How to know when you’re ready to buy a house

Picture of house
Home is where the wallet is.

Don’t do what we did.

I have mixed feelings about home ownership. For one, I believe it is good to own a home, and more importantly, to own it free and clear with no mortgage. As you get older and head toward retirement, having a mortgage is the last thing you need. It’s best to have a home that is totally paid off, with the only fees due are taxes, insurance, and maintenance.

It’s great to have a place to call “home.” It’s yours. You can do with it what you want. Everybody knows, “that’s where the Grubers live.” Homeownership means you have bought a stake in the community. You’re all in.

Unfortunately, our first experience in homeownership wasn’t the greatest. Here’s why.

In 2009, things were getting cramped in the little duplex we were renting. Our second daughter was born in June of that year, and we were getting “the itch” to move up in space and to finally put down some sort of roots.

In 2010, we purchased a house. The payment was just a little more than our rent, and we knew we could “afford” it. With five percent down and an FHA loan, we were off to the races.

It felt good to not be “throwing our money away” on rent anymore. Now our money was going to an asset. Woo hoo! The house wasn’t anything special — it was a two-bedroom, one-and-a-half bath townhouse with a basement and a one-car garage. But it was ours, we had a yard for the kids to play in, and we looked at it as our starter home.

Things were just fine the first year. Oh sure, we had to replace the microwave and the dishwasher, but they were old and needed to go anyway. We put in these beautiful, hardwood floors that I loved (Amy didn’t), which I knew would help the resale value when we were ready to move on.

Our mistake was twofold. One, we shouldn’t have bought a home with other debt. We had credit cards, a van payment, and student loans. But hey, we could “afford” it. Everything was going to be OK, right? Second, we didn’t have a good emergency fund, which meant that when crisis would strike, it would end up going on the credit card.

And crisis did strike.

In early 2011, a tree root from the neighbor’s tree broke through our sewer line. In 2013, a pinhole-sized leak from the water line that went to the ice maker on the refrigerator sprung while we were gone, causing damage to the hardwood flooring. The flooring was a total loss. Of course, there was painting to be done to the exterior, because two really hot summers absolutely destroyed the paint. That led to having to replace some siding, because without a good paint job the rains that eventually came did a number on the siding leading to the front door of our home. I even replaced the storm door on the front because it sucked.

Did I mention the heavy snow? We had two winters where the snowfall was around 12 inches or more. The snow piled up outside our window, which eventually led to wood rot that needed to be replaced. Wear and tear completely destroyed the backyard and killed all the grass, so we opted to put in sod to fix it completely. The window well drain wasn’t working properly, so we had to have another drain installed. Before we sold, I ended up having to put in yet another dishwasher, because we went through many loads a day. My wife ran a preschool out of our home for several years, and all the cleaning of the plates and cups for the kiddos simply wore out the first one I put in. We put in new sliding glass doors. I replaced the flooring in the kitchen and in both bathrooms. My dad even helped me put in a new countertop in the kitchen.

Homeownership is endless maintenance.

When we sold our house the inspector commented that the house was in really great shape, and complimented us on the excellent maintenance we had done over the six years we owned the house. That was great news.

The bad news came as a final parting gift. The buyers of our house did a sewer cam inspection as part of their overall inspection. Although the house came back with high marks, the sewer cam revealed — a total surprise to us — that the sewer had broken again. The aforementioned extreme heat and extreme moisture finally contracted and expanded enough to break the line for a second time.

I’m happy for the buyers of our home, because they got something that was well-kept. But did we ever pay a price to get it there. By my estimate, there’s no way we didn’t put an additional $10,000 in the house based on estimates and repairs.

I can only wonder where we’d be today if that money went toward debt instead of a house we no longer own.

Dave Ramsey has these guidelines for buying a home, and we violated most of them. Homeownership was one of the most stressful things I’ve ever done.

There were some pros to come out of the experience. I learned a lot about home maintenance. I learned to be pretty handy with tools, and got to the point where I felt like I could fix just about anything that came up. Had I to do it over again, I think I could have replaced the sewer line by myself (but I’d really rather not).

Thankfully, for now I don’t have to think about it.

After we sold our home in 2016, we moved to a new city. We did what many people who, after becoming homeowners can’t find it in their heart to do: we went back to renting. In fact, a year and a half later, we’re still renting while we finish the last of our debt.

Because of it, I don’t have a care in the world. Our rental isn’t much. It’s a three-bedroom, one-and-a-half bath townhouse with a basement and a one-car garage. It is sufficient for our needs. When something goes wrong, I call the landlord. Coincidentally, I’ve had to call him once for a minor issue. Other than that, it’s been maintenance free.

It’s funny how that works. All the places we rented were fairly free of problems, but own a house before you’re truly ready and Murphy will take up residence.

So, how do you know when you’re ready to buy a house? If you’re in debt, don’t. If you’re out of debt, get a good down payment and have an extra emergency fund, then buy the house.

I no longer think of a home as an investment, at least not a good financial one. That doesn’t mean I don’t want to own a house again. I do, even with all the maintenance and trouble we went through, I do. I know there will be the same issues with any home you buy. It’s only a matter of time.

But when we do it the next time, we’ll have a good down payment. We’ll have a solid emergency fund in the bank. And we’ll buy something we plan on sticking in a lot longer.

Until then, we are just fine right where we are.

Why I don’t follow most people’s opinions about money

When you start talking openly about personal finance, it opens the floodgates to others who want to share opinions about money.

I am totally OK with this. I like to hear the viewpoints of others, even if I disagree with them.

One of the more common pieces of advice goes something like this:

As long as my investment are making more than my debt, I’m not in a hurry to pay off my debt.

I have had this said to me many, many, many times.

This is a solid mathematical argument. Say I have $10,000 in investments, which makes 10 percent per year. That percent of return is not an unrealistic amount, and it would bring me an additional $1,000 in interest which would continue to compound. That’s pretty good! If I had purchased a car for $15,000 at 5 percent interest, that means it cost me an additional $750 per year. So, $1,000 minus $750 equals $250 extra per year, and I haven’t done anything different. If I were to sink even more into my investments, the difference between my investments and my debt grows even larger.

That is a sweet deal; a really sweet deal. Following this formula, it makes clear mathematical sense to put even more into investments and let the debt get paid off over time through regular payments.

Here’s why we’re not doing that.

In mid-2011, my wife and I were at a breaking point. The relationship was not healthy. Earlier in the year, a tree root had broken through the sewer line of our home costing a few thousand dollars to repair. My wife’s business had only been open about a year at that point, and the income was coming in, but wasn’t steady and was barely enough. We fought all the time about money, or the lack of it to cover the expense of owning a home, coupled with the debt payments we had.

It wasn’t a happy time. We were in real danger of our marriage falling apart.

We sought marriage counseling. We worked through it. We talked, we listened, we traversed rough waters with a third party that helped us see through the struggles we were going through to a possibility of a better future together.

In those discussions, we talked about how I would often bring up my wife’s desire to stay home more with our children. She didn’t want to return to full-time work because she didn’t want to see the early years of our children’s lives pass by while she went off to work somewhere. It wasn’t in her heart to let someone else raise our children; she wanted to be there for all the good things.

I only saw what we were missing out on. If she was working full-time, we could have more money! There would be more money for all these material things and we could pay more on debt, too! I couldn’t understand why she didn’t see that.

Through our discussions, I came to realize that she valued being with our children more than all this other stuff. As she would put it, “I won’t get this time back.”

I realized that I was wrong. I agreed that I wouldn’t pressure her to find work again. We would find a way to make it work together. To make myself accountable, I put it in writing.

My contract with Amy. I thought the “witness” (my oldest daughter, Ember, who could barely write) was a nice touch.

Amy was right. Those days with our children are gone in a moment, and that wasn’t as important as a stupid house.

I haven’t pressured her to return to work full-time since.

In time, her business grew. Although she was working part-time, she was able to do it from our home running a preschool in our house. She had her time with our children, and bring in some extra income. My income improved, too. A little more than a year after our counseling sessions, I took a new job with better pay that ended up being a fantastic experience and career builder.

So when I hear about this formula about how debt isn’t such a big deal, I think of how much we’ve went through to get here. Debt, risk, financial obligations — they nearly destroyed us. What return on investment is worth that? Is it seven percent? How about a 10 percent return? Fifteen?

The answer for us is zero. As in, there is zero amount of a gain that justifies staying in debt, because the emotional and relationship cost is simply too great.

And as Dave Ramsey likes to say, “If we were good at math we wouldn’t be in debt in the first place.”

So to all the naysayers, go ahead and do your thing. Enjoy your returns. You have my blessing. But for us, it’s not worth it.

Teaching children about the chain of debt

Red chain counting down decreasing debt

Although getting out of debt might appear as an event the adults in our household are doing, our children are very much involved in this process.

We have a spreadsheet on the fridge counting down in $1,000 increments, but the kids don’t seem to be into it that much. I can certainly understand why; spreadsheets are quite nerdy.

So to better illustrate our progress, I borrowed an idea from a friend who is also on a debt-free journey and made a red chain out of construction paper. Each link decrements the debt amount by $1,000, and as we move along we will cut through each link and celebrate a mini win. I chose red because financially we are in the red, but the last link is gold construction paper.

That link reads “Debt Free!”

This journey will be worth it because we are using the experience as an educational tool. My hope is that these kids of ours learn enough to avoid any of the same mistakes we’ve made.

We have already started talking openly more about debt, work, giving, and the role of money in our lives. I think we are off to a decent start.

Note: Thanks to Aaron Beatty for the debt chain idea!

What will you buy when you’re out of debt?

The wife and I enjoying a date night in The Year Of No.

Last weekend, the kids took a weekend trip to the grandparents’ house giving my wife and I the opportunity to test what a date night in “The Year Of No” would be like.

We went through the gift cards. I found a movie card for $10.45, but that wasn’t going to be enough to get us into the evening show. I know we have another gift card around the house with much more on it, but of course, I have no idea where it is. We looked, we gave up.

Then Amy remembered we had three $5 gift cards to Starbucks, and she had one $5 gift card to Target (the latter a gift from one of our daughters to her at Christmas). We headed off to our nearest Target — which has a Starbucks inside of it — for a date night on the cheap.

I purchased a decaf coffee, and she got a hot chocolate. Total Starbucks out-of-pocket cost: $0.00. Then we walked aimlessly around Target. She found a t-shirt for our son she insisted he have, so her Target gift card and her weekly spending money cost her $1 and some change.

We looked at shoes and clothing. We chatted with a couple who had a cute little boy who just couldn’t help but wander from his mommy and daddy. I checked out the Bluetooth speakers systems. The Bose sound really good. Then we went home and watched a movie on Netflix. It was a nice evening; just two loves spending the night together.

But a real curveball came on our date when Amy asked me a question: “When we get out of debt, what are you going to buy first?”

I didn’t have a good answer. I thought about it, and decided that maybe I’d upgrade the home computers or something, but that’s really more of a utility than something fun. I spend enough time on a computer during the day for work that coming home and spending more time on one isn’t as appealing as it used to be.

When I thought about it more, I realized the reason I don’t have an easy answer is that I’ve grown more content with the things I have over time. I really enjoy experiences far more than I do material things these days. A newer car would be nice. A new guitar might be fun. But overall, I don’t have anything that I’m super interested in purchasing.

My pursuit has other drivers. I want to own the feeling of not owing anyone or any organization money. I want the freedom to say, “Let’s go on a trip!” and know I’m not robbing Peter to pay Paul. I want the peace of mind of no obligations other than the Four Walls: food, shelter (with utilities), clothing, and transportation. I want the joy that I love to experience by giving to those in need when I’m moved to do so.

That’s what I want. We are going to get there this year.

We are two weeks in “The Year Of No,” and things are going great. Now, to keep the motivation going and dig deep into our goal of zero debt.

How to remove temptations to spend from your phone

iphone with wallpaper that reads "no"
I made an iPhone wallpaper so I get a “subtle” reminder about my mission this year.

I really love my smartphone, and I also hate it.

These devices are magical. Having been in the technology field for more than a decade, I’ve seen the computing power grow so much. I surmise the average person doesn’t comprehend how much computers have advanced in the last 20 years.

In fact, I suspect many don’t even consider a smart phone to be a computer. But indeed it is, and these handheld devices are now more powerful than their desktop and laptop counterparts of not long ago.

The changing computer landscape also brought with it advances in how information is delivered and consumed on the small screen. Social media has flourished. Email is still king. The ability to purchase with your phone has grown to around 25 percent of all purchases in the U.S.

These are amazing times.

I love spending money on awesome things. As we entered the holiday shopping season, I noticed a cooler that I had my eye on all year was on sale through a Facebook post. I’m not ashamed to admit I purchased my own Christmas gift, at 25-percent off, from my phone.

But I recognize that having these magical devices can also come with a curse. Because they are with us all the time, they have the ability to reach us almost nonstop with messages to buy things we maybe should hold off on, or even convince us to become less content with the life we have.

In light of this, I have started taking action to prevent the phone from becoming too much of a temptation for me.

  • Apps: I started by deleting apps off my phone that tempt me to spend. After the fifth notification from Buffalo Wild Wings to come try its new special, I deleted the app and went to town on other apps that tempt me to spend. I don’t need these in my life right now.
  • Unsubscribing from emails: Despite the growth of social media, email is still a very effective marketing tool. I’ve been fighting a battle to unsubscribe from all these lists I’ve gotten myself into over the years, but no matter how many I unsubscribe from, there seems to be something else I missed that pops up given long enough. I’ll keep fighting that battle. The effort is paying off; my inbox has a lot less solicitations in it these days.
  • Being self aware with social media: This is a tricky one. Social media is great because it has allowed us to stay connected, but it’s also quite the marketing beast. My favorite social media platform is Instagram because unlike everything else out there, the pictures make me happy. But have you ever noticed how the perfect pictures with the beautiful images and the right filter can also make you feel just a wee bit discontented with your life? Yeah, that’s mostly fake, so beware of that. Many people only post pictures of the good things in their life. However, I don’t have a problem letting in a little darkness once in awhile.
  • Content blockers: Apple introduced content (ad) blocking in 2015, and I use one to block most of the annoying ads on web pages. It isn’t a perfect technology, but it is better than going without on my iPhone. I’m not against ads, but some companies take it way too far by cramming too many ads on a page. As a sidenote, on my non-mobile device I like to use Ghostery for Chrome.

And as you can see from the picture above, I even made myself a wallpaper for my phone to remind me about “The Year Of No.” Now, the word “No” is the first thing I see before getting to my apps or my browser. Let’s hope these tools help me keeps our money in the bank and re-routed toward our debt.

The Year Of No

No image

We have declared 2018 as “The Year Of No.”

In September 2016, we started paying more — much more — than we had ever done before on our debt. We were taking Financial Peace University, and had a little bit of money left over from the sale of our home. Now renting, my wife and I decided to put all of the proceeds from the sale of the house toward the debt. It was dynamite to a logjam, and it really got the debt snowball rolling.

We made great progress. Most of 2017 we threw huge chunks of money at our debt. But during the summer, I got an idea in my head that we should take a family vacation. We had paid down 25 percent of the debt, and I felt like we could celebrate and be OK. We hadn’t taken a “real” vacation with all our of family since the youngest was born, and I didn’t want to let another year slip away without an experience like that. So we packed up on a five-state road trip and had ourselves a little adventure.

This put the debt snowball on hold a little bit. I came back from the vacation with mixed feelings. On one hand, we slowed down our progress, but I was really glad we did it. I enjoyed spending time with my family, and seeing new sights. Although I hate commuting, I do love a good road trip.

Toward the end of 2017, looking at at progress for the year despite the road trip, I started doing a little math on the possibilities for 2018. Things were good at work and I had received a bump in pay. I started analyzing things we could cut — things we left in our budget during the 2017 year — that could add even more to The Cause.

I got to work. We do our monthly budget in a spreadsheet, so I put our expenses in the document and started cutting away. I am a master of coming up with budgets. My wife hates to make a budget, but she can stretch money like nobody’s business. I must be forthcoming: I’m really good at making a budget, but not very good at sticking to them.

This is the really important part: I need a team. I need my wife to partner with me. I need my kids to understand what I want to do. I can’t do this alone.

One evening, I sat my wife down to show her what I had discovered: “I think we can pay off our debt in 2018, but it will require some sacrifice,” I said. I showed her my spreadsheet. I showed some numbers. I told her I can’t do this without her.

“OK, let’s do it,” she said.

On New Year’s Eve, we went out to eat for what might be our final time for awhile. Date nights that cost money? Gone. Going out to eat with the family? Gone. An occasional event with the kids where extra purchases could be made? Gone. We’re watching every penny, cutting every corner, and putting the rest on this final debt.

We’re only a week into it, and it’s a lot of daily mindfulness of all the little places we might be tempted to spend, or not find the best deal for what we need. I think this will be a good experience for us. We’re going to beat this thing, this year. We’re going to win.

It’s taken me a long time to learn this, but the adage is true: You can wander into it, but you cannot wander out of debt. You have to hate it. You must give it your all. It be must become the enemy.

We are finally at war. We are saying say “no” until it hurts.

And then, when all this is over, we’ll be able to say “yes.”

Amy and Eric Gruber
December 31, 2017: My wife, Amy, and I on our last date night before starting “The Year Of No.”


From the beginning …

My first, post-college car (with debt, of course) was a Dodge Stratus. It wasn’t cool, but it did allow me to exclaim I drive a Dodge Stratus!.

It seems like this journey started such a long time ago.

In a way, the journey began the moment I became an adult, and grew legs as I entered the working world. I graduated from college in December 1999 with a little bit of student loan debt, credit card debt, and the debt on a car I had recently purchased.

On only those three debts alone, I have stories to tell. Those stories will come.

After college, I moved to Lawrence, Kansas for work in February 2000. I barely scraped by on my salary, although in retrospect it was probably plenty had I known what I was doing with money. But I wasn’t good with it and I lived paycheck to paycheck. Those stories will come as well.

After a few years, I got married. She also had student loan debt. She was marginally better with money than I was. We had career changes, purchased new-to-us vehicles, had children, and even bought a house. I have plenty of stories about those events as well.

In July 2016 after years of commuting long distances for work, we made a move. Instead of working 50 minutes from home, the drive was 15 minutes. We sold our house, went back to renting, and decided that it was the time to get serious about paying off our debt once and for all.

One of the first things I did after we moved was find a Financial Peace University class for my wife and I to take. We didn’t know anyone when we moved to Kansas City, Missouri, and I figured a class could help us in two very important ways. For one, it would give us some adult interaction in a new city (they offered free childcare, after all). And most important, I hoped it would help get my wife solidly on board to put all our effort into finally, totally, becoming debt free.

It worked.

And so, I’ve started this as a journal of where we have come, and where we are going. We have had many hard lessons to learn, and I’m going to get them out in the open right here. It’s my hope that these writing might help someone else out there going on the same journey, while being cathartic for me in the process.

Thank you for coming along this journey with us. It’s time to get started.