Pattie Lovett-Reid: Feeling house poor? Don’t panic
Relax – your home may feel like a money pit, but it’s likely not as bad as you think.
The majority of Canadian millennials (61 per cent) feel anxious about buying property – so much so that shared financial (39 per cent) or property (33 per cent) goals are more important than looks when considering a potential future partner, according to a new survey out by HSBC.
Homeownership is not for the faint of heart, and once you scrape together a down payment, for many, the anxiety begins after the purchase. The romance in a relationship can be challenged and pushed to the limit when faced with believing you are house poor. Sure you have an asset and your balance sheet may look impressive, but cutting back on your social life, delaying major expenditures like cars – and possibly delaying have a child – can take a toll.
People will often say: ‘We’ll give up everything to buy this house, but giving up everything gets really boring very fast.’ But sometimes it seems worse than it is.
It is not surprising that over half of millennials feel overwhelmed about buying property compared to only one in five boomers polled for the HSBC survey.
There are applications, mortgage negotiations, land surveys, fees and contracts – and then once the deal is done, what if the property has financial issues you didn’t anticipate such as poor drainage, landscaping that requires immediate attention, and issues overlooked during an inspection.
The tension mounts and anxiety can set in. Before you decide to throw in the towel and feel moving is your only option, consider the following.
- Breathe. Homeownership is never easy and it takes adjusting. Sadly, I’ve met very few first-time homebuyers who are flush with cash.
- You don’t need to be saving for retirement today. You are making your mortgage payments, have a budget, and shared vision – stay the course.
- Consider a side hustle to bring in a little discretionary income.
- Turn a passion into an income generator. For example, you like spinning, and pay to go to class instead become a spin instructor and get paid to exercise.
You may look like the smartest kid on the block in the long run when you buy a home for tomorrow – today. But expect there to be financial pain that you will get through.
Life isn’t linear and today’s millennials don’t have to follow the path of their parents.
Consider buying second hand and never say no to a freebies. Many buy too much stuff needlessly while many keep their belongings in terrific shape.
Give yourself a little wiggle room for emergencies and know that family is there for you should you need them.
The point is, don’t let unnecessary fear overwhelm you when you really are better off than you think you are. Know your numbers, create a budget and stick to it, share your goals and know how you are feeling is really no different than the generations before you.
And remember, you aren’t house poor if you are paying your bills on time, have food on the table and a little tucked away for an emergency.