Financial Planning is Better When Slightly Delusional


I don’t think I’ve written much about financial planning on my blog, but it’s something I think about from time to time. Crunching numbers can be fun even if others consider my reasoning ‘fuzzy math,’ a term coined by former President Bush with a negative connotation implied. Basically a quick search on prices of two bedroom apartments/condos in the middle of Queens a few months ago got me thinking.

Queens is more reasonable then Manhattan, and for $200,000 in the year 2013 you can get something.   With a 30-year mortgage that is about $550 plus interest and other fees. It’s common for apartments and condos to have monthly maintenance fees that seem to vary from $500 to $1200.  From my estimates the monthly costs of everything for owners on a $200,000 mortgage is $1100 to $1700. Basically these landlords are charging their renters more than the costs of the monthly fees. Realizing this fact makes one want to eventually be an owner, especially if one plans to stay in NYC for the long term. I’m actually mad that I’ve been so financially irresponsible the last few years, even though being financially irresponsible means you let yourself have fun.

There is hope for me and I have a simple five-year plan to having the amount for a down payment. Soon this year I will be out of credit card debt and student loan debt. For about three months now I’ve been paying $800 a month toward those debts. I’ve had to cut back on some things, grocery shop, and attempt to live more frugally. So far I’ve been able to pay this amount without charging anything else. Once that is paid I’ll be in the habit of budgeting $800 a month toward something, and instead of debt I’ll put that money toward saving. Setting aside $800 a month and maybe a little extra here and there that could potentially be $10,000 bucks a year of saving.   So in four or perhaps five years that is $40,000 dollars.

In five years it’ll be 2018. I will be 40 or 41 years of age depending on the month!

With $40,000 I could….

  1. Put 20 percent down on a $200,000 mortgage. (Maybe not if there is another real estate bubble!)
  2. Buy a good new car, or a really good used car.
  3. Relocate comfortably to some distant local.
  4. Take a leave of absence from work for a year, and live off of my savings!

See it is great I didn’t become a financial advisor? The only financial future I can ruin is my own!

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