Owning a home is not without its share of expected and unexpected costs and hassles. Fortunately, years of frugality primed us to approach house hunting with an eye toward avoiding unnecessary future costs. Here are some important choices we made when choosing a house that save us money every day:
1. We bought a house close to where we work.
There are many costs to consider when choosing your house location and proximity to your workplace is one of them. After experiencing the pain of a 3.5 hour daily commute, we knew that we wanted to live close to where Matt was going to work. Also, at the time of our move, we were a one-car family and by choosing to live within biking or walking distance of Matt’s work, we were able to continue our one-car lifestyle. Having one car saves us every day on insurance, gas, and maintenance. Additionally, by being so close to home, Matt never needs to buy food because he forgot to pack a lunch. Plus, me and the kids get to see him more and he doesn’t lose productive time to commuting.
2. We chose a house where we could afford to put down a 20% down payment.
In preparation for house hunting, we checked out several books from the library about buying a home, including Tips and Traps When Buying a Home (Tips & Traps) and Nolo’s Essential Guide to Buying Your First Home. We learned that if you did not put down 20%, you would have to pay an additional insurance, called PMI or Private Mortgage Insurance, until you had at least 20% equity in the home. Thankfully we were able to save aggressively for 6 months before closing on a house, add in our healthy savings account, and ask for a little help from our families to avoid this cost which can be $50-100+/month and could have added an additional $10,000 to our lifetime costs of owning a home.
3. We chose a house with a smaller footprint.
Bigger may sometimes be better, but it always costs more. Our family size is yet to be determined, but we chose a house with a modest amount of space so that we could save money on purchase price, taxes, heating, and cooling. People have suggested that we could “upgrade” in the future, but we can’t imagine why we’d want to move. Our family is in the expanding phase right now, but in another 16 years, Pete will be off to college or getting ready to move out on his own with John soon to follow. I don’t want to move for more space only to downsize once again later, losing money every time to real estate agents and closing costs.
Sometimes, not buying a house is actually the most frugal choice of them all. But once you decide to take the plunge, consider how the size, location, and price of your house will affect your bottom dollar and your way of life.