Finances vs. collecting

[insektmute]

So I find myself at a bit of a crossroads lately - pay more per month to live alone, or continue on with the roommate thing, and have more money to burn.

I'll spare the endless backstory, and simply say that now that I'm inching closer to 33, my willingness to be around lazy alcoholics who spend every day smoking pot and pounding through a case of beer a night is basically 0 at this point. On the other hand, I'd be paying out $200-300 more for expenses per month, which means a considerably smaller budget for fun stuff.

Any advice or anecdotal experiences here? I'm mostly curious about who else has decided to live alone, and if you have any tips on keeping your money straightened out.

Edit: I feel the need to point out that I'm not some prudish conservative straight edge dood or anything. I love microbrews and good vodka, smoke cigarettes, hang around in dingy clubs once in awhile, and so on... but spending every single day completely hammered when you're over the age of 25 is just childish and stupid.

[disgaeniac]

So I find myself at a bit of a crossroads lately - pay more per month to live alone, or continue on with the roommate thing, and have more money to burn.

I'll spare the endless backstory, and simply say that now that I'm inching closer to 33, my willingness to be around lazy alcoholics who spend every day smoking pot and pounding through a case of beer a night is basically 0 at this point. On the other hand, I'd be paying out $200-300 more for expenses per month, which means a considerably smaller budget for fun stuff.

Any advice or anecdotal experiences here? I'm mostly curious about who else has decided to live alone, and if you have any tips on keeping your money straightened out.

Edit: I feel the need to point out that I'm not some prudish conservative straight edge dood or anything. I love microbrews and good vodka, smoke cigarettes, hang around in dingy clubs once in awhile, and so on... but spending every single day completely hammered when you're over the age of 25 is just childish and stupid.

I agree very much w/ a lot of this -and- sounds like we share very similar vices & perspectives on things.

Too bad you're not in N.J.

I'm not 'looking' to do so, but, for the right friend/person...I could come up with an extra bedroom or two to rent out.

Maybe raise your sights & standards on what "acceptable" room-mates are for you & find some people that you'd enjoy living with more...and...maybe at the same time, find a bigger and/or nicer place?

[matt]

It sounds like I was you a few years back. I moved out of my old apartment and away from drugs and constant drinking. It really drains on you, especially if and when you are trying to make something of your life. I rented a home and never looked back, even losing a few friends in the process. It's really sad to think that I could go visit them 10 years from now and their life will be the same. All the while I'm gainfully employed, healthy, starting a new business, running VGC, etc, etc.

[matt]

oh and as for the budget goes...yes it hurts. I ended up paying about $400 more a month for my own place. The finances will be rough for awhile but you'll adapt. Depending on where you live, you may even want to look into owning. The market is amazing for buyers right now. I'm looking right now and am able to get a low interest mortgage for WAY less than my monthly rent. I'm even eligible for a program where the government pays all but 1% of my down payment and closing fees. If you have any desire to stay put for 5 - 10 years, do it.

Regardless, if you stay put you are just putting off the inevitable. You can make it work on your own and it'll really help you get your shit together.

[soera]

Lots of truth in this thread.

My suggestion is along the same lines as Disgaeniac. You can have the best of everything if you find legit roommates. I totally agree on the wasting of time on doing nothing but getting high and drunk all the time. I quit most of that when it wasnt that hard to chase down anymore (after turning 21 basically).

I did live alone for a long time. I wouldnt suggest doing what I did to save money as that was play EQ any hour I wasnt working. I also had a pretty cool job for a single guy delivering pizzas. My tips were enough to pay all my normal bills and gas and my paycheck covered the rent with a lot left over. Plus I could eat pizza/wings/pasta/sandwiches from work anytime I wanted as long as I was on shift.

[scott]

For me, I was around 25-26 when I finally left home. After that I had an apartment on my own for about a year, but hated the neighbors and the fact that the walls were so thin and you could hear every conversation that happened next door. I really like living on my own and not having to answer to anyone else or bitch about not sharing the work load on chores. But, I wasn't the greatest about financial responsibility and was having problems keeping up. Cause at that time, I was playing music, drinking and hanging out w/ all of the same friends Matt mentioned plus buying any new game I wanted as they came out.

After a year I had enough, and my sister had bought a house. So I moved in w/ her to help her w/ bills. Of course, this brought me back to the days of not having to dole out a bunch of money for living alone. So while I was living there, I was able to focus on gaming pretty heavy again and spent a lot of money on my Saturn and Castlevania collections. But after 3 years of that I was ready to be on my own again and though I wasn't looking, my house deal fell in my lap.

While my living expenses have doubled, and I'm now in charge of all the bills again. I think I'm ready for it this time. Plus it's so nice to be one my own. I don't have to get pissed off because someone else's mess is covering the kitchen or get yelled at cause I started a load of laundry w/o checking to see if anything else needed to get put in with it. Sure it means I have to watch what I spend now, and have to strategically choose what game purchases are most important to me. But it's worth it.

I'd say, if you can afford it strike out on your own. And like Matt said, the housing market is waiting to be plucked in a lot of parts of the country. If you can find a sweet deal on a house and get out from renting. You'll be building equity and you'll be removing yourself from your current situation. win/win. Sure some hobbies will take a hit. But think of it this way, you'll be able to work on your backlog.

[insektmute]

Wish I could afford a house, but even renting would probably require 2 more people to pull off, unfortunately. It's weird, because houses have held pretty steady for buyers - usually around $120-300k'ish, depending on the size and area - but rent prices have gone up like crazy the last few years. I used to be able to get an apartment around $650-700 for around 900-1200sqft, now it's more around $750-900, houses are generally around $1200-1500 to rent if you stay away from trendy areas.

I'm not entirely against getting a different roommate, but I have to admit, the idea of not having to worry about anyone else really appeals. Maybe a better way to frame it is, I make a relatively paltry $11.88/hr - roughly $22,800/yr before taxes. Finances or sanity? :p

I think you're right about putting off the inevitable, Matt. Never have lived alone, and I know a few people who work here that manage, even if things are a bit tight.

[patrickmeansly]

dont know if i can help but here is my story:   


I been living by myself since I was 19, got evicted out of my apt at 24, and it sucked but I just had nothing, which is how I managed to pay my rent and power.  I did and still do smoke weed a good bit lol.  Certainly not everyday, but a couple times every few months when I get a good deal on a good supply.  But anyways, you have think what is more important to you.  Collecting or not having to deal with alcoholics?? I just started truly collecting this year because I never had the finances to do so from living on my own.   

I would say maybe, get rid of them, and even tho you wont have any money for fun, maybe save every dime you can.  Even if its only 20 a month.  Its better than dealing with the drama.  After so many months, you'll have enough to buy some game you want.  And eat ramon noodles every day to save on food lol

[darko]

Here's my opinion coming from someone in the finance world.

You should only buy a house if you can afford it. Period. The idea that you're going to make money in the long run by owning something you can barely afford is not exactly true. I have friends that have more money than they know what to do with on each coast (in some of the most expensive areas you could imagine in the US) BECAUSE they never bought a house. If you have a wife, are wanting kids, etc - then by all means, buy a house. If, however, you're looking to break out on your own, don't have a job/wife/kids that will keep you in one place for the next 30 years then WHY would you buy? If you don't have anything saved to make a downpayment the likelihood that you'll even qualify for a home loan is sketchy. If you do find a way to pull that off you'll be getting absolutely killed on the interest rate compared to people that could pay 3-10% down on the house. Also, you can't forget about PMI (Private Mortgage Insurance). That's going to add ~ $400/month on your payment (assuming you're looking at a house in the $100-$150K range) until you've paid off about 20-25% of the principal. There will be closing costs, taxes, insurance, upkeep, etc, etc, etc in expenses. 

So let's say your payment is $1200/month with everything (assuming you own a house that's $100K and have an interest rate around 5% - which I don't even know is possible - PMI, taxes, insurance, etc). Let's be conservative:

Insurance   $100
PMI             $400
Taxes          $150 (Rough estimate as I don't know the property taxes where you live)
Interest      $415

That totals $1065/month - leaving you with ~ $135 of principal paid.

Now, to be fair your principal portion of the payment will grow on a curve as your interest paid decreases (that's how home loans work - more interest paid upfront). However, you'll be paying PMI for ~ the first 10 years (until you've paid off 20% of the home). The total interest estimate paid in the first 10 years according to some rudimentary excel formulas totals ~$45,750. So, it's going to COST you almost $46 grand to own 20% of YOUR home.

Do you see yourself living in the same house for the next 10 years? Do you like the idea of paying something off for 30 years?

If you want to own I would suggest a condo. If you can't afford a nice, newer condo in an area that you can sell in a few years should you decide to move - I would rent. Just my 2 cents.

Also, on the selling side, that costs money too. You'd probably be out $2000 in closing costs/getting the house ready to show should you decide to do so. That's eating even more out of the principal you've "made". You'd basically be renting the house you own in the long run - and you're out a lot more time and effort keeping the thing up than you would have spent in a condo, apartment, or rental house.

I'm not trying to be a debbie downer. I own a home. However, I feel like everyone feels like that's the American way and that everyone in the world should OWN. I disagree with that 100%. It's not for everyone, it's not a money maker (unless you can afford to make it a money maker), and it's simply NOT something that anybody off the street can turn into an investment.

[disgaeniac]

Sound advice, Darko.

Another thing to consider (what my parents did when they 1st got married) -if you're really interested in buying/owning- would be buying a 2-family home.

My parents were lucky enough to (and this is, by FAR, the exception -not- the rule) find one, good long-term tennant...and...what he paid them in rent, went a very long way towards paying off the mortgage.

Like Darko, I also own my own home (I bought it outright & don't have to pay a mortgage on it) -but- I'm in one of those "East coast" areas and I pay ~$10,000/yearly in property taxes alone.

Just some more things & ideas for you to keep in mind...

[insektmute]

Here's my opinion coming from someone in the finance world.

Wholeheartedly agree. I spent a couple years in home equity, working for a national bank, and developed a pretty solid knowledge of how all the pieces of home ownership fit together. Far too many people overestimate their ability to keep up on their bills, and a staggering number don't know what they're signing up for to begin with - i.e. people with an 80/20 that didn't understand that the 20% they took out was a revolving line of credit, and they'd spent the last 2 years paying nothing but pure interest on a 5 year line.

Granted, it's pretty stupid to not notice that the principal balance hasn't changed in 2 years, but that's the nature of things. People just don't pay attention.

Personally, I wouldn't even consider buying a home unless I were making at least 40-50k. Some people can do it on less, depending on what state they live in, but for the Portland area, I'd call that a minimum.

[insektmute]

Another thing to consider (what my parents did when they 1st got married) -if you're really interested in buying/owning- would be buying a 2-family home.

Not entirely sure what you mean by a 2-family home... like, going in half-and-half with another person or couple to buy a place, or...? It may be something that's not so common here, or I'm just hitting the tail end of my work day and need more coffee.

Always more coffee. Mmm...coffee.

[disgaeniac]

I meant, for example, say you bought a 2 story (family) house where you could live on 1 (as the landlord) while renting out the other & using that $ towards your mortgage - these are very common in NJ...

[darko]

Another thing to consider (what my parents did when they 1st got married) -if you're really interested in buying/owning- would be buying a 2-family home.

Not entirely sure what you mean by a 2-family home... like, going in half-and-half with another person or couple to buy a place, or...? It may be something that's not so common here, or I'm just hitting the tail end of my work day and need more coffee.

Always more coffee. Mmm...coffee.

A lot of people do this with a duplex in the middle of the country. Basically it's two houses joined together by a single wall. Some of them are really nice. I've had friends in the past that bought both units and rented one out to pay for the other. It's not a bad gig but, once again, you have to pay to play.

[topspot123]

My 2 cents.

It's always worthwhile to be able to take care of yourself, by yourself.  Ultimately who else can you depend on?