Yesterday I blogged about whether an under 30-year-old with student debt should buy a house. The alternative, besides living with your parents or in your car, is to rent.

I used to advise people not to rent. Why pay off someone else's mortgage? Renting used to have a certain stigma attached to it: you couldn't get a mortgage, and you moved a lot. Because of this stigma, it was difficult to get credit while you were renting.

But the good news is, it is different today. As mentioned in yesterday's blog, it's very difficult to sell a house in today's market. Nowadays, many creditors aren't lending to those who have mortgages, since they may not be able to sell if they need to. That leads to foreclosure which then dominos into defaulting on the credit card. Interesting how the tables have been turned. Today owning a house is the stigma.

So you're thinking, house prices have gone down so much, perhaps this is the time to buy. You may be tempted to buy, but many economists predict there could be another downturn soon in the housing market. That means you could still get underwater, where the value of your mortgage exceeds the present value of your home.


Although we have seen some improvement in the labor market, it's always a good idea to think a long time about the implications of any purchase. That is not limited to major purchases, such as a home or car, but applies to any smaller, discretionary purchases such as clothes or an extravagant meal. You don't know what the next day will bring and you may wish you hadn't spent the money when it's needed elsewhere. Can you think of something that might popup tomorrow where you'd need the money you spent today?