The Weekly Encourager – May 31, 2017 – Can't Afford a House?

This week I feature a guest contributor. I've asked my husband Dave to share the story of how his coworker bought a house. That experience had a big impact on us.

"Family Finances" by Davide C. Marney

When it comes to deciding how to support a household financially, there is really only one rule: money coming in must exceed money going out.  Both sides of that balance are equally important. Saving money is exactly the same as making it. For example, choosing not to buy a new car @ $300/month vs. buying a used one @ $150/month is exactly the same as if you had gotten a $1,800/year raise.

Finances should be looked at in terms of net value. Net value measures not only how much you saved or earned, but how much it cost you to do so. For example, a young family where both parents work full time outside the home will need to pay for child care. The additional cost of that care must be subtracted from the additional income of the second job. The remainder is the net value of the income.

When I had my first real job after college, I worked alongside a man whose wife had a very nice, high-paying job, making making much more than either of us were. His family had a toddler and an infant at home, as mine did. We lived in equivalent neighborhoods. However, my wife was working as a homemaker.

One day my coworker asked me how it was that I, on my one income, was able to own my own home, yet he wasn’t able to rub two pennies together. So, we sat down with side-by-side spreadsheets and we ran the numbers on our incomes and expenses. What we found was that I was slowly making money over time, but he, with more than twice the income, was actually losing ground.

The reason was simply this: his life was far more expensive than mine. They had to pay for full-time child care, which for an infant is very expensive. They had much larger clothing expenses, because they both had to maintain professional attire. They had to have two cars, and they both had to be in good repair. They were exhausted after working all day, so they rarely made meals at home, and paid for food delivery or went out to restaurants. Many repairs had to be paid for out of pocket. They took nice vacations because they were both completely stressed out and felt they needed it.

And the list went on. For literally every expense category his were either larger, or were for expenses I and my family just didn’t have. It was quite an eye-opener.

A couple of months later, he left the company and moved to Texas. And six months after that, he wrote to tell me that he had moved because of that spreadsheet exercise! He had found a job where they had on-site day care as a benefit. His wife found a job where she could work partly from home. They sold both cars and bought one for cash. And within six months, they were able to put a down payment on a new house that was only 20 minutes from work. Their new mortgage was half of what had been their rent. Yes, their new combined incomes were lower, but they were higher than their new expenses. They were now making money over time.

So yes, it is possible to “make it” on one income -- even today. You must run the numbers for your particular set of circumstances, and see where you can save as well as earn. You have to start small; you can’t expect to immediately move into the kinds of houses your parents own -- remember, they didn’t start off in that kind of house, either! 

To Dave's article above, I'd like to add that, after running the numbers, he and I decided to live on one income while I was home raising our kids.  Before we had children, we deliberately chose a starter home that we could afford on one income.  We cooked our own food, shopped at thrift stores, drove used cars and vacationed with relatives most of the time in those early years.  We put a lot of "sweat equity" into that little property, which enabled us to sell it for a significant profit.  

By God's grace, that profit became the down payment for our second (much larger) house, where we still live today. Following Spreadsheet Finance, we were able to pay off our mortgage several years ago.  Choosing a simpler lifestyle early on made all the difference in our being debt-free now.  Another note: we've been tithing at least 10% to the Lord since the day we were married, yes, even on one very small income.  It is possible and it is the Biblical path to financial blessing.  

God is faithful,
j