Property - dream home? Or stay put, save, enjoy, persue FIRE

[twinkie100]

Hello wise people.

We are a family of four living in a house that suits our current needs. It is not a dream home (!) as it has a couple of minor (and one considerable) drawbacks, but is 4 bed, nice extended kitchen, driveway, nice little garden, a walk to the kids school/park/lots of amenities in an up and coming area.

We bought at the right time, and the property price (current value) has increased by 49%. Our mortgage is 15% of our net monthly income, so no stretch.

We have some savings in Nutmeg and ISAs, and savings for the kids. We have all the various insurances we need. But not much in pensions which we are addressing.

We could make a significant upgrade - double the value of our current home. There are some things about our current house making us want to move, but we are undecided about it all.

It seems to be the done thing to stretch yourself for big dream homes among many friends - but I'm starting to question it all. Perhaps the right thing is to stay put, overpay mortgage, make substantial savings/pay into pension, enjoy holidays, have more flexibility and choice around work.

I've also been reading into FIRE which is fascinating, and making me question all the material choices we make.

Any experience? Advice? Did you go for your dream home or stay put?

It all depends on your goals. You want to FIRE, then FIRE. You want a dream home then dream home.

I have already decided I want the dream home. I spend most of my time in it and as such thats the biggest goal for me. I get why people consider it a material thing. But I consider it an environment thing. Its not a possession, its your home.

So if your doing it to keep up with the Jones then dont. If you genuinely want a dream home then go for it.

I’ve had the same dilemma! I ended up buying too much house. I love my house, but I could have been happy somewhere smaller but I wanted to do what everyone else was doing and buy the most we could afford. We have a big garden but I hate gardening and spending my money on that.

I would turn the question on it’s head and ask: how easy would it be to be satisfied and content with what we already have? On a scale of 1-10 how content are we with where we live now and what would this be if we lived in dream home. What will it cost you to change your home, and is that worth it?

FIRE seems like a bonkers cult to me. I think you need to enjoy your life throughout rather than scrimping to retire early then worry about being on a fixed income.

But I also don't think stretching for a perfect home is ideal either. Could you find the middle ground with a more suitable home which leaves money for pensions?

I think a lot of it comes down to your age and your children's ages. I too know a lot of people who have gone dream home in their late 40s - mid 50s as their children have become teenagers, doubling their mortgage liabilities, and I just think WTF. Now is the time (for me) to be thinking of getting rid of the mortgage, not extending it.

Can you improve, rather than move, while also paying more into the pensions?

What's the considerable drawback for the house you're in now? I wouldn't go for either of those options personally as I am not interested in very early retirement. I aim to retire in my late 50s, rather than 40s like most people on the FIRE path aim to.

We’re staying put as we want to FIRE & we’re almost mortgage free. Taking on a bigger mortgage for us now would be a terrible idea and would mean us working an extra 20 years-no thanks!

It’s personal choice though & we don’t hate where we live. It just isn’t the 5 bed house many of our friends have gone for. I want freedom from work though and that means much more to me than a house.

I have stayed put. I've now got a very small mortgage and am concentrating on putting money into pensions so I can retire mid fifties. Also means for the moment I can enjoy better holidays, days out etc which is more important to me than a big house

I'd stay put in your position. I've been mortgage free since I was 40 and it's given me so much more choice in the last ten years and allowed me to do things I couldn't have afforded to do if I'd had a mortgage (eg be a SAHP for 3 yrs, fostering, back to university, set up a business). We've decided to move recently, and rather than upsize or go for the dream house, which many friends have done recently, we've bought something a bit smaller and cheaper to free up some money to invest in our business so we can build financial freedom that way. FIRE might seem a bit hardcore now, but if you can be mortgage free and financially independent ten or 20 years earlier, that would be amazing. I can't put into words how much I love being mortgage free. I'd find taking on a huge mortgage really stressful in current times.

Thanks all for your replies, thoughts and experiences. So interesting to hear (and from
both sides of the fence).

To answer a few questions:

I am in my 30s, DH very early 40s. Our children are both under 5.

The considerable drawback is that we are on a busy road. It's a road that is residential where we are but turns into a high street further up. So the plus side is that there's shops galore, the entrance to the park is 200meters away, etc.
We are VERY set back, it's hard to explain exactly without giving too much detail 😂, then have a large hedge and a driveway. It's not the end of the world, but I worry about pollution.

On the question of improving rather than moving - we have already done a loft conversion and new kitchen/landscaped garden. Apart from general upkeep there's nothing else we could 'add' at this stage.

I think we're not going to be in the hardcore FIRE club, but the thought of being mortgage free in my 40s is pretty compelling - which we could be if we stayed and overpaid. We could then sell up and buy outright a larger 'dream home' a bit further out of the city we live in, likely with money to spare.

@Brown76 your experience is really interesting and I worry we might buy too much house, for too much money, and regret it.

@LeafyBamboo the situation you are in now and the choices you have sounds brilliant. I'm also quite 'scared' of tying us to loads of debt and the pressure it brings. Apart from our current mortgage we are completely debt free.

What's this FIRE you all talk of?

@seasonalremarks Financial Independence, Retire Early. There are variations on the theme, some proper hardcore where folk aim to be super rich and debt free by the time they're 12, but I understand it pretty much in the same was as the OP which is getting rid of the mortgage as soon as possible to gain a degree of financial independence and stop work well before 'normal' retirement age.

OP, if it's 'only' pollution that's worrying you and you otherwise love your house then I would be extremely tempted to stay put. There are other things that are important when you have little kids, and I'd put proximity to schools right up there.

I also (as the mother of a 16 yo) think that the 'dream' part of the dream house changes quite a lot over the lifetime of a child. Proximity to friends, going out, shops etc matter a lot more to older DCs than having a garden and country air. Could you work on the basis of 'this is good enough for now', continue to overpay, then reassess when the DCs are nearer secondary age?

twinkie100, given the extra info about your situation, I definitely say stay put. It will definitely lead to more freedom and more choices in the long run.

We bought the dream home as a forever home ten years ago when the kids were small. Huge garden and a fair amount to modernise. It broke is actually (well the affair my XH had really did but honestly think it was a contributing factor)

We never had any spare cash & every spare moment was spent trying to keep on top of huge garden & DIY as well as parenting, working full time etc coupled with the fact my XH didn't like gardening and we were both shite at DIY.

I bought him out a couple of years ago for stability for my kids and now finally am able to downshift to a smaller, newer house with a weeny garden and cannot wait. It's bigger and more expensive than I'd like as still have two teens living with me but my next move will be a far more modest affair.

I often said to my XH 'I feel we've bitten off more than we can chew here'.

On the other hand the house we've called home and poured improvement effort into has provided a beautiful place for us to live and lots of guest accommodation etc so it's been great but definitely at a cost.
If I traveled back in time I wouldn't have changed this route - wish I'd thought more carefully about who I married but don't regret the financial stretch. It forced me to return to work to cover the mortgage after and 8 year sabbatical when my ex's small business wobbled which in turn has brought me so much joy in a profession I love so you never know what adventures new environs will bring.

What about going to see a few places, do the financial modelling, work out what you'd go without or do if interest rates rose, jobs were lost etc and see what your head, heart, gut tells you.

Where you are does sound pretty cool and lucky you for having finances in such good shape.

Keep us posted on what you decide!

We stayed put. It's a difficult decision to make, especially when all your peers are upgrading to gorgeous big houses, and we definitely have felt like the "poor relations" at times.

However, we paid off the mortgage before 40, haven't had to worry about spending money/sticking to a budget, and DH can retire at 55. Pre covid, we also travelled a lot.

Out of two of our closest friends - one cashed in all their pensions to buy a massive place with land, but sold it again a few years later as it was so expensive to run. The others took on a mortgage a few years after paying theirs off, bought a big house and spent a lot getting up to the standard they wanted and now the kids have moved out so there's the two of them rattling around in it on their own.

It's just swings and roundabouts and depends what's most important to you. I was reading about FIRE the other day actually and that's a bit extreme with all the "living frugally" advice...you don't need to go that far. There's nothing to stop you investing your spare money that would've gone on the mortgage to help you retire early, but still enjoy life/travel.

Thanks #NoYOUbekind.

I would be worried about giving up work too early and winding things down. I think work keeps people more agile in every respect and just hobbies and projects from 40 or 50 would not be good for me at all. Having said that we are in the same position and I am thinking staying put is a better option and working on myself and my current environment. I don't think a nicer house would fulfil me now, maybe 10 years ago.

I have just gotten into camping and kayaking much more fulfilling IMO. In my early 50s.

@seasonalremarks

Thanks #NoYOUbekind.

I would be worried about giving up work too early and winding things down. I think work keeps people more agile in every respect and just hobbies and projects from 40 or 50 would not be good for me at all. Having said that we are in the same position and I am thinking staying put is a better option and working on myself and my current environment. I don't think a nicer house would fulfil me now, maybe 10 years ago.

I have just gotten into camping and kayaking much more fulfilling IMO. In my early 50s.

I kind of agree with that, but (for example) I would love to work fewer hours, DH is thinking about just taking a few days a month consultancy work. (What I'd actually like to do is volunteer and work as a theatre usher!) It's about having that freedom to not 'have to' grind it out every day.

Yes a theatre usher would be great!

But I think a small amount of grind is useful maybe just a couple of days a week.

By working on myself - I mean trying not to focus on myself too much if that makes sense?!

I think working part time is preferable as a lifestyle choice to early retirement if you've got yourself into the financial position to comfortably do so.

It's quite remarkable how just dropping one or two days can change your lifestyle and bring an end to feeling stressed/tired always chasing the weekend.

Especially if you have non-working days on a Tues/Weds/Thurs because it breaks the week up into little chunks and feels like 2 weekends. NWDs that extend the weekend are nice for trips away but they can make it harder to keep up with work if you're out for 3 or 4 continuous days each week, and you can still end up always chasing the weekend. It's easy to still feel up to date and included at work if you're there in more frequent short bursts. Tho we are all different of course and it does depend on sector and role .

I can't think of anyone I know who took super early retirement for non-health reasons who didn't end up starting a new career. 40 or 50 years without direction or structure is a long time.

It is not so much boredom because on paper you can come up with lots of enjoyable activities, but the loss of structure. Even if you're part time and not climbing a career ladder, work still provides a sense of structure and achievement and of working towards something greater than oneself. It is hard to replicate that structure when left to your own devices with no greater target or purpose. Nowhere you particularly need to be.

Life can very quickly start to feel empty and meaningless without those things, even if you're doing your favourite activities each day.

So I'd choose smaller house and a lifestyle of being able to work part time comfortably with balance between comfortable finances, structure and achievement from work, and more time to pursue interests and not having to compete to cram everything in on weekends. All of which brings less stress, which in turn is better for health and makes life feel brighter.

I'm not really comfortable with extreme plans that involve forgetting to live at all in the present because everything is being put towards a future you may never even have. You need to remember that life should be worth living today, not always deferring happiness into the future. Tomorrow is not guaranteed. (I sadly knew several people who saved all their dreams up for retirement but died from cancer in their 40s and 50s).

It's not the end of the world, but I worry about pollution.

Air pollution drops off quickly as you move away from a road, and hedges can reduce air pollution. As this is your main problem with your current house, I'd look into the various factors affecting air pollution levels, if you haven't already. As you are far back from road with a hedge, your pollution levels may not be as high as you think.

I’ve mentioned elsewhere that interesting YouTube videos from The Money Guy address this issue. US and financially based - you may not agree but are a very useful starting point

We have bought an expensive house, we moved area and there was not much about and I fell in love!
It’s a lovely house and overall I don’t regret it, but we are very tight financially as a result. If we hadn’t had to move then I think there’s a lot to be said for having some financial freedom. I would love to be able to save to have the house as I want it, take the DC on holiday more etc. I think I’d stay put in your position, at lest for the medium term.

We've thought about the same sort of decision quite a bit and I agree with PPs that defining your goals is probably key to making a rational decision. Here are my random thoughts on that, sorry it is long.

I was struck reading your OP that you talked about having a ‘dream house’ but not what it would be about that house that would enhance your life. I see the term dream house on here quite a bit and I’d worry that it represents an aspirational goal rather than something of value. I’d spend a bit more time working out exactly what you would gain from a move that would really benefit you. Of course for many people an extended 4-bed house in a nice area would already be a ‘dream house’! If might be that you’re looking for extra space for working from home/having guests etc or land to keep ponies or a more peaceful location or whatever it is, but you need to be able to identify that and quantify how important it would be to you.

On the FIRE aim. I think this can also cover quite a range of goals. For me it’s not so much the RE side that I’m aiming for but that ability to gain financial independence to a point where I can make choices about how I spend my time (including working if I want to) without that being driven by the need to earn. For me that’s an important goal but one that I’m happy to reach more slowly than many hardcore FIRE people in order to enjoy life on the way. I fine the mindful spending, investing and freedom aspects of FIRE particularly interesting. We’ve got a thread on it here www.mumsnet.com/Talk/legal_money_matters/4165470-FIRE-starter if you are interested and lots of us have a similar ‘FIRE-lite’ approach.

For us, at the moment we’ve decided to stay in broadly the equivalent of your current situation and work on future financial freedom instead. That’s partly a deliberate choice but also because our house is the perfect location for our current lifestyle and schools/jobs and it’s very difficult to see anything in the same sort of location that would enhance our lives in a way that is worth the insecurity/expense it would bring. I can also see that the dream house with teens is going to be pretty different to the dream later on and I can see our current house will suit the teen phase of life pretty well. At some point in the future we’ll probably reassess.

I do worry that this is the wrong decision and that taking on a large mortgage now when interest rates are low would be a more sensible decision. After all we could always downsize from a more expensive house in the future and release a capital having enjoyed the home with a family. I also worry that FIRE often depends on a stock market that’s currently looking a bit vulnerable. All in all though it seems we can’t go far wrong with a nice home, few financial stresses and a plan for financial independence.

Id go for the bigger house because debt is cheap and savings interest is awful and the only investment making any money is property. And that is very unlikely to change in the medium term, if not longer.

If you invest in your family home you don't pay any capital gains tax on the capital appreciation. Whereas your savings will just be getting eaten away by inflation, which is definitely happening and may well continue. Then sell the house when the kids leave and FIRE then with what you've made on it.

Otherwise the danger is the extra money you have gets frittered away and at the end of the day not much to show for it. Of course its all a balance of enough to enjoy life while accruing as much as possible as well. Also the other advantage of investing in your home, is your family also get to enjoy your investment.

I have never heard of FIRE either but did a quick google probably because I am already too old to retire early

Not to piss on your parades but nothing is guaranteed.

My wonderful, healthy DH died of leukaemia when we were 29.

That changed my whole outlook.
Whilst I agree to plan for the future I am a strong advocate of living in the day...

Let your DC have a fun childhood and enjoy life-don't wish it away.