The Value of Commitment

There’s always an argument, especially in today’s world, when talking about generations. Whether Millennials or Gen-Xers or the generation who are coming next, the group from three year-olds to 18, The Gen Zs.  The upper end of that age group are, for the first time, getting into their first jobs.  Research shows that this group, Gen Z,, as well as Millennials and some Gen-Xers, have no problem leaving a job they don’t like, without much, if any, notice and never coming back, unlike my generation, the Baby-Boomers (who statistics show that fewer than 20% would dare walk out or never show up for work because they were to quit with no notice).  That’s an interesting twist, in how people of different age groups value work differently.  Maybe that’s the effect of social media or just that everything today is about “me.”

This new group are also renters, by and large, and the difference between renting a home and buying a home is very similar now.  Some might believe that renting is cheaper than buying.  But that’s simply not true.  Thanks to several loan programs available today, road blocks to home ownership such as down payments and debt to income ratios have changed.  In fact, if you can afford rent, it’s likely you can afford a mortgage.  There are various qualifying programs that make it possible to own a home.  If you have seen the prices of rents today, you understand that a mortgage payment can be as affordable if not more so.  However, the same mentality of the workplace environment described above might fit today’s renter, who may consider renting akin to the lack of commitment.  Some may feel a mortgage will tie you down, or that you have to remain committed to something you are not sure of.

Some may think having a mortgage means that you’re old or you’re committing to something that doesn’t allow you to make a change. Looking at the facts, if you’re able to afford the monthly payment you’re already paying for rent, buying a house really isn’t much different, and owning a home helps keep the dream alive of one day being able to not work.  Which brings me back to the point made about younger generations being okay with walking out on a job with little or no consequence.  A paid for house can give you that freedom.  Nobody wants to work forever.  Perhaps our ancestors did, but I think most of us are hoping to get to retirement sooner than later.

All the indications point to the fact that we will not be able to count on Social Security to provide adequately (if at all) for us in our older years.  Buying a house is the safest way to assure a financial future.  The difference in paying rent (or throwing away money every month) and paying towards your future is an important consideration.