Tuesday, August 27, 2013

Savers Want Expensive Pretty Things Too

I’ve been tooting my horn a lot about being such a great saver. Not to say that I’m not. But it’s time for me to reveal some of my human weaknesses. Yep, humility here I come.

My favorite moment of weakness was when my husband and I were buying our first house. We ran our numbers and we decided, together, that we didn’t want to spend more than $200,000. That’s not much in California. We knew that the homes in our price range were going to need more than just a little TLC. But we were prepared to put our blood, sweat and tears into fixing up the place. That’s another story.

So, we met with our mortgage broker and she told us that we were qualified for a $400,000 mortgage. What?! Really?! That. Is. Awesome! The houses in that price range are SO much nicer. This is when I got distracted by pretty shiny things. My rational thinking went out the window and my emotions were in overdrive. We all want nice things, right? So, when a financial professional and the entire banking industry tells you that you’re eligible to buy more, bigger, better - It’s hard (no, practically impossible) to say, “no, I want less.”

At my core, I’m a small-quaint-house person. But the carrot dangling in front of me turned me into a big-fancy-house person. I was dreaming about moving into a house that wasn’t just turn-key, it was perfect. Luckily my husband wasn’t distracted for a minute. He saw me going over the deep end and he let me indulge in my fantasy for a minute. But after a couple of weeks, he sat me down and had a nice long talk with me about our house budget. It felt like Thor's hammer came crashing down on all of my newly found dreams. I hated him.

He reminded me that the banking industry determines how much we can afford based on our current lives, but they don’t know what our future lives look like. We knew that we would eventually leave town, rent out our house, and be unemployed for an extended period of time while traveling. He reminded me that a $400,000 house wouldn’t make those plans easy. He was right. It wasn’t a pleasant conversation. Honestly, it wasn't a pleasant couple of weeks afterward either. But it had to be said. And in the end, I was glad he said it.

It took us a while to find a house that was in our price range that wasn’t a complete dump. Seriously, a few houses were going to come crashing down with a big gust of wind, another one flooded every year, and the one with the great view was going to implode from a leaking oil tank. All of these dumps made it really hard to keep looking at houses in our budget. It would’ve been so much easier if we could’ve just spent $50,000 more. But it would’ve increased everything – the mortgage, taxes, insurance, maintenance…the list goes on…

We finally bought the cutest little cabin five blocks from Lake Tahoe for $180,000. Then we put another $20,000 in renovations (plus the blood, sweat and tears that I mentioned earlier). The best part is that we’ve never had a single moment of buyer’s remorse. It took us longer to find the house than we would’ve liked, but it fits perfectly into our lifestyle and into our budget. Which meant we were able to rent it out and be unemployed world travelers for six months.

We’re all human. Sometimes we can rein ourselves in. Sometimes we need someone else to rein us in. We rarely want to hear it. But sometimes we need to. 

-Leah Schonlank

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups. 
Are you ready to reach your financial goals? Get motivated. Get support. Get results!

No comments:

Post a Comment