Dream home or dream life?

Dream home or dream life?

This guest post from Holly Johnson is part of the “reader stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial maturity and income.

A few months ago, we were seriously considering moving. Frustrated by a few of the shortcomings of our current residence, we started looking for a way to upgrade.

Our current house — the one we have lived in for four years — is a four-bedroom, three-bath home with about 2300 square feet. It has a large living area and a play room and sits on a large lot. However, it doesn't have some of the things I've always wanted — a garden tub, a nice backyard that you can relax in, and a roomy kitchen with upgraded cabinets and appliances.

Because of the way our house was built and laid out, remodeling wouldn't make much sense. Our kitchen can't really grow in size, and there's no room for a garden tub in any of the bathrooms. Also, we can't change the fact that our yard backs up to several other back yards. It was beginning to look like we should just move to get the house that we really want.

At the same time that we were considering this, interest rates dropped to record low levels. All of a sudden, houses that were somewhat out of our price range moved into a range that we could afford. After all, a house with a mortgage at 3.5% has a much lower payment than a house at 6%, dependent on your credit score . Suddenly, a whole world of new options presented itself.

Our House Search

We began looking at houses. Large houses. Nice houses. Some had several acres with them. Others had large garages, fancy upgrades, and — yes — even garden tubs.

J.D.'s note: I had never heard the term “garden tub” before editing this story. Apparently they're just big bathtubs. Is this a regional term?

One house in particular stood out and we zeroed in on it quickly. I considered this house my dream home. With a long beautiful driveway, this country house had it all — 3000 square feet on five rolling acres, a creek in the back, and a nice kitchen with cabinets that had roll out drawers.

I could see us in this house. I could picture summer barbecues on the expansive deck in the back. A four-car garage could hold our cars and all of our stuff. I could even put my dad's boat in there so that my mom could finally park in her garage after many years of parking out on the street. Yes, it was all coming together. We could afford this house — our dream home. We could sell our current home and move into this larger, beautiful space.

We began crunching the numbers. The house payment would be about $1700 a month for a standard 30-year mortgage. We could afford this house and all of the maintenance that comes with owning five acres. We wouldn't have to change our lifestyle very much. After all, we'd been paying over the $1400 payment on our current 15-year mortgage…and that was with a good credit score.

That's when it hit me.

To buy this house, we'd have to move up from a 15-year to a 30-year mortgage. Even if we paid additional payments towards the principle on this new mortgage, we couldn't decrease its term to less than 22 or 23 years.

It was time to stop and think what this really meant to us.

If we stayed in our current home, we could pay what we were paying and own it free and clear by the age of 40. We could travel more. We could help our kids with college. We could have many years of owing nothing to anyone. It was at that time that we realized that having our dream house meant giving up our dreams.

Owning a piece of paradise came at a huge cost: our freedom. Owning our dream home meant working more and longer hours. It meant living at our means, not below them.

The Aftermath

Needless to say, we didn't buy the house. We stopped looking and have grown stronger in our resolve to pay off our own house as quickly as possible. We cut more from our budget and started paying almost double payments on our current mortgage. At this rate, we will be debt free by the age of 37.

I drive by my dream home all the time. I can still see my family living there, playing, relaxing, and enjoying life. But, I know that I'm not willing to pay the price. I'm not willing to live more years imprisoned by my debt than I have to. I want off this hamster wheel, and — once I get off — I'm staying off for good.

So here we are, still in our imperfect house. I take baths in my regular tub. I put my dishes and pans away in spaces that make no sense for them. I try not to pay attention to the things that bother me. My kids are happy and safe here, and that's all that really matters. I may not get my dream house now, but with every month that goes by, I get closer to my real dream: I'm one month closer to becoming completely debt free.

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Nick
Nick
8 years ago

I love this article. I especially like the moment where your emotions (5 acres! expensive deck! garden tub!) are trumped by the rational realization that this purchase isn’t about the monthly payment but the quality of life of your family and your kids. Debt free by 37 is something to be proud of. Twenty-two more years of mortgage payments leaves something to be desired. I think it’s human nature to always want something better for ourselves and our families. But sometimes what’s better for us is to look at the numbers without emotion and decide if it’s truly worth it.… Read more »

Elizabeth
Elizabeth
8 years ago

Kudos! I think sometimes we get hung up on the affordability of a monthly payment rather than the long term costs. I love the “wake up call” moment in this post — a good lesson for all of us!

I have to say the house described in this post sounds like a paradise to me. I’m glad the OP appreciates how lucky she is 🙂

K
K
8 years ago

Yes- a reader story with Actual Numbers in it!

Lee
Lee
8 years ago
Reply to  K

Yes! And a reader story that is focused on getting rich slowly. LOVE IT!

What a great lesson in balance.

Samantha
Samantha
8 years ago

Its been my experience that my “dream” thing always changes as soon as my dream is is realized. I tend to take advantage and forget the awesome “dream” things I do own, and I suspect I’m not the only one with that problem. For instance, after the dream home, there would be dream furniture to fill it with, a dream man cave with a 60″ TV, a dream car for the garage. Once you are materialistic and have “stuffitis”, you are never happy. And once you fill the dream home with your stuff, you need more room, and a bigger… Read more »

SLCCOM
SLCCOM
8 years ago
Reply to  Samantha

Congratulations on the new job! Enjoy!

Ms. Rants
Ms. Rants
8 years ago
Reply to  Samantha

That sounds to me like what happened here. The OP has only been in her house for 4 years, but already has a lot of dislikes. It is quite a large house and on a lot of land, yet she wants more. Like you say, after moving, it’s likely that she would want even more. It’s fantastic that she realized this in time!

Jon
Jon
8 years ago

I wish I had thought of it like this when we bought our second home. We moved from a $350 a month payment to $1000 a month. Our new house seemed so wonderful and spacious fifteen years ago, but now it’s too big for the two of us after our kids have flown the nest. The little old house we started with would be just fine.

Glenn
Glenn
8 years ago
Reply to  Jon

Jon, This sounds just like the decision we made about a year ago. Moved from a small house that was almost paid for, to a much larger house (more than twice as big). Our kids are still fairly young and we wanted a bigger place to stretch out. I am almost certain though, that we will eventually move back to the smaller house when the kids move out. Rather than selling the house, we kept it as a rental. The renter pays all the bills and we get to pocket the rest. Now a word of caution to whoever reads… Read more »

Allyson
Allyson
8 years ago

Great post! Ever think about buying the upgraded appliances yourselves and putting them in the house you already own?

Kate
Kate
8 years ago

I love this post. I am currently in the home purchasing phase. I needed the encouragement to make smart financial decisions. I have been doubting my decision to buy a smaller house for our family of 5. I wanted a single family home but a townhouse is what meets our needs. I am determined to have my “dream life”. I want to spend time with them, I want us to travel and I want us to have money in the bank. I keep reminding myself that it is better to have money in the bank than to look like I… Read more »

Rosa
Rosa
8 years ago
Reply to  Kate

Because we didn’t move to a newer, easier, better-neighborhood house, I was able to quit my job when my son was having problems adjusting to school.

There’s no amount of nice house that would have made up for being able to do that.

Ramona
Ramona
8 years ago

Very nice! You sound extremely financially savvy for someone your age. Congratulations on solving a very need-want life problem. Life is really not about “things”.

EmJay
EmJay
8 years ago

I love this approach and think it’s a really practical way to look at life and not buy away your future. Related to the post above, since your mortgage is less than the “dream house” and committed to staying in your current house, it seems like there would be some good, small- to medium-sized investments that could make a big difference. New, space-efficient cabinets and new appliances could be justified

Kiernan
Kiernan
8 years ago
Reply to  EmJay

Totally agree, with everything you’ve saved from not taking on another 30-year mortgage, you can justify some renovations that make your current home more livable and enjoyable. A new kitchen can really transform a space and doesn’t have to cost a fortune.

Sonja B.
Sonja B.
8 years ago
Reply to  Kiernan

Totally agree. You could bring in a kitchen designer (or even a good organizer) who may be able to find some relatively inexpensive solutions to your kitchen storage issues. Or just get some magazines! You can upgrade appliances one at a time and/or with floor models with small imperfections that save lots of money. Little investments that help you enjoy and appreciate your home are worth it because they increase your satisfaction along the way without derailing your trek to your goals. P.S. I will trade you our dust gathering soaker tub for being debt free before 40! 🙂

CincyCat
CincyCat
8 years ago
Reply to  Sonja B.

Sonja B, That’s exactly what we did with our kitchen. I found a magazine picture that had our same basic floor plan, and with a little elbow grease & bargain hunting, our kitchen now looks just like the magazine. I discovered along the way that it was the color scheme I liked best – not necessarily the exact finishes themselves. For example, I found a great, upgrade laminate countertop that looked just like the granite in the picture. And, we bought off-the-shelf unfinished cabinets, installed them ourselves (it isn’t really that hard) and then painted them the color we wanted.… Read more »

Lance @ Money Life and More
Lance @ Money Life and More
8 years ago

I fight with the same thing but on a different scale. We live in a townhouse that is plenty big enough for us now but we will need a slightly bigger house when we have kids. So what we decided to do was live here until our first kid grows up and really needs their own room then buy another house in town while renting out the townhouse. When the kid(s) are all grown up we’ll then move back to the townhouse and rent out the bigger house and by then hopefully we’ll have two houses with no mortgages! YAY!

Poor Student
Poor Student
8 years ago

That sounds like a great plan. Other than the fact of being a landlord it seems like that should be what every couple does.

Jacq
Jacq
8 years ago

What a great post! Loved the way you described the dream house / life – it made me want it too!

I’d like to know though why you totally stopped looking? Maybe a house could come along some day with all of the things you want at a cost that leaves you in the same position financially. That would be quite a win win.

Poor Student
Poor Student
8 years ago

You sound like you made the right decision for you. I am not sure if you considered a larger down payment from the proceeds of selling your old house and some sort of savings and then getting a shorter amortization period but you did what was right for you. The added happiness and freedom from the bigger house is worth something but you decided that it wasn’t worth the extra happiness and freedom you would get by having no debt and being able to travel a bit. For others it might be the other way around, to each their own.… Read more »

maria margenot
maria margenot
8 years ago

Great story with a great decision. I purchased a house in a historic neighborhood I love for cash. I could have bought 5 x the house, but elected to not have a mortgage. I then began to deconstruct walls etc. and slowly make it a smaller version of what I wanted. I just finished it. I don’t owe a dime on it. It is a jewel of a home, and people who had seen this house before the remodel cannot believe the use of space. So what I am saying is: great choice, not owning a mortgage is an amazing… Read more »

DB
DB
8 years ago
Reply to  maria margenot

We are doing the same thing – renovating our town house to maximize its footprint (~1600 sq ft for our family of 3). It is amazing what an efficient use of space can enable you to store without feeling cramped. For example, we completely gutted and renovated our kitchen for about $11,000 (we, mostly my husband, did the majority of work ourselves) – and although we did not expand the footprint at all, by redesigning the space the kitchen went from useless to fantastic.

Angie Kay
Angie Kay
8 years ago

Wow! We just did the same exact thing! This story was amazing and really hit home for me! Last month we put our house up for sale and got a full price offer. So, feeling so excited, we began looking for new construction homes with four bedrooms (we have twins plus 1 kid). We were moving from about a 1300 square foot house to about 2000 square foot house. However, our house payment would have gone up about $500 along with putting every dime we had from the sale of our house as a down payment. Plus, we were looking… Read more »

Sam
Sam
8 years ago

http://adventures-of-sam.blogspot.com/2012/07/perils-of-keeping-up.html

We are watching many of our friends take advantage of the down market and low interest rates (we are also trying to take advantage of the low interest rates by refinancing to a lower rate and shorter term).

It is a weird to watch folks we consider peers upgrading to 8000 sq feet.

Jacq
Jacq
8 years ago
Reply to  Sam

Flashback to 2005-7, ARM and interest only mortgages. But then I also flashback to 1982 when my sister lost her house with an 18% mortgage…

I think a good general rule of thumb is “could I afford this house if interest rates went up 3-5%”? Cuz they ain’t going down any time soon.

Jane
Jane
8 years ago

You probably wouldn’t have used that garden tub very often anyway. Now that you’ve made your choice, though, why don’t you treat yourself once in a while to a night in a nice hotel room that has one? I’m confused by the discussion of the kitchen. Maybe I just like small kitchens, but I find it hard to believe that you can’t renovate a kitchen in a 2,000+ sq. ft. home to be to your ultimate liking. Can you tear down a wall to open it up? We had a similar dilemma this past year. Our wants for our new… Read more »

Holly@ClubThrifty.com
8 years ago

I am the OP!

To answer your questions:

Yes, we have thought about just upgrading our house that we live in. We may do it in the future and that is a really great suggestion.

We stopped looking because we are trying to avoid temptation. It’s so easy for us to give in to lifestyle inflation and forget our long term goals. It has happened to us before…when we upgraded from our “starter home” until the home we have now.

maria
maria
8 years ago

I admire you for your willpower.
I too LOVE a nice big tub, however our bathrooms did not have the space for a “garden” tub.. We did add a tub with the same 5feet length but it is almost twice as deep as the old one. Very nice and still under 1k in remodel costs.

CandiO
CandiO
8 years ago
Reply to  maria

Exactly. When we remodeled our bathroom, I really wanted a garden tub. Not a chance it would fit. So instead I got the biggest deepest tub that would fit into the existing space and I am SO happy! The tub is huge compared to what I used to have and gives me the “luxurious” feel I wanted.

Megan
Megan
6 years ago
Reply to  CandiO

~sigh~ I’d love a tub, period! One more thing to look for in our “forever home” when we eventually buy.

For now, whenever I go to a hotel though I really enjoy living it up in such nice (in comparison) accommodations. 🙂

Mark
Mark
8 years ago

Okay, I’ll be the bad guy : ( I really think you need to consider what exactly is at the end of the alleged rainbow. Imagine tomorrow you paid off your mortgage and were debt free. What would change? There are two things that would change: 1. You would clear the mental boundary of being in debt. 2. You would no longer have to make payments (though you would lose the tax benefit). While I’d love to not have a mortgage….what else would I do with the money, aside from try to accumulate more? To what end? I know this… Read more »

Holly@ClubThrifty.com
8 years ago
Reply to  Mark

I am not offended at all! There are many reasons for wanting to be debt free- some psychological and some practical. The most important reasons are that we want to travel abroad with/without our kids and want to free up income to do so. We are also planning on retiring early and paying for our kids college. I don’t really think that there is a right or wrong answer in this situation. Being debt free is great but having a mortgage isn’t a bad deal either. It’s just a matter of persnal preference and each person has to decide what… Read more »

Barb
Barb
8 years ago

Very nice article. For Jd’s benefit I’ll say that the garden tub (which I have and which IS nicer) is both larger and circular shaped. its also higher and generally has a seat. I have severe arthritis and could never in my wildest dreams get out of a regular but, but can get out of my barden tub.

Becky
Becky
8 years ago
Reply to  Mark

Oohh Mark – I have to disagree on the mortgage payment tax deduction. . . .dollar for dollar, there is more return (tax deduction speaking) in gifting $$ to a charitable organization than paying mortgage interest and then deducting it. I also think there is so much to learn in travel, rather than sitting in a classroom in the best school district.

Janette
Janette
8 years ago
Reply to  Becky

Unless you are planning on traveling full time- I totally disagree. My children lived abroad for five years. They traveled widely. They also attended excellent International Schools in the process. The travel gave substance to their learning, but the schools were the foundation on our bedrock family.

Elizabeth
Elizabeth
8 years ago
Reply to  Mark

I might not die wishing I had lived even farther below my means — but I’d like to avoid feeling that way for the last couple of decades of my life 😉 Retirement worries me.

Babs
Babs
8 years ago
Reply to  Mark

We paid off our house when our oldest was in high school. That enabled us to pay their college tuition. Neither of them have any loan payments that seem so devastating. They both have jobs. They also know how to live below their means.

Pamela
Pamela
8 years ago
Reply to  Mark

Mark, I’d like to pay my mortgage off early for several reasons: 1) I lost my job in 2008. I was able to get another one in six months and my savings tided me over. Had I not found another job, having no mortgage would have helped stretch my savings further. 2) I can sock the money that would have been used for a mortgage payment into my emergency fund/retirement fund. 3) I can sock the money that would have been used for a mortgage payment into a vacation fund. 4) I can sock the money that would have been… Read more »

Holly@ClubThrifty
8 years ago
Reply to  Pamela

Pamela, those are great reasons! I like the way you think. I love the thought of having options and so much flexibility!

DreamChaser57
DreamChaser57
8 years ago

What an incredibly engaging post, a delightful read. The title was fitting because it framed the author’s dilemma nicely. Holly’s A-ha! moment was especially articulated well. It is so easy to conflate extravagance with necessity. People need shelter, food, and in most instances transportation. People rationalize their indulgences all the time in those areas. In the name of entertaining, families overextend themselves by buying bigger houses with sprawling backyards. Spending time with friends and family is a joy, but someone can stay at a hotel, sleep on the couch, or make a pallet on the floor. Out-of-town guests can be… Read more »

Tyler Karaszewski
Tyler Karaszewski
8 years ago

I wish my mortgage were $1700/month – it’s over twice that, and my house sounds more like your current house than your dream house, except that it’s in coastal California. I can only assume yours isn’t.

Elizabeth
Elizabeth
8 years ago

But if you lived somewhere where housing was cheaper, you might not be making the same high salary. Holly probably doesn’t earn what you earn. I think salary and cost of living are all relative. I could move out West (Alberta, for example) and any gain I make in salary would be lost in the higher cost of living. Right now I’m trying to look it in proportions. Where I live now, housing costs about 28% of my take home pay. (I rent and I’m single.) If I moved, could I lower that proportion or would it be higher? That’s… Read more »

Tyler Karaszewski
Tyler Karaszewski
8 years ago
Reply to  Elizabeth

I know, but I still can’t help but be a bit shocked when I see numbers like that, it’s more house than mine on WAY more land than I have for 1/2 the price. One nice thing about living in a high-cost-of-living area is that if you ever need to leave, you can end up with a ton of cash in your pocket if you move to a cheaper house. Assume I pay off my house someday, and it’s still worth what it is today, and I want to retire and move out of California. I could sell my house… Read more »

Tracy
Tracy
8 years ago

I agree with this. It’s one of the multi-horned dilemna we find ourselves on. If we were ok living where we are, we’d be in great shape with a cheap housing market. But as it is, if we can’t get the hell out of this town until retirement, we’ll be looking at higher expenses in retirement than we have now, and that is frightening.

Elizabeth
Elizabeth
8 years ago

lol. I’m a little shocked too now that I see the numbers. $150K would buy a needs-some-serious-updating one bedroom condo where I am, and I’m not even in a major city like Calgary or Toronto.

You make a good point about being able to sell and move somewhere with a lower cost of living. I’m waiting to see if the markets here cool before I jump in, as it would be a “starter home” I’m looking for. (Why buy a family home when it’s just me?) At least you guys know your bubble has burst 🙂

Rosa
Rosa
8 years ago

Yep.

My parents sold a very nice house in small-town Iowa when they retired. You would cry to hear the price. But it limits them in terms of where they can settle down now (they want to be out of the snow).

Family friends went the other way – sold a tiny condo in Chicago and bought a HUGE house in Iowa when they had growing kids. It’s a lot easier to go that direction.

Rebecca
Rebecca
8 years ago

Oh, yes, we have lots of Californians who did that where I live. Sold their expensive CA homes and moved up to WA where they could buy twice the house—-only problem is they drive the cost of houses up for the locals because they’re all, “2,000 sq ft for $300K! What a steal!”.

AMc
AMc
8 years ago
Reply to  Elizabeth

I think that is a great way to look at it – my house is about 2000 square feet, 3 BR, 2 Bath with 2 garages on .75 acre and cost just under $45,000. Sounds like theft to someone who grew up in a metropolitan area like I did – BUT – given the remote area I now live in and the very low wages around here, the percentage of my income that goes to housing is still around 25% of my take-home pay.

Holly@ClubThrifty.com
8 years ago

Just to clarify- we live in the midwest and enjoy a very low cost of living. Our current home cost about $155k and the “dream home” was around $300K.

I have no idea what Tyler makes but it’s pretty likely that it’s a lot more than me! We make a modest living and have a combined annual gross income of around 100K. Our income fluctuates slightly.

Katie
Katie
8 years ago

Isn’t that twice the median annual household income for the nation, much less the low cost-of-living midwest? That’s not “very modest” in any framework I know of.

Holly@ClubThrifty.com
8 years ago
Reply to  Katie

I’m not sure, but you are probably right. My point is that we are middle class. Most people we know personally make a lot more than us. Our income is probably about average for my area.

imelda
imelda
8 years ago
Reply to  Katie

“Most people we know personally make a lot more than us.”

Ah, and here we have the source of your bias! $100k household income is at the very, very top of what is considered middle-class (according to wikipedia) – in fact, is the top of the upper middle class. And that is for the entire country, not just the midwest.

Holly@ClubThrifty
8 years ago
Reply to  Katie

I get your point. I also think that I feel more middle class because we live so far below our means. We have not raised our lifestyle much since we got married 7 years ago. At that time, we made a combined income of about 40K.

Sara
Sara
8 years ago
Reply to  Katie

imelda, the source quoted in wikipedia actually says the American middle class range includes “INDIVIDUALS making between $25,000 and $100,000 a year.” Thus, for a married couple/family, that would be $50,000 to $200,000 per year. In every modern conception of the American middle class that I’ve heard, Holly is right on that her and her husband’s $100,000 combined annual income is solidly middle class.

Bella
Bella
8 years ago

Oh Holly, I loved your article – but I have a sticking point here. You are not middle class. 6 figures combined is (like someone already posted) 2x the average income in the US. It’s hard to believe that you arent’ middle class when all you see on TV is the out of this world crazy celebrities that are living like the Hiltons (but would be bankrupt and broke if their reality show were cancelled). If I lived where all my coworkers lived – I would also feel as if I were average – because a lot of people around… Read more »

Holly@ClubThrifty
8 years ago
Reply to  Bella

Well, you have a point. Being surrounded by a lot of high income earners probably skews my perception.

Becka
Becka
8 years ago

Great article. I was relieved it ended this way. 🙂 I wish I could make this argument for our current home – and the $535/mo 15-year mortgage is outstanding – but while I love some aspects of our house (namely the land, and the $4500 roof we just put on), the fact is that we outgrew it the moment I moved in. 1000 sqft is just not enough for us, especially when one room is dedicated to my husband’s music studio. Our kitchen is similarly minimally upgradeable, and the value of those upgrades may be lost in a home of… Read more »

Troy
Troy
8 years ago

You should have bought the house. And you still should buy the house. It is, afterall, one of your dreams, so while you think you may be giving some up, you are fulfilling other ones. And the price will likely never be lower. The rates will likely never be lower. That 3.5% loan is an inflation hedge. Therefore the 30 yr loan is actually the smart thing you and everyone else should be choosing. you have the opportunity to enjoy your dream living for the next 18 years. At that time, this dream home will likely have appreciated far more… Read more »

Maddie
Maddie
8 years ago
Reply to  Troy

If she crunched the numbers and this is the way she can afford to help her kids pay for college, I think it makes sense.

Elizabeth
Elizabeth
8 years ago
Reply to  Troy

Do you think that will still be the case when the baby boomers start downsizing? (I’m curious to hear your thoughts). I keep hearing that when the baby boomers downsize, there will be a lot of higher end homes on the market and a higher demand for smaller homes. Obviously it’s not going to happen all at once, but boomers will be competing for smaller homes with younger generations who can’t afford the big homes due to student debt, unemployment, lower starting salaries, etc. Some experts warn that people who buy bigger homes now may not see the value of… Read more »

Sara
Sara
8 years ago
Reply to  Elizabeth

If this kind of thing starts happening in a community, I would imagine that the community would start changing zoning laws so that the larger houses could be changed into two or three smaller apartments instead. That is pretty much what happened to many of the massive Victorian homes built at the last turn of the century.

Michelle
Michelle
8 years ago
Reply to  Sara

That’s something that might work. Though I’d hate to see what sort of sound-proofing would be required to make some of today’s houses into livable apartments/duplexes. At least the brownstones were solidly built. A lot of baby boomers that I’ve talked to have mentioned that they’d really prefer to stay put where they are. For some it’s because they don’t want to sell off all of their stuff to fit into a smaller space. For others, they don’t want to leave the area where they are now. It’ll be interesting to see how many actually decide to move versus modify… Read more »

Steve
Steve
8 years ago
Reply to  Troy

I agree about the 3.5% – I would advise people to take out as much money at that rate as they can.

But I disagree about the rest. It doesn’t matter what happens with inflation, the stock market, or other parts of the economy/financial markets. A house is an expense. A house that is too big/fancy/whatever will be drag on your finances.

Sara F.
Sara F.
8 years ago

What a charming post. I also had a small inconvenient kitchen, but with the free help of the designer at the cabinet store, we came up with a much better layout and lots more storage within the same footprint. Places like Home Depot have that service too. I have been in my “starter home” for 36 years and it has worked well for us.

My Money Design
My Money Design
8 years ago

I think Holly made the right choice. Sure a bigger house would be nice. But at what cost? If working down your debt is more important and a higher priority, than it was smart to walk away.

We also have a “garden tub”. And yes, its just a big bathtub similar to a hot tub but without the jets.

Ryan C
Ryan C
8 years ago

Sounds like you made a great choice, but might I encourage you to take an alternative perspective on how you use your space, if your space isn’t meeting your needs. I live in a 210 square foot apartment in New York City, and it often amazes people that I can have the things I have in such a small space. There is something to be said about creativity, and the US housing culture is notorious for going big on space, not on creative uses of that space. I’m not saying you aren’t using your space effectively, but I would urge… Read more »

El Nerdo
El Nerdo
8 years ago
Reply to  Ryan C

@ Holly I read and gave a thumbs up to this post earlier, and after some other random activity I have a few ideas on your home, maybe they can work or maybe they won’t: 1) The backyard has other adjacent backyards. Would it be possible to fence all or part of your yard? If not the traditional picket fence or a brick wall (I love those), maybe living plants like bamboo or something like that? I randomly googled this: http://www.ehow.com/list_7684653_inexpensive-fence-alternatives.html 2) The tub. If you can gain some privacy in your yard, then next you could install an outdoor… Read more »

Holly@ClubThrifty.com
8 years ago
Reply to  El Nerdo

These are great suggestions!

I don’t know why but I have never considered getting an outdoor hot tub before. That is an excellent idea. I don’t know how much they are but will definitely be doing some research. The thought of the extra water use and electricity cost was initially a turn-off but I am warming up to the idea!

My kitchen-
I don’t know. Someone below mentioned that a professional remodeler could see possibilities that I haven’t considered. That may be the way to go.

Thanks for the great suggestions~!

El Nerdo
El Nerdo
8 years ago

Glad you like. Let me just briefly add 2 things: 1) A block of wax like the kind they use in canning (you can buy in any supermarket) will keep your non-rolling drawers opening & closing smoothly (same with old windows, etc.) before you even buy a pot rack. (My mom’s trick– she uses candles on sliding windows.) $2 per block or something? 2) If you are concerned about utilities, maintenance etc., on a jacuzzi, you could go low-tech with the tub. Google “outdoor japanese tub” for examples. I think you pay once, no moving parts. Eg look at this… Read more »

Ted
Ted
8 years ago

If you’re looking at a hot tub, check craigslist. In our area, they show up there pretty regularly for about 20% of retail. You’ll want to pay hot tub movers to move it for you, but otherwise, it can be a great option.

bethh
bethh
8 years ago

I’m replying here since my post is on kitchen efficiency. I have a small apartment kitchen that isn’t very well laid out (it’s long and skinny). My primary work space is next to the stove, and is a small rolling cart from Ikea. I added a magnetic strip on the wall at eye level, and below it hung a metal rod, both from IKEA. I use hooks to hang cooking utensils from the rod. On the magnetic strip I have a few knives and use metal knobs to pin up whatever recipe I’m currently using – the instructions are at… Read more »

Meika
Meika
8 years ago
Reply to  El Nerdo

I absolutely second this with regard to the backyard. We have a similar set-up, it sounds like – small backyard in a newish subdivision open to the neighbors, and no fences allowed by HOA covenant (dratted things). In the last few years, I’ve planted tall ornamental grasses in one corner, redtwig dogwoods in another (it’s boggy and not much will grow there, another challenge), a shade tree in the center of the yard, etc. It’s made a big difference in making our backyard feel a lot more like a real, functional backyard rather than a useless desert that insults you… Read more »

Kingston
Kingston
8 years ago
Reply to  Ryan C

I was going to recommend Apartment Therapy for the commenter above who said she and her partner are too cramped in their 1,000 square foot home. There are a lot of great ideas at that site for living in small spaces.

Tracy
Tracy
8 years ago

This one hits home for me, big time. I’ve often wondered why retirement advice ALWAYS seems to assume that you are living in the house and town you want to stay in (just pay off the mortgage and you’ll be gold!) Well, sure. But how common is that? During the past 7 years (of the 12 during which we’ve had decent income) we have become steadily more frugal, engaged in lifestyle DE-flation, and struggled to catch up on retirement savings while supporting my mother at the same time. We live in one of the cheapest cities in the country, in… Read more »

CincyCat
CincyCat
8 years ago
Reply to  Tracy

Frugal lifestyle now = pay a landscaper later (in cash).

I think you’re making the right decision.

Tracy
Tracy
8 years ago
Reply to  CincyCat

We keep going over and over the decision, and we keep sticking with our default, but we think it is the correct one only because we keep holding on to a sliver of hope that we’ll have an opportunity to relocate before retirement. But it’s a sad, defensive crouch we’re in, IMO. My husband is 50 and I’m 41. The outdoors/nature is pretty much the focus of our identities, and we’ve spent 12 years of our adult lives in the antithesis of nature/beauty/outdoor opportunities. If it were just us, or if we were younger and didn’t need to plow so… Read more »

Megan
Megan
6 years ago
Reply to  Tracy

Is your bigger problem the state/area that you live in? I realize that it is incredibly cheap where you live and it is allowing you to achieve your longer-term financial goals which is great. But if you already know that you are living in the wrong place and are basically biding time until you can move to somewhere you want to be, I think it would be worth looking into whether you can have your cake and eat it to now. That would mean having to find new jobs in a new location which I know is not easy, but… Read more »

Janette
Janette
8 years ago

I would have moved. A creek? Five acres? Probably better school district? Room for loads of teens to come to YOUR house to hang out. And if the end of the world comes- you could farm the five acres (my husband’s input). We had just that- but forest not rolling hills. We chose to bite the bullet and put our kids in a place they could dream and grow with few on lookers. When they bashed the mailbox- it was OUR mailbox. The cross country team lived at our house during the season- at the pool table in the playroom-… Read more »

El Nerdo
El Nerdo
8 years ago
Reply to  Janette

While it sounds like you had a wonderful time in your home, I find it highly unlikely that Holly would be able to replicate your experiences. We don’t know that she wants a pool room to host the cross-country running team and other people’s kids living in her house all the time. All she really wants is a big bath tub, a more private backyard, and a kitchen. And on first impression, adding 10+ years of debt for those 3 things seems horribly expensive– she could get those 3 things for lots cheaper. There are so many things going into… Read more »

Holly@ClubThrifty.com
8 years ago
Reply to  El Nerdo

Ha,ha!

The thought of a whole cross country team staying at my house is truly terrifying but I get the point that Janette is trying to make. There are certain benefits of having a larger home and more space for my kids and their friends would be one of them.

Thanks, El Nerdo, for your well wishes!

Janette
Janette
8 years ago

I think a very important part left out of the story is the one on your blog. There is a chance that you will no longer be able to work in a few years. That would cut your income down a great deal- making the extra $300. a month payments and the longer time more important to the story. Knowing that your back is the other issue makes the garden tub more important as well. I also did not understand that your children are very young- making my comments about sports teams at my house a bit over the top… Read more »

Holly@ClubThrifty.com
8 years ago

Thanks Janette!

Yeah, my kids are 3 and 1 so they don’t really have friends over yet. I honestly do know what you mean though about the benefits of having a large space for your kid’s friends. My boss finished his basement and had an inground pool built in so his teenagers would be more likely to bring their friends over and hang out at home. That way he can keep a better eye on them. Really, it makes sense.

Bella
Bella
8 years ago
Reply to  Janette

I really like this comment, because the desires resonates with me, but I have a perpective Holly can appreciate. When I was growing up – my house was the party house. All my friends were always stopping by, literaly, most Sunday’s during the winter my parents had anywhere from 3-10 extra kids for dinner. Spaghetti anyone? The thing is – they didn’t have the biggest house or the nicest stuff. What they had was the willingness to share their home with their kids friends. they renovated their garage so they would have their own space and turned the house over… Read more »

Lucille
Lucille
8 years ago

I think you did right. My home is far from perfect and has very few of the dream features I wanted at the start. However, my family are comfortable here and the area is good. I would only move now if it was to downsize. Dreams have a time span and, when not achieved, you don’t miss what you never had!

KP
KP
8 years ago

My issues with a mortgage is, Debt = fixed expenses. Working in Aerospace, Defense and Construction my entire professional life, I strive to keep my fixed expenses down. That way when the in inevitable layoff comes, I am not in a terrible spot.

It is easier to trim your lifestyle when you don’t have long term contracts or monthly payments.

That is why we avoid debt.

Pauline Connelly
Pauline Connelly
8 years ago

We moved from a little crowded house to a big house in a better neighborhood when my kids were 12, 11 and 9 – just at / before puberty when privacy and space became more important. We sold it 9 years later when they were 21, 20 and 18. (This was because we got divorced, otherwise I would probably have stayed at least until they were out of college.) I have so many wonderful memories of our house being full of kids, and having enough space that they could all have friends over and still have their own space to… Read more »

Manda
Manda
8 years ago

It can be so difficult to tell ourselves “no” to new, shiny things and be content with what we have. So often, that new and exciting object is not nearly as wonderful after the purchase. You were wise to say no to yourself now. I’ll bet a better opportunity comes along for you and your family — one that will fit your budget more comfortably. BTW, my home has a garden tub, and I rarely use it. It’s so long that whenever I try to recline and soak, I slide right under the water. Not very relaxing! Plus, our water… Read more »

Steven
Steven
8 years ago
Reply to  Manda

I agree that we need to learn how to just be happy with what we have sometimes. It’s so easy to focus on what we don’t have and forget that we’re already living in a 2,300 square foot home that has nothing wrong with it except the things we’ve decided are wrong with it…at one time we were happy with it. And now that we’re coveting something else, even the most insignificant things become major annoyances. It’s nice to have dreams and goals for the future, but when those dreams and goals make you unsatisfied with your life today, maybe… Read more »

Julie
Julie
8 years ago
Reply to  Manda

Thanks for the laugh about your tub. I have always wanted some type of soaking tub, but the reality is I probably wouldn’t use it much either…especially if I might nearly drown.

Eileen
Eileen
8 years ago
Reply to  Manda

Many years ago our home was struck by lightning and there was an attic fire. We had to live in an apt until the repairs were completed…about 3 months. The apt had a garden tub — something I always thought would be great. I used it twice in those 3 months…including the night before we moved out, knowing it was the last time I would have access to it. That convinced me that it wasn’t worth worrying about. Aren’t there larger/deeper regular sized tubs that can fit in an existing tub space? Seems like a good solution if there’s a… Read more »

PawPrint
PawPrint
8 years ago
Reply to  Eileen

Yes! I have one of those. It works out really well. I don’t have jets, but I use it to soak sore muscles. I’m tall, and I can get totally covered with water up to my chin.

Alexandria
Alexandria
8 years ago

I think the point that is missed by some of the differing opinions is that the writer keeps more choices open for her future. Doesn’t mean they can’t change their mind and buy some “dream home” down the road (when it might make more sense or can pay cash or with a small mortgage). Likewise, *no one* wishes on their deathbed that they had lived their life in a bigger/nicer home. & I think Holly *gets* it. I can relate to this post on many levels. We were blessed to learn this lesson in our 20s -that is when we… Read more »

PawPrint
PawPrint
8 years ago

My sister, a lifelong PNW resident, lives in Florence, OR, and has a garden tub. She requested the garden tub when the house was being constructed. So I don’t think it’s regional, just a current term for, as you say, a big bathtub.

El Nerdo
El Nerdo
8 years ago
Reply to  PawPrint

Where does the “garden” part come in though? I though previously this would be some sort of outdoor hot tub. Is it one of those random marketing terms?

PawPrint
PawPrint
8 years ago
Reply to  El Nerdo

Well, dang, you made me go and google the origin of garden tub. This is what I found: “Garden Bath Tubs Historically The garden bath tub originated in Europe in the 1700s. The French elites put zinc tubs outside in their gardens and drained used water into the gardens. The wealthy in England installed the tubs inside the home next to picture windows which overlooked lavish garden rooms or outdoor gardens. Modern Garden Tubs Garden tubs in their true sense today are tubs without showers, similar to large, deep soak tubs but are installed next to picture windows. Hot tubs… Read more »

El Nerdo
El Nerdo
8 years ago
Reply to  PawPrint

Ah, awesome, thanks! I thought it was just a random marketing term, which made it irksome to use. Now we all now the truth– thanks!

This is relevant to Holly’s article:

Hot tubs and Jacuzzis built outside the home are the most traditionally accurate version of the garden tub despite modern water jet systems.

Seems to me she can still have a proper garden tub, much like Ryan C suggested in his post!

stellamarina
stellamarina
8 years ago
Reply to  PawPrint

Having an outdoor bathtub that drains into the garden sounds like a very good “green” idea. I have always wanted an outdoor shower, now I want an outdoor bathtub.

Bella
Bella
8 years ago
Reply to  PawPrint

Oh man, when we bought our house the realtor convinced us that a house of our size (which isn’t mostrously big or fancy – it’s 2500sq ft – 3 bedroom 2 story) really needed the ‘5 piece bath’. Which was defined as the toilet, 2 sinks, a shower and a ‘garden tub’. To be honest – as much as I cringe at the marketing speak (and to read it in the other comment it just screams ‘consumer’), I LOVE my 5 piece bath. I love that I don’t have to share the sink with my husband, I love that when… Read more »

Peg
Peg
8 years ago

This is exactly what we did, but instead of seeing the light, we bought the dream house. And even though we sold it a year ago, after sticking it out for over 7 years, what a toll it took on us, financially and about every other way you can think of. We went from paying in full any charges on our one credit card, to having a $10,000+ balance that we are working our hardest on paying off. Good for you…you’re light-years ahead of us!

Meghan
Meghan
8 years ago

I’m 32, working Dave Ramsey’s program, amd have figured that by following the baby steps we’ll be able to purchase our first house when we are 36. To be debt free at 37 really makes a difference to my number crunching! If I estimate my future (currently unconceived) children won’t move out of the “dream house” until I’m mid-50s, will I then want to downgrade to something smaller? Maybe I don’t need to be looking at 4 bedrooms, 3 baths, finished basements. This was a great article. Showing adults being adults and giving up what they want in order to… Read more »

margot
margot
8 years ago

Congratulations on making responsible, wise, grown-up decisions! I like this article a lot. I am constantly amazed by how over-privileged almost everyone in America is. Instead of focusing on the immense amount that we all have (even poor Americans have things that would blow the minds of Americans several decades ago and of much of the developing world), we whine about the luxury items we don’t have. And we think we need more space when we have enough space to house another whole family if needed. And we complain about needing more storage space so we can store our piles… Read more »

Steven
Steven
8 years ago
Reply to  margot

Thank you. (And ditto.)

PawPrint
PawPrint
8 years ago
Reply to  margot

It is kind of interesting that my sister and I grew up in a 3 bedroom, 1 1/2 bath home that was 1100 sq. ft. and thought it was adequate space. We didn’t have enough clothes to justify a walk-in closet (and still don’t), but that seems to be a must-have now. We shared a bedroom that people would describe as “small” until my grandmother, who had the third bedroom, died. I do have to say that having two full bathrooms does make things a lot easier, even with only two of us.

Bhushan
Bhushan
8 years ago

Wow! Good on you folks! for making the financial decision.
Keep it up guys, pay off the home by the time you are in your mid thirties.

Fantastic financial planning/decisionmaking

Regards,

Beth S.
Beth S.
8 years ago

Thanks for writing this. Our home, while not our dream home, is paid off. Just when I start to feel dissatisfied with it, I remember that I too can either have a dream home or dream life. Thanks for this reminder today!!

bg
bg
8 years ago

A few months ago, we started thinking the other way round. We’re currently living in a rented row house and we ended up realizing that we really want a house out in the countryside with lots of acres around it so that we could have friends living with us and organize gatherings for up to 25 people (which we do at rented locations a few times a year right now). So now we’re saving up for this and BOY, I really am motivated to save up for the first time in my life. I want this SO BADLY, I’ve already… Read more »

Megan
Megan
8 years ago

Holly, can I give you an Internet hug? This was an awesome post! My husband and I are in that spot right now – our home is (relatively) small for our family of four, but buying a bigger home would mean starting all over with our debt reduction. Right now, we can be debt-free by 40. But if we buy a new house, even with a 15-year mortgage, we’ll be well into our 40s – and will miss out on saving as much for retirement, travel, college, etc. (Also, we can barely keep up with the maintenance of our home… Read more »

Jane
Jane
8 years ago
Reply to  Megan

Are you referring to your house as being small or Holly’s house? I don’t know the size of your house, but if you are talking about anything close to Holly’s 2,300 sq. ft, it reveals how off kilter our views of “small” have become.

I don’t think anyone should ever describe a 2,300 square feet house as small.

Some families might think they have outgrown a house that size, but it is not a little house.

Carla
Carla
8 years ago
Reply to  Jane

I got the impression Megan was referring to her own house.

Megan
Megan
8 years ago
Reply to  Jane

Mine’s just under 900 sf.

I guess I should have phrased it as “smaller houses ftw” – as Holly was planning to a bigger home.

Jane
Jane
8 years ago
Reply to  Megan

Thanks for the clarification, Megan. I would certainly consider a 900 sq. ft. home small. 🙂

We are a family of four and are currently expanding our house from 1,200 to 1,500 sq. ft. Sometimes I wonder what I will do with “all” that extra space. I find my biggest anxiety is the thought of having to clean two bathrooms rather than one.

Amy
Amy
8 years ago

I love this reader’s story! Although my husband and I would love to take advantage of the lower rates, and “move up” to a larger house in a nicer area, we succeeded in paying our house off (early)last year and love the ability we have to save more money now than ever. We have a solid emergency savings fund, and a great down-payment for another home, should we find one that would allow us to pay it off in 15 years. Plus, with the first home paid off, we can lease it out for a third income stream, great for… Read more »

Annie
Annie
8 years ago

Whatever size your house is….look ahead. I renovated my 2300 sq ft house and made the existing garage a master bedroom. Now, as I age or have medical problems, my house is all on one floor. I also made energy-efficient upgrades which have helped tremendously. If you own a home, it is certain that you will send money on it at some time. My electric bills are one quarter what other friends who have not made upgrades pay. When the children leave home, the house can be re-floor planned to accommodate a garden tub (seniors don’t really want them), larger… Read more »

amber
amber
8 years ago
Reply to  Annie

my parent’s home has 2 sets of stairs but they installed an elevator when my great aunt and uncle moved in. this made it accessible for them and for my parents in the future as well. Now my mom uses it to bring groceries up. It is a smart use of the space they already own.

Jenna, Community Manager at Adaptu
Jenna, Community Manager at Adaptu
8 years ago

Remodelers can see things you can’t see yourself. Definitely consider looking into it and making friends with your neighbors 🙂

krantcents
krantcents
8 years ago

It gets down to why do you need to move. If you need more space or are you just indulging in a fantasy. There probably is something in between that you could still have a 15 year mortgage.

Eileen
Eileen
8 years ago

Nice story. We live in a 2000sf home that we love. Our home was built in the late 70s and we’ve gone thru rounds of replacements in recent years and we kept thinking how much more we’d be spending (roof, hvac, windows) if it were a bigger home. With our kids finishing high school/college, I can’t imagine having even more space. Lots of our kids friends have bigger homes, but the extra costs (utilities, taxes, upkeep) has to be factored in.

Nicky at Not My Mother
Nicky at Not My Mother
8 years ago

Yay you for not succumbing to the emotions and getting the “dream house”. Sounds like you would have ended up regretting it a lot. (I’m having a similar issue now where my DH wants to buy a property acreage that we could afford but only just.) But, sometimes you shouldn’t JUST be rational. Sure, you don’t need the uber expensive dream house. But, every single day you’re living with a kitchen you don’t like, and a house that isn’t quite what you wanted. Surely there is a compromise somewhere that would allow you to get a house with the things… Read more »

Julie
Julie
8 years ago

Best article I have read in some time. I have a big property, and I would love to get rid of it. I think you did yourself a favor staying away from 5 acres. The upkeep and maintenance on our property is far more than I ever dreamed, and it is the last thing you really want to spend time on when you are in the process of raising kids. When we bought this property, I asked the previous owner if she was moving to another large property. She looked at me and said, “H___ No.” Now I understand what… Read more »

DB
DB
8 years ago
Reply to  Julie

I grew up on two acres in the woods in Connecticut. Beautiful house, beautiful grounds, pool, etc. But you know what? My parents got SO sick of the time and money required to maintain that property – think of all the trees, the snow removal, and how even basic landscaping is really expensive with that much acreage – and now they are beyond delighted to have downsized to a condo.

I think that having land can sound much nicer than it actually is when you are on the hook day in and day out to take care of it…

Julie
Julie
8 years ago
Reply to  DB

I know just how your parents felt. The problem is my kids are now very attached to this house/property, and it is difficult to sell it since they have so many memories. But hopefully as they move away (the oldest is 20) it will become less painful for them. Was it difficult for you when your parents sold their home?

Michelle
Michelle
8 years ago

Excellent post. My husband and I found ourselves in the same situation back in 2007 — before the housing crash. When we looked at the amount of debt we would take on versus the amount we still owed on our current house, it was a no brainer. Not to mention the increase in property taxes, utilities and maintanence. We’re still in our original house, all 1500 sq ft of it. Yes, it gets a bit crowded as the kids grow, but they’ll start leaving for college in about 10 years. Then we’ll find ourselves with too much space again. And… Read more »

Ray31298
Ray31298
8 years ago

What a great reader story, loved iit!

Crystal
Crystal
8 years ago

We are in a similar position, but we have less left on our current mortgage ($25,000/4.5 years at max). So, we went the have-a-home-built route. We are increasing our current housing costs from $750 a month to $2750 a month with both mortgages and all property taxes, but we will also have $1200 of rental income coming in on our current house each month (we already have a renter lined up for when our new home is completed in September) as well as $600 a month for renting out a spare bedroom (which we do now…same friends are moving with… Read more »

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