May 282012
 

A few months ago after lunch at my mom’s, my husband and I spent an hour or so just cruising around the wider neighborhoods looking at houses. Except for the occasional territory disputes, the two of us been happy in our apartment and plan to live there for quite some time. A house though, is something that we’ve always talked about as a someday hazy goal – kind of like, “One day we’ll retire,” or “Someday all our furniture will match!”

Anyway, we thought it would be good to get an idea about the real estate market, and we stopped by a house that was not huge or new, but very charming, with a “for sale” sign out front. I grabbed the flyer, which had photos of the home, the description..and the ABSOLUTELY astronomical price. I used to think that if I ever lived in a house that cost that much, I would be part of an ensemble cast on a Bravo show scheming against Camille Grammer. It was a shock  to discover the cost of our “dream” house.

via

Ever since that day though, my spending has gone down quite a bit. When I was single, I concentrated on saving a certain percentage of my paycheck, and when I got married that became how we looked at our household income too. I was satisfied with the percentage that we were putting away until I looked at that number in light of buying a home. And all of a sudden, our spending levels didn’t seem that great.

I’ve realized that for me, few things work better in encouraging responsible spending and saving than having a big specific goal – something that I can take up on my desk, write in my notebook, and post to the refrigerator. Right now, it’s being able to buy a home in the area we’d like, in a few years. With that goal in mind, it’s been easier for me to weigh the importance of purchases in my head, and to be able to say no (and the all important and fun YES!). It’s a very simple concept to many of you I’m sure, but it took me a very long time to realize.

With that said then…I’d love to hear – what motivates you to save? Are you all just responsible savers on your own, or do you need to dangle big carrots in front of the wheel, like I do? And if so, what are your goals?

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  38 Responses to “The Big Goal”

  1. We’re currently saving for a down payment too. I am decent at saving every month while my husband definitely needs a carrot. Then he’s amazing. We have a certain amount & a deadline that we want to reach it and that really helps us. Here’s to new houses!

  2. We think about the future everyday! It almost annoys me haha. We focus on saving so much because of the lifestyle we live now (we live with BF’s parents). We want to move out so bad and we already have our down payment for a condo but we keep getting beaten out by investors. The future definitely motivates us to save!

    • Good for you, I can see how you’d want to move out but kudos for sticking to the plan until you have enough for your goal! :)

  3. Being secure in our retirement is an important goal. We already own our house & I have a property portfolio that will hopefully become our retirement income. That said, I prefer spending than saving, but both are important as long as there’s a balance!
    Happy Monday Hun xoxo
    http://www.intotheblonde.com/

  4. Right now we’re saving for our honeymoon to Italy. It’s amazing how much you can really save when you TRY. I’d love to own a place some day too so I’m hoping that this year of saving will help us get there in the future.

  5. We’ve never saved but now that I’m late 40’s and hubs just turned 40, we have suddenly woken up, I really wish I was a savvy as others.

  6. Katherine – I’m wearing that outfit you have posted under My Picks in my blog post today!

  7. I just finished paying off all of my consumer debt, and I experienced the scare of being laid off last year. Right now my big dangling carrot is financial security. There’s a LOT of things that I would love to buy fashion wise, but they have to wait until I feel secure. I think its great that you have a goal to save towards. The house in the picture is super cute, I wish you the best of luck in saving for a home.

  8. Saving is very important to my husband and I, especially with a one year old. He’s our motivation. We could go to Target to get milk and would go and end up spending $150-$200 on “stuff”. We just paid off our cars and that felt amazing. It’s like a $550 pay raise every month! Having a baby really changed the way we spend/save (for the better). Just wish we would have come to our senses a long time ago :)

    I’m a new follower and LOVE your blog! Would love the follow back! Enter my giveaway for a Nordstrom and Starbucks gift card!

    The Pretty Pinhead

  9. This really struck a chord with me – while I’m only 24, I do want to buy a house someday and I know that it’s only going to get harder and harder. Although in order to save the money, I imagine that I would have to ban myself from the internet – I get way too obsessive about things like ebay and buy a heap off there. I suppose the upside is that I’ve weaned myself off the other shops.

  10. That is a really pretty house. I’m crap at saving…much better at paying off debt:) But if I have a specific goal (like my Celine luggage tote) I am quite focused. I guess its all about priorities but also making sure you still have money to enjoy life. Morning Katherine

  11. I see, that’s where my saving goes too. All my savings go toward down payments. I don’t particularly have any goals, but once I have enough for down payments, I just buy. Not buying for myself to live, rather buy to invest.

    When I used to work, I put spending money in one account, and saving money into another account. I would never touch that saving money. Either I make it super difficult to withdraw that saving money, or cut all those debt card. I would make big purchases to reward myself once I buy a piece of property.

  12. My husband’s rule is: Income less Savings = Expenses…always set aside and live with what is left.

    http://thekaloka.com

  13. This is a very exciting time for you! I know you and Mr. Feather will reach your goal. After my husband and I purchased our current home, it was our goal to be mortgage free. Each month, we would pay “a little extra” and before we knew it, no more mortgage. Goals are important! The important thing to remember as you’re saving is to allow “a little flex” so you can still enjoy life.

    • Aww you are too kind – paying off my existing mortgage is a goal of mine as well…the “little extra” bit helps out!

  14. I’ve always been pretty good with savings. My problem is that I’m rather risk adverse. My father often lectures me about making money work hard for itself. For example, shopping for the best interest rates and negotiate the rates. How to invest it properly. It was very different when both hubby and I worked full time.

    We saved hard and plowed nearly 50% of our salaries into our savings. We were lucky to invest in real estate just before the boom hits. We kept our expenses really low. Friends thought we were crazy to live in a flat instead of a nice big house. We had a reliable car albeit not that great looking. Friends sneered at us. However, we were very focused. Every time the property prices increased, we would revalue our existing portfolio, re-mortgage and invest in another.

    And then I became a stay at home mom. And we both got lazier probably due to sheer exhaustion of looking after a newborn. What we need to do is to be focused again. It was silly to break the momentum but a good lesson to us that we have to be disciplined regardless.

  15. I will never buy anything unless I can write a check for it. That kind of thinking got me and my family to nearly all our financial goals (because we ultimately need things :)

  16. What a great idea. It’s so hard for people to save these days, when we can buy just about anything at the click of a mouse. My savings goal would have to be an upcoming trip, which won’t happen for about two years.

  17. I live in Brooklyn, and it is so expensive to buy here. I actually think there is a better chance that I will walk into the Wall St. Hermes store and buy a brand new Kelly at full retail price than will ever own an apartment in Brooklyn or Manhattan. Very sad. Great post and I found you when you interviewed my dear Catherine of Aesthetic Alterations. I really enjoy your blog! XO, Jill

  18. Monstruous med school loans motivate me to save more :)

  19. What motivates me? I do not like any debt. I don’t have any credit card debt any more. I have a mortgage and a car note. That’s it. I’m pretty proud to say that I paid half of my mortgage and I have about 1/4 left to pay for my car.

    I think what made me really afraid of debt was the stress. I got married in 2004 and that left me with a staggering $8000 debt. I was appalled. Not only that, my husband had $9000 in student loans. In 2005, Hurricane Katrina left us displaced in Texas. With no job, and little financial help, we accrued an additional $10,000 in debt. A total of $27,000 in debt left me so stressed. I couldn’t sleep and my entire body ached from stress.

    The only thing that really helped us, was our credit card and student loan agencies. All of these agencies actually let us defer payment for a year. Within that year, we worked our butts off and paid off half the amount. Whatever outstanding balances were transferred to 0% interest credit cards that offered deferred interest for additional year. By keeping our credit scores high, we managed to clear out debt in 3 years.

    I don’t think I could go through that again. The stress and anxiety are too much for me.

    • Thank you for sharing your story Helen – I admire you for pulling yourself out of that situation and you are right – you have a lot to be proud of!

  20. I own our very first home at 27 in the US. I personally do not mind living in an apartment because it is much easier to clean and I lived in a house my whole life back home. I enjoyed the luxuries of not having to fix or maintain the place. On the opposite, my husband always wanted a house. He simply was so tired of living with loud neighbors and the lack of privacy in the aparment complex was a main reason.

    We both were very fortunate not having any major debts such as student loans or credit cards to deal with which I know those can take a lifetime to pay off for most people. We also firmly agreed not to have a child until we moved into a house because 1) it would be much more difficult to save when a child arrives 2) we personally want our child to grow up in a house enviroment that has a yard/space. I could personally tell you from my experience that if buying a house is your primary goal, do wait on a child because once a child arrives your money magicially disappears (diapers and child-care related costs). Thus makes it much almost impossible to save.

    At that point in time, I couldn’t care less about buying luxurious/designer items/clothes so I mainly focused on saving and stayed on track. It took about one year for us (with two people working) to save up and bought a brand new house. The key is to stay focused – easier said than done because down payment means many handbags / shoes / clothes / vacations and so on. The moment you move in though, you would not want to go back to living in an apartment.

    • Thank you for the advice and sharing your story! We’ve been told that a few times about children and houses…we’ll have to keep that in mind :)

  21. I, too, need something that motivates me to save. Otherwise, my money goes towards other things (I like to shop. A lot. Sigh). Right now my husband and I are saving for travel – we both would like to visit several places before we settle down and buy a house. Good luck with your saving! :)

    Keep calm and carry lipstick.

  22. Fiance and I have been having the same talk. While we’ll be in NY for a few more years, but once he graduates, we’ll be moving somewhere with actual houses. While the location is still up in the air, we know that we’ll want a home for our future little ones. ;)

  23. Ah.. we are saving too.. Feels like a mammoth task!

  24. What a great post! Encouraged to read about how ur looking towards the bigger picture!

  25. good luck katherine! the bf and i did the same thing this weekend! we drove through our dream neighborhood and drooled over the houses. definitely puts things into perspective! xo

  26. my motivation is saving for a trip!! kragslife.blogspot.com

  27. Hi

    May I ask roughly the price of this house?? thanks

  28. Thanks for sharing this post! Saving money has never been a strength of mine, although I am always in awe of my parents, who managed on one income, to put both my sister and I through school (and she went to private school her entire life) and graduate school, and to live very comfortably. They’ve never done anything too big, or scrimp on the small things, but they were incredible at saving.

    Over the past few years, I’ve really started to pay attention to the things I buy and the things I want to save up for. I have a set goal in mind, and work my way to get it – whether it is a certain amount in my 401k, to buy a purse, a vacation for my parents, and lately, to save up for a house. I opened a new bank account where I have no access to a debit or credit card, and put away money each month. So far, it’s worked! It’s baby steps, but I’m getting closer.

  29. Hi Katherine! I love how I can relate to so many of your posts. My husband and I just bought a house a few weeks ago. Prior to that, I was not a huge saver. When we started looking at our dream homes, I realized that I needed to get my act together. What also motivated me to change my spending habits was seeing how good my husband is at saving. It made me feel so guilty that I started putting 90% of my paycheck into savings (goodbye J. Crew and Louboutins! lol) When we were going through the mortgage approval process I was so glad that my credit was in check and that I had saved substantially. That’s one of the things people don’t realize either—it’s really hard to get approved for a mortgage these days! So we definitely feel fortunate that this worked out for us. Buying a house has changed my outlook on spending so much! Instead of buying clothes, bags, or shoes, I put things into perspective and will think, “Instead of buying the Givenchy Nightingale, I should really get that vintage armoire that I want or put that money towards my dream closet”. Priorities definitely change after buying a home :)

    • Thank you for sharing your story – wow 90% is a FANTASTIC figure, now I think I should be aiming for that! Very inspirational :)

  30. I feel your pain. Living in the Silicon Valley makes it near impossible to save for a down payment while paying high rent. The housing prices are astronomical (if you’re not living in the ghetto ;) especially when you could live in the Midwest in a huge house for what you make in one year!

  31. I guess it has been a habit for me to save since young. I make small goal every year and I tend to save up enough for important birthdays and still get to splurge on myself. My ultimate goal would be saving up to an X amount for retirement (inflation included) before age 45 =P
    All the best to your dream house!

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