I contribute 5% of my annual pay to charity.
About four years ago, we bought a small, inexpensive single-family home near where we work.
I am thinking we should use 90% of our savings to finally move to the city.
My family didnt have much money growing up, so I have always hoarded money and had spending anxiety.
What if there is another recession soon?
We have a cheap, easy if boring life in our current town, with lots of friends.
Also, most of the homes are outside of our price range in this city.
I am worried a condo wont have good resale value, or even be impossible to sell.
Should we buy a second home?
Should we buy a condo or keep trying for a house in our budget?
-Unsure Investor
Dear Unsure,
Buying your dream home doesnt buy you your dream life.
You could buy the perfect home in the city you love.
Oh, you might be depleting your savings in the near future?
Start preparing, now.
See if any of these options could help you cut costs on your bills.
I dont think you should use 90% of your savings to buy a home.
Thats not to say using 90% of savings for a home purchase is always a bad move.
But I doubt that the $15,000 youd have left would be enough for the recommended six-monthemergency fund.
The fact that spending gives you anxiety makes me think you should proceed cautiously.
The condo is easy to rule out.
You doubt its value as an investment, plus it doesnt sound like you want to live in one.
No Interest Til Almost 2027?
I cant tell you which is the better option for you.
It boils down to whether you crave stability and connection over the novelty of a new city.
As life changes, so do our priorities.
What you wanted 10 years ago may not be what you want now.
Also take a stab at be realistic about what city life would look like for you.
Visiting a place is a lot different from actually living there.
Your economic concerns are certainly valid.
I wouldnt worry so much about being priced out of a future home since youll continue to build equity.
But more importantly, your home is a place to live.
Focus more on what you want out of life first and less about the future resale value.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder.
Send your tricky money questions to[email protected].
(Can you sense my millennial sarcasm there?)
You know which ones were talking about: rent, utilities, cell phone bill, insurance, groceries…
