Like one of my favorite bloggers out there, Bad Money Advice, I don’t really get all these “new” rules that are popping up everywhere. I don’t believe the “its different” today BS. I think most of the lists, at best, basically just rehash of old rules that I thought always existed (obviously, minus the past 7 to 9 years) or at worst provide Personal Finance Rules, which shouldn’t be set in stone.
I came across another one of these articles titled, “Seven New Rules for the First-Time Home Buyers” written by Ron Lieber. Mr. Lieber’s rules aren’t wrong, per se, but I don’t feel like they are groundbreaking or new
- Start with the Basics – Put down 20%, Don’t Spend more than 35% of pretax income on mortgage or 45% if we add in stuff like taxes and insurance;
- Consider your income – Don’t suffer from income overconfidence where you assume you’ll be making triple your income in 5 years;
- Bow to Unknowns – make sure when you are buying realize your life changes (kids, unemployment);
- Map out Expenses – to budget is new?
- Buy Best – Either buy your dream home or a starter house, but nothing in the middle
- Stretch your House
- Eight Hour Rule – Sleep on every decision
Like I said, Mr. Lieber’s article isn’t wrong but these rules aren’t knew anyone who didn’t follow them over the past 10 years are probably in foreclosure or will be foreclosure in the upcoming years.