by Kevin Janiec CFP®, MBA
I just read a Wealth of Common Sense blog post titled, “Did HGTV ruin the Housing Market for Millenials?” It’s a debate that my dad and my wife often spar about at our family happy hours. And they both have good points.
It’s debatable whether the heightened expectations of open floor plans, walk-in closets and granite countertops are a sign of generational progress or a symptom of an unhealthy social construct where peer to peer comparisons are inevitable. But I am not writing this to say who is right and who is wrong.
Instead, I’m here to help you strategically plan for the vision of your future. And if HGTV or Pinterest happens to be inspiring that vision (like it is in my own household), we’ll gladly guide you through the process to make it happen. For example, here are five topics we like to discuss with our clients before turning their vision into reality:
- Ideal vision: If money weren’t a factor, what are some of the things you would ideally do to your home today?
Why: Too often, your actual vision is clouded by an unnecessary limiting mindset. We’ll get to the budget and constraints later, but let’s start big with a wish list and work from there.
- Priorities and trade-offs: Based on your ideal vision, how would you rank the items on your wish list? What aspects of your current lifestyle or future goals would you be willing to give up to make these items happen?
Why: Trade-offs are never fun, but they are helpful in separating necessity from excess luxury. In order to understand the true value of the project, we must understand what we would be willing to give up to create space for this “new priority.”
- Time-line/flexibility: When would you like to pursue this project? What arrangements need to be made in between now and then? How flexible is this timeline?
Why: These home upgrades typically require many steps (sometimes expensive and time-consuming) before we get to the project itself, so being proactive about a timeline will help us stay prepared. We also might run into a situation like we face today with uncontrollable market forces changing the pricing dynamics (materials, labor, home prices, etc.). Flexibility will be key to not paying more than you need to.
- Budget and financing strategies: What can you reasonably afford and how will you come up with the money to fund this project?
Once you determine the target budget that you can afford and how that budget might impact the rest of your financial plan, it is important to think about how to come up with this money. You will want to consider the tax consequences, the loan options, and the current risk level of the invested assets that you might hope to use for the project.
- Who and how: What builders/contractors will you use for this project? How will you go about making your decision? How involved will you want to be?
Once you’ve determined what you want, when you want it, and how you’ll pay for it, it’s important to think about who is actually going to do the work and how the process will play out. This is a critical step to actually implementing the vision.
So did HGTV ruin the housing market for millennials? Probably not, but who cares anyway! Reach out if you’d like to talk through these 5 topics, and we’ll help you channel your inner Chip and Joanna. Just promise to send us pics when your project is complete.
Investment Advice offered through FC Advisory LLC, a registered investment adviser doing business as “New Wealth Project” and as “Financial Coach”. This content is provided for informational purposes only. Views and opinions expressed are those of the authors and do not necessarily reflect those of FC Advisory, LLC. Information provided is not and should not be interpreted as investment, tax, legal, or other professional advice or recommendation by FC Advisory, LLC or the members of our firm. Always consult the appropriate professional regarding your specific situation before implementing any options presented or inferred. FC Advisory LLC, All rights reserved.
This content may contain hyperlinks to external websites which are owned and operated by non-affiliated third parties. If you use these hyperlinks you will leave our website; we bear no responsibility for the accuracy, legality, or content of these external sites or for that of subsequent links. No warranties or representations are being made about linked websites, the third parties they are owned and operated by, the information contained on them, the accuracy, completeness, or timeliness of their content, or the suitability or quality of any of their products or services.