18 Aug 2022 What Is A House For?

In September of 2014, Amy and I bought our first house. I had just quit a (higher-paying) job at a Big 4 accounting firm to come work at Beacon that spring, and without knowing much of anything about buying a house, we bought one: 955 square feet, for $130,000, with about 10% down. 

As of this week, we’ve moved to another house and will list our first home imminently*, and the whole process has had me thinking a lot about this question: What is a house for? 

Here are three sentences from Morgan Housel’s The Psychology of Money that, depending on when I read them, either haunt me or challenge me: “[S]pending beyond a pretty low level of materialism is mostly a reflection of ego approaching income, a way to spend money to show people that you have (or had) money. Think of it like this, and one of the most powerful ways to increase your savings isn’t to raise your income. It’s to raise your humility.”

There is nothing about having money that lends itself to “raising your humility,” but this is especially true in the context of house-related money decisions in places like Raleigh. A combination of historically low interest rates, lack of inventory, moving social goalposts about what is an acceptably-sized house, a premium on home aesthetics, a pathological desire to live in homogenous neighborhoods, a felt need to project economic status in an obvious way, etc., etc.–these have created a sort of situation where humility begins to look and feel more like delusion than reason. In the end, it’s dreadfully easy to get over your skis and find yourself in what I have come to affectionately term “artificial poverty.” And nothing, not one single thing, will put you in artificial poverty faster than “too much house.” 

We try and go to the mountains once a year with dear friends, and every year for the last several, we have put the kids to bed, gone outside to sit around a fire, and listened to yours truly talk about the Korver Family Housing Dilemma for three hours. We wrestled with what felt like an unending litany of competing desires: Size, quality, yard, commute to work/school, neighborhood makeup, impact of higher mortgage on the rest of our finances, etc. In the end, I don’t know that we’re any closer to answering the question I’ve posed in this blog, and I’m sure we didn’t get it “right.” But I know that the wrestling in the company of likeminded friends kept us from making much worse decisions a number of times.

And maybe that’s the moral of this rambling tale. For those of us who have much, maybe our responsibility is to give freely, save wisely, and be willing to wrestle with our spending. Wrestling isn’t the most glamorous sport, and wrestlers seem to sweat a lot more than anyone else, but maybe wrestling is the only way to raise our humility? And if so, I bet that humility does more than just help us save.  

*Note: I am well aware that the “right” answer financially would be to keep our old house and rent it, especially with a 2.5% note on it, but here’s the thing: I don’t care! I’d rather get debt off our balance sheet and hopefully never be a landlord, ever.