Living Below Your Means
New Home Spending = Big Debt

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By Leia28
May 25, 2005

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My husband and I just moved into our dream home. We moved earlier than we planned because we wanted to take advantage of very low interest rates. Our savings weren't enough to cover the 20% down payment plus all usual expenses with buying a new home. We ended up putting 20% down, and financing some of the stuff we needed for the house.

We financed things such as an air conditioner for the house, since we all have allergies, and I also have asthma. We also financed a fence, because we have three dogs. We like to walk our dogs, but it's sometimes difficult for me to do this during the day while taking care of our two-year old son.

I am an independent consultant who has the benefit of working as much or as little as I want. I had cut down my work time quite a bit to stay home with my son. I took on some extra work to pay for our new bills.

I wish this was the end of the story. Then everything would be just fine. However, it isn't. This isn't our first home, so we thought we had considered all of our costs. We didn't.

We bought new construction. Our house was delivered three months early. We ended up needing to sell our old house quickly and for a little less money than we had hoped. Plus, moving three months earlier meant we had the new, bigger mortgage three months earlier. This cut into our savings time.

We knew we were going to need to buy some stuff, but since we didn't realize how much. For example, we now have a basement, and so we need window-well covers. I never knew window-well covers could be so expensive. Our windows are very tall, so window coverings aren't cheap.

We told ourselves that utilities would be more expensive, but we didn't quantify that. Our first heating bill in February (in the Chicago burbs) made our jaws drop. Our subdivision is installing sod in our yard this week. It came standard with the house. However, what didn't come with the price of the house is the water that it's going to take make this stuff live. I never knew that sod needed to be kept completely wet for several weeks.

With fixing up the last house and doing work on this house, no one has wanted to cook. The amount we've spent on dining out and groceries (pre-packaged foods) in the last few months is astronomical.

It's also really easy with a new house to get caught up in buying a bunch of stuff for decorating. All of a sudden, our old, ugly, hand-me down bedroom set wasn't good enough. The bedroom set we bought a few months ago was on clearance, so it was a bargain, but we still should have waited until we paid off our debt before buying it. Plus, a few throw pillows here and there and other necessities just increased our debt even more.

Two things got us back into reality and back to our generally non-materialistic selves. First, when we unpacked the computer, and I got Quicken up to date, I totaled our debt. Whoa! Could this really be right? Yikes! It is! Thankfully, our highest interest rate is 3.9%.

The second was one of the many nights last month I spent in a hotel on business. I called home and tried to speak to my son. When Daddy asked if he wanted to come to the phone, my son said no. Then with a loud voice he yelled, "Come home!!!" He doesn't usually mind when I take a trip, but over the last two months, I had literally been spending more time at a hotel than my own home. I'm not criticizing mothers who work or people who travel a lot. However, I realized that I was missing out on time with my son because I was paying the bill for "stuff."

Now, I'm back to a more leisurely work schedule. My husband and I are watching our budget and working hard to pay off our debt and build up our e-fund. (We find that doing both works our best for us.) As a bonus, when we stay within our budget, we contribute a little money to our ING decorate fund. It's a nice incentive. The downside, the major downside, is that we'll take the next 2 to 3 years paying off debt instead of putting that money into savings and retirement.

I'm not sorry that we bought our new home, I just wish we had planned better, and that we hadn't thrown out our LBYM methods for those few, crazy months.

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