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Financial success is driven by good savings habits—and for that we need low fixed living costs.
I spent 20 years in a house that was far less expensive than I could afford. This isn’t a strategy I recommend, because I never much liked the house. Still, it came with a huge silver lining: The modest monthly house payments allowed me to save great gobs of money.
My sense is that most folks aren’t naturally inclined to save. But even if they are, they may find it impossible to sock away a healthy sum each month if they’re hemmed in by high fixed living costs, such as mortgage or rent, car payments, property taxes, insurance premiums, student-loan payments and so on.
My advice: Think long and hard before taking on any recurring monthly or annual expense, no matter how small. Such expenses not only crimp our ability to save, but also they could cause stress, because we’ll have less financial breathing room.
Jonathan is still giving great advice. Simple an to the point too.
We always bought homes we could afford, but only if we really liked them. We spend so much time in our homes, there’s no way we would settle for less. Of course not everyone is in a position to afford the house they want. As retirees, we are in a home much larger than what 2 people need, but it is what we want. Downsizing to a smaller home to reduce expenses and upkeep would make our everyday experiences less enjoyable.
God Bless Jonathan and his wonderful Family. For sure Jonathan helped so many people. Thank you.
Except for a couple of years renting a house from a friend after a cross continent move, we’ve always had newly constructed houses to our specifications and getting exactly what we wanted. Frequently moving because of the military meant we never accumulated much equity, but that was a “price” worth paying. And with a 2 1/8% mortgage on our retirement home, life’s good.
For my wife and I, our house payment rule was that we always wanted to be able to make our payment on one income. It meant that we bought less house than we could afford, but it also meant that we never experienced the real threat of a forced sale that too many families have had to face. It also allowed us to pay ahead on our mortgage, which saved money and meant our house was paid for when we retired.