This will prevent the house from becoming poor


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    When you are poor, you spend most of your income on your own home. This can include your monthly mortgage payment, insurance, repairs, and utility bills.

    Read on to learn how to avoid falling into this trap and why house poverty is such a problem.

    1. Stick to the 28 percent rule
    2. Outside employment at work
    3. Get a roommate
    4. Rent a room on Airbnb
    5. Stick to a budget
    6. Delay buying your dream home
    7. Refinancing

    How to Avoid Being Poor

    Being poor in the house isn’t much fun. Don’t let it happen to you. Consider incorporating these tips into your personal finance strategy to avoid becoming homeless.

    1. Follow the 28 percent rule

    The 28 percent rule states that no more than 28 percent of your gross monthly income (your income before taxes and other deductions) is used for housing costs.

    For example, let’s say you bring in $ 50,000 a year or $ 4,166 a month before taxes. The 28 percent rule gives you approximately $ 1,116 on housing costs each month. So if your monthly housing costs are higher, you could be housing poor.

    Depending on where you live, 28 percent can of course be unreasonable. If you live in an expensive area, you may need to increase your housing costs to 35 percent or more.

    Play around with different estimates, but use the 28 percent rule as a yardstick to guide your decisions. A mortgage calculator can help you figure out how much home you can afford.

    2. Secondary activities in the workplace

    If you own a home and want to be part of the American Dream, you have to work for it. There is no easy way around this fundamental fact.

    Homeownership often requires holding multiple jobs and increasing your take-home salary. Here are a few popular side-hustle options to consider.

    Get paid to drive

    If you own a car, you should get paid to drive it by downloading an app like Uber or Lyft. You earn money in your free time transporting passengers, food and other things.

    Walk with dogs

    Explore your network and look for pet owners who need help. Offer to walk dogs or sit pets a few nights a week when people are out of town. Rover is a good place to find pet care gigs.


    There is also money to be made working well with children. Babysitting and even house-sitting can lead to steady extra income. is a leading online hub for finding quality child (and elderly) care options.

    Apply jobs to TaskRabbit

    Practical people can go to a site like TaskRabbit to find odd jobs for community members. TaskRabbit can lead to jobs like painting and basic household repairs for a secure payment directly through the app.

    3. Get a roommate

    The idea of ​​sharing your living space with someone else may not seem so pleasant at first glance. But it might be the easiest way to make ends meet – especially if you live in a big city and have an exorbitant cost of living.

    If you get a roommate, you can split the rent and utilities. You may also be able to purchase groceries and share household supplies. If you have a large house, you can even open up your space for multiple roommates for even cheaper living.

    Obviously, this situation is not for everyone, especially if you have a family. But a lot of people have found clever ways to shape roommate situations and get ahead financially.

    4. Rent a room on Airbnb

    Another option is to rent your space on a website like Airbnb from time to time. You can do this regardless of the size of your home.

    This can be an excellent option for people who travel for work and are not home all the time. By renting out your space for a few days each month, you can easily raise a few hundred extra dollars. You can apply this directly to your home payments or use it to pay off debts.

    5. Stick to a budget

    If you want to avoid being poor, sticking to a budget is important. This is especially true for people who live in expensive homes that exceed the 28 percent rule.

    Creating a budget is neither difficult nor complicated. In fact, it’s a lot harder to live without a budget. If you need help creating it, visit a website like YNAB or Mint. Include how much you make and where your money goes each month. The results might surprise you.

    6. Delay buying your dream home

    Young homebuyers are often busy buying their dream home with two cats in the garden, a beautiful fence, a fireplace – the list goes on. In doing so, they spend way too much money and get into a financial impasse.

    In some cases, it’s not about buying your dream home. Rather, it is about buying a home that fits your current financial situation perfectly.

    Remember that the first home you buy should prepare you for the next. That is why it is commonly referred to as the starter house.

    7. Refinancing

    If you take out a mortgage and then find that you do not have enough money to make ends meet, you should speak to the lender about a refinance.

    If you have good credit, you can get away with a better interest rate and lower monthly mortgage payment. That could save you quite a bit of money.

    It can also be a good idea to speak to the mortgage lender about phasing out private mortgage insurance (PMI). You can also lower your home contents insurance by switching to a different tariff. These decisions can have a huge impact on your monthly budget and home loan costs.

    Why It Is Bad To Be A Poor Homeowner

    Here are some reasons why you wouldn’t want all of your money to be used on your housing expenses.

    Less money on living expenses

    Houses can be pits of money. When you invest all of your income in home ownership, you have less money to spend on things you need.

    For example, a leaky roof, burst pipe, equipment failure, or septic tank can easily cost thousands of dollars. You don’t want to have to decide whether to fix your home or take your kids to the dentist.

    And if you don’t have cash on hand to cover expenses, you’ll have to pay for it with a credit card. That means taking on more debt – not a good thing.

    Less money for things you enjoy

    If you’re not careful when budgeting for a home, you could struggle to pay for the simple joys in life, like fine dining or fun activities.

    If you want to feel good and give your best, you have to eat healthily. House poverty can make this difficult, especially if you live in an area where groceries and other basic costs are above average (such as New York or San Francisco).

    And when you’re not spending time with family or friends, you can feel depressed. Put simply, when all of your money is used to pay the bills, fun things are much harder to do.

    Late retirement

    Preparing for retirement can be virtually impossible if you’re struggling to make ends meet. If you can’t afford to invest more than $ 100 a month in retirement, it’s not enough to really make a difference.

    Those with a decent income should try to put as much as possible aside for retirement. This means that you are maximizing your 401 (k) plan or your individual retirement account (IRA).

    If the bulk of your income goes towards housing costs, saving for retirement won’t be easy.

    Reduced emergency fund

    Any first-time home buyer needs a significant emergency fund. Ideally, you should have at least six months of living expenses as savings. However, this is very difficult when most of your income is used for housing expenses such as mortgage payments and property taxes.

    Creeping into debt

    Debt creep occurs when you only take on small debts and defer paying so you can keep more money in your savings account or cover your monthly expenses. In just a short amount of time, this can result in thousands of dollars’ worth of credit card debt that cannot actually be paid back.

    Debt creep is a common problem for homeowners who write large bills on their credit cards. These credit card payments have high interest fees. You could lose hundreds or even thousands of dollars in interest every year.

    frequently asked Questions

    How do I know if I am poor in house?

    You are low on housing when you spend most of your income on housing costs. You will have less money to spend on discretionary expenses and may even have difficulty covering other living expenses.

    Ideally, you shouldn’t be spending more than 28 percent of your pre-tax and other deductions income on your monthly home payments and related expenses.

    How do I stop being poor?

    Aside from buying a cheaper home in good working order, the best way to stop being poor is to increase your income. Consider starting a side job or two or taking on a roommate.

    The bottom line

    Never underestimate the cost of owning a home. Otherwise you could become poorer.

    Also, spending too much money on a home is an easy way to destroy your financial goals. And in extreme cases it can lead to foreclosure.

    Remember that your home should be a place that you can afford and enjoy living in. All of your money shouldn’t be used to pay for it.


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