Homes vs. baubles?

[KimberlyH]

My husband has owned a home (with a mortgage, which we''ll always have, no matter how small, for the tax advandage) since he was 20. I rented pre-him (and during-him too actually, until we were married). When we became engaged we bought a place that we chose together, he sold the home he lived in.

I''d/We''d have opted for the house or savings instead of a ring if owning wasn''t in the cards ifrom the get go.

We also live below our means, jewelry included. I am not a spender, at all, neither is he.

 

[monarch64]

Date: 9/28/2007 4:16:58 PM
Author: aljdewey

Date: 9/26/2007 4:01:11 PM
Author: MC

Yep, people have a harder time equating debit card with actual cash. It''s like disassociative spending when using a debit card.

See, I''m just the opposite.

In my younger day, I''d withdraw cash from the bank to cover my weekend, and because money wouldn''t be available to me from noon Saturday until Monday, I ended up taking out more than what I needed. Having that cash in hand felt like I had money to burn.

I thought when debit cards came around I''d be BROKE because then I''d be able to get to my funds all the time. The exact opposite happened.....now that I no longer had to worry about not having $$ when I needed it, I had less on hand, and that made me FEEL poorer.

Sure, I can still use the card, but I only end up using it for what I reeeeeeally want, and it makes me think twice about impulse purchases.

Now I HATE walking around with cash.

ITA! I NEVER carry more than $40 bucks, my bank''s ATM only dispenses in increments of $20 and I can make that cash last for two weeks. Plus, I use my bank-by-phone system like 10 times a week because I don''t necessarily write down in my ledger every single $4 purchase I make at say Walgreen''s or whatever. It''s been a godsend for me (having a debit card) for the last 12 years...plus the bbp thing is available 24/7 so anytime I want I can see if a check has cleared or what my acct. balance is, etc. I don''t ever worry about floating checks, I pay all our bills online, I''m just so happy that everything has an electronic option now. Waaaay easier for me to keep track of things with a click or the push of a phone button than sitting down once a week to balance a checkbook.

On the baubles vs. house thing: we were renting 5 years ago when DH got my e-ring. He financed my ring but paid it off in three months, the timing was just such that he knew when he wanted to propose but also knew when his bonus check would be coming to cover the cost. So it wasn''t like he took out some outrageous loan and would be set back even further by interest over a year or whatever, he had a plan and that was what worked for him at the time. We both cleaned up our credit a ton and bought exactly when the market was right but didn''t get sucked into an ARM that we couldn''t afford later, we went the typical 30-yr fixed rate amount, and although we ended up with a smaller, much older house than we may have dreamed of, we felt we got the best of both worlds...I had a nice e-ring, we had a very nice wedding, and we bought a very nice (to us) home in an area we knew we''d be happy with for at least 3-5 years. We didn''t go ALL-OUT on any of the above and we''re so happy we didn''t, we could''ve easily given into temptation without thought to the future and had phenomenal things but we were cautious enough and had the foresight to imagine that maybe we wouldn''t always be able to lead that high of a lifestyle with the unpredictability of the housing market. So we''re still confident that we made good and informed decisions a few years ago, thus we are a little less stressed than some other couples we know who took more of a gamble, I guess.

We''re not perfect, though...we did screw up with my last car purchase. We definitely bought something NOT thinking about whether my job was stable enough to handle payments (I lost my job in June and didn''t find a new job until August), which resulted in DH having to pay a really large car payment that we hadn''t left room for in his budget. That has set us back a little in terms of our immediate AND long-term goals even though I was only unemployed for a couple months! We got sucked into how great the car was and how many lux options there were on it, yada yada yada, and in the end it was a bad decision because we didn''t really even utilize most of the options it came with! The money we''ve put towards the payments on this car makes me sorta sick because I think about what kind of jewels that money could''ve gone towards the past two years, LOL! Even now that I''ve found a great job I love and it is very good pay, even better than my last job, I am still going to downgrade quite a bit for my next vehicle, simply because I learned a lesson from this whole experience.

 

[diamondringlover]

House was first, my 1st engagment ring back in 1984 only cost $100, it was a very small band of rubies and diamonds, carat weight...very, very small, lol, I didnt get my bigger ring till almost our 20th anniversay, you know mortage, car payments and kids all delayed being able to afford anything nice. Well I got my bigger diamond, now I wished I had went a little bigger, but thats ok, I will keep what I got for now, I would just love to have a much prettier setting, but now my sons college is taking my money...maybe in another 2 or 3 years I will be able to have it reset to the way I really want it, but for now, life just gets in the way of prettier jewerly and I wouldnt have it any other way

 

[Independent Gal]

MC I know what you mean about people being unrealistic in their asking prices. So I looked at what places actually sold for as well as asking prices. Two of the same unit in my building sold this summer...and they averaged about 15% more than I paid (less than two years ago!). So I''m relieved. Selling times are a little slower, but that''s not an immediate concern.

I own 40% of my house, have a good old fashioned 30 yr fixed mortgage, and a quick calculation suggests that at the rate we''re paying it off now, it would be ours free and clear in 14 years! But we''ll need a bigger place well before then if we''re going to have a couple of kids. So we plan to sell in 2 years. By then, depending on the (cough) quantity of ''paper'' wedding gifts, we want to own at least half of this place.

However, my book will hopefully come out some time in the next year, and when it does, I am going to treat myself to a pair of nice diamond studs to mark the occasion. I have a separate fund for that, from discretionary spending.

 

[MichelleCarmen]

Date: 9/29/2007 12:40:41 PM
Author: Independent Gal

However, my book will hopefully come out some time in the next year, and when it does, I am going to treat myself to a pair of nice diamond studs to mark the occasion. I have a separate fund for that, from discretionary spending.

IG - What is your book going to be about? How exciting for you!

Monarch - Which car did you purchase? We almost bought a Mercedes a while back. My husband's friend purchased one and let my DH drive it and of course, DH drove it up to high speeds and then declared it was the funnest car ever and had to have one! We stopped short of test driving a few models at the car dealership. The payments scared me and the thought of someone dinging the door on my really overpriced car scared me even more.

 

[surfgirl]

MC, I always like your posts but hon, you''re not being serious here are ya? Because let''s face it - bling wont keep out the rain and cold...

 

[Independent Gal]

Surfgirl: you''re right about the cold, but in terms of the rain... I mean, if the bling was big enough... just conceivably...

I''m just sayin''.

 

[MichelleCarmen]

Date: 9/29/2007 3:04:36 PM
Author: surfgirl
Because let''s face it - bling wont keep out the rain and cold...

Yes, but an apartment will!

 

[monarch64]

Date: 9/29/2007 1:18:15 PM
Author: MC

Date: 9/29/2007 12:40:41 PM
Author: Independent Gal

However, my book will hopefully come out some time in the next year, and when it does, I am going to treat myself to a pair of nice diamond studs to mark the occasion. I have a separate fund for that, from discretionary spending.

IG - What is your book going to be about? How exciting for you!

Monarch - Which car did you purchase? We almost bought a Mercedes a while back. My husband''s friend purchased one and let my DH drive it and of course, DH drove it up to high speeds and then declared it was the funnest car ever and had to have one! We stopped short of test driving a few models at the car dealership. The payments scared me and the thought of someone dinging the door on my really overpriced car scared me even more.

MC, the sad thing is that it''s not even a "luxury" car...it''s a Chevy Trailblazer for crying out loud.

We found one in the color we wanted at model year-end sale time, and it just so happened to be completely loaded (DVD player, navigation, leather everything, ALL the bells and whistles, probably more than some "luxury" brands would offer) and back then the payments were not all that outrageous...and since DH has a company car and we didn''t have debt besides our mortgage we went for it. Two years later I am just tired of having such a big car payment and so many options that we rarely use, not to mention it''s not a very "green" automobile in general. I''m not looking into downsizing both in size and payments.

 

[Phoenix]

Buying my/ our own home has always been my/ our first priority. However, it is not so straightforward as "either home or bling".

I bought my first home when I was 29 (I used to be extremely frugal and saved most - about 70%- of my earnings), sold it and moved to Hong Kong for my job secondment. For years, hubby and I wanted to buy our own home in HK/ S'pore but we were at a transitional phase, didn't know if we were going to stay put or move back to the UK or the US. We thought about buying for years before we actually committed, when we were fairly sure we would call this part of the world home. House prices here are absolutely crazy too (we're talking millions of dollars for a private condo or house - cheaper goverment housing is only available to Singaporeans), it is not a matter of simply abstaining on other purchases (be they bling, designer clothes, bags, eating at nice places, taking vacations etc.) so that you could buy a home. We just figured that we could live a fairly comfortable life but not be too extravagant and were still able to save up for our property purchases.

Hubby bought my 1ct e-ring whilst we were living in HK and we upgraded after 10 years, after we'd purchased our main home, bought an apartment in Docklands in Melbourne and an apartment in London. Our mortages are about 1/3 of what these properties are worth and we're planning to sell our place in London next year to pay down our mortgage here in S'pore. We fully intend and are on track to own outright both our homes in S'pore and Melbourne (the latter will be our summer home when we retire) in 10-15 years' time, if not sooner.

 

[kcoursolle]

Like others in LA this argument is a little complicated since it takes so much money to buy a home or a condo. What we try to do is keep on a regular savings plan of a set amount each month that will eventually allow us to buy a home. This plan includes retirement savins, home savings, and a little for the unexpected. We are very good at sticking to this plan and and we don''t have debt or use credit that we don''t pay off right away.

However, we aren''t willing to give up absolutely everything in order to own a home either. We rather save over time and live in an apartment for a few years and own *some* jewelry (for me) and some electronics (for him) in the mean time. We feel okay spending money on more frivilous things as long as we are sticking to our plan for the long term. Another thing that we do that helps us have a little more fun money is that I don''t own a car. I know this sounds crazy in LA, but it''s really good for the environment to make a sacrifice like this in a city like LA and it saves us about 5k a year in insurance, retail value, gas, parking, maintenance, etc. I spend some of this extra savings on luxury items and put some in the bank. As someone without a high income people always wonder how I own the things I do and still don''t have any debt and have substantial savings...not owning a car has definitely helped me get there. It''s really amazing just how much money cars suck away from you.

 

[larussel03]

FI and I rent currently.

I'd LOVE to get a house (and really really want one) but financially we're not there yet (I'm laid off and FI is a grad student on a stipend), but also the market is bad in MI (buyers market, but def not a sellers) and I worry that in 4-5 years when we leave that we would have trouble selling it. My fear is fueled by some friends' experience -- they moved to MA from MI after being out here for 5 years and could not sell the house for another 3 years, so they were paying Boston rent (which is very expensive) and a MI morgage.

When it comes to $$, I'm not a risk taker, and we want to leave here as soon as his grad school is over, so it's not like we'd be happy spending a year or two extra here while trying to sell, so we're going the renting route for the next few years. I also am a money hoarder, so I save as much as I can every month so we'll have more options when we move back to Boston in a few years. Don't get me wrong -- I am a spender, I have a thing for designer jeans, and handbags, but I put money into savings first then decide if I can afford whatever thing I want that month, or if I have to wait a couple or a few months before I can afford what I want without it hurting me financially. I'm actually not huge into jewelry, besides diamonds, so I don't buy much of it -- my spending money usually goes to eating out, shoes, jeans and bags. Which is why I never have any shirts!!!!

 

[Heishman]

Actually, right now is the best time to purchase a home, rates are around 6.5% and with homes for sale for so long, you can purchase a home at real value. I wish we didnt use our extra money to buy a vacation home, i woulld buy a home for investment reasons at this time. Go for the home. See how long the house has been on the market, if it is more then 6 months, make a real low offer, some selllers will be forced to sell.

 

[winternight]

I have the baubles but don''t own a home! In DC its not really a ring or home environment since prices here are so high, around 500K for a 2 bedroom condo and a small house starts around 700k (well unless you have a huge ring!) My fiance and I are waiting to see if prices here keep going down (I think they will) so we''re renting but we have a down payment ready. I could have bought a couple of years ago but the numbers didn''t make sense to me, I''d have to pay MUCH more to own then rent and after doing some research I was convinced that the housing market would be forced to correct.

Also, I have noticed is that some people spend all or most of their savings on a ring, which to me is a mistake, financially speaking. I think this is because the size expecatations have gone up significantly, at least in my area. Some people have to have at least a carat, even if they''re starting out, even if the guy isn''t making that much $$. If you look at older women many of them don''t have such a large ring, but they do live in a nice area that they worked up to. This was really a struggle for me as it was tempting to think of how big a 2-3 monthes salary ring would look like, but I went with a classic 1 ct.+ Tiffany ring, second hand from Signedpieces. I could have asked for something larger but then it would have taken a bigger chunk of savings, which is gorgeous and I love it, but of course I do see people in our profession (attorneys) with bigger rings, maybe 1.5-2ct, but then again they all seem to be the younger attorneys! So I''m trying to be balanced about things. Keeping track of my savings/investments on a bi-weekly basis helps, after a certain point its exciting to see that money grow, its just hard to get to the point where its exciting!