Those damn mortgages. They are often the largest debts we ever incur. My mortgage had a devastating affect on my financial situation at the time, and I know that I’m not alone. Today, I bring to you a post from Mrs. Picky Pincher who tells us why they sold their souls.
There I was, covered in satin-finish eggshell paint, staring at a half white and half lime green (yes, lime green) wall. I was a newly minted homeowner taking on the ambitious project of renovating a home myself.
For weeks I subsisted on sad little McDonald’s hamburgers as I threw thousands of dollars into a home I didn’t own. The bank had me by the cajones and yet I happily plugged away, absent-mindedly smearing more overpriced paint on my thrift store clothes.
It wasn’t until I was halfway through painting a lime green room that I thought, “What the f$*#* am I doing?”
We decimated our savings for a down payment and nearly worked ourselves to death during a three-month renovation. I had never seen so much money flee from my bank account at once. And there I was, working ‘til my little fingers bled, all for a home that put us on a financial detour.
“Damn, houses are expensive.”
I knew home ownership was expensive. Everyone complains about it, but I figured I could be the magical exception to the rule. I was a frugal lady and Mr. Picky Pincher was pretty handy. With our combined powers, we could reach early retirement while pumping money into a badass house.
Oh, how the mighty fall, y’all. We’re still meeting our FIRE goal, but uh, it’s been delayed. All thanks to our home.
When Mr. Picky Pincher and I got married two years ago, we had $65,000 in student loans, $25,000 in car loans, and $14,000 in credit card debt. We worked our tuckuses off to drop the credit card debt and the car loans. What remained was the behemoth student loans.
But then we got distracted by something shiny: the overwhelming desire to buy a house. Our original plan was to pay off student loans and then evaluate our living situation. But at the time, interest rates were low with whispers of rate hikes on the horizon.
Mr. Picky Pincher said, “We should buy a house.”
I said, “Dude, we should totally buy a house.”
With that intense debate settled, we funneled our efforts into building our savings. We had a nice sum of $16,000 by the time we closed on the house. $12,000 of it went to the down payment (ouch!!!) and the rest went towards our renovation.
It wasn’t until I was covered in paint (and God knows what else) that I questioned our decision. I crunched the numbers and realized how big of a detour the house was for our finances.
We could have taken our $12,000 down payment and slapped that sucker right onto our student loans. Hell, we would be completely done with student loans by now if we hadn’t bought a home. So in addition to our $65,000 student debt, we now had a $145,000 mortgage to eliminate.
I don’t want debt of any type during retirement, including a mortgage, so we now had to scrape together $145k.
I guess that’s not a huge number if you, I don’t know, are a cocaine dealer. But for an honest Joe and Jane, a mortgage was no small matter. I left Mr. Picky Pincher, our resident Math and Spreadsheet Wizard, to figure out how we could still meet our FIRE goals.
We would be okay, but it meant saving and investing less money as we paid off the mortgage. Ugh.
Now that we’re at the end of the renovation tunnel and paying off our crappy student loans, I don’t regret buying a home. Although we tripled our debt load, I don’t regret selling my soul (and early retirement date) to buy a house.
Why we got a stupid mortgage
Sometimes it’s not about the money.
It made no sense to buy a house on paper. The numbers screamed back at us, “What the hell are you doing?!”
But still we persisted.
Paint me naïve, but I wanted a piece of the American Dream. Picket fences are tacky, but I did daydream about baking apple pies in a big kitchen while my kiddos wailed on each other in the front yard. Ahhh, what a dream.
It’s important to Mr. Picky Pincher and I to own a home and make something out of it. We wanted to come home and say, “Why yes, this is mine. Everything in it is mine. MINE.”
So yeah, maybe it was a silly and selfish decision, but the idea of owning a home of our own was so appealing. We wanted stability to grow our family in a nice-ish area, and that’s what we got.
And yes, I’ve gained at least ten pounds from all the pies I’ve baked in my new kitchen.
I hated renting
I’m an 80-year-old woman on the inside. I’m cranky. Apartment life was a no-go for me.
Greedy landlords and lead-footed upstairs neighbors drove me batty. I never wanted to give my money to a landlord or (politely) scream at a neighbor ever again.
House rentals were an option to consider, but our city has an incredibly competitive house rental market. I had two coworkers vying for the same rental house and it got ugly. They put salt in each other’s coffee and Saran-wrapped each other’s desks. It was amusing, but it wasn’t something I wanted to experience myself.
The housing market wasn’t as competitive with the rental market, so buying meant less bloodletting.
Mr. Picky Pincher and I have green thumbs that extend all the way to our elbows. We’re not happy if we don’t have dirt under our fingernails.
There are limits to how much gardening and building you can do when you rent. If you’re in an apartment, you’re trapped on a sad little balcony with potted plants. Every apartment balcony we’ve ever had faced north, which meant our crops always mildewed and died slowly. RIP, basil plants.
We could have gotten away with a small garden at a rental house. But Mr. Picky Pincher doesn’t believe in ‘small.’ Our current backyard has been transformed into a man cave / agricultural retreat. He would have been devastated to have a backyard he couldn’t tame into submission.
We just set up raised bed planters in our yard and I can’t even describe the sense of satisfaction that comes from harvesting one lone strawberry. Killing slugs is also great stress relief.
We need to be outside and we need to build things, and that freedom doesn’t always come with renting. Our home gives us the space for money-saving projects. Whether it’s gardening or setting our backyard on fire with a smoker, we enjoy the freedom.
The Bottom Line
Although buying a house might not have been the best idea financially, it was still the right move for our happiness.
Sure, we’re now paying a mortgage in addition to our student loans (and sobbing over those high balances), but it’s worth owning a home. I love that people are able to make alternative living arrangements, like Steve’s badass Airstream, but we went traditional. It’s all about doing what’s best for your future goals. Finances are important, but they don’t trump everything.
We want to know: Did you also sell your soul to the bank?
Mrs. Picky Pincher is the blogger and money-saving maven at www.PickyPinchers.com. She writes about living the good life while paying off ugly debt.
Steve is a 37-year-old early retiree who writes about the intersection of happiness and financial independence. Steve is a regular contributor to MarketWatch, CNBC, and The Ladders. He lives full-time in his 30′ Airstream Classic and travels the country with his wife Courtney and two rescued dogs.