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Anyone else struggle balancing need/want to save with living comfortably?

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  • Anyone else struggle balancing need/want to save with living comfortably?

    I've been extremely disciplined the majority of my adult life. I'm 33 and I've been aggressively working toward early retirement since I was 22. I make a comfortable living, live well below my means and every decision I make is carefully calculated in terms of its impact on my ability to achieve financial independence by the time DD graduates high school in 2027. I don't spend much on material things, I drive a 12 year old car I paid cash for, and live in a modest 1,100 sq ft house I purchased for a little more than 1x my annual income. I do make time to travel, keep myself busy with projects like renovating my 86 winnebago and we enjoy dinners and nights out a few times a month so don't get me wrong that I'm not spending any money having fun.

    Here's where I'm struggling. I purchased my current home 2 years ago with every intention of it becoming a rental someday. At the time I thought 'someday' would be when DD graduated and I moved on to whatever "retirement" looks like for me but I'm going absolutely stir crazy in this house. The kitchen is too small, everything feels crowded, DD's room is too small to even organize her things so everything gets dumped in trunks and boxes. My boyfriend recently moved in and now the 1 car garage/driveway is a pain. We have 2 big dogs and I'm constantly tripping over them and the yard isn't big enough for them to burn energy. My responsible brain is telling me to stay put, pay off this house (on track to pay it off in 4 years) and then reassess the living situation. I bought this house at a steal and the market here is SO inflated right now that getting into something remotely close to what I'd like to have is going to double my mortgage payment - I guilt myself for thinking what I could do with all that extra PI if I stay. At minimum, I should wait until this market steadies. OTOH, my impulsive side is telling me that its OK not to live like a pauper and move into a house I can afford andbe comfortable in.

    I could list a dozen more pros and cons for each side - I've hashed them out relentlessly - but mostly I just want to know if I'm the only one that struggles with spending vs saving and how you keep a balance between what's worth saving and what's worth spending?

  • #2
    You are certainly not the only one with that struggle. We deal with it every day. I can't tell you what the right decision is with the house but ultimately you need to find the balance that works for you. I'm reasonably happy driving my 13-year-old car but I can tell you that I'm less happy with it today than I was a year ago even though the car itself hasn't really changed. When I hit the point where I'm more unhappy with it, I'll replace it. Obviously, a house is a much bigger decision than a car but the theory is the same. Every spending decision is a balancing act, current wants/needs vs. future goals.
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
    * There are no shortcuts to anywhere worth going.

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    • #3
      Can you rent out the current house and buy or rent something better in the same neighborhood?

      I feel that money exists to make me happy, so I wouldn't have a problem getting rid of the house that doesn't work for me and getting something that fit my lifestyle if I could afford it.

      Comment


      • #4
        Originally posted by msomnipotent View Post
        Can you rent out the current house and buy or rent something better in the same neighborhood?

        I feel that money exists to make me happy, so I wouldn't have a problem getting rid of the house that doesn't work for me and getting something that fit my lifestyle if I could afford it.
        It is exactly my plan to rent it out. Always been my plan to rent it out. Doesn't change the fact that the market is inflated right now meaning houses that sold for $180k 2 years ago are now selling for $250k+. It's absolutely insane and makes the decision much harder for me because buying in an inflated market doesn't feel like a good investment or have much potential for equity down the line. Honestly wishing I would have bought more house in 2017 when prices were low... hindsight. Having been a homeowner since I was 20, I really can't wrap my head around the idea of renting especially with a german shepherd and a 100 lb pitbull in my house - really not practical for my situation.

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        • #5
          not really, but my situation differs from yours. im a simple person with simple wants and needs. if i want it, i buy it. if i dont really need it, i likely wont buy it or wont be bothered by not having it. Now if I had a few new roommates, i'd be in the same boat as you probably.

          for your situation, it really does sound like it is creating issues, and if you can afford not dealing with it, then you probably should. if you have all these people moving into your cozy house, kids growing up, etc. then you probably do need to move into somewhere bigger, and get them to pay a portion of the rent. You can rent out or sell your house.

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          • #6
            I think you have to weigh what is more important. Being more comfortable in the here and now, or sticking with such an early age for early retirement/financial independence.

            We are *very* financially conservative (by most measures), but that would be way too extreme for us. We are more "financial independence at 50" types, with the trade-off of slowing down and being very present while we raise our kids. This has never been a struggle for us, but we moved a to a cheaper city (more house/less money). My husband had a brain tumor diagnosis around age 30, and that is probably when we let go any plans of retiring any younger than 50. The trade-off just wouldn't be worth it, but we have always been pretty balanced with "early retirement" and "enjoying the here and now." The medical stuff just kind of sealed the deal for us, that we wouldn't have it any other way.

            As to the house, couldn't you just trade up into something that would be more comfortable? Let the rental plan go? Maybe sell the more ideal home for a rental and a smaller "retirement" home afterwards? It seems to me once you are in the market, you are also experiencing the upside. Maybe delaying the rental plan is worth the trade-off of more shorter term comfort. It's always easier to have your cake and eat it too, if you are willing to think outside of the box and consider other options. I don't know the answer, but I would consider other options and maybe let go of the original plan if it no longer is working for you.

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            • #7
              Everyone struggles no matter how much you make. I have a lot of income, but I have a lot of monthly freight, too. $2200 house payment, $4500 per month university payment (during school), $2500 for wisdom teeth extraction for my son in 2 weeks, cars for both kids, insurance, groceries, repairs, maintenance. $800 radiator for my toyota two weeks ago. It just goes on and on.

              Whether you save or not, every dollar of your income ends up being allocated to something, regardless of your income level.
              How can you have any pudding if you don't eat your meat?

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              • #8
                Originally posted by TexasHusker View Post
                Everyone struggles no matter how much you make. I have a lot of income, but I have a lot of monthly freight, too. $2200 house payment, $4500 per month university payment (during school), $2500 for wisdom teeth extraction for my son in 2 weeks, cars for both kids, insurance, groceries, repairs, maintenance. $800 radiator for my toyota two weeks ago. It just goes on and on.

                Whether you save or not, every dollar of your income ends up being allocated to something, regardless of your income level.
                Very fair point. I think what I have the hardest time letting go of is the flexibility the small house/mortgage payment gives me to deal with those sort of things. I can take a spontaneous trip without budgeting for it, cover unplanned medical bills, not have to decide which account an auto or house repair is going to come out of because there's always just money left over while still meeting my savings goals. The price point at which we'd be looking at getting into something bigger is going to cut into that significantly unless I start thinking about increasing my income at the same time, which I'm not really crazy about. Maybe that's my problem lol I don't want to work harder to have the nicer house.

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                • #9
                  Originally posted by riverwed070707 View Post

                  Very fair point. I think what I have the hardest time letting go of is the flexibility the small house/mortgage payment gives me to deal with those sort of things. I can take a spontaneous trip without budgeting for it, cover unplanned medical bills, not have to decide which account an auto or house repair is going to come out of because there's always just money left over while still meeting my savings goals. The price point at which we'd be looking at getting into something bigger is going to cut into that significantly unless I start thinking about increasing my income at the same time, which I'm not really crazy about. Maybe that's my problem lol I don't want to work harder to have the nicer house.

                  In regards to the house, we are crossing this bridge currently. We live in a 30 year old house that was built exceptionally nice, but 30 years takes its toll. 3 years ago we spent $50K on a kitchen remodel, hardwood floors throughout, and some other goodies. Did it add $50K to the value of my home? No way. Fast forward 3 years and we still need $18K worth of new windows, a new HVAC, and our master bedroom and bath are truly hideous. Probably yet another $50K to "get it right."

                  Do we move to a new home? Well, our home is worth $400K tops. A new one to suit us might be $600-700K. And of course my property taxes double. Instead of $7K per year, they go to $14K per year. And then moving costs, new furniture, etc. So am I going to move to a new house and at least double my monthly outlay - from $2200 per month to possibly $4500-5000 per month, from now on? Not a chance.

                  I only owe $227K on my home. We just decided let's do a home equity loan, take out $50K, and get our current house to the point where we like it and don't care about moving. While I won't get most of that back out of my home, it is still a fraction of the cost of moving. My property taxes will stay the same, as I am not calling the City to tell them I'm renovating my house.

                  Your personal home is never an investment. It's just an expense.
                  How can you have any pudding if you don't eat your meat?

                  Comment


                  • #10
                    Originally posted by MonkeyMama View Post
                    I think you have to weigh what is more important. Being more comfortable in the here and now, or sticking with such an early age for early retirement/financial independence.

                    We are *very* financially conservative (by most measures), but that would be way too extreme for us. We are more "financial independence at 50" types, with the trade-off of slowing down and being very present while we raise our kids. This has never been a struggle for us, but we moved a to a cheaper city (more house/less money). My husband had a brain tumor diagnosis around age 30, and that is probably when we let go any plans of retiring any younger than 50. The trade-off just wouldn't be worth it, but we have always been pretty balanced with "early retirement" and "enjoying the here and now." The medical stuff just kind of sealed the deal for us, that we wouldn't have it any other way.

                    As to the house, couldn't you just trade up into something that would be more comfortable? Let the rental plan go? Maybe sell the more ideal home for a rental and a smaller "retirement" home afterwards? It seems to me once you are in the market, you are also experiencing the upside. Maybe delaying the rental plan is worth the trade-off of more shorter term comfort. It's always easier to have your cake and eat it too, if you are willing to think outside of the box and consider other options. I don't know the answer, but I would consider other options and maybe let go of the original plan if it no longer is working for you.
                    Definitely something to consider with selling my current primary. Guess the upside of the inflated market is I could also sell at quite a profit between the upgrades I've done and increased sales prices, and then put a larger down payment on the new house to soften the increased mortgage payment. Good thought MM.

                    Comment


                    • #11
                      Originally posted by TexasHusker View Post


                      In regards to the house, we are crossing this bridge currently. We live in a 30 year old house that was built exceptionally nice, but 30 years takes its toll. 3 years ago we spent $50K on a kitchen remodel, hardwood floors throughout, and some other goodies. Did it add $50K to the value of my home? No way. Fast forward 3 years and we still need $18K worth of new windows, a new HVAC, and our master bedroom and bath are truly hideous. Probably yet another $50K to "get it right."

                      Do we move to a new home? Well, our home is worth $400K tops. A new one to suit us might be $600-700K. And of course my property taxes double. Instead of $7K per year, they go to $14K per year. And then moving costs, new furniture, etc. So am I going to move to a new house and at least double my monthly outlay - from $2200 per month to possibly $4500-5000 per month, from now on? Not a chance.

                      I only owe $227K on my home. We just decided let's do a home equity loan, take out $50K, and get our current house to the point where we like it and don't care about moving. While I won't get most of that back out of my home, it is still a fraction of the cost of moving. My property taxes will stay the same, as I am not calling the City to tell them I'm renovating my house.

                      Your personal home is never an investment. It's just an expense.
                      If it were an option to just update the current to be comfortable, I'd be all about it. I've gone to the extent of looking into an addition and improving our outdoor living space but unfortunately some things just can't be changed like the width of the driveway/garage and the size of the bedrooms. I loathe the idea of moving again, and if I were to sell the primary instead of making it a rental, that just adds a whole new level of stress to find a house and sell a house at the same time. Exhausted thinking about it.

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                      • #12
                        My biggest regret since finding my way 6 years ago was buying a more expensive house when we moved to TX this year. It's nice and we love it, but if we had limited ourselves to what we owed on the previous house (e.g. no additional debt / payment), then we could pay off the house this year and have $175k left over. As it is, we might be able to pay off the house. So, we took door #2 that you are looking at and I don't like it. BUT (and this is the real issue), had we bought a less expensive house, my wife would have had to deal with a move she didn't want, to an area she didn't like with no friends or family at a time that was bad timing along with a house she may have hated. So, looking at all of the factors, this was the right thing to do. She loves the house, loves the neighborhood, is making friends easily as everyone is in the same phase of life as us, and this has made this unwanted move easier for her (and me). In the end, the $175k will come back when we sell and we can still pay it off this year. We did the right thing.

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                        • #13
                          Originally posted by riverwed070707 View Post
                          I loathe the idea of moving again, and if I were to sell the primary instead of making it a rental, that just adds a whole new level of stress to find a house and sell a house at the same time. Exhausted thinking about it.
                          Would you have to do it at the same time? Honestly, I don't know that I'd ever sell a current home until we purchased a new home. It seems that is the upside of being financially conservative, being able to make these things less stressful, being able to carry two mortgages temporarily.

                          Clearly, moving is very stressful regardless and that may be your deciding factor to just stick it out. Or it may just take time to wrap your brain around a new plan.

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                          • #14
                            We considered buying up several times at key transition points ( such as DH retiring from his 1st career, when house was paid off, when I retired, et'c) We chose to stay put--probably the biggest reason was our proximity to other employment opportunities for DH, but also because we like the house and we like the neighborhood. It is not a big fancy house. But, something that didn't dawn on me until later -- we have lower overhead with our smaller house (lower taxes, lower upkeep costs and lower heating and a/c), so staying put has given us more flexibility in other financial decisions.

                            But, given your plan to buy another house and use the current one as a rental at some point in the future, I think I would accelerate the plan and start looking for a new house. If the numbers are not right, you don't have to buy.

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                            • #15
                              Originally posted by MonkeyMama View Post

                              Would you have to do it at the same time? Honestly, I don't know that I'd ever sell a current home until we purchased a new home. It seems that is the upside of being financially conservative, being able to make these things less stressful, being able to carry two mortgages temporarily.

                              Clearly, moving is very stressful regardless and that may be your deciding factor to just stick it out. Or it may just take time to wrap your brain around a new plan.
                              This is so true. Most people think the opposite: Sell your home and THEN buy your next. Terrible idea. That means you are in a mad rush to find something else, which means you pay too much and you probably donít get what you want. And if you decide to wait until you find exactly what you want, that puts you moving twice - once to a rental, once to your final destination.

                              Pay two mortgages for a few months. Youíre far better off in the end.
                              How can you have any pudding if you don't eat your meat?

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