I only want you staring at the wall at night if you’re contemplating paint choices for your new home.
It sounds like your gut is telling you that buying a home is right for you in the long term. Unfortunately, even the right decision doesn’t mean you’ll never have another anxiety-induced stare-in-silence-at-the-wall kind of night. Expensive repairs, job losses, market downturns can always happen.
No matter how prepared you are, these events won’t be pleasant, though a decent emergency fund can ease the stress. So will having as little debt as possible.
So I think there’s a pretty simple solution to your homebuying quandary: Wait until next year when you’ve paid off your debt. Keep the $60,000 in liquid savings.
Once you’re ready to buy, you probably won’t need to drain the full $60,000 from your savings. The median down payment for first-time homebuyers is just 6%, according to the National Association of Realtors.
In the meantime, try having a friendly chat with your neighbor to let them know the smoke is impacting you. If they’re not willing to work out a solution, like smoking outside, go to your landlord. They often have wide discretion to restrict indoor smoking.
Holding off has an obvious benefit: You’ll be better prepared for those expected-yet-unexpected homeownership costs with the other 70% of your income freed up.
While you crush the last of that debt, consider meeting with a financial planner to figure out how much house you can afford. Crafting a plan with help from a professional will make this decision a lot less scary.
There’s also a less obvious benefit to paying off your debt before buying a home: the confidence boost.
Your early experiences with money were negative. But paying off debt is a huge win. You’ll have evidence that the tough times didn’t define you.
You’ll know that not only are the black mold meth apartment days behind you — but so is the debt you carried over from that chapter.
Robin Hartill is a senior editor at The Penny Hoarder and the voice behind Dear Penny. Send your questions about homebuying to AskPenny@thepennyhoarder.com.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.