Eric and I have been homeowners for two months now and I thought I would give an update on the reality of it.
For us, it has absolutely been a dream come true.
We live in an expensive housing market. In fact, the third priciest housing market in the United States, behind only San Francisco and San Jose.
Almost 5 years ago, when we first got married, we were earning less than half the income we make now.
At that time, prices were the cheapest they had been in a decade, and it hurt so much to not be able to afford our own place. We had to pay off our debt first, work on our careers, and save up for a down payment. That we were able to accomplish all this in less than 5 years?
It absolutely shocks and awes me.
Eric and I have always wanted to be homeowners–and this is where we may differ from many other personal finance bloggers.
While we fully acknowledge that a house is a substantial financial investment, we were really buying a home. We love to entertain, we love to host parties and have friends over, and we hope to build many, many, many memories in our home with family and friends.
So while we know that a home is of course a financial investment, we don’t believe that everything is about money. Because, yes, there are absolutely things that money can’t buy, and we get an immense amount of joy and pride in being homeowners.
When it comes to homeownership, I think there are a few ways we differ from the average homebuyer….
Homeownership is a dream
While homeownership may be a dream, or goal, for many other people, if Eric and I lived in, say, Cleveland, Ohio where the median home sales price is $58,000, then homeownership wouldn’t be a goal for us, it would be something to check off our list because it wouldn’t be that much of a financial commitment for us–we’d just pay for the house in cash.
And similarly, when I see other people buying homes for $200, 300K, I think how nice that must be! At those prices, I feel it would be much, much easier for us to purchase a home. So for us, homeownership really was a dream that five years ago, we didn’t even know if we would ever be able to afford to buy.
It’s not just about money
For us, it is a big financial commitment to purchase a home, much more so than if we were simply paying $200 or $300K for a single family home. At this point in the housing market in our area, you have to really consider your home more than just a financial investment–because housing prices are expensive, and the OC rental market is at an all-time high as well.
But I just don’t see it getting any better any time soon. I feel that when you live in an expensive area, housing will always be pretty expensive and out of reach for many.
We don’t have to worry about retirement
One thing that I don’t talk about much is retirement–because frankly, Eric and I are both pretty secure with retirement because of our pensions. At this point, if Eric and I both retire at 55, I will receive 70% of my salary for the rest of my life and Eric will make 75% of his salary for the rest of his life.
This means we only have to worry about covering less than a third of our income, assuming we don’t change our lifestyle. With 10% of my annual salary in a 401k-type account, and maxing out our Roth IRAs, we’re pretty financially covered–and we have our financial adviser to back us up on this to assure us that we are more than fine.
This means that instead of putting money toward retirement, we have more income that can go toward other investments, disposable income, and of course, our home.
We don’t want to die rich
Eric and I have no intention of dying rich. We want to leave something behind for our children, and make sure they don’t have to worry about paying for our funeral expenses (dying is expensive!), but other than that, we want to enjoy the money we earn. Work hard, play harder is our motto.
We have no plans of being millionaires in our 80s, when we can go ahead and enjoy the money we make now.
Eric and I are absolutely happy with being homeowners. It is absolutely everything we had hoped for.