In The Market For The American Dream – Home Ownership

The recent record low mortgage interest rates have lured us into the All American Dream of becoming homeowners. Six-and-a-half years ago I bought a little (crazy little) duplex. It was in the midst of the greedy market and I remember getting approved for a huge amount of money… with a sizable amount of debt, no down-payment, and not much credit. My real-estate agent at the time told me, “A lot of people are buying the biggest house possible and are then getting a lot of roommates!” While I wasn’t super money savvy then (not at all) I do remember thinking, “Um, no! Bad idea brah!” And I am so happy that I listened to that voice in my head saying that that was such a bad idea. Because it was.

I did some basic calculations and figured out what I could afford per month and then I got hooked up with a place in town called Colorado Housing and Finance Authority (CHFA). They’re all about getting 1st time home-buyers into homes, and they loaned me the money for the down-payment on the place that was to then be paid back if I sold the house.

Long story short: I found a place, lived in it for a few years, got married, decided the place was nutty small for two people to live in (I always reasoned that if people in New York City could make super small places work we could do it too). We then decided I’d sell the house, and we would move to Spain (crazy kids!) with the profit from the sale of the house. In the meantime we decided to get a cheap month-to-month apartment while we got all the details sorted out.

Another long story short: ended up not moving to Spain (visited instead), and here we are in our temporary month-to-month apartment years later.

We decided recently that we’re going buy some real estate here in town. I’ve heard that Denver is “house-poor” where the houses are more expensive then what most people who live here can afford so they end up spending most of their income on their homes. I haven’t done research on it myself, just heard it on the streets. It also makes me think of another thing people in town say it’s, “You pay for pretty.” And Denver is very pretty.

image woodleywonderworks

With the decision to go from renting to buying it brings to mind the very controversial topic of: is it better to rent or own? There is no doubt that there are strong arguments for each side (I’ve known people that are adamant about each), and I have experience on both sides. While I had done the basic calculations to see what I could afford I was being super optimistic and hoping that I wouldn’t continue to spend excessively the way I had before the house purchase. Once I was in the duplex I was getting myself deeper and deeper into debt because I continued to spend the way I wanted to even though it was only a line of credit. Since the mortgage was the very 1st thing to get paid every month I felt good about that but there’s no doubt that it was an extremley bad cycle to be in.

When we started renting I didn’t have the upkeep of the house to pay for anymore and I didn’t have to pay for all of the other things that go into home-ownership. We pay our rent and call the landlord if something needs fixing. There’s definitely some relief and freedom in that. But… I also know that every month we’re paying for someone else’s mortgage and when we leave this place we have no equity, no chance of making any kind of profit, and no option of keeping it as an investment and getting renters of our own.

The properties in town are going quick and if you like something you’ve got to pounce on it (this is what I’m hearing on Facebook anyway, and we all know that is completely official and trust-worthy;). It’s so easy to scour the real-estate sites for houses and start dreaming of living in them.

There are some houses that are so cheap and it doesn’t make sense. I can’t help but think, “Yeah, someone definitely got killed there for them to list it at that price!” And then my frugal brain instantly thinks, “Nothing a little bleach won’t fix!”

So we’re looking for something that’s not too fancy or too expensive (can’t afford that anyway), and nothing that is too much of a fixer-upper. We need something that the little girl in Goldilocks would approve of: something just right.

Do you think the American dream of homeownership still exists? Do you believe in it yourself? Why or why not? Would love to hear what you think about this topic.

photo credit: house 1 by hill.josh, 2 by wonderlane, 3 by mrkumm

17 comments

in Goals, Good Vs. Bad Debt, Personal, Societal Pressures, Struggle
And Then We Saved Button Giveaway!

Do you want to sport some And Then We Saved goodness? Well, I’ve got just the thing for you! A button! I have some of these left from the last Accessories Swap and would love to give you one if you’d like to have one. It can also be used as a reminder when you’re in a store and you can look at it and say to yourself, “What would Anna do? Buy this shirt (or anything else) or not?” You can think of it as me being right there with you cheering you on as you get yourself out of debt!

Send me an email with your name and address (sorry US only) to: hello@andthenwesaved.com and I will mail you a button (while they last).

2 comments

in Giveaway
Is There Such A Thing As A Spending Hangover?

image hospi-table

Typical Hangover: We all know about the usual type of hangover: alcohol induced, barf-y, just want to eat cheesy hamburgers and drink coke, sleep ’til noon, down 30 Ibuprofen, and generally feel like a whole bunch of ass.

Emotional Hangover  I’ve heard about this one in recent years. Have you heard of this (or experienced one)? Emotional Hangovers are typically preceded with a bunch of fighting, then crying, then thoughts that everything is going wrong, life is terrible, and it’s probably never going to get better, ever, really probably never ever, and then most likely more crying because, why not? Then, you wake up with puffy, red, tear-stained eyes, and re-live the past night/day and you’re just so SO freaking glad it’s over. Life generally starts to look a whole lot better but you still feel achy and like crap from the emotional toll the previous night/day took. Emo living at its finest? Possibly.

Spending Hangover: I used to get these all the time, but I’d ignore them because if you ignore something it doesn’t exist, right? I think this “Spending Hangover” feeling is more commonly known as Buyer’s Remorse and these days the Spending Hangovers tend to happen after vacations (even small ones) and they’re a lot harder to shake. I spent so much time telling myself “no” during the Spending Fast and Spending Diet that to spend money now gets me feeling icky quicky (groan. i know. had to though). Back when I was in the thick of building up my debt I’d go to Forever 21 and try on everything that caught my eye and then, naturally, I would buy ALL of it. Quantity over quality seemed to be my goal/motto. I created a whole lotta debt by spending like that. It’d get the clothes home and feel bad about it for a minute and then I easily let it go out of my mind. Now, feeling like crap after spending is not as easy to ignore. The spending threshold has been lowered to a more reasonable level and it’s more in the realm of what “normal” spenders would feel guilty about spending. Spending wildly now is out of character for me and, also, um, if I do have a lapse and slip back into my old-way there’s (thank god) these instant erasers… receipts! My purchasing offenders end up going right back where they came from and once the money is back in my account I end up feeling so much better.

All of these three different hangover types start with over-indulgence and end with feeling like crap soon after. I do what I can to avoid every one of these, and even though balance totally isn’t my thing I think that’s the key in avoiding these bad boys.

What do you think? Do Spending Hangovers exist? And, if you’ve experienced one what was it like and did you do something to fix it? 

4 comments

in Do Without, Enough, Motivation, Spending Fast, Struggle
  • Anna

    Hi, I'm Anna! I paid off close to 24k in debt in only 15 months & it completely changed my life! I want you to have a debt-free life too so here you'll be able to read all about: How to do a Spending Fast®, saving & making more money, DIY's, & a lot about living awesomely with less. Let's do this!

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