I have been lectured by a lot of family who think I’m making a bad decision by not “investing” in a house or land. Not to say I am never going to buy a house, I just don’t particularly want to right now. I don’t currently want the responsibility of upkeep and everything else that comes with owning a house. I am in no debt. My rent is low ($600 per month); it might not be the fanciest living situation but it works for me.
I’m honestly generally happy with my life and am focusing on saving money, plus traveling when I can. I have a stable career, even though it is not one I ever expect to make me rich. I have a retirement account that money is put in from each check and I try to ignore it and let it grow, which it is. My family is concerned that I’m missing out on “the lowest interest rates and prices of my life because land and houses are just going to get more expensive.”
Would love any advice. Should I listen to them? Or am I right in doing what is currently working for me? I know that hindsight is 20/20, and don’t want to be making a mistake. I don’t feel personally like I am, but maybe it’s one of those things that everyone but me sees.
— Happy Renting
A lot of personal finance advice takes this one-size-fits-all approach that can make you feel like everyone but you knows some secret to success. Your family members are well intentioned and money-wise in their advice, but they’re missing an important part of the equation: you.
It’s never wrong to do what makes sense for you, even if the math suggests a more economically optimal route.
Mortgage interest rates are always in flux, and you can lock in a current rate when you take out the loan. If rates are poised to rise, it could save you a lot of money over the life of the mortgage, up to 30 years. But a house is more than a vehicle for building wealth; in your case, it’s also a home. And you’re right: Owning comes with more responsibilities (and unexpected costs!) than renting, which can significantly affect your finances and quality of life.
Historically, property prices have gone up over time; that’s why so many Americans count on home ownership for building wealth. So, yes, it’s likely that if you buy a house in 10 years, it’ll cost more than it would today. But you wouldn’t miss out on wealth-building altogether; you’d just have 10 fewer years of potential growth. You get to decide whether that matters to you.
There are plenty of non-measurable advantages to using money toward things that support the life you want now, rather than toward future wealth. Financial optimization isn’t your sole purpose.
When making any financial decision, quiet the voices determined to tell you what you “should” do, and instead consider the consequences of various money moves. Set your own priorities, and choose the moves that let you live the life you want to live. Don’t let those voices shame you for that choice!
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Dana Miranda is a Certified Educator in Personal Finance® and contributor to The Penny Hoarder. Send your tricky money questions to AskPenny@thepennyhoarder.com.