TwentyFrugal

You just graduated college and you're trying to decide whether to buy a house or rent an apartment... There are many different factors that go into this decision. Do you have student loans? Do you have a giant car payment or credit card debt? How long will you live in that location? The list gets overwhelming. I am going to break down several factors in the simplest way possible to show you the options using estimated numbers. Let's say you have a monthly income of $2500 and you are fresh out of college with $65,000 in student loan debt with a 7% interest rate. You are trying to decide on buying a house or renting an apartment in the new city you are living in. The house you want to buy is $150,000 and a fixed mortgage rate of 3.33% with a 15 year mortgage. The alternative is renting an apartment in town for $650/month. Here is the breakdown: Option 1: Buy the house The monthly payment on the house:  $1060  for 15 years to pay off the grand total o...

These are 5 rules that I have set for myself that have helped me do more with what I have. Even with a low income, these rules can help you make the most of your income so that you have more to enjoy later. 1. Live below your means This is a virtue that my father hammered into my skull from day 1. In today's economic environment, it is easy to think that you can afford something that many of us actually can't.  For example: Statements like... "You can afford the monthly payment" "Take a little out of savings and replenish it next month" "You'll never get an opportunity to do this again" These statements may be true, but they are used to make you think you can afford something that you can't. The simplest way to look at it is that you want to have a personal net profit every month.  Net Profit = Revenue - Expenses Tracking your spending will help you find your monthly revenue and also see your monthly expenses. Cut out t...