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Saving 100% Down for A Home: Part 2
By theoffer | January 26, 2010
In Part 1 of our story, I shared about our lean law school days and how my husband had found this guy named Dave Ramsey who he was all excited about. I was less-than-enthused. I mean, c’mon, we were debt-free, we were living on a budget, we were living beneath our means, and we were giving–even on a very small budget. What more could some guy on the radio really teach us about money?
I drug my feet. I made up excuses. But Jesse persisted in encouraging me to listen to Dave Ramsey. So I finally gave in and said I’d go through Financial Peace University with him. I figured it wouldn’t hurt anything. And maybe, I’d learn something new.
Boy, was I ever stubborn and proud.
After the first week of Financial Peace University, I understood why Jesse was excited about this guy! Dave really knew his stuff, he thought a lot like us, and he was a great communicator. And believe it or not, I was getting a little hooked.
As we went through the next 13 weeks of classes, I learned all sorts of stuff I realized I had no clue about when it came to finances. Things like the various pros and cons of different kinds of insurance, what exactly mutual funds are, and how to wisely prepare for retirement.
But more than the typical financial terminology, I had a complete paradigm shift when it came to money.
I’d always thought it was great to live beneath your means and it was good to give generously, but I’d never really thought extremely long-term concerning money. Nor, had I ever had a strong reason for practicing frugality other than that we had to—or else get ourselves buried beneath loads of debt.
Dave Ramsey gave us a vision. He inspired us to think big, plan ahead, and dream big dreams. Most of all, we were motivated to get our family in the best financial shape possible so that we could bless and help others by being generous givers.
When we were finished with Financial Peace University, we sat down and made some big goals. In fact, the goals were so big, they seemed impossible to us at the time. But we decided to aim for the stars. After all, we figured that even if we didn’t hit them, we’d likely make more traction than if we hadn’t aimed at all!
One of the seemingly-impossible goals we made at that time was to buy a house debt-free within five years of finishing law school. It felt so far-fetched that we didn’t even have the courage to tell anyone else about it. However, we thought that if we really scrimped and saved, we might be able to squeeze out enough extra from our budget to buy a small, very basic fixer-upper home at an incredible deal within five years.
After law school, Jesse got a good job–no six-figure income, by any means!–but it was more than enough to pay our bills, so we were elated! It was also around this time that my earnings from various work-at-home jobs started to increase substantially, as well.
I’ll be honest and tell you that there was a very real temptation to want to significantly increase our standard of living when our income went up. Hadn’t we lived on beans and rice for long enough? Hadn’t we spent enough time wearing secondhand clothes and driving old cars?
Instead, thanks to Dave’s encouragement, we decided to think long-term. Sure, we could easily blow the extra money which was coming in on nicer cars, expensive clothes, lots of restaurant meals, or extravagant purchases. But what would be the point of that?
We’d stopped worrying about impressing people a long time ago, we’d learned that money and things don’t buy happiness, and I really liked getting good deals at the grocery store and elsewhere and couldn’t bear the thought of paying full price for things.
In addition, we also considered the possibility that our income could go down significantly or we could have some major medical crisis. Wouldn’t we rather do all we could now to put ourselves in the best position financially while we had the opportunity?
So instead of going out and buying a house or even increasing our standard of living by much at all, we opted to continue our beans-and-rice budget and sock away as much of our income as we could into savings.
As our savings continued to build, we started to realize maybe our “crazy idea” of saving to pay 100% down for our first home wasn’t so crazy after all. Maybe, just maybe, if we kept living frugally, we could actually pull this off.
But then, unexpectedly, my husband was laid off from his job. All of a sudden, our dreams and plans and goals came to a screeching halt.
…To be continued
photo credit: thinkpanama
Topics: Money Saving |