We have a big house payment.
We absolutely love our house but there’s no denying that our house payment is a big part of our world. Now we are going to be in great shape in a couple of years. We took out a 15 year fixed rate mortgage and I love thinking of being completely rid of that house payment by the time my kids are teenagers.
Several years ago we had a rent house that was perfect for us. It wasn’t glamorous and the neighborhood that it was situated in was good, but was definitely aging. Katie and I had just been married a year and we were so excited to be moving into a home together. It was a small place, a little old, but it was perfect for us.
It was a nice place, but after living in it or about a year, and as we starting the think of our future and where we wanted to have our kids, we decided that we wanted to move on. Like all young couples, we had the itch to buy.
There’s all kinds of great reasons to buy, and there’s some great reasons that stand to this day. For one, the money that you put towards principal is going to paying off the house instead of to a landlord.
Of course, there’s the thought waiting to buy a home will just delay when you are able to finish your payment. The problem is that this argument doesn’t really hold up to scrutiny.
Maybe the best argument there is for home ownership is control. Since we own our home, it’s ours, we can do with it whatever we want and can think more longterm with our property. Homeownership isn’t for everyone, but I would definitely say that it is for us.
In our area of Houston, it’s been one of the fastest growing regions in the country. It seems like since we moved to Houston, it’s constantly changing. Which means that around every corner, a developer is starting a new neighborhood.
Now let me tell you, selecting new construction for your home is also not for everyone. I can say that if you have never been through that process, it’s a trip. I’m so glad that I had Katie and her pintrest board. There’s no way I could have navigated all of the sheer options for choice. Building a home from the ground up is such a cool experience. I just remember thinking during the process, I can’t believe that I’m 27 years old and getting to do this. I felt way ahead of my years.
Watching it being built was even more fun. Our Saturday ritual included picking up Kolaches and then heading out to the house to see what progress had been made that week. We took pictures of everything. If I ever wonder what wiring or pipes are behind a wall it’s so simple to just go back and look at a picture of that wall before drywall went up.
Everything about the process of getting to see your home built from the ground up is absolutely awesome.
But here’s the deal…Our house is a big part of our world. We definitely wanted to get a 15 year fixed payment on it, which is cool because we’re going to have our house totally paid off by the time I’m 43. But our payment is big…
That wouldn’t really be such an issue if it wasn’t impossible to see what life has in store for you coming up down the road.
As hard as a tried to forecast and study and see what our finances would look like later on, I just had no idea of knowing what life was about to start looking like.
Now, 4 years later and two kids later, I didn’t foresee all of the costs associated with having and raising kids.
I had heard financial horror stories about what it’s like to have two kids in daycare and I can confirm, it is an unbelievable amount of money.
Things just way feel tighter these days, and I honestly just didn’t see it coming.
Which brings me to what I think the real problem with debt is. You’re going to hear a lot of people talking about the risk of taking on too much debt(which is totally true) and of all the money that you’ll be sending to the bank in interest(also true).
But I think there is something a lot more subtle going on when you borrow money for things you can’t afford yet.
Debt takes away your future choices.
The fact is, is that we have fewer choices today because we have a big house payment. Now I do want to clarify what I mean by big house payment. We utilize about 33% of our income to pay for our home including taxes and insurance. The recommendation is 25% or under. So we’re over the line, but not by a lot. That doesn’t mean that we don’t feel it however.
So our present selfs are dictated by the decisions of our past selves that wanted this bigger house.
What other choice did we have?
Well, we could have just stayed in the much cheaper rent house and keep socking away money for maybe a bigger down payment, or even to pay cash if we wanted to. There’s a lot of decisions that could have been made that weren’t, and that’s ok, it just simply means that things are going to be tighter now for us while our kids are in daycare.
But let’s take another look at how debt has this subtle way of stealing options from our current situation.
Let’s say you took out some big student loans for school-which is widely considered to be “good debt.” And I guess that could be true due to the fact that a quality education will likely mean that you make more over your working years.
Except…that’s not always true is it?
There’s all kinds of factors that go into the work we do as it relates to how much our future incomes will be. And then you need to consider some possible disturbing outcomes. It’s possible that the job you thought you would love isn’t what it turned out to be, and you have all of these loans for a degree that you now feel trapped in.
Some people take it a step further and commit to loan forgiveness opportunities during work that they don’t really want to do, all in the name of erasing that debt.
We all know that credit card debt is not good deep down, but the percentage of Americans in debt is still very high.
When you commit your future money to purchases that you’ve already made, you limit your choices for what you want your life to look like.
Being in the position to take all of the money that you earn each month and to spend it however your current self wishes is the place you want to be in.
What are your current needs right now? Do you have a car that really needs to be replaced? Take all of that money not allocated to head to the bank and spend a few months of really focused intention of getting yourself a new vehicle.
Is your computer about to die? Grab some cash and just go out and get it.
Do you benefit from a little retail therapy? If new cloths make you happy, and you have the cash to spend on it, go crazy! We’ll talk more about making sure you’re hitting your savings goals so that you aren’t ever going too crazy later.
You never need to feel guilty about the way you want to spend your money, but to be able to do that, you have to have some. To have some, you can’t be sending it all to the bank.
We love our house, but there’s a tradeoff. Thousands of dollars are going to the bank each month. One day, we’ll own this house and that will stop. But make no mistake. There are plenty of other things we aren’t doing right now because we’ve traded off those options with our house.
So let me ask you now. If 100% of your take home pay could stay in your pocket without going to the banks, what would you spend it on? Remember, your priorities are your priorities, so no judgement here. But think about how that would feel to have all of that cash to spend on whatever you want to spend on right this second. Let me know, I’m curious what you’ll say.
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