I started this entry as a reaction to the story link Baselle posted in her blog. It is based partly upon that story but also on my fears, the current economic situation and the state of the economy for the state of California.
My big fear is if I buy a house I will lose my job or something like that and be forced into losing my house. I am talking about buying a house that has payment of about 1100 per month and I am stressing about it. I want my own place but am I ready for the big burden of owning my own place?
On top of everything I work for the state of California. Yep, that wonderful state that just 20 years ago was the leader in education, financial markets, one of the top 5 economies in the world even compared to some countries. And now where are we? Overspent, looking at bankruptcy, cutting state jobs (you see my worry here right?) and cutting state employee salaries another 10%.
I agree that there are some employees out there who do not earn their paychecks but there are others of us who educated ourselves (masters degree here), work hard every day and earn each of those pennies they give us. I take work home and don't claim the OT because we can't earn it right now but my work still needs to be completed. Cutting us an additional 10% and laying off people, that are some hard choices.
Please don’t tell me that I could leave the state service and go do the same work someplace else because that is just not true for the field in which I work. My education, both bachelors and masters were geared to serving people, I left as a peace corps volunteer (and came home injured not finishing my service, something I regret every day). I love my work for the state even if I am not earning what I could be. I feel it is a small piece of service to the community and the state.
But what about cutting some of those contractors the state hires? I am not talking about those contractors who build things and remodel things. I am talking about the grant funding that is used to hire “experts” who (in my PERSONAL ) experience have no idea what they are doing? They are making 90-125k a year (also in my PERSONAL experience) taking a job a state employee could be doing. Let’s look at this from a financial point of view:
The state hires someone through a contract with an “agency”. This agency could be a contract through a non profit, a university research center or another place.
They hire someone and pay the “agency” the salary and an administrative fee that is about 40% of the salary of the person they hired. This is supposed to cover the benefits of the employee and a fee for the “processing” of this employee.
Why do I know all of this? I was a contract employee, hired through an “agency” on loan to the state. I never made close to 100k, indeed my highest salary was between 45 and 50k. I earned the equivalent of the other people doing similar work. For the other contractors across the state this is not true. They make close to twice what a normal state workers makes and add in 40% for the administrative fees.
When I no longer wanted to be a contractor because I wanted a permanent job I took a state exam sponsored by another state office, placed first on the exam list and then was hired in the office where I had been working for several years.
Does me not wanting the state to be paying for contractors make me a hypocrite? Maybe, but I was educated and experienced when I took the contractor position and when I took the exam and through the whole experience. I placed that well on the exam list because I prepared, used my education and experience and worked hard to get ready. This is not always the case for the contractors and why should they make twice the other state workers?
The state could save several million dollars in just the one office I worked in, and hire two employees for each ONE hired as a contractor. Most of the money (in fact 99%) of the money the office I worked at was federal grant money good for 5 year period. Do you know how many people the state could keep on, without losing jobs, if they replaced the contractors with state employees? Almost 2 to 1. Yes this might not affect the budget to much as it is federal money, but, it would mean keeping some jobs without having to lay off state employees.
I am so frustrated with where the state is and about the possibility of people being laid off, including me (I got one of those letters even though I have 6+ years at the state). Now they are saying they are definitely going to lay off 5000 people. My agency says they will not be losing staff as we are going to eliminate vacant positions and save millions through not hiring people. But what happens three months from now? Six months from now? I want to buy a house! This is the year when it is a good time to do it, I am financially stable, have money set aside to do a nice down payment and I want the tax breaks that are being offered. But do I do it when the economy is so bad?
I just don’t know what to do.
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On another note the house I made an offer on was out bid by about 2500k.
There is a foreclosure houw I looked at yesterday. It needs some appliances (as there is nothing there), and door, hardware and handles for the bedroom and bathrooms (why would you take those? Are they really worth any money?) light fixtures in the bed rooms and some covers and a swith or two in other areas. It is a three bed 2 bath home listed for 159900. They are anticipating many offers. Payments would be around 1100 a month, do I make an offer?
There will be many more homes coming up for foreclosure in the next few weeks as the 90 day moratorium is gone. Do I wait or offer?
Sharing thoughts, house offer update, still looking or not?
May 16th, 2009 at 06:27 pm
May 16th, 2009 at 11:14 pm 1242515677
in regards to being unsure about buying - there is uncertainty in everything, i guess it is up to you to decide how evenly the uncertainty weighs. when we bought a few months ago, my main work was cutting hours and sales were dropping - i was a little freaked out but put it to the back of my mind. i had been told i wouldn't lose any hours, but still, things could get much worse and my boss might have no choice.
you might have to figure out how much of this is real and how much is in your mind. in the end, do what feels comfortable, but remember that being comfortable doesnt necesarily mean doing the same old thing every day. sometimes you need to take a plunge - but not too deep!
May 17th, 2009 at 11:52 am 1242561160
May 17th, 2009 at 11:57 am 1242561438
oh and i see you have credit card debt to pay off or did you already take care of that. i would try to get expenses like that out of the way first..i guess depending on how much the balances are.
is there anything other than desire to own a home that makes you need a home right now. you don't have to move or anything, do you.
May 29th, 2009 at 01:35 pm 1243604157
If nothing else, I keep hearing there is a huge phantom inventory right now (houses "foreclosing" but banks too busy to get them in the market). I know a few people who walked away from their homes last year whose homes have not even begun the foreclosure process. I have seen a few obviously empty homes in our neighborhood, obviously in the same boat.
I'd assume when these all hit the market some of the bidding wars will slow down. There is just too much inventory. I certainly wouldn't be in a rush, while you see what happens with your job.
I understand. There aren't a lot of jobs here overall. Most people in Sacramento work for the state.
As far as state workers, we have noticed that the revenue collectors (auditors and such) are also on furlough. We were just discussing how stupid the state was to put revenue collectors on furlough (discussing in my office). Doh!