Kids Ain't Cheap

But They Sure Are Worth It

Would You Buy a Home For Your Child?

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While paying for your child's college is noble if you can do so is there ever any reason to buy a home for your child? Let us know what you think!I work for a successful dentist. Part of his success definitely comes from his frugality which I admire. When most think dentist, they think big beautiful home, fancy cars, great work schedule and exotic vacations on a regular basis. While his house is nice, it’s large by necessity not lavishness, he and his wife have four kids and live well within their means. He’s been in practice for 30 years, still works five (long) days per week, by choice, until recently he drove a 16 year old van and when he does take time off it’s usually incorporating a little work with a little play.

He’s extremely modest, except when it comes to his kids.

I totally respect parents who can afford to put their children through school. While I don’t think it is the parent’s duty to do so, if you’re able to afford both putting them through post-secondary while taking care of your own long term financial goals, that’s great. What I can’t wrap my head around is parents who, beyond post-secondary years, continue to financially support their children. For so many reasons I think this is a terrible idea.

Should You Buy a Home for Your Child?

One of the dentist’s children is getting ready to graduate from university this month. He’s finishing with a degree in engineering and already has a job lined up with, what I’ve been told, is a good competitive salary- even better given he has zero debt to manage. He is in a much better position than most all of his peers that’s for sure.

Needless to say I was a little shocked to hear the dentist say he and his wife were considering buying a house for this son to live in, rent free.

Here’s the thing. The kid has already gone through life never having a ‘real’ job, he’s made money doing some sports coaching stuff casually but his only responsibilities were to do well in both school and sports, again given his upbringing that’s fine and I’m not judging, but continuing to baby him beyond university is setting him up for failure. It’s high time he takes care of himself.

If they were genuinely interested in investing in real estate in this city (second highest in our country), because they planned on living there or something, maybe I get it but the kid shouldn’t be allowed to live there rent free that’s for sure.

Thankfully the wife of the dentist spoke some sense in to him and explained where my head at is well, basically that it’s not their responsibility to provide for him anymore and instead are going with him to see a finance person about how he can save for his own place should he choose to stay there (he’s thinking of going back to school).

Though his children are well taken care of, they really do understand how fortunate they are and see how hard their father works to provide for them (probably why of the four kids not one went into dentistry). This story had the potentially to end tragically- like it does for so many families of parents to hold onto their kids way too long, but thankfully they came to their senses and backed out of the idea.

Would you buy your kids a house to live in?

Are You Ready to Buy a Family Home?

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family homeBuying a home for your family is a very exciting time. It is important that you consider all factors before making the transition though.

When hubby and I purchased the home that we currently live in, we fully expected to move eventually. It’s not a large enough home, nor is it in our ideal area. We currently live in the suburbs in a nice area but would rather not see our neighbors. What I mean is that once our priorities are taken care of (paying off debt, minus mortgage) we plan on moving further out towards the ‘country’.

Since we have considered everything we realize that this move won’t be feasible for a few years. These are things you need to consider when thinking about moving your family.

 

Have You Considered all Expenses?

For us, we want to have our non-mortgage debt paid off before we move again. By the time this happens we will be at max capacity of this home (nearing this point now) but have committed to paying things off before moving. This frees up money for other expenses such as larger down payment, legal fees involved with move, potential fees if we decide to build, and professional movers. We have moved twice with the help and kindness of friends and family, but there’s no way we could, or would do it again. Since our plan is to make our next move, our last move, we will be hiring professionals to do it for us. An expense but so worth it.

Consider ALL expenses before deciding to move. In our case when we move out of our current area, a second car will be a must, an added expense we can’t handle right now even with the decrease in public transit use.

 

Is Renting a More Viable Option?

You have to still consider if renting is a more viable option for you and your family. Home ownership is not for everyone. As long as you have a safe roof over your family’s head that’s all that matters. Some argue that rent is throwing money away but if renting means your able to live the life you want, debt-free, without property ownership than who cares?! For some, tying permanent roots down is daunting, they move often or like the idea of a swanky apartment with more amenities than a starter home. If home maintenance doesn’t interest you than don’t ever be pressured to buy.

 

Don’t Buy More Than You Need!

This is a tricky one. Especially if you’ve gone through the pre-approval process. You see how much the bank thinks you can afford and you’re expectations of home get out of control. Try and keep a modest list of wants and needs and be willing to make compromises if needed.

 

Beef Up Your Emergency Fund, Add New Budget Categories

If this home purchase will be your first, it’s time that you establish or beef-up an emergency fund. Homeownership can be a bumpy ride and stuff can go wrong. Mother nature can be a real pain in the butt and hit you when you least expect it. Make sure you have at least enough in your emergency fund to cover any insurance deductibles as well as minor home repairs.

You also need to set aside a small amount of money to new expenses such as insurance premiums and regular home maintenance repairs. If this is something that will send your budget over the edge, probably an indication that you’re not quite ready for homeownership.

Homeownership can be an amazingly fun experience but it can also be very stressful. Make sure you have everything figured out before deciding to embark on this venture, especially if there’s a family involved that you’re required to protect!

What else do you need to be ready for your family home?

Should You Buy a New Home Right Now?

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I just recently purchased my first home, so I’m intimately familiar with the stresses of making a mortgage payment. And it appears to be for good reason. Check out this chart I just found….

More than 40% of homeowners asked for help with their debt last year! That’s pretty scary!

And it definitely leaves me wondering…. Is this really a good time for people to be buying new homes? It’s obviously too late for me to rethink this decision, but I’m curious what the rest of you think. Is this a good time to be buying a home? Or is it simply too much risk right now?

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How to Navigate Life’s Major Financial Obstacles

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Buying a home is one of life's major obstaclesThe cost of living gets more expensive each year, but that doesn’t mean that you have to be continually strapped for cash. If you can learn the ins and outs of some of life’s most expensive rites of passage — such as having children and buying a home — you can make that knowledge work for you. Instead of stumbling through life, turn those financial obstacles into stepping stones with the advice below.

Buying a Home

Buying a home is likely to be the largest financial decision you will have to make in life. It is a huge commitment, but it is also well-worth it, considering that you want to provide a safe and comfortable environment for your children to grow up in. Given all of the uncertainty in the housing market, however, it’s understandable if you’re wary of becoming a homeowner at the moment.

The key to cushioning the blow that can come from the current housing market is taking your time to make smart, well-informed decisions. Don’t feel rushed to buy a home if you’re not ready; it is better to save up enough money for a down payment, which would be at least 20 percent of the total cost of the home in the best case scenario. You can also use this time to boost your credit, which is an important part of finding the best mortgage rates. Taking these steps can shave years off of your mortgage and thousands of dollars off of the total interest that you will pay on your home in the long run.

Having Children

When you think of growing your family, many things come to mind: little league baseball games, dance recitals, and family vacations, to name a few. But did you stop to consider a $227,000 bill? That’s how much you’ll have to fork over per child, according to the U.S. Department of Agriculture. And this only calculates costs up until age 18; a college education could easily increase that amount by as much as half.

Obviously, spending this more than $200,000 on your child will happen over the course of two decades, which should soften the blow. The most expensive areas of spending for a family include food, transportation, and child care, and if you can figure out ways to reduce these expenses, you can chip away at that astronomical cost. Couponing can reduce your grocery bill to practically nothing if you do it often and learn the tricks of the trade. And making an alternative plan for childcare (such as relying on a nearby relative or close friend) can help you save thousands of dollars each year. When it comes to college education, starting an education savings account early in their lives can significantly increase the amount of funds that your children have to rely on when they come of age.

Credit Card Usage

There are some areas of debt, such as education or home financing, that are considered positive because they make you a more valuable asset to your family, to your community, and to yourself. However, too often, parents get bogged down by credit card debt that quickly spirals out of control. The best thing you can do to help yourself chisel away at your card balances is to pay more than the minimum payment. Often, the just handing over very least you’re allow to pay each month won’t help you get out of debt; in fact, you may even see your account balance rise, even if you aren’t making any new charges on your card.

You should also consider switching your balances over to a zero percent interest card, which buys you time to pay them down. And if you struggle with budgeting, spending cash only is a great way to cut out unnecessary expenses.

Information is power, but in these cases, it can also equate to more money for you. There’s no handbook on how to provide for your family, but if you make it a point to constantly search for new ways to save and invest, you can put together a pretty helpful guide of your own.

What other obstacles do you foresee?