Tuesday, October 27, 2009

Don't Live in Your House Forever!

Ok, I promised to tell you why you don't want to live in your house for 30 years until you have it paid for. First of all, think about the house you live in now. What will it be like in 30 years? What will your family be like in 30 years? What will the neighborhood be like in 30 years? Those are probably 3 good reasons to not live in your house for 30 years right there, but I have another reason.

Your house will lose value if you stay there for 30 years (unless you are in some district like Highland Park in Dallas where the values go up no matter what and we don't have that district in Texarkana!) We have dealt with couples that 30 years ago lived in Texarkana's finest neighborhoods. They stayed in their houses until they were paid off, then they realized that the neighborhood was not what it used to be, the house was way smaller than most people live in now and should a spouse die, they wouldn't want the other one left in that older house in a run down neighborhood. So, they went out looking to buy a new home. Those people had to pay from $250,000 to $350,000 to get a home they would be happy with. Both couples sold their existing houses for about $70,000 - barely enough for a good down payment on the new home and they now owe for 30 more years on a house and they are in their 60's! NOT where I want to be in my 60's!!!

Gary and I, on the other hand, being in the building profession and loving new homes, bought and sold. Depending on the economy, we did this every 3 - 9 years. We sold the home when the neighborhood was in it's prime - not on the downhill slide. We would make a little each time on our investment due to rising housing cost and the fact that we kept our home well maintained. We always reinvested all of the equity and profit we got out of our house back into the new home and we would always finance the new home for the same amount of years that we owed on the old home. We never pocketed any money from the sell of the house and we never added years to paying off a home. The idea behind this is that you should be able to afford a little more on the monthly payments by the time you decide to sell the home and move up and you have a larger down payment each time. We are in our 50's and living in a house that is paid for and worth more than $70,000. (And, remember from the last post about money, we paid an extra $100 a month on the principal to get this debt down quicker.) Now which scenario would you rather have for your life - the two couples I told you about, or the one that Gary and I lived?

That is why I say you don't even want to consider living in the same house for 30 years. We made a commitment soon after we were married to never finance anything that did not go up in value. We saved our money and bought what we needed when we could afford it - even cars! I do NOT like paying interest to someone to use their money. There have been times we have financed small amounts on cars when there was 0% interest, but monthly payments are no fun. They take the joy out of life. I will talk more about that in another blogging time.

Hope this helps you down the road in life. Make wise decisions. Seek advice if you need it or even if you don't think you need it. There is always something that we can learn.

Love you and have a Blessed rainy day!


  1. I have heard you say this before, but so glad my daughter read and is going to take heed! They put a for sale sign in the yard and plan to do exactly as you said! I've always heard you are as smart as the people you hang with...thank goodness for your advice! Love your blog!

  2. This is such great advice! Thank you for posting this!