A Too Big Too Expensive House (Oops I Did it Again)

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Mrs. Groovy here. Today we bring you a guest post from Bucket Babe, who blogs over at LeanFIREATL. Bucket Babe splashed onto the personal finance blogging scene just a few months ago in January of 2018. With her wit, honesty, and passion for life, she quickly became one of my favorite writers. She’s a true story teller and we’re very excited to have her with us today.

Take it away, Bucket Babe!

Oops, I did it again.  I bought a “too big too expensive” house.

A re-invention a few years ago led me to downsize and sell almost everything. One month, I occupied four acres on the outskirts of a hip, liberal, trendy college town in my dream home. The next month, I was selling my home near the bottom of the housing market and moving back to a big city—Atlanta–into a 950 SF apartment. A recent job loss, a break up, and need for socialization ushered in big changes for mid-life. It had been 20 years since I last lived in Atlanta. Then, six months after moving to the tiny apartment, I bought my third and final house. Once again, it was too big and too expensive.

The first home, bought in my 30’s, was the proverbial “starter home”. I purchased it quickly after a brazen middle of the night apartment burglary. That was a seminal moment. I wanted out of the city. That burglary uprooted me and I searched for peace and contentment. Within a month of the burglary, I used my Naval Reserve bonus as down payment on a house outside the city.  I found the distance I needed as I settled into small town life.

The home was large, affordable, and in a community of starter homes. Over the course of several years the neighborhood slowly declined. This decline erased the rise in property value and the substantial sweat equity in the home. I sold the home and moved further away from Atlanta near a hip and cool college town. Still safely in a rural area, the move to a house on four acres of land had “potential”. It would require work but I relished the task. I love creating a nest.

Gradually, house number two became “Lovely Acres”. It was not a huge house at under 2000 sf and it was reasonably priced. Best of all, it was a ranch. It was a perfect house in which to grow old.

Over several years, I renovated every room. I installed hardwood floors, quartz countertops, French doors, and plantation shutters. I lovingly cultivated English country styled gardens that overflowed with perennials and roses, pea gravel paths, birdbaths and birdhouses, rock patios, wrought iron arches and trellises, and antique porch swings. I rescued two beautiful orange tabby cats (born under my front porch) and a chocolate lab who swam in the pond daily.

I listened to frogs and toads at night—a country symphony—with the bass jumping in the pond. I spied herons, river otters, rabbits, and chipmunks and turtles sunning themselves on logs by the pond each day.

My surrounding neighbors who lived on either side of me became my two best friends. I developed deep relationships with them. We shared bottles of wine. Life was easy and laughter was abundant. I felt very lucky. In many ways, I had it all—a sense of community, deep friendships, a near perfect job, and eventually, a fairytale romance developed.

Life’s About Changing; Nothing Ever Stays the Same

As my fairytale romance with my wealthy fiancé fizzled, my job was eliminated due to a hospital policy change. I had lost the best job ever. I had been working as a Nurse Practitioner under contract to a physician. Being self-employed, I was able to optimize my life and leverage my experience. I worked about three hours a day. I was making good money and I owned most of my time.

A new beginning would necessitate a move back to the city and re-invention. The job and social prospects were better in the city. I was a middle aged single lady living on the outskirts of a quirky and liberal college town full of 20 and 30-somethings. I had enjoyed going into town to work and returning home to “heaven” every day. The country life was ideal while “coupled” up.  Now, in my 50s, I was single and unemployed. My job and social prospects were bleak staying in the same place.

I told myself I could go anywhere and do anything I wanted…except that I couldn’t. Not really. I wasn’t free. I had a too big too expensive house.  I wasn’t free to take time in finding a job. I wasn’t free financially. I wasn’t free to indulge my need for socialization. I wasn’t free to dive back into the world of dating. Living an hour’s drive into the northern suburbs of Atlanta made dating and social activities a geographic challenge.

I began to make progress toward several financial goals during that last year working as a contractor, but I was far from financially independent. I needed to earn about $75K a year at my current spending level. My expenses were fairly low by most standards, but my housing expenses were relatively high.  Maintenance and expenses are a given for four acres. I faced the truth that I owned a too big too expensive house. With little incentive to stay, the house went on the market.

Back to the Big City—“Hotlanta”

Fast forward one year. I was under contract to sell Lovely Acres and I had a lease on a city apartment. I moved into a 1 bedroom/1 bathroom apartment in a busy and exploding community in Atlanta—it was on the verge of becoming the next big “real estate boon”. Atlanta housing was on fire.  Finding work was easy. No matter what the circumstances, Nurse Practitioners were in high demand. Finding a good job…well, that’s another story.

I explored the city, vastly changed from 20 plus years ago. I enjoyed city and social life again. I had a driver named Uber and Uber was at my disposal. Previously unavailable, this was amazing to me. I joined a wine club, two dining groups, and I sated myself in the exotic dining choices available in the incredible BuHi area of Atlanta where chefs go to eat. Atlanta is an amazing and diverse city. It’s full of great food, festivals, and social and recreational activities. I bought a kayak and took up paddling on the the Chattahoochee. The Chattahoochee is an amazing natural resource. I attended meet-ups. I went to art classes. I took up pottery. I dove into experiences.

Reality Check

Alas, after almost a year back in the city, I wasn’t having much luck finding my niche with a position that was fulfilling. I went from having the best job in the world to trolling the depths. I blew through two jobs within the first year after losing my dream job. Burnout began and it was a rocky time. I was afraid that I’d appear as a job hopper. I played it safe and set my sights on working for another hospital. I had always worked in hospitals previously and had been mostly happy. It was comfortable and there was familiar organization. With all the change of the last several months, I needed and found familiarity.

I took a position with a hospital that was named as a top Atlanta employer and offered a pension. There were many benefits and the compensation was good. Not having caught the FIRE (Financial Independence Retire Early) bug yet, I eagerly calculated my 15 year pension. With my savings, pension, and social security, I was golden. However, this position was different than previous hospital jobs. Now, I was on a hamster wheel. I was no longer self-employed and no longer owned my time. I traded 40 hours a week for a paycheck. On the plus side, the new position enabled me to contribute to employer sponsored retirement plans, an HSA, and obtain financial security that I hadn’t experienced in decades.

My work was unfulfilling and I was not content. I had become accustomed to self-employment and working on my terms. Unhappiness grew with the anonymous apartment living. Having no deep connections to girlfriends or a partner was a big adjustment and a tough transition. Before, I could take a few steps from my house in either direction and my best girlfriends were ready to sit, chat and open a bottle of wine. I found apartment living isolating in a different way than rural country living. I couldn’t develop a community.  I realized that my housing wasn’t a “home”. I reasoned, that this must be what apartment living was like. I examined my options. I was pissing my money away by renting. I again considered buying a house.

So in March of 2016 (the beginning of the resurgence of the Atlanta housing market), I did just that. Echoing times past, I jumped in. And I bought a home on the upper end of what I could afford. Atlanta is more expensive than the country.

My third and last house purchase was a beautiful mid-century modern split level in a vibrant, historic neighborhood in Atlanta, where monthly bunko games and potlucks are the norm. Indeed, the house was very sexy in its mid-century modern-ness. No house in this neighborhood stays on the market for more than a week. I wanted in. The feeling of community was inviting and tantalizing after all the isolation I previously felt. Swim, tennis, garden clubs, a neighborhood newsletter, neighborhood yard sales, a civic organization…this neighborhood has the whole package. The housing market in Atlanta was on fire and this particular development was super hot. I was afraid I’d be left out.  I paid full price competing against two other offers. Appraisals hadn’t caught up to the market yet, so the price was adjusted to my benefit. That was good news. My conversion to a FIRE mentality had not taken hold yet. Romantically, I met my current partner, Jay, within two weeks after my offer was accepted.  Everything moved forward simultaneously.

When I made the offer on the house I decided I would find a tenant for its basement apartment to defray costs. I settled on a tenant fairly quickly. I didn’t realize I was “house hacking” at the time. Unfortunately, the tenant wanted to be a roommate NOT a tenant.  Quickly, that became tiresome in light of my blossoming romance with Jay.

Jay was living a much simpler lifestyle and spending less. He had bought a small condo years earlier. He also discovered Dave Ramsey years earlier and he learned to live within his means. Jay had a healthy emergency fund.  He was well versed in side hustling. He lived “egotrage” before Mr. Groovy made it cool, delivering pizzas one weekend evening a week.

Meanwhile, while love grew, expenses grew, too. Lifestyle inflation took hold when I moved back to Atlanta. Instead of cutting back, I let spending continue at its current rate.  I didn’t accumulate debt other than the mortgage and I took every advantage of all pre-tax retirement plans and my HSA—even contributing occasionally to a taxable account.  Still, while I had learned a lot from my many previous debt lessons, lifestyle creep had its way with me for a solid 18 months. Looking back, I was a “spendy” girl.

The Commute Was Killing Me but…

During my hour-long commutes, I discovered podcasts. They were life changing. I discovered FIRE. This led me to bloggers. Each site led to another. Within a few short months, I realized my folly. I had succumbed to the lure of buying a too big too expensive American Dream House. I bought the idea of housing as an investment instead of simply as shelter. I bought at the high end of what I could afford. A couple of plumbing emergencies, leaky roof scares and the expense of furnishing the too big too expensive house were reminders of the true cost of home ownership.  Expenses ballooned and savings declined.

I shared my discoveries with Jay. We both agreed that something had to give. Looking back, I could easily have increased my savings rate substantially for almost two years before I actually did it. I don’t regret the great times I had but I do wish I’d have discovered podcasts a year sooner!

In love, but burning out at work and unhappy at home, Jay helped me figure out exactly what the future could look like. Armed with my new FIRE education, options began unfolding. I explored turning the basement apartment into an AirBnB.  What if I turned the house into two units; renting both? Could I get another tenant for the basement apartment? Should we renovate and rent his place out on AirBnB? Or get a long-term renter? Which option was right?  We didn’t want complication. We needed to make life easier.

There was only one situation that didn’t add layers of complication—Jay’s condo. Jay’s condo was in the center of North Atlanta, close to almost everything important. Life is simple there. Money management would be simple there. Jay was on board. We decided I would move in with him and sell my house.

Jay and I envisioned small space living in the condo. Plans emerged to design the condo to accommodate a “former bachelor” and his LP collection and a “collector of all things vintage and artsy fartsy”. We worked on how to make room for two in the minimal space. Working with a $20K budget, we limited structural changes but we made cosmetic improvements that largely impacted storage and organization.

Jay’s been a great partner in optimizing spending. Although he has no plans to FIRE soon, he listens to me.  Best of all, he indulges my exuberance about financial independence and is appreciative of my all my efforts to reduce costs.

Getting Back to Basics

We made an error in hiring Lowe’s as contractor for a kitchen renovation (a mistake that cost $12K, but that’s a tale for another time). We suffered through delays in construction and poor craftsmanship. Through it all, in the end we’re happy we made the decision to “right size”.

Anxious to sell my house during the holidays, we actually scored big because that meant very low inventory. Mine was the only house for sale in a sought after neighborhood. The previous spring and summer had been great for home values. My home listing sparked a bidding war and I was under contract on its sale within two weeks. The appraisal came in substantially higher than the amount I paid for the house. Moving into 700 SF, a mere ten miles away, has been a boon to our savings since.

True, we accrued the expense of renovation to optimize space and efficiency.  However, we both believe we have finally optimized our housing costs. My housing expense went from a minimum of $2700/month to a fixed $750.  I pay Jay rent and we cost share most everything else. Now, I am able to front load my 457 and 403b and max pre-retirement accounts. Owning more of my time will become reality soon.

Notably, the savings have been monetary but an additional benefit is that I see a path out of job burn out, too. Burn out in healthcare is commonplace, and the depression and anxiety that come with it is unrelenting. Jay can attest that my outlook has improved. I’ve come to a place knowing that owning my time gives me the greatest value and makes me happiest. Nothing compares to waking up to a day with nothing on my schedule. This is the greatest cure for burn out.

One day, I will be able to follow my passions and own all my time. Eventually, I’ll pursue all my creative endeavors—painting, particularly encaustic painting…making art every single day if I’d like.  I’ve wanted to be a “picker” and resell to antique stores so I might even take on that.  I once owned a home decor/antique store so I have a few “honey holes”. I know where to find incredible bargains for re-sale.

I have Big Hairy Audacious Goals. Many involve travel. Without the limitation on vacation approvals from a job, I’ll be able to slow travel…NOT to be mistaken for vacation. Vacations are for escape. Without full time work—the last anchor around my neck, I’ll be free to truly immerse myself in other places. I believe slow travel will alleviate all symptoms of burn out. I have been travel hacking and I’m excited to use accumulated reward points. Jay and I have even discussed trading in a car for a van or small RV. We’re dreaming again. Traveling this great country of ours and seeing all the incredible things we’ve only studied in photos and travel blogs has a lot of appeal.

“Right sizing”, with a small amount of geoarbitrage thrown in, has been life changing. Who knew you could geoarbitrage your way to wealth accumulation by moving only 10 miles away? It’s exciting to watch our net worth grow quickly. No more treading water. We are committed to living our best life and getting to the place where all options are open. Owning my time is right around the corner. We’ve optimized expenses and optimized our lives. Part time work is within reach and leaves the nest egg free to grow.  A sabbatical is now a possibility.

Reaching the Promised Land of FIRE…what could be better?  Doing anything and going anywhere…this time it is within reach!

Bucket Babe is a GenX chick in her early 50s. She blogs over at LeanfireATL about her journey to FIRE through spending, saving, and investing.  Her goal is to own 100% of her time while living on less than $40k/year.  LeanfireATL explores adding joy, meaning and value to life while working towards early retirement.  It’s about owning your time, saying good bye to the dreadmill and creating a joyful life as a Valuist. 

Mr. Groovy here. First, was Bucket Babe’s guest post a wonderful yarn, or what? It had everything. Adventure. Romance. Real estate. It even had a shout out to my beloved “egotrage.” So thank you, Bucket Babe. I really appreciate that you graced our website with your compelling zest for life and your compelling knack for storytelling. Bravo. Second, Mrs. Groovy and I managed to make Crooked Creek Park a little cleaner and the catalog of riveting videos on YouTube a little larger. Hope you enjoy the latest episode of Talking Trash. Peace.