Counting My Pennies

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A decision (for now) on buying a home

April 28, 2008 By Megan Smith

Those of you who have been reading this blog a few weeks know that I’ve been pondering buying a home. See here and here. I’ve decided that for now, buying just isn’t right for me and I’m going to continue renting. A number of factors influenced this decision.

  1. I got some bad news at work regarding a promotion for the group I was hired along with. I don’t want to go into details, but I will not be getting the promised promotion (and raise). Because of this dishonesty, I am looking for a new job, but for now, I have to realize that I’m financially stuck where I am for the foreseeable future.
  2. With looking for a new job, I want to know where I’ll be working before I make a decision on where I live. Right now, I have a quick, easy metro ride to work. I would hate to buy in this area and then up working completely across D.C. in an area where I didn’t think to look for a home.
  3. Right now, it’s just me. I was out for a run the other day, and I saw some people out doing yardwork and I realized that I’ve come to value the free time I do have on the weekends. Yes, I spend a chunk of it catching up on all the chores I haven’t done all week, but I appreciate the fact that I don’t have a yard to work on.
  4. I kind of like the fact that if something breaks in my apartment, I call maintenance and they deal with it. I don’t have to worry about an emergency fund to cover a new oven, for example.
  5. I can’t guarantee that I’ll be living in this area two and a half years from now. Maybe that’s a silly reason, but it’s just another factor to be considered.
  6. Given my current salary, a mortgage payment and dealing with taxes and all the other fees that go with home ownership is doable, but barely. And probably not on the type of place I want to buy.
  7. Yes, rent is not cheap. But there are perks that come with rent. No property taxes. Security on site (a nice feature for a 20-something female living alone). A gym. Someone to collect my packages when they arrive. Sweet location.

I think I have always believed that buying a home is just something you do, when a lot of people, especially in big cities, live much of their lives in apartments. I think that with where I am in my life, renting just makes more sense. And it means that I can save up more money to put towards a down payment on the perfect place when I’m ready.

Megan Smith
Megan Smith

Megan is a 40-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:

In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance.  It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information.  It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck.  While that was working for me, clearly I needed a better plan.

While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.

Except that’s not what an emergency fund is for.

So I did a lot of research, read a lot of blogs, and decided that I needed a plan.  I needed to budget.  I needed to know what I was spending my money on.  I needed to prepare for the future.

I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way.  I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.

Filed Under: homes

Comments

  1. Tom says

    April 29, 2008 at 12:41 am

    I remember when it used to be cheaper to own rather than rent, and if you were a landlord, it was cashflow positive.

    People keep saying it’s the bottom, but we still have a ways to go if the price to own vs rent returns to it’s historic level.

    Putting 20% down and financing fixed for 30 years (with insurance, taxes and HOAs) should be cheaper than renting. Do the math : )

    You will also need money set aside for emergencies when things break or you need a new roof. You will be rewarded for your patience.

  2. J. Savings says

    April 29, 2008 at 3:05 pm

    I think you’re doing the right thing to be honest with you. You have to go with what feels right, and it looks like you’re def. considering all options 🙂

    Esp with #2 & #4. Having recently bought myself on a spur of the moment kinda thing, I can tell you that taking the time to evaluate everything is key.

    While i’m pretty happy w/ the decision all in all, I probably would have waited another year or two knowing what i know now. And this is ONLY based on my lifestyle change…it doesn’t even consider market prices and all these days.

  3. ntbeachnc says

    April 30, 2008 at 12:36 pm

    I can completely understand. I too live in the DC area and can’t decide whether to buy or continue renting. I’d hate to wait and not be able to afford it later on. But I like some of the conveniences that come with renting.

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