Fix up a house vs. save for college??

[Moxie]

Our house is ugly. Not many things have been updated since the 70's (needs a new kitchen and bathrooms) and the ones that are updated are done wrong and need re-done (painted over wallpaper, rooms not primed so they need scraped and repainted, etc.).

 

We knew the house needed work when we bought it. It was priced at just a little more than half what our very updated next door neighbors house is currently priced at. So we saved money on the purchase.

 

My issue--we don't have enough saved for my oldest 2 for college. Not even close.

 

In discussing this with my sister, she said, "Look, your oldest goes to college in 3 years. You are going to have to have loans for him. Spend your extra money now fixing up the house, deal with the loans later."

 

Tempting. I do hate this house. What says the Hive?

Edited January 4, 2016 by Moxie

[GinaPagnato]

I would save the bulk of my money for helping kids with college.

 

However, I would allocate some funds for fixing the house, and only doing relatively small renovations that aren't too expensive.

 

IOW, I would tackle cosmetic things that won't break the bank or significantly impair my ability to help with tuition.

 

Then again, we're in the throes of college right now, so I may be biased.

[Guest]

I'd absolutely fix up the house, but I'm here every day with few breaks and little things about form and function really grate on me year after year.

 

I don't feel badly about spending some of what we have on improving our home's function and appearance. That's maybe two or three years of our discretionary spending and still leaves time and money down the road for other things.

[Outdoorsy Type]

I'm not an expert, but I would fix the house and borrow more against the mortgage if needed.

[wintermom]

With your youngest dc still toddlers, I wouldn't put masses of money into making the house beautiful as they will counteract some of this work (if they are anything like my dc!).  Then again, removing wallpaper and painting isn't very expensive and can make a huge difference in the look and feel of a house. Kitchens are pretty expensive to redo, and are much more invasive for living and renovating in the same space. 

[meena]

If something forced a sale of your house, would it be hard to sell due to those things not being fixed? Would you have to sell at a loss? If so, then I'd at least do the work to get your house in good enough condition that it would sell in a timely manner and you'd at least break even.

 

If in its current condition you could sell and break even, I'd split extra funds. Maybe 60% to gradually updating house and 40% college? I'd also start looking into scholarships or opportunities that could help reduce how much you would need to contribute to college costs. We are planning on having our kids do dual credit at the CC, which is free here, and having them apply for our state's scholarship program to help cut down on costs. We are also proponents of having a working gap year to help make money before enrolling full time in college.

[bettyandbob]

I would do painting and whatever I could do myself. You could learn to do a lot. My community center has a lot of DIY classes. I think many hardware stores have DIY classes for free.

 

You aren't likely going to able to tackle kitchen and baths, but you can do stuff that makes more livable, which is really important.

 

Not having any savings does not mean you DC will suddenly qualify for mega grants. The college board frequently has discussions about financing.

[SparklyUnicorn]

I don't know the details of your situation, but "I" would fix up the house.  My reasoning would be that I am very unlikely to be able to save enough to put even a small dent into college costs.  Also, I am still paying for my own education. 

 

When the time comes I'll do what I can do to help my kids, but they will likely have to take out lots of loans.  It is what it is.

 

 

[meena]

I'm not an expert, but I would fix the house and borrow more against the mortgage if needed.

I'm no expert either, but here's my two cents.

My ILs did that for their kids. They were in a great market so in the end they ended up selling their house and still making money. But they ultimately lost a lot of money due to compounding interest on the extra money they borrowed against their mortgage. If they would have been in a tougher market, they could have easily ended up upside down on their mortgage and unable to sell. So, it's an option but definitely one to carefully consider. You don't want to end up losing your house or being unable to sell if need be in order to fund college.

[Guest]

To answer some questions--we've done all we can do. The trim needs replaced by a professional because we have been trying to find the time for two years and it hasn't happened. Painted over wallpaper has to be skim coated. I've painted the kitchen cabinets but the counters are still ugly, peeling laminate.

 

Maybe Lotto is the answer???

[fairfarmhand]

I don't know the details of your situation, but "I" would fix up the house.  My reasoning would be that I am very unlikely to be able to save enough to put even a small dent into college costs.  Also, I am still paying for my own education. 

 

When the time comes I'll do what I can do to help my kids, but they will likely have to take out lots of loans.  It is what it is.

 

Yup.

 

I've told my kids that we can't pay for 4 college educations.  (And no it's not selfish to make a home comfortable--not luxurious--comfortable for the family when some of the kids are headed off to college) So, I did my part to give them a fabulous high school education to put them in a better position for college. They will likely go to state schools, and it will be on their dime. My oldest is thinking very hard about the expenses college, living at home vs. living on campus, what her major should be because it will be her expense. She's done amazingly on tests, so even though we make more money than to qualify for low income grants/scholarships, she will still qualify for good scholarships.

 

We'll help by giving her the option to live at home and eat our food should she choose to go locally, we'll help with some small expenses like clothing, phone, etc. But most of her life expenses will be her thing.

 

There's nothing wrong with NOT being able to provide a college education for your kids, and I'd be quite resentful if I and my kids' siblings had to live in an ugly,  depressing home to pay for my kids' college. I don't plan on taking out loans to pay for my kids' college educations.

[Annie G]

Depends...are you planning for your kids to go away to a 4 year school right away or do two years at a community or local school? Have you looked at a FAFSA estimator to see what your expected family contribution might be?  Do your kids have the potential to receive academic or athletic scholarships? Can your kids work while in high school to earn money towards college?  Are you willing to let them take out loans? 

 

All of these questions have to be considered. We were comfortable letting our kids take out smallish loans and working while in school and we are paying the rest. You might not be comfortable letting the kids take loans, or working during school, or whatever. But we live in a house built in 1880 and we've had at least one kid in college since 2001. No way could we put off house repairs and renovations in order to save for college- not for 15 years!  

 

We made the best compromise we could- we did what had to be done but did it frugally.  Most we did ourselves and when we had to hire work out we found the best bang for our buck.  

 

What worked for us was taking loans and paying them back quickly- which we could do because by the time the loan went into repayment, we had fewer expenses because we weren't supporting that kid- so we paid our first loan off in less than a year and the second one will be paid for in two years.  I'm all for saving in advance but it's not always possible.  But you probably want to think about the questions at the beginning of this reply...

[Carrie12345]

I'd do the house.

 

But I say that as someone who is WAY underwater on the mtg, thanks to our crummy market, and it depresses me (not hyperbole) to be financially stuck in this shoebox.  We're currently working on small things to make it better so that I don't completely lose my mind (only slight hyperbole.)  Trying to be comfortable where I live is important to me!

[foxbridgeacademy]

I would save the bulk of my money for helping kids with college.

 

However, I would allocate some funds for fixing the house, and only doing relatively small renovations that aren't too expensive.

 

IOW, I would tackle cosmetic things that won't break the bank or significantly impair my ability to help with tuition.

 

Then again, we're in the throes of college right now, so I may be biased.

 

 

With your youngest dc still toddlers, I wouldn't put masses of money into making the house beautiful as they will counteract some of this work (if they are anything like my dc!).  Then again, removing wallpaper and painting isn't very expensive and can make a huge difference in the look and feel of a house. Kitchens are pretty expensive to redo, and are much more invasive for living and renovating in the same space. 

 

These two sum up my opinion on it.  Since the house is livable then I would start with the sweat equity projects, stripping wallpaper, painting walls and cabinets(New formica countertops while not nice will at least be new and only cost $200-$300 from Lowes).  I might spend a bit on replacing old carpet (we have allergies) but otherwise I'd keep budget to a minimum.  When your oldest starts College then reassess, maybe they got some aid or scholarships, maybe they worked for the last couple years and can help pay. 

[clementine]

Speaking as one with 1 in college & 1 soon to be, I have to say save it for college. I agree with the pp who suggested paint & DIY on the cheap...you'd be surprised how much of a difference that can make. I think if you spent the wad on renovations, you might regret it when college rolls around.

[madteaparty]

I don't know the details of your situation, but "I" would fix up the house. My reasoning would be that I am very unlikely to be able to save enough to put even a small dent into college costs. Also, I am still paying for my own education.

 

When the time comes I'll do what I can do to help my kids, but they will likely have to take out lots of loans. It is what it is.

Same. There's no interest being paid on anything now (other than the interest I pay on my own student loans). We save a tiny amount for college but only because we get a state tax benefit. Otherwise it is not a rational decision for us to lock up savings in an earmarked college account. Also, we plan to pay for college as we go, and unless disaster strikes, we should be able to do so. If disaster does strike, I gather we'd have bigger worries than college payment.

[SparklyUnicorn]

Same. There's no interest being paid on anything now (other than the interest I pay on my own student loans). We save a tiny amount for college but only because we get a state tax benefit. Otherwise it is not a rational decision for us to lock up savings in an earmarked college account. Also, we plan to pay for college as we go, and unless disaster strikes, we should be able to do so. If disaster does strike, I gather we'd have bigger worries than college payment.

 

Yeah that is a huge factor.  No interest.  Also stuff like 529 is not risk free. 

[Liz CA]

To answer some questions--we've done all we can do. The trim needs replaced by a professional because we have been trying to find the time for two years and it hasn't happened. Painted over wallpaper has to be skim coated. I've painted the kitchen cabinets but the counters are still ugly, peeling laminate.

 

Maybe Lotto is the answer???

 

Replacing counters is not that difficult. There are books on it not to mention endless YouTube videos. The material you choose to replace is up to you and you have discretion. You could shop for remnant pieces to be cut to size. Could you hire a retired person who has done this type of work in the past if you don't want to embark on it yourself? My aunt used to have people do house painting and gardening who had done this work professionally but were now retired but happy to earn a little extra in their field of expertise.

 

Make a list of all the "MUST change items." This cannot include things that function but are not your choice of design.

Make a list of all the "LIKE to change items." This can include all the dream work you envision.

 

Chip away at the "must" do list first, then go to the "dream" list.

If you think you are going to sell in the next 5 years, only do the "must do" list for resale value.

[The Girls' Mom]

I would do DIY cosmetic stuff on the cheap.  (And this would be regardless of college savings plans).  They have some VERY nice formica now.  It is durable too.  Check with your local cabinet shops and you may be surprised a the cost of just having new formica counters installed.  Paint is relatively easy and cheap. Kitchen cabinets aren't horrible to paint either. See if you have hardwoods under your carpets, and rip out that carpet if you do.  You can buy and install some masonite doors to replace any hollow core doors you have, paint them and it will look so much better.  We've updated several older homes with just those fixes and you'd be amazed at the difference.  

As for college savings, if you can that is great.  But don't hate yourself if you cannot.  Due to various reasons, we had/have nothing saved up for our girls college.  Right now we are focusing on being able to live off of our retirement so that our kids don't have to finance our old age...that's the best we can offer.  Their education will have to be self-funded, with us pitching in a little here and there.

[Spryte]

You know, this could be a great Hive project.  :)  You can post before pics, and we'll all cheer you on as you DIY, and we'll virtually "help" by pointing you to blogs and watch you do it all.   :willy_nilly:

 

I would probably do some work - to keep the house in condition to sell, should the need arise.  I would not likely do major renovations, just cosmetic things and projects that might seriously impact the liveability factor for us.  

 

Then again, I can't answer for you, and I might be totally wrong.  :)

[Shellydon]

Get bids on what you want to have done, then decide

[TX Native]

It looks like if you save for college for your oldest children instead of the renovations, in 5 years you will be in the same position needing to start a college savings for your now 8 year old. If you don't predict having an income increase in 5 years that will allow for you to start saving for your then 13 yo and for the renovations, will you be fine still keeping the house as is until you save for the next child? Will the kitchen *need* new countertops before your kids hit college aged regardless of if you change them out now? If they will, the money will have to be spent on countertops either way, with college funds in the bank or not. We are fine living in a less appealing house as a sacrifice to live on one income now, but our house and furniture is getting so shabby looking we have to bite the bullet this year and pay for some long overdue home improvements. We have no idea how we will pay for needed braces in 5 years, let alone college. But realistically, we can't hold off on conservative home improvements we need now until we have money for braces we will need to pay for down the road. Unless you predict a huge income increase in the future to do both or you are fine living in the house as is for the next 5-10 years, I would do the renovations sooner and save for college later. I would go as economically as possible with something you like and will also get a decent resale value for your $ in case you unexpectedly need to move, but nothing too high end or fancy. Exception is if you can look at the house objectively and decide peace of mind that your kids will have college funds in the bank at graduation outweighs how much you hate your current kitchen and bathroom area.

Edited January 4, 2016 by TX native

[SparklyUnicorn]

I would do DIY cosmetic stuff on the cheap.  (And this would be regardless of college savings plans). 

 

Oh me too.  Don't need to spend a ton to make it nicer. 

[fairfarmhand]

I'd do the house.

 

But I say that as someone who is WAY underwater on the mtg, thanks to our crummy market, and it depresses me (not hyperbole) to be financially stuck in this shoebox.  We're currently working on small things to make it better so that I don't completely lose my mind (only slight hyperbole.)  Trying to be comfortable where I live is important to me!

 

 

Right. As homeschoolers we ARE home a ton. My dh asked me about living in a fixer upper. I told him that I didn't want to go there. He'd be off at work, with the intention of getting the house fixed up on weekends. However, it would probably take twice as long as we estimated, and while he was at work, I'd be dealing with trying to keep house in a place that I hated. I'd probably stop cleaning altogether because I could clean all day long and it'd still look awful. (I know myself. This is how I am.)  I'd be dealing with toilets breaking and stuff tearing up while he was at work.

 

If I could get away from it by being at work most of my waking hours, I wouldn't mind it so much, but since we are at home so much, the fixer upper would not be worth it to me.

 

[JumpyTheFrog]

Do you have a Habitat for Humanity Re-Store near you where you can get some used cabinets you like better?

[catz]

I would start smalland do house stuff as you go along.  I would just work on having a solid budget with X going to college savings and Y going to household stuff/savings towards work done on the house and march along with that.   I would try hard not to get over my head in a mortgage.   Our 100 year old house is on the 20 year update plan.  We've done some and we've hired some of the work out but we've paid cash for all of it (we've remodeled 2 bathrooms, landscaped, new garage, put in central air, etc etc etc over the last 12 years).  If your mortgage is WELL below your comfort level you could refinance to get a home equity loan and continue to save for college .

 

I would start instilling the idea of starting in community college in your kids as they reach high school age if helping is not in the cards. 

 

I do think of anything, funding your retirement/elder years is one of the best gifts you can give your kids.    But I was able to graduate from college debt free with help from my parents (and my own college choice/working) and that was also a HUGE gift to start out my adulthood with.  I would consider a trip to a financial advisor to look at the big picture.  If you haven't really started, significantly helping 5 kids through college seems like a stretch.