Obstacles to Home Ownership

big-houseMuch has been written and reported about the difficulties young adults face in our economic times.  Wages have stagnated, inflation has not. An income that could support a family of four fifty years ago cannot pay the rent on a two-bedroom apartment in today’s dollars.  With the rising cost of higher education, those who have pursued a college degree get saddled with student loan debt whether they graduate or not and it’s an obligation that cannot be relieved by bankruptcy.  Between student loans, car payments, and ever rising rent costs, how is anyone supposed to save for a down payment on a house?

While I would not argue that establishing an independent, adult household is an easy prospect, there are choices that make it harder than it has to be.  Here are a few things that can add to the difficulty of being able to buy a home.

  1. Delaying marriage.  High divorce rates give marriage a bad name.  Here is the good news.  More than half of all first time marriages last a lifetime.  Those that get married and stay married are up to four times wealthier than their single counterparts.
  2. Not delaying having children.  If getting married makes you wealthier, having children makes you poorer.  If you want to have financial stability in life, get an education, get and stay married, and wait to have children until after you are married.  Having children outside of marriage in the new normal for this generation of young adults and it may be a contributing factor to why they can’t afford to buy a house.
  3. Supplementing income with credit. When we leave our parent’s home, we all would like to maintain the lifestyle we enjoyed there.  But, usually that isn’t possible because we don’t have the income to sustain it. Many solve that problem using credit cards. Using a credit card with a plan to pay it off is one thing.  Using a credit card for living expenses is another.  If you cannot live on what you make, you need to find a new job or a new way to live. Borrowing money for liabilities will bring you nothing but poverty.
  4. Buying new cars on credit.  According to financial advice guru Dave Ramsey, car loans are the single biggest destroyer of personal wealth.  Most of us are not auto mechanics and the fear of being stranded along side the road with a broke down vehicle is real.  However, a membership to a discount towing service and regular car maintenance is vastly more affordable than the loan payment, taxes, and insurance on a new car.  If you are willing to make due with a paid off clunker, you will have the means to save for something better and maybe a garage to park it in.
  5. Not tracking spending. When finances are tight, it is important to know where each dollar you earn is going.  If there is always more month than money, it may be time to re-evaluate your life choices. If housing costs are more than 50% of your income, that is not a sustainable situation.  It may be time to consider moving to a cheaper location, a smaller apartment, or sharing with roommates.  If eating out is a huge expense, may be now is the time to learn how to cook.  Brewing coffee at home in a coffee maker can also breath life into a sickly budget.

If you marry young and well, delay having kids for a few years, live within your means, and drive old cars, you will likely be able to buy a home sooner than you think.  Make these mistakes, it might take you a lot longer.



Decluttering vs. Minimalism

I recently read an article on another blog about living out of a duffel bag and a backpack for a month to see what it would be like.  The author learned that although doable for himself as an individual, it would be nearly impossible for a family as the items required for family life do not all fit in a few bags.  Families need homes with kitchens and gather spaces, entertainment centers and sleeping quarters, as well as books, toys, and games.  Minimalism and children are a difficult combination.

That being said, families can live well and happily without filling every room in their home with stuff.  The key is to find a balance between clutter and minimalism.  Here are a few of my thoughts on the subject.

  • Making a happy home is about intention and balance.  Be intentional about what you bring into your home and how much time you spend managing stuff.
  • For example, if you have a family of five with 14 loads of laundry after two weeks, you have a lot of clothes in your house.  If dressing your kids well is something you love, great. Enjoy doing laundry.  If not, consider reducing the clothing inventory.  It’s more fun to spend time with the kids rather than washing their clothes.
  • Toys that inspire imaginative play, problem solving, or creativity are worth keeping.  Large plastic monstrosities are not.
  • Teach your kids to be selective about saving papers.  Help them create a portfolio of their best work.
  • Once the designated toy storage area is filled, institute a something in, something out policy.
  • Make purchases based on your actual life, not the life you wish you had.  If you never entertain, you don’t need fancy serving dishes.  Maybe for the entertaining you do, all you need is paper plates.
  • Decide what hobbies are important and make space for them.  Make it easy to engage in the activities you enjoy.
  • Keep up with the latest gaming and entertainment technology only if that is the hobby you wish to invest in.  It will likely be the only one you’ll have money for.
  • Try before you buy.  Rent or borrow sports equipment to see if it’s something you will do often before you buy and have stuff sitting in your garage unused.
  • Invest in experiences as a family.  Go to ball games, concerts, plays, or water parks.  Visit the city, the mountains, or the ocean. Kids will remember the time you spent with more than the stuff you bought.