Housing

Choosing your home

Housing meets physical needs by giving

shelter and a place for belonging and personal activities.

Housing meets emotional needs by offering privacy and a place for personal expression.

Housing meets social needs by providing a place to gather with family and friends.

Priorities

People spend more money on housing than on

any other single living expense. Several factors influence the cost of housing:

Size of the home Location (rapidly growing areas are usually more

costly than less popular areas)

Housing Expenses

If you plan to rent, know that rent is only part of

what you will spend. You will need to pay a security deposit, which is a fee

paid in advance to cover any damage you might cause to the property. If you cause no damage to the property, then you should get the security deposit back when you move out.

You will be responsible for utilities such as gas, electricity, water, cable, internet.

Furniture & appliances Insurance (cover your belongings against theft or

damage).

Determine what you can afford

People who buy a home are responsible for a

monthly mortgage payment instead of paying rent. Mortgage is a long term home loan. Like renters, homeowners must also pay for

utilities, furniture, and appliances. Home owners also pay property taxes, maintenance costs, and sometimes homeowners association fees.

Homeowners insurance costs more than renters insurance because it covers the building as well as everything within it.

Buying a home

To save money many decide to share rented

housing. The best way to make a shared living arrangement work is to agree on the ground rule before hand.

Important topics to discuss with a potential roommate include how bills will be paid and whether you will share food and cleaning supplies.

You should discuss how cleaning tasks will be divided and whether overnight guests will be allowed.

Sharing Housing

Recently, more adult children are returning

home to live with their parents. Sometimes it is a matter of economic necessity, and sometimes the arrangement s simply practical, or useful. It can be difficult for both parents and children to adjust to this arrangement.

What is the best way to make a shared living arrangement work?

Returning home

City, suburb, rural Choosing a location is not as simple as

deciding between city, suburb, or rural areas. Do you want to stay in a location that is

familiar to you where you have friends and family?

Do you desire the challenge of living in a new, unfamiliar place?

You must consider job availability, climate, cost of living, transportation, commute to work.

Choosing a location

Renting a home is likely the first place you will

live away from your family. When you rent a unit, you enter into an

agreement with the landlord (owner of the rental property) and through this agreement you become the tenant (renter).

Renting

Renting comes in all shapes and sizes and the property may be

furnished or unfurnished.

Pros: Fixed monthly expenses-you know how much you will be

responsible for each month. Your not responsible for repairs and maintenance. Lower cost of insurance

Cons: Restrictions to making changes to the property. Some landlords do not allow pets Financial drawbacks-you are not making payments toward

ownership, no tax benefits for renting, no control over how the building is maintained/managed, noise from neighbors, clutter.

Pros and Cons of Renting

Your housing costs should be no more than

28% of your income.

The Jones family earns $42,000 as combined income. 29% is removed for taxes before they see their paycheck, which leaves 71% for take-home pay. How much does that give them to spend on bills and savings?

What can you afford?