Speaker 1: Episode six, when buying a house is a frugal move.
Speaker 1: Welcome to the Frugal Friends podcast, where you'll learn to
Speaker 1: save money, embrace simplicity, and live with your life. Here
Speaker 1: your host Jen and Jill. Welcome everybody to the Frugal
Speaker 1: Friends Podcast. I'm so excited to be saying those words again.
Speaker 1: I'm Jen, I'm Jill. Jen's back. Who I did it?
Speaker 1: I had a one on a maternity leave and I
Speaker 1: made it back to the podcast. It's such a good feeling.
Speaker 1: I missed you. There were times that I listened to
Speaker 1: the podcast just to hear your voice. Did I tell
Speaker 1: you that I think I might have texted you that?
Speaker 1: Oh I almost texted you that it was It was
Speaker 1: really adorable, if I can say so myself, Yes, and
Speaker 1: that I have to admit the first time I called
Speaker 1: you after being away from you for so long, I
Speaker 1: had to admit that I understand now what cute aggression is.
Speaker 1: And if you listen to the ends of the podcasts,
Speaker 1: you'll will know that Jill and I did not We
Speaker 1: had differing views on like how much we loved babies. Yeah. No, one,
Speaker 1: it's either you really understand it or you really think
Speaker 1: it's weird and scary. There is no middle ground with
Speaker 1: cute aggression. But I am glad that there's a term
Speaker 1: for it so I don't feel as crazy. But it's
Speaker 1: basically where you want to bite off the chubby legs
Speaker 1: of babies. Yeah, and so I get it now. And
Speaker 1: even I found a key in peel sketch Um the like.
Speaker 1: Instead of babies, it was with puppies. So it's a thing,
Speaker 1: and I get it, and I'm here for it. Yeah,
Speaker 1: we can link the key and Peel because it's worth it.
Speaker 1: We should definitely do that. Anyhow, Jen's back and we're
Speaker 1: not doing anything light today. I've decided we're getting back
Speaker 1: into it. You guys gave us a ton a ton
Speaker 1: of episode ideas in our Facebook group, the Frugal Friends community,
Speaker 1: and uh, we're diving right in with the renting verse
Speaker 1: buying discussion, and uh, I think you're all going to
Speaker 1: really like it. Got some down payment info, some paying
Speaker 1: off mortgage versus investing, all that stuff upcoming, But first
Speaker 1: we wanted to talk about our sponsors and then we
Speaker 1: got a little surprise for you before we get into it.
Speaker 1: Today's episode is also brought to you by co Parenting
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Speaker 1: just for dirty diapers or separated parents, but is literally
Speaker 1: what today's episode is brought to you by. Travis is
Speaker 1: in the other room holding our baby, and I'm so
Speaker 1: thankful for him. Yeah, I know, people really, I've seen
Speaker 1: parents do rock paper scissors, shoot for the dirty diapers
Speaker 1: or for bathtime, so it is really handy in those situations.
Speaker 1: But and I have talked to men who have never
Speaker 1: changed a dirty diaper, or who like can't stand the
Speaker 1: sound of their child screaming. You can't handle it. And
Speaker 1: I'm like, you got a man up, You got to
Speaker 1: you gotta do this thing, you know, with your with
Speaker 1: your person. So shout on Travis. If you want to
Speaker 1: meet my co parent, if you want to beat me,
Speaker 1: if you want to meet Jill, we have a really
Speaker 1: special meet up planned and I'm so excited to announce this.
Speaker 1: We will be in Washington, d C. September seven and
Speaker 1: we're doing a meet up at five thirty p m
Speaker 1: um at Calorama Park, Hope, I'm saying that right. It's
Speaker 1: by the Washington Hilton. So we'll post about this in
Speaker 1: our Frugal Friends Facebook community group. Hopefully we'll be able
Speaker 1: to announce it through finn Con. We will be at
Speaker 1: fin Con, so this is the meetup that we're doing
Speaker 1: during that time. But if you are also just in
Speaker 1: the area, you're welcome to join us because it's a
Speaker 1: public park. No one's going to stop you from coming
Speaker 1: and hanging out with us. But you can't do anything
Speaker 1: strutchy because we will be in a public park. So
Speaker 1: don't think that you're going to be able to come
Speaker 1: and attack us because you care. Yeah, please don't. And
Speaker 1: if you have friends in the d C area, message
Speaker 1: them and tell them to come out because we're just
Speaker 1: gonna have a frugal time of fun. Bring your own snacks,
Speaker 1: we're gonna hang out. There's a big playground for kids,
Speaker 1: and just hang out areas that we can be frugal
Speaker 1: and hang out. So that again, that is Calorama Park,
Speaker 1: September seven, at five thirty pm. We're super excited, Yeah,
Speaker 1: looking forward to meeting people in person. Let's get into it.
Speaker 1: Let's not waste any more time. We're talking about renting
Speaker 1: verse buying for houses, and so our first article is
Speaker 1: from life Hacker, and it's why the rent verse by
Speaker 1: debate is pointless. So I really liked this article and
Speaker 1: the perspective that this author brings because at the end
Speaker 1: of the day, and so spoiler alert, it's not just
Speaker 1: about this conversation of renting versus buying. What life season
Speaker 1: are you in, what makes most sense for you as
Speaker 1: an individual, So that's the point of this question, not
Speaker 1: whether or not one side is always right or always wrong.
Speaker 1: So I really appreciated that, and then I think it
Speaker 1: gave some excellent things to be thinking through with whatever
Speaker 1: season of life you're in on on what might be
Speaker 1: the best choice for you. And I think it's always
Speaker 1: true the pendulum swings right. Like years ago, it was
Speaker 1: you're an idiot if you don't buy. Buying is the
Speaker 1: best thing that you can ever do. And now there's
Speaker 1: articles coming out saying renting is the best thing. Don't
Speaker 1: ever buy, that's the worst investment ever. And the reality
Speaker 1: is somewhere in the radical middle where no one often goes,
Speaker 1: but where we often should all live not in either extreme.
Speaker 1: So we're hoping to be able to walk that radical
Speaker 1: middle line with you all and help decide what's the
Speaker 1: best thing for you. So the article goes into the
Speaker 1: arguments for both sides. What are the arguments for buying,
Speaker 1: what are the arguments for renting, and some of the
Speaker 1: common ones and both excellent points on each side for buying.
Speaker 1: When you pay off your home, it's yours. So they
Speaker 1: say that you eliminate the expense of housing once you've
Speaker 1: paid it off. Yeah, great point. It is an investment
Speaker 1: in some ways. They also say that if the home
Speaker 1: appreciates more than what you've paid a mortgage, interests, taxes,
Speaker 1: maintenance over time, then you've earned a return or you've
Speaker 1: at least broken even, and then you've had a place
Speaker 1: to live. And a lot of times there's tax credits
Speaker 1: to help offset the cost of home ownership. Now we'll
Speaker 1: get into some of the devil's advocate pieces of even
Speaker 1: these arguments, but yeah, for the most part, those things
Speaker 1: are true. And as far as renting, some of the
Speaker 1: arguments include that, uh, if you own your house, you're
Speaker 1: gonna pay quite a bit in interest and taxes, and
Speaker 1: that renting isn't just throwing money away like most people
Speaker 1: would say, you know that you're just flushing it down
Speaker 1: the toilet. Well, you get a place to live that
Speaker 1: does have value. So valid point and that there is
Speaker 1: an opportunity cost to buying. So what you pay in
Speaker 1: down payment, taxes, insurance, interests, etcetera, you could be investing
Speaker 1: while you're renting. So it's worth thinking through if I
Speaker 1: want to rent long term, what could I be putting
Speaker 1: that money towards instead of towards a house. And so again,
Speaker 1: neither one is all right or all wrong. It just
Speaker 1: depends on your situation. But I think it's worth knowing
Speaker 1: what are the arguments on both sides? For sure? Yeah,
Speaker 1: and I think people when they rent, you save up
Speaker 1: for that down payment, and so that's money that you
Speaker 1: could be investing, but you're saving for a down payment
Speaker 1: that over time will appreciate maybe four or five percent,
Speaker 1: so just over inflation. And then you're also when you're renting,
Speaker 1: your buying patients, you're buying flexibility. So it's these arguments
Speaker 1: that people have for not renting, I think are are
Speaker 1: really overrated that coming from a homeowner. So there are
Speaker 1: a lot of strong arguments for either, and then there's
Speaker 1: some individual factors that make it impossible to simplify when
Speaker 1: you own a home. So these are some things that
Speaker 1: you should be aware of if you're looking to buy.
Speaker 1: So you want to know how long you'll live in
Speaker 1: the home. So this will vary and you you won't
Speaker 1: be able to pinpoint it exactly, but know that, just
Speaker 1: a rule of thumb, the longer you're in the home,
Speaker 1: the better. You also want to know the cost of
Speaker 1: housing in your specific area, so that's different. In most cases,
Speaker 1: people rent because houses are too expensive in the area.
Speaker 1: But it all depends on the market you're in. And
Speaker 1: then again the opportunity costs of your taxes and insurance.
Speaker 1: So what kind of long term return could you get
Speaker 1: if you had invested the money in the stock market
Speaker 1: instead of buying your house, Because most people will just
Speaker 1: look at a mortgage calculator and calculate their mortgage and
Speaker 1: p M I and stuff and forget about taxes and insurance.
Speaker 1: Or they'll buy a home and look at what the
Speaker 1: past taxes have been and not realizing that once you
Speaker 1: buy that home, the cost of it goes up and
Speaker 1: that's um submitted to your city, so the taxes will
Speaker 1: be more than what it was previously because it's appraising
Speaker 1: for more, so you have to be aware that the
Speaker 1: taxes will most likely be higher than the taxes that
Speaker 1: are on history. And then also the opportunity costs of
Speaker 1: the down payment, Like what I just said, if you're
Speaker 1: saving ten percent of your income for a down payment,
Speaker 1: that's ten percent you could have been investing for retirement.
Speaker 1: So you just have to weigh that it doesn't mean
Speaker 1: it's a bad thing, and that you should just be
Speaker 1: investing instead of saving for a higher down payment, because
Speaker 1: the bigger the down payment, the better. But you just
Speaker 1: have to like, what are your priorities? Do you want
Speaker 1: to retire earlier or do you want to have a
Speaker 1: house for like you and your five kids? What's more important?
Speaker 1: And I think all these things are worth considering. I
Speaker 1: think for some folks there isn't much thought that goes
Speaker 1: into it, much like I'm going to college right after
Speaker 1: high school, there's not some for some people, there's not
Speaker 1: a consideration of what the other options are or why
Speaker 1: they're doing it. So I think even the point of
Speaker 1: us even talking about this is just to bring some
Speaker 1: awareness to each of those things like we mentioned some
Speaker 1: of the unforeseen costs. What do you want your life
Speaker 1: to look like, what's the long term plan? What would
Speaker 1: be most beneficial for you and your family? And I
Speaker 1: appreciate how the article says in here that the answer
Speaker 1: and whether to rent or buy engines on the specifics
Speaker 1: of rent prices in your area versus prices on homes,
Speaker 1: interest rates, and so on. So it doesn't mean that
Speaker 1: it is a good or bad decision. Like it buying
Speaker 1: a home could be a bad financial move, but for
Speaker 1: some it isn't. So there's so many things to consider.
Speaker 1: But I think that's the that's the key takeaway, is
Speaker 1: that let's think this through and not just say, oh,
Speaker 1: I've heard that it's flushing money down the drain to rent,
Speaker 1: or I've heard it's great to buy, and just do it,
Speaker 1: but to think through all of these other pieces that
Speaker 1: go along with it. Yeah, I think we can alleviate
Speaker 1: like a lot of worry about this decision by stating
Speaker 1: that a home is a purchase, not an investment. So
Speaker 1: there are real estate investments, buying holds, flips, landlording. That's
Speaker 1: when a home house is an investment, but a home
Speaker 1: that you live in is a purchase. It's not something
Speaker 1: like your retirement fund that should be you know, growing
Speaker 1: it around eight percent, like a home won't grow enough
Speaker 1: to make it a viable investment. So while it could
Speaker 1: be a good financial purchase, it is a purchase, and
Speaker 1: don't view it as an investment. So that's how that
Speaker 1: can take a lot of stress off, right, even the
Speaker 1: pressure or expectation that I'm going to be the next
Speaker 1: real estate guru through purchasing the place that I'm going
Speaker 1: to live and that's not reality. But yes, you do
Speaker 1: need a place to live that suits your needs, so
Speaker 1: make a wise purchase. That's fantastic. I think I've heard
Speaker 1: you describe that in your own home buying journey, Jen,
Speaker 1: that you recognize what it was at the time you
Speaker 1: did purchase before you were out of debt, and just
Speaker 1: saying that, yeah, but the suited our needs and yeah exactly,
Speaker 1: And we were we were getting kicked out of our rental,
Speaker 1: not for anything we had done, but he wanted to
Speaker 1: make it an airbnb. So we were getting pushed out
Speaker 1: and we decided we had the opportunity to rent or
Speaker 1: buy at that time, and the rentals we were looking
Speaker 1: at um didn't serve the quality of life that we
Speaker 1: wanted for the price, and like, granted, we're not looking
Speaker 1: for a high quality of life here. We were trying
Speaker 1: to pay off debt and you know, we took like
Speaker 1: catchup packets from the gas station instead of buying ketchup.
Speaker 1: You know, we're not looking for for lavish living quarters.
Speaker 1: So it was just it didn't serve us in the
Speaker 1: way we wanted it. So we decided to buy and
Speaker 1: we put three percent down, which I like don't recommend,
Speaker 1: but it's what we did because we didn't have much time.
Speaker 1: Thankfully we were on We just used our money that
Speaker 1: we would have put towards debt the down payment, and
Speaker 1: we were on such a high momentum we were able
Speaker 1: to get really quickly and we love our house. It
Speaker 1: was not a fixer upper like we had planned to
Speaker 1: do to you know, get the quote unquote investment out
Speaker 1: of It was a flipped home and so we we
Speaker 1: paid a premium for having it done for us, and
Speaker 1: I don't regret it for a millisecond. It was the
Speaker 1: fast decision because we got time back instead of putting
Speaker 1: it into our home um, which is an investment we
Speaker 1: would not see for a decade until we sold it.
Speaker 1: We were able to put our time into our jobs
Speaker 1: and our side hustles that got us out of debt.
Speaker 1: And so that was that, you know, we paid a
Speaker 1: premium on one thing to be able to do something else.
Speaker 1: But yet it was a wise purchase for you and
Speaker 1: that you have been able to generate some come through
Speaker 1: having it be an airbnb. So that's another consideration too
Speaker 1: that yeah, we don't want to always look at this
Speaker 1: as an investment but a purchase, but to consider how
Speaker 1: might off of this purchase, I'd be able to make
Speaker 1: some money or make this more cost effective for me
Speaker 1: in whether that you can utilize it for Airbnb, or
Speaker 1: have a personal business on the property or what have
Speaker 1: a garden, whatever the case is. Um, those are some
Speaker 1: things to consider in buying. Also, yes, not a lot
Speaker 1: of people think about quote unquote house hacking when they're
Speaker 1: thinking about buying home. But it's such an amazing way
Speaker 1: to kind of go in the middle. So live like
Speaker 1: you're renting, but have that home that you can be
Speaker 1: building equity in. And it's basically the concept of buying
Speaker 1: a duplex or a triplex quad or a house with
Speaker 1: an in law suite, or if you're flexible, like Travis
Speaker 1: n I renting out your front room and bathroom on Airbnb.
Speaker 1: But like, if you get the duplex, you can live
Speaker 1: in one side and rent out the other long term
Speaker 1: or on airbnb, whatever you feel comfortable with. My dream
Speaker 1: is to have a house with a in law suite
Speaker 1: one day that we can just generate continual income from
Speaker 1: the in law suite. So that is not something people
Speaker 1: automatically gravitate towards, but it is a highly underrated method.
Speaker 1: And then once you're done and you want like an
Speaker 1: actual house, you can keep your duplex and continue renting
Speaker 1: it out for residual for past income um and then
Speaker 1: get your house. You know, and while you were living
Speaker 1: in the duplex, the side you were renting is paying
Speaker 1: for your mortgage, for your full mortgage. So it's just
Speaker 1: a great a great method. Again, I think patients and
Speaker 1: thinking long term is so key here. I see so
Speaker 1: many people in our age group right thirties who are
Speaker 1: wanting to purchase their forever home, and it's like, well,
Speaker 1: does that have to be the goal or the expectation?
Speaker 1: Can we boot strap our way to that purchase within
Speaker 1: our means and generate some income off of our property
Speaker 1: and work our way up to that point and be
Speaker 1: a little bit more wise and for rugal if I
Speaker 1: can say it that way, by implementing some patients and
Speaker 1: some long suffering in this process. Yeah, when we went
Speaker 1: into our home buying, we were adamant that we were
Speaker 1: not buying our dream home or our forever home. We
Speaker 1: were buying our starter home. And that allowed us to
Speaker 1: search like a lot smaller, something that we could be
Speaker 1: in for more than a few years. We'll talk about
Speaker 1: numbers later, but something we could be in a reasonable
Speaker 1: amount of time to get our money back, but not
Speaker 1: something at we would be in for twenty years. So
Speaker 1: because we didn't need that space, we'll need that space
Speaker 1: in ten fifteen years, but we don't need it right now,
Speaker 1: and so we can afford to start with a smaller home.
Speaker 1: So that could even be one of the benefits of
Speaker 1: home buying sooners that you can start smaller, versus if
Speaker 1: you already have a big family, then you have to
Speaker 1: start larger. So it's just look at what makes sense
Speaker 1: in your area. With those things considered, our next article
Speaker 1: is from bank Rate, and so this gets into some
Speaker 1: of the numbers and nuts and bolts when considering renting
Speaker 1: versus buying. So first you want to be in the
Speaker 1: right mindset knowing that it's there's no pressure you have
Speaker 1: to do what's right for you. But when you've decided
Speaker 1: what's right for you, you you can look more closely at
Speaker 1: the numbers. So some things to consider as you're debating
Speaker 1: this topic for yourself is what can you afford? And
Speaker 1: so we'll tell you here's how you figure that out.
Speaker 1: Your total monthly costs if you were to buy, should
Speaker 1: be no more than of your take home pay. So
Speaker 1: total monthly costs that means your your mortgage, interest, insurance taxes,
Speaker 1: all of those things combined. You should not be spending
Speaker 1: more than of your income. Yeah. And you should also
Speaker 1: be able to put money away for appliance replacement, roof replacement, um,
Speaker 1: and then things that come up. And and also like
Speaker 1: home improvement because you want to improve the house and
Speaker 1: make changes over time, so you should just be budgeting
Speaker 1: for that anyway, and all of that should be no
Speaker 1: more honestly, like, no more than in my opinion, but experts,
Speaker 1: so we're going with you got five percent wiggle room. Yeah,
Speaker 1: And so the second question to ask is how do
Speaker 1: you plan to stay in the home, So in order
Speaker 1: to recoup closing costs, have the home appreciate enough to
Speaker 1: get money out and break even essentially when you sell it.
Speaker 1: Experts say that you should stay in at a minimum
Speaker 1: of five years. So while we're saying don't buy your
Speaker 1: twenty year dream home, don't buy a tiny if you
Speaker 1: plan on like having a kid or something in the
Speaker 1: next six months, don't buy a tiny one bedroom duplex
Speaker 1: with one bedroom on each side. You know, don't buy
Speaker 1: something you won't be able to stay in for five years.
Speaker 1: Plan ahead and get something that you can stay in
Speaker 1: for you know, a reasonable amount of time. Another question
Speaker 1: to consider is whether you want stability or flexibility, And
Speaker 1: so I think we can all assume what which one
Speaker 1: is which, but buying would equal some level of stability,
Speaker 1: ran ting could equate to some flexibility. So this is
Speaker 1: again where you have to consider your life stage and
Speaker 1: potentially location. Also, even if you've been in an area
Speaker 1: for a while, is this where you want to settle
Speaker 1: down or would you want to consider a different area,
Speaker 1: or if you're moving into a new area, it may
Speaker 1: take you some time to figure out where you want
Speaker 1: to settle in. And so even if you have the
Speaker 1: money to buy, consider renting first to suss out the
Speaker 1: area and decide. There are so many of my friends
Speaker 1: and even acquaintances who have moved to other cities and
Speaker 1: purchased immediately because they had the money and they toward
Speaker 1: the place on on a video call and just bought it.
Speaker 1: But then they got there and a few years later say,
Speaker 1: you know what, I actually want to be in this area.
Speaker 1: It's more family friendly, or there's more activities, the nightlife
Speaker 1: is better, and I'm moving. And usually that happens before
Speaker 1: those five years that Jen just mentioned end of max
Speaker 1: or minimum amount of time to be able to recoup
Speaker 1: your costs. So just employing some wisdom in this for
Speaker 1: what's going to make most sense for you, even if
Speaker 1: you do have the money. Right and at that point
Speaker 1: it can be hard to justify renting, but know that
Speaker 1: you're buying patients and time for that year. And I
Speaker 1: mean you could also negotiate with your landlord to say,
Speaker 1: you know, I'll be here seven months and then I'd
Speaker 1: like to go month to month, so you can you
Speaker 1: can have some negotiating power, especially if you have money upfront,
Speaker 1: maybe paying for seven months up front and saying like,
Speaker 1: don't raise the rent. I'm going to pay upfront, so
Speaker 1: give me a discount so you can have some negotiating
Speaker 1: power there. You also want to ask if you can
Speaker 1: afford to be responsible for home repairs and maintenance. So
Speaker 1: that's that five percent that it's between five So it
Speaker 1: just depends on how many improvements you might want to
Speaker 1: make to the house, if you want to move in
Speaker 1: ready or if you want to do fix her upper.
Speaker 1: If you're doing moving ready, you're going to take out
Speaker 1: a bigger mortgage, but you're not going to have as
Speaker 1: much to save every month for repairs and maintenance and
Speaker 1: vice versa. So this is where we say Mary rich
Speaker 1: or Mary Capable for that quote in a previous podcast episode.
Speaker 1: It was amazing to see the feedback on that one.
Speaker 1: Shirts Yeah, so Mary rich or Mary Capable, if you
Speaker 1: want to have a house that needs a lot of repairs,
Speaker 1: know that you can afford to be responsible for those.
Speaker 1: If you're a single person buying a home and you
Speaker 1: know that you're not capable of making all of those
Speaker 1: repairs right now, you're you don't know how to do them.
Speaker 1: Budget for having somebody else do them and just be
Speaker 1: on the lookout for affordable handy men, trustworthy handymen um
Speaker 1: and make sure you have the money to pay them.
Speaker 1: But even if you're d I y NG supplies still
Speaker 1: cost money. So no matter which route, whether you are
Speaker 1: rich or you are capable, or you're both, it is
Speaker 1: still going to cost money. Plumbing just by itself, just
Speaker 1: plumbing fixtures are so expensive, electrical tools, whatever, all of it,
Speaker 1: it does cost money even if you're doing it yourself,
Speaker 1: So consider that as well in in your home buying endeavors.
Speaker 1: Another thing to consider here is what are your financial
Speaker 1: career family goals and how will your living situation either
Speaker 1: help or hinder you in those goals. Do you want
Speaker 1: to retire early? Do you want a big family? Do
Speaker 1: you already have a big family? Do you want to
Speaker 1: travel a lot? All these things would help you in
Speaker 1: considering what's going to be my best move for myself.
Speaker 1: For Eric and I right now, we don't have kids,
Speaker 1: we work remotely, and we travel a bunch. It is
Speaker 1: not in our best interests to be buying a home
Speaker 1: and cleaning that thing and mowing the lawn. That's that
Speaker 1: is the last way that I want to be spending
Speaker 1: my time. So I think they're yeah, where you're at
Speaker 1: in life stage, what your life looks like, plays a
Speaker 1: big part in what you're going to choose to do here, right.
Speaker 1: We have a lot of people in the group that
Speaker 1: their plans they want to retire early, not like in
Speaker 1: their thirties and forties, but just earlier than maybe sixty five,
Speaker 1: and so putting more money, investing more money up front
Speaker 1: helps with that. We're actually going to talk about that
Speaker 1: next week. But doing that more upfront gets you rolling
Speaker 1: to retire earlier. Whereas for saving for a down payment,
Speaker 1: for instance, experts say is the ideal down payment. We
Speaker 1: all know that, and not a lot of people put
Speaker 1: down on their first home, which is absolutely fine, But no,
Speaker 1: your mortgage payment and everything along with that is going
Speaker 1: to be more expensive if you don't, like we put
Speaker 1: three percent down. Flexible people say ten percent. But when
Speaker 1: you're doing that instead of putting ten percent into the
Speaker 1: stock market, you are going to have to work longer.
Speaker 1: So I think I think ten percent is a fine
Speaker 1: down payment, especially if you're doing a lower cost home um.
Speaker 1: And then once you buy a home and you're moving
Speaker 1: to your second home, no less than so That's another
Speaker 1: reason you want to be able to stay in a
Speaker 1: place for more than five years, because you, without a doubt,
Speaker 1: want to put minimum down on your next home. So
Speaker 1: that's another thing you should keep in mind. Yeah. I
Speaker 1: love in this article too. At the very end they
Speaker 1: go into advantages and disadvantages of both buying and renting.
Speaker 1: I think it's an excellent breakdown and could be really
Speaker 1: helpful in guiding us in the individual decisions that we
Speaker 1: each make on this. Just to name a few. For buying,
Speaker 1: the advantages being that you maybe you can build equity
Speaker 1: and credit. You don't have a landlord to answer to.
Speaker 1: There is more stability, especially with schools. Uh. Some of
Speaker 1: the disadvantages mean that it requires more money, paperwork, all
Speaker 1: these things up front. You could lose money, right, That
Speaker 1: is a there is a big if on your home appreciative. Yes, um,
Speaker 1: there are extra expenses beyond mortgage payments, and you are
Speaker 1: responsible for all the repairs and just where the housing
Speaker 1: market is going to go and we don't always know
Speaker 1: that and it depends on the area you live in.
Speaker 1: Regarding renting. There the advantages include that there's there's not
Speaker 1: a whole lot of costs involved, as far as upfront
Speaker 1: upfront costs, there's freedom to be a bit more mobile.
Speaker 1: You're not responsible for maintenance and repairs, you can build
Speaker 1: your credit, you don't have to worry about the housing
Speaker 1: market rising or falling. No pretty tax. But then the
Speaker 1: disadvantages of a landlord could raise rent, they could sell um,
Speaker 1: you might have to move multiple times, and you're not
Speaker 1: building equity in that way as far as a house goes.
Speaker 1: So a really nice snapshot of some of the advantages
Speaker 1: and disadvantages of both that can help us to figure
Speaker 1: out what's going to be best for us. Where where
Speaker 1: we feel our most advantageous route is. Yeah, I'll put
Speaker 1: another advantage on for renting. It keeps you more minimalist
Speaker 1: because moving every few years makes you go through all
Speaker 1: of your things and discard things you're no longer using,
Speaker 1: whereas in a house you don't. You're not forced to
Speaker 1: do that. And so definitely you can hoard a lot
Speaker 1: easier in a house, and I've seen that. And not
Speaker 1: that you don't care for your rental property. You don't
Speaker 1: or you don't take care of it, but there is
Speaker 1: an awareness even subconsciously that it is not yours. So
Speaker 1: even the level of investment that you put into decorating
Speaker 1: oftentimes is more minimal, which is very nice on the
Speaker 1: bank account also, So that's another thing to consider. If
Speaker 1: you know that once you get into a home, you're
Speaker 1: gonna want it to look exactly how you want it
Speaker 1: to look right away, and you don't have the patients
Speaker 1: to employ to wait to get a couch and to
Speaker 1: wait to get nice furniture, then then that could be
Speaker 1: a consideration in the amount of time that you take
Speaker 1: to buy. Yeah, that's an upfront cost that you have
Speaker 1: to factor in to it. So we went from a
Speaker 1: one bedroom in a duplex to a three bed, two bath,
Speaker 1: and for the first six months while we were finishing
Speaker 1: paying off our debt, the extra two rooms were just empty.
Speaker 1: They were empty, and we didn't buy a bed or
Speaker 1: start doing Airbnb until we finished paying off stuff and
Speaker 1: we could furnish everything and get things pretty. But yeah,
Speaker 1: we had to be patient and wait in order to
Speaker 1: put the money towards that stuff. Good for you, guys,
Speaker 1: You know what else is good jen, good for my soul,
Speaker 1: good for everyone. It's the bill of the week, that's right.
Speaker 1: It's time for the best minute of your entire week.
Speaker 1: Maybe a baby was born and his name is William.
Speaker 1: Maybe you paid off your mortgage, maybe your car died
Speaker 1: and you're happy to not have to pay that bill anymore.
Speaker 1: That's built buffalo bills. Bill Clinton, this is the bill
Speaker 1: of the week. Hi. I'm a listener of the Frugal
Speaker 1: Friends podcast. My name is Tony, and I'm calling because
Speaker 1: I just heard the Homesteading episode where I was announced
Speaker 1: about the layoff at thirty one weeks pregnant. I just
Speaker 1: felt compelled to call. I am thirty one weeks pregnant,
Speaker 1: and I also have been living off one income, just
Speaker 1: my husband's income. And to hear how doing that and
Speaker 1: the work it takes to do that paid off so
Speaker 1: that you can have peace of mind and not worry
Speaker 1: so much about finding the gig right away, it was
Speaker 1: really reassuring to me that we're on the right track.
Speaker 1: UM I had a bill of the week, so my
Speaker 1: bill of the week is maternity related. UM I got
Speaker 1: a bill for a genetic testing that we had done
Speaker 1: based on a Midwest recommendation, and I thought it would
Speaker 1: be covered, and it came to our apartment and was,
Speaker 1: which was not in our budget at all. And UM
Speaker 1: I had been inspired by y'all's episode about calling about
Speaker 1: bills but doing it in a really nice way. I
Speaker 1: have the same issue where I can use my patients
Speaker 1: on the phone with customer service and usually send my
Speaker 1: husband to deal with people. But I decided, no, I'm
Speaker 1: going to do it. I'm gonna be extra nice, and
Speaker 1: I called my insurance company. They had denied the claim,
Speaker 1: but I have asked them to look it up, look
Speaker 1: up the exact claim working of what they covered, and
Speaker 1: they could not even find it. So it was kind
Speaker 1: of ambiguous about what they covered or not in regards
Speaker 1: to the test. And then I also called the company
Speaker 1: and they said they would reopen the claim with the
Speaker 1: insurance company based on my conversation with them. So it's
Speaker 1: been about a month and we got our summary from
Speaker 1: the health insurance and they covered two thousand dollars of it.
Speaker 1: The claim got reopened and they processed it, and so
Speaker 1: now I'm waiting for the black d dollar bill. But
Speaker 1: I'm definitely feel empowered to call the testing company and
Speaker 1: see if I can get any discounts on that too.
Speaker 1: So thank you all for your advice on Matt. I
Speaker 1: really appreciate it, and I really enjoyed the show. Thanks.
Speaker 1: Oh my gosh, I'm literally there pumping my fists in
Speaker 1: the air. There are two thousand things I love about
Speaker 1: this Bill of the week. Um. The first is that
Speaker 1: I'm so glad you were empowered by my story of
Speaker 1: being laid off at thirty one weeks pregnant. Yeah, exactly
Speaker 1: what you said. When you're frugal and you live on
Speaker 1: less than one income, when you have two incomes and
Speaker 1: you don't have to worry about an unexpected job loss,
Speaker 1: and I'm I'm really excited for you to have that
Speaker 1: baby and know that feeling and not have to worry
Speaker 1: about that. And also, gosh, maternity related bills suck. I
Speaker 1: am knee deep in them still. And I have also
Speaker 1: been on the phone with insurance providers and medical facilities
Speaker 1: and yes, they do offer like painful discounts, and insurance
Speaker 1: companies make mistakes all the time. I'm waiting. I've been
Speaker 1: charged three four thousand dollars for something that I shouldn't
Speaker 1: have been charged for and I'm waiting for them to
Speaker 1: take it off. So yeah, I'm so glad you did that, Tony.
Speaker 1: I agree with everything Jen said, and I just want
Speaker 1: to add that I'm so glad to hear that you're
Speaker 1: being nice on the phone paid off. I know that
Speaker 1: that wasn't an easy thing to do. We're all growing
Speaker 1: in maturity over here, So so glad that you did that,
Speaker 1: and also celebrating with you for dropping two thousand dollars
Speaker 1: off of bill. My goodness, could you imagine if you
Speaker 1: had just tried to pay that without even knocking down
Speaker 1: some of these doors and spending some time on the phone.
Speaker 1: Just excellent job, Tony. Thanks for sharing. We hope it
Speaker 1: inspires others to do the same thing. Don't just let
Speaker 1: these massive bills happen to you. There's something you can
Speaker 1: do about it, and you can do it in a
Speaker 1: kind way and still win. So thanks for sharing that
Speaker 1: bill with us, Tony. If you want to submit your
Speaker 1: bill of the week, visit Frugal Friends podcast dot com
Speaker 1: slash bill to leave us a bill. It can be
Speaker 1: heart felt, it can be funny. It can be full
Speaker 1: of wisdom and insight. It could be hardly related. It
Speaker 1: will take it all. It could just be that you
Speaker 1: are named Bill and you say whatever you want to
Speaker 1: say on our podcast. Oh my gosh, so true. Yeah,
Speaker 1: I get your friends named Bill to call in that
Speaker 1: maybe a dangerous ask, but equally as dangerous. Sorry I
Speaker 1: didn't wait for you on that one. You shouldn't because
Speaker 1: this is this is your round. We do this for you,
Speaker 1: and this one specifically is for you because if there
Speaker 1: is one person that has not bothered with the by
Speaker 1: versus rent question, it's Jill. She has lived so many
Speaker 1: unique ways, not renting, not buying. Like, you don't have
Speaker 1: to ask yourself this question. Just talk to Jill and
Speaker 1: she'll show you all the alternatives, the middle and the outliers. Yes, okay, Jill,
Speaker 1: here we go. Okay, I'm not sure what this is considered.
Speaker 1: I think we are benting, is that we're somewhere in
Speaker 1: the middle. So we live in an r V. I'm
Speaker 1: sure you all have heard this before. We have lived
Speaker 1: in an RV before. We're doing it again, and it
Speaker 1: is us owning within our means, but yet it is mobile,
Speaker 1: so we do have to find a place to park it.
Speaker 1: So I would encourage anyone who does want a little
Speaker 1: bit of ownership but is not in a position to
Speaker 1: want to rent or buy. So there's a bit of
Speaker 1: both here where you own your home, but then you
Speaker 1: rent the space where you park it, or if you're lucky,
Speaker 1: you can find a free place to park it. But
Speaker 1: even still, the probably best to pay somebody at least
Speaker 1: a little bit of cash for for using their property
Speaker 1: in that way. But it's a fantastic way for us
Speaker 1: to be able to have something that we are building
Speaker 1: a small amount of equity in certainly, but we have
Speaker 1: something that we can sell and hopefully it will be
Speaker 1: our down payment when we do find a place that
Speaker 1: we want to buy. Yeah, because you did fix up
Speaker 1: your RV, so you will be able to sell it
Speaker 1: for more than you pay. That we anticipate making um
Speaker 1: more than a couple grand off of selling this, which
Speaker 1: will mean then essentially we've lived for free and then
Speaker 1: we have a down payment when we're done. So yes,
Speaker 1: that's that's my favorite hack. Yes. Another hack that Jill
Speaker 1: has used is to live with family. So this is
Speaker 1: not obviously something for large families or um older people
Speaker 1: might be sick of their family, but if you're young
Speaker 1: and you don't have many kids or don't have any kids,
Speaker 1: you can and should be open to the possibility of
Speaker 1: living with families. So either parents or grandparents maybe helping
Speaker 1: them around the house in exchange for rent money. But yeah,
Speaker 1: it's a great way to postpone spending the money to
Speaker 1: rent or buy. Another thing that I have done and
Speaker 1: would recommend is long term house sitting. So again, an
Speaker 1: alternative to renting and to buying is if somebody is
Speaker 1: not living in their home for a season because of
Speaker 1: work or other life circumstances, and they want somebody to
Speaker 1: take care of their house or possibly pets or animals
Speaker 1: while they're a way, this is something that you could
Speaker 1: also consider. I think we mentioned this in one of
Speaker 1: our previous episodes, but I can even post a link
Speaker 1: to some websites that helped to link up people looking
Speaker 1: for house sitters as well as people who want to
Speaker 1: house sit. Certainly there are short term options, but there
Speaker 1: are also people who are looking for a year or
Speaker 1: more for people to just house it and make sure
Speaker 1: that the pipes are being used and the properties being
Speaker 1: cared for, and just keeping the house lived in. Yeah,
Speaker 1: because it is not uncommon that people have to go
Speaker 1: away for a year for a certificate for education or
Speaker 1: work or uh something that is actually super common. So
Speaker 1: and our last alternative to renting and buying is to
Speaker 1: build your own home out of earth bags. Yes, Jen,
Speaker 1: you went there. We I found an insulated earth bag
Speaker 1: house tutorial. If you're interested in building your own home
Speaker 1: out of bags filled with earth and stacking them on
Speaker 1: top of each other. To be clear, this is not
Speaker 1: something that I have done them this one. I have
Speaker 1: not built a home out of earth bags. So maybe
Speaker 1: with this instruction article that I found, maybe this is
Speaker 1: what's next for you. It's inspiring me. I believe it.
Speaker 1: I believe it. If you have built your own earth
Speaker 1: bag house, please let us know in our Facebook group
Speaker 1: Frugal Friends Community, and I will be impressed. Fantastic. Well,
Speaker 1: we hope this helps you on your journey of figuring
Speaker 1: out what's going to be best for you and whether
Speaker 1: you want to rent or buy. Just know that we
Speaker 1: we don't judge either way. Whatever is good for you,
Speaker 1: but I will encourage by within your means. Don't stretch
Speaker 1: so far that it causes overwhelming stress for you. Yeah,
Speaker 1: you should still be able to reach your other financial goals.
Speaker 1: Consider think if you are buying, consider how you can
Speaker 1: make money off of your purchase, even if it's just
Speaker 1: a garage on the property that you can rent out
Speaker 1: as storage space or whatever the case. Is just get
Speaker 1: creative with it. That's the frugal way. Yes. And last
Speaker 1: but not least, we're doing the book club thing. So
Speaker 1: it is August, it's my birth month. What what I
Speaker 1: get to celebrate more in my being born, which I
Speaker 1: really had little to do with. So thanks mom. And
Speaker 1: we're reading The Simple Path to Wealth by J. L.
Speaker 1: Collins this month for book clubs, so jump in on that. Yes,
Speaker 1: and this is a self published book, so a lot
Speaker 1: of libraries have it, but some don't. But it is
Speaker 1: essential reading for anybody that wants to learn about investing
Speaker 1: and retirement in a simple way. So if you want
Speaker 1: a free copy, you can enter to win one. Just
Speaker 1: leave us a review on iTunes or Stitcher, screenshot the
Speaker 1: review and send it to Frugal Friends Podcasts at gmail
Speaker 1: dot com and we will select one winner for every
Speaker 1: five reviews at the end of the month. You know, Jen,
Speaker 1: I was scrolling through our podcasts on iTunes and just
Speaker 1: found a really helpful review that I thought that I
Speaker 1: would share with people. Just some fantastic writing, great insight,
Speaker 1: just really helpful. It happened to be five stars and
Speaker 1: it was written by Jasill Black Vizick, and they said
Speaker 1: just a lot of letters. It's just a lot of letters,
Speaker 1: but I think they're from Russia. They love the frugal
Speaker 1: friends and they say, I am so happy to have
Speaker 1: found this awesome podcast period space based space space. It
Speaker 1: brings me motivation and laughter. Thank you to write that, Jill,
Speaker 1: Is that what you're doing this? I did not write that.
Speaker 1: Can I can I write a review on my own podcast?
Speaker 1: I haven't tried. I think so Travis wrote one, and
Speaker 1: you can you can clearly tell? Oh, you can clearly
Speaker 1: which I think I'm going to reading it on the pod.
Speaker 1: I think we will. I think I'm going to reference
Speaker 1: it in our next podcast. Anyhow, that's a helpful one
Speaker 1: that that's a potential potential book, book earning review and talk.
Speaker 1: You don't have to even type in your name. You
Speaker 1: can literally take thirty seconds to type in some letters
Speaker 1: and a few sentences, and it does help more people
Speaker 1: find the podcast and get more information like whether they
Speaker 1: should buy or rent a house. So we really do
Speaker 1: value them and if you have some time, we would
Speaker 1: love for you to submit a review. So thank you
Speaker 1: so much for listening. We will see you next week
Speaker 1: with a really good guest interview. See you next week.
Speaker 1: Welcome back, Jen, What What Frugal Friends is produced edited
Speaker 1: and mixed by Eric Syria. Oh. I do feel a
Speaker 1: little rusty, but it's it feels good to be back.
Speaker 1: What part of you it feels rusty? My mind feels
Speaker 1: good rusty. I don't know what happens to the body
Speaker 1: after giving birth, so I'm just making sure my body
Speaker 1: is okay. I did go back to CrossFit, Um, I know. Yeah,
Speaker 1: I started back and I've done two days so far,
Speaker 1: and my body is in extreme pain. Like I made
Speaker 1: a I was gonna how you're doing. Were you cleared
Speaker 1: to go back? Yes, I've been cleared for a few
Speaker 1: weeks and I've just been waiting to really dive back
Speaker 1: into those You know, Jen, we're older now. The bodies
Speaker 1: don't just bounce back like they used to. I know,
Speaker 1: I'm thirty, I'm not in my two I know. It
Speaker 1: is interesting to see my friends who give birth in
Speaker 1: their early twenties versus those who give birth in their
Speaker 1: early thirties, and what they're able to jump back into
Speaker 1: after childbirth is different. Yeah. Yeah, So I'm taking a
Speaker 1: break for the next few days to give my body
Speaker 1: a rest because it is similar the pain I feel
Speaker 1: is similar to the pain after I had a C section,
Speaker 1: is how I'm I'm having flashbacks like sitting on the
Speaker 1: toilet and like getting out of bed, like I was like,
Speaker 1: oh god, that's how That's how I felt what it was.
Speaker 1: But instead of just one area of my ad a minutes,
Speaker 1: all my muscles and all my body well. And it's
Speaker 1: not like you decided, oh good, I've been cleared, I'm
Speaker 1: going to go take walks now. You jumped into cross fit,
Speaker 1: which did the most intense version of exercise and my estimation,
Speaker 1: so you might just need to be kind to yourself
Speaker 1: and not day that. Okay, I'm gonna go back in
Speaker 1: a few days. Okay, it's expensive. I gotta get my
Speaker 1: money's worth. That's the only reason I work always because
Speaker 1: it's expensive and I have to get my money's worth.
Speaker 1: And that's what motivates me, is money. Work out motivated
Speaker 1: by money. All right, see you later.