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Can a Home Become a Prison?

Nice Home + BMW

We do not necessarily think of our homes as a prison, but can your home actually become a financial prison for you?  Interestingly our culture has gotten to the point where we expect certain things.  In the 1950s the average size home for a family was 900 square feet.

These days the average size home has risen to over 2,500 square feet in size.  We have incredibly high expectations when it comes to our lifestyle and possessions.

  1. We need more than 1 bathroom, in fact a lot of people want 3+ bathrooms.
  2. We need a bedroom for every child and we need a guest room for the 2-3 times per year someone comes to stay with us (Airbnb and hotels are made for guests).
  3. We need an office and sometimes two offices.
  4. We need a 2 car garage.
  5. We need space to store all our stuff so a big basement or garage space is necessary (heaven forbid we get rid of things we do not use – often).

Some people are beginning to break away from this paradigm by simplifying their lives.  See the video below for some examples and more information.

What has happened and why are some of us changing the way we think?  People are saying the economy has come back and unemployment is not what it was during the recession.  Unfortunately salaries are also down overall for normal middle class workers.  Since salaries are either stagnant or down, that must mean other expenses are down right?

Unfortunately other expenses are not down.  Taxes continue to outpace the rate of pay for employees and our government has no idea how to stop spending.  We live in Maine where there is almost no bond issues that does not get passed and most town officials are happy to vote to build new municipal buildings with tax payer money.  Seeing most state budget shortfalls along with tax rates, I am guessing this is not isolated to just one state.

The good news is fuel costs are down, which has helped the commuting budgets.  🙂

This article talks about how most households are one paycheck from the street.  Foreclosures take time, but once you get behind the debt tends to pile up and things get very unforgiving quickly.  Our homes tend to be our greatest expense (even if your home is paid off).

Homes come with taxes, repairs, utility costs, payments, interest, and insurance costs.  The costs add up very quickly and can be overwhelming for any family who suffers a job loss or family emergency.  Home expenses can be a prison for you and your family, trapping you in jobs or locations you may not enjoy.

Home ownership is a wonderful thing and having your dream home is also great.  There is no guarantee or formula for buying the right house, but there are a few good general guidelines.

  1. Your house expense should not be more than 25% of your income.
  2. You should get a 15 year fixed mortgage (if you have to get a mortgage).
  3. Don’t buy more house than you really need and get it inspected by a very good home inspector.  (You was as few surprises after purchase as possible for home expenses such as roof, furnace, basement, etc…)
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