Shelter...What do I need vs. What do I want?

3/19/20242 min read

white and red wooden house miniature on brown table
white and red wooden house miniature on brown table

Aside from food for nutrition, our need for shelter is one of the most basic requirements for living. Shelter is our home, our place of protection, comfort, and rest. Without this most basic of necessities met, our lives are incomplete.

The key in providing for shelter is the skill of differentiating “what we want” from “what we need”. What we “need” is a safe space, with adequate provision for day-to-day living. It should keep us out of weather and maintain a comfortable environment. It should allow for both social space for multi-person families, and private spaces for times we need to disconnect from the world. What we may “want” is that 5,000+ sq. ft. home with a three-car garage, pool, gourmet kitchen, and luxurious master suite. Keep in mind that along with that 5,000+ sq. ft. house goes increased taxes, maintenance + upkeep, property insurance, and higher utility costs. And with today’s housing/rentals going sky-high, these added costs can easily move from being a heavy burden to a back-breaking one.

You may have heard of Warren Buffett’s home in Omaha, NE. Warren lives in the same home he purchased in 1958 for $31,500. This five bedroom, two bath home was built in 1921 and over the ensuing years has continued to meet the needs of Mr. Buffett’s changing family. When asked in an interview why he didn’t purchase a larger estate, Warren responded, “I’m happy there. I’d move if I thought I’d be happier someplace else.” The more you can control the battle over your needs and wants, the easier the path to long term financial health. If you ever find yourself in the situation of being torn between “needs” vs. “wants”, I ask you to pause and reflect on the impact of your decision in three, five, ten years down the road. What other “needs” do I give up just to have the “wants” of today? Can I scale back my expectations and still live comfortably? Follow Warren's example of contentment and you will find joy in your life.

My counsel to those seeking to make these decisions:

  • Realistically evaluate what you or your family “need” vs. “want”. Will it enhance your life or create a long-term burden financially.

  • By deferring an immediate “want”, will I place myself in a better position long term to meet the “needs” of myself or my family?

  • If buying a home, first save to put as large a downpayment as possible on any home you purchase to reduce the amount financed and the interest portion paid over the long term.

  • If possible, finance for less than 30 years to reduce interest paid. A great exercise would be to look at amortization tables for 30, 25, and 20 years on a mortgage. You would be shocked at the final total amount paid for your home under each schedule.

  • Over the years as you get salary increases and decide how to allocate spending, give consideration to re-financing your mortgage to a reduced term or paying additional principal on the mortgage. For instance, on a 30 year, $400K mortgage, making one principal payment of $2500 yearly will pay-off the mortgage 8 years, 4 months early and reduce the interest paid by $104K. Think of the possibilities for that cash!

Wishing you the Father’s blessings in all you do…and until later….