How We Paid Cash for a Rental House and more...

Here's What's New How We Paid Cash for a Rental House 10 Things I Learned From Downsizing Our Life How I Saved This Week: Making coffee at home Gretchen’s $45 Grocery Shopping Trip and Weekly Menu Plan :: How We Paid Cash for a Rental House A testimony from Jackie We are determined to pay cash for everything — even big ticket items. So while my husband and I were getting completely out of debt, I set another long-term goal: to pay cash for a rental house once we were debt-free. The plan was to buy the rental property within a self-directed IRA. (That’s a type of retirement account where you’re allowed to decide what you want to invest in, so long as you stay within the IRS rules.) Small amounts add up: I started contributing to my 401k at work. At first I just contributed 3% to see what my check would be like with that amount gone. Once I adjusted to that change, I increased my contribution by 1-2% every few months. I kept that pattern up until eventually I was contributing 30% of my check! I invested in the options available to me in the 401k, and also got a very small company match. I had in mind that I would be quitting my job at some point in the (then-distant) future to go and work for myself. Once I did, my plan was to roll the 401k money into a self-directed IRA and then buy a rental house within it. The IRA would own the rental property on my behalf. But before I could do that, the company I worked for was acquired. That meant I could roll the money over to a self-directed IRA earlier than I’d expected. I went ahead and did exactly that. Then I went house shopping! Finding the house: I had managed to save up about $80,000 over about 7 years, so I set my rental property budget at $50,000 or less. (I wanted to have extra cash available for repairs and unexpected expenses.) In order to find a house for that low price, I had to look outside of our area. I found an older home listed at around $40,000 in a small town about 40 miles away. I had my IRA make a full-price cash offer, sight unseen, that was contingent upon inspection. (The property was occupied, and they didn’t want people inspecting who weren’t serious.) After inspection, I had my IRA withdraw the offer. The house needed a LOT of work. I got a few estimates, and then had my IRA make a new offer at about half the asking price due to the repairs that would be needed. They accepted. Suddenly my IRA owned a rental property, and I’d paid cash for a house. How it feels to pay cash: The first time you make a large purchase with cash is amazing! So is every time after that! Living a debt free life may not be considered “normal”, but it’s awesome — and something I believe everyone can do once they get their finances into shape. We’re regular people who struggled with debt for years, and we finally beat it. You can too! Jackie Beck is an entrepreneur and the mom of one college-age son. Her husband is a software tester and avid reader. You can read about how they paid off over $147,000 in debt at TheDebtMyth.com. Have you saved up and paid cash for something — large or small? Submit your story for possible publication here.      • Email to a friend • View comments • Track comments • :: 10 Things I Learned From Downsizing Our Life I posted about Small House Living earlier this week and introduced you to Lori and her family of six who are currently living in an RV. The comments on that post were quite lively and there were lots of pros and cons shared for both living in a small house and having a larger house. Lori posted a follow-up post yesterday called 10 Things I Have Learned By Downsizing Our Life. I think you’ll find it very interesting and insightful — at least I know that I did. Head over here to read it.      • Email to a friend • View comments • Track comments • :: How I Saved This Week: Making coffee at home I know it’s simple, but one way we save hundreds of dollars each year is by making coffee at home. You might feel like buying coffee really isn’t costing you much, but here’s what I wrote two years ago: The Simple Dollar estimates that the cost of a 16-oz. brewed at home cup of coffee will cost you no more than $0.50 to $0.60 each, including the cost of energy, cream, sugar, etc. When I calculated it myself, I was coming up with the same costs for high-quality coffee. If you get a good deal on the coffee beans, your savings is going to be even higher. So, if you're typically paying $1.50 per cup of coffee, that's a savings of around $1 per cup five times per week — or $20 per month or $240 per year. If you typically pay $4 for a fancy cup, you're saving at least $17.50 per week, $70 per month, or $840 per year! Crazy, eh? Not only does it save quite a bit of money, I also like coffee brewed at home the best. I can make my cup exactly like I like it. It’s almost like an art form to me! We don’t really make fancy coffee all that often and we don’t even use sugar in our coffee any more around here, but we do love good cream. So we splurge on half and half every week. It costs us less than two cups of coffee at the coffee shop would cost us and it lasts us all week long — and it makes good coffee so much better! Some Tried & True Recipe Links: Do-It-Yourself Homemade Iced Coffee Cut Your Coffee Costs in Half By Roasting Your Beans at Home How to Make Delicious Homemade Lattes Homemade Frappuccinos I was thinking about how much money we save by making coffee at home this week as I found myself brewing a delicious cup and pouring it into my favorite Copco cup before heading out the door. And not only that, but it saves a lot of time waiting in line, too. If you’ve been to a Starbucks any time recently, there’s a good chance you’ve waited in line for a least a few minutes, possibly much longer. Those orders of no-whip-two-pumps-extra-foam-double-cup-extra-hot-sugar-free orders take quite awhile to process. {Speaking of which, I was at the coffee shop recently and someone ordered some drink with a long string of names and instructions that included a specific temperature for the coffee to be. I was pretty aghast that that was allowed. I kind of just want to try ordering a coffee drink with instructions for it to be some random temperature — like 42.5 degrees or something — just to see what the barista says! For the record, I’m not at all opposed to buying the occasional cup of coffee, I just like it to be a fun treat, not an every day occurrence. Because once you add up how much it costs over time for “just that one cup of coffee”, it becomes a lot more motivating to learn how to brew your own cup of coffee! What’s one way that YOU saved this week? I’d love to hear!      • Email to a friend • View comments • Track comments • :: Gretchen’s $45 Grocery Shopping Trip and Weekly Menu Plan Homeland Farmland Bacon – $4.69, used $1/1 mailer coupon (doubled) – $2.69 after coupon 2.39 lbs Fuji Apples @ $0.99/lb – $2.34 1 Cucumber – $0.69 2 Hungry Jack Hashbrowns – $1.59 each, used $1/2 coupon from the 10/5 SmartSource insert (doubled) – $0.59 each after coupon 1 Welch’s Fruit Snacks – $2, used $1/1 printable (doubled) – Free after coupon 1 Wishbone Salad Dressing – $1.67, used $0.50/1 mailer coupon (doubled) – $0.67 after coupon Items a part of the Kellogg’s sale (Buy 4, Save $4 instantly):  3 Kellogg’s Frosted Flakes Cereal – $1.50 each, used $1/2 coupon from the 12/7 RedPlum insert (doubled) and $1/1 printable (doubled) – 1 Free and 2 for $0.50 each after coupons 3 Kellogg’s Special K Crackers – $1.50 each, used $1/3 coupon from the 1/4 RedPlum insert (doubled) – $0.83 each after coupon 2 Kellogg’s Granola Bars – $1.50 each, used $1/2 printable (doubled) – $0.50 each after coupon Total before coupons and sales: $54.38 Total with tax ($1.38) after coupons and sales: $12.94 Dillons 3 half gallons Milk – $1 each 1 Kroger Tortilla Chips – $1.25 1 Welch’s Natural Fruit Spread – $2.99 1 Malt O Meal Cereal – $3.49, used Free e-coupon (no longer available) – $3.49 after coupon 0.79 lbs Tomatoes @ $1.99/lb – $1.57 1 can Kroger Refried Beans – Marked down to $0.49 1 Kroger Butter – $3.99, used $0.40/1 e-coupon – $3.59 after coupon 1 Kroger Peanut Butter – $2.19 1 Kroger Frozen Orange Juice – $1.59 1 Kroger Mouthwash – $1.49, used Free mailer coupon – Free after coupon 1 Kroger Tortillas – $1.79 2.82 lbs Bananas @ $0.59/lb – $1.66 0.51 lbs Broccoli @ $1.89/lb – $0.96 1 Romaine Lettuce – $0.99 2 dozen Dillons Large Eggs – $1.25 each 1 Nabisco Belvita Biscuits – $3.49, used Free e-coupon (no longer available) – Free after coupon Items a part of the Mega Sale (Buy 5, Get $5 off instantly): 2 Gillette Shave Gel (pk of 2) – $1.99 each, used 2 $1/1 coupon from the 12/14 RedPlum insert – $0.99 after coupons (Makes them $0.49 each) 1 Nature’s Valley Bread – $1 1 Cascadian Farms Cereal – $1.99, used $0.75/1 printable – $1.24 after coupon 1 Cascade Dishwasher Detergent – $2.99, used $1/1 mailer coupon – $0.99 after coupon Total after coupons and sales: $32.27 Total for all grocery items: $45.91 Menu Plan for This Week Breakfasts Cereal x 3 Grapefruit/Oatmeal, Toast & Juice Lunches Bacon/Eggs/Grapefruit, Peanut Butter & Jelly Sandwiches, Baked Potatoes, Leftovers, Apple Slices with Peanut Butter Dinners Ground Venison and Noodles, Biscuits, Steamed Peas French Toast, Eggs, Hashbrowns Venison Burgers, Homemade French Fries, Tossed Salad Hamburger Vegetable Soup, Homemade Bread Bean Burritos, Chips/Salsa, Grapefruit Salad Bar, Pumpkin Muffins Out to eat      • Email to a friend • View comments • Track comments •

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