Recently, I’ve heard several college grads say “I’ll never be able to buy a house.” I know the feeling. College debt, car payments, rent, insurance, groceries all suck up the little bit of paycheck you have left after the tax man takes his chunk. It feels like it will never get better.
I’m here to tell you that it will get better.
I’m also here to caution you about the house bit.
Don’t get in a hurry to live the “American dream.”
The thing about buying a house–with or without the white picket fence–is that the down payment and mortgage might just be the cheapest part of the whole experience.
The time, energy and money that go into owning your home can cramp your lifestyle and put strain on your marriage.
I’m not trying to be a downer. It’s just that I remember when Becky and I bought our first house. All those monthly payments left us with not even enough money to paint over the nasty green paint that was throughout our house.
Allow me to run through some of the expenses and/or work of “owning” a home.
- First off you’ll need to save up 10-20% of the price of the house and make a down payment. (That’s money that could otherwise be earning interest or dividends).
- I put owning in quotes because the reality is that the bank owns your home till you pay off that 30 year mortgage. Don’t believe me? Ask the thousands of people that lost their homes when they couldn’t afford the monthly payments in 2008/2009. The bank WILL kick you out if you can’t make your payments.
- Part of your monthly payment will be real estate taxes (and they increase every year) and homeowner insurance.
- Another monthly expense almost certain to be higher than your apartment is utility bills…electric, gas, oil, trash removal, water, sewer.
- You’ll want to fill your house with furniture when you buy it.
- You’ll want to decorate your house after you buy and furnish it.
- Did I mention paint? Those walls may need painted.
- Were all the appliances included when you bought it? If not, head to Sears or Lowe’s and add another credit card purchase. If the appliances were there, don’t worry—it won’t be long before the fridge or stove needs replaced.
- Ongoing maintenance is part of the joy of home-ownership…roofs and siding need replaced, windows and doors wear out, carpet gets nasty, colors and fixtures get outdated, weather takes a toll on sidewalks and driveways. None of that stuff is cheap.
- Good chance the house you buy will be bigger than your apartment. One of the responsibilities of a bigger place is cleaning. More to dust, vacuum, sweep, scrub.
- That beautiful green grass needs mowed. Buy and maintain a lawnmower. Then keep up with your lawn every weekend.
- If you will be joining us in the north, get a snow shovel and snow blower and get ready for some back-breaking work.
I don’t mean to scare you—just want you to have a realistic view of what it means to own a home. You may not have time and money to enjoy your house as much as you thought.
What I’m trying to say is: Don’t be in a hurry to settle in and live a traditional life. Experience the world. Travel. Savor the flexibility that comes with apartment living.
The real American dream is about freedom. Enjoy as much of it as you can before you tie yourself down to a location and commit to buying a house.