Balancing the cost of cruising with cost of life...

[halos]

One could say you are making yourself house poor if you can't afford the house on a 15 year mortgage. I know there are some special circumstances where you have to live places that real estate just isn't affordable, but in general in most markets I personally believe you should shop for a house you can afford on a 15 year mortgage.

 

While it's great to think that you can take a 30 year mortgage and pay it off faster by paying extra each month - you are not FORCED to pay extra each month. Meaning that's one of the first things a lot of people would cut if they wanted extra spending cash. Just basic human behavior - well I don't need to pay the extra this month - it's christmas. Come January 1 i'll start paying it again - and then that never happens.

 

Some people are ok doing that though - if you are kudos, but I would easily bet most people wouldn't be disciplined enough to do something like that and stick to it for 15 years.

 

 

 

If you can do a 15 year mortgage comfortably then it's great...but if you are even slightly squeezed with it, it isn't a good idea. It makes more sense to pay less each month and save money in an account as a cushion. Everyone should have a MINIMUM of 6 months cushion. Personally, a year cushion is far more comfortable. And like I said before, you are in good shape if you only mortgage what can be paid back on one salary (if you have 2 coming in). And if your interest rate is low, why would you want to pay off early anyway??

 

LOL! I was just wondering because I don't know too many if any at all early twenty year olds that could afford let alone qualify for a 15 year home mortgage where I live:D

I seriously don't know how ya'll do it. Prices there are just insane....although I guess they're a bit lower now. Is the market rebounding at all there?

[Calinae]

We did both.........

 

We saved and saved for a house that is now worth 75 thousand less then the loan for it is. Took us 7 years to do that......

 

Took my husband, yes him alone, 2 years to save enough for the cruise with a enough cushion to truelly enjoy ourselves on it. Bless his heart, he scraped from his lunch money to do this for me.

 

Now given the choice.........

 

Houses are at historic lows, unfortunately, still getting lower....

I could be renting for less then half of what my mortgage is and going on more cruises. You cant take it with you, might as well enjoy it while you have it. After all in 20 years when we retire, we MIGHT be able to sell our house for what we owe on it. I would much prefer to enjoy my life while I am young enough to do that.

 

That being said, flame away.... owning a home is not what it used to be.

[trock]

If you can do a 15 year mortgage comfortably then it's great...but if you are even slightly squeezed with it, it isn't a good idea. It makes more sense to pay less each month and save money in an account as a cushion. Everyone should have a MINIMUM of 6 months cushion. Personally, a year cushion is far more comfortable. And like I said before, you are in good shape if you only mortgage what can be paid back on one salary (if you have 2 coming in). And if your interest rate is low, why would you want to pay off early anyway??

 

 

I seriously don't know how ya'll do it. Prices there are just insane....although I guess they're a bit lower now. Is the market rebounding at all there?

 

Long Island here.. it's torture!

[Kurbanfan]

We did both.........

 

We saved and saved for a house that is now worth 75 thousand less then the loan for it is. Took us 7 years to do that......

 

Took my husband, yes him alone, 2 years to save enough for the cruise with a enough cushion to truelly enjoy ourselves on it. Bless his heart, he scraped from his lunch money to do this for me.

 

Now given the choice.........

 

Houses are at historic lows, unfortunately, still getting lower....

I could be renting for less then half of what my mortgage is and going on more cruises. You cant take it with you, might as well enjoy it while you have it. After all in 20 years when we retire, we MIGHT be able to sell our house for what we owe on it. I would much prefer to enjoy my life while I am young enough to do that.

 

That being said, flame away.... owning a home is not what it used to be.

 

LOL! It seems you don't remember when the market took a dump in 1990:D Be patient........

[halos]

We did both.........

 

We saved and saved for a house that is now worth 75 thousand less then the loan for it is. Took us 7 years to do that......

 

Took my husband, yes him alone, 2 years to save enough for the cruise with a enough cushion to truelly enjoy ourselves on it. Bless his heart, he scraped from his lunch money to do this for me.

 

Now given the choice.........

 

Houses are at historic lows, unfortunately, still getting lower....

I could be renting for less then half of what my mortgage is and going on more cruises. You cant take it with you, might as well enjoy it while you have it. After all in 20 years when we retire, we MIGHT be able to sell our house for what we owe on it. I would much prefer to enjoy my life while I am young enough to do that.

 

That being said, flame away.... owning a home is not what it used to be.

That sucks...you bought at the wrong time, through no fault of your own. BUT the OP has an opportunity to buy a home at the perfect time. She can benefit hugely from this.

I wish my kids were in a position to purchase a home right now. NOW is the time to buy...the market seem to be rebounding in some areas. Before the prices get up high again, now is the perfect time to buy a house.

[ericrz]

Lots of good advice here. But in the end, everyone has to make the decision that is right for them. You'll have to live with the consequences, no one else will.

 

I will say though, on the subject of home ownership -- don't feel that, as a young married couple, you have to move to the next step on the board game of Life and become homeowners.

 

If you want to own a house, great. If you can afford a 15-year mortgage on it, and are going to stay in that house for 15 years, fantastic. A great investment, in all likelihood (though there are no guarantees in this economy!)

 

But if you like your "beautiful apartment," aren't sure if you'll remain in that area, don't know yet if you'll need space for future children, aren't sure you'll remain in your current careers, etc. -- don't rush into buying a house because "that's what everyone does."

 

Owning a home can drain your bank account, age you horribly, and it can be more of a nuisance than a pleasure.

 

Now, that's the pessimistic scenario, of course. But any home ownership experience has its ups and its downs.

 

Financial experts will scream and yell, telling their audience that long term renting is a horrible idea, akin to leasing a car. Everyone should buy a house on a 10- or 15-year mortgage, and everyone should purchase used vehicles in cash.

 

From a purely dollars-and-cents view, they are correct. However, everyone needs to put a price on their own sanity, their own stress levels, and their own peace of mind.

 

The fact that the two of you have a savings account and a retirement account puts you well ahead of most 20-somethings I know. (And well ahead of where I was at that age!)

 

If I were you, I'd go on the Mediterranean cruise, if it's something you've always wanted to do. If it puts you 1-2 years behind on purchasing a house, and you can live with that, go for it.

 

As long as you're both honest and realistic with each other about your financial situation -- i.e., "If we take this cruise, we probably won't buy a house until 2013, when interest rates may be higher and housing more expensive" -- then the two of you can make an informed decision.

 

Best of luck.

[Calinae]

That sucks...you bought at the wrong time, through no fault of your own. BUT the OP has an opportunity to buy a home at the perfect time. She can benefit hugely from this.

I wish my kids were in a position to purchase a home right now. NOW is the time to buy...the market seem to be rebounding in some areas. Before the prices get up high again, now is the perfect time to buy a house.

 

 

I dont see them geting high in ANY area, at least not for a couple years. If I had the choice and (of course) knew what I know now, I would wait at least 5 years before buying, I would want to see them rebounding before I would buy. I dont see them rebounding when they do at a remarkable rate. With rent the price it is and mortgages the price they are, you can continue to save more by waiting, just my 2cents.

[T. Advisor King]

This is such a great thread. Thanks for asking this community for input.

As you know, the world is full of choices and there’s no right answer. The choice you have to make is very typical. The only thing I’d change about the way you’ve phrased it is saying it is a choice between “the trip of a lifetime” and “the pride of ownership”.

First, you might go on a fabulous trip to Europe. But I think it would be premature to characterize it as “the trip of a lifetime”. That isn’t to say that you have to be 45 or 60 before you’re allowed to call a trip “the trip of a lifetime”. I’m just saying that you might be overstating things.

Second, while “pride in ownership” is a nice side-benefit to owning your own home, I don’t think it should be the key motivator or the main benefit. The advantage to buying a home that you can afford is that it acts as an investment in the sense that it builds and retains value (not to be confused with an investment that you might hope to flip for a profit). It also means that instead of paying rent every month, you’re paying into something you own (albeit at typically higher monthly payments).

I'm a little surprised by the number of people saying "take the trip", particularly those who couple it with the sentiment that more or less equates to, "you might as well do it today because you could be dead tomorrow." The fact is, there is a very slim chance that if you don't take the trip now, you'll be dead before you get a chance to take it. A philosophy of "live for now; worry about the future later" isn't particularly practical.

If going to Europe is important, consider taking a less expensive vacation. I agree with the other poster(s) who indicated that there are much cheaper and better ways to see Europe. Or consider deferring the trip for a year or two and save specifically for it. And if you believe it would be too difficult to save that much money over that period of time, then think how difficult it will be to save for that down-payment on the house if you do take the trip now.

In addition, consider creating savings accounts for fixed amounts each month for both vacation and "house" savings. Most banks will set up automatic transfers so you only have to set it up once and the money automatically comes out. Most people fall into the trap of saving "what is left over" after they've spent what they "need" to spend. That is a mistake. Save a fixed amount first, then spend the rest.

But I agree with the posters who say it doesn't have to be a choice of either the house & family or the trip. It can be both. We always take nice trips with our kids, so I don't think that should stop you. And if you're disciplined at planning, budgeting and saving, there's no reason you can't do both.

[halos]

Long Island here.. it's torture!

 

I imagine it is!!

When I lived in the Allentown PA area there were a good number of people who lived there and would commute to NY every day because they couldn't afford the real estate.

 

This is such a great thread. Thanks for asking this community for input.

As you know, the world is full of choices and there’s no right answer. The choice you have to make is very typical. The only thing I’d change about the way you’ve phrased it is saying it is a choice between “the trip of a lifetime” and “the pride of ownership”.

First, you might go on a fabulous trip to Europe. But I think it would be premature to characterize it as “the trip of a lifetime”. That isn’t to say that you have to be 45 or 60 before you’re allowed to call a trip “the trip of a lifetime”. I’m just saying that you might be overstating things.

Second, while “pride in ownership” is a nice side-benefit to owning your own home, I don’t think it should be the key motivator or the main benefit. The advantage to buying a home that you can afford is that it acts as an investment in the sense that it builds and retains value (not to be confused with an investment that you might hope to flip for a profit). It also means that instead of paying rent every month, you’re paying into something you own (albeit at typically higher monthly payments).

I'm a little surprised by the number of people saying "take the trip", particularly those who couple it with the sentiment that more or less equates to, "you might as well do it today because you could be dead tomorrow." The fact is, there is a very slim chance that if you don't take the trip now, you'll be dead before you get a chance to take it. A philosophy of "live for now; worry about the future later" isn't particularly practical.

If going to Europe is important, consider taking a less expensive vacation. I agree with the other poster(s) who indicated that there are much cheaper and better ways to see Europe. Or consider deferring the trip for a year or two and save specifically for it. And if you believe it would be too difficult to save that much money over that period of time, then think how difficult it will be to save for that down-payment on the house if you do take the trip now.

In addition, consider creating savings accounts for fixed amounts each month for both vacation and "house" savings. Most banks will set up automatic transfers so you only have to set it up once and the money automatically comes out. Most people fall into the trap of saving "what is left over" after they've spent what they "need" to spend. That is a mistake. Save a fixed amount first, then spend the rest.

But I agree with the posters who say it doesn't have to be a choice of either the house & family or the trip. It can be both. We always take nice trips with our kids, so I don't think that should stop you. And if you're disciplined at planning, budgeting and saving, there's no reason you can't do both.

 

I just want to say that I always enjoy your posts. :)

 

I dont see them geting high in ANY area, at least not for a couple years. If I had the choice and (of course) knew what I know now, I would wait at least 5 years before buying, I would want to see them rebounding before I would buy. I dont see them rebounding when they do at a remarkable rate. With rent the price it is and mortgages the price they are, you can continue to save more by waiting, just my 2cents.

 

Goes to show that your experiences totally shape your opinions. I can understand why you would feel the way you do, although I still do disagree.... ;)

[trock]

I imagine it is!!

When I lived in the Allentown PA area there were a good number of people who lived there and would commute to NY every day because they couldn't afford the real estate.

 

The housing market has dropped a bit -not a lot but it has.. But the taxes and LIPA are the real killers... So many people are moving off the island!

I just want to say that I always enjoy your posts. :)

 

 

 

Goes to show that your experiences totally shape your opinions. I can understand why you would feel the way you do, although I still do disagree.... ;)

I agree TKING.. nice post

[GaNavy]

In your mind, what is more important? Making memories and seeing far away places, or the pride of being a homeowner?

 

And for all those who cruise often (I want to be like you someday!)... how do you do it? Are there things that you sacrifice, to be able to cruise often?

 

A house is a place to live - I say you shouldn't look at it as an investment, lots of people did in recent years and have nothing to show for it. Sure, you might make money when it's time to sell, but you should be buying it because you want to live there. Period. So much the better if you make money later.

 

A cruise is a place to go - you aren't going to stay there forever, but the experience will be one of the things that makes your life fulfilling.

 

I can't tell you what to do (although I think those who have suggested you get some financial education are on the right track), but in my lifetime, at some times I've owned my house, and at others I've rented it. I didn't see any particular advantages in one over the other. For what it's worth, I'm now renting.

 

They're not likely to drain the Med any time soon, and there will always be houses to buy. Considering you present circumstances, perhaps your best choice would be to save the money and forgo both the cruise and the house for a while.

[halos]

The housing market has dropped a bit -not a lot but it has.. But the taxes and LIPA are the real killers... So many people are moving off the island!

 

 

:eek: Taxes

I can't even think about the taxes here without getting seriously sick.

Cost of living sucks here...although it is likely far better than where Kurb is :eek:

It's all a matter of perspective...

gonna retire in the south and be wealthy as hell......:rolleyes:

OH...and WARM :D

[Calinae]

I imagine it is!!

When I lived in the Allentown PA area there were a good number of people who lived there and would commute to NY every day because they couldn't afford the real estate.

 

 

 

I just want to say that I always enjoy your posts. :)

 

 

 

Goes to show that your experiences totally shape your opinions. I can understand why you would feel the way you do, although I still do disagree.... ;)

 

 

I also live in a rural area. We are over 30 miles from the city where my husband works with nothing in between. Experience does pay off, and the OP is getting opeinions form other posters on their experiences and suggestions. I do wish I would have though of that. We thought we were buying at the right time as prices had stabilized in our area. It was foreclosures in our area that again dropped the market substantially.

 

Doing what is best for any individual is what really matters.

 

My oldest daughter and her husband are ready to buy, but have decided to wait. They are not taking a cruise with their money which is what I would do :D, they are just merely waiting. The longer they wait, they more they can put down, unltimately bring payments down, or affording more home.

 

There are millions of areas, millions of prices and millions of going ups and going downs. Researching is your best bet, and for me I did not do that ENOUGH to save me thousands of dollars.

 

Best of luck to the OP and whatever they decide. I am sure you will m ake the right choice for YOU.

[combatboots2jimmychoos]

I'm actually closing on my first house in the ATLANTA area (conyers) next week (was supposed to be today). I'm 27 and fiance is 33. We are buying a really nice forclosure and our mortgage is actually HALF of what we pay in rent (downtown midrise). So we will be SAVING money by giving up the downtown beauty by buying a home a few miles outside of the perimeter. I was lucky though and didn't have to have a down payment because I'm a veteran. In my opinion if you can rework your budget, you may be able to have the best of both worlds.

 

If you are willing to be frugal in some areas then you can save the money that you'd normally spend and put it towards one dream and then the expected surplus would go towards the second dream. So look in areas where you are willing to cut- big places I save are not getting my nails done every week or 2 ( I chip the polish in a day anyway), eating out less (includes fast food- I bring my lunch now), stopped drinking starbucks and (I'm going to get flamed for this) cut back on alcohol. You'd be suprised that between 2 people- this can add up to a few hundred a month.

 

Also- you can hint to family to purchase Carnival gift certificates for you and DH for birthday and christmas presents to help cut down the price of the cruise. I know my sister flat out asks me what I want anyway......

 

Or perhaps extend your cruise an extra year if you don't think you can accomplish both in a reasonable time.

[halos]

Doing what is best for any individual is what really matters.

 

 

agreed :)

[Nunu]

If I could go back I would never have bought a home.

[nrdsb4]

Everyone should have a MINIMUM of 6 months cushion. Personally, a year cushion is far more comfortable.

 

My husband is in a 100% commission industry. The last "bust" lasted for three years. We saved for a 3 year cushion.

 

His industry has tanked again and we are 1.5 years into a 3.5 year cushion. Still, we are cutting way back. No guarantees that the bust will end in the next 2 years.:(

[grandmallie]

this will be my DH and my 3rd cruise together, wish we could afford more than that,but I have 2 adult children from a former marriage and I will be turning 50 in June, my husband 58 in August. in my first marriage we never owned a home, we rented, never went on any vacations except to my families place in N.H., never had extra money to spend.the best advice I can give you IMHO is the earlier you start saving,the better off you will be.we didnt go on our first cruise until our 10th anniverary, we didnt even take a honeymoon. we bought a house.we put money into the house, and it is sooo much more worth it than putting it towards a rent, that is like throwing money away. both my DH and I have worked since we were 16, we have both made financial mistakes:rolleyes:, but I give huge kudo's to my hubby because when it comes to money he is super shrewd,or as we like to call it Anal with a capital A ;)

We are lucky to have our home here and have a manufactured home in florida to retire to, we skipped a cruise last year and im glad we did because we lost my MIL, she was sick for quite a few months before she passed away.If you work hard for something, it is all worth it, and like others are saying, being debt free is soooo very liberating.

Best of luck to you in your quest and I hope I havent rattled on to much.

Hard work and percerviernce will get you what you want:D

[zqvol]

You are basically on the same side of the coin as I am. I have been telling myself "right now is not the time to worry about being responsible".

 

However, I am worried if I don't become responsible soon, 10 years from now I will kick myself.

 

It's hard. My mom is pushing us to travel... hubby's dad is pushing us to buy a house. Both are basically in the same position. And I understand both points of view.

 

Thank you for being honest and in voicing the same concerns/feelings that I have

 

 

I have the perfect solution. tell your mom that you would love to travel but are saving for a house.Would she like to treat you to a trip? Tell your father in aaw that you would love to have a house but want to travel. Would he like to give you the down payment? :D:D:D

 

If you are lucky you get both to say yes!!!!:):):)

[Thamsey]

GREAT GReAT post.

I am a 58 year old single woman I am 2 years off of owning my condo It would have been sooner but I put money towards my RRSPs (Canadian Retirement Plan) and 2 vacations a year. I beleive there is a cruiseline bare bones but alot cheaper called Easy cruise you can find it on these boards. The cruiseline is alot cheaper and its more like off the beaten track I would look at this one if I was your age. They also go into ports in the med that larger ships don't.

[Kurbanfan]

If I could go back I would never have bought a home.

 

 

Why?

[halos]

My husband is in a 100% commission industry. The last "bust" lasted for three years. We saved for a 3 year cushion.

 

His industry has tanked again and we are 1.5 years into a 3.5 year cushion. Still, we are cutting way back. No guarantees that the bust will end in the next 2 years.:(

I'm sorry to hear that....I'm happy that you have that cushion, however.

I hope things turn around for you.

 

 

If I could go back I would never have bought a home.

 

Wow. You must have had a horrid experience to say that.

 

There's not a day that goes by when I pull into my garage, that I don't thank God that I have a home to call my own.

My feelings are in synch with my astrological sign if you believe all that stuff. ;)

I am, by nature a home-body...a water sign (which explains my cruise addiction as well :D)

[iamsteph]

I think you could do both! Really figure out where you are splurging in every day spending, and cut back. If you buy coffee every day, make it at home and take it to-go. If you buy lunch every day, take a lunch (i like frozen meals for lunch--they are $2 cheaper in the frozen food dept. at a retail/department store than they are at the supermarket, go figure. Also, make a couple of big meals on Sunday, put them into containers as leftover for lunches). If you go to the movies every weekend, get a subscription to a by-mail movie service. Aaaaaall those little expenditures add up, and that is money you could be saving. Just internet search 'ways to save money'--there are lots of ideas!

 

Now to give you hope--my fiance and I, started cruising in 2007-I was 25, he was 26. We bought a house using a down payment he brought to the table, but we bought a house whose monthly payment we could afford, and have a little each month left over in 2008. We are planning our Mediterranean cruise in 2011. Basically the same situation as you.

 

So it is possible :)

[Nunu]

Why?

 

Because we all fall into the trap of chasing the dream. How many in N. America are slaves to those 4 walls in hopes of paying it off if they're lucky 10 yrs before they die? Lots of cultures don't have that goal. I wish I were part of that.

[Kurbanfan]

Because we all fall into the trap of chasing the dream. How many in N. America are slaves to those 4 walls in hopes of paying it off if they're lucky 10 yrs before they die? Lots of cultures don't have that goal. I wish I were part of that.

 

 

I don't feel trapped......I can sale and move anytime I want:D