Hi EnLifers! So, this week, I finally filed my homestead exemption. I’m not sure how many of you have heard of this, but please look it up if you haven’t heard of it and see if you are eligible. Basically, it is a discount on your property taxes which could ultimately lower your tax bill and/or mortgage payment if you have elected to carry an escrow account. The clerk said it’d take 40% off our fair market value and then she went through some calculations that I didn’t quite follow and I won’t bog you down with. However, I am eager and excited to see what discount awaits me! Now granted, I’m kicking myself about this because I’ve been in the house for 2+ years at this point and missed out on the discount, but I can’t dwell in the past. All I can do is learn from it and share with others so they don’t make the same mistake, which is what I’m doing now! Anyhow, all of the property taxes stuff got me thinking about the true cost of owning a home and if it’s really worth it. Now before you look at the screen all crazy, bear with me. First off, when I say worth “it”, what is “it” exactly? For me, it’s the investment itself-if it’s a good investment say over the stock market. I listen to quite a few finance podcasts and read my last Money magazine yesterday (I have decided not to renew any more magazine subscriptions-more about that later). There are many debates on real estate investing and stock market investing. The real estate folks talk about how much they’ve made in real estate and the stock market advocates say that real estate long term return on investments is usually lower than stock market performance. For me, the stock market argument makes sense to me on the surface when you’re looking at pure returns, but I always wonder what goes into the “real estate” returns. I mean understand it to mean home fair market value increases over time. For example, home prices rose 6.5% from 3rd quarter of 2016 to 3rd quarter of 2017, Quarter 3 according to the Federal Housing Finance Agency (FHFA). However, that got me thinking. There’s SO much that goes into value for me. As a homeowner for the 3rd time now, I think about all the money we spend that kind of gets lost and/or not counted in home ownership, hence the property taxes. However, there are other things too like mortgage insurance that some borrowers have if they put down less than 20%, and then just the pure mortgage interest you pay, homeowners insurance, Homeowners Association fees, appliances and their maintenance, the house itself and its maintenance, yard maintenance, and if you’re like me-all the decorating including furniture!! That’s A LOT. Now some may say, some of these things you’d have no matter what. Well if you’re renting, you definitely don’t have property taxes, mortgage insurance, or mortgage interest and renters insurance is pretty cheap comparatively. So I don’t know. I haven’t sat and done the math. However, there’s another angle that I think of when talking of real estate investing and that is the folks that either flip properties and/or rent their properties out or even just had to move and sold their house for way over what they paid. I fall into that latter category, so I’m all about real estate in the right market. So, in that sense I wonder what the return on that is? Again, I haven’t done the math, but I’m curious about it. What I know for sure is that for me, there is something that feels good about owning-maybe the idea that one day, I will fully own it and not have to worry about arguably our biggest expense ever again and that hard earned $ can go toward my future retirement savings. I won’t ever own if I’m renting. So for me, in that sense, it is worth “it”. I believe on the investing front, it’s just always important to diversify. I personally plan to someday have a mix of investments in the stock market (I do that now through my retirement savings) and real estate via renting or flipping. In the meantime, I’ll just think of my house as a modest investment and someplace I like to come home to with the hope that I’ll actually own it one day and that it’ll be worth at least what I bought it for by the time I’m ready to sell. What about you? Do you think buying a home is worth it? Let me know your thoughts!
Dental Savings Plans – The answer to my dental expense prayers?
Hi EnLifers! I hope this finds you thriving! I have a little time whiplash, like seriously where did January go?! Today, I’m going to follow-up with the last post around dental insurance. Now if you are wondering why I am so stuck on dental stuff right now, it is because I am in the midst of what seems like a lot of dental work at the moment (see last post re: my lack of dental hygiene J). Anyhow, this past week, I had a root canal and I’m waiting for an appointment to get a new filling from the hole they created with the root canal and possibly a new crown for the tooth. Now, I knew going in to this year that I would need the root canal, however I didn’t know what else might come up. In anticipation, I opened a health savings account so that the out of pocket dental costs wouldn’t disrupt our financial lives and spend plan too much, plus it’s tax free dollars, so double ching-ching for me!! Anyhow, I had already determined that insurance wasn’t cost advantageous, however I stumbled upon dental discount/savings plans on a website called dentalplans.com. There may be more sites like this, but this one happened to be offering a sale on their plans when I visited. I also recognized some of the popular insurance companies represented like Aetna and Cigna, that I just felt comfortable with this site. I wondered if this could be one more way to save a little on the dental work in addition to or instead of the 10% self-pay discount they usually quote. I researched which plans my dental providers accepted (at this point, I have a dentist and endodontist) and looked for the balance in overall price of the plan and the discount provided for the various procedures I needed. The plans ranged in cost from about $80/year to $180/year for individuals and about $130/year to $300/year. The discounts on various procedures ranged from 10-60% AND some of them also served as discount and/or savings on vision, prescriptions, and more. I purchased the Careington POS plan that provided a 20-50% discount and also has other benefits such as pharmacy, vision/LASIK (which I may need renewed soon), hearing, and specialty care. The site was running a sale (remembering 30% off), so normally, the plan would be $199 per year plus a $20 processing fee, so essentially $220 a year, however I got it for $149 plus the $20, so $170. Now all I had to do was sit back and see how this works out ie. if it actually ends up being cheaper for me or not. I figured worst case scenario, I could at least break-even. I plan to track all year and provide an update at the end of 2018 as to how much I actually saved. I have to say I think it will be pretty good as I just did the math below and I’m already in the black as far as savings outweighing the initial upfront costs – see below.
| Normal Procedure Cost | Actual Cost with Savings | Amount Saved | |
| January | $162 | $154 | $12 |
| February | $1200 | $960 | $240 |
| $252 (Total Saved); Amount over breakeven is already $82! |
Ok-well another post in the books! If you are reading this, please subscribe and share with others you think could benefit from it! Continue to thrive as you continue to enhance your financial and overall life!
Happy Love Month!
MK