Am I Being Frugal Enough with my Housing Choices?

Note: This post was originally written and meant to be posted around closing on the condo, so that should explain any references to a condo or related numbers.

My monthly HOA dues plus my property taxes per month add up to about $700. That is almost as much as some as my friends pay in rent. I know some friends who are splitting a 2 bedroom apartment for $1,000 per month TOTAL, while I was paying about $1,300 (now $1,550) for a 1 bedroom apartment. When I told them how much the HOA dues on my condo were going to be, they thought I was crazy because that was pretty much how much each of them was paying for rent.

This, my friends, is lifestyle inflation on my part. My friends make a comparable income to me, but they are each spending about 1/4 on housing in comparison to what I will be spending after I move to the condo or about 1/3 right now.

When I first moved to start this job, my original budget for a 1 bedroom apartment was around or under $1,000 per month. I didn’t really want a studio (too small) and it turned out that I didn’t want to live anywhere that I could find a 1 bedroom apartment that cheap. (I wouldn’t want to live where my friends are splitting a 2 bedroom apartment for $1,000 per month total either.)

I realized that I could afford a bit more than $1,000 per month and being happy in my home is incredibly important, so I rationalized anything past the $1,000 marker as needing to make me happier. 1 bedroom over a studio? Yes. Laundry in the apartment over in the building’s basement? Yes. A den/nook area over a plain old, rectangular 1 bedroom layout? Yes. I ended up paying about $1,300 per month and sure, it hurt a bit at first, but the place has made me happy and that’s what matters when I can afford it. I spent money on things that made me happier, which is the perfect usage of money.

I used similar logic in picking the condo I would eventually buy. Sure, I could spend only $500 per month on housing, but would that make me as happy as the 2 bedroom condo will? I can’t say for sure, but I don’t think so (at least not in the city I am in now). Sure, I could save an extra $1,300 per month if I was only spending $500 on housing, but I’m already investing $25,000+ for the year for retirement, saving for vacations, replacing my car in 2020, planning on making some mortgage pre-payments and saving for a down payment on a house. Balance is important and I think I’m doing okay at it. So long as the more expensive condo still gives me some breathing room in my monthly cash flow and it makes me happier, it’s a fine choice for me. Personal finance isn’t really full of single “right” decisions – there are many “right” decisions and you need to weigh the options and try to pick one.

Readers, how have you dealt with lifestyle inflation happening for you faster than your friends?

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11 thoughts on “Am I Being Frugal Enough with my Housing Choices?

  1. I think I face a situation where our lifestyle inflation isn’t happening as fast as our friends. When we buy a house, it might go up a bit but we are going to have a basement suite and rent it out so I don’t think it’s going to be too crazy. I’m probably deluded thinking like that.

  2. I don’t think our lifestyle has ever inflated faster than our friends (that grad school thing really took a hit on our spending in our 20s). We’ve just had different priorities or different opportunities. We tend to save more than most of them, at least as a percentage of our income if not in absolute terms.

    • Different priorities and different opportunities is a very good way of phrasing it – thank you.

      “that grad school thing” sounds exactly like something I would say :)

  3. I am amazed how geography changes everything. I live outside (but not in) a resort/popular tourist location, and my monthly mortgage (PITI) and HOA for my house (3 bedroom, detached) is nearly $1G. After living in an apartment during graduate school, there is no way you I can ever return to living with neighbors that close (either above or to the side).

    • The prices here in areas I would want to live in for even a 1 bedroom condo are ridiculous. I could quite easily end up with monthly PITI+HOA costs of over $2,500, but I’ve decided I would rather spend more time saving and do a larger down payment to keep my monthly costs down.

      It is looking more and more like the price range on what I want is $300k-450k, which is insane. Houses really aren’t that much more expensive…

      Condos here tend to have better sound-proofing quality than apartments. I’m paying about $1,680 right now including parking to rent a 1+den condo-apartment. That’s more than your mortgage on a 3 bedroom house, wow :/

    • I hear you on neighbors being too close – one of my condo requirements is that it be a corner unit and that the master bedroom doesn’t share any walls with another unit. And when I was considering townhouses, one of my requirements was that it be an end unit for the same reason.

  4. When I was in graduate school, I would teach all-day on Saturdays at a community college for (1) more teaching experience and (2) money. To arrive there before my 8.30 AM class, I had to get up at 4 to take public transportation (train, subway and bus). My upstairs neighbor would host every Friday night what I wanted to call “Dance Party USA.” Thank goodness my partner introduced me to ear plugs.

    • Holy crap, that sounds like when I worked retail. When I had a 7 am shift, I had to get up at 4 am, but my roommate would come home from campus at 2 am and make cookies. UGH. I’m so glad I’m past that stage now. I feel you on the Dance Party USA – I lived in a few basement suites in college. I never thought of ear plugs though!

  5. I’ve also been in a spot where my lifestyle inflation is not happening as fast as my friends. Now that I’m a little older, we are in the middle of our friends. I try to focus on our own priorities and not worry too much about everyone else but sometimes that is easier said than done.

    If you can afford it and you value having a nice place to live, I say go for it!

    • Yup! The first wave of college friends are getting married now, which feels weird. I have friends who are starting to have kids too, but that is just not my priority right now. I’m not concerned about it so much, but my female friends who are in long-term relationships and aren’t married seem more concerned by everyone else getting engaged.

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