Lee Ginsburg

Learning to Budget! Kudos To The Teacher.
December 28, 2008 ·  

As many of you are aware my Prudential office in San Bruno, Ca. is the largest single independent Prudential office in the country.  We are very progressive and have kiosk in several of the regional malls in the area.  As I had my shift just before the holidays, a young boy, I’d say about 12 or 13 was looking at some listings.  I let him look for a while and then approached.  He told me he was 30 years old and looking for a rental for his family of 4 with a $60,000 annual income.  I did a double take and he explained he had a home work assignment to balance a family budget including housing.  I helped him find a few rental homes in the area.  The reason for me writing about this, I thought it was a great assignment; Reality, Life.   I think this should be taught in detail to all high school seniors and to all purchasing a home.  I believe saving should be part of a family budget.  The savings could be for a down payment, home maintenance, vacation, rainy day, etc.   If people budgeted in a savings category they should come up with a 5% or 10% down payment pretty easily.  Let’s look at the home buyer of a $400,000 home.  Their previous rent payments might have been $1500 a month and their new mortgage payments and taxes are going to be $2500-$3000: A minimum difference of $1000 per month or $12,000 a year.   Within a year they should have saved a 3% down payment or more.    The larger down payment will create immediate equity, lower their payments and prove they could save.  One of the problems today is that people do not want to give up the 2 lattes a day, fine dinners out, top of the line cars, etc. to save for a home.  That is OK, If they are not ready to buy.  Maybe they should continue to rent until they are willing to sacrifice to reach the “American Dream”.  Even with the Real Estate Turmoil there is nothing like calling a place your own home.   An agent in my office recently told me about a client whom lost their home in foreclosure while they were making payments on a Mercedes.  Once again I thought it was super that this 7th grader was learning about life’s financials.  He was leaning to budget for food costs, housing costs, transportation, clothing, etc.  What a great lesson.  Kudos to the teacher. 

www.leesellsmore.com

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Filed Under Important Thoughts, Real Estate Finance, Real Estate for Buyers and Sellers

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Comments

6 Responses to “Learning to Budget! Kudos To The Teacher.”

  1. Michael Monozon on December 28th, 2008 8:12 pm

    Lee,I could not agree more,I believe the credit card started the path to family debt. Growing up our families rarely spent money they did not have, debt was much more difficult to accumulate.
    The future is our children, and they must be taught to save rather than spend.

  2. Lee Ginsburg on December 28th, 2008 9:05 pm

    Michael, Thanks for your support. I was concerned when writing this because it affects our business volume. In the long run if only people whom could afford homes purchased homes we would have higher respect in the consumer’s mind. Happy Holidays!

  3. Kathy Wall on December 29th, 2008 6:35 pm

    Great column, Lee, and, oh so true. Some good things are coming out of this economic crisis and the most important of those is that people are starting to put their priorities in the right place.

  4. Adam Chinn on January 1st, 2009 6:56 pm

    Great post Lee. I could not agree with you more. I’m happy to see that some teachers are teaching great lessons to our youth. I do believe that understanding one’s priorities and long term goals are important factors to what type of life you live.

  5. Larry Franzella on January 7th, 2009 9:06 pm

    So true – great advice!

  6. Brian Boisson on January 8th, 2009 11:02 am

    The young people of today, are our customers tommorrow!

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