Don’t spend too much on your college education or your mortgage.
One of these I did well, the other, I am still living with the consequences. When you are in college, money is so ephemeral. There are all these loans they want to give you that you can pay back later. Plus, you are in the program you are in which is going to lead you to a great job and Bill Gates isn’t handing out cash, so of course you will take the loans.
All of the above makes sense while you are in school. But when you get out and you are not working in quite the job you thought you would for quite the amount of money you projected, it is depressing to pay that student loan bill every month. Do whatever you can to find some other way to pay for your schooling. Or, radical notion, don’t attend college at all. If you are just going to go, it’s not worth it. Go get a job and work for a few years until you figure out what the heck you would be happy paying someone to teach you about.
As for a house, I pined for a mortgage of my own through the last housing bubble. I watched horrified from the sidelines while cute little houses for sale for a reasonable $135,000 shot up to above $200,000. Though people with the same income level were buying houses for this much or more, I did the figuring and knew that I could never pay that much into a mortgage every month. I wasn’t buying the argument that stretching a bit was fine because the house would only increase in value. Not only that, but how long would it take me to save the down payment when “normal” houses were upwards of $240,000.
Luckily for us, we have a great land trust organization in our town. Through Portland Community Land Trust we bought our home and today have an affordable mortgage. I’m glad we don’t have to scrimp every month to make our payment and I’m glad that we are not “upside down” on our house right now. The lesson? Do your research and see if you can find an alternative home buying program that works for you.