully admit we have done.  Long-term planning + college students ... well, you get the picture.

So this time around, I want a serious bike.  Which also means a serious pricetag.  I want something that will get me to work, get me exercising, and provide something Mike and I can do together.   

Based on the models we looked at, we're looking at spending approximately $900 on 2 new bikes.

Trek 7100 Hybrid Bike Path Bike: $420 (ish) + tax

That's a cheap used car! 

But I have to tell myself, these ARE in place of a cheap used car.  This equipment is promoting entertainment, health, and environmentalism all in one.  That's a good combo for nouveau hippies like us :)

So to purchase these bikes circa April, when I'm hoping the snow will melt, we have to squirrel away around $225 a month into savings.  Sigh, particularly when we've been averaging $60 a month, and that in itself has been steep. 

Of course, we are going to look at some more options, particularly national chains like Dick's or Scheel's.  A friend also suggested checking out pawn stores, which is a fantastic idea.

Regardless of getting the money together, I am excited about this venture.  It's perfect in so many ways.  And the best part: we've both resolved to not buy a second car until we can do so upfront, no loan, gently used. 

Any other suggestions for getting a good bike?