Frugal or cheap?

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gt5550
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Frugal or cheap?

Post by gt5550 » Sat Jun 22, 2019 2:51 pm

Wife and I have steady stable income of 235k combined. We are 32 and were diligent to pay off our 180k home in 6 years. We have been working for 9 years and have 430k in retirement accounts and 180k in a brokerage account. Wife wants to do a 100k addition to our home. I am struggling to spend as we have been focused on saving. Is this crazy or am I crossing past frugal and becoming too much of a tight wad? Appreciate advice and thoughts

Minty
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Re: Frugal or cheap?

Post by Minty » Sat Jun 22, 2019 2:52 pm

Do you need the addition? Will you use it? Kids?
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gt5550
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Re: Frugal or cheap?

Post by gt5550 » Sat Jun 22, 2019 2:54 pm

Home is 3 bed, 1400 sq.ft no kids but hope to have a couple kids. Dont need it, but it would be nice to have some extra space

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Sandtrap
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Re: Frugal or cheap?

Post by Sandtrap » Sat Jun 22, 2019 2:57 pm

Would it be more advantageous in the long run to buy another home that is larger and has better future accommodations for family?

Sometimes, value per dollar, you get more by buying a larger home. Sometimes.
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dm200
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Re: Frugal or cheap?

Post by dm200 » Sat Jun 22, 2019 2:59 pm

gt5550 wrote:
Sat Jun 22, 2019 2:51 pm
Wife and I have steady stable income of 235k combined. We are 32 and were diligent to pay off our 180k home in 6 years. We have been working for 9 years and have 430k in retirement accounts and 180k in a brokerage account. Wife wants to do a 100k addition to our home. I am struggling to spend as we have been focused on saving. Is this crazy or am I crossing past frugal and becoming too much of a tight wad? Appreciate advice and thoughts
In my opinion, you can certainly spend the 100k on your house.

"happy wife - happy life"

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TxAg
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Re: Frugal or cheap?

Post by TxAg » Sat Jun 22, 2019 3:00 pm

I'd wait

Kids are expensive. Keep saving. 3 bedrooms is fine for now.

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SquawkIdent
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Re: Frugal or cheap?

Post by SquawkIdent » Sat Jun 22, 2019 3:01 pm

dm200 wrote:
Sat Jun 22, 2019 2:59 pm
gt5550 wrote:
Sat Jun 22, 2019 2:51 pm
Wife and I have steady stable income of 235k combined. We are 32 and were diligent to pay off our 180k home in 6 years. We have been working for 9 years and have 430k in retirement accounts and 180k in a brokerage account. Wife wants to do a 100k addition to our home. I am struggling to spend as we have been focused on saving. Is this crazy or am I crossing past frugal and becoming too much of a tight wad? Appreciate advice and thoughts
In my opinion, you can certainly spend the 100k on your house.

"happy wife - happy life"
+1

retiredjg
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Re: Frugal or cheap?

Post by retiredjg » Sat Jun 22, 2019 3:04 pm

Unless you just prefer and are accustomed to small spaces, I fear that 1400 sq feet would be difficult with kids. If you want to stay where you are, I'd add on (assuming that will not price you out of your neighborhood).

Why not go look at some homes on the market to give you an idea if moving or adding on might be the better choice?

Irisheyes
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Re: Frugal or cheap?

Post by Irisheyes » Sat Jun 22, 2019 3:06 pm

Build the addition.

100k is a small amount really in the larger scheme of your life/savings/income.

Shortsighted both in terms of your relationship (it will make your wife happy) and your future potential space needs (kids) not to do it.
Last edited by Irisheyes on Sat Jun 22, 2019 3:07 pm, edited 1 time in total.

student
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Re: Frugal or cheap?

Post by student » Sat Jun 22, 2019 3:07 pm

From a financial point of view, you clearly can afford it. Do you want to go through the addition? I also think that you should compare the total cost of adding and the cost of moving.

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Stinky
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Re: Frugal or cheap?

Post by Stinky » Sat Jun 22, 2019 3:08 pm

retiredjg wrote:
Sat Jun 22, 2019 3:04 pm

Why not go look at some homes on the market to give you an idea if moving or adding on might be the better choice?
Putting $100k into a $180k house is a real question for me. I’d be concerned about overbuilding the neighborhood.

Why don’t you go out and look at some $250-$280k houses? You might be pleasantly surprised, and can avoid the hassle and mess of major construction.
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HomeStretch
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Re: Frugal or cheap?

Post by HomeStretch » Sat Jun 22, 2019 3:13 pm

IMO you can afford it and should move forward if:
1. the house’s market value will increase by at least the addition cost;
2. you love your property, house and neighborhood;
3. there is no other house for sale in the $280k range that you like better;
4. Kids are in the near future - adding space before they arrive is easier than living thru a reno with kids;
and most importantly,
5. you have a great contractor, good handle on your reno budget, are ok with making lots of reno decisions and living with Sheetrock dust for awhile.

Broken Man 1999
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Re: Frugal or cheap?

Post by Broken Man 1999 » Sat Jun 22, 2019 3:15 pm

You have the ability to do a $100,000 addition, but I would not go down that path.

One reason is you might be overbuilding your neighborhood.

Me, I would find something already built that checks all the boxes for what you and your wife consider important in your housing needs.

Broken Man 1999
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Tdubs
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Re: Frugal or cheap?

Post by Tdubs » Sat Jun 22, 2019 3:25 pm

You can afford it. But putting on addition can be an awful disruption and a nightmare dealing with contractors. I'd rather buy a house.

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gt5550
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Re: Frugal or cheap?

Post by gt5550 » Sat Jun 22, 2019 3:26 pm

Bought in 2011 when the market was down, on the water close to work. Like the location and others on our street around 2500 sq ft have sold in the 300-350k range recently so not outpricing the neighborhood

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willthrill81
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Re: Frugal or cheap?

Post by willthrill81 » Sat Jun 22, 2019 3:29 pm

Here's one way to think purchases of any kind. If you would be glad a year from now that you made the purchase and are able to do so while still meeting your financial goals, then you should probably make the purchase.

A "frugal" person tries to maximize how much value they get out of the money they spend.

A "cheap" person does not want to spend money even if doing so would provide them with good value.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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JonnyDVM
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Re: Frugal or cheap?

Post by JonnyDVM » Sat Jun 22, 2019 3:37 pm

Answer to OPs question- cheap. You’re being cheap.

Agree with everyone else. Spending 100k on an addition seems odd. Makes more sense to buy a larger house.
Sometimes the questions are complicated and the answers are simple. -Dr. Seuss

retiredjg
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Re: Frugal or cheap?

Post by retiredjg » Sat Jun 22, 2019 3:43 pm

gt5550 wrote:
Sat Jun 22, 2019 3:26 pm
Bought in 2011 when the market was down, on the water close to work. Like the location and others on our street around 2500 sq ft have sold in the 300-350k range recently so not outpricing the neighborhood
Sounds like it might be a good place to stay and raise a family. :happy The addition sounds a lot more reasonable with this additional information.

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Cycle
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Re: Frugal or cheap?

Post by Cycle » Sat Jun 22, 2019 4:31 pm

gt5550 wrote:
Sat Jun 22, 2019 2:54 pm
Home is 3 bed, 1400 sq.ft no kids but hope to have a couple kids. Dont need it, but it would be nice to have some extra space
Perhaps look into minimalism.

My wife, infant and I have 1050 sqft in a 2br/1ba, but we don't have much stuff. We plan to have a second child and live here at least another 4 years.

I have a general rule to only buy or rent for current needs, and not try and plan too far ahead. So in your case, you wait till kids are not infants and then upsize at that time if u want.

Your home addition will cost more than I paid for my unit.

I did put $50k into a gut rehab tho, which included new boiler, knocked out a few walls, new kitchen, new bath, new laundry, new ceilings, minisplit ac, gutted bath, refinished floors, rewired kitchen/bath/garage.

Maybe first put that $100k into a 529 if u know u will have kids. I think there's a way to do that before they are born.
Never look back unless you are planning to go that way

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Nate79
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Re: Frugal or cheap?

Post by Nate79 » Sat Jun 22, 2019 4:40 pm

Do it and pay cash. If not willing to pay cash then you shouldn't do it. You are not over spending the neighborhood and it's a good idea to do ahead of time. That way you are not in a rush and have to deal with the severe disruption while also dealing with kids. Paying cash will also help you check every spend detail vs borrowing the money and open checkbook syndrome.

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Re: Frugal or cheap?

Post by aspirit » Sat Jun 22, 2019 4:49 pm

dm200 wrote:
Sat Jun 22, 2019 2:59 pm
gt5550 wrote:
Sat Jun 22, 2019 2:51 pm
Wife and I have steady stable income of 235k combined. We are 32 and were diligent to pay off our 180k home in 6 years. We have been working for 9 years and have 430k in retirement accounts and 180k in a brokerage account. Wife wants to do a 100k addition to our home. I am struggling to spend as we have been focused on saving. Is this crazy or am I crossing past frugal and becoming too much of a tight wad? Appreciate advice and thoughts
In my opinion, you can certainly spend the 100k on your house.

"happy wife - happy life"
Sure, :annoyed "happy wife - happy life" :annoyed is a foolish maxim that's as outdated as horse & buggy.
As dm200 points out, if you wife is clueless, ..you should be also.

I'd suspect that contractor is a "happy contractor" w/no negotiations.....usually translating to cost overruns. Many, many, costs overruns because you're easy* fishing.
No second, third, or fourth estimate?

Market crash starts tomorrow, it goes to fair value data, last I looked was about 1600 in a 6month panic........ are you prepared ?
Next year it goes about another 50% lower to 888, are you prepared?
Good luck!
Last edited by aspirit on Sat Jun 22, 2019 4:57 pm, edited 1 time in total.
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crake
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Re: Frugal or cheap?

Post by crake » Sat Jun 22, 2019 4:54 pm

My humble opinion, have kids first, then see if you need more room.

More space means more furniture, more stuff to clean, more stuff to maintain. 1400 sqft should be enough to raise a family in.

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Re: Frugal or cheap?

Post by CedarWaxWing » Sat Jun 22, 2019 5:10 pm

retiredjg wrote:
Sat Jun 22, 2019 3:43 pm
gt5550 wrote:
Sat Jun 22, 2019 3:26 pm
Bought in 2011 when the market was down, on the water close to work. Like the location and others on our street around 2500 sq ft have sold in the 300-350k range recently so not outpricing the neighborhood
Sounds like it might be a good place to stay and raise a family. :happy The addition sounds a lot more reasonable with this additional information.
Being on the water... might change the remodel decision since it may be hard to find the "on the water" place you like.

However... being on the water can be a very significant hazard to young children that you may have later. I would love to live on a river or lake... but passed that up because I had 3 young boys and the fact of having children is that they have ways to escape your immediate supervision, and it only takes a few minutes for them to get into bad situations around open water. Even with a good fence and gate.. it only takes on mistake for a serious mishap with young kids.

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Re: Frugal or cheap?

Post by KlangFool » Sat Jun 22, 2019 5:25 pm

gt5550 wrote:
Sat Jun 22, 2019 2:51 pm
Wife and I have steady stable income of 235k combined. We are 32 and were diligent to pay off our 180k home in 6 years. We have been working for 9 years and have 430k in retirement accounts and 180k in a brokerage account. Wife wants to do a 100k addition to our home. I am struggling to spend as we have been focused on saving. Is this crazy or am I crossing past frugal and becoming too much of a tight wad? Appreciate advice and thoughts
gt5550,

IMHO, it is crazy to do a 100K addition to a 180K house. It is better to buy a new house.

KlangFool

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Re: Frugal or cheap?

Post by mighty72 » Sat Jun 22, 2019 5:28 pm

OP based on the numbers, you can afford it. I mean if you don't want to pull the money out of your savings, you can do a HELOC. I am not suggesting you do but you can.

what is your annual expenses and savings rate? I think that is an important number as you having being working & saving during a period where market has been going up at rate which is not average (185% in 9 years)
- 6/20/19: S&P 500: 2950
- 7/2/10: S&P 500: ~1022
The savings rate is your margin of security and if I am going to spend almost 40% of the income on a sunk cost (no return) which is not liquid, I would look at the savings rate.

You didn't say if both of you work or single income, however do you expect the income to change when you have kids. You certainly will see your expenses go up. Please take that into account.

I agree @CedarWaxWing about living close to water with young kids. A lot of people do but will you be comfortable with it, specially if both of you are working and not at home.

Lastly, look if you can buy a larger home. It not easy to remodel and existing home even if it is an addition. There will be surprises, delays, etc and in most cases I have seen that it is very disruptive for your daily life

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Re: Frugal or cheap?

Post by jebmke » Sat Jun 22, 2019 5:45 pm

aspirit wrote:
Sat Jun 22, 2019 4:49 pm
Sure, :annoyed "happy wife - happy life" :annoyed is a foolish maxim that's as outdated as horse & buggy.
along with "the wife"

I have never heard myself referred to as "the husband"
When you discover that you are riding a dead horse, the best strategy is to dismount.

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Re: Frugal or cheap?

Post by willthrill81 » Sat Jun 22, 2019 5:49 pm

aspirit wrote:
Sat Jun 22, 2019 4:49 pm
dm200 wrote:
Sat Jun 22, 2019 2:59 pm
gt5550 wrote:
Sat Jun 22, 2019 2:51 pm
Wife and I have steady stable income of 235k combined. We are 32 and were diligent to pay off our 180k home in 6 years. We have been working for 9 years and have 430k in retirement accounts and 180k in a brokerage account. Wife wants to do a 100k addition to our home. I am struggling to spend as we have been focused on saving. Is this crazy or am I crossing past frugal and becoming too much of a tight wad? Appreciate advice and thoughts
In my opinion, you can certainly spend the 100k on your house.

"happy wife - happy life"
Sure, :annoyed "happy wife - happy life" :annoyed is a foolish maxim that's as outdated as horse & buggy.
Having been married for 18 years, I'm not so sure about that. :wink:
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

Invest4lt
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Re: Frugal or cheap?

Post by Invest4lt » Sat Jun 22, 2019 5:49 pm

KlangFool wrote:
Sat Jun 22, 2019 5:25 pm

gt5550,

IMHO, it is crazy to do a 100K addition to a 180K house. It is better to buy a new house.

KlangFool
This ^. Plus I can’t imagine the nightmare of dealing with the contractors.

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Re: Frugal or cheap?

Post by BanquetBeer » Sat Jun 22, 2019 6:00 pm

Based on comments what could you buy for $100k+ sale value of your home? Probably better but not *exactly* what you want.

Will the update bring you on par to your neighbors or put you at the top in terms of niceness? I’m all for buying someone else’s work 50% off.

“Happy wife” shouldn’t mean go blindly along - bad idea. Find out what the goal is - then work together on the best way to meet that goal. Remodel may be the best or worst decision.

I wouldnt live there (sq ft) with kids. (Did you check schools?) and I wouldn’t spend that % of income or house value at such a young age.

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Re: Frugal or cheap?

Post by willthrill81 » Sat Jun 22, 2019 6:04 pm

KlangFool wrote:
Sat Jun 22, 2019 5:25 pm
gt5550 wrote:
Sat Jun 22, 2019 2:51 pm
Wife and I have steady stable income of 235k combined. We are 32 and were diligent to pay off our 180k home in 6 years. We have been working for 9 years and have 430k in retirement accounts and 180k in a brokerage account. Wife wants to do a 100k addition to our home. I am struggling to spend as we have been focused on saving. Is this crazy or am I crossing past frugal and becoming too much of a tight wad? Appreciate advice and thoughts
gt5550,

IMHO, it is crazy to do a 100K addition to a 180K house. It is better to buy a new house.

KlangFool
You're assuming that there are homes where the OP wants to be that fit their needs. That might not be the case. Also, their home might be worth $280k after the addition, maybe even more. It's probably best to buy another house, but not necessarily.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Frugal or cheap?

Post by KlangFool » Sat Jun 22, 2019 6:07 pm

willthrill81 wrote:
Sat Jun 22, 2019 6:04 pm
KlangFool wrote:
Sat Jun 22, 2019 5:25 pm
gt5550 wrote:
Sat Jun 22, 2019 2:51 pm
Wife and I have steady stable income of 235k combined. We are 32 and were diligent to pay off our 180k home in 6 years. We have been working for 9 years and have 430k in retirement accounts and 180k in a brokerage account. Wife wants to do a 100k addition to our home. I am struggling to spend as we have been focused on saving. Is this crazy or am I crossing past frugal and becoming too much of a tight wad? Appreciate advice and thoughts
gt5550,

IMHO, it is crazy to do a 100K addition to a 180K house. It is better to buy a new house.

KlangFool
You're assuming that there are homes where the OP wants to be that fit their needs. That might not be the case. Also, their home might be worth $280k after the addition, maybe even more. It's probably best to buy another house, but not necessarily.
willthrill81,

Based on all my first-hand observations, the likelihood of that to be true is very slim. How about you?

KlangFool

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willthrill81
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Re: Frugal or cheap?

Post by willthrill81 » Sat Jun 22, 2019 6:08 pm

KlangFool wrote:
Sat Jun 22, 2019 6:07 pm
willthrill81 wrote:
Sat Jun 22, 2019 6:04 pm
KlangFool wrote:
Sat Jun 22, 2019 5:25 pm
gt5550 wrote:
Sat Jun 22, 2019 2:51 pm
Wife and I have steady stable income of 235k combined. We are 32 and were diligent to pay off our 180k home in 6 years. We have been working for 9 years and have 430k in retirement accounts and 180k in a brokerage account. Wife wants to do a 100k addition to our home. I am struggling to spend as we have been focused on saving. Is this crazy or am I crossing past frugal and becoming too much of a tight wad? Appreciate advice and thoughts
gt5550,

IMHO, it is crazy to do a 100K addition to a 180K house. It is better to buy a new house.

KlangFool
You're assuming that there are homes where the OP wants to be that fit their needs. That might not be the case. Also, their home might be worth $280k after the addition, maybe even more. It's probably best to buy another house, but not necessarily.
willthrill81,

Based on all my first-hand observations, the likelihood of that to be true is very slim. How about you?

KlangFool
I agree that it's slim, but you're the one constantly telling people that they aren't a statistic. :wink:
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Watty
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Re: Frugal or cheap?

Post by Watty » Sat Jun 22, 2019 6:42 pm

gt5550 wrote:
Sat Jun 22, 2019 3:26 pm
Bought in 2011 when the market was down, on the water close to work. Like the location and others on our street around 2500 sq ft have sold in the 300-350k range recently so not outpricing the neighborhood
Even with that I would be real cautious about putting that much money into a house since houses that have been added on to like that are often have a awkward floor plan and my look odd or outright ugly from the outside. When you bought the house six years ago for $180k you may have bought something like a $50K house on a $130K lot.

It would be good to figure how much if its current value is in the lot and how much is in the building.

I obviously don't know your house or neighborhood but if you are going to put that much work into it might make sense to tear your current house down and rebuild from scratch so you could end up with a great home when you are done. I suspect that if you sold the house today that is what most buyers would do.

I would also be cautious about owning a house on the water if you will be having kids since the water could be a huge drowning risk and it would be a lot harder to fence off than a swimming pool.

If you will be having kids you will also need to take a hard look at the school in that neighborhood.

One other consideration is that in most areas housing is still booming now and it is hard to get good contractors and when you can they will be charging top dollar so this may not be a great time to have major work on your house done. If you really do not need the space now you might wait a few years and do any changes after the current market cools off and it is easier to get good contractors for a fair price.

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Re: Frugal or cheap?

Post by abuss368 » Sat Jun 22, 2019 6:48 pm

gt5550 wrote:
Sat Jun 22, 2019 2:51 pm
Wife and I have steady stable income of 235k combined. We are 32 and were diligent to pay off our 180k home in 6 years. We have been working for 9 years and have 430k in retirement accounts and 180k in a brokerage account. Wife wants to do a 100k addition to our home. I am struggling to spend as we have been focused on saving. Is this crazy or am I crossing past frugal and becoming too much of a tight wad? Appreciate advice and thoughts
Do you need it? Was is the opportunity cost of the $100,000 over time? Would you be better off selling and buying a different house?
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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Re: Frugal or cheap?

Post by abuss368 » Sat Jun 22, 2019 6:48 pm

dm200 wrote:
Sat Jun 22, 2019 2:59 pm
"happy wife - happy life"
Priceless.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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Re: Frugal or cheap?

Post by abuss368 » Sat Jun 22, 2019 6:50 pm

Wanted to ask: will the addition add value that you can recoup when sold? Would it stand out or be difficult to realize that value in your area?
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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Re: Frugal or cheap?

Post by willthrill81 » Sat Jun 22, 2019 6:50 pm

abuss368 wrote:
Sat Jun 22, 2019 6:48 pm
dm200 wrote:
Sat Jun 22, 2019 2:59 pm
"happy wife - happy life"
Priceless.
Believe me, it has a price tag. :mrgreen:
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Frugal or cheap?

Post by abuss368 » Sat Jun 22, 2019 6:51 pm

willthrill81 wrote:
Sat Jun 22, 2019 6:50 pm
abuss368 wrote:
Sat Jun 22, 2019 6:48 pm
dm200 wrote:
Sat Jun 22, 2019 2:59 pm
"happy wife - happy life"
Priceless.
Believe me, it has a price tag. :mrgreen:
:mrgreen: :mrgreen:
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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Re: Frugal or cheap?

Post by thankyouverymuch » Sat Jun 22, 2019 7:06 pm

Congratulations on the good decisions you've made to put you in the position to have this choice. For what it's worth, my wife and I raised three kids in a 1,400 square foot three-bedroom house. The only time it ever felt crowded was when we had overnight guests. A few bedrooms, a living room, a dining room, and a kitchen ... what else do you really need? Any extra space you add equals more tax, insurance, maintenance, cleaning, furnishings, etc. Less is more!

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gt5550
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Re: Frugal or cheap?

Post by gt5550 » Sat Jun 22, 2019 7:34 pm

We save around half of our income, started out at much lower incomes and have had decent raises. We both work. We would be paying cash for it but I am hesitant because it would be a big purchase and take away from retiring earlier if we get to that point.

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gt5550
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Re: Frugal or cheap?

Post by gt5550 » Sat Jun 22, 2019 7:38 pm

It would add value and be comparable in the area. I still see all primary residence as sunken costs.

MnD
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Re: Frugal or cheap?

Post by MnD » Sat Jun 22, 2019 7:41 pm

gt5550 wrote:
Sat Jun 22, 2019 3:26 pm
Bought in 2011 when the market was down, on the water close to work. Like the location and others on our street around 2500 sq ft have sold in the 300-350k range recently so not outpricing the neighborhood
Go for it given this additional info!
Young, ample double income, pre-kids - this would be exactly the time to do something like this.
Wait till income drops and/or kids come along and it gets multiple times harder. Seems very low risk and you will learn a lot from this project. :beer

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aspirit
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Re: Frugal or cheap?

Post by aspirit » Sat Jun 22, 2019 7:46 pm

jebmke wrote:
Sat Jun 22, 2019 5:45 pm
aspirit wrote:
Sat Jun 22, 2019 4:49 pm
Sure, :annoyed "happy wife - happy life" :annoyed is a foolish maxim that's as outdated as horse & buggy.
along with "the wife"

I have never heard myself referred to as "the husband"
I've heard both sexes refer to each others significant other in endearingly deprecating terms when in groups of the same sex. Like locker room talk. :wink: Thats life!


PS, additionally to inquiry, it does not sound optimally profitable.
GOOD LUCK!
Time & tides wait for no one. A man has to know his limitations. | "Give me control of a nation's money and I care not who makes it's laws" | — Mayer Amschel Bauer Rothschild ~

Hulu
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Re: Frugal or cheap?

Post by Hulu » Sat Jun 22, 2019 8:09 pm

Sounds like you’d invest if not? So depends how strongly your wife’s preference is. I do not like contractor noise or the distraction of managing one. But I guess moving would be a distraction too. I’d probably do it provided I loved the contractor. That way you get the enjoyment longer

retiredjg
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Re: Frugal or cheap?

Post by retiredjg » Sat Jun 22, 2019 8:19 pm

gt5550 wrote:
Sat Jun 22, 2019 7:34 pm
We save around half of our income, started out at much lower incomes and have had decent raises. We both work. We would be paying cash for it but I am hesitant because it would be a big purchase and take away from retiring earlier if we get to that point.
So...gt5550, what is your alternative proposal?

Is your plan to stay in a house that may be too small in which to comfortably raise a family with your chosen loved one? Would your choice be to live uncomfortably in a tight space for 20 years so you can retire a few years earlier?

Yes, it is true that many people have raised happy families in that amount of space or even less. But it does not sound like that would suit both of you, even if it would suit one of you.

If your joint income were $85k, I could see your point. You do what you need to to. But it seems like you can afford to live a little nicer than what you have in mind. So I'd have to say it seems the scales are starting to tip away from "frugal" toward "cheap".

JBTX
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Re: Frugal or cheap?

Post by JBTX » Sat Jun 22, 2019 8:21 pm

gt5550 wrote:
Sat Jun 22, 2019 2:51 pm
Wife and I have steady stable income of 235k combined. We are 32 and were diligent to pay off our 180k home in 6 years. We have been working for 9 years and have 430k in retirement accounts and 180k in a brokerage account. Wife wants to do a 100k addition to our home. I am struggling to spend as we have been focused on saving. Is this crazy or am I crossing past frugal and becoming too much of a tight wad? Appreciate advice and thoughts
We recently sunk $100k into a remodel including new furniture of a $300k value home. I rationalized it as flows:

- we had done little in 20 years. It needed something done. We could have done it for half of that if we were trying to save money but it wouldn't have been nearly as nice.

- if we didn't remodel, we really needed to move and then would have to sell a house with significant work done and move into a substantially more expensive home.

- I figured if the remodel were to increase the market value half of what we spent, I could justify the other $40k to $50k as a quality of life upgrade we could afford.

You can afford the $100k. Whether it makes economic sense really depends on where you are how badly you want to stay there vs move somewhere else.

toofache32
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Re: Frugal or cheap?

Post by toofache32 » Sat Jun 22, 2019 8:56 pm

The math is simple: Calculate how much further into retirement this 100k will cause you to work. Only THEN can you decide if this is worth it.

Dregob
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Re: Frugal or cheap?

Post by Dregob » Sat Jun 22, 2019 9:13 pm

We bought a 1500 sq ft home. No kids,then we had 2 kids, and thought about adding on. But we never did it and now, 20 years later, no kids at home and that same 1500 sq ft home is our perfect retirement home! Procrastination pays!!

7eight9
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Re: Frugal or cheap?

Post by 7eight9 » Sat Jun 22, 2019 9:36 pm

Right now you have a 1,400 sq ft house with 3 bedrooms (2 bath?) that you bought for $180K. 2,500 sq ft homes in your neighborhood have sold in the $300-350K range recently. Are those homes 3 bedroom / 2/3 bath (all ensuite)? What I'm getting at is if those homes have similar room count you will still have 3 smallish bedrooms + the $100K addition vs. their larger rooms. Or maybe you are combining some of the existing rooms, enlarging/adding to the current baths, etc. How will the layout of your remodeled home compare to the 2,500 sq ft homes that were that size originally?
I guess it all could be much worse. | They could be warming up my hearse.

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TxAg
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Re: Frugal or cheap?

Post by TxAg » Sat Jun 22, 2019 9:49 pm

One more vote for "happy wife - happy life" being a dumb saying

Marriage is a partnership

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