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Learning about finances in your twenties is a bit late, but better late than never. What's worked for me and others I know is to get out of debt and stay out o

Learning about finances in your twenties is a bit late, but better late than never. What's worked for me and others I know is to get out of debt and stay out of debt. This guy has a reasonable program to do that: https://www.daveramsey.com/get-started/debt https://www.daveramsey.com/get-started/debt

PoachedSausage 9y ago
I agree, staying out of debt should be a priority, but how do you reconcile that with buying a house, which around here cost on average around £226k? I would love to not need a mortgage and have to work more to pay the interest but what other choice is there?
- dlp211 9y ago
  Not all debt is bad.
- tomohawk 9y ago
  Econ 101 says never borrow money on a depreciating investment. A house may appreciate, so it may make sense to buy one. A house can be a blessing or a curse. You should first decide if you want to own one, regardless of the economic pros/cons. Owning a house means you always have a job to do. If that doesn't appeal to you, maybe get a condo? In the US, the best approach is usually to get what's called a conventional mortgage. That means putting 20% down. There are some good reasons for going this route. First, it makes you prove to yourself you have the discipline to put money aside for a house, without actually having the responsibility of a house hanging over you. Secondly, its better financially as you can usually get a better rate and don't have to pay private mortgage insurance. In addition to the 20%, you really need 6 months of money set aside in case something happens. The last thing you want is to default on a loan because something unexpected happened and you have no income for a few months. One of the worst things that happens is someone goes and gets a house with 0% down and without the real financial wherewithal to weather a financial storm. The house quickly becomes a curse when the unexpected happens.
JBlue42 9y ago
Learning about it in your twenties isn't late but par for the course in the US. Some get to it even later, after they've been burned or struggling. There's no required high school or university seminars on teaching people these basics and parents who might also not be great at this stuff aren't exactly reliable. The our culture doesn't exactly preach financial prudence either so give the kid a break. :-)

PoachedSausage 9y ago

I agree, staying out of debt should be a priority, but how do you reconcile that with buying a house, which around here cost on average around £226k? I would love to not need a mortgage and have to work more to pay the interest but what other choice is there?

dlp211 9y ago
Not all debt is bad.
tomohawk 9y ago
Econ 101 says never borrow money on a depreciating investment. A house may appreciate, so it may make sense to buy one. A house can be a blessing or a curse. You should first decide if you want to own one, regardless of the economic pros/cons. Owning a house means you always have a job to do. If that doesn't appeal to you, maybe get a condo? In the US, the best approach is usually to get what's called a conventional mortgage. That means putting 20% down. There are some good reasons for going this route. First, it makes you prove to yourself you have the discipline to put money aside for a house, without actually having the responsibility of a house hanging over you. Secondly, its better financially as you can usually get a better rate and don't have to pay private mortgage insurance. In addition to the 20%, you really need 6 months of money set aside in case something happens. The last thing you want is to default on a loan because something unexpected happened and you have no income for a few months. One of the worst things that happens is someone goes and gets a house with 0% down and without the real financial wherewithal to weather a financial storm. The house quickly becomes a curse when the unexpected happens.

JBlue42 9y ago

Learning about it in your twenties isn't late but par for the course in the US. Some get to it even later, after they've been burned or struggling. There's no required high school or university seminars on teaching people these basics and parents who might also not be great at this stuff aren't exactly reliable. The our culture doesn't exactly preach financial prudence either so give the kid a break. :-)