Jul 12 2011

Homeowners by 30? Maybe not

I’ve been digging through my archives to create a start page of sorts to help new readers and old friends find some of my older stuff. In doing so, I’ve come across (a lot) of posts that have made me cringe in one way or another.

One post, you might recall if you’ve been with this blog for awhile, was about my fantasy for owning a house outright by my 30th birthday.

Well, I just celebrated my 26th. A lot has changed in my life since I wrote that post in January 2008. I became a mom of two children. We paid off some debt and built a bit of savings. Et cetera.

Part of me is rereading that post and thinking how naive I was to think we could acheive such a thing in such a short amount of time, but the other part of me is saying to not be so hard on myself.

We’re still on a good path. We’ve ticked off nearly all of the items on my prerequisite list — building our emergency fund and building our down payment. We’re aiming for a shorter term mortgage and even if we do go with a 30-year, we’ll pay that beast off fast.

My reasons for wanting to pay the house off ASAP back then are the same as today, perhaps even more so. If we shake our mortgage payment, that frees up a lot of cash flow for funding other projects, such as the kids’ college funds. We’ll save a lot of money in interest.

But if we get a mortgage soon and rates are about where they are now, it might not be as big of a deal for us to pay it off as soon as we can. We should still accelerate our payoff, but maybe not to the extreme.

I don’t even know that we could pay it off within four years without cutting back in every way and even then, our income may not be able to support that. I don’t want to make extreme sacrifices for four years for such an arbitrary goal.

We want to continue on with the baby steps of putting money aside for college. We want to be able to spend money here and there on things that are important to us. Unless our situation dramatically changes, I don’t think we can pay off a mortgage that quickly.

I still think we should aim for paying it off in less than 15 years. Once we find out how much our payment will actually be, and get used to it for a little while on our new budget, then we should be able to accelerate the payoff somewhat.

All that to say, I don’t think I’ll be able to meet our original goal of having a paid-for house by the time I’m 30. But by age 40? Yes.

Let’s do it.

4 Responses to “Homeowners by 30? Maybe not”

  1. Johnny won’t even be 18 when you’re 40! Without a mortgage payment, you might even be able to swing paying tuition as you go. Or at least you’ll have extra money to help him out, and he can get a jerb and pitch in. Plus your household income is only going to go up as Shane moves up in his career. I think you’re most definitely on the right track!

  2. Karen! Math fail. Johnny is 2.5 and I’m 26 and so he’ll be 18 when I’m 41. I was 23 when I had him. But yeah with no mortgage while a kid is in college would definitely help our cash flow to help them out!

  3. Looking at all of this from 50 here’s my sage advice (since I’ve done everything wrong there is to do with money and am living to regret it!!!!)

    1. The more money you tuck away now the better. If that means you rent, rent. You won’t regret it.

    2. The more money you put into Retirement savings the better–especially as early as possible. You don’t want to be joining me in the cat food isle, do you? lol

    3. Think back (or get out albums and look back) at how much house was “enough” when I was growing up. Most of us would be shocked. 900-1100 square feet was very, very normal. 1 bath was normal. No garage wasn’t unheard of. That sounds grim today, but I’d like to say my two teens and I live in such a house today. And, guess what? Where happier than we were in the big 2 story with huge yard. Why? It doesn’t take much to keep it up. We don’t accumulate piles of junk because there’s no place for them!!
    Point here is: really look at what you NEED not what you want. Babies, as raised in America today, take acres of STUFF. If you do the job right, the acres of stuff diminish as the kids get older. Think ahead! No one ever sees a rubbermaid tub of toys in a BH & G layout, but it IS only for the first few years that you have that much junk!

    4. A mortgage is still debt. Your new neighbors are wallowing in debt for their overpriced houses gone bad. That bears thinking of too.

    5. The right house, at the right time, in the right place is like the right guy: you know it when you finally meet him!!

    6. Hidden costs to suburban living (remember I’m beyond where you are in parenting): the “right” school often dings you to death for supplies you never knew your kid needed, for special tshirts, etc till you want to scream! Ditto–really ditto–the “right” sports league. Watch out as you shop for houses. Does every mini-van/suv have Soccer clings on the back window? Could be a coming OMG of expense!

    Good luck! Kacie, you have so much common sense, I know you’ll come out ok. And, I thought the rest of you might listen to somebody else’s Mom before you listen to your own (laughter)!!

  4. Our goal is to pay off the house before Roanin goes to college. That’s 2026 (I think), so I’ll be 46. Yikes! But that’s the very conservative goal. With the way things look now, we’ll finish the mortgage off closer to my 40th birthday.

    My parents paid for their very first house with cash saved from college summer jobs and 1 year of full-time work. Thirty years later, my sister had to take out a 30 year mortgage to buy a similar house in the same neighborhood. Sad, huh?

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Hey! I'm Kacie, wife to Shane and mother to Jonathan (7), Vivienne (5) and Amelia (2) . I write about my family's finance: how we save money, improve our spending, and plan for the future.

I hope I can inspire and encourage you to improve your situation. See disclosure.

I'm adopting a much slower-paced posting schedule, and treating this as a hobby blog now.

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