Recently, Housing and Urban Development Secretary Shaun Donovan said, “Not everybody is going to be able to get a mortgage or buy a home. We need to recognize that as a country.”
The argument he was making was that lenders simply can’t lend to everyone. People in poor financial shape received loans that they couldn’t afford during the housing bubble and when they weren’t able to pay, the housing bubble burst. Donovan argues that this is a mistake that we shouldn’t repeat.
I agree with him, except that I put it in a personal context.
If you’re not in good enough financial shape to be able to have strong credit and save enough for a down payment, then you’re not in good enough financial shape to be a homeowner with a mortgage and all of the other costs associated with home ownership. A bank should not take a risk in this situation and you should not, either.
Does that mean that the “American dream” of each person being able to own a home is dead? No.
Regardless of the fact that not everyone should receive a home loan right now, the vast majority of Americans (excluding those in truly exceptional circumstances) has the potential to get their finances into good enough shape to be able to handle home ownership. The fact that the road is tough for many does not mean it’s impossible.
The steps to getting there aren’t a secret. Take your job seriously and work hard at it. Stop wasting money on small things because they add up to a sacrifice of the big things. Use community resources whenever you can to avoid spending your own money. Build skills and seek better positions that pay more. Pay down your debts and don’t add new ones to the pile. Keep your eyes on the prize.
The fact that a lot of people don’t do this doesn’t mean the path is impossible. It merely means that the path is challenging, with many distractions along the way.
The goodies in the checkout aisle are a distraction. Cell phones are a distraction. Most prepackaged foods are a distraction. Most forms of entertainment that aren’t free are a pure distraction. They take little bits of your money away from you, leaving you with even less than you had before.
That coworker that would rather talk than work is a distraction. Time spent idling or web surfing on the job is a distraction. Time spent not learning new skills or finding things to do at work is a distraction. They’re very easy to fall into, but they also ensure that you’ll never move up at work and never increase your earnings there.
Constant offers for credit cards are a distraction. Big sales on things you don’t really need are a distraction. A desire to also own the shiny things you see other people owning is a distraction. You don’t need these distractions if you want to achieve that dream.
Most of all, doubt is a distraction. Never, ever let yourself think you can’t do this.
The American dream isn’t dead. It’s just hidden behind thousands of distractions. If you want that dream, you have to sweep those distractions away yourself. No one else is going to do it for you.