New foundations - finances

When you're young, you think you know it all.  Yes, I admit it. You are going along with what culture is doing - what you're supposed to do.  Guilty.  Guilty.  Guilty.  But the great thing about life is that you can change.  You can step back and look at how you've been doing things and ask why.  Admittedly, not everyone wants to.  Some people have perfectly fine reasons for why they are doing things the way they are.  We realized our reasons weren't really that good.  Thank God.

I firmly believe people are put in our lives for a reason.  We learn from them, good and bad.  We learn about others and about ourselves.  In Maryland we became friends with some people we were politically aligned with.  One of them was a man we'll call Mark.  He and his wife are closer in age to my parents than to us, but we still meshed well.  We respected their opinion and when we made our decision to move, we asked them to dinner to discuss it with them. 

That night changed our lives. 

We told them our plan.  We were done with Maryland.  We were going to head west.  We would just rent out our properties in Maryland and manage it somehow.  We knew we were supposed to move, we just had to figure out how to make the details work.  We were drowning where we were and had no idea how an advanced degree and another child would be possible there.  It was looking like we would have to shell out at least $1000/month to cover the difference between the mortgage payment and rent we could get for our house, but what other option did we have?

Mark asked us "Why don't you just sell it."

"Well.....it would have to be a short sale."

 "Yes, but if they agree to it, what is the problem?"

 "Well......we signed a contract.  We promised to pay.  I just don't feel comfortable with that."

"Yes, but it is done in business every day.  Your circumstances have changed, so you can see if they are willing to renegotiate your contract.  They can always say no."

That very moment changed everything.  The reality is, most of us approach things on an emotional level, yet that is not how the corporate world around us is operating.  We were not approaching it from the perspective that it simply was not a feasible contract anymore.  It's business.  That is how they are operating yet not how we were. 

So we asked if they would renegotiate the contract.  And they did.  And our foundation was changed forever.  In addition to the house being sold, we brought a chunk of money to the table and we all agreed to settle the debt.  The transaction worked out for all and we started our next phase with a completely different outlook on finances.

 Why do we go into massive amounts of debt to feel that we have the "American Dream" of home ownership?  The reality is, there are lots of expenses that come with that "dream".  The reality is, debt is a burden.  The reality is, if you have debt, you are not free.  I can almost guarantee the ones that have been selling this dream are also the ones that have convinced the government to make your loan interest tax deductible, you know, to make getting into the massive debt sound like an even better idea. Did you know credit card interest used to be tax deductible?  How has that worked out for everyone?

We've embarked on a whole new life because we see everything with different eyes now. We can now move where ever and whenever we want.  We bought into the idea that you had to buy when rates were low and your home would appreciate and blah, blah, blah. Um, our house sold for more than $100k less than what we bought it for (with a fixed rate loan) five years earlier.  We were young professionals and were supposed to buy a house (before having kids, of course)......but were then stuck when our life goals changed and property taxes continued to go up and home values crashed around us.  It was our fault.  We own it.  There was no one to blame but ourselves.  So now we are doing it differently.

For now, we rent. Do I miss being able to make our home "ours" with personalized paint colors?  Of course, but is that really important?  Life has been considerably cheaper as a renter.  I don't worry about our furniture or decor being "just right" because who knows where we'll end up - so we use what we have.  Imagine that.  I'm much more content to have extra money in savings than to have an entertainment center that looks "just right" in our living room. We accumulate far less junk and have been getting rid of things, because who wants to move all that stuff another time?  Oh, the kitchen faucet isn't working?  The landlord gets to take care of that.  We still keep a nice house and do any repairs where we can (with prior landlord approval and reimbursement, of course) because we are decent people and want to live in nice conditions, but there is a very nice level of comfort when you know that if the roof needs to be replaced, it isn't coming out of our savings.

 Do I hope to own a home again someday?  Honestly, yes.  But there will be a huge difference.  Either we will pay for it all in cash, or you better believe that loan will be minimal and that land is going to be capable of contributing to our family through either food or income and that is just what it will do.  There are no free rides.  Yes, I like to feel all warm and squishy inside, but I like to be free of the shackles of debt even more.  We've also basically gotten out of the stock market, except for some retirement stuff that isn't as easy to move around.  We just don't trust it.  Easy come, easy go.  Do I really trust those people/companies, that I don't really know, to have my best interests in mind?   Nah.  At this point it is pretty clear that it is all a game where those in power are picking the winners and losers anyways.  We decided to take our ball and go home.  We're not playing that game anymore.  And you know what?  It feels so much better. (This is where you start thinking we are conspiracy kooks, right?)

We have used this new foundation to rebuild our savings.  Aside from some unforeseen student loan debt, we are doing well.  The plan from here is, once Hubs is done with his degree, to have him practice in a health care shortage area to get that debt forgiven.  Nice part is, almost all of this state, except one or two counties, is considered a health care shortage area. Yup, he'll basically have to be someone's b*tch for three years because he owes them.  That's what debt is - "something, typically money, that is owed or due."

We are at a point that we really prefer not to owe anyone anything.  We would rather be free to succeed (or fail) on our own.