Why It Sucks to Be Fiscally Responsible in This Economy

This post need a small disclaimer:

1. I bitch/vent a lot. Don't forget to cover your ears.
2. I complain about HGTV. If you're a fan, you might want to look away during those parts.
3. I don't hate good people who were affected by the financial meltdown. I hate, well, you'll see. But yeah, I know it affected good people in all kinds of ways and those aren't the people I'm talking about.

Now, onto bigger, better things...

The other night I was watching Property Virgins, a home buying show on HGTV. It follows someone as they buy their first home. In this case, it was a young, newlywed couple that was buying their first home in Florida. Since A.P. and I are getting ready to do the same thing and he's from Florida, I figured I'd watch (yup...it takes that little). After a while though, it became kind of disgusting. The couple was approved for an FHA loan with 3.5% down. Their loan was approved for $270,000 plus their $10,000, which means they were working with a total budget of $280,000.

If you've never watched Property Virgins, the show always starts out with the host/real estate agent showing the buyer a house and asking them to guess how much it costs. It's like real estate for retards, except no one is retarded. The buyer is never completely clueless, so they almost always guess within range. (This guessing game continues throughout the show and gets annoying. Just tell us the damn price already!). So that's exactly how this episode started off. The real estate agent takes them to their dream neighborhood and shows them their dream house and goes, "Guess how much this obviously expensive house is??" They guess correctly. And she smiles and nods. She proceeds to give them the same lecture she always gives about how their dream is not within reach at this time, so her job is to show them similar homes in different, up and coming neighborhoods (read: the ghetto) that are more suited to their shitty budget. And here's where it gets interesting. They tell her that they're going to have to look at more expensive homes, then. Wait, what??!!?? They're supposed to say, "Okay! Find us our budget home!" But these fools who aren't even putting down 10% (!!) are demanding a mortgage they can't afford. And just like that, my mind was blown.

I've spoken before about our budget and financial goals. We want to buy a home (that can be a house or a condo, just so long as it fits our needs) in the next year or so. We want to put down 20% so that we can avoid paying PMI. We also want to look drastically under what we think we'd be approved for so that we have a lower mortgage and also so that our 20% really goes far. So we're saving 20% of a magic number that is sort of our max, but I know for a fact we'd be approved for way over our max. In other words, we're doing all this safe, smart stuff while these f***heads, who aren't even showing a bank they're a safe bet (hello? measly 3.5%, wtf?) are asking for a mortgage ABOVE what they can afford! It's times like these A.P. and I feel like fools. I know we're not, but it's hard not to feel foolish.

Here's the thing, I am a big believer that it is YOUR job to be fiscally responsible. Not the bank's, not your parents', not the government's...YOURS. We watch movies like The Inside Job and they make you believe that the government did all these shady things that forced us into this financial collapse/crisis/hullabaloo. You watch Fox News and they'll have you believe that's all the opinion of the liberal media elite (God I love saying that...it just sounds ridiculous. Seriously. No matter whether you're liberal or conservative, that shit sounds dumb.). Honestly, who cares? All I know is that a bunch of dumb people bought a bunch of crap that they couldn't afford and SOMEBODY LET THEM!! Again, what the what??!!?? It's ridiculous and it angers me more than the government. Why? Because it's representative of what's wrong with our society: nobody wants to work for anything anymore and everyone thinks it's their right to be wealthy.

When my parents bought their 3 bedroom condo on the lake in Chicago for (don't faint) $30,000 in the '70s, they saved up money, found a house they could afford, and my dad worked 2 jobs/6 days a week to make sure he could pay the mortgage. Flash forward to the new millennium where people buy homes they can't afford, lose their jobs because of the recession they helped create with their crappy loans and bad decisions, and then cry woe is me when they have no more home. I don't want you to think I'm heartless or cruel. It's a terrible, terrible thing that so many people lost their homes to foreclosure. But it's also the price you pay when you take a very risky risk. And I feel like it's so freaking American to blame everyone else but the person you signed the bad idea paper (i.e. mortgage contract).

Plus, it causes problems for good people. People like us and friends of ours who have bought homes recently, as well as friends and family members who already owned homes. It makes it suck to be fiscally responsible. It makes us have to fork over more cash, have perfect credit. and have some reasonable assets to back up the goods to show we're super, duper fiscally responsible. Like more responsible than the previous homeowner. So we have to save more and make sure we're doing everything right. And unlike all those other people, we don't get to own a home overnight. Instead, we have to put off our dreams a little longer and work a little harder. I know we have to and that we're doing the right thing, but it still sucks. And watching those bratty newlyweds on Property Virgins just pisses me off more.


  1. I love this post. It is SO TRUE. When my fiance and I bought our house it was literally a nightmare because of the crackdown on lending because of the exact situation you are describing. While we were financially ready, and I might add buying a house significantly below what we could afford, bank didn't think we were a trustworthy demographic. Several of them ever turned us down because we were not borrowing ENOUGH money i.e. they would not make enough money off our loan to justify it. During this time we would watch Property Virgins and be just dumbfounded by how these young people felt entitled to a mansion that didn't even need paint.
    When I was fresh out of college I stumbled into a job working as an, ahem, mortgage collector. I thought I would hate it, but really I was amazed by how much the bank would work with people, and how little responsibility people felt for the contract they had made. Several people actually told me that since the value had gone down they didn't have to pay for it anymore. My standard response was that if the value had gone up as expected the bank wouldn't have expected them to pay more on their note! Anyway, it was a very valuable experience that I think everyone should have to do for a little while so they understand that contracts are contracts regardless of what comes up.
    Endrant. I really liked your post and have been enjoying your blog. Hopefully we will get to hear a lot about when you start looking for houses because it is very exciting. My parents always preached the value of living below one's means, and it seems like you guys are going about it the right way. Best of luck!

  2. Ouch. I agree- it's hard to watch so many people going waaaaaay into debt for the house/wedding/ring/car/wardrobe/etc. they think they need... and all of the social cues telling us what we "should" have don't help.


  3. I totally agree that it's your job to be financially responsible, however I regret that nobody really teaches you that. Or maybe you guys do but here, you don't learn at school how to manage your finances, even on a basic level. Which means if your parents aren't good at it and/or aren't teaching you that stuff, you're kind of bound to make mistakes/get in debt before you figure it out!

  4. @Magnolia: Thank you for the kind words. And yes! It does suck!! It sucks to know there are so many people who are the real deal, the wise investment, and everyone else (e.g. the customers on Property Virgins) just wants a house. We probably won't start looking until next year. Right now, we're still researching/saving. We do a lot of looking online, too. But I'm sure I will document that search here, so stay tuned! : )

    @Helen: Yes! I didn't even get into all that. I could have gone on and on and on about keeping up with the Joneses. Do you know what drives me crazy? When you open a magazine like O (Oprah's mag) or Real Simple and all they have are $400 skirts or $1000 couches. Real Simple is a bit better, but it's so hard to realize that the whole world really wants you to spend beyond your means and you're just stuck being responsible and not having the pretty things forced in your face. I'm over it because I think we live pretty fabulously and cheaply, but it's still hard sometimes.

    @Musing: That's a very good point. I definitely was not taught how to budget, manage finances. I was taught to be thrifty, save, and not blow cash. I also learned from my parents' mistakes: not planning well for retirement, not having a lot of credit card debt, etc. I think it personal finance should be taught in high school as a required elective. I'm not even kidding.

  5. Waiting sucks, but you are doing the right thing. We waited and saved forever, once we had saved 20% of the budget we set for ourselves we started looking for homes we could afford. It took us over a year to find the right house in the right neighborhood, but isn't our dream house, it is our first house. It is exactly what it should be, and it feels good to own something that we can afford that is building equity, not building even more debt.

  6. I totally agree...but I cut my homeowner teeth on HGTV and now almost exclusively watch DIY when the remote is in MY hands.

    SO. We bought a house in a "developing neighborhood" and it has been HORRIBLE to be impacted by others' bad decisions. Our neighbor across the street was great, but her house was an investment property by her rich brother, so when her son turned into a teenager she just abandoned her house and moved to a ritzy suburb. Houses in our neighborhood are on the market for $7,000 (yes you read that right) and we bought ours at the top of the bubble for $85,000. I know, I can't bitch to a Chicagoan about that, but it has been extremely hard for us to keep our heads above water, and seeing the methheads across the alley sell mattresses out of their yard and live on welfare and drug sales has made it hard to want to be good.


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