In your 30s: buying more house than you can afford
Why it happens: You want your first home to be your dream home, but more often than not, it won't have everything you want. A big house may make you look successful, and with a low-interest rate, buying one seems doable. But that can lead to borrowing more than you can afford long-term—it's what ultimately led to the subprime mortgage crisis and subsequent recession in 2008.
How you can avoid it: "You don't need to go out and get the house that your parents have," Zagarola says. Start small and work your way up, thinking about how you'll afford homeowner's insurance, property taxes, repairs, and maintenance, as well as how life changes—like having a baby, needing a new car, or reducing hours at work—could affect your ability to pay for it all. It's also essential to give yourself some wiggle room so that you can still do the fun stuff, such as going out to meals with friends and taking vacations.
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Sure, the thought of buying a starter home and having to move again later can seem daunting, unfortunate, and just plain stressful—but it's also extremely common. The average homeowner lives in a home for seven years before moving and will move 11.7 times during her life, according to real estate site Trulia.com.