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8:12 pm - Monday November 18, 2019

The Perfect Home is a Financial Nightmare – Don’t Get Caught Up In the Costly Race

| Home Finance and Mortgage, Money Saving Tips | Rating: 4.5
by Numan

It is very easy to get sucked in a terribly expensive effort which never really ends

My wife and I just returned from our 203th visit to IKEA with some interesting insights I’d like to share. Since we’ve bought our apartment and renovated it we’ve been caught up in a continuing effort to furnish and design it into our perfect little home. All this time a very obvious yet elusive insight eluded us: There’s no end to this effort, no finish line to the race.

It starts very early on. You decide to buy a house, maybe even decide on a budget but all the plans and all the decisions soon fade away when you start shopping for a one. It’s understandable. Some locations, architecture and design, extra rooms and more may be well worth the extra money but have you ever heard of anyone buying a cheaper house than they initially planned on?

It continues with massive, endless renovations trying to shape reality to dreams with multi-million homes as our inspiration. Even the world’s best interior designer can’t create that much space in a two bed room apartment.

Naturally, our quest goes on even after we’ve moved in. Furniture, appliances, designs and adjustments all continue to trouble us. I’ve heard the sentence “we’ve got to replace that couch” from everyone of my friends (and they bought the couch just a couple of years ago).

Our house is a major factor in our lives. It’s our home, it’s where we spend most of our lives (after work), it’s where our children grow up and it also reflects on us as people. Aiming for the perfect home is very understandable but is it wise? Is it financially sound? Is it at all possible?

I’ll show you that even billionaires can’t really attain the perfect home and are constantly busy searching, buying, designing and eventually selling their homes.

My case against the race for the perfect home is built on the following:

#1 It’s Endless

Stop and think about it. When will you tell yourself you’ve got it made? Chances are you’re not even living in your perfect home just yet. Most of have dreams, be they a park view apartment in Manhattan, a mansion in the English countryside or whatever else comes to mind. It could also be just two more rooms, or just a pool and that’s it.

Don’t delude yourself. We can’t really be happy and content with what we’ve got. It’s a human curse and a blessing. We adjust too quickly to both good and bad and always fail to appreciate the present and what we’ve got. It’s a sort of hedonistic fallacy. We always want more and better. It’s fantastic because it drives humanity forward (supposedly) but we must understand this basic psychological concept and how it affects us so powerfully.

#2 It’s terribly expensive

When it comes to our homes it’s always expensive. Forget about buying or renovating one. Those costs are astronomical and the point is easily made. Instead think about that $2,000 designer sofa you just saw on “sale”.

Designers of any sort have it made. They can price their products as they like since “inspiration” cannot be measured. The only measure is whether people buy it and surprisingly they do. You don’t need me to tell you there’s no practical difference between a $200 sofa to a $20,000 sofa. It’s whether someone is willing to pay that price (and keep mentioning it in our ears to justify the purchase).

The same goes for tiles, baths, showerheads, dining rooms and everything else you can think of. Nothing is too good for our home, and the retailers know it.

#3 It’s time consuming

I’ve personally spent (or invested some might say) at least 50 hours searching for an apartment, 200 hours renovating one and at least 50 hours shopping for my home. It’s not wasted time but that time has many alternative uses. Every time you go looking for a set of cups think about the alternatives.

As the quest never ends so the shopping, browsing, designing and adjusting never cease.

#4 Fashions change

Fashions change and we have to start everything from scratch. This means yet another trip to the handy store for that oceanic-pearl wall color to replace our previous wall color of tomato-orange mix or whatever name they came up with to justify paying an additional 20% for that color.

We obviously have to re-design everything else to fit that new wall color and so on and so forth.

The National Association of Home Builders (NAHB) cites interesting numbers for first year spending in a new home (the numbers are for 2003 but the ratio’s are ever more relevant):

Another interesting view point is how these expenses divide up the first year. The following pie charts speaks for itself:

Remember I promised you I’d prove how even billionaires take part in the race? Well, Russian billionaire Roman Abramovich just bought a $36M Colorado ranch. The 1,300-square-meter, split-level home is set on a secluded 81 hectares in Snowmass, near Aspen, The Wall Street Journal reported Friday. The house, built by surgical-equipment magnate Leon Hirsch, has 11 bedrooms, 12 bathrooms, a media room, a climate-controlled wine room, a hot tub and a spa, the report said.

I’m sure you don’t find this at all surprising. But did you also know Roman Abramovich intends to create a super mansion in the heart of London which will become the most expensive private residence in England and that it will cost approximately $300M? Apparently Abramovich owns dozens of houses around the world, all unique, beautiful and terribly expensive.

I guess it really never ends.

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