If you’re like a lot of people, you probably feel like the economy’s put you further behind financially, but experts say that some of the advice you might hear about how to get back on track financially isn’t the best advice. For example:
- You may have heard that now is NOT a good time to buy a house. Sure, renting means you’re not stuck with repair bills, and you can move pretty easily, but researchers say that rentals will go up about 3-and-a-half percent this year. So, if you pay $1,000 a month, that’s another $35 bucks. Meanwhile, the National Association of Realtors says owning a house has never been more affordable. Home prices have dropped more than 30% over the past five years, and interest rates are still low. However, you’ll want to avoid some of the pitfalls that got a lot of homeowners in trouble during the mortgage mess. For instance, don’t buy a bigger home than you need, and commit no more than one-third of your take-home pay to monthly mortgage payments.
- Another bit of financial advice you might want to ignore: Skipping college. Sure, four years’ worth of private tuition, room, and board can cost $200,000 – especially if you don’t qualify for loans or scholarships. However, experts say the mistake is looking at college as an “all-or-nothing” proposition – where you either spend a lot on an education or skip it altogether. Experts say that if money’s tight, choose a school that’s close enough to still live at home. Remember this: public universities can cost up to $45,000 less per year than private colleges. Consider this: During the recession, unemployment among high school grads with no college peaked at 11.2%, but for college grads, unemployment was less than half that much.