ADAM GARRETT

Budgeting

Here I share about budgets in general in addition to the positive impact that homeownership can make to help many save more and invest more. Sometimes renting is a better fit, but it's important to look at the facts to be sure before renting, even if homeownership seems impossible. No matter how much or how little your income is, your financial growth, even your giving potential, will be forever limited if you don't first limit yourself with a budget. The ability to invest is catapulted by good budgeting. Without good budgeting, it's easy for years, especially younger years, to pass by without nearly the assets built up that one would be more intentional about if they were to do it again looking back. 

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"Low income is not always to blame for financial hardship. Only 1 in 5 people (20%) facing financial hardship fall below the poverty line and make less than $40,000 per year." https://www.debt.com/statistics/

The biggest issue with budgeting is that most people don't budget, and if they plan out a budget, they don't stick to it. Besides that, some of the biggest budgeting issues that people typically don't save or invest enough, while they overspend on the major average expenses, like housing (especially renters) & transportation (especially those that buy vehicles new &/or with financing & those that lease). Many people I talk to are car poor or house poor. The average American also carries a balance on his credit cards. Bad credit can also have a very negative impact on budgeting, increasing insurance costs & interest rates on housing, transportation (if not buying in cash), & otherwise. Besides those 2 things, many people commonly overspend on their food, clothes, & certain items that are not necessary. For those that smoke, drink alcohol, or do drugs, many also spend quite a bit on those items as well, not to mention the higher health costs for those that smoke, do drugs, & drink a lot. A low amount of red wine can have a positive impact on health but overdrinking & smoking are part of what made me never know my grandfather. 

Transportation: In our experience buying older, low mileage, reliably rated vehicles (such as Nissan, Toyota, & Honda w individual reliable ratings as well for the specific vehicle) with high MPG that are relatively cheap without too many fancy amenities in cash, then taking them to honest repair shops including but not limited to for all the inspections, is the way to go. Honest auto shops seem to be the minority these days but include Champs in Poquoson, Garrett Motors which do not do state inspections in Hampton, & Cliffs on 17 in Yorktown.

How can someone that I've been talking to for months at the time of this writing with an income of less than $750/month, who wants a house instead of the never-ending rent cycle, be in a position to buy a house? They budget decently & don't take on too much debt. Also, government grants and programs like the USDA direct loan with 1% interest are very helpful. Even with an interest rate closer to normal, they could still get a house. At the time of this addition, they have purchased a house & are paying significantly less in their monthly mortgage today than what they used to pay in rent. They also no longer have to deal with a landlord who didn't like to fix anything.