I did math today. I'm kind of a math nerd and I like math. I like the way numbers are orderly and predictable and, usually, when I do math I have a pretty fair idea of what I'm going to end up with before I start. My impromptu session with the calculator today was an unusual shock. It had never occurred to me before to work this particular problem so I went in without any ideas of the outcome.
The question I wanted answered was this: Roughly how much have we spent on housing over the course of our marriage? Rent on our first apartment was $500. Our house payments now are $2200. There were many years overseas where his housing allowance was in excess of $1600 a month. The answer to my question knocked the wind out of me: nearly $400,000. Of that amount I can discount $10,000 of equity in the current house. $390,000 up in smoke. At minimum wage working a 40 hour week and paying neither taxes nor social security, a person would have to work 24 years, 40 hours a week, 52 weeks a year to earn that much.
After I stopped hyperventilating, I started thinking about what I would do differently if I had it to do all over....and what I want to do now.
If I could go back to 1990 and hit the re-set button, we would have been in a cheaper apartment and the first year we would have spent ruthlessly paying off the debt that HM was dragging around from the ex-wife. The next year I would have rented the cheapest apartment I could find in a safe neighborhood, all of our furniture would have been second hand, and I would have saved like crazy. The third year I would have bought a piece of land for cash and taken out the smallest construction loan I could to have a very modest house built- maybe one of those Jim Walter's houses where you finish it yourself.
Since HM was in the military, and I wouldn't trade the experience of getting to travel, I would have kept that first house as a rental and had it paid off while someone else was in it & the army was paying our housing expenses overseas. Yes, those years would have been lost opportunity costs as far as housing allowance but there is more to life than just money. When we returned to the US, I'd do the same thing over again but- since I must be magic to go back in time- I would know to sell everything except the home I wanted to live in forever by 2006.
If I could find a young adult who would really apply what I've learned I would tell them this: Buy land. Pay it off. Save some more and build a tiny cabin for cash if you can, with a small loan if you can't and get that paid off in a year or two. Work two jobs if you need to, don't eat out, don't buy "stuff", live with an outhouse and beg showers at friends or join the gym if you need to. Paid for is way better than fancy. Start with a cabin with a bedroom under the rafters - 12 x 16, for example. Get your well and septic in, that cabin paid for, then start building a 'house' addition on one side and a garage on the other making your original cabin a big kitchen. You may be young and single now but eventually you're probably going to have a spouse and 2-4 kids. Trust me: if you build the house and its paid for before you acquire the toys, you won't need to sell the toys when the babies start to come along and you need a minivan. I would loan this mythical young person some books- Rob Roy's "Mortgage-Free!: Radical Strategies for Home Ownership ", Matthew B. Crawford's "Shop Class as Soulcraft, An Inquiry Into the Value of Work" , and Shannon Hayes' "Radical Homemakers: Reclaiming Domesticity from a Consumer Culture". There is plenty in that last volume I don't necessarily agree with but the central idea is that one can choose to live differently, on a smaller income and with greater happiness. I think that is far more realistic if one is free from large housing costs.
So what to do now?
I've known since the medical bills started rolling in that our house and financial balance is unsustainable for us. When you add utilities, it eats a little more than half the take-home pay and is on a 30 year mortgage- talk about a death pledge! There are rooms we don't use, kids are leaving soon, and its just too big. Also, as kids grow up, move out, and are no longer on our tax return, our tax burden climbs. I want to find a way to build for cash but I recognize that we are not 21 and 28 anymore and that we are attached to the creature comforts (plumbing!) and will not move into a small cabin with kids and no water. I'm still looking for a solution, a way through, a way to build a life with the freedom of security because honestly- if HM lost his job we would be totally hosed. I know that we will keep this massive house and rent it out to build more equity in hope of recovering the huge losses we took in the retirement account. I'm just not sure how to get my hands on land. I may have to wait another year. Patience is certainly a virtue but it isn't necessarily one of mine!