Dear Cary,
At 41 years old, I'm at a point in my life where I need to start making some serious decisions. But I'm stuck!
I have a good job at a nonprofit whose mission I admire. I don't make a fortune, but I'm paid as much as I probably ever will be to do the kind of work I do. I own a house I love. It's an old bungalow with a huge southern porch. In most ways, it suits me to a T, and it's also likely a good investment since my formerly edgy neighborhood is being gentrified left and right and nearby rundown warehouses turned into condos and retail space.
However, my old house, while charming, requires a lot of maintenance and upkeep. I'm single and not particularly handy, so I've taken out a home equity loan for various projects. This has added to my debt, which, while not unmanageable, is increasingly causing me worry.
At the same time, I've become bored with my job specifically and my work in general. I'm also not optimistic about my long-term job security. I long to do something more fun, more creative and less stressful -- which will also mean less money. So, I've begun thinking that I should sell my home, use the profits to pay off my home equity loan, and buy an inexpensive condo.
The pluses: I'd be left with very little debt and a cheap mortgage payment. With so few living expenses, I could afford to find a more fun, less well-paying job. I wouldn't have to do any yard work or maintain an 80-year-old house. The minuses: Resale on condos isn't so hot, and I'm afraid that if I move there and didn't like it, I'd be stuck. I love living in my house and my neighborhood. I fear that I'd regret selling both because of the house's potential to increase substantially in value (over the next 10 to 15 years) and because of the way I feel curled up on the couch in my front room. I've only moved twice in 20 years, so clearly I'm the type who likes to feel settled.
I realize in the big scheme of things this is a pretty minor problem, and I hope it doesn't sound like I'm whining. But, beneath the surface question, for which you might suggest I simply consult a Realtor, is a bigger, looming issue. I think it taps into what I value and what's important to me. But, how do I figure it out? What if I make the wrong choice?
Any suggestions?
To Downscale or Not
Dear To Downscale or Not,
OK, maybe yours is a luxury problem, but it's a luxury problem I have too, so I'd like to talk about it with you.
The sentence I keep coming back to is, "I own a house I love. It is an old bungalow with a huge southern porch."
You own a house you love.
I think the smart thing to do -- and you probably agree in principle -- is to hold onto the house for the next 10 to 15 years. If you get restless, rent it out and move somewhere. See how you like living somewhere else. But hold on to the house.
That is the smart thing. But the smart thing is not always the easy thing.
I don't even love my house that much, or my neighborhood. But I've sunk so much money into it -- all from the home equity loan, of course -- and put my wife through so much hell that it's like our own private Iraq now: All those sacrifices have to mean something! So damn it, we're staying the course!
You are lucky in one way. This asset that you feel tied to for economic reasons, because it is appreciating in value, is also an asset that you love. So you can make the right financial decision and it also is the right decision for your heart. Except, again, it is not easy. Because you are restless and unhappy and stressed out.
What you are really saying, I think, is that economic pressures are bothering you -- you are squeezed for time and money. I hear that too. I also have a home equity loan that is putting economic pressure on me. I also am tired of being an unpaid handyman and maintenance supervisor on weekends. I too am tempted to sell to relieve the economic pressure. I think the thing to do, though, is to wait it out. It's not a happy truth, but I think it's the truth.
The only thing I can think of that would merit selling the house is some kind of major leap, like moving to New Zealand. If you're going to stay in your city, where you can keep an eye on your house, and you can afford to rent somewhere, I would hang onto it and rent.
Remember when you bought the house? It was scary, right? It seemed like such an enormous sum of money? You perhaps feared you would not be able to support the payments, stretching away into a seeming infinity of months? And yet your career stabilized, and you were able to make the needed improvements and repairs. And now you have borrowed perhaps a little more than you expected to, and interest rates on equity loans have risen, and you are uncomfortable again. I would say wait it out, hold on through this period of discomfort, and things will work out.
It is difficult to go through difficulty. Ha ha. That's me at my most penetrating, no? But seriously, what I mean is, it is difficult to go through difficulty smartly. It is difficult to go through difficulty without being made stupid by the difficulty. It is difficult to make the right decisions when it is tempting to say to hell with it in order to eliminate short-term conflict and worry. I know. I would like to say to hell with it all. The trick is to find support so we can get through difficulties without panicking and throwing away all that we have worked so hard for. The trick is to change our lives in ways that relieve some of the pressure but do not disrupt everything.
What do you need? What do you really need? You need less stress, less worry about money, more free time. Those are things to work toward individually. You will probably get raises even though you are in a nonprofit. You can find ways to free yourself as well. You may be able to cut back your hours and do higher-wage part-time work freelance. I would say stick it out, try to make incremental changes, give yourself a break, and spend more time curled up in that sunny front room.
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