Comments on: Playing House: Prepare By Pretending

By: Joyful Abode

Joyful Abode — Sun, 16 Aug 2009 17:21:08 +0000

We “pretend” all the time… with my husband in the military, my job situation is pretty up in the air. We’re about to move for the 4th time in just over 2 years, and I have to start over with work every time.

So we budget with his income and mine goes to savings that are flexible.

It’s very much like “pretending” I’ve stopped working due to having a baby (we don’t have kids yet). So when we do have a baby if I need to take some time off, it won’t be much different. Also, I work from home so I’ll be able to stay at home once I start working again.

We also “pretend” to pay a car payment (our cars are paid off) but really that payment goes into a car savings account so that when we need a new (used, new to us) car we’ll have cash for it.

By: karla (threadbndr)

karla (threadbndr) — Wed, 22 Jul 2009 15:12:08 +0000

I did this with my new (to me) car! It gave me enough of a downpayment that I was never upside down and my trade in (barely) covered the taxes.

It’s good to know that you can easily make the payments. And like Miranda – after this car is paid for, I’m planning to continue to make the payments to myself. From here on out, I’m paying for my cars in CASH. Being able to write out a check for a third of the cost of a new car was so liberating.

By: DDFD at DivorcedDadFrugalDad

DDFD at DivorcedDadFrugalDad — Mon, 20 Jul 2009 12:48:17 +0000

Sort of like paper trading . . . nice approach!

By: Funny about Money

Funny about Money — Sun, 19 Jul 2009 16:10:32 +0000

Utility bills are only $100 a month in the Baltimore-DC area? And what insurer is charging you only $600/year for homeowner’s coverage? Uhm, unless maybe you live in a condo?

The tax rate is exorbitant compared to mine, but given the desperate predicament of our city and county governments, no doubt ours will soon match yours. In that case, it sounds like it would be cheaper to live in your part of the country…where salaries are WAY higher than in our right-to-work-(for nothing) state.

By: Patrick

Patrick — Thu, 16 Jul 2009 12:39:47 +0000

This is a great strategy. It really give you a good idea on how life will be when you do decide to buy a house. It can also unintentionally get a person to save without realizing it

By: Beth

Beth — Wed, 15 Jul 2009 20:09:03 +0000

I like this idea I’m aiming to keep my housing costs almost the same moving from an apartment to a condo, so what is or isn’t covered by condo fees will be part of the issue too.

I think I’m going to try this for my next car and see if I can “pay it off” before I actually buy it.

By: Corporate Barbarian

Corporate Barbarian — Wed, 15 Jul 2009 17:13:00 +0000

I’ve used this method before, at home and at work. The fancy finance term is a pro forma projection, where you factor certain what-ifs into your expense model. I like Miranda’s idea, too. Cars get old and need to be replaced. It makes perfect sense.

By: Dave

Dave — Wed, 15 Jul 2009 15:43:15 +0000

I think this is a great idea. I did something like it prior to buying my house. Since I use quicken regularly, I was able to see the impact of the increases mortgage and property taxes (minus my additional tax liabilities, or course).

Based on what our normal spending patterns were, I was able to figure out exactly how much mortgage we would be able to afford. Knowing this, my wife and I knew that we would have to make some sacrifices if we wanted to live in a house higher than what I calcualted.

By: Caitlin

Caitlin — Wed, 15 Jul 2009 15:42:17 +0000

I’ve done this!

I also really like Miranda’s idea to keep making payments even after you’ve paid off the item! Sort of like the Debt Snowball, only you’re saving instead of paying off debt! Great idea!

By: Miranda

Miranda — Wed, 15 Jul 2009 12:55:08 +0000

We did this as well. It is a great tool. It also works with a car payment. In fact, we keep making our “car payment” even after it is paid off. That way, we’re ready to buy a car with a bigger down payment should it become necessary.

By: Nicole

Nicole — Wed, 15 Jul 2009 12:42:02 +0000

I thought my mother had invented this idea! She and my father did this in the early 1980′s when they were planning to buy their first house. She taught me how to do it a year before I decided to buy my house. It was a good learning experience, because I hadn’t realized all the different costs involved in a house beyond the actual mortgage.

Good article, Jim.

By: Craig F.

Craig F. — Wed, 15 Jul 2009 12:06:04 +0000

What a great suggestion. I wonder where we would be if people had used this suggestion before 2008?

My wife and I did something similar when we were considering going from a two income family to a one income family. First, we worked the budget with our new take home pay and then we tried to see if we were willing to live with the sacrifices. Though the ‘pretending’ was inaccurate at some points it gave us a good idea of what life would be like with the new income.