Thursday, September 25, 2008

"Renting is just throwing your money away!"

Sigh...I can't tell you how many times I have heard that since the spring of this year. With DH's new job and rising gas costs, we decided to try and move closer to the church to save on fuel costs.

I got to work. I constantly checked the classifieds of our local paper, craigslist, and asked friends to keep an eye out. We were advised to look into buying since the market was definitely a buyer's market. We did try, but were unable to do so.

You see, DH and I were not taught how to be wise with money while growing up. We made lots of mistakes that cost us. We learned our lesson thank goodness. We learned it the hard way, but we are wiser nevertheless. Isn't it funny how it takes much longer to correct the mess than to make it?

Our choices were simple: 1.) buy a house or 2.) rent a house.

As I said before, buying was out. DH's credit was around 12 points below the approval score. So that left us with renting. I was very disappointed. I really got my hopes up that we would be able to buy, but if you can't do it, you just can't do it.

During this time when I would be talking to someone, they would say "Oh renting is just throwing your money away." I beg to differ.

First, I don't think paying for a place to live can be catergorized as throwing money down the drain. We're talking about providing a roof over your children's heads here people. LOL I know when you own a house, the value will increase (in most cases) over time. But if you think about it, there are many things we purchase/pay for in our lives that don't accrue value. For example, your vehicle. It loses value as soon as you drive it off the lot. However, we don't say financing a vehicle is throwing your money away do we? Of course not. Transportation is a necessity especially in towns that don't provide public transportation services.

Second, you have to remember that more goes into buying a house than just a monthly payment. If you don't have a certain percentange down payment, they add mortgage insurance to that monthly total and usually add in the property tax as well. Next, you have to think about homeowner's insurance. Another addition to your monthly mortgage payment. Last, if something breaks, it is your sole financial responsibility to fix it. If you're struggling to make ends meet or trying to get out of debt, renting may be the wiser choice.

Third and lastly, it just plain sucks to hear something like that. I know those who said it to me were not intending any ill will. But it sort of brings up feelings of guilt and shame. You feel guilty because you got yourself in the present situation and although you are doing your best to rectify those mistakes, it is still your fault. Shame comes into play because you feel sort of embarrassed that you can't get a loan for a basic, low cost home. The house were looking at was priced at $149,000 and had been on the market for almost a year. We were hoping to be able to purchase it for $140,000 at the most. And we couldn't do it...at that time anyway.

Things do work out though. We are back in the subdivision we used to live in that is right next to the church. And what is even cooler is that the house we are renting is has always been our favorite house in the neighborhood. Our landlords are very nice and have offered to sell it to us after a year. As my friend Beth says, there is season for everything.

Basically, I have said all that to say this...please don't tell someone that they are throwing their money away because they are renting instead of buying. If it is said to a person in my situation, it sort of hurts. There are also people who prefer to rent instead of own and that is their perogative. Paying for a place to live is not wasting money as long as you are being wise about what you are renting. After all, a person living alone really doesn't need a 3 bedroom house. But I shall digress...

2 comments:

angeljoy said...

I just recently heard this point of view on the radio on Crown Financial. They did a blurb on the top three (or so) reasons to rent and in reading your post, it sounded familiar. I think this has been so propagated,(renting is throwing your money away) that now people take it as the gospel.Someone in the lending industry no doubt started this lie to get people (like us) to move heaven and earth to borrow money to buy a house so we'd quit "throwing away" our money! You make some good points. I think you're right on target!

Melanie said...

I feel smart now! hehe