True Trick to Save Money on Appliances

And the trick is...CLEAN THEM.  Yeah, I was shocked too, lol.

After reading this post on Yahoo, I realized that we are way behind on appliance maintenance.  Here's their list of appliances and how they need to be cleaned occasionally:

Dishwasher: Take out the racks. Check the corners and the rubber lining around the door for cracks and food residue. Clean out both with a sponge and plastic-bristled brush (don’t use metal as it can damage the machine). Consult the owner’s manual and remove the spray arms and wash them with soap and water. If you’ve got a filter basket at the base of your dishwasher, carefully remove the filter itself and give it a rinse as well. Slide your hand in the filter hole and check for debris. Put the pieces back together and run the machine empty with a bit of detergent.


Refrigerator: The coils underneath the machine tend to get clogged with dust, which can make it hard for the compressor fan to circulate fresh air. To make sure they’re all clear, unplug the machine, get down on the floor, and pull out the vent plate that covers the coils. Then use a vacuum hose to clean the coils. It’s also good to wipe down the door gasket as with a warm damp cloth to make sure there’s no sticky build-up there, which can cause the gasket to tear (and inhibit your fridge’s ability to refrigerate).


Air conditioner: Similar to refrigerators, air conditioner coils need to be cleaned every once in a while—now, a.ka. the beginning of the season, is a particularly good time to do this. Remove the filter cover and run a vacuum brush over the coils. While you’re at it, pull out the filter and clean or replace it, depending on what kind of model you have.


Vacuum: This is one of the most oft-neglected household gadgets. Filters and bags need to be swapped out at least annually. If you have a bagless model, wipe out the canister with a sponge. Test it’s suction power: try to vacuum up a bit of sand, and see if your vac sucks up the majority of it (if so, it’s in good shape—if not, take it to a local repair shop to see if it’s just a question of changing out a part. If you’ve got motor issues, it’s probably more cost effective to buy a new vacuum).


Ceiling fan: If you notice the blades on yours are wobbling, you’re in for trouble—this wears out the motor a lot faster. Dust off the tops of the blades and tighten the screws to make sure everything is locked into place.


Stove and oven: Gas stoves in particular need to be kept clean to ensure burners and igniters will keep on for years. A warm cloth and a bit of dish soap is all you need to get them spic and span. Mr. Fleshman from Fleshman Appliance Repair tells The New York Times that the self-cleaning feature should be avoided, since the super-high-temperature can be hard on your oven’s wiring and electrical components. Instead, after you’ve used your oven, wait until it’s cool enough to touch but still warm, and wipe it down with a moist cloth. Fleshman also says not to worry about stains, “always tell my customers, if people are looking in your oven and complaining about it being dirty, you shouldn’t have those people in your home.”

Here's how we stack up after living in our house for 3 years:

Dishwasher:  I've never done anything with it except add soap and Jet Dry (which seems to be useless).

Refrigerator:  I've been meaning to do this since last year.  We have two dogs and the sheddy Pug stays in the kitchen at night (he snores too loud to come upstairs)...I'm surprised our fridge hasn't died yet.

Air conditioner:  My husband's grandfather occasionally checks our A/C since he used to work in that field.  I should pay attention to what he's checking...

Vacuum:  We change the bags pretty often but I hadn't thought of the filter for a while.  I know we changed it about two years ago, but since we got wood laminate floors downstairs, we barely use the thing.  Yes, I know I only said "downstairs", but just don't go upstairs, okay?

Ceiling fan:  I only dust the blades every year or so, but none of our fans are wobbly.

Stove and oven:  We have an electric oven/stove combo and our housekeeper cleans the outside every two weeks.  I don't see any problems on the inside...

How do you add up?  Anybody have any ideas on motivating me to take care of the things on the list that I obviously need to get to?  I hope that by the time this post pops up in 3 weeks that I have some better news about the refrigerator at least...

Cost of the First Year of Home Ownership

Amanda at Frugal Confessions mentioned her costs of the first year of home ownership in this post and my reply made me realize how lucky my husband and I really got.

Apparently, the average first year spending on a house built after 2004 is $12,332.  I could totally see that based on what our house contained in that first year, but most of what we had were hand-me-downs, gifts, or things we brought from our apartment.
 
Thanks to all of that and patience (it's still patience, even if it because you feel broke...), we only spent a total of $735 on our house in that first year.
 
We bought:

• Garage Door Opener and Installation - $225
• Lightbulbs - $50
• Ceiling Fans - $175
• New locks - $60
• Miscellaneous little stuff like handles for the cabinets and whatnot - $125
• A/C compressor that busted - $100

We were gifted or given:

• All appliances were house-warming gifts from my parents (and cost $2300...I was there).
• Sealy Posturpedic bed for our wedding was a gift from my parents ($700...I was there too).
• Leather couches are/were hand-me-downs from my parents.
• Our two recliners are/were hand-me-downs from my husband's grandparents.
• Kitchen supplies are/were wedding gifts from almost everybody...I love my 4 slice toaster and our primo stainless steal pots set and Chicago Cutlery knives!
• Patio furniture was a hand-me-down from his grandparents too.
• Office desk is/was a wedding gift from my aunt, uncle, and cousins.
• Office chair is/was a hand-me-down from his parents.
• Office couch is/was a hand-me-down from his grandparents as well.
• Guest bedroom bed was my husband's college bed that his parents bought from Ikea.
• Throw rugs were the same ones we had in our apartment.
• Kitchen table was a hand-me-down from his aunt and uncle.
• Blinds were a housewarming gift from the in-laws.

We had everything else that we needed and waited a year or two before we added wood laminate flooring ($2200 a year later), paint and new fixtures ($430 a year later), lawn scaping ($150 a year and a half later), and a new Tempurpedic bed and wooden bedroom set ($6000 last year).

Wow...put like this, I really need to thank our family some more!  All of that would have easily have cost us at least an extra $6000 and that is only if I found great deals on the used stuff from Craigslist.  Thanks again to our generous family and friends!

Do you remember how much you spent the first year you owned your home?  Do you know how much you spend each year now?  Do you have any suggestions on how to keep costs down for the current and future-homeowners in our group? 

If I get enough tips together, I'll make it into another post and link to you too...bribery works, right?

Free Renovations Can Go Too Far

How would you like to have your house remodeled for free?  Whoo-hoo, right?  Not so fast...

According to this article, Extreme Makeover renovations were so intense that the homeowner's were left with way larger utility bills and property taxes than they had before.  In one case, it was more than the owner's could handle.  The first "Extreme Foreclosure" of a previously renovated home has prompted the show to scale back.

How do you scale back when you're whole show is based on amazing your viewers?  They have begun renovating "smaller" homes (3000 square feet instead of 5000 plus square feet), installing low flow toilets, leaving out swimming pools some of the time, and landscaping to the home's specific environment.

I think it's awesome that an American TV show all about extravagance has decided that downsizing is "in".  The best part to me is that the show apparently started as an idea of helping "regular" people while entertaining an audience.  It took time and a housing boom to push the renovations into the OMG category. 

Maybe getting back to basics can help the owners of these renovated homes and the TV show too.

Do you watch Extreme Makeover?  Have you noticed a difference?

Do You Escrow? Guest Post at Free Money Finance...Check it Out :-)

My guest post, Do You Escrow?, is up at Free Money Finance today.  It's a quick intro to escrow and an explanation of why my husband and I don't use that service.  Please take a look if you get a chance!

Overlooked Costs of Home Ownership

Yahoo had this article about the 12 Hidden Costs of Homeownership that reminded me of the many times I had to take a deep breath when we were buying our home.  Here's a quick summary of their list:

1.  Home inspection - $300 or more
2.  Pest Inspection - $50-$200
3.  Appraisal Fees - $350-$400
4.  Closing Costs - 2%-3% of the mortgage loan amount
5.  Moving Expenses - Variable
6.  Furniture - Variable
7.  Property Taxes and Homeowners Insurance - $3000 or more and 0.5%-1% of the loan respectively
8.  Supplemental Insurance - $240 a year
9.  Homeowners Association/Condo Fees - Variable but could be more than $1200 a year
10.  Utilities - Variable
11.  Ongoing Maintenance - Variable
12.  Repairs - Variable

Here's how we have fared so far:

1.  Home inspection - $200
2.  Pest Inspection - $50
3.  Appraisal Fees - $250
4.  Closing Costs - 2.2% mortgage loan amount or about $2000 total since we had a $91,200 mortgage.
5.  Moving Expenses - $400 since we packed our stuff and hired a company to simply bring the boxes and furniture to our new house.
6.  Furniture - So far we still use family hand-me-downs for almost everything, but we did spend $6000 last year for a new bedroom set and Tempurpedic mattress.
7.  Property Taxes and Homeowners Insurance - $2200 and 0.9% of the loan respectively...again, we have lower costs than a bunch of people around us since we bought a very nice foreclosure for $114,000 and put 20% down.
8.  Supplemental Insurance - $260 for flood insurance in the Houston area.
9.  Homeowners Association/Condo Fees - None since we're not part of a homeowners association.
10.  Utilities - $80-$180 for electricity and $30 for water...we don't have a gas line or a home phone line.
11.  Ongoing Maintenance - We pay about $2000 a year between our yard guy, housekeeper, and miscellaneous costs like cleaning supplies.
12.  Repairs - So far, we've only paid about $300 for repairs in 3 years ($100 for an A/C compressor, $150 for a water heater problem, and about $50 for supplies for minor problems on a toilet and guest bathtub).  We have an account that is building up while we wait for something big to break.

In short, there are a bunch of expenses that kind of sneak up on you when you buy and live in your own home.  My husband and I were aware of these costs before we started the whole process, but it's still not the easiest pill to swallow. 

We've kept our costs lower than the other homeowners that we know by buying an affordable, newer house that is in great condition and by handling minor issues ourselves.  We'd save even more if we handled our own lawn care and chores, but where's the fun in that?

How do your home costs look?  Did you expect them or were they a pretty rude shock?

BFS Guest Post at Little House in the Valley - How Much House is Enough House?

Just wanted to say a quick thank you to Little House in the Valley for letting me guest post!

Feel free to take a look at the article, How Much House is Enough House?, to see my take on my own home.

Thanks again!

Need Money? Have an Extra Bedroom?

A year after my husband and I bought our 3 bedroom home, a friend needed a place to stay for a little while. Our guest bedroom was open and our friend was living in an overpriced hotel. When he offered to pay $350 and half of the utilities per month, we happily agreed. Since our mortgage payments are only $740, it was a win-win for everybody.

Three months later, our friend moved on. We thought we’d love having complete privacy again, but we missed the money more. After a 20 minute discussion, we decided to list our spare bedroom on Craigslist.

I knew nothing about actually renting out the room, so I looked up ideas online. I listed the room in detail with pictures of the spaces that were being rented out - room, bathroom, laundry area, and kitchen. I asked questions on the phone about pets and smoking habits. When they showed up for our scheduled meetings, they filled out their job and housing history and signed off on background checks.

I’ll be honest, I knew exactly who I wanted to live with by the time they walked back to their car, but I did a background check and verified their employment anyway. We signed a lease the next weekend.

He was the perfect renter. He paid on time, cleaned up after himself, and stayed over at his girl friend’s house more often than he was ever around ours. He stayed for a little more than a year. Dude, if you’re reading this, we miss you.

We quickly relisted the room since we were so happy with the set up, but we didn’t get as much response. When we finally found someone we were okay with, he ended up being completely immature and flippant. He even ordered a different cable service for his room since he didn’t like the one we paid for...without telling us. Needless to say, it didn’t work out and he moved out in less than 5 months.

At that point, we decided that our stress-free life was worth more than $500 a month.

So, yes, renting out a spare room can be very helpful fiscally. Just be careful to properly weigh the costs and benefits of the situation for yourself.

If my husband and I ever need some extra money again, this would be our first choice. Even though our last roommate was a putz, we never had any real issues. We just didn’t need the money as much as we craved a place to ourselves again.

Do you need any extra money? Would the rental rate in your area be worth more than your complete privacy? As always, it’s a personal decision, but it’s good to know all of your options, right?

How We Chose to Buy Our Home

After coming across yet another blog about renting versus buying, I decided to explain how we chose to buy our home.

First of all, I was extremely frustrated that our rent was increased by 5-10% at the end of every lease. We were clean, quiet, and paid early every month. I was always able to cut down on the increase, but I could never stop it completely.

Secondly, having to ask permission to change absolutely everything meant we never changed anything at all. Our apartments didn’t feel like homes…they felt like temporary bases. We did everything that we do now in a house, but now I’m surrounded by the colors we picked out and art that we finally allowed ourselves to buy since we felt stable.

Thirdly, the financial numbers worked in our favor in our area. No, it isn’t wise to buy a house that you cannot easily afford. That means that we would probably never allow ourselves to buy a home if we lived in the high cost areas along the coasts. Luckily, Houston has inexpensive homes in good locations. After looking around for a couple of months, we found our house – the perfect starter home for us. This is how the numbers looked:

Rent was costing us $8760 a year and was increasing 5-10% a year.

Our home was going to cost us $24,000 up front (20% down and closing costs) and cost an additional $15,000 a year including taxes, insurance, and maintenance for 11 years. After the end of 2017, we’d only need about $4500 a year for taxes, insurance, and maintenance, and we were budgeting for that to increase 3% each year (our taxes have actually decreased since 2007, but these are the numbers we used).

That meant that with a 5% increase every year on rent and a 3% increase every year on property taxes, we would be breaking even with home ownership in less than 20 years plus we would own a home outright in about 11 years. In less than 20 years of renting, we would have paid just as much and have no physical thing to show for it. That alone would have convinced me to buy in our area.

Lastly, by putting 20% down on a foreclosure that was already heavily discounted since it was on the market for more than a year, we had instant equity. This didn’t effect our decision much, but it was nice to know that we could have taken out a home equity loan if necessary. I like having lots of options when it comes to finances.

Over the past 3 years, our taxes have decreased but our equity has increased. We are still on track to pay off the mortgage by the end of 2017…maybe earlier if I get my way. We’ve spent less than $300 a year on home maintenance since it was built very well and barely lived in at all before we snatched it up. To be honest, we have spent almost $3000 on new floors downstairs and paint, but that was a choice and makes us very happy.

No, home ownership is not for everybody. It’s not even a good financial choice in many areas. I also know that I don’t enjoy having to fix my own problems. Yet, I wouldn’t change a thing.

How about you?  Is your market nice to homeowners?  Do you enjoy renting?