Big Plaster Mess!
Since we last checked in with Heather and Frank they’ve made quite a bit of progress working on the house, including demolishing and hauling away the old kitchen appliances and cabinets. They’ve been doing most of the work themselves, occasionally hiring day laborers through St. Joseph Day Worker Center for heavier jobs. Frank thinks the worst of the dry rot was around the kitchen window and behind the sink, and it does seem to smell better since they replaced the framing along that wall and installed the new window.
Plaster Everywhere
Despite their best efforts, costs are running up quickly and Heather is worried they’ll soon exceed their remodeling budget. Holly told her about the 5-yr-income-prop.xls spreadsheet available via the post Expected Return of Income Property, so she downloaded it and filled it in based on the current San Jose rental market. To her shock, she will lose $17,901 on the home investment if she rents the property and sells it in 5 years as planned, and that’s if she doesn’t spend more than the $20,000 budgeted for remodeling!
She will need to hold the property 11 years to break even on the investment, 6 years longer than she told Jack and Ben it would take her to pay back what she borrowed from them for the down payment.
Heather meant to work on a spreadsheet before buying the house, but the ballpark numbers seemed so workable and she just had to have the house! She didn’t know till Holly told her that historically house prices mostly break even with inflation.
Heather is ambitious to get ahead financially, yet her plans never seem to pan out. It’s not that she doesn’t work hard, or that she spends more than she earns on ordinary living expenses.
Her mother Katherine was a teacher who grew up on a farm in rural Nebraska during the depression. She taught Heather very well about the basics of frugal home economics, including how to balance a check book, shop smartly for groceries and other household expenses, make her own clothes, cook inexpensively for a crowd, and lovingly refinish and restore furnishings purchased at thrift stores and flea markets.
Her dad Daniel was an aspiring broadcast engineer, son of a retail store manager in the Nebraska town closest to Katherine’s family farm. He met Lois at a Presbyterian church social just a few weeks before receiving an offer for an RF Engineer position at a San Francisco East Bay radio station, and proposed to her immediately. The couple married and moved to California within a month of meeting. Heather was born a year later, her brother John two years later.
Daniel was even more of a financial minimalist than Lois, who chided him for wearing threadbare jackets and socks with holes, and for taking the family to cheap motels for summer vacations.
There was no question of the virtue of thrift, yet family discussions never ventured into the territory of saving money with an eye to gradual accumulation of wealth. The wealthy were derided in Heather’s household. Lois and Daniel, who found themselves with increasingly less in common to talk about over the years, always agreed on this one point: the wealthy were to be regarded with suspicion.
Heather rebelled against everything her parents stood for, including their thoughts about wealthy versus regular folks. It wasn’t that she meant to rebel for the sake of rebelling, but that life at home was unhappy. Lois and Daniel grew apart, Daniel not understanding how Lois could embrace the dull fate of a mother and teacher, and Lois not understanding how Daniel could let his frustrations distance himself from her and the children. Heather and John spent as much time as possible away from the house, seeking warm connections with friends, the parents of friends, and teachers interested in their progress and future aspirations.
Heather, exposed to influences outside of her family circle, began to dream.
{ 2 comments… read them below or add one }
I love the story. It’s interesting that some people who grow up in really frugal households, have no clue as to how to accumulate wealth and actually despise the idea of being frugal.
Just last night my husband and I watched Confessions of a Shopaholic. Not a great movie, but the underlying theme was that the main character’s parents were really frugal and she didn’t like their way of life. She rebelled by getting herself deep in debt, a kind of “Sex in the City” lifestyle. However, it was a slap in the face to those “savers”, when the parents sunk everything they saved into a really crappy RV. My husband and I thought they should have bought a really high end RV to show that saving money means something. Just a thought. Will be coming back for more!
@Little House I agree that the whole point of saving is to use the money for a worthwhile financial goal, but for me a high-end RV would never be worth all of my savings! As we’ll see, Heather eventually embraces the principles of frugality and basic money management she learned from her parents, but she doesn’t know how to take it to the next level and become financially independent.