As the season comes to a close, it’s time reflect on this winter on our burbstead. Winter is our least “stead” and most “burb” season, but we make the most of our .3 acre plot by splitting wood, making fires, and tapping our maple trees. And we get to enjoy the fruits of last season’s harvest with our own chickens, canned salsa, and pickled jalapenos. Our maple syrup also lasts the year and pancakes are a Saturday morning tradition here.
Why do we tap our trees? Because they are there. One of our two maples was afflicted by ants while the ants were also eating our house. We stopped tapping it since it isn’t healthy. Fortunately our wonderful next door neighbors let us tap their maple tree. Of course we give them syrup in exchange.
The weather this winter made for a strange sugaring season. We must have tapped at the right time because I’ve never seen the sap flow like it did those first couple of days. After a good first week, the temperature was all over the place. For a while it was in the 60s by day and not dropping below freezing at night, which is necessary for sap flow. Then it was too cold for a stretch—it has to go above freezing during the day.
We just kept our taps in and waited it out. Sap can be refrigerated or frozen while we’re waiting for a full pan for boiling, or if our schedule requires us to prioritize suburban activities over homesteading ones.
This was the first year we did not lose any syrup to mishaps like burning or spilling. We’re bad burbsteaders 🙁 But that’s the beauty of burbsteading—we’re not actually living off the land, so there’s no pressure while we figure out things like how quickly syrup cooks at the end. We learned to bring it in from the outside to our stove at the end for close monitoring.
All told our yield was over a gallon. For more on making syrup, check out our creatively titled post, Maple Sugaring.
Our wood pile is getting low, meaning we’ve enjoyed lots of lovely fires in our fireplace. It has a heat exchanger insert which greatly increases the fireplace’s efficiency. Neil did some tests this year to measure the heat output for different amounts of wood burning in the fireplace. Conclusion: we’ve been wasting a lot of wood by stacking it high in there. The “smaller” fires are more efficient. Again, all part of the burbsteading learning curve!
Our five-year-old often alerts us when the fire needs a log—and he really knows whether it needs one or not. It’s quite helpful and adorable.
Neil splits the wood himself and gets it for free from tree lawns, the city leaf and wood pile, and has been known to knock on doors when someone is clearly having a tree cut down. For more on getting free firewood and fireplace efficiency, check out Fuel Your Way to FIRE with Free Firewood. Neil also received a nice kindling hatchet as a gift for being in a wedding. Which brings us to…
Since fall, Neil was the best man in two weddings, and we attended a third one as well. This means wedding festivities—showers, bachelor parties, rehearsal dinners, and of course the big day—were a common calendar items for us this past season. Neil’s bachelor parties and toasts were a hit, and I believe his days as a best man (these were not the first) are over as all his dearest friends are now married.
Most people go through a season of life when they’ve invited to lots of weddings. Then the majority of their friends are married off, and they might just go to the occasional cousin’s wedding. Not so for us. Though the wedding frenzy has slowed some (one summer in college we went to seven!) we spent several years in youth ministry and those kiddos are now grown up and getting married. Add in the cousin weddings, and some friends who found love after the post-college wedding peak, and we’re still in this space. Let’s just say our annual budget’s “gift” line item accounts for this and always gets put to good use.
Another wedding happened to be on St. Patrick’s Day, and the bride and groom asked if I would lead an Irish dance. I sometimes plan “flash mob” type dances, and I took a whole nine months of Irish dance during high school. My credentials were satisfactory for this carefree couple, and I rounded up a troupe of about 10 to perform a simple reel to a Riverdance tune. I was just impressed I found any willing participants.
We’re gearing up for our annual camping trip to Florida. Many people view camping as “not a vacation,” worse than a last resort when it comes to travel. Us, we’d rather travel more often in less style, than vice versa. Camping allows our family to take more trips while sticking to our annual vacation budget. Between now and the end of summer, we have five camping trips planned, with talk of a couple more one-nighters in the works.
Some camping trips are more “glamping” than others. To me the difference is all in the bathroom facilities, proximity to water, and electricity hookup. Other have preferences about the foliage, campground amenities, nearby attractions, or the size of the sites. Our Florida trip is definitely our most glamping trip—it runs us around $700 including a rental car. Here’s why I consider this camping trip luxurious:
- A room with a view. Camping is the ultimate room with a view. Rather than paying $150+ per night for a beachfront hotel, I pay $100 for the week and open my tent door to beautiful Florida foliage and sunshine–most days at least! Just a couple miles away, within the campground, is a gorgeous, expansive beach.
- We eat food I didn’t prepare. Between a couple inevitable (and budgeted for!) Bojangles stops on the way down and back, and the meal rotation we participate in with friends, I get to enjoy a few meals I didn’t cook myself. That’s a relative rarity and one I thoroughly appreciate. We also eat more processed foods, which is simultaneously gross and glorious, and makes my life so much easier for that week.
- We will rent a car. As part of our overall car cost strategy, we rent a car for this annual 2000 mile trek. Renting allows us to avoid putting undue wear and tear on our already-older vehicles. It costs us around $200 and sometimes we are able to use coupons. Though the main reason is to be kind to our vehicles, it’s an added perk that should something go wrong, we won’t have to halt our trip to personally fix it—a not unlikely scenario in the cars we own. And of course, driving a newer rental vehicle is quite lavish compared to our 14- and 15-year old rides.
- I will shower without my children in the same building. I’m really excited about this one! At home, I’m liable to be interrupted when someone has to use the toilet (we have two, people!), beg to join me (the toddler), or just ask me random questions about Star Wars plot points. In the camp ground’s remarkably nice shower house, the water temperature and pressure might not be ideal, but at least I am alone.
- We use paper products. Disposable napkins, cups, plates, forks…the irony of depleting earth’s resources while enjoying her beauty is not lost on me. Some friends wash reusable camp dishes, but I soak in the glory of simplied meal clean-up.
- We have instant entertainment. The campground contains a beautiful ocean beach, kayaking, nature trails, and a turtle pond. Then there is biking, the playground right next to our site, and the fact that over 100 of our friends are there with us. Not only are we in good company, our kids have a dozen of their pals right there to play with. No need to break out the calendar to schedule play dates. We just mosey on down the road and see who’s out. It’s a child’s dream—being outside all day with your friends, riding bikes, going to the beach, and best of all, being dirty.
- Speaking of which, I can look a mess. I’m not one for fussing over hair and makeup, but in normal life I feel compelled to at least look presentable, and maybe like I’m even trying a little. At camping, I refuse to straighten my hair, put on mascara, or anything of the sort. Ponytail and sunscreen is the extent of my beauty routine there. I always find it a bit comical to see the young ones getting done up in the bathroom. I’m sure they find the sight of me comical, or perhaps horrifying. Maybe I’m the reason they’re in there with their makeup bags!
- I don’t have to clean my house. In essence there is less cleaning because dirt is just part of the experience. No vacuuming, dusting (not that I actually dust), less dishes and laundry. Yay! I always pack too many clothes for the boys, forgetting they don’t change often while camping. I’m also secretly looking forward to using the dryer instead of my laundry lines at home.
- My husband will be there. One of the best parts of camping trips is having Neil with us all week. I suppose this goes for every vacation, but it’s more noticeable there because camping with kids absolutely requires us to work as a team. I always leave feeling closer to him and more cohesive as a family.
- I take a break from technology. My phone, my laptop, and Internet connection are all wonderful luxuries I wouldn’t want to live without. They’re also conveniences I didn’t miss one bit last year. I was completely offline all week last year and didn’t even notice until we were on the way home. It was a much-needed break from status updates, the blogosphere, and all the random distractions of the Internet. It was awesome to just enjoy the moment with my family, friends, and nature.
Perspective is everything. I could think about the drive, the dirt, the bugs, the kids getting off their schedules…or I could think about just how refreshing it is to camp in a warm, beautiful place with my family and over 100 friends. Not to mention the savings. An affordable spring break beach vacation? Yes, please.
More on camping, if you’re interested:
Have you ever reframed a frugal choice as luxurious? Have you/would you consider camping as a way to vacation more often?
Big news: I got a smart phone.
I know, I just extolled my dumb phone in In Praise of Old Technology. But when Neil got a mobile upgrade at work and got to keep his iPhone 5s, it seemed like the right time to make the switch.
I knew it was inevitable. I was having problems receiving texts that contained emoticons—which comprised a lot of texts from a lot of my friends :). It rendered the whole message unreadable :(. I also couldn’t respond to group texts. And I got lost on the way to basically anywhere off the beaten path.
There were other things I LOVED about having a dumb phone: no temptation to waste time online, my kids couldn’t ask me for constant entertainment, and my battery life was amazing. Once after a vacation I didn’t unpack my phone charger until 5 days had passed!
Anyway, my time had come. Now what phone plan to get? I’ve had Verizon for 10 years. Don’t judge me. Every time I start thinking about switching to a less expensive provider I hear awful things about it from a friend. Since Neil’s always had his phone paid for by his employer, who also discounted my dumb phone plan for a while, I’ve never been motivated to change.
I’m definitely not one to scoff at small savings that add up in perpetuity. But this is one area I’ve been willing to pay $5-10 more per month to avoid 1.) the cost of purchasing a phone and 2.) the hassle of changing phone plans. Because let’s face it, dealing with phone companies is a hassle.
While we’re on that point, let me clarify: I’m not in any way affiliated with Verizon. My recent experience with them has been a hassle. But I do think this little-known plan I’ve stumbled upon is pretty sweet—too good to keep to myself.
The plan is a $30 per month, prepaid Wi-Fi only smart phone plan. Talk and text are unlimited, of course.
This plan is not clearly visible on their web site. To find it, you have to begin the process of signing up for a different prepaid plan, and then go to the shopping cart page where you can downgrade to the $30 Wi-Fi plan.
Why it’s awesome: Almost everywhere has Wi-Fi now. It automatically connects to my home network. If I’m somewhere without Wi-Fi and really need it, there’s probably a McDonald’s or somewhere nearby where I can get it.
Thirty dollars per month is the same price I paid for my very first cell phone plan when I went off to college 14 years ago. I realize the market has changed a lot, but the fact that I haven’t increased this expense is nice!
I’m also not tempted to be browsing the Internet needlessly while out and about. I won’t bother getting on Wi-Fi unless I actually “need” to. Hey, price-checking is necessary! Plus, I’m usually surrounded by people (including my husband) who have data plans so I can just be that annoying person who asks questions and lets someone else look up the answer. (I consider this a great way to serve my husband since he loves looking at his phone!)
For directions I use the GPS on the Google Maps. I downloaded a map of my area—and it’s a big map. While offline, it can search nearby for open-ended destinations like “library” or “Indian restaurant” (both important!) and find it without an address. Then it offers offline directions, map, and navigation just like an old school GPS.
Having those maps downloaded is actually better than using Verizon’s network because it’s not dependent on signal strength. Just last month, we were driving back from a church retreat in the middle of nowhere and Neil’s phone service wasn’t working as we left. Because I had the map saved, Google maps app navigated us without a problem.
Drawbacks: sometimes there is no Wi-Fi available. This requires more planning ahead, including downloading maps, coupons, and other information ahead of time. You could probably get something similar for $5-10 less with a different provider.
I recommend this plan for anyone:
- Interested in switching from a dumb phone to a smart phone
- Who is home a lot and is paying for Wifi there, or has access to free Wifi most of the time.
- Values having very reliable phone service.
- Who (like me) reguarly gets lost in the middle of nowhere and doesn’t have a GPS.
- Who comes by a good free smart phone and is ready to make the change.
Someday I may want data, at which point it’ll be time to shop around. For now, I’m happy with my Wi-Fi only plan, great service, and being able to keep my phone.
Would you ever consider a Wi-Fi only plan? Any recommendations for data plans with reliable service?
I’m a Christian, but I don’t believe in “tithing”–a religious requirement to give away 10% of your income. However, I think it’s a darn good idea for a host of non-religious reasons.
1. Ten percent is enough to make a difference. I’m sorry, but tossing a couple bucks in the Salvation Army bucket at Christmas isn’t going to change anyone’s life. Neither is the random $20 tip. Ten percent of your income can’t save the world, but it can truly inflate the lifestyle of someone who needs it. For example, 10 percent of a median $50000 salary is $5000—enough to sponsor about 14 impoverished children for one year. Or fund 50 micro-loans to help end the poverty cycle in one family. Multiply those effects over years of giving and you’ve made a significant impact.
2. Giving ten percent motivates financial responsibility. Learning to practice giving has helped us figure out both the how and why of managing our money well. It’s led us to practical steps like getting financially educated, annual budgeting, and living like college students while we paid of our school loans. It’s also motivated us to make responsible choices, because “having something to share” (Ephesians 4:28) is one of the most convincing reasons to say no to yourself.
3. Giving ten percent can make you cheerful. A famous Bible verse says “God loves a cheerful giver” (2 Corinthians 9:6). Interestingly, secular research shows giving can actually help make you cheerful. The Paradox of Generosity, based on the most comprehensive study of American giving habits ever done, reports generosity causes—not just correlates—with happiness. The study found lower depression rates among Americans who donate more than ten percent of their income, along with many other positive outcomes. It pointed out that those who experienced happiness practiced generosity consistently over time.
4. Giving ten percent is not irresponsible. A concern is that people will give to the point of financial irresponsibility. To be honest, I don’t think most of us are in danger of this. But ten percent is a very reasonable guideline that will not endanger you financially. After all, it’s in proportion with your income. If you can live on $50,000, you can almost certainly make it on $45,000–though perhaps not without some sacrifice.
5. Giving away ten percent teaches you how to live on less than you make. Ten percent is enough to inflate your lifestyle, too. Giving away a tenth means you’ll choose a slightly simpler life with lower expenses. This can come in handy in lots of scenarios, like if your income decreases due to a job layoff, career change, retirement, or one parent staying at home with kids.
6. Giving ten percent helps you spend on what you value. We talk a lot about values-based spending, and then go to Target and buy diapers and Lysol. It hardly feels like values-driven budgeting. I guess I value containing bodily fluids and slaying germs. But if I care about the homeless, the hungry, and the hurting, I will spend money on them, too.
7. Giving ten percent acknowledges God’s provision. Even if you don’t believe in God, it’s healthy to recognize that certain circumstances outside your control, such as your intelligence, personality traits, or opportunities, contributed to your current income. Of course that doesn’t mean you didn’t work hard, hone skills, or grow your career. Both are true.
If you can believe God or the universe has smiled on you at least a little, giving acknowledges that. “What do you have, that you did not receive?” (1 Corinthians 4:7). If we believe we’ve been given to, we are so much more likely to give to others. And giving ten percent is a tipping point where you’re parting with a substantial portion of your pay. You’re actively agreeing that 1. God gave me this and 2. He will continue to meet my needs. I don’t need to hoard it all for myself if God is a good provide
8. Giving ten percent helps protect against greed. It’s easy to say, I’ll give when I make more, or when I reach financial independence, or when I have XYZ in place. There are seasons where more or less giving is appropriate, to be sure. But the only way of being fairly certain that you really will give when X, Y, and Z happen is to give all along the way. Greed is not reserved for those with an affinity for nice, new things. It can also corrupt those like me who love to save. Generosity guards your heart by keeping you compassionate toward others
9. Giving ten percent allows charitable organizations to plan for consistent impact. Giving consistently over time makes you a dream donor–even if you aren’t giving away millions. We split our giving between several destinations, but deciding ahead of time how much to give, and making the commitment over several years allows the organizations you support to keep their efforts afloat.
10. You will feel it if you give away ten percent. Generosity has an opportunity cost. It’s helpful to realize the trade off and affirm how worthwhile it is. Choosing to forego a few wants in favor of supporting important causes is a beautiful way to practice mindful, sacrificial philanthropy.
Lest anyone to feel guilty, judged, or pressured about their giving habits, I leave you with this gracious verse:
“You must each decide in your heart how much to give. And don’t give reluctantly or in response to pressure. ‘For God loves a person who gives cheerfully.’ And God will generously provide all you need. Then you will always have everything you need and plenty left over to share with others” (2 Corinthians 9:7-9).
What benefits have you experienced from practicing generosity? What causes do you value?
If you passed our homebuying readiness checklist, it’s now time to think about your wishlist. Here are some important questions to consider to help lead you to home, sweet home.
When we started looking for a home, we didn’t know exactly where we wanted to live or what we wanted in a home. We saw fixer-uppers, turnkey homes, old homes, new homes, big homes, small homes…probably 100 homes before we finally settled on one three years later.
Our poor realtor.
She isn’t a realtor anymore. She claims that isn’t related to us.
More important than sparing your realtor’s time is protecting your own time and money. Here are some important questions to consider in your home purchase, beyond what you can afford.
Where do you want to live?
There are so many possible good reasons for choosing a location, but if you don’t prioritize you may have a hard time honing in on a search range. Do you want to live in the suburbs, the city, or a rural area? Will you base your choice based on proximity to your job, family, friends, quality of schools, how hot the real estate market is, home prices, proximity to shopping, walkability, or neighborhood type?
These are just a few of the many factors you may consider. It’s possible to satisfy more than one, but you may not hit all in one property. Prioritize to narrow your search and save yourself time. Or if you’re flexible on all of these you may be able to prioritize price over other factors.
How long do you want to live there?
What first-time homebuyers don’t see is how much it costs to sell a home. Realtor fees cost 6-7% of the home’s value. So for a $150,000 home you’re looking at $10,500. This is in addition to extra repairs and upgrades you’ll make to help it sell. The point: it pays to stay in your home for long enough to gain equity to compensate for the cost of selling.
Buy with a view to sell. We’ve talked about the fallacy of depending on your residence as an investment, but do keep future marketability in mind. Chances are you will not live there forever. Properties in obviously bad neighborhoods, with very strange floor plans, or with major foundation or structural problems are not just drawbacks for your time there. They’ll also deter future sellers.
What type of home do you want?
Are you looking for something move-in ready, or are you willing to build sweat equity on a lower-price property? It’s so important to know thyself here. Don’t buy a fixer-upper if you don’t like to fix things. Don’t count on sweat equity if you don’t like to sweat. Unless, of course, you’re happy to pay someone else and have the savings to do so.
Maybe you’re very handy but are short on time. Again, be cautious about getting in over your head. And just because a home price is low doesn’t mean it’s affordable. For example, if the property needs to be gutted, make sure you have the cash on hand or can responsibly finance the project.
Do you want a starter home or somewhere you could stay indefinitely? Keep in mind how long you want to stay and whether the home could accommodate children, a home office, or anything else you might have in mind for the future.
Do you want an older home with more character, or a modern home that may be more “cookie-cutter”? Older homes may be an affordable way to score beautiful features, but they can come with a lot of maintenance requirements as well. If you’re not interested in taking care of an older home, don’t buy one!
We also discovered that the newest homes we looked at (1980s) were also the most run-down. In our price range, these newer homes were just old enough that nothing had ever been replaced. That meant we were looking at 30-year old furnaces, hot water tanks, and roofs. (Not to mention lots of outdated wallpaper and fixtures.) Read: lots of expenses on the horizon. We opted for a late 70s home that had updated these major items within the past 5-10 years.
What features do you want in a home?
When we started house-hunting, we were interested in having a large room that could hold up to 30 people for church meetings. As time wore on we realized this would be hard to find in our location and price range. We didn’t want to get into a situation that required major remodeling right away. Eventually we dropped this from our list. Thankfully we’ve still been able to host lots of other types of events.
Some people really want a master bath, a two-car garage, a dishwasher (or room for one), or a formal dining room. We knew we wanted a yard—it didn’t have to be big, but we saw many homes with postage-stamp size yards, some of which were completely paved. We knew we need a little grassy space to garden. Thank goodness we realized this. Now our .3 acre plot is a burbstead where we raise chickens, garden, and tap our maple trees.
There’s no right or wrong to your home-buying wish list, but you may have to hone your non-negotiables. And those may change over time as you see what’s available. Update your priorities as they change and communicate this with your realtor.
And hopefully she won’t quit.
Homebuyers, what’s on your wishlist? Homeowners, what else should prospective homebuyers think about? What do you wish you would’ve considered while house hunting?
This weekend Neil had a man cold. And a rusted out brake line. This didn’t make for a very fun weekend for him. Spending an afternoon under a rusty, 15-year-old car tracing brake lines instead of watching sports (what sport season is it? I have no idea) is a sacrifice. However, we might be sacrificing much more if we value convenience too much.
How much do you spend on conveniences each year?
Add up those Keurig pods.
The paper towels, napkins, plates, and cups for parties.
The baby wipes. And boogie wipes. And make-up removal wipes. And disposable diapers.
How about single-serving snacks, like granola bars, yogurt cups, chips, etc.?
Now add in frozen meals, prepared foods, fast food, and take-out.
And subscription services like Netflix or Kindle Unlimited.
Do you pay someone to mow your lawn? Clean your home? Wash your car? Fix your car?
How much might you pay to have a new car so it “won’t break”?
What does your convenient technology run you? Your data plan? Your eReader? Your computing needs? Your FitBit?
If anyone is still calculating, you’re a better person than me. I admit I spend a countless amount on conveniences each year.
To be clear, I am NOT saying there is anything wrong with buying any of the items or services mentioned above. I choose to buy many of those items regularly or occasionally. But let’s just all be honest about the fact that we spend a lot to avoid inconvenience.
Now, it’s absolutely glorious that I can throw my clothes into a washing machine and have them come out clean. No hauling them down a creek. No heating up buckets of wash water over a woodstove. I also love my microwave, my Kitchenaid mixer, my laptop, my cell phone, my dishwasher, and toilet paper. The list could go on, but the point is, we have to the draw the line somewhere.
I draw the line after toilet paper and washing machines.
I draw the line before Keurigs and a new car.
But that’s just me. Where will you draw your line? I can’t tell you where that line is, but I can tell you need to draw it somewhere.
This ain’t Little House on the Prairie, but it ain’t Downton Abbey, either. You gotta do stuff for yourself sometimes,
There is a reason we aren’t all still growing our own wheat, grinding it into flour, and making bread. There’s a reason I don’t have any sheep in my yard to make clothes out of. Industrialization is awesome.
There’s a good reason modern conveniences have become standard in homes. They free up time for people to pursue innovative careers and hobbies. They improve our quality of life, without a doubt. But at some point, if I’m too busy or lazy to do basic human tasks like cook food, clean, or fix things, maybe I need to re-evaluate.
Perhaps your life is filled with conveniences because it’s over-filled with commitments, hobbies, or entertainment. Maybe you’re spending more money than you’d like on conveniences because you haven’t taken control of your time. Learning to say no is crucial.
So is accepting that avoiding inconvenience is impossible, anyway. Things will break. Plans will fall through. You will get sick. There’s no way around some suffering in this life, but making it our purpose to avoid inconvenience means we won’t have the endurance needed when the inevitable comes.
The High Price of Convenience—It’s About More Than Money
Ultimately, the price of convenience items can be much higher than meets the eye. For example, we all know eating restaurant food or prepackaged foods is less nutritious than most home-cooked meals. We also know that being glued to technology can inhibit our relationships, health, attention and reasoning skills, and productivity in the real world.
Letting machines do everything for us isn’t great for our physical health, either. Most of already work sedentary jobs, now referred to as the smoking of our generation. Add to that the fact that we drive everywhere rather than walking or biking, and pay others to do our housework, yardwork, and car repairs, and we can easily end up couch potatoes with catheters a la Mr. Money Moustache ‘s article “Is It Convenient? Would I Enjoy It? Wrong Question.” (or Idiocracy).
Unfortunately, kids are also spending way too much time on screens. As a parent, I can see why. It’s so much easier to turn on Youtube than to get everyone into their clothes, shoes, and coats to go play outside. But kids and grownups alike are much better off when we move our bodies and spend time outdoors.
Paying for convenience can also rob of us of the satisfaction of a job well done, learning new skills, and challenging ourselves. When I attempt a new recipe, I feel accomplished and satisfied while I eat the work of my hands. Neil still speaks proudly of the time he replaced the head gasket on his 1990 Dodge Shadow (my brother still drives it—it’s older than him!).
Many convenience items also represent a high environmental cost. Keirig is the ultimate example—the inventor claims he now regrets creating such a wasteful product. Maybe that’s just because he sold it for a meager $50,000 before it got hot! Don’t feel too bad if you own one of these nifty contraptions. We’re all guilty. Think of all the paper products we consume, the handy pre-moistened cleaning wipes, food packaging, flash fashion, not to mention the amount of technological waste we create with constant upgrades…it all adds up to a lot resources depleted to create it, and a lot of junk sitting in landfills when we’re done with it.
Last but not least is the financial opportunity cost of what we spend on convenience. Perhaps a few minutes here and there could add up to a small fortune when we consider what our savings could earn if invested over time. Just reducing restaurant eating and prepackaged foods alone could free up hundreds of dollars each month.
I love convenience. It’s hard to put a price on it, but we all need to draw the line somewhere. Otherwise the price could be your health, your sense of satisfaction, your productivity, your family, your money, and your world.
What conveniences are worth it to you? Where do you draw the line? What other non-financial tolls might conveniences take on us?
The English language borrowed the word mortgage from French, in which it literally means “death pledge,” alluding to the long-term nature of such a commitment. Not to mention if you get in over your head, your home loan will surely feel like death.
A mortgage is also a place where you can royally mess up your finances for the long haul. You can clip coupons, shop at ALDI, do a shopping ban, and drive an old car, but if you over-do it on the house, it’s hard to ever get ahead. This is one of the big areas to get right as it’s likely going to be your top living expense.
Fortunately there is a way to buy a home without killing your financial future. It’s all about going in financially prepared. Use the checklist to determine if you’re ready to take a mortgage, rather than a death pledge.
I know how much money I spent last year. You must know where your money is going, or you don’t know whether you can afford a house. If you base mortgage affordability solely off what you pay in rent, you may be unprepared for the extra costs of home maintenance and repairs and increased utilities.
I’ve recorded a budget for this year. You must know where you want your money to go in order to save a down payment, cover closing costs, and be sure you know what you can afford to buy.
I have no credit card debt. Ideally, you’d want to go into buying a home with no debt, since a mortgage is the largest debt most people will take on. At the very least, you wouldn’t want to be paying high interest on credit card debt. That’s a financial emergency you must get out of before you start saving for a house down payment or getting into another loan commitment.
What about car loans? It doesn’t make much sense to keep an auto loan around (and paying interest on a rapidly depreciating liability) while trying to purchase a home, either. It would be wise to pay it off ASAP, thus minimizing the interest.
What about student loans? In a perfect scenario, you’d want to have student loan debt out of the way. Especially if you have a mortgage-size student debt, why not wait? You don’t need two death pledges! But as long as you have a plan to pay off student debt and factor this into your budget for a home, you should be fine. We had a modest amount student loan debt remaining when we purchased our home, but purchasing an affordable home and having a plan to pay off the debt meant it wasn’t a big burden.
I have six month’s living expenses saved. That’s nice you’ve saved $20,000. But what is it for? Emergencies such as job loss or illness? A down payment? Closing costs? Incidentals and furnishings? You need to separate these categories, at least mentally. Write it all down, total it up, and save that much, not a random round number that sounds good. What if you buy your house and unexpectedly get laid off? Having a cushion to fall back on is more than ever once you have the major financial commitment of a mortgage.
I have determined a budget for the price of my home, and the mortgage, taxes, and insurance will not exceed 25% of my monthly take-home pay. As mentioned before, please base your budget on the lowest income you expect to earn while paying off that house. If you’d like on parent to stay home with future kids, base it off of one income rather than two. You can always save, invest, or pay down debt with the other spouses’ pay while you’re still a dual income household.
I have saved a 20% down payment. Again, this is in addition to my emergency fund (6 months’ expenses). Putting 20% down will:
- Avoid PMI which is money down the drain for a homeowner with insufficient equity to secure the property.
- Ensure some equity when you need/want to sell. Early mortgage payments are almost entirely interest meaning you don’t gain much equity in the first few years.
- Make your mortgage smaller and monthly payments more affordable.
- Indicate you have the financial discipline to handle a mortgage.
I’ve saved an additional 5-7% for closing costs, inspections, appraisal, and setting up the home. For a $100,000 loan, you’ll spend around $5,000 or more just on the home-buying process. Additionally, you may need a lawnmower, furniture, appliances, and other tools to set up your new pad. The cost can add up even if you purchase secondhand. If you buy below your budget, the difference from your down payment savings can cover this. If you buy at the top of your budget you’ll need some extra cash on hand.
I am saving for retirement. At the very minimum you should be earning your employer 401k match. If not you’re essentially allowing your employer to keep part of your paycheck. But investing 6% is only going to inch you toward solid retirement savings. Dave Ramsey recommends investing 15% to build a solid nest egg for the future. Don’t ignore your future in order to purchase a home.
The difference between a death pledge and a mortgage lies in your financial readiness for home ownership. If you’re free of high-interest consumer debt, have sufficient savings, and live in area where home prices are reasonable, home ownership can be a solid choice. Just don’t sacrifice other goals like retirement, staying home with kids, or paying off other debt to do so. It’s worth the wait to avoid the death pledge.
Homeowners, what would you add to this list? What do you wish you’d done to prepare for buying a home?
The very act of shopping makes me feel like a sucker. Here I am at the mercy of a retailer, a helpless consumer who needs to buy things I can’t or won’t make. At the same time, I’m really glad I don’t have to spend my days shearing sheep, carding wool, spinning yarn, weaving cloth, and sewing clothing. That would suck. I hate sewing on buttons.
If we need something out of the ordinary, we wait to see if we can make do without it or fix what we already have. Next, we exhaust options like freebies, gifts cards, hand-me-downs, Craigslist, garage sales, or eBay (depending on the item).
But if I have to go the typical retail route, I avoid paying full price if at all possible. One strategy that has saved me a lot is shopping in the wrong department. This works particularly well for certain sizes of clothing and shoes, but also for some specialty items. Just think about it: you are in the clothing section, held captive to these awful prices because you need a bathing suit.
Here are some examples of discount finds I’ve made by shopping the wrong section.
- Kids XL bathing suit bottoms instead of women’s Small: $8 instead of $22. Same brand.
- Kids tennis shoes: $20 instead of $60. Same brand.
- Juniors undergarments instead of women’s: one quarter of the price. Same brand.
- Toddler clothes instead of little boys (for sizes 4-5T): $4 instead of $8. Same brand.
- Boys undershirts instead of girls’ camisoles: $1.50 each instead of $2.50 each. Same brand.
- Sunhat in gardening instead of fashion accessories: $10 instead of $20. Same brand.
- Baby Advil & sunscreen: in medication/personal care instead of baby: half-price generics available.
- Travel mugs: in dishes instead of travel or lunch box section: $8 instead of $20.
- Kids-size fishing pole in fishing section vs. one in toy aisle : $8 instead of $16 & way more durable.
- Pretty blank cards in stationary, instead of individual greeting cards: a box of 20 or even 50 can cost the same as a single greeting card.
A few tips:
- Look outside of specialty areas. If you are in a specialty section, you might pay more for the same item. If it’s an item only sold there, you’re out of luck. But if you can think of another area where it might fit, check it out. It might be half the price.
- I realize not everyone can fit children’s clothes, but if you or your children can span two departments, the smaller size section will usually be cheaper. Toddlers overlaps two sizes with kids. Babies overlap one size with toddlers. Kids’ shoes overlaps several sizes with adults’.
- Steer clear of end caps and seasonal displays. There are often less expensive, sometimes better quality options in the larger departments.
- When shopping secondhand, small women’s items are sometimes misplaced in the girls’ section. I don’t go digging through the entire thrift store aisle of kids’ clothes, but sometimes just walking by will notice an item that looks too grown up. Scored my last pair of shorts this way (J. Crew, $5), as well as a couple sweaters. Maybe this happens with boys’ clothing too?
If this sounds time-consuming, it isn’t. Glance through two departments and compare prices. If you live simply, avoid clutter, automate errands, and don’t shop as a hobby, these expeditions for non-routine items should be few and far between.
I hate feeling like consumer sucker. Don’t you? Brainstorming alternatives is second-nature to those pretending to be poor. It’s not extra effort. It’s only natural. We enjoy it. Seeking creative alternatives and solutions is fun!
Have you ever found a great deal by shopping in the “wrong” department? Tell us about it! What are your other thrifty shopping tips?
Dear Mom & Dad,
I know you want what is best for me. You want to read to me as much as possible, take me on as many cool adventures as you can, and help me become the most successful, well-rounded individual I can be.
I know you want to race against the clock to find freedom before I’m too old to want to hang out with you. Before I’m too big to think you’re cool. Or maybe that’s not an option, but you want to make sure you’re as involved as possible. I think it’s pretty cool that you want that.
I know you want to teach me to work hard, to be resourceful and creative. You want me to learn things they don’t teach at school, like entrepreneurship and investing and how to DIY anything. And I’m sure I’ll thank you later for that.
You are saving for my college because you don’t want me to be stuck with the same debt you graduated with. You’re priming my resume by funding any extracurricular I choose. Okay, you drew the line at ice hockey. But you’re doing all you can to make sure I get good grades and good test scores, in hopes of stretching the college fund a little further.
Even if you didn’t have the money to do all this, it’d still be tempting to over-praise, over-purchase, and be overly-involved for me. I can make my own lunch and do my own laundry, okay?
You love me and you’re doing all you can for me. But please, watch out. As one of the wealthiest kids on the planet, I am at high risk for entitlement. In fact, it’s already happening. Between the participation prizes, the endless affirmation, the constant access to my grades, and all the attention you’re encouraged to give me, it’s almost inevitable.
I know, you’re frugal. You’ve told me no countless times when it comes to spending. You’ve taught me that money comes from hard work, and not to fritter it away. You didn’t do the epic themed birthday parties or annual Disney vacations or buy me designer clothing.
But you’ve also shown me that money is a Big Deal. Without it we couldn’t do all the awesome trips and adventures. Without it you’d have to be at work more, rather than with me. Which I love, but…
Please un-entitle me.
Let me manage my own schoolwork, forget my gym shoes, and not make the varsity team.
Take me to serve a meal at the homeless shelter. Encourage me to volunteer at the food bank. Have me visit handicapped adults. Show me how good I have it, and that I am not the center of the world. Nor the center of your world.
I can’t be the center of your world. That’s too much pressure. I could never live up.
Model to me that success is not what matters most in life—at least if success means promotions or net worth growth. Show me how to succeed at truly loving other people. Teach me that money should facilitate that end.
Teach me how to be a good friend. One who is loyal and sacrificial. One who can help in practical ways, but emotionally as well. Raise me in community.
Don’t just teach me frugality, or how to earn a lot of money. Teach me how to give generously.
Don’t just teach me how to sell, teach me how to care. I need to see people not as obstacles or tools, but with compassion and empathy.
Don’t just teach me how to be happy, teach me how to be content. Every problem I’ve ever encountered has been so first-world, I have little tolerance for suffering. Don’t be afraid to let me suffer a little. Let me fail.
Don’t just teach me how to be polite, teach me gratitude. Not just the pleasantries of saying please and thank you, but a deep attitude of realizing I deserve very little, and have very much.
You can read me all the books, take me to all the countries, play all the sports with me, and still miss the most important part of me: my heart.
It would be such a shame if you tried so hard to raise a productive, well-rounded human, and I still turned out self-centered and entitled. The odds are against you. The culture unwittingly supports this most dangerous outcome.
But you know how to go against the tide. You don’t like to fit the mold. You wouldn’t be where you are if you didn’t have a counter-cultural streak. I know you can do it. Please un-entitle me.
How have you combated entitlement in your family?
“Contact your bank for pre-approval.”
“Determine your budget.”
“Location, location, location!”
“Make a wish list of features you want or need.”
“Start browsing online to get an idea of what you like.”
All of this advice and more is cited as step one for prospective homebuyers. But before you start shopping for a home in earnest, there is one thing you absolutely must do: have an annual budget.
I’m not talking about a stab in the dark at what you think you spend in a year. I mean cold, hard, well-crunched numbers based data, i.e. your spending from the previous year or more.
If you’re working toward home ownership, I’m assuming you’ve already started saving a 20% down payment. More here on why that’s critical and you’re foolish to buy a house without one. Plus, practicing the discipline required to save up that big of a chunk of change is a good sign that you’re financially responsible enough to take a death pledge (the literal translation of mortgage.)
A fortunate few receive all or part of a down payment as a gift or from an inheritance. If this is the case—congrats! What a wonderful gift. But this makes it all the more important that you carefully inspect your budget and confidently know what you can afford. I’ve seen people buy too much house this way and it’s not a pretty sight.
Why am I so dull as to peel you away from your Zillow search so you can stare at bank statements and spreadsheets? Because I love you.
- How the heck can you set a home price budget without knowing what type of monthly payment you can afford?
- How can you determine what you can afford without knowing how much you spend now?
I realize that people compare mortgage payments to their current rent prices, and that makes sense to some extent, but you also must account for the hidden costs like closing fees, property taxes, homeowners’ insurance, utilities, repairs and maintenance, furnishing, and moving. Check out Millennial Firecracker’s excellent calculations on the true cost of home ownership. This stuff definitely adds up over time, making home appreciation less profitable than you might think. Plus, you can’t walk away from a 15- or 30-year commitment easily as you can at the end of a lease.
And don’t even consider your monthly budget, not until you account for all those annual or biannual expenses like vacations, Christmas, gifts, other holidays, and the like. Once you’ve determined those expenses, either spread them out evenly over your monthly expenses (total ‘em up & divide by 12), or subtract them from your take-home pay and pretend that money isn’t even yours. Then put it in a separate savings account.
Let me also highly recommend that you set your budget based on one income, even if you are a dual income house, if you ever conceivably might have kids. Even if you both plan to keep working. Even if you don’t think you’ll want kids. You simply do not know what the future may hold, and how having a child could change your plans.
Aside from having kids, you also never know when one partner could become unemployed. So pretty please do yourself a huge favor and buy a place you can afford on one person’s income. If you both keep killing it at work, you can pay that sucker off fast and be done with the death pledge.
How Much House?
The age of the starter home seems to be over. According to Zillow’s research on Millennial homebuyers, “millennials tend to buy larger homes with more square footage and a higher price tag. The median millennial home purchase is $217,000, which is just 11 percent less than Generation X home purchases and slightly costlier compared to Baby Boomer homes.” I don’t assign moral values to home size or price, but it’s curious that the generation with sometimes mortgage-sized student debt are also biting off big home loans. Certainly knowing your monthly budget will help you avoid getting in over your head.
With your budget in mind, determine how much you’d like to spend on a mortgage, including principle, interest, taxes, and insurance (PITI). Don’t forget to estimate 1-3% annually of the home’s value for maintenance—believe me, you’ll need it. Houses are made of wood, drywall, paint, and lots of other materials that wear out over time. They are also full of expensive appliances which are ticking time bombs for a financial emergency, if you’re not prepared.
Now that you’ve got a real monthly number that’s based on data (i.e. your past spending), go play with some online mortgage calculators. Zillow reports that two-thirds of millennials use mortgage and affordability calculators while considering home ownership. Friends, let’s make that number 100%.
And don’t be fooled by incomplete calculations. Watch out for those real estate web site calculators that report the monthly price for that gorgeous turnkey house is less than you’re paying in rent. They’re often assuming a 30 year term with 20% down, and may not be counting hundreds of dollars per month for property taxes.
While you’re playing with those calculators, select a 15 year term, which will NOT be the default. I know there’s a raging debate over whether or not to take a 30 year and invest the difference, earning a higher interest rate than you’re paying. But let’s just be real. Most normal people are NOT going to be putting the difference into the stock market. If you are really going to invest like crazy, I trust you to navigate this decision. For everyone else, I highly recommend the 15-year. Otherwise, the interest you pay will likely devour the appreciation. It basically works out to a rental agreement (with the bank), but you’re also allowed to hemorrhage money on maintenance and remodeling.
Conventional wisdom says not to spend more than 25% of your income on your mortgage. I concur. And let’s be conservative and say 25% of your take-home pay, and include all of PITI when calculating your housing costs. Naturally, you don’t have to spend this much, but don’t surpass it.
And for the love of God, do not pay PMI. Wait and save 20%. Side hustle, cut spending, put all windfalls into your down payment savings, and wait.
Remember, I’m telling all these horrible, awful things because I don’t want to see you strapped by your mortgage, let alone upside down in it. Even if you’re making payments easily, you don’t want it to prevent you from traveling, being generous, or having the financial flexibility to work less or retire someday. Don’t marry your mortgage. You’ll thank me later. 🙂
Homeowners, what advice do you have for prospective home-buyers? How did you determine your budget?