Make Enough to Rent?

This family wants to buy a home but still have a lot of credit card debt.

QUESTION: Tim and his wife have $8,000 in credit card debt.  They are in an apartment and they feel like they’re throwing their money away.  They bring home $22,000 a year and want to know if they should stay in the apartment or buy a house.

ANSWER: Renting for the rest of your life is not a good plan.  Buying a mobile home is a worse plan.  Buying a home is the best plan when you can afford it.  Right now you have two issues standing between you and buying a home.

1.    You need to get rid of this credit card debt.
2.    You need to get your income up.

Develop a five-year, step-by-step plan to get to where you want to go and get passionate about taking care of what you need to get out of the way in order to achieve that.

I want you to own a house – I just don’t want it to own you.  If you go get the first-time home buyer deal right now, you’ll be upside down.  Spend the next three years getting out of debt, increasing your income, and then go buy a house.