As I discussed a few days ago, when Sarah and I first started shopping for houses, we looked at some very nice homes. We looked at places with five bedroom homes with three bathrooms and a finished basement and a nice big yard. We looked at houses with granite countertops and enormous decks.
When we began to realize that the homes we were looking at were out of our price range, we stopped for a bit and reassessed what we actually needed for a home at this stage in our life.
We came to the logical conclusion that we weren’t necessarily buying the home that we would be living in for the rest of our lives. Instead, we were buying a home that would work for the years while our children were young.
We did not need an extremely nice house. We just needed one that would work for two parents and two or three small children.
In other words, we didn’t need a bedroom for each child. We didn’t need perfect rooms; in fact, with young children at play, nice rooms would end up costing us quite a lot in wear and tear. We didn’t need an opulent kitchen, just a functional one.
We might someday want a nicer house, but we didn’t need a very nice house, especially at that stage in our life.
By committing to this approach while house hunting, we easily saved $100,000 on our home purchase. This enabled us to have much smaller mortgage payments, insurance payments, and tax payments.
Because of that choice, we now have no debts, are saving for our dream home (someday), and have a house that has worked perfectly for our growing family.
When you buy anything, whether it’s a home or a car or even something as simple as a new gadget, focus on what you actually need. What are you actually going to use this item for?
The key is to distinguish between rational reasons for wanting something and impulsive desires. You can pay attention to your impulsive desires later on when you’re not putting your financial future on the line. If you want things that are unnecessary, budget for them out of your extra money. Don’t commit to years of debt just to have it now.
It takes willpower and courage, but focusing in on just the things you need and skipping the higher-end versions of the item at hand – whether it’s a home or something else – will almost always serve you well.
This post is part of a yearlong series called “365 Ways to Live Cheap (Revisited),” in which I’m revisiting the entries from my book “365 Ways to Live Cheap,” which is available at Amazon and at bookstores everywhere. Images courtesy of Brittany Lynne Photography, the proprietor of which is my “photography intern” for this project.