Termite Damage and Live-ability Made the Difference
Pictures from our Home Remodel:
Podcast Episode Transcript:
(Rough cut, unedited)
If you’re a homeowner, you probably understand the tension that I’m living in right now and that tension is that there are things in my house that need to be repaired and there are things in my house that could be repaired and there are areas of my house that I just really want to make better and there are areas in my house that my wife really wants to make better, but we also hate having a mortgage and we are sick and tired of making that payment and we are sick and tired of people telling us that if we own a home, we have to have a mortgage for 30 years. I’m tired of that. I don’t believe that. I don’t think in any way, shape or form. Is that the way that I need to live or want to live, but we live in this tension of do we fix up the house or do we pay off the mortgage faster? Today? I want to invite you into that kind of decision process that I’ve been going through and explain to you why to home remodelers showed up at our house today and started demolition.
Hello and welcome to the cheerful money podcast, the show dedicated to helping you create financial margin to give more generously and live more free. And I hope, I hope. I hope. I hope. I hope that you are doing that today. That you are living the life that you are called doing. You’re not letting money creates stress, but you are taking control of it and choosing instead to enjoy the blessings and the opportunity to bless others that you have by having access to money and that blessing itself. My name is Guy Smith and I am honored and I am excited that you have chosen to spend a little bit of time with me today. So like I said in the intro today, I want to invite you into a little bit of a tension point that I have in my life and that I have in my home, in my marriage, in my house purchase.
So I’m going to walk you through the situation that I am in. So this show is going to be a little bit different than some of the previous shows that you’ve listened to. A lot of those shows started out with kind the big view of what cheerful money is about. And then I, I’ve delved a lot lately into scripture and I know that is relevant to many of my listeners, but I also know that for many of you, you really just prefer like the nuts and bolts a less than than we talked about or the podcast where we talked about budgeting and the importance of that. Um, so today, to kind of take this a little bit of a different direction, I just want to invite you to see in some of the realities of my current situation. So let’s just be right up front and frank about what’s going on and what’s happening in the Smith household today.
So let me start at the beginning. Um, so my wife and I, we got married in 2012 and we were renters. We were renting in a small town and we were renting at an incredible price. Now, depending on where you live in the country, you’re either going to think, I’m like the luckiest person in the world. Are you going to think I’m a liar? Right. So. So for the first, for the first two years of our marriage from 2012 to 2014, we rented a two bedroom, half house. So like half of a house. Was it? It was not really a duplex. It was kind of a duplex, but it’s like the slick, the back half of the house kind of broken off, like not like a real nice looking duplex. Just an old house that they had turned into two apartments and we were renting half of that and that had two bedrooms and a kitchen, a nice dining room, that kind of tunnel kitchen.
But we were renting this in a small town, our hometown for $250 a month. Yeah, $250 a month now. Now let me give you another perspective on that. That was more than I was paying for the studio apartment across town before I got married. I was living in this studio apartment for and I was paying a hundred and $75 a month before utilities of course, but whenever I proposed to my future wife, she said, hey, hey here, a little side note, right. I’m not going to live there, so we need to start looking for something cleaner. So I’m, yeah, I’m one of those bachelor’s who didn’t live real clean, didn’t, uh, you didn’t learn everything I needed to learn from mom growing up. She took such good care of me that I didn’t really know what all required to take care of my own apartment, what was required of that.
So I wasn’t real clean, but I lived in this apartment that was, it was a studio apartment, not the nicest place in town, but I was paying $175. So that’s my context. I moved out of my parents’ house to pay that price. And then when I got married I had a $75 a month increase in what I was painting that still just $250. So that’s where I’m coming from. Okay. And then in, in, uh, as we’re living there, we began the process of we were working through the Dave Ramsey baby steps I was teaching or leading. He likes to, I guess he doesn’t call it teaching, he does the teaching day, does the teaching on the TV and we do the coordinating. If you, if you’ve ever lead an Fpu class, you do the coordinating, you’re not actually, you’re just kind of facilitating the conversation. He doesn’t ever want anyone to say they’re teaching it because that’s, that’s his thing.
Right. And that’s fair. I’m, I’m, I’m fine with that. So I was coordinating a financial peace university at my church. I did it four or five different times and so my wife and I were working in the system. We were working on our finances and following his steps. So while we’re paying $250 a month for our housing, we’re also building up a mutual fund that is specifically designed for specifically earmarked. It wasn’t like officially earmarked or anything, it was just like for us, we just said, okay, so here’s a mutual fund that we’re going to feed for a minimum of four years. It was kind of the target, right? I know longterm investment, we need to go five years or more. If you’re in the stock market. I, you know, I’ve been in, in uh, as a part of all those conversations, but our plan through talking with our Dave Ramsey recommended a endorsed local provider at the time.
We said, you know, I’m comfortable if you wait four years, you’re going to do just fine. So we started funding that while we’re paying a very small rent. Well, in 2014 we had the opportunity to calling to, to move to another town not too far away and begin pastoring a local church. So when we did that, we took a pay cut and we also said to the church leadership, we said, yeah, we’re willing to move to your community. Well, one of the things that we didn’t expect is that all the farther we were moving, it meant a significant increase in our rent. So we looked for a long time, we shopped as hard as we could and looked at a lot of apartments that were. People were asking a lot more than $250 and it wasn’t as nice. So we realize, man, we got a sweet deal over here.
Like this is incredible. I can’t believe this guy is only charging us $250 and it’s nicer than this apartment over in this other town that they want five, six, $700 for like where? How lucky are we? Like, do we even really want to move? Maybe I shouldn’t try to commute this, you know, but because it was a church job, I thought it was important to live in the community that I was serving in shop at the stores with people from my church and I just see people on the streets making sure that my kids are going to the school district. Once we get to that point, all of those things mattered to us from a state of ministry. So we kept looking and we eventually, through a connection, my father in law, we were able to find a very nice apartment for $600, so $600 a month, but that was negotiated.
It was supposed to be 700. And I said, Hey, listen, I’ve been paying 2:50, I’m taking a pay cut by making this move. Is there any way that you can meet me at 600? And so we made that negotiation and he agreed, uh, as long as we didn’t tell the neighbor who was paying $700 and he’s like, he’s like, Hey, I’ll do this, but please don’t tell the guy next door or he’s going to hang me. Right. So, so we made that agreement and, and, and we lived there. We never told anybody we got away with it. Uh, it was a blessing. That was a wonderful place. We got to bring our first son home there. So we lived there for roughly roughly, I think it was 15, 16 months. And kind of following that, Dave Ramsey housing, a teaching that he would say is, you know, when you move to a new community to live there for at least a year, which I think is very wise to, for one way, you’re, you’re making sure that you want to even be there.
So that was my plan. I thought, you know, I want to know that this church is where I want to be, that pastoring is where I want to be. That there’s some stability here, um, that, that I see God calling me to be here longterm before I invest beyond renting. So, uh, we, we did that for a little over 15 months and then we decided to, we, we did think that God was calling us to be here for the foreseeable future. You know, we never know too deep into the future. But for the first pupil suture we thought this is where we’d be. So we began house shopping because we started looking and we heard a lot of people would say, you know, don’t want to rent real long. You know, you, you know, renting is good for a transition. It’s very important for a transition, but we don’t.
You don’t want to rent forever because you know, you can say, well, you can argue, well, hey, you’re throwing your money away. You can say you’re throwing your money. Went and I, I personally, personally, I get that. I get the equity thing. You’re throwing your money away, right? It’s gone, but, but I don’t think you are throwing your money away because you’re paying for a place to live. Like you’re buying housing, right? Like I, I go to the grocery store and I buy $100 worth of food. I don’t feel like I’m throwing my money away. I feel like I’m feeding my family and when I put gas in my car or if you have a car payment and you’re making a car payment, I don’t feel like I’m throwing my money away. I feel like I’m providing transportation or fuel or what have you. I’m buying something for my family because we have a need in.
This fulfills the need so the housing is that need is being fulfilled by paying rent. But if you do that forever, you’re not building equity, you’re not building your estate and, and an absolutely it, if you do that forever, it becomes a financial mistake I think in a lot of ways. But if you’re in a transition, there’s nothing wrong with it. So, but we began this process of searching because we had a lot of people tell us that their mortgage was less than what we were paying for rent. So we’re paying $600 for rent and, and, and we could do better than that are in our community. And I know some of you people, you’re listening to this, if you’re listening to this and you’re in a year in another country, you’re not in the United States, you might be thinking, who in the world would pay $600 to rent an apartment?
You’re crazy, right? That’s absolutely nuts. But if you’re listening to this in an American city or a Canadian city, you might be thinking, holy cow, that guy got a two bedroom apartment for just $600. Right? So, I mean, I get that and I hope you get that. There are dollars means something different based on the cost of living where we’re at, but our situation was 600, so my wife and I thought, you know what, we’re going to plant our feet, we’re going to trust God with this. And in all of my research and the things I had been learning in on the conversations and in following, again, following a lot of the Dave Ramsey advice was, you know, I’m going to assume that unless something blows up and goes crazy, that I’m going to be at this church in this community for five more years. This kinda just kind of my hope, right?
I mean, God can do what he wants and you don’t know what’s gonna happen, but it’s kind of the hope in the back of my mind. And I thought, you know, that way, you know, we’re here for six years, uh, will have one year of renting and five years of paying a mortgage, owning a house. So let’s make the jump. And that way we aren’t buying a house and then leaving next year and making this a financial mistake. Let’s just kind of jump into it. So we began to shop and we, uh, we were looking and we had that fund that we had been feeding for a few years now and uh, we had saved up in that fund, uh, I think it was pushing $40,000 at this time. Again, that’s to some people that’s incredible and it. And it was, that was incredible for us because we had been making essentially because our rent was so low and we were both working, making good money at the time.
We were able to continually monthly pump money into that fund and say, okay, when we’re ready to make a down payment on a house, we’re ready to make a down payment, let’s just do this. So my wife and I were having a lot of different conversations looking at it, a lot of different houses and, and, and, and I was, I was of the mind that I hated debt, absolutely hated it. I wanted nothing to do with it. Um, and my wife laughs at me because she’ll say, well, you know, Dave Ramsey is okay with mortgage. Said he actually lets people come on his radio show and scream I’m debt free even though they have mortgage debt, so they’re not really debt free, they’re just like debt minus the mortgage. Right? And, and, and you know, all that kind of consumer debt. Break it down however you wish there, but he’s okay with it.
But yet here I am thinking, you know, we have $40,000, let’s buy a $40,000 house and we can slowly fix it up and then we don’t ever have to have a mortgage. I think there’s a lot of wisdom in that. But what happened was, what happened was my wife saw me using a hammer and a saw one day and she saw me run a tape measure and put a, put a, put a line on the board and cut and then run a tape measure and put a line on the board and cut again and again and again. And it just wasn’t working out. So my wife realized that I’m not the kind of husband that needs to be fixing up a house. We’re not really fixer up. People. I love watching fixer upper, I love, uh, all of those things that people do, the idea of buying old houses and fixing them up and flipping them.
I think that’s a wonderful business to be in. It’s a great hobby business and turn it into a full time business and I champion anybody that is able to do that. But what happens to me is it’s like, it’s like as soon as I start I just get frustrated. I get frustrated. I mean, I, I mean I, I, my wife and I have gotten, I’ve gotten hot at each other because she’s asking me to hang a picture frame and I can’t. I just can’t get it right. Like there’s a, there’s a curtain rod upstairs in our bathroom that, that holds a, a very, a very painful tail when we first moved in and it’s still not hanging right? But it’s on the wall and I ain’t about to touch it, but my wife will constantly or anytime I say I can do it, I want to remodel the basement by myself.
My wife will say, Hey, you remember that curtain rod? The you almost snapped in half and threw out into the snow. Yeah, yeah, yeah. That’s the reason why we’re paying somebody to do this remodel job. So my wife noticed my lack of skills in that area and said, we’re not fixer upper. People were moving ready people. So I said, okay, all right, so let’s look at what is a move in ready house look like, what does that cost? So we started looking and started shopping and we found out that our, our, our, our $40,000 savings was, was not going to be the price of our house. It was going to be the down payment on our house. So when we finally made the look and the ask on the House that the brick ranch that jumped out at us, uh, we began that conversation and I, and I looked at this house and my wife walked through this house and she said to me, she said, okay, so this house is move in ready?
And, and I and I, to this day, I have this, this quote in my head of, Hey, this house is move in ready? And those two words that I might never believe again, but this house is move in. Ready, all we need to do is replace the exterior doors and then we can start paying off the mortgage. That’s it. That’s it. Let’s fix these doors. Let’s pay off the mortgage. Right. Life goes on. So I sat down with a computer and a calculator and the numbers and I just for for days and days and days, I poured over those numbers and I worked my tail off to do everything I could to make sure that we could get this house not on a 30 year mortgage because I wanted nothing to do with a 30 year mortgage. So I worked at, I called every bank that I could find and I and I worked my way into a 20 year mortgage and my plan from the very beginning was to pay off that 20 year mortgage as fast as I possibly could.
Now I know the real estate agents and, and, and the bankers, they all say, well just get a 30 year mortgage and then pay extra on that mortgage every month. And that way if you have a hard month or you know, don’t have the income or some surprise comes up, then you can just forego that extra payment and you’re okay. You don’t default. And Mr. Payment. Well I know my behavior well enough to say that I, I don’t think I’m going to do that. Like I just don’t, I just don’t think that I’m going to commit to that. Uh, so my secret in pain off my mortgage in 20 years or less is to get a 20 year mortgage and force myself like direct deposit like this. Just direct withdrawal. This just happens, right? Like the bank, there was no question. The bank just said, hey, this is how we take the money on the first of every month we drafted out of your bank account.
And I said, well all right, well then if I pay extra and as great. So. So we began the process and we got this on a 20 year mortgage and move in ready house. And I can tell you that we weren’t here long before we realize the benefits of renting. And that might sound weird to you because I’m been a homeowner now for for a two and a half years and I realized pretty quickly the benefits of renting because in all the years that I rented in the several years that I rented, very few things broke in those houses. And when they did break, I didn’t call the plumber or the electrician or the carpenter, I called the landlord, my rent stayed the same and he paid the guy to fix it. But very few things broke anyway. But when they did, I just, I just called him. So what I quickly learned was that even though my mortgage, my technically my mortgage is $579 a month, but my, which, which, which my, my rent was 600 at the time before we made this move. So my mortgage is less but when something breaks out, pay for it.
I also have to pay property taxes. So my actual monthly payment is couple hundred dollars more than I was paying when I was renting. So I’ll look at the whole picture. I see the, hey, you know, I’m building equity. I own the house, I can do whatever I want to, to the house, but this is pretty expensive. It’s a lot different than just renting. Now I don’t despise, I, I don’t regret purchasing a house. Um, but what I want you to see is in this story, because the house has mostly been a blessing, but the house comes with so much more responsibility and so many more potential headaches and so many more potential expenses than what writing that monthly rent check did that I just want you to know, you need to be careful that you need to consider this. You need to think this through as you make these kind of big decisions.
But I explained all of that to say this in, in the intro to this show. I made the statement that this morning I welcomed to home remodelers to come in and they ripped up the floor and they’re working in our kitchen. So here’s the, here’s the place where my wife and I live at right now. My wife is awesome. My wife is incredible. I, I am the luckiest man on the planet when it comes to finding a wife who is totally chill and okay with the way our finances, very content, just enjoys her life, not, not needing all of these, all of these frills, all this unreal like my wife before we got married, my wife saved money and spend as little as possible. She doesn’t need extravagant. It’s, it’s, it’s awesome. Like I highly recommend if you’re single and you’re considering getting married, that you find somebody that is that a content with a, with her life and the things in her life.
So, um, I have my wife’s listening to this and I don’t know if she ever will, but I, um, has been outstanding. So I love you baby. I love you baby. Please, please continue to save money. Right? So, uh, so what happens is my wife is 100 percent on board with wanting to get rid of this mortgage. She doesn’t like it either because she’s experienced what it’s like in the years where we had absolutely zero debt before we had a mortgage and how powerful it was to have all of this income coming in and nobody telling us what we have to do with it, but instead being able to choose to invest and to give at levels like we had never given before and invest at levels that we had never invested in before. So she wants to get rid of the mortgage, but we live in this tension where we also have some things at the house that absolutely have to happen.
So for example, when we moved in, we needed to replace our exterior doors. I don’t know why the previous owner didn’t do it because this house was built in 1956. It was the year 2016. And the doors were like Lynn, all of the hot air out. It was terrible. And then we started trying to check out our water. The previous owners were, uh, they had culligan coming in and uh, the water here tastes terrible. So we had to get a new water softener system and in the process we found out that we needed a better deep well, and then after all of that was done because our, our home is built in a, an old coal mining community. We had a lot of ironing or water that was built up in the pipestone. No matter what we did, no matter what we changed, there were still a, the pipes had built up so much iron that they were shooting red water into the sinks and into the bath that we just cannot get rid of it.
So then that meant that we had to call the water guy again and he came in and he changed out all of our water pipes. So it’s constant changing. Constant improvement. We have a boiler that is original, so 60 year old boiler. We have uh, already in these last two and a half years we’ve replaced the hot water tank and we changed, excuse me, change that over from electric to gas. We knew when we bought the house that we would need a new roof. We haven’t done that yet, but that’s coming up this summer or something that needs to to happen because we’ve got some severe leaks that are happening. We have a terrible wobbly old brick sidewalk outback and a brick front porch that are just terribly falling apart and we had to rip those off because they were not just ugly, but they were unsafe.
So we worked on that and the two guys that showed up this morning to work in the kitchen and the room connected to the kitchen. They weren’t here because we wanted a new kitchen or because we wanted a new floor. They were here because the room beside the kitchen had old termite damage and there was a hole in the middle of the floor under the carpet that my wife was afraid she was going to fall through. Now I want to remind you that when we bought this house, we thought it was move in ready. So that’s an example of all the more we really even knew about houses. So we have these certain things that have to happen in order for our house to be safe in order for our house to be functioning properly and efficiently. So these are things that we’re not choosing because we just want our house to look nicer. These are things that we’re choosing because we want our house to be safer and more comfortable and more fitting for our two and soon to be three young children. Even though we have this desire to get rid of the mortgage, we find ourselves at a place where the most sensible thing to do is to renovate and fix what is broken.
So that’s what life looks like right now. So one of the big questions that we always ask ourselves is how do we make decisions, uh, like this? Whenever it’s not a clear cut answer, it’s not a definite must do. This must do that. See, one of the things that I’ve learned over the years, just like whenever we purchased this house, is the, is to remind yourself that you never made a bad or a stupid decision. You might think that you made a stupid decision. When you look at something with hindsight, you know, I might be able to look back two and a half years and say, well, if I knew this was going to have, I knew there was going to be water damage in the basement. If I was new, if I knew we were going to have this much trouble with the roof, if I knew this was happening, this habit, if I saw that whole, if I found a walked over here and looked at it from this angle than I would have known that I shouldn’t have done this.
From hindsight, I can say, well, you know, maybe that wasn’t the wisest decision, but. But what I’ve learned over the years that I’ve heard from different people that are highly recommend you changing your vocabulary and your perspective whenever you look at your past is that you made the best decision possible based on what you knew at the time. Don’t, don’t look at something begrudgingly because it didn’t turn out the way you thought it would. Right. You made the best decision based on what you knew at the time and that’s okay. That’s life. That’s just what we do and that’s something that affects so many areas of our finances, so when we bought this house, we made the best decision at the time and now with where we sit today, my wife and I both absolutely want to rid ourselves of this mortgage, but at the moment the best possible decision that we can make is to have the hole in the floor fixed right and to make sure that the roof doesn’t leak and to dry up the basement and to put into a safer sidewalk so that my kids can play in the backyard to to make the space what we need it to be for our stage of life.
So that means making sacrifices. That means spending the next probably eight to 10 months fully focused on every dollar of extra income. Every dollar that’s not going towards must pay bills is going towards paying for these projects and our goal, our plan, just so you can kind of know upfront if you’re following along with any of the things that I’m sharing. The plan is to complete these projects, the necessary projects that make the house safer, function properly, and set it up so that our kids will be able to enjoy their childhood here safely in, in, in, in a, in a, in a, in a space that, um, that we enjoy being in is to get these projects done and then turned back on all the things we’ve turned off, things temporary, things like retirement and car savings temporarily turned off while we take care of this and then ramp all of that backup and begin the process of saying, okay, let’s turn back on the contentment and say no more projects unless something breaks.
We fix it when it breaks, but we’re not renovated in the stead. We’re focusing full on 100 percent in. Okay, let’s get rid of this mortgage in less than 20 years. I mean, I’d like to do it in 10 years, right? I mean, we’re two and a half years and I’d like to do it as fast as I can because I just want to get rid of it, which means ramping up the income and it means prioritizing extra payments. And cutting where possible, but still not to the point and not, not to the point of these financial independence guys where it’s like, well, I’m going to live on nothing so that, uh, so that I can live on nothing for the rest of my life, but doing it in a way where you’re still giving your family and your kids the things that matter. So that’s the kind of the tension, the story and the things that have where we’re living right now.
So the thing, the big takeaway that I want you to see today is to understand that, you know, whatever stage you’re at in your life, in home ownership or otherwise, there are a lot of big decisions that we have to make and there are big goals that we want to, that we want to reach. Like I want to get rid of this mortgage. But I also, I want to like where I live and I want my kids and I want my wife to feel as comfortable as I can as they can in the home that I, that I have worked hard to provide for them. So that means that I sometimes have to make sacrifices of not getting exactly what I want and instead allowing those things to take center stage and lead in the priority list. So just remember that no matter where you’re at, when you look at a financial decision that you’ve made, be it’s something big like a house or something big like a car or something small like your food budget.
Just know that as long as you’re making the best decision possible with the information you have provided for you at the time, don’t beat yourself up about this. Money is fungible. We’re figuring it out as we go. You never made a stupid decision. So just keep. Keep moving forward because it’s so important that you take control and that you get to make the decision. That’s the cool thing, right? You get to make the decision. Nobody’s making the decision for you. Nobody told my wife and I that we had to buy this house and nobody told my wife and I that we have to fix this or that we don’t fix this or that. We pay off the mortgage. Or if we do a 20 year or 30 your year or we just keep it forever or we pay almost nothing and then flip it, right?
Like nobody’s telling us what to do. We’re, we’re the siding together were preying on, on this and say, okay, what’s the future hold for us? But we are making the best decisions possible at the time and for us today, even though there is a piece of me that the writing the check for the renovation just kind of grates at me because I would much rather write that check towards the mortgage because I see that as a step of freedom, a step towards more freedom. I have to step aside and say, no, this does matter and it does matter to my family. So I hope that’s helpful today. Give you a little bit more of a glimpse into who I am and where I’ve come from and what, uh, what’s going on in my life right now. Because, uh, this, this crew is showing up every day between now and Christmas.
And they should have this phase of the project done by the time we do Christmas. And it was great because when I was talking to talking to the guy, he and I asked him how long it would take. He said, well, we should be done by Christmas. So, uh, some merry Christmas to you. There’s your Christmas gift. And, and I said, I said, hey man, thank you. I will remember that when you asked to be paid. And he just kind of laughed it off and said, well, well, what I meant was, that’s a Christmas gift from you to your wife. And I said, ah, yes, yes, yes, yes. That’s a, that’s a, a good save there. Right. So, um, so that’s, it really is essentially the, the Christmas gift that my wife and I are giving to each other. Not to mention, we actually just had our, our, uh, electric panel updated too.
So the list goes on and on and on. So it’s so important that you know, uh, and you enter into a house purchase with caution and wisdom because it is a blessing, blessing, blessing. But it can also be a curse. And I can tell you it is a, it absolutely can consume a large portion of your finances. So enter that decision with wisdom, but know that if you’re making the decision with the, with all of the knowledge that you have available at the time, don’t beat yourself up. Houses, buy and sell every day. You can do what matters to you, what is important to you. So I want to thank you for tuning into this show. If you’ve enjoyed yourself, uh, I would invite you to a head on over to itunes and click the subscribe button and give me a, a great rating, uh, that will help more people hear the message of cheerful money and learned to create financial margin to give more generously and live more free.
So head over to itunes and click subscribe and give me a rating and a review. And I also, I also want to let you know, uh, if you go to cheer for money.com, and then there’s a button in the top right hand corner, says coming soon. If you hit coming soon, that will take you to a page or with a brief introduction for the cheerful money community membership site that is coming in the future, which is going to be a place where we can, uh, build, uh, build our financial pictures together in a way that is honoring God, which will involve things like getting out of debt and handling our money the way that he called us to it, becoming incredible, incredible givers. So a head over there. And, and when you sign up for that, I will email you a free gift, a spreadsheet to help you give more generously to your church and to other causes that matter to you. So again, my name is Guy Smith and I thank you so much for spending some time with me today. Have a Merry Merry Christmas.