Can I Afford a Vacation Home?

El_Paraiso_Motel_and_Lodges,_Big_Bear_Lake,_Calif_(81924)A vacation home is a popular topic for our family. We live in an area where the cost of a primary residence hovers near the one million dollar mark. Our prospects of owning our own home are years in the future. However, there are mountain communities surrounding Los Angeles where the cost to buy a home is considerably less. My wife and I have tossed around the idea of buying one of these mountain homes. A mountain home would give our children a place to play and explore. Is buying a vacation house good idea, or do we have house fever?

I came across an article on www.daveramsey.com that sheds lite on our vacation home debate. The article “How Can I Afford a Vacation Home?” expands on our question. The article breaks the larger question down into five small questions to ask yourself.

Questions to ask yourself before you buy that Vacation Home.

  • Can I pay cash for the vacation home?
  • Is my primary residence already paid for?
  • Am I saving 15% of my income for retirement?
  • Do I have a three-to-six-month emergency fund in place?
  • Am I saving for my kids’ college?

The answers for my wife and I are No, No, No, No and Kinda. This is unfortunate but we know it is not permanent. We will be able to answer Yes, Yes, Yes, Yes and Yes to all of these questions at some point in our financial journey. When that day comes you will find me at our mountain home relaxing and not worrying about how I am going to make payments on this little slice of paradise.

The article does point out that renting a vacation home would allow us to enjoy many of the same benefits without the hassle of maintenance and upkeep. Who shovels the snow at our vacation house? Who is responsible for the roof at our vacation house? If we rent the answer is not my problem. If we own however the answer sounds more like cha-ching.

What this article does not say but does imply is the lesson of living within your means. If you weigh yourself down in debt you will never be able to enjoy the finer things in life. Learn to delay gratification now and it will pay dividends later in life. For my wife and I, today is not the day we buy our dream vacation house but it is the day we lay the foundation.

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