I told my boyfriend a little while back that we should semi-retire at 35. He laughed at me.
Then I told him I was serious.
As it stands we both make respectable incomes, and we both own our homes. We’ve been maintaining our respective residences since before we started dating little over 2 and a half years ago. For most home owners just starting out, housing expenses are the single largest budget expense they have, so the fact that we as a couple have that line item doubled is a bit of a financial hamstring.
We’ve watched a few of our couple friends go through what could be considered a fairly normal trajectory for this area. Basically as incomes combined and increased, so did their spending. We know a few couples with $500k+ houses, all new furnishings inside, multiple vehicles, and busy(ish) vacation schedules. We shake our heads wondering how they can do it, but at the same time we also recognize that they are living as a single family unit, while we are living as two singles.
My suggestion to him was simple: we live on his income and put my entire income on the mortgage.
If we did that, and we put my home equity onto his mortgage, we could have
his our house paid off by the time we were 32-33 years old. More likely though, since he’s not entirely happy with his house (the parking situation is pretty bleak), is that we would buy a home together, and then apply the same plan to that home. For the price range we’ve been looking around in, that would put us paying off the mortgage at 35.
From there we would have a couple options. We could continue what we’re doing in terms of work, and buy a few acres of land out of town to build our dream house on (the ultimate goal). We could try starting our own businesses, or go back to school and change our careers if we felt like it. We could dump both of our incomes into investments and fully retire at 45. We could take annual summer and winter vacations all over the world. We could theoretically keep up with the Jones’ without destroying our finances if we wanted to – he could be knee deep in performance car parts, and I could be knee deep in a designer wardrobe. There’s all sorts of options that open up to us at that point.
Granted, there are hiccups to contend with. I want a family, and my body isn’t exactly going to hold out until I’m 45 waiting for that to happen. What happens if we buy a house together and then find out I’m pregnant at 32?
If my income has been going directly to lump sum mortgage payments, then we’re already practiced at living on one income, so having my income suddenly disappear isn’t exactly an issue there. Since the mortgage has already been paid down substantially, we have some flexibility in adjusting our payments if we need to. We would also be sitting with a much smaller mortgage balance than most of our peers, meaning we’re in less of a treacherous position if we find we need to renew our mortgage at a substantially higher rate down the road.
We got talking about it again this past weekend, and it sounds like he’s warmed up to the idea. I guess that means he doesn’t think I’m that crazy anymore
When you combined households, how did your budget change? Did you save more, or did you find you experienced lifestyle inflation afterwards?
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