Author Topic: "Because I can afford it" makes decisions harder for anyone else?  (Read 3903 times)

YTProphet

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Does anyone else find large money-related decisions being heavily influenced by their means? I know this is a frugal crowd, but has anyone else struggled with whether to buy a house below their means for the sake of finances or buy something more in line with their income level for the sake of happiness?

I currently have about $300k equity in my house. I make low six-figures and have another $100k in investments. No other debt. Long story, but I need to sell. Home prices in my area have climbed a lot and what's available at the $300k price point are cookie cutter 1970s/1980s houses in subdivisions. Living in a subdivision like that would depress the hell out of me. Living in a busier downtown area or in the country would make me much happier and increase my quality of life. However, both those options would probably be in the low $400k range.

Am I being too much of a diva for not wanting to be in a subdivision? Plenty of Americans lead happy lives in those cookie cutter homes. Should I just learn to be more content?

2Birds1Stone

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Re: "Because I can afford it" makes decisions harder for anyone else?
« Reply #1 on: August 04, 2015, 06:49:47 AM »
Do you have a large family?

If not I would sell the house, invest the $$ and rent a nice apartment downtown that would let me live car free.

Not sure how old you are, how close to FIRE etc, but it sounds like a bad idea to be leveraged AND have 75% of your net worth tied into your living space.

YTProphet

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Re: "Because I can afford it" makes decisions harder for anyone else?
« Reply #2 on: August 04, 2015, 06:58:04 AM »
Do you have a large family?

If not I would sell the house, invest the $$ and rent a nice apartment downtown that would let me live car free.

Not sure how old you are, how close to FIRE etc, but it sounds like a bad idea to be leveraged AND have 75% of your net worth tied into your living space.

I've got a family and we've already moved a fair bit, so I think this next house really needs to be the house that my kids spend their formative years in. Time to settle down. But I agree that having such a large % of net worth tied up in house is a bad idea. However, I just got done paying off a mountain of debt and that nest egg should start to grow very quickly since we're saving at about a 40% clip now.

mskyle

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Re: "Because I can afford it" makes decisions harder for anyone else?
« Reply #3 on: August 04, 2015, 07:30:42 AM »
I think you ultimately just have to weigh whether the fulfillment and enjoyment you would get from this house would outweigh the other types of fulfillment and enjoyment you'd be passing up. You can't afford *everything* - is this house worth the other things you will no longer be able to afford?

Why do you have so much equity in your current house? Has it just appreciated a lot or have you been paying your mortgage down aggressively? If you have $300K in equity and you want to buy a $400K house, why not cash out some of that equity and put it in a more diverse set of investments?

bobechs

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Re: "Because I can afford it" makes decisions harder for anyone else?
« Reply #4 on: August 04, 2015, 08:56:35 AM »

...or buy something more in line with their income level for the sake of happiness?



I think you answered your own question, if by happiness you mean happiness.  Even if by happiness you mean status display, and that's what winds your clock you have still answered your question.

The concept that happiness is a natural knock-on result of moving toward frugality and simplicity only works if living lower is not a burr under your own particular financial saddle, that it not an antagonist instead of a catalyst for happiness.

All metaphors in this posting have been reviewed and approved by the local metaphor police.

AZDude

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Re: "Because I can afford it" makes decisions harder for anyone else?
« Reply #5 on: August 04, 2015, 10:22:08 AM »
An extra 25% in mortgage is probably worth the extra happiness you get, assuming your job is stable and you have a good shot of reselling should the worst happen.

DeltaBond

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Re: "Because I can afford it" makes decisions harder for anyone else?
« Reply #6 on: August 05, 2015, 05:31:02 AM »
I found a house that's close enough to downtown, close to the country, AND not in a subdivision.  Its surprising to me that I don't mind living on a hwy, but I have an acre lot and the house is far enough from the road that it doesn't feel like I'm on a hwy.  Neighbors aren't so close I can hear their conversations.  I say look for something in both areas you mentioned, and in between, and see if something surprises you.

DeltaBond

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Re: "Because I can afford it" makes decisions harder for anyone else?
« Reply #7 on: August 05, 2015, 06:22:48 AM »
AND I make $80K yearly, financed $163K.  Sale price was $191K.

Matt_D

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Re: "Because I can afford it" makes decisions harder for anyone else?
« Reply #8 on: August 05, 2015, 06:41:30 AM »
...what's available at the $300k price point are cookie cutter 1970s/1980s houses in subdivisions. Living in a subdivision like that would depress the hell out of me.

What specifically about this situation would depress you?
If you can identify that, how can you avoid whatever-it-is and still stay within a more comfortable range?
Also, if the neighborhoods are 20+ years old, I have to assume that there is at least some differentiation between houses and neighborhoods at this point.

catccc

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Re: "Because I can afford it" makes decisions harder for anyone else?
« Reply #9 on: August 05, 2015, 07:11:15 AM »
...what's available at the $300k price point are cookie cutter 1970s/1980s houses in subdivisions. Living in a subdivision like that would depress the hell out of me.

What specifically about this situation would depress you?
If you can identify that, how can you avoid whatever-it-is and still stay within a more comfortable range?
Also, if the neighborhoods are 20+ years old, I have to assume that there is at least some differentiation between houses and neighborhoods at this point.

My husband is the same way.  It's the neighborhood format, I think.  I don't know how to explain it.  He has no problem living in town closer to neighbors, or living on a farm with lots of space.  I'm not him, but if I had to convey the feeling secondhand:
There is something about subdivisions that recalls the lemming like path that people are told they should take and they end up in these cookie cutter homes- aka little boxes, like the 60s era song by Malvina Reynolds:


Little boxes on the hillside,
Little boxes made of ticky tacky,
Little boxes on the hillside,
Little boxes all the same.
There's a green one and a pink one
And a blue one and a yellow one,
And they're all made out of ticky tacky
And they all look just the same.

And the people in the houses
All went to the university,
Where they were put in boxes
And they came out all the same,
And there's doctors and lawyers,
And business executives,
And they're all made out of ticky tacky
And they all look just the same.

And they all play on the golf course
And drink their martinis dry,
And they all have pretty children
And the children go to school,
And the children go to summer camp
And then to the university,
Where they are put in boxes
And they come out all the same.

And the boys go into business
And marry and raise a family
In boxes made of ticky tacky
And they all look just the same.
There's a green one and a pink one
And a blue one and a yellow one,
And they're all made out of ticky tacky
And they all look just the same.

catccc

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Re: "Because I can afford it" makes decisions harder for anyone else?
« Reply #10 on: August 05, 2015, 07:14:00 AM »
btw, my advice is to not save a buck if it is going to depress you.  I'd never ask my husband to live in a subdivision like you describe to save a buck.  Even if I don't mind it.  Like all other mustachian practices, it's about prioritizing your values.

zolotiyeruki

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Re: "Because I can afford it" makes decisions harder for anyone else?
« Reply #11 on: August 05, 2015, 11:01:27 AM »
Ok, so pop culture tends to make fun of suburbia.  Cookie cutter houses, cookie cutter families, the stereotypical middle class white family with 2.2 kids , blah, blah, blah.

SO WHAT? You need to ignore the stereotypes, ignore what's popular, and focus on your needs.  You shouldn't feel depressed in a suburban house just because an element of our culture says so.  Rather, list what you want/need from a house.  Things like "good schools", "close to work", "X bedrooms and space for Y", "low crime rate", "kids in the neighborhood", or "walkable area" or "lots of similar families in the neighborhood" or "lots of space for a huge garden" or "a 6 car garage for my car hobby" or whatever.  With that list in hand, take a look at what's available in your area, and at what price points.  If there are homes that match your criteria, but you immediately pass them by, figure out the reason you didn't like the house.  And closely examine the reason--if it's a good reason, add it to your criteria.  If it's a knee-jerk response without a rational basis, then you may want to adjust your mindset.

In my opinion, there are a few things that should *not* be on that list.  Things like "on the more fashionable side of town" or "expensive enough to match my income."  Neither of those should affect your decision.  This is about your *needs*, not about people judging you for your choice of neighborhood.

BlueHouse

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Re: "Because I can afford it" makes decisions harder for anyone else?
« Reply #12 on: August 05, 2015, 12:15:34 PM »
I recently moved into the city from suburbia and am 1000x more happy.  But I fully understand the reasons, and it's not about all the houses looking alike.  If you don't want to live in a cookie cutter box, then I'm afraid you'll have to build your own dome house, or something similar.

My house is a rowhouse in the city and rowhouses are typically very similarly configured because there is only one way to maximize space. 

The reasons I moved into an urban area were:  people had lifestyles more similar to mine; more single people; more people with hobbies that didn't revolve around their children; more walkable neighborhood; more things for adults to do (museums, lectures, nightlife, etc). 
Basically, I was dying out in the burbs because suburban life tends to be built for families with children and I just didn't fit in.  I was the "creepy old guy" at the youth soccer games because I didn't have kids (I was there for my nephew but felt so out of my element I never went back!)  I don't have enough people in my household to make shopping at Costco worthwhile (and also, their toilet paper sucks). 

I agree with others:  figure out why you want to move and what you are looking for.  It sounds like it has nothing to do with your means and more to do with boredom.