Homeforward thinkingIf we didn't want a house.

If we didn’t want a house.

I was doing some driving today, and like I often do, I started thinking about our finances. Today, I was contemplating our savings goals. If you aren’t already aware, Girl Ninja and I kind of want to buy a house one day in the future. So to prepare for said house, we have spent the past two years being diligent little savers.

But what if we have a change of heart and decide we don’t want to buy a house anytime soon (meaning in the next five or so years)? This isn’t a rhetorical question. Seriously, what the frick would we do?

Or another way of phrasing the question (and probably a much more realistic hypothetical situation) is this: What do we do if we reach our $100,000 goal, but aren’t ready to buy yet? We’d still have discretionary income coming in, but do we really need $120,000 or $150,000 in the bank? At what point would our savings just become awkwardly excessive?

I mean, I don’t want to be the cat lady that dies with millions in the bank. So if we reach our $100,000 goal before we even want to buy a house, I guess the only solution is to spend more of our money. Maybe we’d take a few big vacations each year. Perhaps we’d buy a new couch. We’d give more money to charity. I’d up our retirement contribution to 30% (yawn). Girl Ninja would overhaul her wardrobe and I could buy myself some expensive gadgets I don’t really need. But even then, we’d eventually run out of things we want. Where does your money go, when you have no where to put it?

I’m extremely grateful we are in a position where we can save the majority of our income, but for the last two years I’ve put my focus and energy on reaching this $100,000 goal. Which in turn means I’ve put absolutely no focus or thought in to what we’d do once we reach that goal. Help.



  1. If I were in that position, I would give more money to charity through projects such as Kiva. While I would definitely treat myself and my wife to a nicer holidays and some new things, it would be important to me to start a project.

  2. Goals, one of my weaknesses. All I can tell you is you better start creating a new list of goals, otherwise you will be a lost soul like me. Looks like you already have a start with the ones you have mentioned. Funny how “extra” money can be a “problem”. Oh, you forgot about having a baby in your list 😉

  3. In regards to having “too” much money, too me that number is 10 million in the bank with zero debt. Until then keep saving.

  4. Start a house remodel/repair/upgrade fund. Thrust me you will need it. I just purchased a fully remodeled and upgraded house and still had to do work to it. OK I wanted the work but it will be my house for the next 10 years (at least) so I want to make it perfect. Few more projects and it will be done. Cost of all of the projects when it’s said and done – $15,000.

  5. I don’t think you’re in danger of becoming the cat lady. And don’t worry so much about goals; goals are pleasant fantasies, but they have to be adjusted with circumstances. I personally wouldn’t hold so much cash as it is earning very little interest and you might be better off investing some of it, but I see no real problem if you just left things as they are.

  6. I don’t think your savings will be too excessive if it exceeds your goal by 20 or 50%. I wouldn’t spend out of that fund, but I would cut back on the savings rate to do some of the things you mentioned. I’d also probably move a portion of the money to higher risk/reward investments. Can you start a college fund before you have a SSN for a kid??

  7. I’d keep saving; trust me, when you’re ready to buy a house, you will hemorrage money! Luckily, the townhouse we’ve bought and taking possession in 3 weeks was been fully renovated in the past 2 years (to our taste, no less!), BUT we now have 2 extra bedrooms, and a finished basement to furnish… not to mention finally having the room to purchase the dresser that is part of our bed set, area rugs, pictures, decore, a proper desk, etc….

  8. Unless home prices have dropped, i would keep saving. Why not change your goal to pay cash for a house? That would save you thousands in interest, and make it easier when gn stays at home.

  9. Speaking from experience, houses and children will eat up any “extra” rather rapidly, so unless you two do a total 180 and decide not to buy a house AND not to have kids, you’ll find a way to spend that cash. For instance, if you have kids but no house, that’s a mighty fine college fund, and it pays for a lot of piano lessons too!

  10. Once you hit your savings goal. I would start investing in some index mutual funds. 80% U.S. and 20% international. Trimmed by whatever percentage of bonds you need to feel comfortable. Keep adding to that until you’re ready to buy a house and maybe you’ll have enough to pay cash.

  11. I had an interesting similar thing happen to me yesterday that I need to think about. I used a retirment type calculator provided by my company. Under my current scenario, which I thought was fairly conservative, if I died at 100 I would still have $3 million left to leave my heirs. The problem is…I don’t nor will I have any heirs (I’m 44 and don’t plan on having kids). That left me wondering what to do, same as you? Slow down my savings? That doesn’t feel right.

    I know it’s just a calculator, and even conservative estimates might not be enough, so I plan to continue on as is. But I wondered why you thought it was a problem to have more savings than your $100k? Savings is never a bad thing is it (assuming you move it to a type of investment that will earn you a little more money but still be fairly safe).

  12. Knowing that you eventually (even >5 years) will buy a house, i don’t think any amount in savings is “awkward”. I would definitely up the retirement over splurging on material goods. 30% may sound like a lot to put into retirement, but if GN is going to spend several years out of the work force raising kids, you really just can’t put too much away while still at DINK status.

  13. I’m with JP on this one: invest it. You can get 8% per year on preference shares. IN fact, I’d invest it until you buy your house. The ideal time for that is at the bottom of the next recession, and in the meantime you can add another $20,000 or so. That ought to pay for all the incidental costs, what do you think?

  14. Why do you feel the need to spend on extravagances if not buying the house? Keep racking up the cash you never know when you could be unemployed or what if you decide you get sick of the rat race one day and with your saved up $$ you could even consider the possibility of early retirement?

  15. I don’t think you really DO know how lucky you are. Otherwise, you would stop whining about having too much money.

  16. You could start putting anything over the 100K into a taxable investment account. That way you could tap into it for whatever you needed it for and have the potential for higher returns. You could also decide you may not want a house for yourselves, but you may want a rental property, in which case you would have a great down payment for one of those.

  17. You do not have the problem of too much money in the bank with $100,000. After you and the Mrs. have a little fun with some of it, you can start an education fund for your future kids, Invest in your Manteresting project or keep the money there for when you two are ready to buy a house! If you guys end up having $150,000 at that time, then you will be in a better position.

    One thing that my wife and I will be doing once we’ve saved up enough money and I’m fully vested in my company stock (cha-ching!), will be quitting our jobs to travel the world. If this is something you guys are interested in doing, then you are in a perfect position with a lot of money saved up and no kids.

  18. I don’t think there’s ever too much money in savings. I think you have a great balance in life right now, why do you need to spend more. You seem happy. Just increase your savings goals.

  19. If I were in your shoes (and I’m not…live in LCOL Texas, married 8 years, DH works full time, I work 10-15 hrs a week, one year old child, only debt is 65K left on our house) I would change your goal to put down more on your house (or pay cash), and start a “missions/giving” fund. When we paid off the car and student loans (during the 6 months we both worked full time after college), we increased our savings and the amount we were paying towards our house, and we also started a missions/giving fund. When smaller opportunities (<$200) to help come along we can give freely from the fund. And because we are continually putting money in that account, God has also given us the ability to help when someone has a more substantial need ($1000+) also.

  20. I’ve been working on setting up “alternative sources of income” such as DRIPs (currently have the dividends set on reinvestment so it’s increasing my shares without having to put more money in) while establishing a rotation of CDs monthly (and when they come due, taking the interest and re-committing the money for a year). I have my eyes set on a prize of retirement in 20 years but know I’ll be taking a hit on my pension and won’t be eligible for social security (if it’s still there) for about 20 years after that. Will need something to fill in the gap and using time to build my cushion.

  21. For me, where you redirect that money would depend on why you chose not to purchase a home at that time. Directing your cash at the realestate market seems like the next natural step.

    Rental properties seem to be a pretty sound strategy long term (provided you do your homework) but wouldn’t be a great choice if you wanted to avoid the headache of housing maintenance. Alternatively you could buy an index fund REIT like Vanguards. That way you diversify your portfolio as if you owned property, lots of little bits of property at that.

    Do you read these?

    I agree with previous comments as well: Don’t let it burn a hole in your pockets. If you choose to delay your home purchase, having more money will not hurt when it comes time. Reduce your contributions and put it in a new high yield money market to provide flexibility and keep it out of sight/mind.

    • I read every comment I get for ever blog post I write. I just think its lame to save more and more and more. Especially when we Would have a significant amount of liquid cash and are already putting away a reasonable amount for the future. There has to be more to life than living frugally an investing insanely.

      • Hey, Ninja, if you were hard-wired for home ownership then you’d be a homeowner by now. No rush. You’re keeping tabs on the market and visiting open houses, so you’ll know “the one” when you see it.

        “Frugal fatigue” happens when you’re not spending your money on the things that bring you value. Maybe it’s time to loosen up the purse strings a little:

        Here’s another thought: why not put your down payment stash in long-term CDs, in increments of $10K? I’m talking 7-10 years, the kind where you lose 12-18 months of interest for early redemptions. This way you’ll feel like you’re taking action, you’re keeping your money safe, and you’re losing less to inflation. If you find a home then take the early-redemption hit and spend the money. If you don’t find a home then you’ll have cash for whatever you want.

      • Well, I in fact totally agree with you, and this is a welcome change from the young man who wouldn’t spend $100 for a bus tour around Aruba. Money is not only to be saved but to be used. Cut yourself some slack. Personal finance is not only about saving, and an economy that is so contracted that people are afraid to spend is not a healthy economy either. I look at it this way: I can be assured that within any few weeks, my net worth is going to rise or fall about 1%, more or less, depending on market conditions, contribtuions, and so far. So what if I spend about one quarter of one percent of my net worth every once in a while on something just because I want it. I took trips to Europe almost every year between 1993-2004, and I’ve never regretted that once – all the more since with increasing age I can’t climb stairs or walk for long distances the way I could 10-15 years ago.

  22. There is only one obvious solution: Purchase your own California Burrito and taste victory! Just make sure you don’t eat away all of your profits.

  23. I would save up enough to buy a house with cash. Once our mortgage is paid off I am seriously considering quitting my current job and just teaching guitar/banjo/drum lessons full time.

  24. Interestingly enough, I have this conversation with other financial planners all the time. What happens when they hit their savings goal and then the day they retire they get hit by a Mac truck? There is a need for moderation in all things. Enjoy the time/freedom you have now, but not at the expense of your bigger goals. Depending on what your priorities, values, and goals are one really CAN save too much. I have yet to talk to a client who, in their final days, tells me that they wish they could have saved more/left more for their kids. Include fun/memories/vacations in your budget as a separate item and spend it when you hit that smaller goal.

  25. To be honest, now that we have our 2nd kid (I’m 31, husband is 36) I wish we had given thought to generating passive income streams so that money wouldn’t be as much of a worry when the kids arrived. If I were you, I’d give some thought to that.

    Also, I’d take girl ninja to RN74 in downtown Seattle, get her some beingets, and a glass of wine and pretend you’re in France.

  26. I’m not saving for a home – I’m in Manhattan and self-employed, and I’d need about $250K cash deposit for a small studio. NO THANKS. My safety net has passed the 12-month mark, and I feel I can loosen up a bit – more like slowing down my rate of savings rather than eliminate it.

    I have ONE thing that truly makes me happier than anything, something that I put on the backburner for 3 years while I figured my way out of the hit that our international and my personal economy took in 2008: TRAVEL. And I don’t mean Paris (think: February in Tanzania/Serengeti, $3800 all in). Now I’m not saying you should do this…just give some thought to things that truly make you happy, and do more of that. The nice thing about the travel focus is that, should things dip in my personal economy again, I just stop for a while – it’s not like belonging to a golf/country club or anything with hefty contracts.

    Oh, the other thing I also like is learning new stuff, be it work related or just a random interest. I happen to live near a campus of the college I went to as an undergrad, and I just found out last night that I can audit classes for a “nominal fee” as an alumni perk. So while I was prepared to lay out $400-700 to brush up my Italian, I might not have to. Hmm.

  27. You should both quit your jobs and open a California Burrito Food Truck in Seattle! I live in San Diego and share your appreciation of California Burritos! Have you ever been to Rudy’s in Solana Beach? One of the best I’ve had!

  28. I have never really understood your savings / investment allocation. IMHO, you are not anywhere near the paint at which you “savings just become awkwardly excessive.” If I am reading your net worth updates correctly, you have ~$65K in retirement savings and ~$70K in a bank account earning ~0% interest. If you decide you aren’t ready / don’t want to buy a house, you could put that ~$70K into retirement savings. Again IMHO, it doesn’t make any sense to say that you have excess savings until the point where you can live off of the passive income from your saving (i.e. the interest on your savings is sufficient to cover your life expenses FOR THE REST OF YOUR LIFE without you having to work).

    The Ninja’s are doing well, don’t blow it by falling into the fallacy that you need to spend that money just because you have it. You are going to need MUCH more than ~$130K over the rest of your life; your saving aren’t even close to excessive.

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