Q: My wife and I have been married about four years. The subject of buying our own home came up recently, but I'm not sure we're prepared for that kind of financial commitment. What should we consider?
Jim: The conventional wisdom for decades has been that owning a home is always superior to renting. But conventional wisdom can change with the times.
When deciding whether to buy or rent, you should take into account the nature of your occupation(s), the location, and your needs and goals. If your vocation requires you to move every two to five years, renting would probably be just as wise as purchasing. On the other hand, if your family wants to establish roots in a neighborhood, owning a house may be more appropriate than renting.
Experts advise that you resist the urge to jump immediately into a house purchase before having an emergency fund and a significant down payment. A good goal is to pay at least 20 percent of the purchase price as a down payment. This probably means that you should save a little longer to buy that first house than you expected.
If you're renting, rent shouldn't exceed 25 percent of your gross pay. However, there's more flexibility -- if you've overcommitted to a rent payment, you can usually change your circumstances fairly quickly. By comparison, you're usually better off to buy a house only if you expect to live in it for at least two years -- and the longer you stay, the more cost-effective your investment will be.
Owning a home may be an important part of the "American Dream," but use wisdom in deciding whether it's best for you.
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Q: My daughter is a great kid, but she doesn't always see her own value. I believe in her; still, I sometimes have trouble communicating that to her. How can I build my child up?
Danny Huerta, Vice President, Parenting and Youth: Who and what we become is generally impacted by many people. Let's talk about three types of "builders" your child needs: investors, influencers and encouragers.
Who are the investors in your daughter's life? These are people who contribute their time, money, talents and advice. I had several coaches during my teen years who invested time in me. For example, I was awful at tennis in high school, but one coach believed in me and took time to help me become a better player. I eventually won a tennis scholarship my second year of college, because someone invested in me.
How about the positive influencers in your daughter's life? These are wise life decision-makers your daughter admires and trusts. They teach and model good examples. These may include friends, siblings, teachers, coaches, mentors and, of course, parents.
Who are encouragers in your daughter's life? These individuals' words propel us forward, reminding us of our value, purpose and direction. (Unfortunately, many of tend to pay more attention to the critics.) When I was in high school, my principal stopped me one day and said, "You're going to be a great leader someday." Those were profound fueling words. He may not remember that moment of encouragement, but I'll never forget it.
I urge you to commit to consistently investing in your daughter, positively influencing and persistently encouraging her along the way. And remind her to not give critics too much "microphone time" in her mind.
On a related note, Focus on the Family has developed a suicide prevention resource called Alive to Thrive (alivetothrive.focusonthefamily.com). It's a free and excellent resource to equip those who invest in, influence and encourage young people. I urge you to use this to help your community move in a healthier direction. Every life is important and precious!