Don’t let holiday spending interfere with the American dream
For the majority of Americans, December is a month filled with out-of-the-ordinary indulgence and above-average spending. We treat ourselves and others to the finest “whatevers” we can afford, and way too often, some we cannot. Frugality gets packed away with the summer clothes as months worth of paychecks burn up quicker than a strand of dollar-store Christmas lights.
For many of us, that cycle is the norm and although it’s a penny-pinchers nightmare, it doesn’t have a major impact on our American dream. But, for some it might.
Statistics show that millions of us are in the home buying market. While winter is not the most popular time to buy a house, that market quickly picks up in the spring. Therefore, our spending now will have relevance then and it has little to do with a pending mortgage.
Sensible consumers looking to buy a house have planned for its expense. They know what they can afford, what home costs are, and what they can reasonably expect to spend on taxes and insurance. But,what they don’t plan for is what I call the “phantom cost of moving.”
According to the National Association of Realtors, that cost is a big one. They report that when a home is purchased in Pennsylvania, a buyer should expect to spend an additional $4,572 on consumer items like appliances and furniture, as well as immediate remodeling like new paint or lighting.
That’s nearly five grand to make that new house a home. Anectdotally, I can report that “five large” might be small compared to what many will spend. In my hardware business I see countless customers who are moving into a new home and need everything from the simple and cheap (picture hangers) to the complex and pricey (new carpet) before they are settled. Often times those customers will return daily for months to complete the task.
All of this is a normal function of home buying and should not be an unproductive drain on ones personal finances. The economic value of real estate combined with the warm and fuzzy feeling of owning a home are undeniably positive. Conversely, there are few redeeming qualities to things like over-priced coffee and the short lived thrill of its purchase.
For the record, I am not a holiday curmudgeon and contrary to the belief of my wife, I am not an incurable cheapskate. I just won’t trade things of high value for fruitless spending and its dangerous partner — credit card debt.
If you are planning to purchase a house and move any time soon, you may want to adopt a similar philosphy. After all, those phantom costs are an investment. The expensive “whatevers” we purchase with regularity in December are not.
It might seem boring but it’s just plain better to use your cash on the hidden costs of your new living quarters. Doing so doesn’t make you an incurable cheapskate or a holiday curmudgeon. It just makes you a smart home buyer properly equipped to overcome a phantom.
Ed Pfeifer is a Tribune-Review freelance columnist and owner of Pfeifer Hardware Inc. If you have hardware-related questions, call the store at 724-625-9090.