Monday, September 26, 2022

Money Monday- Long Hauler

   


     Not really happy with this post, as I don't know if I captured what's running through my head. It's a bit about real and imagined buyers remorse, but not getting panicky about it. There's no doubt certain purchases become difficult to return or get rid of, and certainly possible not get out what you put into the purchase.  By return, I mean any form of moving on from said item. It could be simple- the what was I thinking hat or distressed blue jeans that look like I tried too hard to look youthful. How many of us have clothing items with tags still on because we had remorse after said purchase and either no return option or realization until too late? Or the simple resell of an item after my own need has been satisfied. My older children's crib and double stroller both were expensive and I got pennies per dollar spent, but they did their job, so selling cheaply was ok.

     I'm more talking those big ticket items that are long haulers. Once committed, they're in your life for the unforeseeable feature. Houses, cars, college tuition- particularly if it came with a student loan, and pets. What if you fear you've made a mistake? Without losing substantial funds or emotional cost, these aren't returnable or exchangeable. We've been there, or thought we were there. My daughter might feel she's there. House, pet, car, life. But really, unless a person truly was mislead, or the purchase, terms, or impact was misrepresented, I think the fear is normal, and probably good. It keeps me grounded in priorities, and not frivolous spending elsewhere. It also helps call attention to where we might need better or different help and advice going forward to make the purchase really work. 

     Take houses for instance. In the early 2000's housing bubble, misrepresentation on what a borrower could afford was rampant. Being honest for both inflated values and above a person's means crippled the economy. The ripples are showing still now and the past year's bubble has been a reminder. Today, I think the approval and vetting process helps avoid this to an extent. Investing in a private housing inspection is another bit of insurance. Still, when that first pipe bursts, or the furnace won't fire up in the first bitter cold day of winter, the fear kicks in again. It also might be an adjustment to new community, neighbors, shopping, and recreation options. Starting again, even if just a little bit farther away, is hard. Also, if used to putting a large amount aside into savings and not worrying about fun money spending, home ownership can make a person feel house poor, even though over time it's a solid financial move. 

     Here's my take. It's scary to commit years or even decades to a financial obligation, but consider the alternatives. Everyone needs to live somewhere, so a purchased home with a mortgage, in a safe neighborhood, that can be made your own may be as good a place as any, if an emergency savings is in place. The being beholden to your own means and opportunity, not your landlord, is powerful. Worst case scenario, your job takes you elsewhere or you outgrow and have to sell and buy again, which has new costs, of course, but you can learn from your first experience as a home owner. As for a car, I'm not a fan of auto debt, but when you absolutely rely on a trustworthy vehicle for your livelihood, a new to you car, with payments and under warranty might be the best option. Pets? They become family, and family is not always easy, but usually is rewarding. 

     I guess I'm thinking a lot on long haul purchases both because of my kids and how close we are to retirement. I feel we need to be smart, but not feel debilitated by any purchase or acquisition. What's the scariest purchase you ever made and were you glad you did? Any major regrets?

29 comments:

  1. Buyers remorse is very real. I felt it when I purchased a new to me car after my divorce in 2000. But we used that car for over ten years, so it was a very good investment at the time. But as they say hindsight is 20/20. 😊

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    1. That's what is scary. We don't get to look ahead 5, 10, etc. year's.

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  2. I can't really think of any purchases that I was scared or regretful of except maybe our current living room furniture. I like a pop of bold colors. Our previous couch and chair was a gorgeous red. After 20 years it needed replaced. I agreed to deep gray and I honestly don't love it.

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    1. At least you can add color pops with pillows and accents.

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  3. Buying my first house with a partner, that I quick- claimed to him, after realizing this was a bad relationship and a couple of bad decisions. Ended up buying a townhouse (qualified for a larger unit but opted to take one of the smaller units, which I felt more comfortable with regarding monthly mortgage etc. - no regrets with that part of the decision) at 10% interest! Desperate times call for desperate measures. I did refinance a few years later (after getting married) and got much better interest rate, making almost complete payoff, before selling and moving to our new location in 2016. There were many struggles, including a truck payment that I brought with me when buying the townhouse and a loss of employment. (thank goodness I still had some savings to tie me over) Left behind a dog because I was afraid he would bark all day long while I was at work. Not a good situation with very close neighbors. I did bring my 2 cats though and glad of their company. It was a scary time for me but a new job introduced me to my, now husband, and many years later, we are mortgage free. I've made mistakes, we've made mistakes, but we fixed them ourselves without asking for money or help from anyone else. Sounds a bit prideful, in a way, because I now realize asking for help isn't a weakness. As I've gotten older, I've needed to ask for help and it's not always an easy thing to do or to accept. Pride can be a tough emotion to work around. As a whole, lessons learned and no actual regret because it all lead to where I (we) are now and I'm okay with that. Ranee

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    1. It's good to be able to look back and say, yes, mistakes made, but I learned. I agree needing and accepting help is not anything to feel ashamed. That's human.

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  4. We bought our current house, and it was the very, very edge of what we could afford. I was pretty nervous about it. It turned out to be a great decision, and while there are many quirks of the house I don't enjoy (we only have one workable shower, amongst many other things), we have since paid it off, due to a variety of positive financial changes. I'm so grateful we are not still renting, trying to enter the market. The housing market has slowed down, but is still up substantially since we bought, and interest rates are much higher.

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    1. I think my daughter will end up being so happy she made the decision to buy. Interest rates are climbing as is rent. She just had an issue with circuit breaker. She had to buy a dehumidifier. Things are t perfect, but she's got no one telling her how quietly she needs to walk, or hearing neighbors above at 3:00 AM.

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  5. A common feelings. I find out it is better to make a decision and see it as an experiment, and try not to see it as trapped per se. Making a decision for me is better often than the avoidance of making that decision.

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    1. I guess everything is an experiment. We went out in a limb for our second house. We're still there 31 years later.

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  6. I am currently in a car from h… situation! I’m finally thinking I will sell it at whatever price with full disclosure and be out several thousand dollars. About 7 months ago bought a 2007 car I always wanted, (had the same one I loved but was totaled a couple of years ago. Totally misrepresented in the Facebook sale (at title transfer not a pro party but a LLC. He had the cash already. Red light lit up 45 miles out!!!! I have put in 2,500 replaced most big things but three garages cannot figure out a gas cap/line leak (new cap and 400.0 later) seems to be the last issue but still broke ugh!!!!!! Drives great but check engine light on and in this car that cuts the cruise which I need. So much regret. Ha! But I reassure myself it’s money not my family etc. but so much anxiety.

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    1. Cars are often a necessary evil! I'd love someday to be a one car couple. I wish you less stress from your car.

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  7. When we bought this house (the one I bought my ex out of when we divorced) I remember worrying quite a bit. Oh I knew we could afford it but my husband's spending was all over the place and I had loads of "what if" moments. Still, it all worked out in the end and sometimes I think you just have to plow ahead!

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    1. My daughter is afraid she rushed. Well she started looking March 2021. She looked at hundreds on line, and 2/2 dozen in person. She needed to make a decision and I think she'll be glad she did.

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    2. I think this is normal for such a big purchase on her own. Especially if something breaks etc. but she will have a moment in the future where that house will feel like her “home” and the independence and freedom of having her own place will become worth it to her!

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    3. The what we think is minor is going to feel so much more monumental to her, both because she's a new home owner and just one salary.

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  8. I liked reading through your thought processes around big ticket items, Sam. It's been so long since we did one of these, so my personal experiences are that I hopefully won't have to go through a new home or car again for a while!

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    1. We'll be looking to downsize within 6 years, or at least down size stairs. Our worry is not the home but the where.

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    2. I have to downsize sometime but am terrified! I’m on my own, have way too much stuff, ? Where/what to buy? But hardest is my house needs work/updates I think to sell at a better price. Scary! Jre

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    3. Getting a certain price too is important for relocating in retirement years. Likely we won't buy a less expensive house, just one better for retirees. Ours is 100% meant for a family.

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  9. I don’t love our house. It was supposed to just be a starter but we never left. It’s a great school district and the taxes are low but I have no attachment to it. My son has said he would like to buy it if we decide to move in the future, and it would be perfect for him. It’s also five minutes away from his job. Getting my daughter into college and everything that went with that was incredibly scary to me and all I can do is hope that her degree will be worth it. I have faith in her. She’s taking multiple classes that are mostly sophomores and juniors and is on pace to graduate a semester early. Still makes my tummy a little twisty though. JoAnn

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    1. It's scary how much college costs, and what obligation so many students have. I'm sure your daughter will do you proud. I didn't think our would be our forever house, we'll technically not, but thought we'd have upgraded when our son was in middle school. That was at the height of the housing bubble so needless to say, we're glad we stayed out.

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  10. When I bought my current apartment, I was overwhelmed by the debt I had taken on but, I got very lucky and paid it in full within a year. (Back then mortgages were not a thing in this country). I walked in my apartment on the day everything was paid off and took a deep breath. It was a risky purchase which turned out to be a great investment. Now that I am retired, I do not want to make a big purchase anymore. My car is a late 2017 with only 44,000 miles on it. I probably will be able to use it for 10 more years and I will be 66 by then. So, I see a new car purchase on the horizon but, it is still too far away to worry about.

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    1. You did well and retired so young. We're the same age!

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    2. Well, I never married and had kids. That saved me a ton of money although, it is not the right choice for everybody else. I do admire your wonderful family. I am sure it is worth postponing retirement for good reason.

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    3. Some days, don't we all wonder about different paths? Hopefully at 62 I'll feel comfortable financially retiring.

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  11. Our last house was a major regret. While I'm glad DH and I had no need to climb stairs, we were there less than 3 months when I started feeling like we were on top of one another. BIG regret, but, hopefully, the sale closes as planned in October. As for college, as long as my kids are studying something they love, and performing well academically, I will never, ever regret the expense. (I believe in education for the sake of an education, not to exchange for currency on the job market...but I shall spare you my pontifications on that!) One thing that I cannot bear, though, is chronic indecision. I don't understand the fear motivating it, I guess.

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    1. If college didn't come with 15-20 year financial handcuffs, I might feel similar. My kids were fortunate to not need to borrow for their undergrads. Their post secondary, another story. It sounds like your current house is the one that will work for you. I'm glad.

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  12. We bought a house when we were 21yo. Back then one could assume a mortgage. The interest rate was a mere 10% (going was 19%). The payment though? 55% of our take-home income. By age 49 we had 2 paid off homes and zero debt all because of that gutsy move. Learning $$ management is key in this life!

    BEST stupid thing we ever did. Our sellers were just a few years older than we were so there were no questions asked about income, ability to pay etc. AND, they were responsible for the mortgage for 5y after we assumed and I was certain they had no idea (I have always read the fine print).

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