Apr 4, 2013

Apartment Living, Part 2

Fully half of my apartment sized kitchen.
But the savings is worth it.
While we have owned a house in Minnesota for nearly ten years, I've spent the last five or so thinking that we should sell it and rent instead. We were lucky when we bought our house — although we bought at the top of the market, we bought from someone we knew who charged a very fair price for it. Additionally, we got a loan through our local bank, and they didn't give us more than what we could afford. We didn't realize how valuable these two things were, and how truly lucky we were, until a couple of years into our mortgage when the housing market collapsed and people started losing their homes. Thanks to our interactions with honest, helpful people, we could always afford our mortgage.

That said, it was still taking a large portion of our income. We aren't big spenders, really. We don't go on massive shopping sprees. I don't own 20 pairs of shoes or 30 handbags. We shop when we need something, like work clothes, but often it is because what we have has actually become worn or faded or otherwise inappropriate for the office. When we do shop, we generally look for good deals (or go used) and for pieces that can mix and match easily so we don't have to buy so much. I'm not saying we never purchase anything else — of course we do or we wouldn't be in this financial situation — but I would bet that our spending on "stuff" is lower than the national average.

Nope, instead the bulk of our money goes to buy food (more on that here) and pay for housing. After doing some reading on getting out of debt, I immediately began to feel like one of the key places we could save money would be by reducing our housing cost.
There are only two of us (and two pooches), so we didn't need anything big. That meant we could probably find a rental for $300-400 less than our mortgage/property tax/house insurance/interest payment (and boy, the interest on a house payment feels like flushing dollars down the toilet). Beyond that, we were continuously putting more money into our house for repairs, updates, new windows, little landscaping projects, paint, and more. Many of those things were optional, it is true, but as homeowners we thought about keeping up our home's value for resale, so we continued to spend money on it.

I didn't have the courage to make the transition without a push. B's new job in a different state was just such a push. The house went on the market, and we were suddenly renters again. (You can read more about my reasoning here.) Our new apartment is a bit smaller than our 800 sq ft house was, but our rent is about $400 less per month than our mortgage. And we don't have to pay for upkeep, updates, and repairs. Once the house sells, this reduction in housing expenditure will really help our financial situation.

Apartment living isn't all puppy dogs and roses. There is more noise than we are used to. There are personalities to contend with. There are changes that I'd make if I owned it, but that I shouldn't waste time and money on since I don't. But it is hugely worth it to see a major expense of ours cut down, and I wish I would have had the courage to do it years ago.

The reality for us is that while we didn't get a mortgage we couldn't afford, we could have rented for much less and paid off more debt over the last ten years. I don't know that we will rent forever, but we are pretty certain that if we ever do buy again we'll wait until we have saved up the cash to buy it outright. In the mean time, we are slowly getting used to apartment living, and slowly making this new space our own.

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