Some time soon, I’m going to start regaling all of you with tales of Mel’s and my adventures in homebrewing. My sister and her husband have been brewing beer for well over a year, and they’ve gotten so good at it that they decided to brew all of the beer that was served at their wedding. They’re really good at it. Not kidding.

I did the menu for them. Thought you might like a looksee. These six brews represent the best that these two have ever made. Man.

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Okay, so a lot of people seem to be focused more on the monthly payment than the actual cost. Fine. It’s shortsighted, but if you won’t budge from that, let’s at least look at the money that is “wasted” on rent vs. the money spent “building equity” on my home.

Below, you’ll find a tabulation of all money spent on living that disappears forever, i.e. rent, interest, etc, between renting and homeownership. Note that for interest, I’m basing my figure on what I currently pay in the second year of my two mortgages. This would of course decrease over time.

Apartment: Rent — $800; Utilities — $150; Total — $950

Condo (not counting repairs): Interest — $900; Utilities — $200; Association Dues — $185; Property Tax — $350; Total — $1635

By purchasing a home, I experienced a 72% increase in “waste” expenses, money that disappears from my pocket that I will never see again! Yes, you are wasting money on rent, but in many situations, you would quickly find yourself wasting a great deal more on homeowner costs.

That said, if you can put yourself in a situation such that the money that you “waste” on homeownership will either be less or become less within three or four years, even without coming up with 20%, then by all means, buying the home early might actually be the way to go. I feel like this will be a minority of people, though. In my case, if I stick to minimum payments, it won’t become less for another ten years or so. Yikes.

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I was a little curious about what my budget would look like if I still had my old $720/month apartment instead of my condo, which costs me about $1700/month to live in, so I went ahead and made up a hypothetical budgeting spreadsheet, based on the spreadsheet that I currently use for my real budget.

Here’s my current budget.

Here’s what my budget would look like if I didn’t have the condo.

A few assumptions that I made:

• I didn’t have to pay for gas or water in my old apartment. I’m estimating that for electricity alone in a small apartment, I’d never go above $150/month during A/C season.
• My apartment was $720/month when I had it. I’m guessing it’d be up to about $800 now.
• If I can afford to, I want to be putting money into my Emergency Fund. Right now, I can’t, so I leave it at $1000 and stop there so I can work on other stuff.
• I’ve been putting money aside to start homebrewing later this year. I’m not setting off much, though, and I think it’s going to make it a little tight for us when we’re ready to finish buying the equipment we need (we still need a kettle and a primary fermenter, among other things). A small bump to this would be nice.
• If I didn’t have a home, I’d want to be aggressively saving up for one, so aggressively that I would be willing to sacrifice long-term investing for it. It’s that important to me — which is why I pulled the boner of buying one before I was ready.
• I like to think that if my expenses were lower, I’d still be able to curb my petty spending, but I’m only saying that because I’m already well used to spending less than 5% of my income. That said, there a lot of toys that I wish I could afford. Adding an extra $25/week to my spending money seems reasonable to me.

So, if I were still in that apartment, I’d have a little more money to spend, which, yeah, but most importantly, I’d have more freedom to put money into savings, which is something that I have a hard time balancing right now. I wish I didn’t have to worry about that.

Something that’s really worth noticing is how my expenses would be way under what the 60% rule would prescribe. As it stands, my expenses are a good $150/week too high.

Does that mean I shouldn’t have bought my condo, period? Yeah, basically. I should have saved up until I could afford a full 20% down payment. Instead, I was able to come up with 10%, and had to take out a second mortgage for the other 10%. Moral of the story: Yes, buying a home is worth doing, but wait until you can come up with 20% for it.

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