海角大神

Anyone who鈥檚 been awake to watch the changes in the economy over the last five years is familiar with the burst of the housing bubble. Too many people were given mortgages that were bigger than their budgets could handle and when those people couldn鈥檛 pay, the banks that offered those mortgages were in serious trouble.

Virtually everyone who signed up for these troublesome mortgages was in a situation where it strained their budget to make the payments and when something changed, whether it was the adjustment of a mortgage rate or something else, they were unable to keep paying.

That situation is one that I heard a few times growing up: 鈥渉ouse poor.鈥� It referred to people who had a mortgage sitting over their head with monthly payments large enough that it was a monthly struggle to keep the bills paid. So much of their monthly income was sucked up by that mortgage that they had to live in near-poverty in other aspects of their life just to keep the house.

I can fully understand the desire to own a house of your own. I can also fully understand the desire of wanting the best house the bank will possibly allow you to get. I experienced both in 2007 as we shopped for a home of our own.

At the same time, 鈥渉ouse poor鈥� is not a place you want to be. Being 鈥渉ouse poor鈥� means a lack of freedom.聽

When you sign up for a large mortgage, you鈥檙e essentially requiring yourself to maintain a certain level of income. If you can鈥檛 maintain that level of income, you鈥檙e going to be facing some very difficult decisions very fast 鈥� selling a house, drastically downsizing in a hurry, taking a brutal hit to your credit, and adding even more worry to your life.

You鈥檙e sacrificing the freedom to make many career choices, for example. You can鈥檛 take that lower paying job that鈥檚 exciting and perhaps gives you equity in a company or builds some amazing experience and references. You can鈥檛 walk out on a job that鈥檚 making you miserable without a secure job already in place. You can鈥檛 afford to do these things because that mortgage is hanging over your head.

You鈥檙e sacrificing the freedom of having spending money in your pocket. Your budget is now nice and tight, so you can鈥檛 just spend $20 or $40 on a spur-of-the-moment date. It doesn鈥檛 work like that any more.

These sacrifices also come with stress. You know you鈥檙e walking a tightrope now. You know you have more to lose if you make a mis-step.

To me, having some additional square footage or having a granite countertop or a showy living room isn鈥檛 worth the loss of freedom.

I would far rather control my own destiny in a lower-stress environment in exchange for having one or two fewer bedrooms and a bit smaller kitchen and maybe some elements that I can gradually repair or replace.

In that situation, I still have choice. I can choose to keep saving for the nicer home. I can choose to invest the money on hand into the house to make it nicer, both for myself and for resale value. I can choose to make a career switch if I want or jump to a different job if the career stress is too high. I can choose to go out once in a while with my wife and know that I鈥檓 not putting my budget in a precarious place.

When you鈥檙e faced with the decision about whether to buy an amazing house you can just barely afford or a less exciting house that you can easily afford, take your eyes off of the granite countertops for a moment and think about the freedom of choice in other aspects of your life.

Would you rather have career freedoms, lower stress, and many windows of opportunity? Or would you rather have that granite countertop and that unused extra bedroom?

For me, the choice is clear.

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