Sunday, August 22, 2010

Keep Your Options Open

Our society has what I would consider a conventional life path. Grow up, get a good education, get a job (climb the corporate ladder), get married, buy a house with a yard, get a dog, have kids, retire and live happily ever after.

I wish someone would have told me to question that ideal while I was growing up. I don't have the dog or the yard with a white picket fence, but the rest has been a strong guiding force leading me to where I am today.

With what I know now, my career path would have been a lot different and I might not have bought a house. Why?

Well, I'm finally learning that you don't have to follow these rules or guidelines to be successful in life. Health, love, and happiness should define success--not the size of your house or the rock on your finger or the car you drive. I think seeing so many people lose everything in this recession has brought this to light. Having a second child has also given me much reason to reflect on the subject.

As an entrepreneural spirit, I would not have bothered trying to fit into a traditional job straight out of college. I've been annoyed with most of the jobs I've held and haven't found many of them challenging, or fulfililng. I'm meant to be on a more non-traditional path. Too bad it has taken me a few quarter-life crises to figure that out. It's still a work-in-progress.

As for buying a house, having children is more expensive than people realize. If you buy a house and are living within your means, your income will need to increase with each child. If you are a two-income family like we are, having a house could limit your options once the baby is born as expenses increase and, depending on your maternity benefits or lack thereof, income may decrease. Mortgage lenders have made it possible for families to finance the "American Dream", but at the expense of making them "house poor"-- a very common conversation amongst my group of mom friends these days. Most of our incomes go toward our mortgages, taxes, and condo assessments. And in the midst of a recession, we are all feeling trapped by housing prices that would force many of us to take big losses if we sold now.

If you are wealthy or talented at climbing the corporate ladder and having income that continues to increase as your family grows, that's great. But if you (or your spouse) lose your job or want to stay at home with the kids, you can get into a real pickle. Here in Chicago, our mortgage and condo association assessments are much higher than the cost of renting a place of the same size. I find myself jealous of renters all of a sudden when I grew up thinking home ownership was the way to go. Instead, I find ownership expensive, risky and stressful -- especially in this market where so many families are losing so much as they foreclose on their homes.

I'm not staying I like the idea of renting where you have a landlord, can't do home improvements, have annual rent increases, and have the possibility of moving more often. I prefer being settled and the freedom and security that ownership brings. I guess the bigger problem here is a lack of what I consider affordable homes in the city and the mortgage industry's willingness to loan out way more than a growing family can afford. Hopefully, the future will bring more life planning into the mortgage qualifying picture instead of just being a percentage of income and credit risk calculation. I'll put in a request for better landlords, better tenants, and better maternity leave benefits for all while I'm at it.

Moral of the story: Having kids is stressful enough that you shouldn't have to worry about how to support them too. Plan ahead and save, save, save.

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