Page 24 - Workbook3E

3 Housing
Housing costs are typically your single largest expense. Today the purchase of a home usually involves a long-term mortgage, substantial debt, and a lifetime commitment. The other alternatives of renting or leasing are also expensive and involve dependency on the whims of a landlord. Your housing has the potential to greatly enhance or detract from your quality of life. Studies show the average household spends
more than 30 percent of its disposable income for housing, so where you decide to live needs to be an important concern for you.
Buying vs. Renting
Even though home ownership can be an excellent financial decision, there are many factors that must be considered. You might not be able to sort out this dilemma without the proper knowledge and careful consideration. Tax breaks, etc., tend to make owning your home more fiscally favorable. However, the ease of movement and the limited responsibility associated with renting or leasing are sometimes more important.
Traditionally, there have been great benefits in owning real property, especially your own primary residence. Citizenship rights, voting rights, social standing, and a host of other benefits have often been dependent upon owning land or real property. Special tax breaks are awarded to those who own or are buying real property. There’s a sense of pride associated with owning your own home—even though ownership typically includes a long-term financial commitment.
Renting or leasing on the other hand, avoids many of the problems associated with home and real property ownership. Homes require considerable attention and maintenance to preserve them as valuable assets. Typically leasing or renting doesn’t include financial responsibility for maintenance and repairs—that rests with the property owner. When renting or leasing you’re usually responsible for:
1. Making the monthly agreed-upon payments
2. Using the property in a reasonable and responsible fashion
3. Insuring against any possible loss of personal property or property damage.
Your quality of life can be greatly influenced by whether or not you own or rent your home, and where you choose to live. It comes down to what you want and need. Whatever your choice; make sure it’s an informed decision. Your confidence in your decision and your peace of mind, are major factors in whether you feel good or bad about how and where you live. Friends, neighbors, schools, churches, and many other things can also be greatly affected by where you live.
“You are a king by your own fireside, as much as any monarch on his throne.”
~ Miguel de Cervantes
20 Workbook 3: Prepare for the Future