I write today’s post with both disgust, and relief. Disgust because we shelled out over forty-seven THOUSAND freakin’ dollars on our house last year (!!!), but a sweet relief that we’re finally out of that dang place and onto greener pastures… as well as getting all those renos out of the way too.
But it still stings looking at the numbers no matter how you put it.
Anyone who tells you owning a home is the same as renting is full of crock (or have never owned before). Here’s how the numbers broke down for 2013. Take a gander while I go cry some more real quick…
- $15,328.31 –> Total interest
- $6,100.75 –> Principal paid off
- $2,430.28 –> Taxes
- $867.62 –> Rental repairs
- $2,423.33 –> Rental fees (securing a tenant, mgmt. fees)
- $2,000’ish –> Home owners fees + other stuff I’m probably forgetting
- $18,000.00 –> Rental renovations (hardwood floors, carpet, new kitchen)
Boy, just hits you right in the face, doesn’t it? Imagine what $47k could have gone to elsewhere? Or if it were saved/invested over a 30+ year period? (Don’t tell me, nerds. I don’t want to know!) Pretty disgusting… And, admittedly, pretty much our fault too. For reasons such as:
- We didn’t have to put in sexy floors
- …or a sexy kitchen
- We could have found the renter ourselves
- … and then managed it all
- We could have stayed put
- … and been bored out of our minds
So it was a move we were willing to take (quite literally!), despite those around us possibly not understanding and/or thinking it unwise. But remember what I wrote about Monday on knowing yourself? And ignoring everyone around you? Yup…
I’m all for being financially prudent, but I’m also all for living. And the idea of staying in that house for another month was soul crushing. I liken the decision to those who know they’re about to lose a fortune getting a divorce: You don’t want to give up 50%, but you just HAVE TO GET OUT! ;)
(Any divorcees with me on that one?? Or is this another of those “you’re full of crock” type deals? (and why do I keep using “crock” when I mean crap?))
The point is, sometimes you have to do stuff that stings the crock out of you when going for your dreams. It may not always cost you money, but when it does it’s a choice that you, and only you, can make. Okay, and maybe along with your wife or husband and your pet monkey too.
A number I purposely left out above was $10,000’ish – the amount we’ve collected in rent so far. It doesn’t wipe out all of the damage, but it certainly helps. And God willing, next year the input vs. output will be a lot closer aligned! Especially as we’ve got the initial burn out of the way…
The second point for today, is that your house will ALWAYS cost you more than you think. Even if you’re a bad ass and can avoid giving into desires – no one’s invincible to things just falling apart. The year before (2012) we must have spent at least $3,000 repairing the house, and our total interest then totaled a whopping $17,027.64 to boot. On the plus side we paid $2k less in interest this year, but still. Not fun.
Of course, there are a ton of PROS with owning a house vs renting too, but I’ll leave that for other bloggers who have a much less bias towards the subject than I ;) Not that I’m totally against it – I’m not, it’s a REAL smart move for some/most people! – but obviously I’m not one of them quite yet.
Tell me though – How much did YOU spend on your house(s) last year? Interest + principal + any repairs/etc? It’s pretty amazing when you look at the interest vs principal you end up paying, at least starting out… makes you kinda want to get into the business of lending, doesn’t it? ;)
PS: Mortgage means “death contract” in French
UPDATE: Johnny Moneyseed down there brought up a good point I forgot to mention – A lot of these expenses can be written off as the property is now a rental house (aka business) than one we reside in. This will definitely shave off a handful of thousands from the pain.
Killer resources and apps:
- Best Budget Templates & Spreadsheets (FREE)— The best free budget templates from around the community! Including the ones I use :)
- Personal Capital* (FREE) — A great app to track your investments and net worth. You can see an in-depth review we did here from a millionaire who checks it daily 😂
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- Digit (FREE 6 mo. Trial, then $5/mo) — This is one of my favorite apps for automatically saving money, and I even came on board as an advisor I believed in them so much! You can see my full review on Digit here.
- Acorns* ($3-$5/mo) – Similar to Digit, this app helps you automatically INVEST money by rounding up all your transactions to the nearest dollar and then investing it right away for you. My full review of Acorns can be found here.
- Honey (FREE) — By far my favorite coupon service out there! Click the Honey button any time you're about to buy something online, and BOOM - any discounts it finds will be automatically applied at checkout. You can see my write up on them here.
- Credit Karma* (FREE) — An easy way to check and monitor your credit score AND report! See my full review of these guys here.
- My Favorite Blogs + Books < -- Click here to see all my other recommendations!