Buying vs. renting: it’s a never-ending discussion, and something that’s constantly on our minds here at TFD. Property ownership used to be one of the most telling signifiers of adulthood, and while we believe there’s no one true definition of “making it,” it’s still a completely legit goal, if owning a home is important to you. Buying a home is not something that is in the cards for many people, but it’s also top of mind for many others. Be sure to read on for more on the great benefits of home ownership from Earn, Spend, Live, and check out our primer on buying a home here.
If you’re in the right place for it, financially, buying a home is one of the most financially-responsible things you can do as a young person. Many young Americans want to become homeowners, and it’s a wise investment.
Unfortunately, despite the benefits, many people are unaware they can even afford to purchase a home when they are still fresh out of school, or just beginning their life as an adult. If you are considering building or buying a home at a young age, there are many reasons you should go for it.
1. Investing in Your Future
Buying a home is an investment in your financial future. A house is one of the most valuable things you’ll ever own. In most cases, real estate increases in value over time. It is possible for the market to change and the value of your home to decrease, but that rarely lasts long when you make a wise investment in the home you choose to purchase.
Buying a home at a young age allows you to invest in your future by providing you something you can turn around and sell when you’re ready to move on, which can provide you with a down payment on a larger home later (if that’s something you want for yourself).
2. Build Your Credit
If you’re buying a home at a young age, you’re already working with credit. Obtaining a loan with a financial institution or a direct lender at a young age is only going to make your credit history look more impressive to future lenders.
If you’re just starting out, you probably have a car loan, a credit card, or an installment loan you’ve been working with. A home loan that you pay back consistently and on time can help your credit score rise significantly, which can help you afford a much larger home in the future.
3. Learn Better Spending Habits
Perhaps it sounds a bit cliché, but you’ll learn quickly to become more responsible when you buy a home at a young age. While other people your age might fall into a lifestyle inflation trap and start spending their money frivolously, you’ll be paying a mortgage. You’re learning how to afford to pay for a home and utilities, how to upkeep and maintain a home, and perhaps a bigger responsibility than you’ve experienced so far. The money you put toward your own home isn’t spent mindlessly; it’s going back into your pocket in the future.
Buying a home at a young age changes your decision-making process. As a homeowner, you’re more likely to turn down irresponsible choices, because you have to put money away for your mortgage. It’s good for your savings account, and it’s a decision you won’t regret having made when you’re older.
4. Experience Tax Benefits
Perhaps you’re not entirely aware of how much buying a home benefits you in terms of your taxes, but it’s significant. Homeowners get tax credits you can use to lower your tax liability. This means you owe the federal government less money each year during tax time, and you are more likely to receive a tax refund than you are if you don’t have the ability to itemize your deductions for a higher rate of return.
Homeownership is not for everyone, but it’s one great way to invest in your future. Think of it in terms of renting versus buying. When you rent, you give money to someone else to put in their pocket and use for their own future. You never get that money back or reap any benefits from it. When you purchase a home, you spend a lot of money up front — but as the years go on and your home increases in value, you’ll see that money and much more back.
Mia Morales is a loving wife and mother of twins from Colorado. She is a self-described “DIY addict,” and loves to decorate her house and office with her creations. When she’s not writing, you can find her with a glass of mint lemon water and a child on each hip. Who says moms aren’t superheroes?
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