When you are about to start your life anew by getting married to the love of your life, there are many things that the two of you have to take into consideration like – “How are we going to pay for this wedding? Will we continue to have separate bank accounts? Where will we live after our wedding?”
In this article, we will discuss the last questions — and specifically why renting as newlyweds can be better than buying.
Getting married debt-free was one of the best days of our lives. Before saying, “I Do,” the reality of the grown-up decisions we had to make hit us. The first major one was deciding where we were going to live. We knew we wanted to buy a house, but we weren’t sure about the route we wanted to take to accomplish that goal. The choices we had were:
- Live with either of our parents to save up a huge down payment.
- Rent an apartment for a year and save up for a down payment.
- Buy immediately with as little down as possible.
We’ll walk through our thought process to our final decision and hopefully provide you with some insight into your situation.
Living With The Parents
Before getting married we each were living at home with our parents. On one hand, we felt that it would be a good idea to still stay with either of our parents. Why? Because we could’ve stayed with either of our parents and paid little to no rent. This would’ve given us a lot of time to save a lot of money for our down payment for a house.
However, we would’ve been giving up our freedom as newlyweds and the ability to truly enjoy our first year of marriage. Don’t get us wrong. We don’t think our parents would’ve tried to “teach” us how to be married.
What we are saying is that we wanted to create the space to define what our marriage would be without anyone else being in that space. We felt we wouldn’t be able to do that living with our parents.
Rent An Apartment
To rent an apartment or not? This seemed like the million-dollar question considering we could’ve stayed somewhere practically rent-free. We already knew what area of town we eventually wanted to buy a house in. So when we considered renting an apartment, it seemed like the perfect idea to try to find an apartment in that same area.
The first apartment we looked at was perfect. It had a nice layout, granite countertops, and all the other nice finishes. As a matter of fact, we wondered if it was too nice.
Would we be so comfortable here that we end up renting long-term instead of pursuing our dream of buying a house? There was also a waiting list you had to sign up for before you could find out when you could actually get an apartment in the complex. It would have been a minimum of two months before we could move in. Did we want to wait two months, maybe even longer, before we could get our own place?
Ironically, there was an apartment complex next door. It DID NOT have granite countertops and all the other bells and whistles. At best, it had a decent layout. It DID have a price tag $300 less per month than the first apartment though. And there was no waiting list. We could move in whenever we wanted to.
Need help crunching the numbers? Check out this rent affordability calculator.
Buy A House Immediately
After our wedding, we didn’t have enough money for a down payment for a home. We chose to save up money for a year so we could have and enjoy our debt-free wedding. We didn’t have a large amount of emergency savings either. Yes, we could’ve gotten approved for a home with little money down. After all, we got married in 2012 when the housing market was definitely a buyer’s market. But was that the best option for us? Would we have felt rushed in making a decision to buy a house right away?
Which Option is the Best Option?
With so many great and not so great options to choose from, we definitely had a lot to consider. So where did we start? We discussed the pros and cons of each of our living options.
We both felt that rushing to buy a home with little money down and minimal emergency savings wasn’t a good idea. It was actually the worst option. The last thing our young marriage needed was the pressure of a house payment with essentially no cash reserves.
Neither of us was very fond of the idea of living with either of our parents for the reasons discussed above. After we made our final decision, both of our parents told us they felt we made the right decision by not living with either of them. We definitely weren’t expecting that response considering the amount of money we could’ve saved! Yet, it was great to have their support.
In the end, we chose the cheaper apartment! It wasn’t the most lavish apartment with all the nice upgrades, but we used that to our advantage. It motivated us to save for a down payment for a house AND we got our own space as well. So often with personal finance, we can get stuck on the “finance” aspect and completely miss the “personal” aspect. The “personal” part was a little more important than the “finance” part to us. It was worth it to be in our own space and go through some of those fights to learn to work with each other (lol). Yes, it probably slowed us down in the short term, but the lessons learned in that cheap apartment are the foundation of what looks to be a bright future.
Lesson Learned As Newlyweds
Overall, one thing we’ve learned about finances is that it’s better to take your time when making a decision and get it right instead of rushing into it unprepared. If you make the wrong decisions it can take YEARS to get back to par, especially as newlyweds.
This was a guest post written by Kim & Omar from Thinking of Someday.