Should I Rent or Buy When I’m Just Starting Out?

Have you ever felt stuck between two good options, but you had no clear answer? I got one today. Rent and keep things simple or buy and start building equity. Like, either way, you're afraid of making the wrong move.And maybe right now you're standing at that crossroads in your life. Well, today I'm going to help you move forward with both wisdom and peace.So if you're thinking about buying a home, today's going to be the show for you. Hello, friend. Ralph Estep Jr. Here.Welcome to Financially Confident Christian, where every day my goal is to help you break that cycle of financial shame and live in confidence. And today we got a real practical voicemail question, and it's this. Should you rent or buy when you're just getting started?I get this question in my practice all the time, but I'm going to play a message that we got from a listener about this very topic right now.

Hey, Ralph, I was hoping you could help me think through something. So I'm 24, and I'm about to start a job in a new city, and I've saved up a pretty decent amount so far.And now I'm just kind of going back and forth on whether I should buy a home or just rent for a few years. If I buy, It'd be around $2,500 a month, which is definitely more.And, I mean, I know it could help me build equity and maybe even turn it into a rental later on, which sounds great in theory, but then renting is closer to $2,000, and it just feels a little more flexible, especially since I'm still new and kind of figuring things out, like, where I even want to be long term. I think I'm just. I don't know, I'm a little stuck.Like, part of me feels like I should take advantage of where I'm at financially, but then another part of me is like, what if I'm moving too fast? So, yeah, I guess I just really appreciate hearing how you'd think about that.

Well, thank you so much for your question. If you've got a voicemail question, you can send us one, just like this person did by going to Financially Confident Christian.But, friend, what I want you to hear right off the bat, this is not just a financial decision. It's a life decision. And I love the fact that you're thinking through this carefully because it says a lot about your maturity.You might be a young person, but you are definitely thinking about this. You're not just asking, what can I afford? You're asking, what is wise and that does matter because here's the big idea for today.The right decision is not just about math. It's about the season stability and stewardship, which is why I've got what I put together, a decent answer for you today. I think.Let's talk about this together. I love the fact that you've asked this. First thing is don't rush a permanent decision in a temporary season. You said it very clearly.You're starting a new job. Maybe you've moved into a new city. There's a lot of unknowns here and that matters more than the numbers.I could easily say to you, sure, buying over the long term, that's going to be a better financial decision. But the other part of this, buying a home ties you down.If you buy a home, and I've seen this happen to people that I've worked with throughout the years where they buy a home and then they're stuck in this job that they might not want. That's where buying ties you down. But renting could give you some flexibility, especially if you're starting a new job.And there's wisdom in giving yourself space to settle into your new environment before making a long term commitment. So first thing, take a pause. Think about what do you really want to do? Is this just a season you're in right now? Kind of let it simmer a little bit.But you've also got to look beyond the mortgage. You focused on that $2,500 payment and I think that's a good place to focus. You've got the numbers right, but that's not the full picture.A lot of people don't think about this, oh, I can afford this mortgage, I can do this. But think about the maintenance. Yesterday we talked about that on the show. If you didn't listen to that, go check it out.You can go check out all of our episodes@financiallyconfidentchristian.com but there's maintenance, there's repairs, maybe vacancies for those rental units if you're going to rent this out. Listen, as a homeowner there are always unexpected expenses. My son and my daughter in law, they're in Texas. They rent a house.Well, guess what happened last week? The air conditioner blew up. I'm talking about it actually blew up.My son sent me a picture of this and you can see the outdoor unit like exploded out the side. Scared the dickens out of him and his wife. But if he had owned the house, guess what?He'd have had to come out of pocket to pay for it, but he's in a season of his life right now where he's renting. And guess what? He picked up the phone, called the landlord and my daughter in law told me as of Friday it's fixed.So sure, homeownership builds equity over time, but it also requires some margin. And if you don't have margin, what looks like an opportunity right now can quickly become pressure. I've seen so many first time buyers especially.Listen, I was that person. I mentioned it on yesterday's show. I bought a new townhouse. It wasn't a week later the air conditioning blew up.I didn't explode like my sons did, but didn't work. $6,000 Bill later, borrowing from mom and putting money on credit cards. I had no margin.So understand that that equity that you're talking about is not the same as cash flow. Sure, you can build 400, $500 in equity each month by buying it, but you're also committing thousands of dollars in non recoverable costs.You're going to be paying interest, you're going to be paying property taxes, you're going to have homeowners insurance and upkeep. You can't just buy this house and say, well, it's going to take care of itself. Doesn't work that way.Sure, equity does grow, but cash flow affects you right now. And right now your margins matter. You didn't tell me what your margins look like.But if you're just getting started, maybe you need to build that margin a little bit. But you got to be wise with relational and financial boundaries. If other people are contributing, that's helpful, but it's not guaranteed.And they don't have that same level of ownership. They don't have that same level of requirement.So be careful about building a financial structure that depends on someone who isn't legally tied to the asset. Maybe that's a renter or a boyfriend or a girlfriend. And I'm not telling you to do this from a state of distrust.It's just about wisdom and protection. Here's one thing I tell people all the time. If you can't afford to pay for it yourself, don't do it.If you're counting on somebody else, don't do that. Because relationships fail. I hate to tell you that. Here's a surprise for you.Relationships fail sometimes, but in the end, choose the path that gives you the most peace and, and the most flexibility. So I'm going to give you a square answer right now. You mentioned renting at $2,000 in this particular case. And I don't often do this on the show.I think that's your best option and I'll tell you why. It creates margin, it gives you freedom and it gives you options. You mentioned you're just getting started.It allows you to adjust to your new job, you can confirm your long term plans and you can continue building those savings. Now, I'm not telling you that buying might not be the right move. It might just not be the right move right now.And waiting is not losing, it's just preparing for the future. Here's my encouragement for today. Wisdom chooses timing, not just opportunity. I want to say that again because I want that to sink in.Wisdom chooses timing, not just opportunity. So here's your one win for today. It's a great idea for all of us to do this. Write down what matters most in the next season of your life.Flexibility, stability or ownership. See, I think the thing is with this buying of a house thing, I think we hear a lot of chatter in our ear from everybody.Oh, well, you should own a home and you should do this.I'll tell you what, I've done both and I've had seasons in my life where being a renter was great and I've had season in my life when owning was great. Last couple of years have not been fun as an owner with spending money, but choose the option that best supports the prior in your life.It's not just financially that we're talking about this today. We're talking about practicality. Let's get right into the word of God. We're going to go to the book of Proverbs, chapter 24, verse 3.By wisdom a house is built and through understanding it is established. Now, I wanted to lean into this because I think this really fits today, building anything, especially a home.And we can change the word building for buying. But buying anything, especially a home, requires wisdom. It requires timing and a strong foundation, not just a desire to do it.I think that's the thing that gets so many of us in trouble. We have this desire because we hear, oh, renting, you're just throwing away money. But you've got to look at this big picture.Wisdom, timing and foundation, not just your desire. Let's pray to God right now. Heavenly Father, I lift up my friend who is standing at a crossroads. You can see they're not sure what to do.They're trying to make a wise decision for their future. And Lord, you see the diligence in their thought process.You see their discipline and you see that desire that so many of us have to do this the right way. And Lord, I ask them right now that you would give them wisdom beyond the numbers.So easy to get stuck on the numbers, Lord, but help them to see clearly what the season they are in in their lives and what step is best right now for them. Lord, I ask that you would remove that pressure to rush into a decision and replace it with peace and replace it with confidence.Guide all of our decisions, protect our futures and remind us that waiting can be part of your plan. Lord, we might not like it, but sometimes your very plan is for us to wait. And we ask this in the name of Jesus. Amen.Friend, I want to leave you with this a why start set you up for a strong future. It just does that why start can lead to a strong future.I've seen so many people make this decision and bury themselves in something that's hard to recover from. And right now maybe you're facing a financial decision and you want some guidance. You want somebody that's been down there and done that.I've done a lot of things in my 53 years and if I haven't done it my 30 years working with people, I've probably seen it and I would love to hear what's going on in your life. You can record a voicemail message for me by going to financiallyconfidentchristian.com/voicemail we've made it super simple.We'll put a link in the show notes, but you can just record a quick message and I would really like to hear from you at financiallyconfidentchristian.com/voicemail I just want to thank you so much for joining me today. Thank you for the voicemail question. I feel what you're going through. I've been there and done that. But you can do this. You'll figure it out.Stay financially savvy, my friend. May God bless you and you have a great day today.