# Buying "below your means"



## Addy (Mar 12, 2010)

My husband works for the military (air force). We are due for a posting anytime now (most likely not this summer but next, so summer 2011).

We are currently in Winnipeg, where we chose an inexpensive house in an area close to downtown and therefore close to many employment opportunities for me, close to restaurants, mom and pop grocery stores as well as a few larger grocery outlets, close to libraries, community centres and near decent transit routes.

Since this is our first posting I feel we were very lucky to get a posting at a base located in a decently sized city - large enough to have some ammenities that make it easy to live without a vehicle for the most part.

From what I understand, most militiary bases are in towns that make it very difficult to be without a vehicle, and even difficult if you have a vehicle and try and not use it daily. This may force us to purchase a house that is either a fair commute to work for my husband (ie if we were posted to Petawawa we may chose to purchase in Pembroke, which is too far to cycle to work for my husband, but would give me more employment opportunities and more reasonably priced housing stock, along with a (albeit small) transit system and enough small stores that if we strategize where we purchase our home we could walk to enough grocery stores, bakeries, etc that we wouldn't be hugely reliant on our vehicle OR buy a much more expensive house close to the base where we would have a big mortgage.

Either way we would try and rent a room out (as we have for years) to help with the bills.

I'm curious to hear from others who live in smaller towns and have chosen to buy a home well below what they can afford, and how it has worked out for them. I'm also curious to hear from people who live in smaller towns that may not have transit or at least if they have transit it's not a great system, and what strategies they use to get around to work, shopping, school, etc.


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## Berubeland (Sep 6, 2009)

Buying an inexpensive house is a good idea but certainly you are right about these small northern ontario towns unfortunately a vehicle is an absolute necessity. 

Where I come from Temagami I can't imagine being without a vehicle. It's far from everything. There is a local grocery store but the variety is appalling and the produce even more so. Just about everyone goes to the next larger town of New Liskeard to do groceries and that's about 60 km away.


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## MoneyGal (Apr 24, 2009)

Slightly different situation here, but we follow(ed) the same philosophy. I live in the east end of Toronto and we relate to our neighbourhood as a small town. So, we chose a house in a neighbourhood with very high walkability and density - my kids go to the school on our street, right next to our local library; and there is a big No Frills two streets over, plus lots of "ethnic" stores and a couple of indie coffee shops. 

When we purchased, we purchased for $150K less than the mortgage amount for which we were approved. (Now we would not be purchasing in this neighbourhood according to that rule, but that's neither here nor there.) Our thought was that we needed to be able to make life work if and when we had kids and I wanted to stay home for a while - which is, in fact, what we did. So, we bought based on my husband's income alone - sounds like you already do the same thing. 

Yes, we live near 24h transit (the local streetcar) but we mostly walk or cycle. If we moved to *no* car (which we might do when our kids are older) I will probably get groceries delivered. 

So my situation is vaguely similar to yours. I did live on a (former) farm in rural eastern Ontario for 10 years (in a town of less than 1,000) prior to moving to Toronto and in that situation, I would not have wanted to be without a car.


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## Oldroe (Sep 18, 2009)

I bought my first house at 19 there wasn't much of a qualification process but I did fire my 1st agent that was determined to sell me high, got the next agent that sold me a starter with lots of potential.

The next house in the early 90's we went through this process and were qualified in the mid 350's can still remember the agent opening the MLS book to the back pages and me flipping to the 150-200 pages.

Everybody should back this qualification # back about 25-30 % our you will live for your mortgage.


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## brad (May 22, 2009)

Buying below your means can be practical just about anywhere, except probably western BC where housing prices are so high that you'd have to be pretty well off to buy a house that's significantly cheaper than what you're qualified for.

I live in a big city; we bought a house that cost half what we were qualified for. And it's a house that we'll be happy to live in for the rest of our lives, we love it and it's perfect for our needs; I don't feel like we compromised on anything except we don't have a driveway or garage, which would have been nice but parking on the street is not much of a hassle. We're thinking of getting rid of the car anyway, since the bus stops at the end of our street and we're right on the bike path.


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## lonelimey (Mar 11, 2010)

We emigrated from England in 2007 and decided to purchase well below what we could afford. We purchased a semi for $278K and have been happy here for the last 3 years. We will move after summer next year when our youngest child starts university.


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## andrewf (Mar 1, 2010)

brad said:


> Buying below your means can be practical just about anywhere, except probably western BC where housing prices are so high that you'd have to be pretty well off to buy a house that's significantly cheaper than what you're qualified for.
> 
> I live in a big city; we bought a house that cost half what we were qualified for. And it's a house that we'll be happy to live in for the rest of our lives, we love it and it's perfect for our needs; I don't feel like we compromised on anything except we don't have a driveway or garage, which would have been nice but parking on the street is not much of a hassle. We're thinking of getting rid of the car anyway, since the bus stops at the end of our street and we're right on the bike path.


Living in a market like that would make me nervous of a housing crash, perhaps making renting a better alternative.


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## MoneyGal (Apr 24, 2009)

The discussions of frugality here are interesting to me. Seems like a couple of us share the philosophy of buying "under your means." What's interesting to me is not so much how those of us in that camp got there, but why there are so many in the *other* camp - i.e., "you should really stretch yourself to buy a home..." etc. 

Are people just fundamentally more optimistic than I am? ("It will all work out eventually!") Or are they ... not paying attention to anything but the current low monthly prices? ("Sure, we can afford $2500 in mortgage payments at these great 1.9% rates!") Or ... what is it? Maybe it is generational? 

Just musing aloud on a rainy dull Sunday.

To clarify: I don't mean other people *on this board* who are in the "stretch yourselves" category. I mean my peers and acquaintances, some of whom are hurting badly right now. One woman in particular whom I know who bought in New Jersey is kind of obsessed with her home's declining "Zestimate" of value on Zillow.com. She's considering walking away.


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## OhGreatGuru (May 24, 2009)

_Are people just fundamentally more optimistic than I am? ("It will all work out eventually!") Or are they ... not paying attention to anything but the current low monthly prices? ("Sure, we can afford $2500 in mortgage payments at these great 1.9% rates!") Or ... what is it? Maybe it is generational?_

All of the above, plus:
- a consumer-driven society that is encouraged to believe they can have it all now;
- an expectation among young adults that they should immediately have the same assets it took their parents/grandparents 30-40 years to accumulate


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## lonelimey (Mar 11, 2010)

I believe there is alot of "keeping up with the Jones's" with people when it comes to their own property or, more importantly (in their eyes) to be ahead of the game. When we emigrated from England in 2007 we purchased a semi-detached house which was more than adequate, but, well below what we could afford to buy. I'm sure there were a few raised eyebrows from certain family members but for us it is fine. We will move house when our youngest starts university next year.


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## stardancer (Apr 26, 2009)

Berubeland said:


> Buying an inexpensive house is a good idea but certainly you are right about these small northern ontario towns unfortunately a vehicle is an absolute necessity.
> 
> Where I come from Temagami I can't imagine being without a vehicle. It's far from everything. There is a local grocery store but the variety is appalling and the produce even more so. Just about everyone goes to the next larger town of New Liskeard to do groceries and that's about 60 km away.


Hey fellow northerner. I'm from Kirkland Lake!


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## Addy (Mar 12, 2010)

It's such a relief to find others here who think similar to how my husband and I do. Since we are a military family, I find by far most military families live WAY beyond their means. Not all of course, but by far most. My husband and I are actually looked down upon by some of his coworkers; once I phoned my husbands boss for some support while my husband was in the middle of an eighteen month deployment and his boss told me he didn't understand why we didn't have our vehicle on the road, and he continued to tell me that HIS wife chose to stay home with their children and NOT WORK while he was deployed (essentially telling me that I should not be working while my husband is deployed). I wanted SO badly to tell him off but that would get my husband in ****, so I said nothing. Thats a rant, sorry, but I just wanted to show essentially what we're up against by trying to be frugal.

Chances are a bit higher we will end up in Pembroke, Ontario so I have been keeping an eye on the mls listings and (love google street view!) checking out the neighbourhoods and where the stores and other conveniences I would make use of. It seems we could do it, but it would mean my husband would have to commute to work daily (30 min drive or so), but he may be able to carpool if he asks around so that will help somewhat.

We're paying off our mortgage soon and I don't think I've been this excited since my wedding day! I don't think a huge mansion of a house with a big mortgage would come anywhere near the joy I'm feeling about being mortgage free!

So thanks for sharing everyone, and please keep adding to this thread, it would be nice to get some ideas from others as well.


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## brad (May 22, 2009)

The keeping up with the Joneses thing probably has something to do with the propensity of some people to stretch themselves, but I also agree with OhGreatGuru that there's a sense of impatience, of wanting your dream house now rather than later. And I wonder how much of that has been fostered by credit cards, which train us to buy things we want now and pay for them later instead of saving up for them. Instant gratification is the norm.

The other thing I've observed is that once you've bought a house (or more accurately, once your bank has bought a house for you), there's a lot of peer pressure around you to "improve" it. Our house was renovated a year before we bought it so it doesn't need any work, and yet while we're working out in the garden in spring we always get neighbours asking if we're going to put in a driveway or some other major renovation. We also get complaints that our house seems abandoned, because we don't leave it all lit up at night (we turn on only the lights that we need, and only turn on outside lights if we're expecting company). People also think we're strange to take the bus or bike when we have a car, and we're one of the few families on our street who do all our own gardening and snow removal instead of hiring out that work. I'm sure most of our neighbours have concluded that we're struggling financially, but in fact we're just frugal and our finances have never been healthier.

Fortunately, while we get along well with our neighbours, we don't care what they think of us. But appearances are more important for many people and probably cause them to spend way more money than they really need to.


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## bean438 (Jul 18, 2009)

I think each situation is different. Personally I am in a way bigger house than I need. 1900 square feet. I could move into a smaller house and be mortgage free with slightly lower taxes. 
But I earn decent coin, have no kids, buy a new car and drive it for 10-12 years. I don't drink, smoke, gamble, take yearly vacations. 
My mortgage will be gone by the time I am retired, and I can max out my RSP, and TFSA. 
I like the house, hate moving, and I am in a nice area. In winnupeg you have to pay a premium to live away from the crap that our city has an abundance of. 
I have a lot of equity I can use as a tool to leverage, and if I can afford it then why not?
I am probably the only guy who cuts his own grass, and shovels his own snow. I also drive the oldest vehicle on the street at 5 years old. 
This is one drawback of living with the Jonses. 

As to guru's comments I couldn't agree more. 
But who is to blame? I blame the parents. My grandparents had ****, and thus my parents had ****. My parents while wanting us to have more than they did, thankfully had the decency to pull the reins in. 
This is not so in MANY cases. 
Kids, and young adultd these days have an unreal sense of entitlement. They don't want to work, and if you can talk them into working, they want to be the CEO, and not start from the bottom 
They do not recognize that they have to do the crap tasks that others have done before them wheb they started out. 
Try to scold them and they quit. 
This generaation was spoiled, told how special they are, and that they have rights. Everybody got trophies, and nobody failed. 

Google "cbs + here come the mellenials". You will find a youtube 60 minutes story on the youth of today. It is bang on.


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## high octane (Jul 21, 2009)

bean438 said:


> This generaation was spoiled, told how special they are, and that they have rights. Everybody got trophies, and nobody failed.


Haha so true



> Once I phoned my husbands boss for some support while my husband was in the middle of an eighteen month deployment and his boss told me he didn't understand why we didn't have our vehicle on the road, and he continued to tell me that HIS wife chose to stay home with their children and NOT WORK while he was deployed


I think there was either a misunderstanding or his boss is not acting they way the military expects. If your husband can still get to work there's absolutely no need for a vehicle. I don't know why he would say you shouldn't work during "single parent ops" because the military takes this very seriously and has many ways to help. You should deal with the family resource center instead.

I think people just say things sometimes without thinking. I just came back from deployment to find my car wouldn't start and I hear "why don't you buy a new one already" (cause everyone else has a new one right?)

As far as your original dilemma, why don't you consider married quarters? Your husband could just cross the street to get to work.

It's a shame our society doesn't think like you, because then we would have far better public transportation. But alas, I think most military people have a vehicle on the road because it is the status quo in America.

I think you'll find that on these "smaller bases" the cost of living is actually far less than a "big city" like Winnipeg. I bought a house near my base, and it was far cheaper than buying one downtown further from work. Every base is different, that's why we have a pay adjustment based on location

Personally I can't imagine living in Pet without a vehicle. I'm guessing you are hesitant to move away from a big downtown because you have always lived in one? I have never lived in a big city, and I would be anxious myself if I was posted to one (like Halifax where no one gets a parking space) because I imagine them as far far more expensive and it would be hard to adjust my lifestyle and give up my vehicle


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## Four Pillars (Apr 5, 2009)

Nothing wrong with buying below your means. I did that with my first house (not so much with my second) and although financially I probably would have been better buying some more expensive, it did allow me a lot less stress - especially when I was close to being laid off in 2002.

How long are these postings? Is renting an option?


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## Addy (Mar 12, 2010)

high octane said:


> You should deal with the family resource center instead.


I have tried, and some (not all) the staff at the MFRC here are not great. We lost a child three years ago, and the social worker was very cruel to me, and when I complained to the director he was also really rude to me... I think he listened only to the social worker. Neither staff even said "I'm sorry to hear about your loss" to either my husband or I, they were only concerned about their budget, saying that it was near the end of the fiscal year and there wasn't enough money to offer us emergency respite (and we had lost a child, my god not much is worse!) Sickening!



high octane said:


> I think people just say things sometimes without thinking. I just came back from deployment to find my car wouldn't start and I hear "why don't you buy a new one already" (cause everyone else has a new one right?).


I think you hit the nail on the head - the guy I spoke with I believe is a nice person, he just doesn't think the same way my husband and I do, and to him not having a vehicle on the road is akin to not having a home to sleep in!



high octane said:


> As far as your original dilemma, why don't you consider married quarters? Your husband could just cross the street to get to work.


But I wouldn't be able to get to work if we lived in quarters (we bought a home in an area that gives easy access to downtown and hospital (where I work), etc. When we get posted though we will consider quarters, but it depends on what they charge for rent, and if I can find employment that I can actually get to.



high octane said:


> I think you'll find that on these "smaller bases" the cost of living is actually far less than a "big city" like Winnipeg. I bought a house near my base, and it was far cheaper than buying one downtown further from work. Every base is different, that's why we have a pay adjustment based on location.


I agree with you, I grew up in a small town and there's a lot of advantages, but for my career, a small town wouldn't allow me to work, and that takes out a huge chunk of our income. Plus I like being able to walk 2 or 3 minutes and get to a small grocery store and walk another few mins and get to a pharmacy, and having lots of little stores around where I can walk to most.



high octane said:


> Personally I can't imagine living in Pet without a vehicle. I'm guessing you are hesitant to move away from a big downtown because you have always lived in one? I have never lived in a big city, and I would be anxious myself if I was posted to one (like Halifax where no one gets a parking space) because I imagine them as far far more expensive and it would be hard to adjust my lifestyle and give up my vehicle


I would love to live in Halifax  But thats besides the point, I understand what you're saying. I lived in Vancouver (Granville Island) for many years, owned property there, and loved it. So I am a city girl for sure, even though I understand the attraction of a small town.

Four Pillars, renting is an option, we could get a house in military housing but it's at market rent so it's often cheaper to buy a house - plus there are incentives to buy. Postings for my husbands trade run about five years give or take a year or two.

If I were a stay at home mom we would most likely rent military housing and be close to my husbands work. I think I would go seriously crazy staying at home though....!


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## the-royal-mail (Dec 11, 2009)

Buses are like sardine cans these days.

Buy a cheap car ($5K - $10K) so you can get around. You'll probably have kids at some point and so the need for your own car will be even greater. There is nothing luxurious about owning a car, no matter where you live, they are a necessity and give you the flexibility to get things done and not rely on others or do the transit dance.


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## Addy (Mar 12, 2010)

the-royal-mail said:


> Buses are like sardine cans these days.
> 
> Buy a cheap car ($5K - $10K) so you can get around. You'll probably have kids at some point and so the need for your own car will be even greater. There is nothing luxurious about owning a car, no matter where you live, they are a necessity and give you the flexibility to get things done and not rely on others or do the transit dance.


Cars are not a necessity by any means. Some may be fooled into believing they are, but that is not the case.

I would really not like to be dependant on my automobile, I would rather live where I can walk or cycle to where I need to go as necessary, or even bus or taxi it when convenient.


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## high octane (Jul 21, 2009)

Addy said:


> We lost a child three years ago, and the social worker was very cruel to me, and when I complained to the director he was also really rude to me... I think he listened only to the social worker.


I don't know how the MFRC works but I look after my unit's non-public funds. If something serious happens, there are many ways to get more non-public funds (not tax payer's money) It must be the people there because anywhere I've been family issues are held pretty high. There's lots of big whigs in Winnipeg I can't believe heads didn't roll. 



Addy said:


> Four Pillars, renting is an option, we could get a house in military housing but it's at market rent so it's often cheaper to buy a house - plus there are incentives to buy. Postings for my husbands trade run about five years give or take a year or two.


There are many incentives to rent as well; cold hard cash instead of RE incentives, security, less commuting, community daycare/school/church, yard supplies etc. Financially speaking it is cheaper to rent military housing. However, I find the quality of life well worth the extra cost and if the house sells at a profit it's all gravy.



Addy said:


> Plus I like being able to walk 2 or 3 minutes and get to a small grocery store and walk another few mins and get to a pharmacy, and having lots of little stores around where I can walk to most.


All the air force bases are near a community with this as far as I know. Just watch out for posting to Alert, Thule, Cold Lake haha. I know lots of people who pick their posting preferences based only on how much their wife will make

Being military I think you'll want a car though, either so you can live dt and your husband can drive to work or vice versa. When you think of how much cheaper it is to not live in a huge city (property taxes yikes!) it easily justifies paying for a reasonable car.

I wonder if the military would give your husband a duty car if he was on call 24/7 haha. Sometimes I'm called in on very short notice and I'm not sure what they would say if I relied on a taxi. I got a duty cell phone that way haha


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## Square Root (Jan 30, 2010)

Addy-I would like to thank you and your husband for serving our country. I am always surprised at the high quality of personel in our armed forces. As someone who is generally not motivated by ideaology or conviction, I am glad that others such as yourself are. It certainly can't be for the money.


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