There are few things in this world that make such a screaming statement about the person you are (or want to be) other than the home you live in or the car you drive. These two high-ticket items allow you to shape the perception others have of you without having to utter a single word. For the purpose of this analysis, we’re going to focus on your starter home.
Let’s face it, your house is THE LARGEST TANGIBLE ASSET you own, so you better make it count, right?
History is a great predictor of the future; therefore, past historical behavior is a great predictor of future behavior. When it comes to tradition and purchasing real estate, Americans have a collective behavior over a standard lifetime that goes something like this…
- Get a job
- Buy a starter home
- Get a better job
- Up-size that starter home
- Downsize to a smaller home (Hint: You could’ve just stayed in your original starter home)
However, just because this is the traditional path and you could take it, you might want to think long and hard whether or not you should take it. Think for a moment about skipping #4 and #6 – now consider what that could mean for your finances over the course of your lifetime.
I’m lookin’ at you, Generation X – the generation living large in upgraded homes with little in the way of savings for retirement. Uh huh.
Starter Homes Don’t Have To Be Small
Just to be clear, the term starter home often makes people think of smaller homes and townhouses – that is not necessarily true. Size really doesn’t matter here.
Despite the size of your first home, it’s safe to assume that if you’re thinking of selling it and buying another one, you’re most definitely going to trade it in for one that sports a bigger price tag. After all, you get what you pay for, right?
Unfortunately, a bigger price tag means BETTER in the minds of most people. That is sometimes the case, but it is not a universal truth. There are many homes with reasonable price tags that can be whipped into HGTV-shape with a little elbow grease and some imagination.
Side note: If your arms aren’t broken, you can probably do a lot of repairs and upgrades on your own, effectively saving yourself a crap ton of cash. Invest the difference and you’ll be sitting on a big chunk-o-change down the road.
Related: How We Almost Committed Financial Suicide Again
Reasons You Might Want To Trade Up
Even if you’re not increasing your square footage, you certainly have valid reasons for wanting to trade up to a better house. Those reasons usually fall into one of the categories I’ve conveniently listed below.
- Your house is just too small for your ever-growing amount of crap.
- You need room for out-of-town guests – because you should definitely be buying more house so your relatives and friends have somewhere to crash when they occasionally come through town.
- You have kids or you plan to have kids and they all must have their own bedroom. Other useless rooms you require include a playroom and a home office, neither of which is necessary for most families. Just sayin’.
- Instead of updating your starter house, you want to just start over and pay more money to have a home that is already updated.
- You want to validate your successes by making a statement without uttering a word. You want the world to see where you live and know you’re a success.
Mo’ House Mo’ Problems
Trading up often means you’re increasing the footprint of your home. Beware. We’ve all heard that old saying… mo’ money means mo’ problems. The same holds true for bigger houses. A bigger house will cost you in terms of money, time, and aggravation. Besides, someone has to clean all those toilets, cut the lawn, re-surface the driveway, and on and on and on…
Related: We Made Our Dream Home A Reality
Killer Reasons To Keep Your Starter Home
…which brings us to the whole point of this article. So, pay attention!
Problem: If you’re going to up-size your starter home, you’re probably also going to downsize that “better” home at some point.
Hence, the vicious cycle of home ownership comes full circle. Buying and selling multiple homes when it’s avoidable (think: you’re buying and selling homes in the same area) is a terrible drain on financial resources.
Fortunately, there are some pretty easy alternatives.
Solution #1: Keep your starter home and remodel/upgrade it to be your ideal home.
Solution #2: If you insist on wanting a bigger/better house, just wait until you can afford THAT house and skip the starter house altogether. In essence, your better house will also be your starter house.
Here, I will counter all the reasons for trading up in the first place. If you’re on the verge of trading up, get ready to resist my Killer Reasons To Keep Your Starter Home! Here we go.
Here’s The List!
- Is your starter home really that small? Maybe you should consider home sizes across the globe and realize how fortunate you actually are. You could also consider getting rid of your crap. Ever hear of minimalism? You don’t have to go full-blown minimal, but a little minimalism never hurt anyone!
- Kids don’t need more space.
- YOU are the one who wants more space for your kids.
- Your kids just want your time.
- Bigger houses separate families.
- Kids grow up and you’re left with a big empty house.
- If your starter home isn’t updated the way you’d like it to be…update it! This is pretty easy. It is almost always less expensive to update a home than it is to buy another one.
- Try not to focus on external things to validate your successes. Instead, focus on the person you are and the person you want to be, regardless of your possessions.
- You will save massive amounts of money if you don’t do the real estate shuffle. Transaction fees alone could run into the tens of thousands of dollars, if not more.
- On top of transaction fees, there are increased insurance premiums, property taxes, maintenance costs, higher utility bills, etc.
- Time is money. The time you spend maintaining a bigger/better house means less time you can use for other things. Things like creating more income, nurturing your relationships, and spending quality time with your children. Don’t forget, those children are growing up and getting closer to moving out every single day.
- Time is fleeting.
- Time is precious.
- Don’t trade your time with loved ones for a better house to impress people you barely know.
What are your thoughts on starter home ownership? Is it worth up-sizing your starter home just to downsize it again later in life? Give us your thoughts in the comments below!