Give Now

4 Money Mistakes: #4 – Buying a Home You Can’t Afford

 Four money mistakes can affect your financial health.

This week, I’ve addressed the problems of a get-rich-quick mentality, failing to listen to your spouse, and not scheduling for surprise expenses. #4 is buying a home that you can’t afford. Nearly every family in America dreams of owning their own home, but purchasing a home too early in marriage or paying too much for one causes financial trouble. Far too often these families don’t realize that homeownership created their money problems. It simply required too much of their available income. A house payment for the average family’s budget should not exceed 25% of Net Spendable Income after giving and taxes. Add to the mortgage payment the other costs associated with a home and your total expense climbs much higher. If a family can afford to purchase a home within their budget, a budget based on one income only, that makes sense. Destroying the budget just to get into a home is asking for trouble.

Couples who stretch to buy often end up “house poor”. Overreaching for a home in a preferred neighborhood, within a preferred school district, or with preferred amenities creates problems. Plus, it restricts the ability to give, save, and invest. Keep total housing expense at 30% or below of your available income. This relieves a great deal of stress. Include utilities, homeowner association fees, property tax, maintenance, repairs, and landscaping. You might even want to add furniture and décor. Remember, “Godliness with contentment is great gain.” (1 Timothy 6:6)

In my new book, Seven Gray Swans, I describe potentially significant events that could happen. A gray swan’s an obvious danger that we tend to ignore.  My goal is to show you how to prepare for and survive these economic threats. The ebook is available now at