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Home ownership can be a significant drag on an individual's or family's finances.

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The question

My friend and his wife recently bought a home in Toronto and as most people know, this is a massive financial investment. I have known them for many years and am quite proud of them for working hard to earn this. Recently, however, I have come to realize that they are house-poor – a term I recently learned – and have become fairly tight/strategic with their money. They don’t come out for drinks or dinner anymore and almost all plans have to happen at their new home. While I understand they want to show off their new place, when I visit it is not the most hospitable environment. No snacks are offered, certainly no beverages, and my friend even asked if I can bring over some beer for him last time. Should I say something or just wait until their financial situation improves?

The answer

I know how it feels to be house-poor.

Actually, I could only wish to be house-poor. I am “house-sinking-like-a-horse-and-buggy-into-a-quicksand-of-debt.”

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I aspire to house poverty! It is my fervent wish one day – don’t jinx it by saying anything! – to be free of debt and merely flat broke. To have a zero bank balance with no minuses. Then I will account myself a wealthy man.

One casualty of being house-poor: No more fancy-pants vacations with your more well-off friends. It’s sad. As one friend of mine says, “You feel like a loser for saying no and weird that money is suddenly an issue within a friendship where it never was before kids/house payments/adult life.”

For me, though, missing these gold-plated getaways is no biggie – and in fact most of the time a bullet dodged. Kids in tow, personality conflicts, problems with the hotel – I’d rather stay home!

Anyway, if my home is going to bleed my bank account white, I might as well spend as much time there as I can. Invite friends over for dinner or a glass of wine. Tanned and glowing, they can show me pictures of themselves cavorting with spider monkeys in Costa Rica or swimming with the dolphins off the coast of Antigua in my mostly-unpaid-for living room.

Perhaps your friends are taking it too far, to the point where they can’t even put out a bit of cheese or a six-pack when people come over.

You could advise them to borrow off the equity of their home so they could live in less straitened circumstances. But “here be dragons,” as medieval cartographers used to say. Could lead down the garden path straight into a pool of red ink.

Or you could advise them to sell. I have a friend who was feeling the pinch of house poverty, enacting all kinds of austerity measures. When a friend of hers died suddenly in his mid-forties, she thought, “Life’s too short,” sold her house and rented another. Now she goes on trips, out to dinner, sips chardonnay in the sunshine and generally breathes a little easier.

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It should be said, though, that she got lucky in finding a rental. These days, you sell your house and the first thing anyone asks is, “Where you gonna go?” Because they know it can be a real challenge finding anything else.

I ask you to consider several things:

  • First, unsolicited advice can not only backfire but make people actively angry. Their thought-balloon: “You think you know better than me? Who asked you anyway? Who do you think you are?”
  • Second, they probably won’t take your advice. I know I wouldn’t sell my house, or borrow (more) off it, just because a friend thought I should.
  • Third, has it occurred to you they may actually be doing the right thing? Ask any financial guru-type, they all bang the same drum: Live within your means! Like our grandparents did in ye olden, golden days of yore! Be frugal and don’t go into debt!

Easier said than done, for many of us, but clearly your friends are attempting to operate within those parameters.

And is it really such a hardship to bring over a few beers? Really, they shouldn’t have to ask. I believe it’s customary to have something in hand, e.g. wine or beer, when you visit someone’s house.

I’d go further and say why not bring a cheese tray, or maybe even a frozen lasagna while you’re at it? Rather than advice, why not just give them support and sympathy during what are obviously difficult, belt-tightening times?

Are you in a sticky situation? Send your dilemmas to damage@globeandmail.com. Please keep your submissions to 150 words and include a daytime contact number so we can follow up with any queries.

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