“We rushed into buying a $730K house. Now I can’t sleep at night”

Recently I shared my five point checklist to know if you're ready to buy a house or not. Let me give you a few of them right now. Am I going to live there for 10 plus years? Have I saved a 20% down payment? Is my total monthly housing expense less than 28% of my gross income? You can stretch that a little in certain cities. And whenever I post guidelines about real estate or I point out that I make more money renting rather than owning, I get a lot of angry pushback. Some of them just say that I'm stupid and I'm terrible.

Okay.

Some of them say, well, what about retirement? What you want to rent when you retire? How are you going to pay for your housing then? And to me, this demonstrates a total lack of understanding how the numbers actually work. I want you to be equipped, knowing the numbers and also knowing money psychology when it comes to buying a house. So this week on my podcast newsletter, I'm going to respond to, to those common, usually angry messages that I get. You know, saying, 20% down, that's for boomers. I'm going to show you my responses and you can decide whether that makes sense for you or not. I send this newsletter out every Saturday. You can get it@iwt.com podcastnewsletter and it will be coming out this Saturday where I respond to common questions about buying versus renting. Again, it's free@iwt.com podcastnew newsletter we put.

The offer down in the house and Lily, I woke up the next day and actually for the two weeks before closing, I almost every night I had like panic attacks. So just, whoa. Yeah, like crazy level of anxiety. I think the, the psychological, like, burden of, of death for me. I, I know I felt it like in my body, like in a very, very real way.

We weren't at the healthiest place. On the other hand, like, he had to make a decision, financial decision. So a lot of the conversation we had was, I'm doing this for you, but do you want it?

What was your monthly payment on the place you were renting right before this?

We're paying about 1,800 per month for rent. So.

And now what are you paying?

We're paying 4150. When I put my head down my pillow at night, it's like, okay, so even if all the numbers work fine, just seems like there's this huge kind of liability of the house hanging over my head.

I kind of have like this big stir of like, oh, it's fine, like we'll be Fine. And the stress is on him because he does everything for planning and finance and all of that stuff, and I don't. So I live with peace. And he loses his sleep.

Meet Jonathan and Shalom. Jonathan's 31. Shalom is 27, and they've been married for five years. He works in tech as a program manager and. And she is a nurse, having recently.

Finished her second degree. What we're going to talk about today.

Is how they have started to disagree about money when it comes to their house. They recently bought a house and I want you to hear the way they talk about money and about things like getting a couch. Because so many of us will have the exact same conversations at some point in our lives. As always, remember that you can watch this full episode on YouTube. We which is quite entertaining to see the facial expressions and body language.

All right, let's get to it. Why'd you guys buy this house, by the way? Oh, that's a. I can't wait for this.

I'll let you speak.

They're just laughing.

They'll let me talk.

Yes.

What made us make the leap?

Yeah.

Yeah. So I think, wow, there's a lot.

Of smiles going on right now. Like, what in the hell is happening? Everybody's like looking down.

I. I was originally super against buying a house. That kind of. I agreed. Let's at least see what's out there. Kind of open minded.

You were. When we first start looking for a house, we did it as a date thing.

Okay, like, like Sunday date. Let's just go see what's around Saturdays.

You know, like, why don't we do open house and see what's like on the market and how much it is and what, what the process is. Because I don't know how buying a house. My parents don't. Don't own a place or a house. A property in the US So we started tending like open houses and that. It just went really fast. And we saw this place and then we had to buy it a week after.

The two of you were like, oh, like let's go on date night today. What do you want to do? I want to go to ice cream.

I want to go to an open house.

And then you blink your eyes and you turn tripped and you fell and.

You like handed over like $500,000 or something.

Like just the most expensive date night in history.

I think when we had the conversation. And this is like, housing is so expensive in Seattle. And this was like on the lower house market. And if we ever buy a place and this might be like the lowest price we would get for the place where like the, for the area we're in. And that was the rationale I had. If we end up having kids that we're going to need a place that's bigger than like just an apartment for freedom too. Like, we both grew up before I came to the US Or Jonathan also grew up with a big backyard and like we had a very good memory just playing outside and running around. For me, I want to be able to do that for the kids we're going to have. And I don't want to like, waste kids in a very, like, apartment, very tight area. And that's with that emotion though, like, I think we rushed into, hey, like, we need to get the house and whatever the house, like whatever we can with the budget or with the price that, you know, we can buy it now.

And then things, things go very, very fast. Like you start looking at houses and then you kind of get in negotiations and then things go like, very, very fast. The house we were looking at, someone else had offer down. So I think it kind of got like, how can we, you know, win the house? And then the, the issue is once you put your money down, put big.

Earnest payments, then what was your first bid for the house?

So our first bid was about. We originally going for like 700, so.

And what'd you end up getting it at?

So we, it didn't. We had to counter with the full, the full price full was what, 730. I don't think realize just financially and emotionally, just everything that goes into buying houses.

What do you mean? It's just, you know, you look at the Internet and everybody says you buy a house and then it prints money and then if you don't like it, you just rent it out. And that's how you create generational wealth. What are you telling me they're not telling you the full story, Jonathan?

No, and you know, I did, I did run the numbers, as it were, but yeah, I would just say that there's things that, you know, you'll look at a spreadsheet and it works out. The numbers may work, but just kind of the psychological element of being in that much debt and then how there's like fixed costs are not the same thing as, you know, your, your other money just it's required for you every single, every single month.

All of this is hilarious.

And I really like Jonathan and Shalom. So we're all having fun. One thing I do want to point out is that offhand comment she Made about, if we have kids, we're going to need a bigger place. And we grew up with a lawn. And it has so many good memories. It is no accident that when people go through life changes in America, they all say the same thing. I'd rather have a small wedding and put a down payment on a house. Or we're having kids, so we need a bigger car and a house with a yard. Do you find that interesting? Do you think that every one of us just independently came up with the exact same phrases? Do you think that other people in other countries say the same things? Or do you think there might be a series of organizations who stand to profit from you believing you need to spend hundreds of thousands of dollars at a very specific time in your life? Just remember these peculiar beliefs about money pop up in very specific circumstances over and over again. If you decide you want a house with a lawn or a certain type of car for fantastic, if you can afford it, you run the numbers and it's joyful to you, great. But do not simply slide into someone else's idea of a rich life.

What was your monthly payment on the place you were renting right before this?

Yeah, that was part of the thing that was really stressful. So we're paying. We're paying about 1800 per month for rent, so.

1800, but. And now what are you paying?

We're paying 4150, which, um, I didn't put on the plan, but next year it's going to be going up 500, and then the year after that, it's going up 500.

No, no, that. That can't be. Because everybody tells me that real estate allows you to lock in your price and you never pay more. That's what the Internet told me. And by the way, your utilities cost 400 bucks a month. Right. Let's not forget that. That's kind of a considerable jump. Right? You went from 1,800amonth in rent, which was all in. That's how much you paid.

That's.

That was it to now 4,500, plus assorted phantom costs that haven't even really been added. Let's just say, I don't know, four or five hundred bucks extra a month. Ballpark. That's a huge jump. More than double.

When I put my head down my pillow at nine, it's like, okay, so even if all the numbers work fine, just seems like there's this huge kind of liability of the house hanging over my head. You know, there's. It's just like those things like, you know, flood, there's mold. I mean, there could be a tornado hits the house. I mean, and it's kind of one of those things where. Yeah, I just. I feel that. Feel that weight.

Shalom. What happens when your head hits the pillow?

I fall asleep. Oh, no.

So interesting.

I kind of have like this big stir of, like, oh, it's fine. Like, we'll be fine. And the stress is on him because he does everything for planning and finance and all of that stuff, and I don't. So I live with peace. And he loses his sleep.

It's so interesting. I wonder if there are any patterns here. The person who just kind of lapsed into taking care of the money is the one who's consumed with worrying about it. And the one who, you know, goes to work and. And says, like, oh, I trust him. She's fallen asleep within two seconds. Any patterns here? Anybody? You don't see the pattern?

I just see. Yeah, I can see the pattern.

I think mainly in a. Probably a fear side of things. So we put. We put the offer down in the house. And Lily, I woke up the next day and actually for the two weeks before closing, I. I almost every night I had, like, panic attacks. So just.

Whoa.

Yeah. Like, crazy level of anxiety. I think it started to kind of the psychological, like, burden of debt for me. I know I felt it, like, in my body, like in a very, very real way.

We weren't at the healthiest place, both of us. Me, I got attached to the house because we toured so many houses, and this felt like it was the house. And for Jonathan, one hand, when he says no, he felt like he was not doing the right thing for me. On the other hand, like, he had to make a decision, financial decision. So a lot of the conversation we had was, I'm doing this for you, but do you want it?

This is the most American story I've ever heard in my life. Two people are just going out for coffee, having a nice walk. They stumble into a Saturday open house, and then they go, you know what? We should do this every Saturday. They do it for months. They get so tired in their ears. Meanwhile, people are chirping, saying, you need to buy a house. You're just throwing money away on rent. Meanwhile, they're looking at prices, going, how are we ever going to afford something like this? Then one of them starts going, well, what about kids? Well, we don't have kids yet. Well, one day we're going to have kids, and then we need to have a yard and a lawn for them. Then the other one starts having panic attacks. Then they start arguing, what about me? What about you? And finally they go, screw it. Let's just write a check. I'm done with this. And then seven months later, they end up looking back and going, we're paying more than double what we paid in rent. Okay, look, buying might end up being a good decision for them, but the way they made this decision is fascinating to me. It is exactly what the real estate industry wants people to do.

To live by myself after. So we got married right after graduation, so I never had to experience, even after getting a job, what it means to plan or, like, actually, like, budget. A lot of it has been done by Jonathan. And even if our income, like, our income is combined, but a lot of it is done by how we budget our life and what we do.

Kind of early on in our relationship, I was kind of the one who just had a little bit more fluency around money, a little more background around money. I Probably in the beginning relationship, just kind of. I handled things. I wouldn't say I was overly controlling, but just. That's kind of the default roles we fell into.

So what is an example of something that you previously were totally aligned on, financially speaking?

Traveling. We do a lot of trouble. We've been to a lot of different places. Italy, Mexico, Ethiopia, Sweden. Yeah, we travel quite a bit. So in those areas, we tend to agree on how much we spent and the amount of money we allocate toward those things.

What would be perhaps the most expensive trip that you have taken together?

Europe, Italy, and England.

So how did you decide how much to spend? Was that decided ahead of time or was it after the fact? Talk to me about that.

I'd say we. We kind of went in with a budget. I think we did end up exceeding it a little bit. But, yeah, we were pretty careful in how we. How we went forward with spending and so forth.

Who came up with the budget?

Jonathan did.

That was me.

So I'm gonna guess that's a trend, right?

Yes. And it's a reflection I'm actually, like, thinking about right now. We do travel a lot together, but a lot of the budgeting is put by Jonathan. And I don't even have to worry about, like, how much we're planning because he does a lot of the planning, and I kind of, like, trust he's planning, and I trust whatever happens afterwards.

So I have a question for you. You said, I don't have to worry. I noticed you used that word. Worry. Is thinking about money the same as worrying about it.

Sometimes since we moved in, there's a couple things that need to get. That needed to get done, like painting the house and, like, fixing floors and that kind of stuff. And now for me, it's like, let me furnish the house. But Jonathan has been kind of, like, putting a pause on those things and saying, like, we don't have the budget for that now and we can't do those things. And in my head, the house is empty, so we need to go and, like, actually, like, make it feel like a home.

Is it empty? Like, literally empty?

Not literally, but there are things that are. That should be there that are not. They're not there. Can I see the living room?

Okay.

All right, let's get a look here.

House tour.

So this is. How new is this house?

We moved in completely, like, last week.

Oh, wow. Okay. Pretty new. All right. And you just bought it, is that correct?

Yes. All right, so it's a little messy, but this is what it looks like right now.

All right, hold.

Hold it. Hold it right there. Don't move. So we're looking at what is this your family room?

Yes.

Beautiful living room. And show us what else are we. So you think that's missing, like, a couch?

Yeah, so, like, having a couch would be better to have a couch, but we have another couch that's by the entrance, which is right there. So there's all the paper on the floor. So. Excuse me for that.

Don't worry.

Jonathan wants that couch to move on that side, and we don't need another couch.

Ah. And is that a source of disagreement with the two of you?

Yes.

Thank you. I'm sure there's more, but I think we get the idea.

Yes.

That's cool. I like that. We just got the home tour. Thank you. This might be the first. Are we the first people to have ever seen your house?

Yeah, I think so.

We haven't had people over yet, so we're planning a housewarming party in a week or so.

Love it.

All right, maybe I'll send you an invite.

All right. Please. Me and just a few million other people who are going to see this. This is great. All right, so you move in about a week ago, and you've been talking about getting new stuff, furnishing it.

I say we should probably get a couch for the living room. And Jonathan responds, you can go ahead and respond.

Yeah, I usually kind of couch it in terms of, like, you know, trying to create a budget for it and then planning for it and distributing that amount. We put every month to Getting it. So usually I kind of for it.

I don't get upset right away, but I try to have, like, rational getting, like, I try to get rational out of him. So yes, budgeting makes sense, but same time, we just moved to a new house and like, after we do the basics, then we can save, like getting a couch, and then we can put money if we need to do anything else on the house.

So how long do you want to go before you get a couch, Jonathan?

It's a good question.

Probably.

Probably a good year. So I guess I tend to have pretty simple requirements.

So that noise was Shalom bursting into laughter. Why are you laughing?

I'm laughing because it's funny to me. Like, how can you live without a couch for a year?

This is actually pretty interesting. It's funny, but I can also see both sides. Jonathan says we should save for a couch, then buy it. Shalom is like, how long can you live without a couch?

A year.

Remember this detail.

Well, this is going to happen pretty soon, right? You're having this get together next week.

Exactly.

Oh, wow. The stakes are high. Wait, so what's going to happen right now? If you had people come over tonight, what would they do?

Will you please answer that, Jonathan?

I mean, we do have a nice backyard, so it'd probably be kind of like a long party kind of, kind of thing.

Standing.

Could be standing. Yeah. Or picnic blankets maybe.

So I can't wait to see that.

What does a house mean to you?

We live in a community. This space provides that, like, home for those people, too. Like, family comes and stays with us. Friends, like traveling, they stay with us. And having that space for me is huge versus, like, oh, it's just the two of us. And yeah, basically like a little shelter.

All right. What does house mean to you, Jonathan?

Yeah, I'd say a house. To clarify, do you mean like just renting a house, owning a house, or just house in general?

Your house?