Check out this guy's blog...

[bke]

This is a new blog that I just discovered. He's new but it has a lot of great information to offer. He reminds me of Amy D. in the way that he breaks down the actual cost of owning a specific house or car.

I hope some of you will enjoy reading this site as well.


www.mrmoneymustache.com (http://www.mrmoneymustache.com)

[Tammy]

I just found him a week or so ago, and love his style.

[flowerseverywhere]

excellent. Thanks for the link. Highly recommended.

[jennipurrr]

I enjoyed it and have added it to my bookmarks! Thanks for sharing.

[rosarugosa]

Thanks, I think I'm going to enjoy this one!

[bke]

I'm glad I took the time to share this. I've been thinking abut the blog all weekend. I love the way he breaks down the spending vs. savings over a ten year periond of time-very inspiring!

[fidgiegirl]

His writing style is really funny. I enjoyed this post about the cost of raising children. (http://www.mrmoneymustache.com/2011/05/26/what-is-the-real-cost-of-raising-children/) I am kind of fearful about all the kid "stuff" one "has" to have and frankly it makes me kind of reluctant to even tread there. Obviously it's not all about that but it is something we think about.

[heydude]

omg i love this blog! i liked the post about the realtor association and the "horror" of requiring people to put 20percent down. THEN, they'd actually probably not bail if the house went "under water" because with 20 percent, chances of going under water are much lower.

[ApatheticNoMore]

i liked the post about the realtor association and the "horror" of requiring people to put 20percent down. THEN, they'd actually probably not bail if the house went "under water" because with 20 percent, chances of going under water are much lower.

Well realistically putting 20% down with TODAY'S prices here in Southern CA would be near impossible. If you figure housing prices of 400-500k and do the math that's 80-100k in down-payment. Yea, yea, make a post on how easy it is to save nearly 100 thousand dollars AFTER TAX on a minimum wage job. I want some of what you're smoking then, sounds like good stuff! On a private sector professional income or two it may be possible, but those incomes are also highly taxed, so possible but still not easy.

HOWEVER, with higher down payment's housing prices would NEVER have reached today's, much less bubble peak prices to begin with. What is currently supporting the market and current housing prices? 3% down FHA loans. People are taking out these loans and buying houses in which they have no stake, and the default rates are growing. It is a crisis waiting to happen. Because the government stepped in and did the EXACT SAME THING banks and the like were doing before, lending out loans to people with no stake.

So yea higher down payments (even just 10%) would return some sanity to the housing market (but at the cost of reduced housing prices which the banks can not afford - never doubt the final beneficiaries of these policies - it's not greedy realtors though they get a cut, it's the banks). But claiming putting 20% down everywhere in the U.S. is easy at present in a system already corrupted to the core with low down-payments and 100 other shenanigans designed to keep housing prices up, is just nonsense. In such situations I recommend renting :). By the way I saw a few (still a tiny tiny minority) of local closings recently for under 400k, might be dumps, but it is some proof prices are still falling.

[danna]

Great site!!!

[rosarugosa]

What do you folks think about his idea of paying off ALL debt before funding an emergency fund, and then using a home equity line in case of a true emergency? I've been really mulling this one over. We have a modest balance on our HELOC, which is our only debt. We're paying 4.25% interest, and we're currently on track to pay it off in 37 months or less (we throw extra money at it when we get the chance). The thing is that our emergency fund/savings is enough to pay it off, but that would leave us with only a tiny EF, and that makes me uncomfortable. Of course, we have plenty of borrowing power at our disposal if we truly had an emergency, but we're really committed to the idea of becoming debt free and remaining that way for the duration. So I dislike the idea of taking on debt in an emergency, but if our furnace died in January . . . In purely mathematical terms, his concept absolutely makes sense. EF earns 1%, HELOC costs 4.25%, so no contest. I'm reminded of JD Roth's words of wisdom about personal finance being more about psychology than math, because otherwise nobody would have financial issues. I do also think that MMM is sometimes a bit cavalier with his sweeping generalizations, because one size often does not fit all. What do you think?

[Tammy]

I think it depends on a person's tolerance of risk, and their perceptions about debt. We considered our quite high credit limits on a few credit cards to be our emergency fund for years, as we paid off college loans, car loans, loans from our parents, and funded 3 kids through high school and helped with their college costs. About once a year we had a surprise (big car repairs, big medical bill, etc.) that we would pay for with the credit card, using one of those 6 months with no interest offers. Because we did this once in a while but not too often, the credit card companies were always sending us those checks, so it was no problem.

The thing is, the credit market has tightened down a lot, so I'm not sure our particular plan would be good at this time. We are now at a place where we have actual cash in an emergency fund. It feels good, but not all that different than playing the 0% game with the cards.

So knowing my history, his idea of using a HELOC sounds absolutely conservative. ;)

He is a bit cavalier, but I like him as a balance to Dave Ramsey (and I like Dave for the most part) because Dave has formulas for everyone, one size fits all, and Mr Money Mustache allows for a lot more individualization of a plan, and he also expects that his followers will think for themselves and use some judgement along the way to make their own path.

[rosarugosa]

Thanks, Tammy. I should note that we would then keep making payments (and then some) to our savings account, to build it back up again as fast as possible. But it would probably take about two years to get it to its current level.

[HKPassey]

Wow, great resource. Thanks!

[heydude]

how would one qualify for an HELOC in a real emergency - say, loosing your job. can you get a loan when you have no job?

[benhyr]

how would one qualify for an HELOC in a real emergency - say, loosing your job. can you get a loan when you have no job?

Generally, no. Have it in place before you need it. However, they likely have fine print that allows them to prevent any further draws. We have a cash emergency fund but I've been thinking lately that high balance cards would be as good, or better as an alternative. This would be especially true if that frees up otherwise idle money for investing or debt repayment.

[rosarugosa]

Yes, it might be hard to open a HELOC if you are jobless, for example, but if you already have the line of credit, you could draw upon it in a crisis.

[heydude]

You can have a standing HELOC just waiting to be used indefinitly?

[rosarugosa]

I don't think indefinitely, I would have to check my paperwork, but it's something like 10 -20 years if I remember correctly. At the end of the period, you can have a balance, but you have to start paying it down as opposed to continuing to draw upon it. I would imagine you could do some type of refinancing at that point if desired and if your credit standing was good.

[Chickadee]

Awesome blog. Thanks for sharing!

[Florence]

Very interesting. I am enjoying reading through his posts.

[Brian]

thank you as I have subscribed, posted comments and enjoyed daily.

[Amator]

Thanks for posting this, I am now following this blog - great stuff and amusing to boot!