Category Archives: Money issues

Budgeting a Dream

24 Wednesday Oct 2012

Posted by in General, Money issues

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Budget and dreaming are words that feel out of place together in the same sentence, but indeed if you’re going to make a big project come true, you’d better be able to pay for it. More to the point, you’d better want to pay for it. And keep wanting to pay for it until it’s done.

One of the things that happened within months of buying the villa is that we suddenly found ourselves having to move back to Canada. We’d bought the place assuming we were going to continue living in Milan, but alas the working world didn’t cooperate. As a result, all kinds of new priorities entered our lives – buying a house in Toronto (we’d been renting as expats in Milan), a car (that had come from the company before), living fully in this country, and traveling back and forth to the old one. We’re not crazy spenders or lavish livers, but we can rack up a bill or two doing the things we love.

And our focus shifted. Every time I was back at the villa I thought wow this place is magical and so worth the effort and money. Months later and back in Canada, the memory of that feeling would become dim and I’d think things like it would make much more sense to spend the money on fixing up the back deck in Toronto than on electrical channels in the villa. Being so far away made a huge difference to the perceived reward of doing something, when the gratification of money spent in Canada was so immediately satisfying. That was a killer.

Hmm…shall we fix this gross thing that’s 5,000 miles away, or get laptops for the kids?

Advice: set up a budget that allows money to be put aside specifically for the project. Make sure it always goes there, and only gets spent there. We have an account in Italy and this actually did help – once the money had gone over, there was no means to spend it here.

Budgeting is very personal and relates to your own priorities. I’m not going to tell you where you should spend your money, only that you have to decide for yourself and stick to it with a firm resolve. For more ideas on budgeting, there’s a good book available that, although a bit extreme in its application, gives tons of good pointers: Dream Save Do: Stop Dreaming and Start Living: Betsy Talbot,Warren Talbot: Amazon.com: Kindle Store

Questions of Money

16 Tuesday Oct 2012

Posted by in General, Money issues

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I’ve always found money to be a relative kind of thing. So when one of the questions is ‘did you run out of money’, the answer is more like we ran out of money we were willing to put into this project, against the benefit we thought it would create. But it did cost more than we bargained for, and we did run out, in the sense that there was rarely enough left for the villa after other priorities had been met. So why did that happen?

This might take more than one blog post.

Let’s start with our initial budget. We ludicrously underestimated the cost, getting caught up in the dream and not doing enough thorough research. We were really ignorant at the beginning. We got a ballpark estimate from a geometra who resided in a different city – one that was arranged by the realtor. It was actually not too far off the truth, but we didn’t believe it would actually be so high, as nothing was itemized and he said he made it big so we could get a mortgage that would pay for the construction.

Yes, we thought it might be made habitable relatively easily. We’d seen worse.

Advice: Use a local geometra, one who knows the contractors in the area. Ask the butcher, the bar owner, various locals who they would recommend.  Don’t use the one your realtor gives you; it’s not that they’re unscrupulous, but they are in the business of selling you the house, so you can’t expect objectivity.

Pay the neighbourhood-endorsed geometra to assess the house and get a real contractor’s itemized budget. At this point you still won’t have plans, so the estimate will not be precise in the details, but the buckets will be established. You’ll know whether the entire roof has to actually be replaced right down to every beam (yes), whether there is asbestos in there that requires an expensive hazmat team to remove (yes), whether every window is likely to crumble to dust when you try to remove them for replastering the holes in which they reside (yes).

Then add 30% and see how excited you still are to buy the house.

Nothing puts a damper on dreams faster than seeing the bill. But if it’s really important to you, you’ll figure out a way to pay for it. James W. Frick said Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.

That’ll be lesson number two: prioritizing and budgeting.