We Just Love to Throw Money Away!

Said everyone who heard we were renting an apartment after we got married.  Okay, maybe not EVERYONE, but we sure heard it a lot.  “Why aren’t you buying a house? If you buy a house, you’ll have more space!  If you buy a house, you won’t have to waste money on rent!  Buying a house is so much better, because everything is yours!” Not to be argumentative, everyone in the world, but we disagree with all those things being better for us.  Here’s why.

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Apparently, if you do a Google image search for “throwing money away,” Drake pops up.  Interesting.

We Don’t Need More Space (Yet)

When R and I moved in together, we had a lot of stuff.  I’m talking like, two truckloads of stuff.  Big truckloads.  The kind of truck that inspired so many “yo mama” jokes.  All of this stuff made our tiny new apartment feel even tinier.  We had space for our furniture, a TV, a bookshelf, and not much else.  So, what to do?  We discussed getting a storage unit (for about three seconds), we discussed pawning most of our non-essential belongings off on my dad, who had a basement that was more than roomy enough to accommodate us, we even discussed becoming simultaneous Tetris and Jenga masters.  But what we ultimately landed on was addressing the real problem: we had too much stuff.  Since moving in together, we have consolidated, sold, and donated so much stuff that the thrift stores around us have to have clearance sales when they see our car pulling up to the donation door.  And you know what?  We’re still alive.  We still enjoy marriage to each other, and we’re not laying awake at night mentally listing out the things we miss.  I don’t even remember most of what we’ve donated, I just remember it was a lot.  Living in a smaller space has forced us to evaluate what we really need vs. what we just had to have, and the ability to get rid of things instead of hoarding them will hopefully follow us through the rest of our lives.  Will we eventually need a bigger place?  Yes, I don’t think having a baby thrown into our multi-purpose room (which is the dining room, living room, study, and both feet of hallway space) would be good for anyone’s sanity.  Especially Linda, our upstairs neighbor who we’re not really sure is named Linda, and sometimes hosts auditions for Stomp: The Musical in her apartment.  But for now, our tiny apartment comes with a tiny rent and a tiny amount of space for stuff we don’t need to spend money on in the first place.

Paying Rent Isn’t Wasting Money

For the past year and change, we’ve paid rent every month.  Because that’s what good tenants do.  Some buy-a-home-as-soon-as-you-can-find-one folks argue that we have lost that money forever.  I’m going to counter that idea with the following clarification on our situation:  For every month that we have paid money to our apartment complex, they have allowed us to have a place to live.  We can eat there, sleep there, shower there, yell at Linda there, really do whatever we want.  One time, I even drank egg nog straight out of the carton, and they didn’t throw us out.  I would much rather be “throwing money away” and have a place to come home to at night than be couch surfing because I’m waiting for the right house to come to market.  And renting an apartment has allowed us to make sure that where we’re at is where we want to be for the foreseeable future without signing up for years of mortgage payments.  Have we gotten as significant of a return on our money as we would if we were building equity in real estate property?  No, surely not.  But once we’re turned around in other areas of our financial life, we’ll be better able to take advantage of those equity opportunities, instead of just having them add to the pile of stresses and burdens.

In A House, Everything Is Yours

This is one argument that I don’t disagree with at all.  I see the look on friends’ faces as they show off their new houses to us, how the door is theirs, the kitchen is theirs, the stairs are theirs, and I get it.  But the “everything is yours” argument is what really scared us off the most from buying a home right after we got married, because there’s another side to that that nobody really mentions: the expenses are yours.  Right after we moved in, the dryer that came with our apartment started to get a little wonky.  Our clothes came out damp even after two cycles, some had burn marks on them, and it never seemed to run for as long as it should.  We notified the complex, and the maintenance guys were out the next day.  They did some maintenancing and left a note saying it should be good to go.  We gave it another week, and after the same problems kept cropping up, we complained again.  Three days later, we got a brand-spanking new dryer, complete with happy beeps, luxurious inside-the-drum lighting, and shiny selector knobs!  That would have been at least a $400-500 expense right out of the gate for us a month after we said “I do” if we had moved into a house.  Instead, it was covered by the apartment complex, precisely because we don’t own it.  I know that some complex’s maintenance teams aren’t worth the price you pay for them, but ours is really friendly, professional, and quick to make things right.  The risk of those extra breakdowns isn’t something we’re financially ready for quite yet, so the satisfaction of owning is going to have to wait until we are.

Results May Vary

If you have bought a house, please don’t take this as me telling you that you should be renting while you pay down your debt.  That’s just what we’re doing, because we’ve talked about it and decided it’s the best path for our family to take.  Home ownership is definitely in our sights, but we’ve learned the hard way that when we try to do things out of order, we get in trouble.  Buying a house is a big deal, and we’re going to take it slow and make sure we do it right.  Until then, we’ll continue to throw money away.

14 thoughts on “We Just Love to Throw Money Away!

  1. You guys are absolutely right to wait. The other thing people forget to take into consideration is that early in a loan most of your payment is going towards interest. The ‘equity’ built up in the first few years of a mortgage is peanuts.
    The second thing is that people forget about the transaction costs of buying/selling. Between real estate commissions, closing costs, mortgage origination costs, inspections, moving expenses, etc. every buy/sell cycle eats up about 10% of the transaction cost. I have a friend who bought her home at the same time as me. Two years later she met a guy and they got married. Then they got pregnant, moved back ‘home’ and immediately bought a house. Spent a year up there and decided they missed Florida so they sold and moved back. This time they rented. Then he got a job offer ‘back home’ and they moved and bought again. In five years they probably burned $40,000 of equity in transaction costs while I stayed in the same place and paid it off. Don’t buy unless you’re near certain you’ll be in the same house for at least 5 years. And to really build long term wealth, buy a house and stick with it, even if you only move every 10 years that’s still a huge hit to your lifetime savings in buy/sell costs.

    1. That’s crazy about your friend!! And I completely agree with all the miscellaneous costs that come with the process of buying a house, no one ever mentions those! I think having at least a five-year mindset is great advice, thank you 😊

  2. You’re definitely on to something! Any money ‘lost’ in rent payments buys a lot of peace of mind. Apartments are also a lot cheaper to heat and cool and don’t come with the high property taxes of houses. Now that I’ve got a family, owning a home makes sense, but when it was just the wife and I, renting an apartment was great!

    1. Very true! I’m very grateful that we don’t have to pay as much in heating and cooling as we would for a larger house. Here in the midwest, we don’t do seasons half-heartedly, which translates to some crazy temperatures. It’s nice to only have to keep a little bubble of comfortable air!

    1. Haha, thank you 😊. It feels like we renters sometimes get an unfair slap on the wrist just because we’re not doing what someone else wants to do.

      1. We had a friend who, when he found out we were hosting Friendsmas this last Christmas, question our ability to have “that many” people in our townhouse and suggested we should all go to his house. Chill, bud!

  3. Joe and I just played a round of the “move in and throw everything away together” super awesome couple game! He moved in in November and we’ve been taking a garbage bag of donations almost every week to our thrift store. It’s actually a fun game now. We spend days off clearing out different corners and hunting down things to get rid of. It’s so satisfying and we feel so liberated every time! 😃

    1. Don’t you get kind of a weird rush? R and I start tearing through our apartment like crazy people. Like anti-Oprahs. “YOU don’t need this! YOU don’t need that!”

  4. Great article! I think it totally makes sense to rent given your situation. No one should feel forced to buy a house when they are not ready to handle such a large commitment of time and finances. I listen to the Mad Fientist podcast and he had a couple on the show that chose to rent versus buying a house. One of them wrote an interesting article on whether they would be richer if they bought a house versus rented. Here’s the link if you’re interested in giving it a read. http://www.millennial-revolution.com/rent/bought-house-back-2012/

    1. That’s a great article! I hope people don’t think I’m totally against owning, as we definitely want a place to call our own someday, but she’s right, the math is absolutely not always in favor of owning.

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