I proved in my article about delaying gratification how buying a starter home could save you large sums of money. I want to reiterate the financial benefits of not over stretching ourselves and the drastic difference it can make in our long term wealth. It would take a whole other post to explain how helpful it has been to start a marriage with low financial stress, and how big an impact it has made in our wealth and vision for the future.
With that said, let’s look at some of the other benefits of buying a starter home. I am speaking from personal experience, since The Happy Rockette, The Happy Pebble, and I still live in a 900 square foot condo. Here is what we have learned:
- Buying a home is a learning process. You first home purchase will teach you a lot about the location, types of houses, and features that you are looking for. It is makes financial sense to learn these things with a less expensive property rather then your ‘dream home’. You learn to drive in a beat up 1978 Chevette, not a Porsche. The same principle applies to a starter home. When you go to buy your ‘dream home’, you will have a much better idea of the qualities that will make you truly satisfied.
- You will make mistakes. Most people under estimate the true cost of ownership by overlooking costs like taxes, association fees, lawn care, utilities increases, and maintenance. Learn what it takes to own a house without the stress of a huge mortgage payment. You will create a tangible framework from which to envision the three hours every 10 days that it will take to cut the backyard of you ‘dream home’.
- Be a low-stress handyman. Try fixing some things yourself. You can educate yourself and save a lot of money, while not feel like you are ruining your dream home. Personally, I have had a chance to do some small projects around the house, most notably a successful granite tiling of the kitchen counters. I got the experience of planning home improvement projects on my own and convinced my wife that I could do a job well.
- Be content. Buying a starter can help you avoid the consumerist mentality. We have realized that we can be happy anywhere. Our dream home won’t make us happy, we control our feelings. We have mostly broken the desire to keep up with our peers. Sure we would like to be able to entertain better, but sitting on the floor or the couch for dinner keeps it real. Setting frugal patterns early in your life will really provide a big return on invest throughout the rest of your life.
- Simplify. Small spaces help breaks the clutter habit. A smaller house helps break those hording tendencies, and makes you think through what items are ‘keepers’.
- Finally, a starter home helps you to truly appreciate the ‘dream home’. By the time you get to your ‘dream home’, you know exactly what you want and you will have earned it. Not to mention the fact that your finances will be in a vastly superior state. *Note that renting versus buying a starter or dream home will also depend on an array of other factors such as market potential, taxes, income levels, length of stay, and a variety of personal issues.