Hey Money Minder,
I almost went all out on a house that I can afford right now. I have a full-time job that pays well, and a couple of side hustles that have been bringing in consistent income for over 2 years now. I managed to qualify for a huge mortgage loan because of both my side hustle income and my W2 income. Even if I were to quit my side hustles and get big promotions at my job, it still wouldn’t match up to my current income level. Plus, I might end up taking a pay cut on my way to the top.
The issue with my side hustle is that it’s not sustainable and I can see myself burning out in a few more years. It’s draining me mentally and physically, leaving me with less time for my family. I just don’t see myself doing it forever.
I thought about selling some assets from my brokerage or my current property to make a larger down payment, but even that wouldn’t have made a big enough difference in my mortgage payment compared to my full-time income. I was looking at spending 90% of my take-home pay on mortgage expenses. It might have worked if I kept up with the side gigs.
But then I would have been tied to those side hustles forever, unable to relax. What was once extra income for vacations and child care would have become essential for survival. I didn’t want to give up my current home with its low interest rate.
The other house I was considering? It had 800 more square feet, was in the same school district, just a 10-minute walk away, had 2 extra rooms, a pool, a big pantry, and an extra half-bath. A real "luxury" home worth double what I have now. The mortgage would have been over 3 times what I’m paying now.
We’re living comfortably now – going on vacations whenever we want, eating out without worry, saving heavily for retirement. All of that would have been stretched so thin.
We do need to upsize at some point, but for now, we’re good where we are.
Learn from my mistake, guys. Don’t get caught up in the FOMO of buying your dream home if you’re not sure you can handle the mortgage payments and you’ve hit your peak earning potential.
Could I start a business in the future and make more money? Maybe. But I wouldn’t have had the time for that if I had to keep up with the side hustles. Sure, I could always earn more without stretching myself thin, but with my current workload, I wouldn’t have had the time.
Farewell,
House Hunter
Response from THE MONEY MINDER:
Hello There,
It is understandable that you were enticed by the idea of owning your dream home with all the desirable features and amenities that come with it. However, it is crucial to take a step back and assess the practicality of committing to a mortgage that would significantly strain your financial resources and potentially compromise your quality of life.
Given your current situation, where your side hustles are already taking a toll on your well-being and family time, it is wise to consider the long-term implications of overextending yourself financially. While the allure of a larger, more luxurious home is tempting, peace of mind and financial stability should take precedence.
It is commendable that you have recognized the potential risks of stretching yourself too thin and have opted for a more conservative approach. Rather than focusing on immediate gratification, prioritize building a strong financial foundation that allows for comfortable living, saving for retirement, and maintaining a healthy work-life balance.
In the future, when considering upsizing your home, ensure that the decision aligns with your financial capabilities and long-term goals. It is prudent to avoid succumbing to the fear of missing out and instead make informed choices that support your overall well-being and financial security.
Remember, financial freedom and peace of mind are priceless assets that should not be jeopardized in pursuit of material possessions. By making sensible decisions and prioritizing your financial health, you are setting yourself up for a more secure and fulfilling future.
Farewell from THE MONEY MINDER.
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