Homes vs. baubles?

[door knob solitaire]

I think it depends on your employment...if you are self employed and use your capital/assets as a tool in your business...that is different than say someone who punches a time clock and get a specific amount every week. That person only has a raise or Christmas bonus to add to his normal income. That person should look into the cheapest money available and lock into his shelter. If the self employeed person can make more points using his money to make more...than he should stay out of ownership and earn more outside of shelter.

Return Reason is how much money costs you to how much shelter costs you to how much saving you can accumulate.

It is my view that one should never allow just the MARKET to steer your investments...it is more personal and specific application to each individual. What is right for one...is not always right for all.

Build your financial life on a firm foundation...then go out and get the trinkets.

DKS

 

[Independent Gal]

House first. No question about it. I'm a proud homeowner and I enjoy it so much!

I was in school for 10 years, but through a combination of taking on extra work, winning lots of scholarships and prizes, a few lucky investments, and being savvy with my spending money, I had saved enough for a serious downpayment by the time I got my graduate degree. I'm on track to pay off my home in 15 years (but we'll hopefully get a larger home well before that! That's our saving- priority right now).

We would never buy luxury items, including an e-ring, except with cash (or on a c/c to be paid in full when billed) and because of that and because the house is our priority, my ring cost one month's salary, not two.

Jewelry is always a 'if I have some dosh left over' purchase for me. Lately, I meet my jewelry shopping needs primarily by buying gifts for my loved ones! Heehee.

Oh yes, and living vicariously through my PS ladies.

And while I love designer clothes, as MC mentions young things appear to in her OP, I buy them only on sale!

ETA: Oops! do I still count as a young thing? I passed the big 3-0.

 

[rockzilla]

I wouldn''t agree that renting is necessarily flushing money down the drain- in my area, the INTEREST (for the first 5 years) on the mortgage of an equivalent place to my apartment is more than the monthly rent we pay now. While it''s true that the interest is tax deductable, you''d also have to consider:

$100K down payment
likely $300-$400 a month in Condo fees
any ''special assessments'' (ooops, we need a new roof...that''s $10k...didn''t this just happen to someone on PS?)
cost of any repairs that are necessary

Add to this the intangibles (I can pick up and go with 30 days notice, don''t have to parade strangers through my house if I have to move, don''t have to worry about the market going down and not being able to sell, it''s the landlord''s problem if the toilet breaks, etc) renting makes a whole lot more sense.

For a while everyone was gung-ho on buying since...even though you paid off very little of your principle the first few years, INSANE gains made it look like everyone was making money off real estate.

Buying is not always superior to renting, especially if you are in an overheated market and will likely move in 5 years or less. Definitely a good long-term investment, but you have to be there for the long term.

PS I get a sick fascination watching those wanna be "House flippers" on HSN and the like...going over budget and losing money now that housing prices aren''t going up 20% a year

 

[neatfreak]

We bought the ering first, but that simply is because we are both in Ph.D. programs right now and don''t plan to live in this area after we are done with our degrees (another 3 years). So financially, it doesn''t make sense for us to buy right now. BUT we did buy a ring that he paid for in cash, and once we move to a more permanent place, we will buy a house first thing.

But if we planned on staying here long enough to make buying a house "worth it", we would have bought already.

 

[ephemery1]

I find it really hard to pass judgement on this area. People have different priorities for different reasons, and a decision that seems realistic to me might be unrealistic for somebody else. That said...

My DH and I currently live in an apartment owned by his parents... they purchased it intending it to be a "city home" for themselves someday, and we're fortunate enough to be living there in the meantime. So does it make sense for us to put "buy a home" at the very top of our priority list right now? Not necessarily. Our first major joint investment has been graduate school... and all extra money after that goes into our "future home" fund. And since we don't even know where we want our first home to be, we feel good about our current timeline.

Given those circumstances, we set an e-ring budget that was a little higher than it would have been if we needed to buy a home immediately. Not extravagant, just a bit higher. I also make it a practice to use birthday and Christmas money as "fun money"... to fund things like bags and jewelry (or golf items for DH). Along the same lines as Deco... I'd rather satisfy a few of those cravings now, before we have children and additional financial responsibilities. But we certainly don't go into debt to make any of those purchases. And I did use some b-day money last month to buy a new closet organizer, so I must not be TOO irresponsible.

 

[Independent Gal]

Rockzilla Me Me Me! That HUMONGOUS special assessment nightmare just happened to me and ate up a chunk of our wedding budget and my savings. But I'm still glad I'm a homeowner! Besides, this place has appreciated more than that since I bought it. And it's mine! Mine mine mine! The first thing I did when I bought it was draw on the walls (subsequently painted). That was the best feeling. My walls! I'll draw on them if I want to!

I agree that there are circumstances where it doesn't make sense to buy a house. If a person isn't expecting to stay in an area for at least 3 years, for instance, or if the ring is a small fraction of savings. My grammy likes to say that with money, balance is important. Saving every penny may be smart but it's no fun. A nice balance between fun and smart makes for a good life.

 

[goldenstar]

Just to play the devil''s advocate...

I don''t really think the original question is fair. If anyone would actually prioritize jewelry over real estate, they''re not going to admit it here. We are not going to see both sides in this thread, which I think is unfortunate because there are two sides to every debate.

 

[Tacori E-ring]

rock, like I said really depends on WHERE you live. Some cities have crazy home prices and owning is not possible for everyone. I bought my first home at 23, 0% down and it was not much more than we were paying in rent and much larger. It has gone up over $10,000 a year so it was obviously a good investment. Plus like IG, I love the lifestyle of owning. Painting whatever colors I want. Not hearing my neighbors. Not smelling other people''s food. Easy parking/garage. Knowing it is mine. I agree some of those shows are NOT realistic. Even taking in account realtor''s fees eats up the profit very fast on an expensive home.

 

[ladypirate]

I''m with Rock and Fleur--Los Angeles is really expensive. K and I are both making pretty decent salaries and we''re still stuck wondering how the heck we''re going to afford a house. The latest idea is to buy property somewhere more affordable in a couple of years when the market bottoms out and rent it until we can either leave Los Angeles and move there or afford to buy down here and keep that as an investment property (feasible if we get a short-term mortgage).

In any case, while I don''t have one yet, chances are very good that I will have an engagement ring (diamond or not) prior to buying a home.

 

[MichelleCarmen]

Just to add to my post, I DO live in an expensive area (just outside of Seattle) and my husband and I bought our first house in our 20s. We sold it, then bought a second home (that we rented after living there a short time) and purchased our third home. I made A TON of sacrifies while in my 20s so we could buy a home, but now in my 30s, with a sense of security, I spend more friviously. I do like to live, too

Oh, and I''m not trying to place judgement on people. . . it''s more a concept of the idea of whether and how much people value the "American Dream" of owning a home vs. short-term gratification. It''s just an observation I thought would make for a good post since we Pricescopers mostly all post about goodies we buy and less frequently show pictures of our homes.

 

[Clio]

I have been in a situation where we bought when we really shouldn''t have. 15 months after we bought the house, we decided to leave the area. In hindsight, the signs that we didn''t love the area or (in my case) the job that had brought us to the area were there early on, and we should been more conscious of those feelings rather than letting the lure of home ownership and and admittedly wonderful house blind us to the reality.

We moved to the DC area at exactly the wrong time, at the height of the real estate madness, but we did buy a house, and we''re okay with that. Yes, we bought at the top of the market, and judging by recent sales in our neighborhood, prices have gone down about $30K since then. But, we both have very stable jobs and we''re not planning to leave the DC area EVER, so unless something should happen in the next few years that would cause us to sell, we should be fine.

I definitely put a house before jewelry or any other luxuries. We don''t take a lot of big trips or buy tons of things. I do have a list of jewelry and other items I''d like to get, but I save up for them. Right now, paying down the house, investing for retirement, and saving for the kids'' college is are our top priorities.

 

[musey]

Date: 9/26/2007 4:30:08 PM
Author: rockzilla
It's really tough to compare the two when you live in expensive city like I do (LA).

Entry level condos in so-so areas start at $500k...a 20% downpayment is $100K...so for us, it's kind of like asking 'Would you rather have new shoes or a new car?' You'd have to go shoeless for a WHILE to make up the difference

Ditto this (I live in LA, too). IMO, we are too young and our careers are not stable enough to try to buy at this point (save, yes--but buy? no).

We poked around a little at condos when we got engaged, thinking "wouldn't it be nice" to have an actual home after the wedding. In the area(s) we would need to live in (so as not to go through commuting hell on a daily basis) condos start at about $700,000--and this is for 900sf, 1bed 1bath). Our rent for a comparable apt. is well below the mortgage for one of those puppies, and my ring cost about 6% of the potential $140,000 (20%) down payment.


So for us, at this stage in our lives, the ring was more important than saving that 6% of a down payment for a long-in-the-future home purchase. Would it have been smarter to just save the money for a future home purchase? Definitely. But I could go the rest of my life saying that, and never own anything beyond necessities.


ETA: We payed cash for my stone and credit for the setting (paid off during that billing cycle), if that matters.

If we WERE in a good place to be looking to buy a home, I would have been engaged with a band or nothing, and been completely happy with that. But for our situation, it worked out just fine.

 

[wolftress]

I agree that it should be house first, then sparklies... but the housing market is so bad in Melbourne right now it makes no sense to buy. DH and I are also thinking if things don''t improve in the next five years or so, we might relocate to my home country, Singapore, where all young Singaporean couples get a nice sum from the government to assist in buying a house.

We would NEVER buy luxuries on credit, the only debt we have is our car loan. DH does indulge me and buy me jewellery, and I buy some myself, but never more than we can afford. Right now, I''m tempted to blow a wad of $$$ on a custom re-set for my diamond, but DH and I feel the money would be better spent elsewhere, so I have to wait... and plot... and plan....

 

[musey]

Oh, and to the issue of young women with lots of expensive clothes, etc...

HERE, at least (I don''t know if this is true in other cities) they are getting them for FRACTIONS of retail cost. Deep discount sample sales, pre-season "invite-only" shopping, etc... these women KNOW how to make the most of their money in the fashion world. A lot of them are also working minimal hours at high-end boutiques ONLY for the discount. I also know a girl who sleeps with designers and their assistants if they promise her first pick (for free!) of their new lines.

So yeah, that''s not true everywhere, but it certainly is true of many of the women here. But I do think that many of said women just don''t save. I forget the statistic, but there is some insane amount of people living hand-to-mouth in this country... and not always because they don''t make enough money to save. Many people just don''t think in terms of "10 years from now."

And that''s fine with me. Those are the people who make the cashback bonus on our credit cards possible

 

[Miranda]

*sigh* Home is my answer, but, only because my arm is twisted by DH and the kids. I''d much prefer a cardboard box and a GIGANTIC diamond. My vote is only good for 1/5 so big expensive house it is. Here''s another question...Food or baubles! I''d go for Top Ramen anytime! Why oh why won''t anyone else see it my way!!! When I think of the $ I could save if I didn''t have my humongous grocery bill...

My story is kinda like yours MC. We got married young, bought a house in our early 20s, kept that house for 10 years and earned a fortune on it, used proceeds as down payment on this money sucker that we are living in now. HaHa! I do love the house and especially the area, but, I cannot get past my burning desire for a larger stone. DH knows this and is fine with it. Our rule is that baubles (this includes surfboards, clothes, bags, etc.) need to be paid for with cash (not paper dollars, debit card is OK

) We set a budget for EVERYTHING and stick to it. The interior and yard need to be done before I can wrap my brain around bling upgrades. So, soon I hope.

I hear ya, LA people. I have a girlfriend that was engaged with a 5 ct ering, but, doesn''t own a home. The cost of living is so high there AND she moves frequently to avoid a long commute. I guess anything over 3 miles can equal a 1 hour drive some days.

 

[strmrdr]

Date: 9/26/2007 4:30:30 PM
Author: Tacori E-ring

Renting is like flushing money down the drain IMHO.

I disagree.
In my area tax+insurance on a starter house is around 350 a month. (fyi my landlord pays ~$300 on my apartment)
Rent is around $650.
So in real terms Im paying $300 a month for an apartment that is comparable in size to most starter homes(they are small here).
A small house would run me another $300 more a month.
So in a house id be paying $600 a month in real costs(-a small amount refunded in tax) + a whole lot of work.
Not worth the hassle, more $ and more work.

 

[wolftress]

Date: 9/26/2007 8:56:37 PM
Author: musey
Oh, and to the issue of young women with lots of expensive clothes, etc...

HERE, at least (I don''t know if this is true in other cities) they are getting them for FRACTIONS of retail cost. Deep discount sample sales, pre-season ''invite-only'' shopping, etc... these women KNOW how to make the most of their money in the fashion world. A lot of them are also working minimal hours at high-end boutiques ONLY for the discount. I also know a girl who sleeps with designers and their assistants if they promise her first pick (for free!) of their new lines.

So yeah, that''s not true everywhere, but it certainly is true of many of the women here. But I do think that many of said women just don''t save. I forget the statistic, but there is some insane amount of people living hand-to-mouth in this country... and not always because they don''t make enough money to save. Many people just don''t think in terms of ''10 years from now.''

And that''s fine with me. Those are the people who make the cashback bonus on our credit cards possible

musey, it really is scary how many people don''t save. DH didn''t even know how to save before we met, and I asked him what his plan was if a rainy day eventually came along??

Here in Australia, they''re launching a new credit card specifically aimed at teenagers. DH thought it was appalling to encourage young people to use credit, but I think it''s a great way to teach them how to use it responsibly. There is a very low credit limit on the card, and if you don''t pay it off by the due date, the card is cut off until it''s paid. Debt is a real issue in Australia; just curious if it''s the same in America or other countries? I know in Singapore, it''s nowhere near as bad because you can''t even apply for a credit card unless you''re in one of the higher income brackets.

 

[musey]

Oh yeah, Wolftress, debt is a HUGE problem here. But, like I said, those are the people paying for the cashback bonus on my Discover card

I've never not paid my balance in full every month. I didn't even know that people DIDN'T do that until a couple of years ago. And you should've seen my face! A couple of friends were talking about their debt (THOUSANDS and THOUSANDS... and these kids were still in college!! And this wasn't even student debt, just spending spending spending!!!). I thought, previously, that there was some secret pitfall to credit cards where they tricked you into debt somehow because, hey, if you pay off the balance, where does the debt come from?

I guess maybe that means my dad did a good job teaching me about finances?

Anyway, a little off-topic... but I think the credit cards are really causing this problem. They shamelessly push student-specific cards on college (and even high school!) students, KNOWING that they'll spend themselves into debt and end up paying off interest forever.

As an example, my aunt (age 5 is still paying off debt that she incurred only between the ages of 20-26. She will never, ever be able to retire. All because, for those 6 years, she paid the MINIMUM PAYMENT only. But, she HAS been a homeowner since her 30's. Just goes to show that owning your home doesn't necessarily mean your finances are in order, just as NOT owning one (or not TRYING to own one) doesn't mean your finances aren't in order...

 

[moremoremore]

yeah, sorry, i agree...now is the best time to buy a house...inventory is way up so sales prices are down...even here in NYC (we are in Queens but part of the NYC market) things are slow...We've had SEVEN bids on our place and most were waaayyy tooo low...buyers assume sellers are desperate now...well, many of them are...ANd to answer the question, yes, we own and are moving..yippee....so it's all about timing...right now I couldn't care less about a bigger rock...I'm more into range hoods and vanities and ghost chairs ... right now

 

[Tacori E-ring]

Date: 9/26/2007 9:13:48 PM
Author: strmrdr

Date: 9/26/2007 4:30:30 PM

Author: Tacori E-ring


Renting is like flushing money down the drain IMHO.

I disagree.

In my area tax+insurance on a starter house is around 350 a month. (fyi my landlord pays ~$300 on my apartment)

Rent is around $650.

So in real terms Im paying $300 a month for an apartment that is comparable in size to most starter homes(they are small here).

A small house would run me another $300 more a month.

So in a house id be paying $600 a month in real costs(-a small amount refunded in tax) + a whole lot of work.

Not worth the hassle, more $ and more work.

See to me I would rather pay $300 more to own and pay off MY mortgage vs. someone elses. But everyone has different opinions on how to spend their time and money. Also I suppose I am lucky b/c my DH can fix almost anything and the things he can''t he knows someone who can do it at a good price.

 

[Tacori E-ring]

Date: 9/26/2007 9:33:04 PM
Author: moremoremore
yeah, sorry, i agree...now is the best time to buy a house...inventory is way up so sales prices are down...even here in NYC (we are in Queens but part of the NYC market) things are slow...We''ve had SEVEN bids on our place and most were waaayyy tooo low...buyers assume sellers are desperate now...well, many of them are...ANd to answer the question, yes, we own and are moving..yippee....so it''s all about timing...right now I couldn''t care less about a bigger rock...I''m more into range hoods and vanities and ghost chairs ... right now

I was wondering how your selling/home search was going. At least you know you can get a great deal here in NC

 

[DivaDiamond007]

As far as real estate is concerned, my husband and I are in an interesting situation. We moved into our house in March with a 4 year lease. The house is owned by a family member. We knew when moving in that the owner would die before our lease was up. Well, he died a few weeks ago and we find out that our lease is binding on his estate. So, what we want to do is escrow our rent and then use that money for a down payment to buy the house at the end of our lease term - which is 3.5 years from now. The end result is win-win for all involved. We get the buy the house and the heirs to the estate will get their cut once it is all said and done. Whether or not this works in our favor is not known at this time but we are praying.

My husband paid for my wedding rings with a credit card at 0% interest for 12 months and paid it off in that time. Probably not the smartest move, but it''s too late to hem and haw over that. What''s done is done.

We try to save money from each paycheck but that can be difficult because we both like to spend so it takes an enormous amount of self control for both of us. We don''t have a lot of debt - student loans and my car loan and that''s it. We pay off our credit cards in full each month which is something that I''m proud of - because I was once riddled with debt and overcame it.

Because of past mistakes on both of us our credit is not steller so obtaining a mortgage in this market is not in the cards for us. We''ve looked into it and we''ll be better off in a few years when the car is paid off and we have a bit more cushion in the income. We do not want to be "house poor" even though we would really like to buy now. We are doing the best we can to save and to live below our means, even if it means sacrificing luxaries (sp) such as jewelry.

The market in our area is very bad to say the least. I live in Ohio, which is (I believe) #2 on the list for foreclosures. As some of you may know, I work for a bankruptcy attorney and I''d say that around 80%+ of our clients are in foreclosure or are headed in that direction. House values are overly inflated and there are not enough good paying jobs to go around. Don''t even get me started on subprime loans.

I do not believe that paying rent is throwing money down the drain considering that I only know 1 family that has actually paid off their mortgage. Most people I know have two or more mortgages on their homes so they might as well be paying rent in addition to the other expenses that go along with owning a home. Property taxes, new roof, water heater, furnace, windows, maintenance, etc. In the end they''d probably be better off renting and pocketing the difference! I certainly do no advocate carrying more than one mortgage, just trying to be honest here.

Jess

 

[CrookedRock]

Can I have both? hehe...

 

[wolftress]

Date: 9/26/2007 9:02:51 PM
Author: Miranda
*sigh* Home is my answer, but, only because my arm is twisted by DH and the kids. I''d much prefer a cardboard box and a GIGANTIC diamond. My vote is only good for 1/5 so big expensive house it is. Here''s another question...Food or baubles! I''d go for Top Ramen anytime! Why oh why won''t anyone else see it my way!!! When I think of the $ I could save if I didn''t have my humongous grocery bill...

My story is kinda like yours MC. We got married young, bought a house in our early 20s, kept that house for 10 years and earned a fortune on it, used proceeds as down payment on this money sucker that we are living in now. HaHa! I do love the house and especially the area, but, I cannot get past my burning desire for a larger stone. DH knows this and is fine with it. Our rule is that baubles (this includes surfboards, clothes, bags, etc.) need to be paid for with cash (not paper dollars, debit card is OK

) We set a budget for EVERYTHING and stick to it. The interior and yard need to be done before I can wrap my brain around bling upgrades. So, soon I hope.

I hear ya, LA people. I have a girlfriend that was engaged with a 5 ct ering, but, doesn''t own a home. The cost of living is so high there AND she moves frequently to avoid a long commute. I guess anything over 3 miles can equal a 1 hour drive some days.

LOL when I first read this, I thought Top Ramen must be some expensive noodle delicacy and you''d rather blow your money on that over diamonds.

I would actually choose good, indulgent food over diamonds... I need my fresh seafood/sushi/sashimi fix every week. It''s expensive, but tastes sooo good! Some husbands leave roses and romantic notes when they have to go away on business, mine stocks up the fridge with lobsters and smoked salmon

 

[Miranda]

Date: 9/26/2007 10:11:20 PM
Author: wolftress

Date: 9/26/2007 9:02:51 PM
Author: Miranda
*sigh* Home is my answer, but, only because my arm is twisted by DH and the kids. I''d much prefer a cardboard box and a GIGANTIC diamond. My vote is only good for 1/5 so big expensive house it is. Here''s another question...Food or baubles! I''d go for Top Ramen anytime! Why oh why won''t anyone else see it my way!!! When I think of the $ I could save if I didn''t have my humongous grocery bill...

My story is kinda like yours MC. We got married young, bought a house in our early 20s, kept that house for 10 years and earned a fortune on it, used proceeds as down payment on this money sucker that we are living in now. HaHa! I do love the house and especially the area, but, I cannot get past my burning desire for a larger stone. DH knows this and is fine with it. Our rule is that baubles (this includes surfboards, clothes, bags, etc.) need to be paid for with cash (not paper dollars, debit card is OK

) We set a budget for EVERYTHING and stick to it. The interior and yard need to be done before I can wrap my brain around bling upgrades. So, soon I hope.

I hear ya, LA people. I have a girlfriend that was engaged with a 5 ct ering, but, doesn''t own a home. The cost of living is so high there AND she moves frequently to avoid a long commute. I guess anything over 3 miles can equal a 1 hour drive some days.

LOL when I first read this, I thought Top Ramen must be some expensive noodle delicacy and you''d rather blow your money on that over diamonds.

I would actually choose good, indulgent food over diamonds... I need my fresh seafood/sushi/sashimi fix every week. It''s expensive, but tastes sooo good! Some husbands leave roses and romantic notes when they have to go away on business, mine stocks up the fridge with lobsters and smoked salmon

LOL!!!! Top Ramen is very pricey stuff. $.10 per packet...Each packet lasts a good 2 lunches!!!! I could eat for $10 a week on diet coke and Top Ramen!!!! HaHa! Not really, I, too, love good food!

 

[Tacori E-ring]

Date: 9/26/2007 9:57:41 PM
Author: DivaDiamond007
Property taxes, new roof, water heater, furnace, windows, maintenance, etc. In the end they''d probably be better off renting and pocketing the difference! I certainly do no advocate carrying more than one mortgage, just trying to be honest here.
Jess

Oh I do not agree. If you pocket the difference your money is not working for you (unless you are talking about investing it in high yield funds/stocks). Real estate is an investment. It should be looked at that. Long term gain. Ohio does have lots of foreclosures and if I am correct strict mortgage critia. It is VERY unusual that your home will not be worth more over time. Like many PSers it is a great stepping stone to some day owning your dream home. And like Mara said it is a great write off at tax time. An extra payment a year (or a 1/2 a payment every two weeks) will make a huge difference and cut your loan down by years and years. I know many people with homes paid off 100% and hope to be one of those people some day!

 

[Haven]

Home first, definitely. Then baubles and designer jeans.

FI and I do not buy anything using credit (other than cars and homes, and only if we can pay them off in less than have the length of the loan,) so FI paid for my e-ring with cash. For me, charging an engagement ring would have felt terribly irresponsible. Everyone makes different choices, though, and personally I enjoy the security of knowing that I live far below my means.

I''m young, 26 (for two more weeks, at least) and I admit that (it seems like) I am sadly in a very small minority of financially-secure and stable twenty-somethings. When I graduated from college my top priority was to live debt free and become a homeowner, so I lived with my parents for a few years, worked an insane amount of jobs in addition to my full-time job, and saved up every single penny I earned. Was it hard when my girlfriends were leasing new cars and buying scrumptious handbags and the most adorable designer jeans? Yes. But now that I''m on my own and I have a nice little investment portfolio, I''m proud to say it was all worth it. Even the living at home bit.

(Now that I type this out, I realize I owe my dedication to being financially stable to my first job out of college--I worked with actuaries to calculate retirement benefits for a particular corporation. I saw first-hand how poor decisions had a serious impact on your retirement, and since I plan to retire at age 55, I don''t have time to play around!)

It seems like young people are being groomed to become indebted to the major credit card companies--cc applications all over college campuses, MTV shows about adolescents living extremely glamorous lives, hot new cell phones that cost several hundred dollars. I have a lot of students who receive free and reduced lunch at school but they''re walking around with Razr cell phones and the newest iPods. How did they get these expensive electronics? Thank you very much, Visa, Mastercard, American Express!

I think people just have different priorities, but I always tell myself that if it''s worth buying then it''s worth saving for. And I know that one day I''ll be able to splurge much more because I''ve skimped a little now. And I plan to--that Michael B Riviera ring will be mine one day, mark my words!

 

[Sparkster]

Date: 9/26/2007 8:47:27 PM
Author: wolftress
I agree that it should be house first, then sparklies... but the housing market is so bad in Melbourne right now it makes no sense to buy. DH and I are also thinking if things don't improve in the next five years or so, we might relocate to my home country, Singapore, where all young Singaporean couples get a nice sum from the government to assist in buying a house.

We would NEVER buy luxuries on credit, the only debt we have is our car loan. DH does indulge me and buy me jewellery, and I buy some myself, but never more than we can afford. Right now, I'm tempted to blow a wad of $$$ on a custom re-set for my diamond, but DH and I feel the money would be better spent elsewhere, so I have to wait... and plot... and plan....

Wolftress, I couldn't agree with you more. I also live in Melbourne and FI and I bought our house almost 3 years ago to this date. It's frightening how much the prices have soared since. We have a four bedroom house on about 600 sq.m. of land which. We are now thinking of downgrading and if we bought a two bedroom townhouse in the same area, we would be paying more for that 2 bedder than we did for our 4 bedder 3 years ago!! And don't get me started on stamp duty! Do you qualify for the first home owner's grant?

I'm an on an average wage and FI is on a high income. We live quite a comfortable life but our main priority was always to get our own home first.

 

[MichelleCarmen]

Date: 9/26/2007 9:23:32 PM
Author: musey


As an example, my aunt (age 5 is still paying off debt that she incurred only between the ages of 20-26. She will never, ever be able to retire. All because, for those 6 years, she paid the MINIMUM PAYMENT only. But, she HAS been a homeowner since her 30's. Just goes to show that owning your home doesn't necessarily mean your finances are in order, just as NOT owning one (or not TRYING to own one) doesn't mean your finances aren't in order...

Your poor aunt! Recently a family member of my husband's moved back after living in another state and I admit there is *a bit* of competition among the ladies in dh's family. We all compare bags, jeans, jewelry, HOUSES

, but I could not even attempt to keep up with that recently returned relative. She went from an empty apt. to one that was overflowing with exotic decor items. Every time I saw her she had a new bag. It was about the time that I felt a bit out of her league when my husband found out that she had cashed her 401K and spent it ALL!!! She had no savings and no retirement! Can you imagine? Working till your 70 because of handbag purchases? Her actions panicked me so much, I actually didn't go shopping once for almost a month. lol! My husband started commenting that I was acting weird, though, so I finally caved and visited Nordies.

 

[musey]

Date: 9/26/2007 10:49:05 PM
Author: Haven

FI and I do not buy anything using credit (other than cars and homes, and only if we can pay them off in less than have the length of the loan,) so FI paid for my e-ring with cash. For me, charging an engagement ring would have felt terribly irresponsible. Everyone makes different choices, though, and personally I enjoy the security of knowing that I live far below my means.

But again, there has to be that distinction between paying for a ring on credit, letting the balance sit and incur interest...

-OR-

Charging it and paying the balance off before your interest kicks in. I don''t think there''s anything irresponsible about paying with credit when the balance is paid off monthly (or however often you receive statements).

I don''t know which (or both) of those scenarios you''re saying is irresponsible, but it seems that whenever we talk about purchasing on credit people confuse the two, assuming that the posters who view purchasing on credit as "bad" are referring to using a credit card at all.

Aaaaaanyway!