Buying property is better than renting.
A common refrain, even on the heels of the bursting real estate bubble, is that renting an apartment is "throwing money away" compared with homeownership and the ability it offers to build equity and wealth.
As if staggering foreclosure rates and underwater mortgages aren't enough to make a different case, consider that it is not just mortgage payments to worry about. There are interest payments, property taxes, homeowner's insurance, furnishings, utility bills, maintenance and repairs to add to the mix.
Treating a home as an always-appreciating investment is no longer a smart strategy, and those who base their ability to pay a mortgage on projected earnings, rather than current paychecks, may be dangerously optimistic.
Resolutions That Will Save You Money
Make paying off debt a priority.
Reducing your debt and excising the interest payments and accompanying fees is usually a good idea. But paying down debt shouldn't derail a savings plan.
It is important to knock down those credit card bills, but be careful you don't shortchange your retirement savings or emergency fund to do so.
Also, not all debt is bad, suggests Morrison Creech, head of private banking and executive vice president for Wells Fargo Private Bank (NYSE: WFC - News).
In a recent interview with The Street, Creech suggested that if you have debt maturing in the next 24 months, you might consider extending that to a five- or 10-year horizon and taking advantage of the current historically low interest rate environment. If you are contemplating additional debt over the near term again, locking in a rate now would be advantageous.
For some, allotting money that would be used to pay down low-interest debt might be better used to improve liquidity, diversify portfolios and mitigate risk, he says.
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A common refrain, even on the heels of the bursting real estate bubble, is that renting an apartment is "throwing money away" compared with homeownership and the ability it offers to build equity and wealth.
As if staggering foreclosure rates and underwater mortgages aren't enough to make a different case, consider that it is not just mortgage payments to worry about. There are interest payments, property taxes, homeowner's insurance, furnishings, utility bills, maintenance and repairs to add to the mix.
Treating a home as an always-appreciating investment is no longer a smart strategy, and those who base their ability to pay a mortgage on projected earnings, rather than current paychecks, may be dangerously optimistic.
Resolutions That Will Save You Money
Make paying off debt a priority.
Reducing your debt and excising the interest payments and accompanying fees is usually a good idea. But paying down debt shouldn't derail a savings plan.
It is important to knock down those credit card bills, but be careful you don't shortchange your retirement savings or emergency fund to do so.
Also, not all debt is bad, suggests Morrison Creech, head of private banking and executive vice president for Wells Fargo Private Bank (NYSE: WFC - News).
In a recent interview with The Street, Creech suggested that if you have debt maturing in the next 24 months, you might consider extending that to a five- or 10-year horizon and taking advantage of the current historically low interest rate environment. If you are contemplating additional debt over the near term again, locking in a rate now would be advantageous.
For some, allotting money that would be used to pay down low-interest debt might be better used to improve liquidity, diversify portfolios and mitigate risk, he says.
Read whole article