Cool off your house fever with a long-term financial plan
My husband and I are in our early 30s, and we are not homeowners. We never have been homeowners, actually. Much of this is because of our expat lifestyle, but even if we were stateside, chances are, we'd still be renters.
And we are okay with that.
There were times when we seriously looked into buying a home, and I definitely struggled with home envy. I often felt like the only person in my demographic without a mortgage and who was "throwing away" my money to rent. But hindsight being 20/20, God protected us from ourselves and prevented us from signing any deals.
The reason I'm so thankful to not be homeowners is because when we were looking into it, we did not know as much as we know now. Many of you know that I've drunk the Dave Ramsey Kool-Aid, but I really am so thankful for his radio show, his books, and for his Financial Peace University course, because through them my eyes were opened to so much about mortgages, PMI, contracts, down payments, tax write-offs, and the like.
I never knew much about personal finance growing up, and it never was a huge interest of mine. But the more I learned, the more I wanted to learn. And the more I learned about how to handle our own family's finances, the more I wanted to learn about broader topics, such as home ownership.
I don't pretend to know everything - not by a long shot - but with the little bit I have learned, we've created a long-term plan to become home owners, and to do it well the first time.
Here's our family's home ownership plan:
1. Save up for at least a 20% down payment. 50% would be ideal.
2. Sign only a fixed-rate, 15-year mortgage that's no more than 25% of our income.
3. Buy a fixer-upper in an up-and-coming neighborhood. I am extremely blessed to have a husband that knows how to build a home from scratch, since he used to be a contractor - hopefully, we can put quite a bit of sweat equity into a home.
4. If we love the home we've fixed up, we'll stay. But if we don't, we'll sell at the right time and take the equity from that home and upgrade - doing the same thing as before. Buy a fixer-upper in an up-and-coming neighborhood.
5. Eventually, we want to custom build a smallish, eco-friendly home from scratch, and stay there long-term. And pay off the mortgage as fast as we can.
I know it's always that cut-and-dry, and that there are a lot more details involved in home ownership. But in a nutshell, we won't consider buying a home until we're able to do the above steps, and to do them well.
If you want to own a home, but you're just not ready yet, please know that you're not alone. There are a lot more renters out there than you'd think, and they're doing just fine. It's so easy to believe that home ownership is everything, because that's what our culture tells us. But renters really are whole human beings, capable of intelligent rationale and mature decision-making skills.
Home ownership is great when it's a blessing. But when it's not, it's a curse. Just ask millions of people who've made headline news recently.
When you get house fever and it's just not time to buy yet, here are some tips to cool you down:
• Work on your budget and figure out how you can save just a bit more.
• Take FPU, either locally or online. I can't recommend this enough.
• Take it one step further, and join My Total Money Makeover, where you can find accountability and encouragement for following Dave Ramsey's baby steps with others.
• Focus that energy you're using on home envy onto something else - exercise, crafting, reading, or skill-building.
• Pray. Ask God to help you with contentment.
• Drive through the lower-class part of town, praying for those people and giving thanks to God for what He's given you. Not with a superiority complex - with a humble, grateful attitude and an open heart to do more to bless others.
• Start a list of things you're thankful for. Post it somewhere prominently, and add to it regularly.
Photo by Mike Rosales
• Remember how the rest of the world lives - Americans live so much more richly than the rest of the world.
• Go one step further, and sign up to support a child who truly needs help.
• Balance your checkbook.
• Start living on the envelope system, if you haven't yet.
• Go on a cheap date with your spouse - walk around a bookstore, or go hiking.
• Avoid shopping when you don't need to. You'll save more money for that big down payment.
• Stop dwelling on it - think of something else. Use a Redbox code and rent a free DVD.
• Finally, make a plan. Instead of just pouting that you don't own a home, get out a pencil and paper, and figure out how to get that money you need socked away.
Have you ever struggled with house fever? How have you successfully handled it? What is your family's longer-term plan towards financial peace?
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