But First! My Review of Budgeting Apps: Monarch Money vs Origin

Now if you’re really hurting on cash, I have a free budgeting template that I’d suggest using.

I bring up budgeting apps because if you’re about to make a decision to buy your first home or to upgrade, you should probably make a budget.

But to really maximize the odds that you stick to a budget, I encourage people to use a budgeting app that automatically tracks their spending. Tracking is the most tedious part, and often why people stop.

The two apps that I recommend are Monarch Money and Origin.

After now using both apps for at least 5 months, I wanted to share my thoughts.

In my opinion, Monarch is the superior product. Monarch is Apple, and Origin is Android.

I was able to get the hang of using Monarch within a couple of logins, and I found that it was much easier for me to visualize where my money is actually going using their app.

I’ll be honest, I don’t use the app to it’s full extent, I mostly like to use it to make sure that we’re sticking to our savings and investment goals and to get a baseline of how much we spend on things like eating out, coffee, and other “wants”.

I felt like when I was looking through the categories of spending in Origin I often had to make tweaks to the category it was put in where as Monarch was pretty seamless and surprisingly accurate at guessing what things belonged in. Which again, is the most tedious part in my opinion.

Now you might say, but Android is superior. And for those people, I would highly recommend Origin.

Where Origin wins is that it feels like an engineer’s dream. They have basically built ChatGPT into their product so you can go buckwild with financial planning.

You can basically talk to AI while it has context to your finances. Which I love, but the product just feels a little bit behind Monarch in it’s development. And while it’s super customizable, it just took me longer to get the feel.

Lastly, Origin wins with the fact that it’s $1 for the rest of the year. Idk how long they plan to keep that alive, but in comparison, Monarch is around $50 right now if you sign up through my link.

Overall, for $1 you get significantly more than my free budgeting template at almost nothing.

But, I question how likely you are to stick to budgeting using Origin so maybe the $49 extra is worth it.

Upgrading Your Home

Now, before I talk about buying your first home and moving from renting to owning, I wanted to talk about upgrading.

I have yet to meet anyone who’s bought a home in the last 8 years that intends to live there for the rest of their life.

Most first-time home buyers stay in their home for 2-5 years and only 18% of first-time home buyers intend for that home to be their forever home.

But maybe you’re sitting on a 3% interest rate. Maybe homes have gone up in price in your area so significantly that you couldn’t fathom spending that much on a home.

I hear you, Katey and I are currently evaluating how long we want to stay in our current home.

We love the area, but not the school systems. We like our yard, but would love more space to start growing our own food and even get some livestock.

Want, want, want.

It’s ok to want a better home or a better life.

But now that we’ve gone through the process of doing a ton of renovations that actually didn’t net us as much money as we would have thought, I’ve accepted that your primary home is not an investment.

It’s better than renting, but it’s not the same as investing for retirement or to build wealth.

Which means that when we think about upgrading, we have to ask ourselves two questions:

1 - What can we currently afford?

2 - How will this payment impact our financial goals?

Let me break these down a little further.

What can we afford

Work with a realtor or lender to get better numbers, this is meant to be a rough estimate.

1st take your monthly household income and multiply it by .25. This will tell you what 25% of your income is, but it will also give you a boundary to not cross so you don’t end up house poor. (btw, some people would say spend even less)

Let’s say you can afford $2,500/mo.

If you’re deciding to sell the house, find some similar homes in your area to get an estimate on your home’s value. Let’s say it’s $500k

You’ll have to pay some agent fees which is probably ballpark 5% meaning that you’d pay $500k x .05. So $25k

Which means you’d get $475k subtract your mortgage, let’s call it $350k.

So you have $125k plus whatever savings you’d want to add as a down payment.

Using a mortgage calculator here you can start to play around with your downpayment and price to see what kind of monthly payment to expect. (Use 6% as your interest rate for now)

For taxes and insurance just use 1.5% of the home value as a placeholder.

As you manipulate home prices and adjust the monthly payment, you’ll start to see what your $2,500 budget would afford you.

How is this going to impact your goals

What’s the difference in payment between your new monthly payment and your current monthly payment? Let’s say it’s a $900/mo difference.

You may say, oh we’ll just cut back. You won’t.

You know where it will impact you? In the amount you save and invest every month.

So now you’re going to take that $900/mo difference and subtract it from what you currently invest every month.

Let’s say you invest $1,500 per month.

Now you’re investing $600/mo. Is that enough?

Using this compound interest calculator you can find out.

Take your current retirement savings and whatever investments you have and that’s your “initial deposit”. Let’s say you have $150,000. This wouldn’t include the deposit on the home you’d buy.

Years of growth is the age you want to retire minus your current age. Your 35 and want to retire at 55, so 20.

Rate of return is 7%. (invest in target date funds or SPY index funds)

Contribution amount is $600/mo. You end up with just shy of a million dollars. Assuming you never get a raise, never increase your spending, etc.

Is that enough? If you don’t know, just take your monthly expenses and multiply by 20 to see.

This will show you the impact this upgrade has.

That’s it for this week.

As always, let me know how I can help!

Best,

Dan