HelloGiggles Team
June 18, 2019 7:32 am

How I Bought That is a monthly spending column from HelloGiggles that takes a peek inside the process of making a major purchase, whether your budget is big, small, all your own, or supplemented by family and/or financial institutions. In this series, we look at many different spending #situations: from how people afforded big purchases like first homes (with the help of real estate-savvy in-laws), new cars (after landing a new job), splurge-worthy bags (that took more than a year to save for), and more. The common thread here is saving with a goal in mind, and then spending like you had it all along.

Age and location

Age 29, Los Angeles

What do you and your partner do for work?

I work in digital media as a senior editor and my husband is in the entertainment industry. He’s a writer and also freelances for big production companies, helping them come up with pitches and sizzles that help them sell shows and movies.

Annual household income

It varies depending on my husband’s workload, but usually $120,000 and up.

When and where did you buy your house?

We bought our house in L.A. (Silver Lake to be exact) in 2017.

What was your living situation before you bought your house?

We were renting a 2-bedroom/1-bathroom apartment in West Hollywood/Fairfax for $2,150/month.

What was the purchase price of your house?

$945,000

How much did you put down as a down payment?

$189,000 total downpayment; we paid for half and my in-laws paid for the other half.

What is your monthly mortgage payment?

$3,500 total; we split it with my in-laws, but each of us (or “couple”) adds $2,500/month to our joint account to cover our monthly mortgage. We like adding an extra $1,500 ($750 each) to cover our end-of-year taxes and to have a safety net in case something unexpected happens and we need a repair of some sort (which happens all the time).

Did you have any family support to buy your house? 

Yes! We wouldn’t have been able to buy our place without the support of our family. Buying a place was always on our radar but seemed like an unattainable goal given how expensive everything is. Luckily, my in-laws are very savvy when it comes to real estate, have a few other investment properties, understand the market, and agreed to help us. We worked with a lawyer to come up with a co-ownership agreement so everyone is 100% clear as to who is responsible for what. For example, anything that we do to the house that increases the value, our in-laws will pay half of, but things that we want to do just because, or regular maintenance stuff/bills, etc., my husband and I are responsible for. We don’t owe each other any money, we’re all in it together, and can also buy each other out or sell if we ever want to. We realize this isn’t a common scenario at all and we’re very grateful for the support we’ve gotten.

How long were you saving up for a down payment?

Well, my parents opened up a savings account for me when I was 6 and I also had some stocks/dividends set up for me at a young age. I didn’t really have access to a lot of these accounts until I was 25 or so, but was able to accumulate a lot of money from them. For any birthday or milestone (Bat Mitzvah, high school graduation, college graduation, etc.), I made it a point to put everything into my personal savings account. I also started working when I was 14, and since my parents supported me through college, I was able to save the majority of this money.

What types of weekly expenses did you cut to save money?

We moved to L.A. about seven years ago, around the time that I started to support myself. My husband and I invested in a Nespresso so we wouldn’t go out for coffee, planned our meals for the week so we wouldn’t go out to eat, and tried our best to stay in when we could. I’d say together we’d save about $150/week for not going out to eat/ordering food/getting coffee every day. I still have coffee at home in the morning or at the office, bring my lunch to work every day, and at least during the week, eat at home the majority of the time. Admittedly, we’re not as strict on the weekends anymore.

What types of monthly expenses did you cut to save money?

We didn’t cut that many monthly subscriptions/memberships, to be honest. My husband can write off a lot of the monthly subscriptions and bills for work since he’s in the entertainment industry. I did cancel my gym membership and decided to workout from home/hike, which saved us $50/month. We also tried to shop secondhand as much as we could to save.
 
What types of big lifestyle changes, if any, did you make to save money?

We honestly didn’t make any big lifestyle changes except for what was talked about above.

How did you decide what changes to make in order to save money?

I think it was easy for us to decide to just stop going out as much as we were. When we would look at our monthly bills it was crazy to see how much the “small” things added up. Sort of sickening, to be honest. Going for a coffee or grabbing dinner and drinks was just so expensive. We knew we could save a lot (and be healthier) if we just planned our meals, went grocery shopping on Sunday, and stayed in whenever we could.

Overall, is there anything you would have done differently during this process?

After buying our place I really didn’t want my savings account to get lower than $40,000 because I like having a personal safety net in case of emergencies. I didn’t really account for all the new furniture we’d need to buy (we were going from a a 2-bedroom/1-bathroom to a 2-bedroom/2-bathroom + studio in the back) and other random life things that always happen at the worst times (needing to buy a new car, sigh), so it didn’t take long for that number to drop. Also, we were so excited to be in our new house that we did a few cosmetic changes (like hired painters to paint the walls white), which we probably could have waited to do. So, I guess I wish I would have budgeted better for those things so my personal savings would be closer to what I originally wanted it to be.

But now life is just more expensive. Having our own home is really amazing, but it’s a lot of responsibility, maintenance, and money. Our bills are higher (we didn’t know how much water/garbage was since this was usually covered by our apartments) and we have to pay property taxes, so it is harder for me to save now than before home ownership. Whenever I get down about it, I try and remind myself that one of the main reasons I saved was to purchase a place, and I’ve already done that, so I shouldn’t be so hard on myself.

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