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Worst Case Scenario Analysis/Hope is Not a Strategy

February 19th, 2011 at 07:32 am

I continue to umm, "educate" contractors who call me about the vinyl siding I want on why it's not nice to ask a female, would-be customer if there's a "Mr." in the household.

Seems like every single one of them lately is asking that question very pointedly. They insist that they do it so that one spouse won't sign a contract and commit them to the job without the other one's knowledge or consent. C'mon. I find it hard to imagine a spouse signing up to do a $10,000 project unless the other spouse already agreed it was ok to do so.

I explain that as a single female, I don't feel I should have to divulge my marital status to someone (a contractor) I don't even know. It's a question of security. It's really none of their business.

So after initially agreeing to have this guy come out, I changed my mind after he asked that question and didn't back down. We ended the conversation. Two minutes later, the phone rings again and it's the owner on the phone, attempting to resuscitate the visit out here.

Anyway, he was super polite and nice about it, and we thoroughly discussed why he does it and why I don't like it. He seemed so reasonable I relented and said ok, let's keep the appointment. He admitted that I wasn't the first woman to object to the question, and he even said he would bring it up at their marketing meeting next week. But I keep imagining that as soon as these guys hang up from me they're saying, "What a b****! What a pain in the a**!"

As for the worst case scenarios referenced in my headline: I woke up around midnight, unable to sleep. Actually high winds forecast for today were already ferociously banging one loose wood shutter on the house, and that's what woke me up. So i got up, opened the window and leaned out to take the screen out so I could secure the shutter.

But I had a kind of bad dream, one i think was caused by general anxiety about my future. I went through all of last year just hoping I'd get a phone call about one of many jobs I'd applied for. All I got was that temporary 3-month job and the Census Bureau stuff i did from spring through summer.

I'm fortunate to still have unemployment benefits and expensive COBRA, but this will run out by the end of the year, roughly. What happens if ANOTHER year goes by, just like last year? From a job-seeker's point of view, the economy hasn't moved much.

As I firmly believe, hope is not a strategy. I always feel more in control of things when I've planned ahead for various contingencies, and continued unemployment is certainly one of them. Heck, it's frightening to think about, but what if I never get another f/t job again?

What exactly will I do? Umm, I'm not sure, and that's what is making me so anxious. If I can't control my income, then I have to look for more ways to lower expenses. And I don't mean by clipping coupons. It needs to be in a big way to have any real impact.

Take in a roommate? Ugh, that would be a total sacrifice of privacy and I know, from having one or two boyfriends live here, that I'm very particular about how things are kept and that caused issues with others living here. Don't really see this happening.

But I've been thinking more that one option would be to sell my house and downsize into a less expensive condo sooner rather than later. Meaning, I always knew I'd want to move into a condo some day, but I had no specific schedule for doing so. Perhaps in 9 more years, at the latest.

But now I'm looking at a more immediate condo move not just for lifestyle reasons to free myself of time-consuming maintenance responsibilities, but increasingly, as a money-saving move.

Assuming I moved to a condo outside of this town into my current condo of choice, I'd save $3,000 a year in taxes right off the bat. (My preference would be to stay in this very lovely town, but taxes are higher and there aren't any condos I really like...they're either too expensive or not nice enough.)

I'd also be paying for the condo in full with cash and walk away with an extra $50 to $75K in my pocket,conservatively, depending on the sale and purchase price of both properties. There could be a smaller savings in heating due to smaller square footage, but I'm not counting on that to be as significant.

There are 2 problems: 1) My condo of choice requires you to be at least 55 years old. I'm 3.5 years away from that. I'm going to call them Monday and see if that's a real hard and fast rule. 2) There's a LOT of stuff I'd have to do to this house to make it market-ready. This includes dealing with the exterior siding, which is why i want to get vinyl, also paneling 2 closets and repairing all the damage caused by this winter's ice dams, repairing a leaky pipe (think plumber bill), restaining a small part of wood floor that I sanded down to bare wood after cat urine stained it black...disgusting) and maybe a few other things. Since I'm not working steadily, this would all come from personal savings which are basically earmarked for retirement (not in IRAs, though) so of course I want to minimize expenses.

Prepping and selling a house is so much work. But doing it now would be good in that since I'm not working, i wouldn't be totally stressed out by trying to work a f/t job AND prepping the house and doing all this stuff at the same time. Keeping it perfectly spotless would be easier if i wasn't working.

Another reason to do try to sell now rather than wait is that there's a really good selection of units at this condo complex that i like; once the market returns to more or less normal, I imagine other buyers will be active and I'll have less to choose from.

So, that's where my head is at right now. The only other good thing is that, in the absence of further mortgage prepayments, I'll have the house paid off in 4 more years, so that would lower my monthly expenses, though not by as much as you think, since when i bought this place i put down 45% cash. My principal is only about $750 a month.

I've also been wondering about the heating at these condos. It's all electric baseboard units. I know that heating oil is very expensive. This year it was high, and i don't see it getting any cheaper, since it's a finite resource and for a whole host of reasons, not to mention recent unrest in the Middle East. But I've heard many times that electrical rates in CT are among the highest in the nation. I don't heat with electric now, but my electric bill is typically $65 a month, and that's being very frugal. I shudder to think what it would be it I were heating with it.

There's one other thing I thought of...talking to my dad this weekend, he told me my sister is just getting by, financially. She lives in the nearby town where my favorite condo complex is. We have never been close (not my choice) and she never says much about her personal life when we get together, which is not that often.

She has a house about the same size as mine, with a separate barn/garage with a rentable apartment above it. She's had to have a few tenants leave after they lost their jobs and couldn't pay rent. One scenario I thought about was what if I sold my place now and moved into her rental apartment for a few yeas, until i turned age 55 and could move into the condo i want. I don't remember exactly what she charges for rent...I'm thinking it's $900/month. It's got a very large living room with a smaller bedroom and kitchen. It's not ideal as it has a long flight of outside stairs to access the apartment. On the plus side, she might have space on her 3 acres to let me continue to have small vegetable garden. Plus, she is my sister and she'd never do something really rotten, however, she is very prickly and short-tempered and hard to get along with at times, hence our current relationship. Well, in any event, she has a tenant in there now but i think she lost her job. My sister would probably like the idea if having me there becus she knows she can count on me to pay the rent on time.

I can't really think of any other options that would result in significant lowering of expenses. The best case scenario would be finding a new job. It wouldn't even have to be a great paying job, because I've already calculated that even with no further contributions to my retirement savings (assuming no big withdrawals, either) I'd end up with enough to retire on. (I haven't done my February investment statement yet, but I know the market's been up and I'm hoping i hit the half million mark.)

So a new job would only need to cover my current living expenses and provide me with reasonably priced health insurance. If I got another job, maybe instead of contributing to a 401(k) I'd start a new savings account for a new car, something I'll need in a few years. Or maybe contribute the minimum needed to get the employer match on the 401k...i don't know, just a thought. I'm eligible now for the catch-up contributions, so would hate to give that up.

9 Responses to “Worst Case Scenario Analysis/Hope is Not a Strategy”

  1. MonkeyMama Says:

    "He admitted that I wasn't the first woman to object to the question,"

    ???????????? I suppose I wonder what is wrong with women then. As a married women, I would react exactly the same way. I tend to handle most the car and home maintenance stuff in my household, and no one has ever asked me for the man of the house. Rolleyes It would annoy me on many levels - on the "what if I were single and it's none of your business" level, for sure.

    The house downsize seems the obvious solution. Though you are about as frugal as can be, the house is much more than it needs to be - you could certainly take on a roommate or downsize, rather than fall behind on your retirement goals.

    "i put down 45% cash. My principal is only about $750 a month."

    Likewise, I think $750/month is a TON and would be a huge boost to your budget. Isn't the house payment a huge percentage of your spending? I just wouldn't write off what a huge boost that would be to your budget. ($750 looks like 20% of your expenses at current. But, then again, a condo would have HOA fees near as much as your mortgage, now that I think about it. Of course, erasing property taxes and home maintenance/insurance might even that part out).

    BTW, have you considered looking for any minimum wage type temp work or retail jobs??? It's the only other thing that comes to mind, reading your post.

  2. patientsaver Says:

    MM, I always love to get your comments; you are always so sensible and insightful.

    Well, yes, living minus the mortgage would make a huge difference, I'm not discounting that, I just said that becus in comparison with the huge mortgages many people have, the expense reduction I'd experience after paying off the mortgage would be a lot less than what some people would experience.

    Yeah, my favorite condo has those HOA fees of $400 or so,and i think there's still a sizable quarterly district tax on top of that becus it's such a huge complex.That's one reason i was seriously considering one-bedroom units as well as two-bedroom units, just to err on the side of caution. The last thing i want is to have to worry about finances when I'm retired.

    I have been looking for temp work all along, at the same time I'm looking for freelance work and permanent work. People assume it would be easier to just take a lower paying job, but I'm telling you, regardless of how much or how little job pays, employers can afford to be choosy now and even if I say in my cover letter that i'd be thrilled to work for substantially less pay, it doesn't seem to make a difference becus they all think that you'll bail as soon as you find a better paying job. Employers also want someone who has already done the specific job they're advertising for, even if you are way over-qualified in general and have years of experience. It just is not easy to convince employers that money is not the most important thing.

  3. patientsaver Says:

    Further clarification: The HOA fee on just the 1 bedroom i liked is $405 a month, and taxes are $1,920. That comes out to $6780 a year,which is slightly higher than the $6600 I now pay in property taxes for my house!

    So I guess I stand corrected: I wouldn't be saving much in the way of property taxes, remarkably. I would only be saving (substantially) in terms of the purchase price, using this one really nice unit and its price of $160,000, vs the estimated $300 to $330K I could get for my house.

  4. Joan.of.the.Arch Says:

    My sister and I talk about eventually living together should I lose my spouse. I don't know what it would be like. She is the one with the bigger house, but there are many ways in which I cannot stand the geography and the local culture where she lives. Still, it is a comfort to know we can count on each other. I do think a lot of families are pulling together these days. That's easier done among some than others.

  5. Petunia 100 Says:

    I think that if you are plannig on down-sizing eventually, and you are certain you want to buy one of these particular condos, then it makes a great deal of sense to begin working towards that (getting house ready).

    I would go for the 2 bedroom as you don't know what the future holds. If your mom or dad need to live with you at some point, or you need live-in assistance at some point, the second bedroom would make that a much more pleasant living situation.

  6. Buckeye Says:

    Please remember that the condo fees are not going to go down and you will be saddling yourself to that payment on going. Could you possibly rent a condo to see if you like that type of living,following the sale of your house?

  7. My English Castle Says:

    I salute you for thinking through the alternatives. It's an age of anxiety, I think. I wish you the best sorting it out.

  8. Jerry Says:

    HOA fees can really lead to something of a millstone for some couples... it happened to a dear family friend whose mortgage payment was relatively reasonable, but she could not afford the HOA. You are doing a good job of thinking it all through, which should give you some insurance of knowing exactly where you stand before you make a final decision. Good luck!
    Jerry

  9. Jerry Says:

    HOA fees can really lead to something of a millstone for some couples... it happened to a dear family friend whose mortgage payment was relatively reasonable, but she could n

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