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There is a popular saying in the financial community, “One House, One Spouse, One Job.”
It essentially constitutes one of the “golden rules” of finance and is advice often given to those seeking financial independence.
Breaking one or more components of this tenet implies that you may find yourself in a financial pit with little chance of escape.
It is therefore quite easy to become disheartened, and even give up before starting the journey to financial success, if you happen to be one of the transgressors.
As the purpose of this blog is meant to uplift and not discourage, I thought it would be beneficial to highlight individuals who have indeed broken the rule and still found financial success.
I consider myself one of the major violators of this rule, and have broken all 3 components in grand fashion, exemplified by my 5 part series “I Have Pretty Much Made Every Mistake In The Book.”
These stories are meant to inspire so that others know it is still possible to reach your financial goals despite straying off the ideal path.
Marc, who is a personal finance blogger at VitalDollar.com was gracious enough to share his experience with defying a golden financial rule and the experience he learned from it.
Please provide your age and marital status:
I’m 40 years old and I live in Pennsylvania with my wife and our two kids.
Which of the golden rules did you break?
I’ve only been married once, so I’m good with that rule.
I bounced around several different jobs in my 20’s, but for the past 10 years I’ve been self-employed as an internet marketer.
Although I changed jobs a lot early on, I’ve settled in during the past 10 years, so I feel like I’m pretty good there too.
Plus, the change to self-employed was a very positive move for us financially.
The rule that I have broken is “one house”.
My wife and I have been married for 12 years and we’ve lived in 4 different homes.
Our first home was a rental and we were there for less than a year.
The first place we bought was our home for 3 years before we moved and upgraded.
We lived in the next house for 6 years.
We bought our current home to get more privacy and more land, and that was about 2.5 years ago.
Each time we bought a house we’ve sold our old one, and we have no plans for owning a 2nd home or vacation property.
For each golden rule broken, can you please provide the following information:
a) How old you were when you first broke the rule
I was 31 years old when we sold our first home and moved.
My wife was 29.
b) What is your best estimate for the cost of breaking this rule?
The rule of thumb is that fees add up to 5% of the house’s value when you’re buying and 10% when you’re selling.
From my experience, those estimates are pretty accurate when you factor in all of the costs.
Based on that, buying and selling houses has cost us $71,975 compared to if we had stayed in our first home.
However, there is some context that also needs to be considered.
Our first home was a two-bedroom condo.
Living there with two kids would be possible but challenging, especially considering I work from home.
With that in mind, the next move is the one that had a bigger financial impact.
When we moved 2.5 years ago it was strictly by choice.
We didn’t have to move, but we wanted more privacy and more land.
We sold our home for $237,000 (10% of that would be $23,700) and we bought our current home for $417,500 (5% of that would be $20,875).
So that decision to move cost us $44,575.
But that’s also not the full story.
Our current house is bigger than the last one and our utilities are significantly higher.
This house and property are also more expensive to maintain, and our property taxes are higher.
With all of those things included, our expenses for this house are about $7,000 higher per year compared to our previous home.
c) How many years, if any, do you feel breaking the rule set you back financially?
I think our last move 2.5 years ago probably set us back about 5 years looking at the big picture and how our expenses will be higher for the next 15-20 years (assuming we stay in this house until our kids are adults).
d) How were you able to overcome the financial repercussions (if any)?
We paid for our current house with cash, so not having mortgage payments helps.
Even without a mortgage, the property taxes (close to $9,000 per year), utilities, and cost of maintaining the home and property still add up.
We’ve also overcome it by having higher than normal income for the past few years.
My wife and I had an Amazon FBA business, which was a side hustle, that we sold in 2017 for $225,000.
And I sold a blog in 2018 for $216,000.
Of course, I also have some regular income from my business aside from the sales.
Our living expenses are only about $60,000 per year, so we’ve been able to save a good bit.
e) What were some of the factors you considered when weighing your decision to break a golden rule?
The biggest factor has been quality of life.
When we sold our condo, we did it so we could move to an area with a lower cost of living and upgrade to a bigger single-family home.
Our most recent move was motivated by our desire to have better outdoor area for our family and to get out of a development where the houses were so close together.
f) If you went back in time and was faced with the same situation, would you defy a golden rule again or would you instead find an alternative course (and if so what would it be)?
I definitely don’t have any regrets about our move from the condo to our first single-family home.
We took a little bit of a hit financially, but ultimately it was a good move for our family.
But our most recent move is different.
I love our current house, but if I were to go back in time I don’t think I would make the same decision.
Instead, I would either chose to stay in our previous house and just deal with the fact that we had no privacy, or I would find another house that had more privacy but wasn’t as costly to maintain.
It’s not the cost of buying and selling that bothers me the most.
The higher maintenance costs of our current home are what I would try to avoid if I were to go back in time.
I knew this house would be more costly to maintain, but I underestimated it.
Also, my interest in pursuing financial independence has increased in the past year or two, so that has a big impact on how I view things.
g) What advice would you offer readers potentially facing a similar decision?
My advice would be to think about the long-term impact.
If I had calculated the impact of spending an additional $7,000 per year and compared that to what would happen if we invested that $7,000 per year, I’m not sure I would have made the same decision.
Also, I think it’s important to keep in mind that there are many other things in life that are more important than money.
One of the reasons I’m not totally down on the fact that we’ve moved several times is because each move has benefited our family.
Yes, I’d like to avoid the higher costs of maintaining our current home, but the move has helped us to get outside more, and we do love the extra privacy that we have.
h) Why do you think the rule that you broke is even included in the financial tenet, “One House, One Spouse, One job?”
I think it’s included because moving is expensive and you’ll be better off if you can minimize it.
It’s not a crippling mistake, but you can definitely save a lot by avoiding it.
i) If you were faced with breaking a golden rule today, would you do it?
If I thought it was better for our family, yes, I would do it.
Is there one financial rule you would never consider breaking and if so why?
I don’t think there are any rules that I would never consider breaking because you always have to consider the context of your decisions.
Things are rarely black and white.
If you have an inspiring financial story as a “financial golden rule breaker” feel free to offer a submission so that your story can likewise inspire others.
For guidance please check out this guest post checklist.
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Thanks for the opportunity to participate in this series!
I appreciate you sharing your story
Thanks for sharing your story. I think most people can recover from the home changes and job changes. Divorce seems to be much harder.
Having gone through all 3 I would say Divorce hands down is the worst one. Even in the best of circumstances (mine wasn’t) divorce can slice your net worth in half.
I agree. I’m hoping to avoid divorce 🙂
Ouch, that is a lot of opportunity cost for those moves, though since he has 2 kids I definitely get moving from a two-bedroom condo to a house. It’s a shame that the new place is so much more costly than expected, but it sounds like they’re still doing okay and still on the path to FI. So that’s probably what’s most important here. That and the fact that his family sounds happier with the additional privacy.
Thanks Abigail. I agree that as the family expands sometimes the house rule is broken out of necessity. I can attest that privacy does make you more at peace when you do get home 🙂 Have a great day
One of the reasons that the move to our current house hasn’t been more of a problem is because we stayed well within our budget when we chose the home. Yes, it is more expensive to maintain than we anticipated, but it would have been a lot worse if we had stretched further and then it wound up being more expensive to maintain. If that were the case, I’d probably be looking to move again, but thankfully that’s not necessary.
Housing is often one of those issues where your appetite shrinks over time. If I had a do over, I’d buy a third less house with a good layout and lower recurring costs as well.
Appreciate your story and related to your situation,
I have bought a total of 3 homes in my life (with two during 2 different residencies). I am fortunate that my true attending house is my forever home with my 14 year of ownership. The previous mistakes were thus relatively small