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?