From Two Houses to One
Note: I am currently training to do financial coaching. Blake and I have a plan to live on one income after we’re married, save for a house on the water, and ultimately stay/be debt free. Along the way I’m going to share about our journey in hopes that it will help other people make their dreams a reality as well. If you need financial coaching/help yourself, feel free to shoot us a message.
We’ve always wanted being debt free to be a top priority in our relationship. I’m grateful regularly that I found someone I love who’s also really smart with money. People love to say money isn’t everything or it doesn’t make you happy and there’s some truth to both of those things. But being broke doesn’t make anyone happy, either. Just saying.
We sat down and figured out that our best option was to sell one house (Blake’s) and live in the other (mine). After we finished premarital we were sure we were moving forward with marriage but we had a few steps to go. If Blake sold his house and moved in with family until we tied the knot he could make a great profit, purchase a ring for me (cash), and put a big chunk in savings which would later combine with mine to give us a good start on a future house fund. Also, while living with family he’d save a couple thousand dollars in living expenses which helped make up for the fact that selling when he did meant paying capital gains tax (you have to pay this when you live in a home less than 2 years before selling).
Why did we sell early? In large part because it made the most sense for our timeline of being together forever. We didn’t want to wait another 8 months. Also, Blake could make a huge profit on the house and we worried that with interest on the rise we wouldn’t get as much money 8 months later anyway. Neither of us is a real estate genius but we both felt pretty sure that as interest rose, prices would drop at least a bit.
Blake’s house sold in 48 hours (all cash, over asking, with some closing costs covered). Everything about it was a blessing and we give the credit to the Lord. We made back most of the money we’d ‘lose’ with capital gains in the process. We spent the next few weeks getting Blake moved in with family and selling, giving away, and moving the items we wanted to keep and the ones we didn’t.
Here’s how we made our decisions:
Which house to keep. Blake had owned for a year and a half and I’d owned mine for 12. As a result I’d paid a lot less, didn’t have a mortgage, and mine was actually worth more in the end. So, we decided if we kept it we’d be able to live on one income to save for a house on the water AND it would make an ideal rental property in the future (passive income, amiright?).
Selling early. I covered this somewhat but I’ll share this - we figured out exactly how much we’d have to pay in taxes to sell early. Then we added up what Blake would save on living expenses and how much we’d save being married months earlier where we could start living on one income and saving the other. The difference was minimal and we wanted to be together as soon as possible. It was worth it for us.
Why not a rental? If I were you one question I would have is: why not rent the second home? Fair question. And we did talk at length about this option. I’m sure you could find people with a lot of opinions about this but in the end, we didn’t want the financial liability right now when we knew we could make a huge profit. If we rented we wouldn’t lose money but we wouldn’t have made much. At least not for 28 more years until it was paid off. We discussed throwing all our money at paying it off to keep it but in the end, we decided we’d much rather be in our waterfront home sooner. We do think we want rentals eventually but we want to be setup in the home we want before we make that a big financial priority.
Order. I know several of you will have questions about why we didn’t just live together. The short answer is: our faith. We had committed to waiting until we were married for this step and we are honoring it. Could we have just gone ahead and gotten married? Sure. But we already had a pretty quick plan. I don’t think either of us wanted to hurry it up that much. Living together (eventually) was definitely our best option and we were working towards it but it was worth it to us to take a few months to set things up and do it the way we wanted, on our timeline.
If you’re facing similar choices and want to chat with us about it, feel free to reach out via e-mail.
