While we’re on the subject of housing, there are a couple of points I would like to address. Housing plays a huge role in the area of personal finance, because for many of us, it will be our largest expense in life. As young adults, we are often pushed towards homeownership. There are easily accessible programs that allow you to put as little at 3% down, and some people will even qualify for 0% down loans. These programs are incredibly risky: by design, they are intended to help individuals with no savings or emergency cash. If these people do not have cash now, what will they do if a major component of their house needs replaced, such as HVAC or a roof? All of a sudden they find themselves in even more debt, to the point that they owe more than the house is worth.
As has often been pointed out on the Internet, a house is not always a great investment. In fact, for many people it becomes a financial drain. Our generation seems to think that if you get pre approved for a $300k mortgage, that you should go out and spend every last penny of it. We have grown up with House Hunters shows where the couples often go over their pre-set budget. As a result, our views on housing have become quite skewed.
It also makes me chuckle when I see these shows, and they need to have more bedrooms and bathrooms than they have people, plus a separate man-cave (I hate that term, by the way), a separate play area for the kids, and a separate place for the wife/mother to relax. I don’t know about the rest of you, but I married a woman I love. And while yes, we do occasionally like our time by ourselves, I’m not going to spend an extra $80k just to get more rooms that we are only going to use once a month. I have the same opinion on guest rooms: I’m not going to spend the extra $30-40k for an extra bedroom that will get used once a year. So if you really want to watch your finances, make sure you aren’t paying extra for items that won’t add any benefit to your life – the difference in housing costs could be enormous.