I am a frugal person. I always have been, and I always will be. I cannot tell you the last time I paid retail for something, and I write those words with pride. I mean, heck, Frugal is part of my URL!
Sometimes, though, being frugal is as much a weak spot as it is a point of pride for me.
Take real estate, for example. I found a condo I loved back when I first started looking at buying property six months ago or so. There was a problem, though, and that was that the building had limited funding available. For whatever reason, building a condo building from scratch is fraught with problems (not opportunities). Your building can’t be warrantable until it’s 50 percent occupied, so there was no way I was going to be one of the first to buy. Heck, I’ve read the home buying tips to save you thousands!
Fast Forward to Last Monday
My friend (who reads Frugal Portland, and saw the post where I lamented my first foray into real estate and adjustable-rate mortgages) emailed me. The condo I’d written about was on the market again, and this time it was ready for FHA financing. It was warrantable. There were only two empty units, was I interested in putting in an offer?
I barely hesitated – this condo is absolutely gorgeous. Hardwood floors, stainless steel appliances, a gas range, two bedrooms, heck, two bathrooms. A not-super-ideal location, but very good for my price range.
Real estate deals happen very quickly (or very slowly, usually the opposite of what you want), and now, all of a sudden, my condo is pending. I am about to hand over a check for “earnest money” (which is a funny term to me, since every last dollar of my money is earnest!) and then we will go through the paperwork, and one thing will lead to another, and before Memorial Day, I’ll have keys to my forever home.
Or at least my “for the next 10-15 years” home.
My parents should be sainted, since they are gifting me the down payment. I fully intend to pay them back one day, but that’s neither here nor there, and legally speaking, the down payment is a gift. My parents really are the best.
Justifying the Cost
I keep telling myself that the mortgage (plus taxes and insurance and HOA) is less than I’d pay to rent a two-bedroom place in a similar neighborhood. I keep telling myself that if I’m going to pay this much money anyway, why not pay toward my own net worth instead of someone else’s? I keep telling myself that the people who have the highest net worths are the people who own property.
And yet, it’s this frugal mentality that is keeping me awake.
It wasn’t so long ago that I had debts that were higher than my annual salary. These weren’t even “good” debts, either. They were the kind that charged a heck of a lot more than 3.5% interest and they were largely retail debts. But I clawed and scrabbled my way out of those in an unbelievably short period of time, and now, merely $1500 from saying sayanara once and for all to all of my debts, I’m on the precipice of increasing my debts for 30 or so years.
It’s painful to part with all of my savings.
It doesn’t feel frugal, this buying a condo. And I think the reason it doesn’t is mostly due to the generosity of my parents. It would take me four or five years to save up 20% for a down payment, even with my aggressive savings strategies that have gotten me to where I am today.
Furthermore, it doesn’t feel like I’ve been “on the other side” of debt long enough to avoid worrying about backsliding. I think the thing that scares me is that money will be tight for a while, and the last time money was tight, I leaned too heavily on my credit cards, hopeful that my future self would figure out something I didn’t yet know, even when that future self lived less than two months away.
William from Drop Dead Money tells us that we are either debtors or savers/investors. I’m worried that jumping into a mortgage keeps me in the debtor mentality much more than I’d really like.
However! I do have to live somewhere, and I do have to move at the end of next month anyway, because my sister is moving to Portland, and she is going to live with me for six months before she gets married at the end of this year. We need a two-bedroom place anyway, and as much as I think it might be kind of fun to live in a super urban tiny studio, it’s definitely better to have an additional room.
I can’t shake the nerves, though, no matter what I tell myself.
Is this normal? When you bought your first place, were you 100% confident or were you also a ball of nerves?