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Economics - Home Finances

How do you buy a house when you are 19?

Our son pulled it off with hard work, and more than a little help from his parents

*****

Our son Seth read this story and gave his permission to share it

How do you buy a house when you are 19? The answer in our case is hard work, lots of saving and a whole lot of parental help.

My husband and I have four children of whom Seth is the oldest at 19. I’ve always enjoyed keeping an eye on the housing market, and after I learned Seth was interested in buying a house, my eyes were glued to the daily real estate listings.

It wasn’t long before one came to my attention due to its low, low price. It was a 920-squarefoot, 72-year-old small house on a large lot, right in town, listed for $315,000. To put the price of this house into perspective, in our town right now there are 16 houses listed between $385,000 and $777,000.

We set up an appointment to see the house the very day it was listed and it had already had five views and one offer on it. We looked at it at 5pm and put in an offer a couple hours later that same evening. As my son says, he went to work without an idea that he would even be looking at a house that day, never mind putting an offer on one that very evening. This was the first house he had looked at.

He started at 13

Seth started working at McDonald’s at 13. We live in a town where if your family is trying to limit screen time and your kids aren’t really interested in sports, there isn’t a lot to do. So, that meant there was lots of time to work Saturdays and a couple hours for a couple days a week after school.

The rule we made for our kids when they started working was that 10% of what they made went to church, 10% to spend on what they wanted, and the rest went to savings. These savings could only go towards something big, like a car or a house. As this was something we also did with their allowance when they were younger (although different percentages) it was a natural progression, and did not come as a shock to the kids. As we provide everything our children need, we didn’t want them to have access to huge amounts of spending money – we did not think this was wise, or a fair representation of what life as an adult is like.

Baggie budget

Also, wanting our children to learn more on making wise financial decisions, at age 13 we instituted “baggies.” We take plastic Ziplock baggies and mark them with an amount and a description, and every month we fill them with the amount listed on the baggie. Money in the baggie can only be used for what it says it is for on the baggie.

For example, we have a baggie for clothes that is $45/month. Every month we fill that baggie with $45 which the child uses for all his/her clothes needs. The child can decide to shop the sales, save the money for a couple months for a larger purchase, buy second-hand or even possibly have to wait for a couple weeks if money is not spent wisely.

Some other baggie examples we have used are for gifts and school supplies. We started out with a lot more categories, but eventually found these to be most useful.

Invest low

During the spring of 2020 when the stock market crashed, I talked to Seth about investing his savings under my name as he was too young to open an account himself. I used this time to teach him how to look for solid companies, read financial documents, search for past dividend payment history, and explain the difference between owning a part of a good company versus gambling your money away by putting it into meme stocks hoping to get rich quick.

By 2024 Seth had saved up $30,000 for a down payment, and having graduated in 2023 he was working full time at a small company. Actually, more than full time: he was picking up an extra half hour each day of overtime, as well as working any Saturdays that he was offered.

A day or two after we put in our offer, we got word back that the seller was willing to work with us. I think the seller picked us over the other offer partly due to the fact that we did not make the offer subject to financing, and because we were willing to consider taking on the renter (a relative of the owner) with the property.

Help from mom and dad

Probably the biggest factor in being able to buy this property was that we, the parents, were willing to use the equity that we had in our own house to take out a loan to cover the other house. We bought our own house 7 years ago and since then it has almost doubled in value according to our BC assessment. So we actually hold the mortgage that Seth pays for – all three of our names are on the title to our son’s house. As soon as Seth is able to take on the mortgage amount himself (as he pays the mortgage down and gains equity in his own house) he will do so, and we will take our names off his title.

Another way we have helped out is that Seth lives at home rent free (he is renting his house out at $1900/month), with the understanding that the extra money he makes will go towards making extra payments on his house. This arrangement won’t be long term, as we will be reassessing in a year and a half. After that he can either move into his house or try to find a smaller, cheaper rental for himself so that he is still making extra by renting out his house. We could allow him to stay, either with or without rent, but we think it is also good for young people to struggle a bit, not always relying on their parents, because, as the Apostle Paul says (in a different context), suffering produces endurance, and endurance produces character, and character produces hope, which does not put us to shame (Rom. 5:3-5).

The pros to the situation include the obvious: that not only was Seth actually able to purchase a house without a huge down payment, but also that, with our names on the title, it brought his house insurance down as we haven’t ever had a claim.

Probably the most concerning con is that lending and borrowing between family members can lead to strain and resentment and family discord (according to Dave Ramsey). Another concern for us is that if Seth ever needed to make an insurance claim it would probably affect our own insurance rates in the future.

From 25 to 10 years

Right now, Seth pays $683 bi-weekly with only $212 of that going towards his principal. His mortgage is 25 years, but he makes as many extra payments on his principal as possible, which will hopefully see him paying off the house within 10 years. It is pretty crazy to see how much interest there is on a 25-year loan and how little your regular payment actually goes towards paying off your debt. On the other hand, it is amazing how putting extra payments on your mortgage can take months and even years off the mortgage payment schedule.

I feel like as parents we have tried to teach our children to be good stewards of their money, tried to open their eyes to different opportunities and tried to show them how to use the gifts that God has given them in ways that glorify His name.



News

Saturday Selections – Dec. 14, 2024

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And for a more serious take on why not to lie to your kids about Santa, check out "Yes Virginia, there was a Santa Claus."

Responding wisely to pop psychology

Much that trades on the name of "Science" is trying to claim for itself that same credibility that we all found in our basic physics and chemistry classes back in high school. Drop that ball and it will fall at a steady 9.8 m/s² every time. But the "science" of evolution is not reproducible like that. And in the field of medicine, the human body is so complex that the same treatment on two different people could result in two very different outcomes. So there's certain science, and then there is a whole realm that shares this same name but which involves guesswork, assumptions, and even philosophy.

Christians need to be aware that psychology isn't as measurable as physics –  it isn't that sort of firmer science – and it has, over the decades, had trends that at times were clearly unbiblical, like the 1980s self-esteem trend. Christian counselors that leaned too hard on popular psychology then baptized this trend with the biblical text "love your neighbor as yourself" and put a twist to it, saying self-esteem was important because you can't love your neighbor if you don't love yourself. Which isn't at all what Jesus was saying.

This isn't a long article, and it is worth a slow read.

Did Pangaea really exist?

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Today's Devotional

December 14 - The great feast

“Then I saw an angel standing in the sun, and with a loud voice he called to all the birds that fly directly overhead, “Come, gather for the great supper of God.”” - Revelation 19:17 

Scripture reading: Revelation 19:11-21

Christ is coming to meet all who are opposed to Him. He is going to tread the winepress of the fury of the wrath of >

Today's Manna Podcast

Manna Podcast banner: Manna Daily Scripture Meditations and open Bible with jar logo

Confidence in the face of Uncertainty

Serving #691 of Manna, prepared by James Zekveld, is called "Confidence in the face of Uncertainty" and is based on Matthew 7.















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In a Nutshell

Tidbits – November 2024

Burke’s best Most have probably run across Edmund Burke’s most famous quote: “All that is necessary for the triumph of evil is for good men to do nothing.” Quite the punchy point, but like all wisdom, a man can sidestep it without too much effort: maybe good men need to get busy, but what can little ol’ me do? Well, Burke had a response to this sort of thinking too: “No one could make a greater mistake than he who did nothing because he could only do a little.” My new favorite knock-knock joke Part 1 Knock, knock. Who's there? Cows. Cows who? No, no, cows don’t who, they mooooo! Part 2 Knock, knock. Who's there? Owls. Owls who? Indeed they do. Popsicle babysitting A few years back, this was quite a thing in some Canadian Reformed Churches – popsicle babysitting. The premise is that every church has a lot of mothers in need of babysitting, who are also willing to do some babysitting. So every mom who wants to sign up is given 30 popsicle sticks, with each stick worth an hour of babysitting for one child. If you want another mother to babysit your four children for two hours, you’ll have to “pay” her eight sticks. That mom would then have 38 sticks to “spend” and you would be down to 22. If you quickly become low on sticks that means that you had better start babysitting someone else’s kids to build up your stick reserve. All babysitting requests and offers are handled via group emails. As one of the organizing mothers put it, “This gives you the option to have a ‘guilt-free’ sitter” because they don’t cost you a cent. So you can go out and have a good, inexpensive date night, or bible study, or doctor’s appointment, or whatever! I don't know if this is still a thing, but if not, maybe it should be again. 10 truths from a man with one eye Vivek Ramaswamy is a part of Donald Trump’s incoming government, earning his spot there with his uncommon amount of common sense, and his impressive ability to articulate it. As an observant Hindu who rejects Jesus as Savior, he is, however, blind to what matters most. Still, a one-eyed man in a kingdom of the blind is going to be able to see far better than most, even if his sight is still impaired. In a discussion with Tucker Carlson he shared that he holds to 10 truths, and he was able to articulate all 10 off the tip of his tongue: • God is real • There are 2 genders • Fossil fuels are a requirement for human prosperity • Reverse racism is racism • An open border is not a border • Parents determine the education of their children • The nuclear family is the greatest form of governance known to mankind • Capitalism lifts us up from poverty • There are three branches of government in the United States, not four • And the US Constitution is the strongest and greatest guarantor of freedom in human history God has given us His Word to allow us to see even more clearly, and He charges us in 1 Peter 3:15 to always be ready with an answer for the hope that is in us. So, if we were asked to articulate our own lists of truths, would we be ready? And what would our one, two, or ten truths be? Truth vs. tolerance “If anybody comes along espousing some message and asking for tolerance, you can be sure it’s error because error demands tolerance, whereas truth demands scrutiny.” – John MacArthur Ventilation by Jay Adams Not too long ago there was a psychological theory called “ventilation.” I’m not sure whether or not it has died out everywhere yet. But theory or no theory, it’s still seems to be a popular idea – If you’ve got something churning inside, you’d better get it out, for your own good. “What’s wrong with that?” Well, several things. I think I’ll just mention two. First, the self-centeredness of it is apparent. Who cares what happens to the other guy when I take out my ire on him—I’m the one who counts! “Well, I can see that. What’s the second thing?” Let me read you what God says about the issue in Proverbs 29:11: “A stubborn fool fully ventilates his anger, but the wise, holding it back, quiets it.” “Wow! Didn’t know God had spoken about the matter!” Quite explicitly. Who wants to make a fool of himself? And it doesn’t hurt you to “hold it back” as the Freudians thought, either. In fact the more you work yourself up into a lather that finally spills out, the worse things get – not the better. Not only for you – but for everyone around you. And first thing you know, you have to go around seeking forgiveness. To vent your anger is foolish in every way you can imagine. For sure, ventilation isn’t an option for the believer. Something to think about, eh? “Yea!” SOURCE: Reprinted with permission from Jay Adams’ June 1, 2009 entry at www.nouthetic.org/blog. High view of sex It’s an irony that chastity is portrayed in today’s popular fiction and film as being a matter of prudishness, as if only those who hate sex would fail to indulge in it whenever and with whomever. It is not the chaste, but their opposite – the promiscuous – that can best be likened to sex-hating prudes. 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Post-secondary miseducation isn’t new When I hear from nieces and nephews about the woke nonsense being pitched to them in university today, I can offer a strange bit of encouragement: at least it’s nothing new. Two decades back, it wasn’t transgenderism, but another ideology that was not to be questioned. At least one of your profs was going to make you ingest Al Gore’s Inconvenient Truth documentary, which had a generation worried about the planet’s certain, and imminent demise! It didn’t matter if you were taking English, Engineering, Medicine or Physical Education, you were going to see it! Three decades ago, R. Emmett Tyrrell Jr. had this harsh evaluation, which seems every bit as topical today: “In college one is exposed to a vast amount of information that is quite untrue, and it is most unjust that one should have to demonstrate one’s mastery of untruths to graduate – one has to go even further to graduate with honors.” And William F. Buckley Jr. articulated his own indictment of post-secondary education more than seventy years ago: “I should sooner live in a society governed by the first two thousand names in the Boston telephone directory than in a society governed by the two thousand faculty members of Harvard University. Not, heaven knows, because I hold lightly the brainpower or knowledge or generosity or even the affability of the Harvard faculty: but because I greatly fear intellectual arrogance, and that is a distinguishing characteristic of the university which refuses to accept any common premise. In the deliberations of two thousand citizens of Boston I think one would discern a respect for the laws of God and for the wisdom of our ancestors which does not characterize the thought of Harvard professors – who, to the extent that they believe in God at all, tend to believe He made some terrible mistakes which they would undertake to rectify; and, when they are paying homage to the wisdom of our ancestors, tend to do so with a kind of condescension toward those whose accomplishments we long since surpassed." Spurgeon on the need for earnest preaching “It is an ill case when the preacher: Leaves his hearers perplex'd – Twixt the two to determine: ‘Watch and pray,' says the text, ‘Go to sleep,’ says the sermon.” “You may depend upon it that you may make men understand the truth if you really want to do so; but if you are not in earnest, it is not likely that they will be. If a man were to knock on my door in the middle of the night, and when I put my head out of the window to see what was the matter, he should say, in a very quiet, unconcerned way, ‘There is a fire at the back part of your house,’ I should have very little thought of any fire, and should feel inclined to empty a jug of water over him.” SOURCES: C.H. Spurgeon’s Lectures to my Students and The Soul Winner Lyric o’ the month Addison Road’s What do I know of Holy? I made You promises a thousand times I tried to hear from Heaven But I talked the whole time I think I made You too small I never feared You at all, No If You touched my face would I know You? Looked into my eyes could I behold You? I guess I thought that I had figured You out I knew all the stories and I learned to talk about How You were mighty to save Those were only empty words on a page Then I caught a glimpse of who You might be The slightest hint of You brought me down to my knees What do I know of You Who spoke me into motion? Where have I even stood But the shore along Your ocean? Are You fire? Are You fury? Are You sacred? Are You beautiful? What do I know? What do I know of Holy? What do I know of Holy? What do I know of wounds that will heal my shame? And a God who gave life "its" name? What do I know of Holy? Of the One who the angels praise? All creation knows Your name On earth and heaven above What do I know of this love? ...