Money From The Sky

The Wife and I really would like to purchase a house this year. We have been putting nearly a grand each month for the last 3 years towards nothing. Both of our jobs are now over on the southwest side of town and our condo on the northeast side of town. This takes both of us roughly 30-45 minutes of commute to get there. We have looked at apartments and condos down there, but there is nothing worth moving to. There is a really nice community down there that have some very nice homes for some reasonable prices, I think.

We do not know anything on buying a home and have no idea where to start. The one thing we do know is that it is definitely a buyer’s market. Everyone seems to have an opinion on the market.

Global Insight, a Waltham company that crunches economic data, projected last week that housing prices would keep sliding well into 2009.

Daniel Mudd, chief executive of mortgage giant Fannie Mae, said in a speech yesterday that prices likely would not begin to recover until 2010.

And Robert Shiller, a Yale economist famous for forecasting the burst of the dot-com bubble, has warned this slide could last five years or more.

There are contrarians.

The chief economist for the National Association of Realtors said the real estate market already has hit bottom. The group projects prices to hold steady in 2008, and sales to increase slightly, before the market roars back in 2009.

The realtors association last year predicted that 2006 was the bottom for the real estate market, and that sales volume and prices both would rise in 2007. In fact, the trade group overestimated sales by 700,000 units, and prices dropped 2 percent.

pulled from: Forecasters: No quick end to housing ills

It is hard to say when the housing market will turn back around, but by the time we would sell a house if we got one this year would not be for 6-7 years. With us currently paying of our debt we would not have a down payment. No idea how much that will hurt us, but it seems everyone runs specials with no money down for first time home buyers.

For now we will keep paying of our debt and research this home buying process and hope that we will be able to. If anyone has any tips, suggestions, where to start, it would be a big help.

This is a list of what I have currently setup for this year, 2008.

1.) Setup a Google Docs - Spreadsheet (everything revolves around this)

• On the first sheet I labeled it, Debt. On this sheet I listed all of our current debt, with the current balance and current monthly payment for each card. This one little step here is a big reality check for a lot of people and it definitely was for me as well. You have a card here and a card there and the out of sight out of mind rule really comes into play, but when they are all bunched together in one list, OUCH!
• I created a second sheet and labeled it, January - Forecast. On this one I listed all of our bills (rent, cable, credit cards, etc.) This is all totaled up to project what we will be spending in bills. Then I have listed my wife’s and I’s take home pay for the month to see the money coming in. Our Income is then subtracted from our bills to see what we have left for the month to spend on food, gas debt reduction, etc.
• I created a third sheet and labeled it, January - Budget. I have never created or restricted myself to a budget before so this will be a learning and tweaking thing for me. On this sheet I took an amount from what we have left after we subtracted our income from bills. I put this total at the top of the sheet then underneath it I started a item list of what we purchase. This includes our food, gas and entertainment or everything outside of bills. This column totals up and subtracts itself from the budget number to show the remaining budget left.
• I created a fourth and final sheet and labeled it, January - Item List. This sheet will keep a running total for the entire month of all our money coming in and going out. I list the date, item and the amount under either debit or credit.

The money we have left at the end of the month after the bills and budget the wife and I will be putting the money towards our lowest credit card balance. Both of us decided it would be best for us to go the debt snowball route. I first read about this at the blog, Get Rich Slowly. I would recommend checking them out because I have received some great advice from reading it daily.

That is the current plan as of now. If anyone has any suggestions or thoughts I would love to hear them. Hopefully this will work for me, but I am sure there will be a lot of learning and tweaking the plan along the way.

Welcome to my personal finance blog. I have tried blogging in the past but never really stick with it. I hope this to be the first blog I actually stick with. I will begin with just a little background information on myself and what I hope to accomplish with this site.

I am a 25 year old male and recently married this past July. I am a web developer for an eCommerce store and my wife is a kindergarten teacher.  Both of us are currently in debt, roughly $20,000 combined. With both of us now working full time, steady jobs we are ready to get out of debt.

I believe we have a good system setup so that we can accomplish this. With this blog I will document what we are doing and what we discover. Hopefully as people begin reading this they will be able to offer tips and guidance along the way.

I know that there is no way we will eliminate all this debt in one year, unless we stumbled upon some unfound money which is highly unlikely.

Our other goal/dream this year is to buy a house. Our lease on our apartment is up at the end of May and would love to be moving into a house so we can stop putting roughly a $1,000 a month towards nothing. Is it realistically possible for us to do this? I have no idea, not a single clue on the home buying process. Rates are very good and home prices are very low right now, so we are going to be trying our hardest to make this happen.

That is all for now. The next post I will go over our current debt plan. Hopefully this blog will turn into a good resource for others and will help me out in this process.