For most people, a house is the biggest purchase they will make in their lives, one they will pay off for years, even decades, to come. But spending too much on a house could leave you with little money for other goals in life, such as retirement, college funds and vacation.

Before beginning a house hunt, you must first decide whether renting or buying makes the most sense.

If you’re a renter, keep in mind that your rent will go up over time. Renters usually rent if they know or like the idea that they can move when and if they like. Also, renters usually do not have to pay for the maintenance, lawn care or home repairs. They also don’t have to put sweat equity into the rental.

If you buy, know that you’re committed to years of fixing anything that breaks in the house, manicuring the lawn, and paying for any major repairs. Renting makes sense if you plan to live somewhere for a relatively short period of time, as the costs associated with buying a home — such as escrow fees, taxes and closing costs — take some time to amortize. If you’re planning to remain in a place for a longer period of time, buying a house is usually the way to go (however, this equation changes with home values in your area, employment trends and several other factors). Even though the market may fluctuate, over a long stretch you’re likely to make money. And as the real estate market has shown us in 2007 and 2008, it can be a bumpy ride.

If you’ve decided that home ownership is right for you, the next step is deciding how much home you can afford. Typically, most lenders suggest that you spend no more than 28% of your monthly income on a mortgage. Try calculators from dinkytown.com or Bankrate.com to find out how much you can afford. Keep in mind, in addition to the mortgage costs, you’ll have to pay the closing costs and legal fees, which are usually 2% to 3% of the house price. Also, don’t forget moving fees and labor, and any fixes that you might have to make to the house upon moving in, plus monthly maintenance fees if you’re moving into a condo or planned community.

When you’ve figured out your price range, take a look at the market and the issues that matter to you. Research school districts, crime statistics, impending construction or anything that could decrease or increase the value of a home. Look at the surrounding area to see if it’s a place in which you see yourself and family. You can research at greatschools.net or Zillow.com.

When you’ve chosen a home to bid on, don’t assume that the selling cost is the actual cost of the house. While real estate agents use comparable houses, or “comps” as way to price a house, consider what it might cost to buy and build a home on piece of land in that area. For a thorough assessment, hire an appraiser. You can even search zip codes online at AppraisalInstitute.org.

If you have the cash to buy and upkeep, go ahead and buy a home. It’s an investment that will grow over time.

For Wall Street Journal Article Click Here

 

This Saturday Night Live Skit is the funniest thing I have seen in a long time.  

http://www.hulu.com/watch/1389/saturday-night-live-dont-buy-stuff

Click Here to view Suze Ormon's article explaining The Refinancing Program and The Loan Modification Program. 

I love articles give multiple tips to save money.  If you can find something to save you money it is worth the read.  

The categories are as follows: cell phones, credit cards, entertainment, gas, groceries, insurance, and utilities.  It even has some free budgeting software. 

Click Here to view article.

I find financial inspiration in many books I read.  This quote comes from It's All Too Much by Peter Walsh. Such a great read and there are tips for even the most organized person.

"How did we get here?

We live in one of the most prosperous nations on earth, and we measure our success by material accumulation.  Everywhere we look we are encouraged to buy more.  Love your kids? Prove it by giving them the best clothes, games, sports paraphernalia, or the latest video game system.  Just got a raise or a better job?  Time to show it off with a bigger TV or a flashy new car or more (and expensive) clothes.  In two-income families where there's barely time to relax, we try to find happiness by buying more stuff. Everywhere we turn, we're told that more is better.  We supersize our food.  We buy two for the price of one instead of buying one at half price. But for many, it has become clear that instead of bringing happiness and peace of mind, all this stuff is stressing us out and alienating us from our families, our partners, our dreams.  Sure, some stuff does improve your life.  Of course it does.  Who can argue with a comfortable home and a nice car? But where do you draw the line?  Did you know that the size of the average new house in this country has grown almost 50 percent in the last thirty years?  And all this while the average family size has declined. 

With more space has come the urge to fill it with more stuff.  Unfortunately, more stuff doesn't guarantee greater happiness.  And when happiness doesn't come, you buy more, thinking that's the answer.  Instead of bringing you closer to the life you want to live, your stuff starts getting in the way.

Disposable Income

What is all this stuff we keep acquiring?  A lot of it comes down to discretionary spending-those things we choose to buy with the money we have sitting in our purses, pockets, or wallets.  You might be surprised to learn where most Americans spend their disposable income.

In any year, more than two-thirds of households in this country spend a sizable portion of their disposable income on videos and DVDs, music and CDs, books and magazines, specialized personal care products, and candles.  More than one-third of households buy collectibles, craft supplies, and sporting goods.  Not surprisingly, the way we spend our money breaks down along gender lines. Men buy more technology (videos, TV's) and sporting goods, while women buy more books magazines, personal care products, and crafting supplies.

There is nothing wrong or bad about these purchases-some of them are educational or entertaining-but how many of them have lasting value? What do you have to show at the end of any one year for the money you have spent? Is it a home equipped with valuable and useful items or just more clutter? No matter how you break it down, there's no getting around the truth of the matter: This is the stuff that causes many people's clutter issues.  Stuff we don't need.  Stuff we buy for our own pleasure, often on impulse, that has little long-term usefulness and adds little to our long-term quality of life.

The new town square

Who can blame us for all this consumerism?  All accross the country the mall has become the new town square.  We spend our leisure and recreation time at the mall. Walking clubs go to the mall for excercise. You can even have an overnight campout at the Mall of America! As we grow up, for many, the mall brings our first taste of freedom-the first place our parents might send us off on our own, telling us to meet up with them in an hour.  This is how we-to our children-come to associate social freedom with a retail environment.  No wonder we're drawn back there as adults.

It's not just childhood experiences that draw us to malls. Hands down, shopping is the most accessible form of stimulation. When you're bored and looking for something to do on a Saturday afternoon, shopping is a whole lot easier than planning a picnic. And it's not weather dependent. Plus, there's so much to look at. In the 1950's, a typical corner store stocked one thousand items. Now a Wal-Mart superstore holds about 130,000 items, offering hours of exploration and potential purchasing for the whole family.  And retail therapy is no joke. Having new things is exciting  and makes you feel like you're changing your life for the better.  Your skin will be softer, ore you'll have something better to watch on TV, or a new coat will impress your colleagues. Ever left a superstore or a mall without making a single purchase? It's very, very hard to do.

Saying goodbye....forever

I've already told you you're not alone. America has a problem with overaccumulation. It's abundantly clear if you spend one minute noticing how many self-storage facilities have sprung up in your neighborhood.

Now what's so bad about renting storage space, you ask? It's a way of not dealing with your clutter. You're saving things you don't need or want by dumping them in a black hole you'll probably never unpack, and you're spending extra money every month to store them.

Think about it from a money standpoint.  You're increasing your housing costs without increasing your standard of living. Is it worth it? Think about it from a psychological perspective. You're hiding away stuff you really should deal with, postponing the issue to some undetermined future date. Is that how you deal with all your problems? I sure hope not. Look, if you have a sudden change of situation, okay, I'll definitely cut you some slack. But as soon as you've rented the space for longer than a year, you have to accept that your situation isn't temporary. Your life has actually changed. You need to deal with the change head-on."

As anyone who knows me, knows how important fitness is to my life.  I do have a gym membership and I use it 4-5 times a week.  But, I do feel a gym is not for everybody or everybody's lifestyle.  Before taking the plunge into a gym (the initial fee can be costly, do do your research), you really do have to ask yourself how much value you personally will get out of it.  We have to be very careful when adding anything to our budget's monthly costs.  Each of these expenses on their own can be inexpensive, but together they can rack up a hefty bill. 

Homework:  Look at all of your monthly EFT Transfters from your checking and your credit cards.  Does each add true and meaningful value to your life.  If you are not using it to the full potential, you either need to get rid of it or ask yourself why you are not using it to potential the cost deserves (then get to using it, no excuses). 

I love the idea of getting a two week pass to make sure it fits your lifestyle.  In two weeks, you can make a very educated decision on the value of a gym membership for you. There are some very helpful hints for those of you looking into a gym membership.  

Click here for the full gym article.