It’s the American dream: barbecues on the 4th of July, married with two kids, owning your home. While that may sound silly, I believe that expectation was ingrained in us all when we were kids, including the piece about owning a home. We grow up understanding that the natural progression in life is to go to college, start a career, get married and then plunk some money down for the home of our dreams.
I’ve been there and done that — and, to be honest, I’m happy not owning a home anymore.
You Fix It
In my first year of home ownership, I was a ripe 24 years old and had no idea how expensive it was to fix anything. To my dismay, I wound up having to replace the entire piping in my house, all the way out to the curb. That meant holes in the walls, lots of concrete broken apart and a price tag for it all somewhere around $25,000. Honestly, I don’t know many 24-year-olds sitting on a spare $25,000. It was, to be frank, financially devastating.
About seven years ago, I decided to sell my house when I went through a divorce, and it was one of the best decisions I ever made. Now, when I have a repair, or something breaks down, I call the landlord and don’t have to sweat the costs like I did when I owned my home.
More on the Cost to Own a Home: Renting vs. Owning a Home: The Cost in Each State
What About the Deduction?
As a certified financial planner professional, I’ll be one of the first to admit that the mortgage interest deduction can be significant when it comes reducing taxes. With the new tax law, that deduction has lost a bit of steam, but for most people, owning a home still makes a lot of sense. Yes, it was hard to walk away from this powerful deduction, but the costs of keeping and maintaining my house were too great for the benefits of the mortgage interest deduction to make sense.
If you’re at a crossroads yourself about owning or not owning a home, it’s always a good idea to meet with your CPA and a financial planner to understand the numbers behind which decision makes sense with your finances.
It’s All About Freedom
I used to frown on renting and had been known to utter, “But you’re throwing your money away on rent.” Now, renting offers me a great deal of freedom. I’ve moved three times since I sold my house and was able to live right on the beach, fulfilling a lifelong dream. I like knowing that I can walk away from where I live at any moment (of course, as my lease allows me to). When I was younger, I loved the idea of having my place, a landing spot, but now I enjoy having options and welcome the sense of adventure that renting brings.
Owning a house isn’t for everyone, and what once worked for you might no longer be the right fit. I’m a big fan of advising people to figure out what works best for their individual lifestyle, financial goals and bank account. The American dream might be to own a home — but that doesn’t mean it has to be your dream.
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