I’m grateful that I have some equity in my condo. One day in the future, I’ll be able to reap the benefits of that. In the meantime, this home of my mine is putting a significant obstruction in my debt free plan.
Condominium Special Assessment
I’ve previously mentioned that my HOA Board is planning to issue a special assessment for the replacement of the roof on our building. Each unit owner must pay his or her proportionate share of the cost of the roof replacement, based on the size of their unit. This wouldn’t be a big deal if I lived in a highrise with plenty of units. Given that our building only contains 14 units, however, the projected cost of the roof on a per unit owner basis is several thousands of dollars.
When the initial projections for the roof were first presented, I was told that my portion to pay would be around $6,000. At our HOA meeting earlier this week, I learned that my contribution will be closer to $8,200. The HOA Board wants to ensure that we add some financial cushion to account for any construction overages or unexpected costs. As we all know, construction projects typically go over budget and the Board wants to ensure that we don’t end up in a bind to cover the entire cost when it comes due.
Each unit owner is supposed to be ready by February 15, 2020 with the first half of our portion of the payment; the other half is due 3 weeks later, during the first week of March, 2020. That gives me 3 months to come up with $8,200.
That gives me 3 months to come up with $8,200.
~ Single Girl
As someone who is following Dave Ramsey’s baby steps, I only have $1,000 in a baby emergency fund. In anticipation of the special assessment, I started putting money aside to be prepared to make the payment. I saved $1,000 last month toward that end. I also reserved some of the money I earned from my recent commission and put it into my sinking fund for home repairs. Currently, the account holds $2,058. In my budget for November, I’ve allocated $1,000 toward savings for this as well. So, as of the end of this month, I should have around $3,000 towards the $8,000 I’ll owe.
That gives me 3 months to come up with the $5,200 balance.
The HVAC Unit Strikes Again
Last weekend, I discovered that my HVAC (heating, ventilation and air conditioning) system went out. Completely. The thermostat wasn’t displaying anything and the unit wouldn’t heat or cool. Given the time of year this is, my heat was the main concern. I think that because half of my walls are brick, I don’t experience significant temperature fluctuations. Plus, we have both electric and gas service in our units. The oven is operated on gas. Gas payments are covered in my monthly HOA dues (which is the same payment every month). So what did I do? To warm my place while my HVAC was out, I’d heat the oven to 450 degrees then open it up and let the heat escape. I kept the oven on for as long as I needed the heat.
In September, the problem with the HVAC was that it wasn’t cooling. I spent $419 ($169 over what I budgeted) getting a short-term fix for that issue. This time, I had no idea what the problem was. My biggest fear was that it had totally died on me and that it would need to be replaced entirely.
I got a referral from a friend for one of the maintenance guys who does work at the apartment complex in which she lives. Because I’m really watching my coins, I wanted to get as low-cost a diagnosis as I could. If the issue was a major one, I’d then be more inclined to have the work done by a larger company – one that would be bonded and insured and could provide a formal warranty for their work. But, since this was a totally unexpected (and un-budgeted for expense), I needed it to be low-cost. Usually the lower-cost folks are those who do maintenance and construction work as a side hustle to their main gig.
I was happy to learn that the problem with the unit was a blown fuse. The maintenance guy changed the fuse for me and got the unit back to work.
Total cost: $100.
Water Heater
While the maintenance guy was on top of my bathroom diagnosing the HVAC unit (remember, my HVAC sits atop my bathroom), I asked if he could take a look at my water heater. A couple of weeks ago, the hot water in my shower started acting weird. The water gets hot, but it doesn’t get hot until I’ve turned the lever almost as far as it will go. Then, the water doesn’t stay hot for very long after that. (I’m no Jennifer Anniston, with her 3 minute “protect the environment” showers. I like to take long showers. Fortunately, water is included in my monthly HOA payment.)
The maintenance guy told me that my water heater is on its last leg and explained why my water isn’t getting and remaining hot like it should. He said that, if he were me, he’d replace it immediately. “I’m a budgeter,” I said. “I’m not going to be able to replace it this month.” He thinks I may have a month or 2, at most, before it completely goes out. I’ll wait a little longer.
Total cost for diagnosis: $20 (plus, I tipped him an additional $20).
The Plan
I have adequate space on my credit cards to cover both the cost of the special assessment and the water heater replacement. Plus, the HOA Board is considering allowing owners who are suffering a hardship to borrow from the HOA reserve fund, so that they have more time to come up with the money. I’m officially 102 days credit sober; borrowing the money for this in any kind of way is not an option.
For the HOA assessment, I’m deciding whether to put my debt snowball on hold over the next three months and save the $1,700+ per month that I need to cover the $5,200. It is possible that I may close on a small real estate deal between now and then, so I may get a couple of thousand dollars through that, which I could also use toward the assessment.
I plan to have the water heater serviced by the maintenance guy who is side hustling because (1) I was happy with his professionalism and his willingness to really take the time and effort to diagnose my problem, (2) I think his prices will be cheaper than most and (3) he thinks he may be able to get me a discount on the water heater. He said that a water heater like mine (a 40 gallon) should cost between $400 and $500. For labor, he would charge me $200, including picking it up for me from Lowe’s, Home Depot or wherever. Of course, I’m going to do my research on what the water heater and the associated labor should cost before making a final decision. I’ve got to look at the numbers for next month to determine whether or not I should move forward with it in December or January.
Broke + Homeownership = No Bueno
I cannot stress enough that a broke person should not own a home. When these expenses come up, you have to find a way to pay for them. And, clearly, these expenses can be significant.
Granted, I’m delighted that I have equity in my home. But that equity isn’t money that is accessible. I don’t plan to sell my condo for a few years, so, while (hopefully) my equity continues to grow in the upcoming years, I’ll be paying bills on this place all along the way – while trying to get rid of my tsunami-sized debt.
Geez, $8,900 could do A LOT for my debt snowball. But, I recognize that life continues to happen while on a debt free journey. I also have to remember – things could be a lot worse.