PMI + Potential Year-Round Capsule

In my last post, I mentioned that the reason my husband and I are holding out to purchase a home is because we don’t want to pay PMI for having less than 20% down. One of the reasons I chose to start talking publicly about our finances is because it allows me to look at things from an outsider’s perspective. When I edit blog drafts, one of the many things I do is ask myself questions I think my readers would propose as they read through. Of course, immediately after I typed out, “I don’t want PMI so I’m saving up the 20%” I realized “but if you’re planning on paying off your home, there might be some overall savings if you take the small hit from the PMI instead of paying rent every month”. For instance, if you’re paying a $50 PMI on top of a $850 mortgage, that’s still cheaper than $1000 in rent.

So I pulled up Excel to do some calculations to see how the savings differs. Considering the same $850 mortgage if you choose to only put 10% towards the down payment versus 20%, you would not only have $13,000 less in savings by the time the PMI drops off, you would have $12,000 more due on your mortgage. It’s only a difference of a 16 months paying rent to save up that extra 10% – that’s $9,000 you’re missing out on! And that savings gap only gets larger with a higher mortgage. I don’t know about you, but my kids’ teeth are coming in crooked so that $9,000 I would have saved in the 8 years I was paying PMI could have gone towards Invisalign.

Long story short, it’s not the PMI that will get you, it’s the fact that you’re putting a smaller percentage towards your downpayment which equates to bigger mortgage payments and less money in your pocket in the long run. Every home buyers situation is different so always work out your specific costs to decide when you’ll hit that sweet spot of savings in the long term. Because there might be a situation where you’ll spend more in the rent saving for a downpayment than you’ll save on your mortgage in the long term.

Alrighty now that I’ve cleared up that misconception, on to the real reason we’re here – a Year-Round Capsule Wardrobe! I’ve been doing some form of a capsule wardrobe since spring 2014. It has allowed me to pick out clothing quicker, helped teach me about my style, and given me a better appreciation of the clothing I have. There are a lot of reasons a person would want to start doing seasonal capsule wardrobes. For me, the biggest reason was to stop wasting money on thoughtless purchases. I have considered shopping a “hobby” since probably middle school. I think a lot of people (women) do, and that’s a sad fact. I wanted to think about clothing in relation to how it assisted me with my daily activities and not how it made me feel or how it portrayed me to the world. In the last year before capsules (2013) our household spent $3435 on apparel. The following year (2014) only $1945. And this year (2015) we’ve spent even less at $1272 (so far). I’ve been happy with this progress, but I’m starting to feel some purchasing urges coming on. This fall’s capsule has been extremely unsuccessful, and it has made me feel like I need to go out a purchase an entirely new wardrobe. But instead I decided to do another big wardrobe cull.

I started by removing a bunch of items because they didn’t fit well and because they didn’t work for my lifestyle. THREE silk blouses?!?! I stay at home all day with toddlers, when does it make sense to wear any of these blouses? I find myself rotating between the same 4 tops and 2 bottoms or just comitting to full on SAHM-mode with Norts and one of many promo t-shirts. Yet at the bottom of my closet hung the rest of my wardrobe; over 80 pieces that I wasn’t even going to consider wearing this season. I started browsing through the bottom row of clothing – a radish-colored velvet blazer, a nude lace pencil skirt, a geometric print blouse with a big bow around the high neck. All of these are great workwear pieces. But when is the next time I am going to need workwear? 2 years from now when the babies start going to preschool, 4 years from now when they’re in kindergarten, or maybe even 9 years from now when they’re starting to do a lot of after school programs? What if I never go back to a traditional office setting? Why do I have all of this clothing hanging in my closet that I couldn’t imagine myself wearing in the near future?

I decided to remove everything I couldn’t see myself wearing as a stay-at-home-mom and piling it onto the bed. I created three piles: donate, consign, keep. The biggest pile was keep. I can’t bare the thought of getting rid of perfectly good clothing that I LOVE just because it doesn’t fit my lifestyle in this moment. After removing all the workwear, I could not believe how little was left on my shelves. Besides the special occasion dresses, I left hanging in the corner covered in a dress bag, I have under 50 clothing items. TOTAL. Like for ALL seasons. Also 8 pairs of shoes, 5 belts, 1 hat, and 6 purses. After removing all of the excess storage options and organizing the remaining clothing items, I felt elated. Like literally on cloud nine. Much better than I would have felt after coming home from a shopping trip. No longer would I walk into my closet and (still) see clothing I wasn’t going to wear.

image

I’ve been living with this new year-round capsule for about three weeks now, and while I still WANT to take advantage of the holiday sales, I know that I don’t NEED to. I continue to wear my Norts and a t-shirt uniform 50% of the time even when everything I own is freshly laundered and hanging in my closet. I thought my cluttered wardrobe was keeping me from my dressing nicely every day when in actuality, it’s just my sheer lack of motivation. Which is a whole other blog post on it’s own.

Before I decide to delve into the stay-at-home-mom slump that has taken my ambition hostage, I would like to hear from others who have been in or are in the same position that I am. Who else has reached that point in their minimalist journey where they are now confronted with the true reason they feel discontented? Are you still working out the kinks or have you made it over the hump? I would love to hear from you.

 

xoxo Lauren

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s