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Don’t Get Trapped By Fixed Expenses

June 6, 2011 · 33 comments

in Personal Finance

I graduated from college in 1991.  Unfortunately, the economy was not at it’s best and a lot of graduates did not have jobs.  As a matter of fact, I remember some kids wrote on their cap ‘Will work for food’ as a joke.

My husband and I got married right after graduation and we started working right as soon as we got back from our honeymoon.  He worked for a ‘Big 6’ accounting firm and I started my enthralling career in computer programming.  We made decent money, but we also had my student loans to deal with, two car payments, wedding debt, rent, and more.  After two years, we bought our first house for $95,000.

Looking back on that first home purchase, I am not sure I would have bought a house so soon.  What we did that I regret is we obtained a mortgage that required both of our salaries to pay.   Even though the economy was not at its best, we were young and foolish enough to think we would both be able to find work immediately if one of us were ever laid off.

We were lucky because even though layoffs were happening around us, neither one of us were ever affected.  However, that house payment added stress because we knew that if we were ever reduced to just one paycheck, we would not be able to cover our bills.

Shortly after purchasing our home, I was pregnant.  I was thrilled to be expecting, but crushed that we could not afford for me to stay home.  I hated that the decision to return to work was made for me because of our expenses.  Financially, I think that was a turning point for me because I felt like I didn’t have control over how I wanted to live my life.  I love control, so not having the choice to stay home really bothered me.

Fortunately, I was able to work out a deal where I just went in to the office three days a week.  However, once we could afford to live on just my husband’s paycheck, I quit.  My boss talked me into working part time and I was told I could work entirely from home.  I had just had my third child and decided to give it a try.  I did that for a year and was just exhausted, so I quit for real.

Since that day I fully stopped working in October of 1999, I vowed to not make any financial commitments that could not be paid with just one salary.  Over the years I have worked from home again on and off, but I never committed to a summer home, bigger mortgage or anything.  (We did move from that starter home, but the house we bought ten years ago was based solely on my husband’s income.)  I never, ever want to feel trapped again.  Now, we don’t save all the money I make now, as we do like to take vacations and such.  However, our fixed expenses never change regardless of our income.

The point I am trying to make is this:  even when times are good, spend like times are bad.  Circumstances can change in the blink of an eye, and if you can try and live off of  just one income, your life will be full of so many more choices.  I am not just talking in regards to staying home with children,  I am referring to life in general.  Would you rather have a secure retirement or an extra bedroom and larger dining room?  Many people move because housing deals are so good that they can’t turn down the ‘opportunity’.  However, buying anything in a recession may be like catching a falling knife.  No investment is certain, and do you really need that bigger house just because you can afford it at that moment?

Have you ever felt ‘trapped’ because of the amount of money committed to fixed expenses?

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