My friend Rose from Our Lady of Second Helpings posted her version of our trip to the farm to buy our cow. She’s a food blogger, so her article focuses more on the nutritional aspects of grass-fed beef. It’s a great compliment to the articles I’ve written on the cost-savings potential in buying an entire cow.
For instance, here’s her take on grass-fed vs. whatever-junk-they-use-on-feedlots beef:
Taste and Nutrition – We would rather not eat greasy food. Compared to factory raised grain fed beef, grass fed beef is extremely lean. We prefer the more meaty and slightly gamey flavor of grass fed beef. Studies have shown grass fed beef to be higher in nutrients, minerals, and “good” fats.
Go read the whole article, it’s interesting.
When she read that I was talking about buying or building a house, Foundry reader Ethel mailed me and asked if she could write a guest post about an important elephant in the room when making a large purchase: your credit score. Ramit Sethi from I Will Teach You To Be Rich points out that a bad credit score will cost you tens of thousands of dollars over the course of even a modest mortgage.
Take it away, Ethel…
Why it’s Frugal to Build a Better Credit Score
A good credit score can make it easier to secure loans and get better interest rates, but what many don’t realize is that a bad credit score can hit your wallet in ways you are not aware of. Besides having to pay higher interest rates on loans and mortgages, a poor credit rating can cause denial of employment, higher insurance premiums, or paying a higher security deposit when renting a house or apartment. Cell phone companies may even require those with a low credit score to pay a security deposit of as much as four or five hundred dollars before they can open an account.
What is a Good Credit Score?
Most credit reporting agencies use what is known as the FICO (Fair Isaac Corporation) model or a version of it to calculate your credit score. Various factors such as your bill payment history, the types of credit you have, the length of your credit history, and recent borrowings are considered in its calculation. A “good” credit score, according to Experian, one of the major credit reporting bureaus in America, depends on the system used by your lender. Most credit scores fall in the range of 600 – 750, and the average score for the United States is around 720. Generally they say, a score of 700 or above suggests that you manage credit well.
How to Improve Your Credit Score
There are several steps you can take to improve your credit score if it’s on the low side. One of the most effective methods is to pay off any outstanding bills and continue to pay them on time in the future. Your history of paying bills makes up 35% of your credit score, so making timely payments can raise it quite quickly.
Another effective way to raise your credit score is through the responsible use of a credit card. If you charge only small amounts which you can pay off in full every month, your credit score will gradually rise. If you aren’t able to pay the full balance, maintaining one of less than 30% of your card’s limit is also effective. For instance, if you have a $1,000 limit on your credit card, make sure you keep the balance at around $300 or below. [ed: NEVER use a credit card if you can't pay the balance in full each and every month.]
If you don’t qualify for a standard credit card, you can get a secured credit card. You simply deposit an amount of money with your bank, and they will issue you a card with a limit equal to the amount you deposit. You must follow the same practices as with a normal credit card, keeping your balance at below 30% of your limit, or paying it off in full every month when you can in order to increase your credit score.
Raising your credit score is really not that hard. It does require a focused plan and a bit of discipline, but it is well worth the effort it takes. Paying your bills and making loan payments on time can save you from costly penalties or late fees. For those seeking a mortgage, a healthy credit score can save you tens of thousands of dollars over the course of the loan. Why pay more of a security deposit than you need to? A little effort can go a long way, not only towards raising your credit score, but to raising the balance of your bank account as well.
Ethel Wilson is a financial and credit specialist with 12 years experience in the banking, credit scores, and financial industry. She has advised countless clients on how to improve their credit score rating. She now shares the best of her credit score rating information as a contributor and editor of creditscoreresource.com
Thanks, Ethel! One thing I’d add is to check all 3 credit scores yearly. The official website for checking your scores is annualcreditreport.com. Do NOT use the websites that you see advertised, even if they say “free” they are for-pay services. You can also get your credit score checked for free by 3rd party sites like creditkarma.com. They “guess” your score so it isn’t 100% accurate, but it’s close enough to monitor if you’ve been the victim of identity theft, between your yearly official credit check-ups.
Once we realized that buying a ready-to-live-in home was just one of many options for us, we soon realized just how many options we have. We’re literally still thinking of new ways to attack the “where are we going to live?” problem. This blog post is an attempt to capture each idea, along with its pros and cons.
0. Buy the house we’re currently renting
Our landlord has repeatedly offered to sell us his house. Just getting this one out of the way first, as Mrs Foundry has already veto’d it.
Pros: no moving. Cut out middlemen to decrease sale price. We’re very aware of the house’s shortcomings
Cons: it’s on a busy street. We’re very aware of the house’s shortcomings.
1. Buy a house that’s ready to live in
This one’s pretty obvious since it’s what most people do. You buy a house that’s been kept up well and/or remodeled recently so it doesn’t need much additional work put into it.
Pros: move in right away. No getting your hands dirty.
Cons: more expensive. No customization. Someone else reaps the sweat equity of remodeling the home.
2. Buy a fixer-upper
Perhaps this one gets the silver medal for obviousness. I haven’t seen too many fixers on the market, but it’s something to consider. I could see us moving into an outmoded—yet functional—house with good bones (picture green shag carpet and harvest gold countertops) and remodeling room by room. We could do many things ourselves and pay to have professionals do the rest.
Pros: move in soonish. Don’t have to start from scratch. A remodel is easier to get permits than new construction.
Cons: fixers are actually pretty expensive. Don’t get to pick the floorpan. Depending on the condition, living in a fixer is probably stressful.
3. Buy a too-small house and add an addition
Mrs. Foundry thought of this one last night. For instance, we could buy a small rambler and plop a 2nd story on top of it. Probably easier said than done. There are lots of combinations of existing homes and possible additions (build into the back yard, build a 2nd story, build a tree fort with a zipline into the house)
Pros: Expands the selection of homes to choose from. Potential cost savings? A remodel is easier to get permits.
Cons: Have to work around the constraints of the existing structure. Potentially time-consuming.
4. Buy a teardown
Buy Bob’s Crusty Shotgun Shack and host a sledgehammer party. Then, see Option 5.
Pros: doens’t matter what the house looks like as long as the lot is nice and foundation is solid. Companies like Re-Store will pick up demolished materials for a tax write-off. There’s already a foundation, utility connections, etc. Building the new home could be considered a remodel, which is easier to get permits for.
Cons: extreme shortage of these. I think I’ve seen a total of two teardowns on the market in the past four months. You still pay for the value of the house, and then pay again to have it demolished.
5. Buy land
Like Option #4 without the sledgehammer party.
Pros: don’t have to pay for demolition. Can start completely from scratch. Get to choose everything, a completely custom home.
Cons: shortage of vacant lots in Seattle. Need to do more work ahead of building, such as geotechnical reports and foundation. More permitting red-tape.
So it’s five options, that’s not too many, right? Wrong! Each of the options that involve building (either an addition or an entire house), also involve sub-options!
Apparently when you build a house on-site, it’s called stick-built. This is what everyone pictures when they think of building a house so I won’t go into too much detail.
Pros: everyone understands this process. Easier to get loans (compared to prefabricated, see below).
Cons: materials get damaged by weather, stuff gets stolen, can take a while
Prefrab gets a bad rap because many people think of mobile and manufactured homes. But “prefab” simply means building some of the house offsite. The house itself can still look awesome when it’s done. Prefab includes “modular,” where the house is built 90% offsite and lifted onto the foundation. I’d call this the “legos” school of homebuilding. There’s also Structural Insulated Panels, or SIPs, which are like pre-built walls. I’d call this the “construx” school of homebuilding (remember those?). Those are just two of the many ways that some (or most) of the home can be built offsite.
Pros and cons here are less straightforward because it’s really on a case-by-case basis. Furthermore, you’ll rarely get a straight answer from professionals because most of them have skin in the game for one or the other. Proponents of prefab will tell you “you wouldn’t send a team of mechanics to build your car from raw materials in your driveway, so why do the same for your home?” Detractors will point out that for single-family homes, the economies of scale just aren’t present to make prefab a cost savings approach.
Then there’s financing. Fewer lenders are willing to make loans for prefabricated homes, so there’s less competition in the market which drives mortgage rates up. Apparently the modules are considered “personal property” until they’re installed on the lot. Only then are they considered “real property.” Personal property is riskier to lend money for (that’s one reason credit card rates are higher than mortgage rates), and banks are understandably skittish about loaning money for enormous, hundred-thousand-dollar cubes of wood that are literally trucked across the country on the back of flatbeds.
So there you have it. About a dozen different approaches to owning a home. We’re keeping our options open (you don’t even want to see how many spreadsheets and saved real estate searches I have going), but there will come a time where we’ll need to pull the trigger and start the journey down one of the aforementioned paths.
Anyone have experience with any of the non-traditional routes?
Mrs. Foundry and I are on month four of a house-hunt in the Seattle area. I enjoy looking at real-estate, weighing pros/cons of various floor-plans and neighborhoods, figuring out mortgages, etc. However, it’s a time-consuming and sometimes frustrating process. For those not familiar with the parcularities of the Seattle area, we’re experiencing an unprecedented shortage of homes for sale, which is driving up prices and generally making it a less-than-awesome time to look for a house.*
We’re working with an awesome agent, Sheley, who is being patient with us, since we’re being very picky about where we spend a gajillion dollars and park our tuchases for the next few decades.
I recently got turned on to the blog A House By The Park, which details a local dot.com millionaire’s process of buying land and building a very expensive modern home. Even though we have a fraction of his budget, the thoroughness of his writing inspired me to check this option out. In addition, I have a soft spot for modern home architecture, but always assumed it was out of my price range. Since housing is artificially inflated by low inventory, wouldn’t that make building a home a relatively cost-efficient thing to do?**
And why not blog about it along the way? I figured my blog name is already appropriate: the “foundry” being the home and the “forest” being Seattle. I can write about how we’re challenging the status quo in order to save money, which is pretty much my favorite thing to do and to write about.
So please pardon the mission creep, and indulge me while I write about buying, remodeling, and/or building a home, from identifying the property right up until moving in. Maybe some readers have experience with this already? Either way, I think we’re all in for a wild ride.
* An architect/builder friend explained that banks aren’t lending money for high-density condos, so developers are building lower-density townhomes and single-family homes. The lower density leads to less properties for sale, which leads to the classic supply-and-demand problem that isn’t unique to housing. I’m sure this is a simplified view of the situation, but it’s a more satisfying hypotheses than “nobody wants to sell their house right now.”
** This statement only applies to the house itself. Apparently I’m not the only person in town who came to the conclusion to build, as Vacant lots are also being subjected to the current mini-bubble.
Each week, my Rabbi gives a moving and informative sermon. They’re always top-notch, but this week’s was also very topical for Foundry in the Forest. I asked him if he’d be willing to let me turn it into a guest post, and he was kind enough to oblige.
The holiday of Passover is coming up next week, so Jews around the world are doing spring cleaning: literally, to get rid of the bread crumbs in the cupboards, and also metaphorically to try to rid ourselves of the excess in our lives.
The sermon is long but I encourage you to read the whole thing, regardless of your faith, as the message is universal.
The Anti-Accumulation Holiday
Rabbi Jay Rosenbaum
I have made it known over the years that the most valuable lessons I have learned in life come from television. But, today, I’m not going to limit my comments to TV. I’m going to start with a television show. But, then, I’m also going to talk about an insight into the Exodus story I learned from a Muslim friend, and how it’s connected to the show.
First the show. There is a show on HBO called “Enlightened” starring Laura Dern as Amy. In one of the episodes, there is a five minute encounter between Amy’s mother, Helen, and Helen’s old friend Carol, played by Barbara Billingsley.
Helen and Carol used to be good friends. They were both married to successful husbands, and they ran in the same circles. They run into each other in the store, after not having seen each other for several years. At first, they are delighted to see each other, and they start to catch up on each other’s lives.
Carol tells Helen about her daughter who is married and has two beautiful little children. She pulls out her iPhone to show Helen the photos. Then Carol asks Helen about her children. Well, Helen has one daughter, who has a child, but she hasn’t spoken to this daughter in years.
Her other daughter, Amy has just gotten divorced from Levi. They used to be the envy of everyone in high school—the energetic, beautiful blonde that all the boys wanted to date, and the handsome, star athlete. But, things haven’t worked out for them. And, now Amy has been demoted from her job and is living with her mother, trying to figure things out.
When Helen tells Carol about her children, Carol makes a feeble attempt at sympathy, but change of facial expression and tone of voice reflect a sense of superiority laced with contempt. “You know,” she says to Helen, “my daughter was always jealous of Amy in high school. Everyone wanted to be Amy. She had it all.” And, it was clear that Carol believed she had won the race. She had children, she had grandchildren who were flourishing. And, the former prom queen had nothing. And, she was happy about it.
The whole conversation lasted no more than five minutes, but it was brilliantly done. Because it showed how a simple exchange between two women who were supposedly friends and interested in each other’s welfare, was really about an intense jockeying for power and position. No one pulled out a gun, no voice was raised even a notch. But, this was war. It wasn’t enough for Carol that she had so much to be grateful for in her life. She had to derive additional satisfaction from the fact that her friend Helen had less than she did, and so she had won.
What causes human beings to behave this way? Here I would like to turn to a story we spoke about a few weeks ago, but which I saw differently because of a discussion we had in our Muslim-Jewish dialogue group this week. We were studying the story of the manna. After our people left Egyptian slavery, and we were traveling in the desert, we were anxious about not having enough food. So, God gave us a guaranteed food supply for forty years. But, God only gave us one day’s supply of manna at a time.
And, there were rules. We were not allowed to save any manna for the next day. We were to take only as much as we needed and no more. And, the Torah tells us that no matter how much we gathered, every one of us had just enough, but no surplus. So, clearly, many of us tried to grab as much as we could, but to no avail.
Many of us tried to save the manna for the next day, but it spoiled. We were only allowed to save the manna once. That was on Friday, when God gave us a double portion, so we wouldn’t have to gather on Shabbat. But, that didn’t prevent the Jewish people from going out the next day and looking for more.
Why did God choose this particular method of feeding the Jewish people at the moment we had been released from slavery? What would have been wrong with allowing us to save up some of the manna, and relieve us of the anxiety that we wouldn’t have enough for tomorrow?
When we were studying this story in our Muslim-Jewish dialogue group, one of the Muslims, David Suissa, remembered that in the Joseph story, there was an opposite scenario. Joseph was the ultimate saver of food. He presided over the saving of food in Egypt during the years of plenty so that when the famine hit, there would be enough to feed everyone.
That sounds so sensible. But, what actually happened? Joseph controlled the entire food supply for Egypt. He rationed out food as he saw fit. Initially, people bought the food. When they ran out of money, they sold their land to the government in exchange for food. When they ran out of land, they sold themselves to Pharoah in exchange for food. Now Pharoah controlled all the land in Egypt and he had a huge slave force.
When we look at life as a zero-sum battle for scarce resources, the result will be slavery. In our fear that we will not have enough, we will want to grab as much as we can. We will horde, we will try to corner the market. And, the result of that kind of unbridled competition is always going to be that a small number of people are going to control a disproportionate share of the resources, and a huge population is going to have little or nothing. The resource could be land, money, oil, water, and even things like friendship, or sexual partners.
The Torah traces human oppression to the propensity of every human being to take more than we need. It’s why the Torah says of the king, ‘The king was not to accumulate too much gold, too many horses, and too many women.’ Because if the criterion of a successful life is having more and more and more—if the more we have, the better we are, that’s a recipe for gross inequality and mass human misery.
When the Jewish people left Egypt, the goal was to create an egalitarian society, How do you do it? You attack the source of inequality—our human tendency to want more than we need. If God had allowed the Jewish people to collect as much manna as they could, there would have been a fierce competition, with the Jewish people stepping on each other to grab as much as possible.
The result would be that a small number of people would control the majority of the food supply. They could sell it at any price they wanted. And, now, once again, you have a slave society. By forbidding the Jewish people from even saving for one day, God was reversing what went wrong in the Joseph story, where hording led to slavery.
And, the way we celebrate Passover is a reflection of this philosophy. In the month before Pesach, it’s a liability to save. You’ll end up throwing things out.
Passover is the anti-accumulation holiday. To get ready for the holiday of freedom, we have to un-save, we have to un-accumulate. We have to get rid of all the extra stuff that we don’t need. It’s a way to rid us of the insecurity that leads us to horde and take as much as we can. Because it’s this compulsion to take more than we need that leads us to be blind to what others need.
It’s no accident that the most popular song at the Seder is Dayenu, which means “We have enough.” To create a truly just society, it is essential that each of us master the ability to take what we need, and no more. Passover challenges us to ask ourselves: what do we really need to be happy and fulfilled?
And, not just in regard to material resources. There are many ways to play the hunger games. We can hunger for attention. We can hunger for applause. We can look at life as a bank account in which we have to continually pile up credits to our name. In our mussar class in the Fall, Ann Trail called them merit badges. The more badges we have, the more worthwhile we are. When that hunger to accumulate becomes obsessive, even in the most polite society, we can end up taking joy in our neighbor’s unhappiness.
Passover encourages us to live more simply, to live more modestly, not only in our physical needs, but in our emotional needs, too: to take for ourselves enough attention, enough praise, enough appreciation, but not more.
Passover encourages us to sing Dayenu, not only at the Seder, but in our lives, as well.
Who knew that the main theme of Your Money Or Your Life (having enough) has its roots in an old Jewish Passover song?
Thank you to Rabbi Rosenbaum for allowing me to publish his sermon. Happy Passover, Happy Easter, Happy Spring, no matter what you celebrate!
I was recently struck, like knocked to my knees, by a quote of George Saunders’. Asked of the pressure of raising kids in our society, where desire to give them the world and to keep up with the Joneses butts up against reality, Saunders noted, “Materialism is not only rampant and ascendant but is fast becoming the only game in town.”