Balling on a Budget: The challenges of buying your first home
Yesterday, I ran into two very cool twenty-somethings, legal employees who are looking to buy their first homes in my neighborhood. We spent over an hour talking about the home-buying process, the rewards of home ownership, and the unique challenges of home ownership that most renters may not be prepared for.
I spent a blog post explaining why twenty-somethings should buy homes now, but there are a few challenges that you must take care of during the process:
You need to understand the home buying process. Purchasing your first home can be a confusing, intimidating process. Before getting started, make sure you understand the real estate process, lest you fall prey to rogue real estate agents, predatory lenders, and botched deals.
Although there are many helpful vendors out there, don’t depend completely on the people who are selling you a product to give you objective information. I know several people who lost thousands because they didn’t fully understand the process.
There’s plenty of information out there to give you a good overview of the process and some tips. Check out HUD, About.com, Kiplinger, and Smart Money to get started.
You need good credit. Each twenty-something should check his or her credit report three times each year using the free credit reporting systems online. You get one free report per year from the three reporting bureaus, and your credit score — aka FICO score — is the key to getting a good interest rate. Not only will you have a better picture of your financial health, but you will also catch identity theft.
If you have credit problems — such as late payments, credit limits to the max, or even lack of credit — you can talk to credit counselors and loan officers to get input on strategies that will improve your credit score and make you more attractive to lenders. Having a few problems on your credit doesn’t automatically disqualify you, though. I was a little irresponsible with a department store credit card I got when I was a freshman in college, but using strategies from credit counselors made everything even out.
You need savings. I encourage everyone to look for those home ownership programs that will help you with a down payment and closing costs. I got over $40,000 from state and federal sources that are often overlooked.
However, there is a significant investment required. I put a little over $1000 down to qualify for the home ownership programs, and as part of your initial offer to purchase a home, you need to put some money down as “earnest money.” Also, I had to purchase a refrigerator, washer, dryer, kitchen items, and furniture, which are important but should not be the source of more credit card debt. I saved and saved beforehand until I could pay cash for most of these items.
You need to continue saving. If there’s a problem at your house, it’s your responsibility to fix it. Pipes burst? You call the plumber. AC or heat not working? You call the technician. I think you get the idea: there’s no more landlord to call in order to take care of household repairs.
If you purchase a home, you need to save at least 1% of the home’s value each year and devote it solely to a home maintenance fund for emergencies. Purchase a home warranty that will cover repairs during your first year or more — my contractor has fixed small things for me at no charge because of my warranty.
And if you have a homeowners association (HOA), figure out what repairs they cover. My HOA costs a pretty penny (over $100 each month), but they take complete care of my lawn and garden area, exterior water and sewage problems, and exterior painting.
You need to stay on top of things. The home buying process takes a lot of paperwork and people management. Make multiple copies of your tax returns, pay stubs, and loan applications, and keep them in a safe place. Turn in applications and forms in person, if possible. Follow up with all of the people you meet in the process and make sure your real estate agent, loan officer, and attorney keep their promises.
Finally, you need patience. Finding the right home, real estate agent, and loan package can be an arduous journey. Doing it right means conducting careful research, talking with many people, taking time from work, filling out countless forms, and waiting on things to be approved. In fact, it took me a few weeks shy of a year from thinking “Hey, I want to buy a house!” to my closing date. Many people give up because of the time involved, but patience will definitely pay off.
Again, I recommend that twenty-somethings purchase homes if they’re planning on staying put for the next 3-5 years. The time is now to take advantage of the nation’s housing situation. Home ownership is deeply rewarding, but be ready for the challenges that lie ahead.
Why I left my political career
Earlier in the week, I talked about the surge in twenty-somethings’ political interest and discussed the things I gained from my career in politics. To recap, I spent two years doing grassroots organizing and fundraising and compliance consulting all over North Carolina through local organizations, 10 political committees, and 85 candidates.
It was a truly rewarding experience, but late last year, I decided to make a career shift and return to non-profit fundraising. Here are the challenges I faced that ultimately led to me leaving my political career:
Ageism. During my first week on the job, a workplace bully began attacking me and a few older activists yelled at my bosses for “hiring a kid.” I smoothed these issues over by standing up to the bully and by winning over the vocal critics through relationship building, but I still had to regularly confront subtle criticism about my age from older activists.
My bosses would sometimes throw me menial tasks — making copies, assembling notebooks, proofreading memos, entering data, moving furniture, and taking out the trash (yes, the trash) — because I was young. Luckily, it was only a small percentage of my work — most my cohorts were in completely clerical jobs — but it was still tough.
But the most annoying aspect of political ageism is when clients and candidates didn’t listen to me. I tried to consult a political organization through a much-needed reorganization of their governance and financial structures, but the organization’s leader dismissed my carefully researched advice because “that kid can’t possibly know what he’s talking about.” Two years after my recommendations were ignored, the organization is now facing a leadership crisis in which two people claim to be president, membership has plummeted, and their finances have been depleted due to frivolous spending. If only they had listened!
Rankism. I had to endure rude treatment from people who looked down on me because I wasn’t a senior staffer. Some political candidates who paid for and benefited from my consulting would not return my phone calls and would only speak to senior staffers, and a state-wide civil rights leader abruptly ended a phone conversation with me because he “doesn’t have time for peons.”
Lack of work/life balance. When I moved to fundraising and compliance consulting, my boss put 18-20 things on my project list to juggle at any given time, and I regularly pulled 12-15 hour days. My commute was 35 minutes each way, and I had to travel across the state many evenings to meet with clients. Add weekend events at least twice each month, and you have the perfect recipe for burnout. This is probably one of the most common complaints about political work.
Low pay. Most young political staffers don’t get paid much at all. I knew several twenty-somethings who worked full-time for less than $30,000 without any benefits. I fared significantly better in pay and benefits, but I still had trouble paying all of my bills while creating emergency savings. And it was laughable to even think of saving for retirement or investing.
“Loss of voice.” Taking a political job usually means the end of expressing one’s own opinion publicly. Blogs must be taken down, social networking pages have to be cleaned up significantly, and no staff can talk with the press unless authorized to give a statement. And anything you say publicly must go along with your bosses and clients’ stances.
I had to bite my tongue regularly and not say a word when things happened that I didn’t agree with from policy decisions to statements, from workplace issues to my bosses’ actions. Heck, I even had to work for candidates whose ideals and voting records made me cringe, but I couldn’t say a word about it.
And finally, I left politics because race matters. Black and latino political staffers are often confined to grassroots organizing and GOTV jobs throughout their careers, and the senior level jobs are almost always out of reach. There are only a handful of minority political executives, lobbyists, and fundraisers across the nation and only one national black pollster. There are even fewer black candidates who run competitive, party-supported campaigns in districts that aren’t majority minority as dictated by the Voting Rights Act.
The few minority political staffers have to walk a thin tight-rope similar to Barack Obama’s struggle with race. I felt racial discrimination from a handful of the more closed-minded people I encountered, and my bosses expected me to connect heavily with the black community and “be black” at work. At the same time, some black activists vocally questioned if I was authentically black because I didn’t graduate from a historically black college, I date a white woman, and I practice progressive politics.
Although I have been fighting it all of my life, I detest “black enough” racial politics and refuse to play those petulant games. I had to find a job in which my race is deemed completely unimportant to the quality of my work.
So yes, political work is challenging. I still stand behind the things I gained from this work. It has helped me tremendously and has given me the best gift I could have received — thick skin.
But when people ask me about my career in politics, there’s only one quote that can accurately describe how I feel: “I’m glad I did it, partly because I enjoyed it, but mostly because I’ll never have to do it again” (Mark Twain).
Things I learned from a career in politics
Twenty-somethings are engaged in politics like never before. Online communications, social networking tools and the general buzz around the this year’s elections have made us more socially conscious and politically active than ever. The zeitgeist has no doubt made countless twenty-somethings consider making political work their career, but twenty-somethings should apply some serious thought before deciding to work in politics.
The excitement around 2006 led me to take a political job. I spent two years working in North Carolina’s political realm, doing grassroots organizing (canvassing, phone banks, training, and voter outreach) and fundraising and campaign finance consulting. I worked with state-wide organizations, groups in all 100 North Carolina counties, 10 political committees, and over 85 candidates.
But late last year, I decided to shift careers and go back to non-profit fundraising, and I want to present the logic I used to make that decision. In two posts, I want to look at the plusses and the minuses of a career in politics.
Let’s start with the positives — things I gained from being a political staffer:
A “tenacity in pursuit” work ethic. Campaigns are time-driven machines that require careful planning, prioritization of tasks and quick execution. Good political staffers have to be fast, focused, flexible and ready to respond to anything while under all kinds of stress, and those skills have tremendously helped me in the “real world” workplace.
Management skills. A campaign’s success is driven by the staff’s ability to get volunteers, surrogates, consultants and candidates to perform key tasks — even when it’s pure grunt work or something the person does NOT want to do. These skills give former political workers an edge on managing employees, clients, donors, and volunteers.
Cool travel and even and phenomenal networking. I put well over 35,000 miles on my car in two years and it was worth every dollar I spent in gas. I got to drive all around North Carolina, meeting great people from all walks of life — voters, local leaders, candidates at all levels, elected officials, activists, political consultants and state-wide leaders. I was able to build relationships that I still keep today, find several mentors, and learn more about the state I now call home.
Workplace research and strategy skills. No matter the specific role, political staffers have to conduct careful, intense research on your candidate, opposition, and electorate before launching the campaign. The research makes sure you’re looking at all angles to find strengths, weaknesses, opportunities, and threats before charting a course. It’s very valuable for me in my current job as we create new fundraising programs.
Technological skills. At every level of modern campaigns, staffers have to daily use technology for data and volunteer management, voter contact, fundraising, and polling, to name a few things. I’d taken some great computer classes in college, but political work refined my web, database, and Microsoft Office skills.
Being inside of the news. Once you work in politics, you can never read the news in the same way. It’s pretty cool to pick up a newspaper and read things that you knew days prior to the press finding out. It’s cooler to read a politician’s statement and know the staffer who actually wrote it. It’s coolest when you wrote a statement yourself or were directly involved in something that made the news.
Impressing people after you move on. People, especially donors, seem to be impressed by my political past — far more than when I actually worked in politics, to be honest. It is the launching point for many conversations in social and work situations, and the skills I gained from working in politics undoubtedly helped me land the job I currently have and will continue to help in future job searches.
And finally, stargazing. When I was in politics, I regularly ran into political celebrities — congressmen, state-wide elected officials, journalists, and pundits. Less often, but still exciting, I’d run into national people like Howard Dean and governors of other states. Just by volunteering last week, I saw both Hillary Clinton and Barack Obama speak and was about 20 feet from BO. Exciting stuff.
The key, though, is to not simply stargaze; meeting these political celebrities provide great networking opportunities. I’d dare say that few of them know me from Adam — they meet thousands upon thousands of people — but I’ve taken the opportunity to network with their staffers, who’ve helped me get access to the celebrities when I’ve needed them and given me great advice.
And I’d be remiss not to mention how fun it was to run into political celebrities I’m not particularly fond of like Al Sharpton, Jesse Jackson, Kwame Kilpatrick, Mike Nifong, and even Star Jones. These are not my favorite people, but my encounters with them provide great content for random conversations, especially at parties.
These are the positive things that came out of my stint in politics. Stay tuned for a post looking at the negatives before deciding a career in politics is for you.
Social enterprise is the future of non-profit organizations
I spent today with social enterprise on the brain. In a class that’s part of my non-profit management program at Duke University, David Rendall, a Mt. Olive College business professor and author of some very cool books, proposed social enterprise as the future of non-profit funding.
As of 2006, there were nearly 1 million 501(c)(3) organizations in the US — a nearly 70% increase from the 536,000 there were ten years earlier — and I’ve heard that number currently grows at a rate of 1,000 per month. As the number of non-profits grows, inefficiency within our field goes up while the pool of available donors shrinks. Competition will be high for donations, and only well-oiled organizations will be able to thrive in the super-saturated market.
Given the conditions of the market for non-profits, how can non-profits protect themselves for the future? One way to look at becoming a social enterprise: a non-profit organization that generates earned income to support its social purpose. Earned income is revenue that’s received in exchange for products or services
Here are some notes from David’s class:
Organizations should combine service with business. A great example is TROSA, an organization in Durham, NC, that provides residential rehabilitation to recovering substance abusers. TROSA gives their program participants jobs in several businesses, including landscaping, framing, moving, and event logistics. The men in the program get job experience and structure to continue their rehab, and the organization gets much-needed funding from their enterprises across the state. In fact, my home-owners association contracts with TROSA to do our yard work.
Social enterprise should participate in the Experience Economy. More and more, consumers are paying top dollar to have unique experiences. It’s why Wilco broke new ground — ignoring the naysayers — by providing albums for free to generate million-dollar interest in their tours. It’s why people from all over the Mid-Atlantic region flock to Durham for the World Beer Festival and why people go to the symphony. They want non-replicable experiences. Non-profits should consider eco-tourism, travel, direct service opportunities, and experiential events as new fundraising mechanisms.
Don’t take on business models that have been rejected by the private sector. In the age of eBay, we don’t need another thrift store. Goodwill still manages to make it work very well (while linking it to their direct service to the public), but unless you have the capacity to launch a national chain, you should leave it alone.
Consider other audiences for our organization. Too often, groups dismiss social enterprise because the people they serve can’t afford to pay. Don’t concentrate solely on your service constituency, but think about businesses and individuals who are willing to pay for what you give. For example, one of my classmates today runs a violence alternative training program for prisoners and at-risk youth. They could slightly modify their program and teach conflict resolution and alternative dispute resolution techniques to corporations. The corporate training and consulting could completely fund their prison and school programs.
And finally, don’t start a non-profit, start a social enterprise that can make money and then fund charitable pursuits. Starting a business is far, far easier than starting a non-profit. All of the forms, legal information, reporting, and liability with a non-profit added to the super-saturated market for non-profits is reason enough to concentrate on social enterprise.
David’s class was by far the best I’ve had in the Duke non-profit program, and he’s an excellent thinker on leadership and how we can expand the non-profit sector. Check out David’s blog to learn more about his teaching, speaking, and international consulting and stay tuned for more info on him. I think he and I will be sharing a lot of ideas in the future.
It’s not often that two of your favorite things come together
I try to stay away from politics on the blog, but I couldn’t help but pass on this NY Times article about Obama’s visit to Chapel Hill. Go Obama and Go Heels!
Dribbling Past Rev. Wright, Obama shares the court with the Tar Heels
Balling on a Budget: Five reasons twenty-somethings should buy a home now
I’ll be starting a new category today called “Balling on a Budget,” which will present ways we twenty-somethings can maximize our money and save for the future while still living our fabulous lifestyles.
It’s time for a celebration! I am about six weeks away from my first anniversary as a homeowner. At the same time, my best friend Josh, who is 23, is preparing to close on his first home down in South Carolina. I encourage twenty-somethings in small to medium cities to take a hard look at buying a home. Here are some things that might convince you to buy:
Buying a home saves you money long-term. As I mentioned in an earlier post, I had no parental support during or after college, so I’ve had to earn and save every dime to my name. Before I bought my townhome, I was splitting $1500 each month in rent with two college friends, which is pretty fair for our area.
My monthly payment including mortgage, taxes, insurance, and homeowners association dues ends up being half of my old rent. It’s a phenomenal savings, and I know that every payment I make adds to home equity. Instead of losing money each month to magically poof into the pockets of a developer, I’m paying myself. It’ll definitely pay off when I’m ready to sell.
There’s free money out there. National and state initiatives provide down-payment assistance to first-time home buyers who make less than the median income in their areas, which applies to most young non-profit professionals. The best part is that the process is pretty objective — if you qualify, you get the money — and few people take advantage of the programs.
Through programs with the City of Durham and the North Carolina Housing Finance Agency, I got about $45,000 in down payment help and my closing costs covered by public sources. I only had to put $750 down and attend classes for first-time home owners.
And the income requirement is based upon your income at the time of your loan application. If you get a raise or a better job after you’re in the house, nothing changes.
Check out the HUD website to find information on first-time homebuyer programs in your state. The site will lead you to the free money and tell you about free programs to counsel you out of bad credit or to walk you through the entire home-buying process.
The time is right (if you have a few years). It’s a buyer’s market, and we should take advantage of the housing bust’s falling interest rates and prices. There are opportunities for us to get great real estate at phenomenal prices. It will take a time investment, though, but not a long-term one.
Of course “long-term” is subjective, but many people erroneously think buying a house during the housing crisis locks you into a 30-year commitment. Don’t plan on buying a house and flipping it next year or the year after, but if you think you’ll be in an area for 3-5 years, it could be worth it to buy. Some folks disagree, but I definitely think the time is right.
Roommates can pad your budget and help you save. If you buy a house with multiple bedrooms, renting them out to other twenty-somethings or college students could give your budget just enough of a boost to save tremendously. Instead of paying a real estate developer for rent, you’re now the landlord.
And finally, buying a home gives you the opportunity to express yourself. I hated the fact that I couldn’t paint in apartment and dorm living. I mean, I could have, but I would have been forced to paint it back to the sterile white color or lose my security deposits. In my house, I’ve been able to paint almost every room and invest in art that reflects my personality and gives me pride.
But of course, buying a home isn’t right for everyone, and a first-time buyer should be prepared for some serious work ahead. Stay tuned for a post that discusses challenges twenty-somethings will have to face if they want to buy a home.
Fast Company says my boss is like a monkey, a dog… maybe even a steer
Quick post, but my friend Kerra told me to pick up the current Fast Company magazine, which features a great article on how we can manage our bosses to get the desired working relationship.
Bosses are tough. I’ve worked for yellers, bullies, silent types, huggers, mentors, and complete goof-offs. Right now, I now face the extraordinary rewards and challenges — mostly rewards, in case Dan is reading (haha) — of working for one of my best friends. No matter how great the boss, though, we’ve all been in situations where we’re not entirely happy with how our boss treats us and wish we could change it.
According to Fast Company, we can change our boss’ behavior by doing one thing: treat them like animals.
Dan and Chip Heath propose that we use the techniques of exotic animal trainers to manage our bosses and create the work environment we need. They suggest that we ignore bad behavior, reward good behavior, and stay consistent.
It makes sense to me. I don’t have any experience with exotic animals, but I grew up with pets (three dogs, a flock of ducks, a cockatoo, rabbit, cat, and even a show steer — yes a cow), and the techniques they recommend were the only way we could get the animals to do anything.
At work, it makes sense especially because many of the supervisors we encounter are continually learning how to manage and lead while facing pressure and deadlines from their bosses. We have to make sure their learning process includes how to deal with us in order to keep us happy and get top results.
So the next time my boss does something I don’t like, I’ll try to think of him like Mooey, my old show steer. By ignoring bad behavior, rewarding the good, and staying consistent, it should work. But be careful, even the most carefully trained animals can unexpectedly cause serious harm.
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