Keeping Up with the Joneses: A Tale About a "House Poor" Life
by Christa Palm
Their house was beautiful. We pulled up expecting a small ranch like our own, but found ourselves sitting in a three-car driveway, in front of a three car garage. Really? How many people need a three-car garage?
The House
The house itself seemed to sprawl for miles. It was an architectural dream, all sharp angles and perfect windows. The landscaping was astonishing, with perfect bushes and plantings complementing every angle of the perfect house.
We warily climbed from our dilapidated SUV and glanced at the simple bottle of $10 wine we had brought as a housewarming gift. “A little bit of under-kill, huh?” I asked my husband.
He stared at the house, his mouth agape, and asked, “Can they really afford this? I mean, they’re younger than us…”
We climbed the perfect staircase and rang the perfect doorbell, plastering fake smiles on our faces, forcing our little green demons to hide for the evening. Of course we were jealous. We were plugging away at our modest house payments, and it seemed we had nothing to show for it. At least nothing like this!
The Surprise
Waiting for the Joneses to answer our knock, we were prepared for a stunning interior, beautifully decorated for an extravagant party. But Molly answered the door in jeans and a nice shirt and showed us into her beautiful living room…strangely empty of a single piece of furniture.
We exchanged pleasantries, and Molly led us to the kitchen, calling over her shoulder, “The party will be in the kitchen. We’ve been so busy, we haven’t had a minute to buy furniture.”
In the kitchen, there were a few stools at the counter, but Molly had settled for a buffet style party. She pushed the table back to the far wall of the attached dining room, and some simple appetizers completed a modest spread.
The party was a success, although the missing furniture made some guests leave rather early, including Mike and me. I assured Molly we would have to get together soon, planning a nice evening out on the town.
The Truth
But that evening never came. Molly kept blowing off plans until I finally asked her to come up with a time and place. She asked us over to their home for pizza and game night one evening, which sounded fantastic.
We arrived, expecting the house to be furnished after their many months to settle in, but the house was still empty. We sat at the simple dining room set Molly bought at a discount store right after college, ate frozen pizza and played cards.
The evening was nice – we really did like hanging out with the Joneses. But they didn’t seem like themselves while we were there. It seemed like Molly forgot how to laugh, and Jake didn’t smile at anything. They looked drained and overworked.
I finally pulled Molly aside and asked if she was ok. She shrugged it off and said money was tight, but they should both be getting cost of living raises soon. She knew their luck would turn around. Plus, they both had second jobs now to make a few extra bucks. They were one of the many families who had over-extended themselves and couldn't afford anything besides their house payment. They were "house poor."
I told her the next night was on us, at our home: a chicken dinner with roasted vegetables and a nice wine. Molly smiled and hugged me, relief washing over her face.
Mike and I talked on the way home, and we decided that even if our house wasn’t a fabulous architectural dream, we were happy where we were, complete in the creature comforts of simple furnishings. We do hope the Jones’s luck turns around, but we wish we could have cautioned them to carefully consider the amount of house they could afford, to keep them from becoming house poor.
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The Dividend Pig wrote:
Tue, 03/22/2011 - 10:21 Comment #: 1It's sad that so many people get suckered into the belief they should buy as much house as they can afford, because it's an "investment". There are so many hidden costs of home ownership, and bigger houses bring bigger everything...utilities, furniture costs, even the size of the tv you need to fill your room...
Niki wrote:
Tue, 03/22/2011 - 11:26 Comment #: 2This is so sad. Sometimes I wonder if our under budget lifestyle is sustainable, but this is actually so much worse. How long could this type of situation actually last.
Ravi Gupta wrote:
Tue, 03/22/2011 - 12:49 Comment #: 3Unfortunately that case is quite common. I never understood the fascination with large houses and perfect lawns. It seems like such a waste. When I was younger I wanted the mansion but now that I look at our modest 3 bedroom, 2 bath house and I feel that it served our needs and that's all that matters. Call me cheap or frugal but I would rather have money food and fun than have a big house lacking in those two items. But that's just me.
-Ravi G.
Randa wrote:
Tue, 03/22/2011 - 17:05 Comment #: 4So sad but such a true reality in this world now. I'll admit that I want a house that my family will grow into since I would like to stay in the same house for the rest of my life but I don't plan on being "house poor."
Christa Palm wrote:
Tue, 03/22/2011 - 18:15 Comment #: 5Dividend Pig, isn't it surprising how many expenses come with home ownership? At least, it's surprising for first-time homebuyers. The taxes, insurance and upkeep alone are huge, but add in those mega utility bills, and people find themselves in sinking ships in these huge houses!
Niki, great job on the under budget lifestyle! Doesn't it give you so much more flexibility for the unexpected in life? I prefer a smaller house and extra cash to a huge house with a budget stretched to the max.
Ravi, very true -- this case is common. I saw a lot of this when I worked in the mortgage department of a bank, and I always cringed when first-time homebuyers chose to max out their debt to income ratios for the big, unaffordable house.
Randa, good point about buying a house to grow in. Those who can afford to buy a comfortably-sized house can purchase with the intent to stay -- and save on so many sales costs and moving hassles. Sounds like you're on the right track!
Jane wrote:
Tue, 03/22/2011 - 21:47 Comment #: 6How silly, and possibly tragic if housing prices fall - they'll have more mortgage than house. I know people raise their eyebrows at me still living in a small townhouse condo that I bought as a single parent 17 years ago for $69,900. With my income I could have bought something bigger years ago but I stayed put instead. And because of that I was able to afford dance lessons for my daughter and we travelled all over Canada so she could compete - they were the best years of our lives and kept us very close. It's not the house that makes a home, it's the people in it!
Nicole wrote:
Tue, 03/22/2011 - 23:43 Comment #: 7We couldn't afford to buy furniture for several months after we bought our house. In the end we split up our apartment furniture across more rooms and only bought a few new pieces. But we didn't do too badly... 20% down, entire payment on a 20 year fixed rate at 4.75% is about 14% of our salary (it was a smaller monthly payment when it was initially 30 years at 6.5%). We could and probably should have bought something smaller-- it was at the top of our affordability range.
How sad to be so house poor. It doesn't sound like they're running up credit card debt to furnish the house and so on, which is something. I hope they dig themselves out of their hole.
Newlyweds on a Budget wrote:
Wed, 03/23/2011 - 01:24 Comment #: 8I may be a bad person, but I like hearing stories like this. It serves as a warning to be careful what you wish for.
On the other hand, I'm not even house poor. I'm just poor poor. I know it's only temporary, but I wish temporary would go away.
Paula @ AffordAnything.org wrote:
Wed, 03/23/2011 - 02:35 Comment #: 9I agree with Dividend Pig and Christa -- for first-time homebuyers, it's astonishing how many unexpected costs come with home ownership! It's not just insurance, taxes and "repairs," as people believe. It's also furnishings, trash pick-up, water, and tools -- yes, tools! -- that you need to maintain the house.
Christa Palm wrote:
Thu, 03/24/2011 - 16:01 Comment #: 10Jane, great job prioritizing! Exactly -- spending time with family is way more important than housing them in an oversized monstrosity of a house!
Nicole, you sound like you're in a great situation -- 14% housing debt to income is fabulous in my book! And yes, the Joneses realized how tight their budget was and didn't dip into credit. Eventually, they will dig themselves out, but they are struggling now.
Newleyweds on a Budget -- the first years are rough, with little savings and lots of debt. But if you're smart with your investments, you'll build an awesome net worth!
Paul, completely agree! Those sneaky little fees and necessities sure add up. I remember when I got my first apartment how surprised I was at how fast just the cleaning necessities and pantry essentials added up. I was a little more prepared for buying a house, but that apartment was a shock!!
MR Cache 2011 March 27 – Driving Is Now Luxury! | Money Reas wrote:
Sun, 03/27/2011 - 05:28 Comment #: 11[...] Keeping Up with the Joneses: A Tale About a “House Poor” Life – Interesting tale of a couple that bought off more then they could afford in the housing [...]
Financial Samurai wrote:
Sun, 03/27/2011 - 06:18 Comment #: 12I bought right at the lower end of my range, and had mixed feelings for the longest time as I saw the housing market go higher and higher.
Most people over time make more, so it's a logical step to buy almost as much as you can if your career is on an upward trajectory.
Anything bigger than 2,500 sqft for 2 people and a kid is too much imo. Keep it simple!
Sam
Christa Palm wrote:
Mon, 03/28/2011 - 13:32 Comment #: 13Welcom, Financial Samurai! Great point -- I agree that 2500-plus square feet is too much for two and a half people! I think 1500 square feet is sufficient for the average American family, but a couple hundred square feet more can come in handy, huh?
Carnival of Money Stories #100 – Retire Gracefully wrote:
Mon, 04/04/2011 - 10:07 Comment #: 14[...] presents Keeping Up with the Joneses: A Tale About a “House Poor” Life posted at MomVesting, saying, “They were one of the many families who had over-extended [...]
kh wrote:
Mon, 04/04/2011 - 17:09 Comment #: 15I've seen this a whole lot in my town. People buy huge houses - I have friends who have 1 child who were insistent that they needed 5 bedrooms plus a fully developed basement for the days the husband worked from home. Of course they have this huge house and have furnished only the parts that people see with equally expensive furniture (also bought on credit). The parts of the house that company doesn't see is either empty or furnished with handme downs. It's really sad. They could have a lovely house in a nice neighborhood if they weren't so determined that they needed 3500 square feet and the most luxurious neighborhood around.
Christa Palm wrote:
Mon, 04/04/2011 - 18:25 Comment #: 16KH, I agree -- five bedrooms and a killer basement for three people seems like such a waste of time and money. Let alone, having all those rooms to clean would give me such a headache!
Carnival of Money Stories #100 Retire Gracefully Edition | C wrote:
Wed, 04/06/2011 - 12:03 Comment #: 17[...] presents Keeping Up with a Joneses: A Tale About a “House Poor” LifeArticle source: [...]