Home prices have been soaring throughout the COVID-19 pandemic, with costs driven up by low mortgage rates leading to high demand at the same time when the supply of properties was limited. The price of new and used vehicles has also been soaring, in large part due to supply chain issues including a shortage of semiconductor chips.
Despite the fact that home prices were hitting recent record highs and cars have been selling for above market price, I purchased both a home and a car in the last 12 months. There’s a simple reason why I made this decision, despite the fact I didn’t get a great deal on either the house or the vehicle.
The simple reason why I purchased a house and a car at inopportune times
My decision to purchase a new house and a new car were both driven by necessity. I had sold my home before the peak of the market with plans to build a new one, and was living in a vacation house when the real estate market started to see skyrocketing prices.
Building became extremely difficult due to COVID and supply chain issues, and I needed to get back to the state where I lived, so I had no choice but to purchase a home as renting wouldn’t work for us due to our dogs and the type of properties available where we live.
My choice to purchase a car was driven by two factors. I was adding a new child to the family and needed a vehicle that could fit two car seats. And my existing car was a two-wheel-drive vehicle that wasn’t safe to operate in any type of bad weather, which made it difficult for me to drive my children around safely.
In other words, life circumstances necessitated buying both a car and a house at a really inopportune time — and there was nothing I could do about either, without compromising my family’s safety or security.
It’s important to be financially prepared for purchases that become necessary due to life circumstances
My situation is a classic example of why it’s important to always plan for the unexpected when setting financial goals. Sometimes, you can’t wait for the ideal time to buy a house or a car when prices are low, and you may face surprise expenses at inconvenient moments.
Since I had been saving money diligently for years and living below my means, I had the financial cushion to overpay for a car and to buy a home at a high price without having to take out a big mortgage. While it was inconvenient for me to pay a little bit extra for my home and vehicle, doing so wasn’t going to put a big strain on my budget or leave me with more debt than I could afford. I’ve aimed to be responsible with money since I began my adult life.
The important thing is to realize that you may also find yourself in a situation where you have to spend money on things at a time that’s less than ideal — and to try to make your financial choices about spending and saving in a way that allows you to do that if necessary.
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