Regardless of where you live and what “small” means to you, I’m here to tell you that if you’ve considered downsizing, or are in the market for a first-time home, there are absolutely some BIG benefits to living in a SMALLER home.
When Jesse and I bought our house in 2012, we did not view it as a “starter home”. We also did not go into it thinking about whether or not it would be our forever home.
Well happy freaking new year. I’ve been MIA from the blog for awhile, and figured it’s about time I let you all know that I’M STILL ALIVE. And kickin’. I have been busier than ever with my day job (whomp whomp), but I feel like 2016 has some good things in store.
Here’s a quick run-down of what you can expect this year from me and my little blog!
New Domain(!): Yes, after just over a year of blogging, I’ve finally figured out what my blog name SHOULD have been. I’ll be moving all of my content over to the new site, and hope it goes smoothly – and that you’ll continue to follow along!
The very first step that Jesse and I took to gain control of our money was to partially combine our finances. According to Dave Ramsey, you should never ever do this until you get married. However, he would also probably say that you shouldn’t live together before marriage. I tend to disagree. So shortly after we started renting a house together in 2012, we opened a joint checking account. We totaled up our rent and monthly bills, and each contributed half of our costs into this account each month. We also chose to keep our separate personal checking accounts (another choice that Dave would disagree with, he says once you’re married, all funds should be combined). Some people have found that combining everything is the best option for them. Some interesting thoughts on that option, here. While I can see the potential benefits to the “what’s mine is yours” philosophy, we’ve found that having personal spending accounts works well for us. This way, we contribute equally to be sure our living expenses are covered, as well as the shared savings funds that we’ve set up. We pay our individual student loans separately out of our personal accounts. Beyond that, we both have our own hard-earned spending money to do with whatever we please. Sometimes I will buy new clothes or get a haircut and color that costs $140, and Jesse may splurge on a video game or upgrade some parts on his bike. I should also say that we communicate very well, so it’s not like we are buying things secretly and avoiding financial transparency. We have just found that it works for us to have personal accounts that we each have control over, we respect each other and don’t have to question the other’s purchases.
For the majority of our money, however, we share accounts and financial goals. Here are some of the things we’ve done with our shared finances that I would recommend for anyone in a long-term relationship:
I’ve mentioned a few times that Jesse and I like to geek out together over money. It’s so odd to me that money is the top reason for couples to argue, as well as the #1 predictor of divorce. We all know what they say, that money can’t buy happiness. I agree with this to a point, but I think it certainly helps maintain a peace of mind. On the other end of the spectrum, money has the power to tear relationships apart. Not the case for us, we’re total dweebs in love! Jesse and I have found that talking about money is actually fun, and probably one of the biggest strengths in our relationship. It’s not because we’re loaded (we’re not), and it’s not that we’re financial geniuses, or have always been naturally “good with money”. In fact, we haven’t. Both of us can think back to a time when we were pretty much broke, and couldn’t comprehend having such a thing as extra money in savings. There was a time when, for either of us, an extra $100 was more likely to mean “new clothes!”, or a few extra rounds of drinks at the bar, than an extra payment towards anything remotely long-term. Don’t get me wrong, I do still occasionally engage in some retail therapy, and I believe it is important to reward yourself for a job well done or a milestone reached.
One of our goals for the year is to pay off debt. I’m not even sure where January went so fast, but we’ve already knocked down one huge item (of four) on the debt list. Jesse officially made his very last student loan payment two days ago!! This is a BIG deal, you guys. It took about 7 years total on this one loan (still only half of the average payback time), but we’ve only been serious about our debt for the last 2 years. Up until then, we were separately paying on our loans, making the minimum monthly payments at best. Jesse started paying back his student loan in 2007, and took a break on it when he got laid off from his job sometime in 2008. I asked him, “what even happens when you just stop paying?”, because obviously that is not ideal. But the reality is, the U.S. has over $1 trillion borrowed in federal student loans. I don’t know about you but from my point of reference, a trillion might as well be a google (the number, not the search engine), because I can’t really comprehend how much money that actually is. In 2014, more than one in eight people with student loans were in legal default, meaning they were unable to make on time payments for nine consecutive months. So, there are a ton of people dealing with this, who either:
a. Aren’t in a financial situation to be able to make minimum payments, or
b. Don’t understand or don’t care about the negative impacts that ignoring a loan will have long term.