“Just Stop Buying Lattes” — The Worst Homeownership Advice for Young People Today
Jul 11, 2022 brooklyn,Brooklyn Buyers Agent,brooklyn homeowners,brooklyn real estate,brooklyn realty,buying into brooklyn,financial planning,milennial buyers,realty collective
For the millennial age group, it seems like buying a home gets more and more difficult every single day. We’ve been through a global pandemic, a housing shortage, and record inflation in just the last few years, let alone the significant events that changed finance forever during our childhoods.
So, why are people still saying we’d be able to afford our dream home if we just stopped buying lattes?
Where the Latte Myth Originated
The first person to publicly link lattes and financial ruin was financial advisor David Boch in 1999. He believed that everyone made enough money to become rich, but their spending habits prevented them from doing so.
Bach created a chart with a 23-year-old woman buying a latte for $5 every day. He said that if that money was invested instead ($150 per month and $2000 per year), she would have 2 million dollars by the time she retired at age 65.
That math was far from correct, but it still caught the attention of people across the globe. Why? Because specialty coffee shops were just catching on, and they were seen as a frivolous thing. They were fun for the middle class, people who wanted a treat but were out of reach for designer jeans. And they definitely ate up a large sum of money when you looked at their price per month or year.
Why Lattes Aren’t the Reason Homes are Out of Reach
Cutting back on unnecessary purchases is a good way to save money. But it’s not enough to keep up with the financial events that have pushed so many potential homebuyers out of the market.
Home prices have risen over 18 percent in the last year, and almost 30% since before the pandemic. Latte prices certainly don’t cover that. Young people today are facing unprecedented challenges while trying to buy a home. And the drinks they treat themselves are far from the blame.
What You Actually Can Do to Afford Your Dream Home
Keep sipping on your Starbucks and try these tips instead of feeling bad about your morning caffeine:
- Pick up a side hustle — Consider tutoring, babysitting, or pet walking to build a down payment fund. The larger you’re able to get the sum, the more affordable your future home payment will be.
- Find a first-time homebuyer program — This blog post is filled with Brooklyn’s best resources for purchasing your first home.
- Save money with a more affordable rental — We’ve gathered tons of info on affordable rentals here. Maybe the difference in monthly payments can add to what you put away for your dream home someday.
And if you have any questions about saving for a home, finding a great rental, or figuring out if you’re finally ready to become a homeowner yourself, reach out to our experienced, Brooklyn-centric team today. We promise we won’t judge you for your lattes.