Spendaphobia – I think I have it

by Sandy L on April 10, 2012

I’m house hunting. It’s clearly something that’s right for my family.  The thought of living in a bigger home that can house my mom on a little more land is SO appealing…but I’m going through sticker shock.   The good news is that having bought 2 fixers already, I can clearly see the potential in an older home that needs work.  I can reconfigure things in my head and imagine kitchens with shiny new appliances and different layouts. The downside is a little calculator in my head starts tabulating all the costs a new home will bring.  My brain is going click, click click, caching, caching..as it’s summing up all those new expenditures. In addition to my brain, my body gives me signals too.  I literally get nausea at the thought of paying a certain size mortgage payment every month (even if we can “afford” it). It seems like I also have an upper limit on the amount of property taxes I will pay as well.  Some towns have crazy high tax rates and one house I’m looking at has taxes that are more than the mortgage was on my house. Blech…can you hear me choking down that vomit yet?  Yes, it’s way over assessed and I’d have to file an abatement and all that, but  the thought of that really scares me..to be throwing that much money on taxes that I will never ever get back.

Most shrinks will tell you that most of these strange things are linked to some warped childhood experience. For me, I think it was this sense of being trapped because I was poor.  From the time I was able, I started earning money every chance I got so that I had more freedom.  The very first experience was when I started babysitting on a regular basis and could actually go to a mall and buy cute clothes (vs the boy clothes my mom sewed for me from 70’s polyester…oh and it was the 80’s now btw). So as you can see, the thought of willingly entrapping myself to a certain size house payment isn’t very palatable to me. Above all, I want to maintain my freedom, so the buying a home based on one income rule must be kept intact.

Speaking of phobias, Babci has a great fear of any kind of vermin.  When she sees a mouse, even if it’s a fake one, she jumps up on her tippy toes and screams. Well, I’m sure this is linked to her experience of sleeping in straw tick beds growing up with all of the neighborhood mice burrowing in her bed.  It must have been terrible.   Human hair not attached to anyone’s head also majorly grosses her out. When she sees a hair anywhere near food or in the kitchen she scrunches up her nose, shudders and removes it immediately.  As I take a shower every morning and see the miniature cousin it at the bottom of my tub, I think I understand that one as well.  Babci didn’t have running water, so none of the 11 people living in her one bedroom farmhouse got to shed their hair in a designated place every morning. I think people bathed maybe 1/week back then if they were lucky.  There must have been hair everywhere and on everything.  I think I get it now when before it always seemed like a weird thing to get all grossed out about.

So..back to my phobia.   I think in general, it’s a good thing to go into a buying situation with open eyes, but I also think it may hold me back from making the right decision. My biggest fear is not overspending on a house but underspending when we might just be at the bottom of the market right now.  Of course, the realtor is pushing the more expensive places as the best values relative to what they used to be worth, but my frugal side is rebelling even at homes that are less than 1/2 of what the bank says we can afford.  Plus, my frugal side is telling me that it will be easier to move a cheaper property someday vs an expensive one because it’ll be more affordable to a broader range of people.  I think house hunting will take a while and hopefully I’ll end up somewhere in the middle of the two extremes.  It may just be that the 150ish properties that are on the market now just aren’t that good and “our home” hasn’t come on the market yet.   I thought I got close last week with a tear down on a nice bit of land but then I found out there might be stuff I don’t want buried on the property.  Of course, I didn’t find this out from the listing agent (and I asked specifically about it), but a neighbor who lives around the corner that I know pretty well.  Yikes.

I can see now why some people fear change.  There are a lot of unknowns to making a big move like this. However that’s not to be feared.  There’s a lot you can do to educate yourself about a new place or a new opportunity with the main thing being, do your homework!  I think my gut will tell me when we’ve found our place, but for now, I’m trying to keep an open mind and looking at as many options as possible. How many of you knocked on the door of your neighbor’s house before you put an offer on the home you’re in now? Am I weird for doing that?  I mean I made sure I didn’t look like a bible salesman when I did it, but still.

 

 

{ 14 comments… read them below or add one }

Linda April 10, 2012 at 10:10 AM

I understand that committing to a big mortgage and spending a lot of money in one fell swoop can be difficult. I’ve been saving money for “big projects” around the house and now that I have one I’m ready to pull the trigger on and it’s sort of sickening me. The upstairs of my house — two bedrooms, one of them a very large space with soaring ceilings — needs updating in the worst way. With the exception of the bathroom that was remodeled about five years ago, the rest of the upstairs is the same as it was when I moved in 10.5 years ago. And except for some bad decorative painting in one of the bedrooms, that really means that the upstairs has remained untouched since about 1960. I had two renters up there and a lot of wear on the carpet. So I’m looking at a project to rip out about 700 sq ft of badly worn and stained carpet in the bedrooms, hallway, and stairwell and replace it with laminate flooring (so much more durable) and new carpet on the stairs. Additional work: necessary repairs to the walls, ripping out some built in desks, moving a hot water heat return pipe, installing a new cover over the attic hatch, and painting all the walls. I’ll do some of the painting myself to save money, but I’m not able to paint the stairwell or the big bedroom with the soaring ceilings; they require too much skill with scaffolding and ladders for me. The work is going to take all of my tax refund plus a couple thousand more from my savings account. Having just dropped a wad of cash on a car doesn’t help with the level of discomfort I’m having around this work, but it really needs to be done and I’ve been waiting a long, long time to do this.

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Sandy L April 11, 2012 at 4:07 AM

Linda – Well, it sounds like you’ve been patient with your upgrades and are doing all the right things (saving first, spending later). We waited 10 years to do our kitchen and it was the first room I wanted to do when we moved in (it ended up being the last in fact). That ended up being a good thing because I better understood what I wanted it to be like and had more money to do it properly. Good luck. You must take before/after pictures and post on your blog.

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Acorn April 10, 2012 at 11:41 AM

I’ve been considering buying a second home, but this article gave me pause for thought;

http://patrick.net/housing/crash1.html

Though I have enough for a sizable down payment, I can’t stand the idea of taking on a mortgage – even a small one. I share your distaste for debt.

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Sandy L April 11, 2012 at 4:09 AM

Acorn – well if it’s a second home you wouldn’t be in it full time right? That doesn’t make sense to me either unless you’re close to retirement or an imminent move. Good article though.

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frugalscholar April 10, 2012 at 5:49 PM

Are the high property taxes linked to the quality of the schools. You do have little ones, so in that sense, you would be getting the taxes back.

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Sandy L April 11, 2012 at 4:15 AM

Frugal Scholar – The answer to that is kind of. This particular town went into a great amount of debt building new schools and a shiny fire station, so yes, the school is nicer and technically better, but I don’t agree that a town should go into vast amounts of debt to do those things, so a good chunk of the taxes are going to interest on the loans, not actually to paying teachers, etc. Another town which has the best schools and a lower tax rate actually took the reverse approach. They fund raised for the schools for years and then they built new ones once the money was available. The flipside is that this town has the most expensive homes in the area to live (but also is the most fiscally responsible). So, I don’t like the thought of paying extra taxes because a town is bad with managing their money. It just doesn’t sit well with me.

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Jacq April 11, 2012 at 12:53 AM

I feel the same as Linda. I’ve put away money to do upgrades to my house and it STILL bothers me to have to spend it. I keep investing instead. It’s a problem. And I’m only trying to spend a measly $1,000 a month in upgrades and am saving over 50% of my net income. WTH?

Having said that, I did open up my squeaky wallet and bought a new stove this past weekend. Only because mine finally died. I wish my fridge would die too. :-(

But I’ve promised myself that come hell or high water I’ll buy a new fridge to match in April. They’re on sale. ;-)

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Sandy L April 11, 2012 at 4:27 AM

Jacq – Well, I guess I’m comforted by the fact that I’m not the only one with these tendencies. I think what helps me is that my husband who’s also frugal but doesn’t have the same money hoarding tendencies helps reason with me about spending more. Being single, you have to duke it out with your own brain. I’m glad you’re spending more.

Anyway, I think it’s better to level load your spending on house repairs and maintenance. I’ve been looking at loads of homes where home improvements were not a priority and the places are wrecks. One home in particular was less than 30 years old and it had broken windows and wobbly railings and all kinds of little things like that. It doesn’t cost much to fix those things and it makes a huge difference to the general appearance of a place.

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Nicoleandmaggie April 11, 2012 at 7:53 AM

You’ve still got plenty of time. Even if you don’t hit the absolute bottom of the market, you’re still saving money by not spending it on the higher property taxes and interest while you wait to figure out what you want. There’s no need to rush this decision and there will be more properties on the market and you’ll get a better feel for everything that’s out there so you can make the most informed decision.

It *is* a big decision! And it would be a big change. I don’t think you’re feeling anything that isn’t normal or even sensible.

My sister took about a year to find her house– she made offers on some places that were overpriced and by the time they came down to her price months later her situation had changed and she finally picked out a nicer place in her perfect neighborhood.

We took 3 days to pick out our place, but you can do that when housing prices are ridiculously low and you used to be paying way more in rent on a fraction of your new income. (We did NOT get a fixer-upper!)

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Sandy L April 12, 2012 at 4:36 AM

Nicole – yes, it took me about a year to find my first house and 9 months to find my mom’s. My post is really my impatience talking and you’re absolutely right. I really am in no rush to be paying more in everything and waiting longer means a bigger down payment. Thanks for reminding me of your sister. Something better will come up eventually.

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retirebyforty April 11, 2012 at 6:03 PM

Good luck with the house hunting. I hate paying property tax too, but you know what I hate even more? The HOA fee! Our condo has a ridiculously high HOA fee and I am really tired of paying that. Oh well, live and learn. It’s the price we pay to live in this location. If we ever move, I will take the property tax and HOA into consideration much more.

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Sandy L April 12, 2012 at 4:37 AM

Rb40 – Yes, in general I have a great hatred of high fixed expenses I can’t control. I think I may keep my search narrowed to my original list of towns. The ones with the super high taxes aren’t in a town that was originally in my search criteria.

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Andrew @ 101 Centavos April 13, 2012 at 10:50 PM

I understand how you feel. The extreme other side of spending aversion though is paralysis. As long as you’re not in a great big hurry though, it saves you from making rash decisions.

And no, you’re not weird for visiting with a potential future neighbor. It helps to know whether you’re buying next to a meth lab.

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Sandy @ Journey To Our Home April 14, 2012 at 1:01 PM

I like the idea of talking to neighbors. You never know who you may be moving in next to, and with kids it is even more important to me to be weary of neighbors.

I get sick when thinking about spending money too. Now that we have money in savings, and our debt is decreasing I don’t necessarily vomit before I have to pay large amounts of money.

Good luck on the housing search. I know it is a big decision to move and a big change.

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