Keeping Up with the Joneses
Throughout my life, my parents have warned me over and over again: Do not try to “keep up” with anyone else. Easier said than done, I know. Through their work in buying, selling, and building real estate, they watched countless families “upgrade” their homes to get something bigger, better, and almost always more expensive. They have watched customers stretch their budget as far as it would go, and they always reminded me to avoid falling into the same trap.
Sure enough, the minute we put our house on the market, we started looking at homes and condos at the top of our “new” price range. Since we are shopping in the city, finding more homes at a higher price was really, really easy and really, really tempting. While searching, we found ourselves asking, “What if we just go a little higher?”
What happened to the savvy, conservative, money-conscious couple who wanted to maintain or reduce their spending whenever possible, dying to pay off their student loans?
In a matter of minutes, we transformed into a couple of yuppies, complete with Ray Bans, Sperrys, and eyes glued to Zillow, looking to buy the best condo in the best neighborhood in the city. Why? Do we need to be in the best condo in the best neighborhood? Do we need to be near good schools? Do we need a roof deck?
We snapped back into reality when we realized that, instead of paying off our student and car loans, the money we would make from our home sale would go to the next house’s down payment. That certainly wasn’t the plan.
We reigned in our excitement in and went back to our initial goal: How do we pay off our debt, continue to maintain or reduce our expenses, and retire as soon as possible?
For the same reason that I’ll be driving my perfectly reasonable Nissan Rogue for the next few years, we will be moving into an affordable (and beautiful) home that won’t max our budget.
It’s not about impressing the neighbors with fancy real estate—it’s about impressing them when we retire before middle age hits.