Purchasing a house is a goal for many young adults today. Often when people get them first big salary job, they might think it's the perfect time to make a transition from living with parents or renting an apartment to home ownership. If you're thinking about making that decision, consider looking at your finances first for these reasons before taking the plunge.
Retirement
Choosing to live a good life with your money at a young age is important, but you should consider how you can help your retirement now. A recent study found that those who retire at an earlier age, tend to do more healthier activities that end up extending their lifespan. You don't need to put a bunch of money every month towards your retirement, but starting funds like a 401k really helps at the account makes you more money every year. If you're not in a position where you can start funding this now, you may want to consider postponing moving till you balance your funds.
Bills
It's been generally considered that you should be spending no more than 30% of your monthly gross income on housing. Many places that offer to rent out apartments will check how much an applicant is making and accept or deny based on how much they fit the 30% rule. The reason this rule is in place is that it's important that you have enough every month to balance between all of your bills. By undergoing a mortgage that won't necessarily check if you fit the 30% rule, you could be starting a worse lifestyle in the means that you'll be struggling with bills, not being able to put much into savings, and not being able to put money towards entertainment. Truly look at your finances and figure out if you're going to have a more enjoyable lifestyle by undertaking a mortgage.
Business
Many small businesses around the country have been popping up every day with young owners looking to succeed. If you're looking to start a small business, chances are you've been worried about the financial side of things and how to make sure you keep up a steady profit. Business owners are different from those making salary in that they are probably seeing different amounts of money every month coming into their pocket, especially if they are starting out for the first time. Before deciding if you are fine to put a house with those responsibilities, make sure your finances are in order, such as checking your contracts like the ASC 606 FASB. If you find that it might be tough down the road to keep up payments on your mortgage, consider renting an apartment for the time being as you'll save money and be a lot stressed when you don't have to deal with repair and lawn care while juggling all the time you're putting into the business. By being savvy on your finances, you can be a much better homeowner when the time comes.
Conclusion
Being a successful, young adult isn't measured just by having a house or not. Making smart decisions like what you can really afford while still having an enjoyable lifestyle is important and can lead to better things down the line. You'll be happy when you realize how much better off you are by really making sure your finances are fine.
