The “Stop It” Guide to Personal Finance: Part Three

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There’s a difference between functional housing and dream housing. Functional housing provides the bare necessities while dream housing provides all the modern conveniences and wraps them up in a whole lot of class and style. It’s the difference between floors covered with linoleum and floors covered with Brazilian walnut hardwood.

Now, to further drive home the distinction between functional housing and dream housing, I decided to include some YouTube videos.

Functional housing can be summed up with the term “just enough”—as in just enough to get the job done. There are no bells and whistles in functional housing, just amazing economical utility. Here are some examples of what I mean:

Dream housing, on the other hand, is HGTV housing or billionaires’ row housing—it goes way beyond necessity and bathes the homeowner in a level of opulence that most of the world’s inhabitants can scarcely imagine. Here are some examples:

There’s nothing wrong with dream housing, of course, providing you can afford it. And this one little axiom escapes the ken of far too many Americans. In other words, too many Americans that should be in housing that skews functional are actually in housing that skews dream. The end result of this mismatch is economic weakness. We’ll get into the main peril of economic weakness shortly, but for now, I just want to present “Stop It” rule number three. Here it is:

Stop It Rule Three: Stop buying dream housing before you’re financially ready.

If you’re in dream-skewed housing and have neither a six- to nine-month emergency fund nor a savings rate of 15 percent or greater, “stop it!” You’re over-housed. Granite countertops aren’t for you. You’re laminate countertops all the way, baby, and you need to downsize your housing ASAP.

Just why you need housing that doesn’t impede your ability to build wealth is rather grim. Scum prey on economic weakness, and there’s a lot of scum in business and government. If you’re not economically strong and well on your way to having FU money, you’re going to be the bitch of some boss or bureaucrat. Your boss wants you to take a vaccine you don’t want? Oh, well—buying that fashionable house in that fashionable neighborhood means you have to roll up your sleeve. The edu-fascists at your childrens’ school want your children to be ashamed of their skin color? Too bad—having a mortgage that requires two full-time wage earners means you can’t home-school your children and you have to forfeit their dignity as well as your own.

Dream-skewed housing isn’t so great when it puts you at the mercy of scum. You’re far better off being economically strong in functional housing than being economically weak in dream housing. In the short run, your ego will resent you, but in the long run, your wallet and pride will thank you.