Ghost Town Condo and Money Mistakes

One subject Dave and I want to tackle on this blog is the area of personal finance, including debt. Ah, the good old "d"-word. Debt has caused most of the economic problems that our country finds itself in. Debt has also caused many a financial headache for Dave and I over the years until we finally turned things around and paid it all off! (More on that to come.)

A story I just ran across about a guy who went into great debt holds some good lessons for us all. The poor sucker and his family made several mistakes including:

-buying a condo in a building that has few tenant/owners
-going into huge debt for a vacation home (not a good idea for your primary home either)
-putting all his financial eggs in one basket

Read his fascinating story about living in a building that seems like something "in a scary movie."


Story here.

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I also found some fascinating insights into these people's state of minds and decision-making process. The wife states that "We wanted to believe... we were looking for what we were offered."

"We wanted to believe." They also wanted a vacation home they couldn't afford. Just like WE ALL want that certain car or house or whatever. It's easy to slip into that wishful thinking mode that leads to giving in to our wants and dreams without pragmatically facing our realities.

Just today I was faced with a big want. Dave and I want to buy a house with a little bit of land (like 1/2 to 1 acre or so) in the city so we can have gardens, chickens and rabbits. We recently found out that such a neighborhood exists in our city in just the area we want to stay in! I've been doing some research on Zillow and found a house in pre-foreclosure that we could potentially get a bargain on.

(this could be me... blissfully tending my garden on my little slice of country in the city... *sigh*)


But we weren't planning on buying a house for 2 or 3 years until we had a 3-6 month emergency fund and hefty down payment saved up. Oh yeah, and first we need to get through a job transition to know if we are even going to live in this state in 2 more years.

Yet I started thinking about that $8000 dollar tax credit the government is offering for first-time buyers. I found myself thinking that it could be okay if the payment was comparable to our rent and we got a bargain.

I started worrying about what would happen if the home prices climb back up and we are priced out. And what about those good interest rates right now? Aaagh!! It's so maddening how easy it is to justify this! I'm back to convincing myself it could be a good idea!

Must.Stay.Strong! Help! :)