When becoming a home owner feels out of reach

[0:00] When a financial difficulty becomes part of your life, whether it's medical bills, the high cost of housing, or credit card debt, it can have consequences for your well-being. [0:09] I'm AP financial wellness reporter Cora Lewis. Welcome to our Money Happens series. [0:14] In each episode, you'll hear from everyday people sharing their personal financial experiences, and from experts who offer advice which could help you or someone you know, even in a small way, starting as soon as today. [0:25] For this episode, we're focusing on housing. [0:27] Every time I get a paycheck, like, it's all already spoken for, you know? [0:32] The first one's always, like, electrical, my car insurance, food, like, all the small bills, my cell phone, and then the last bill of my rent, the month, I mean, the last paycheck's always just rent. [0:46] Like, it goes straight to rent. [0:48] You just heard from Tyler Jones, a 21-year-old who works part-time at a deli and at a community nonprofit in Springfield, Massachusetts. [0:55] He doesn't see home ownership in his future. [0:58] Tyler lives with his girlfriend of three years. [1:00] She works as a house cleaner and is also a student. [1:03] The two would like to own a home one day, but don't see it as realistic. [1:07] Right now, 65% of working-age renters can't cover their monthly expenses after paying for housing, according to an analysis from Harvard's Joint Center for Housing Studies. [1:16] And nearly half of all renters were cost-burdened by rent in 2024. [1:20] That means they spent more than a third of their income on housing and utilities. [1:24] That's based on data from the most recent census. [1:27] On top of the serious practical concerns that high housing costs introduce to people's lives, these kinds of calculations bring psychological stress and pressure. [1:35] If he's constantly feeling insecure that he could be getting evicted, I mean, that's huge. [1:40] I'd want to come back to this anxiety, this sadness that's stopping him from really getting his arms around his finances. [1:52] For this episode, we spoke with John Hankins, a certified financial therapist based in Colorado, who works with patients to cope with financial stress and make plans for moving forward. [2:02] He mostly works online with people across the country. [2:05] The thing that scares me that I would not want to see him fall into, and I see this, is that that anxiety becomes kind of a self-perpetuating cycle. [2:16] And that goes on for a while, and then finally it sort of crashes and burns, you know, that things really start, you know, to turn into problems. [2:27] And then it takes, it's that much harder to resolve the situation. [2:32] I asked Tyler to walk me through his financial and housing situation. [2:36] At the moment, I'm paying $1,300 a month for an apartment that I could get evicted from, that I actually don't have any ties to besides the community that I decide to build. [2:46] Though I have no student loans, I have a 99 Camry, you know, bought and paid for. [2:56] But it's just, it's, it's hard, like, I'm terrified of, like, the thought that I need to mass capital. [3:07] I'm 21 and I need to, like, start building my credit. [3:10] And everyone's telling me not to take credit cards out. [3:12] And then, like, my friends are telling me to start credit cards and just go crazy. [3:15] Tyler said he makes $22 an hour at the nonprofit and $18 an hour at the deli, where he picks up ships wherever he can. [3:23] But he still feels like he's living month to month, paycheck to paycheck. [3:26] I never, like, sit down and calculate what I make because it always makes me sad when I do. [3:30] I shared Tyler's story with John, including the fact that he's avoided student loans and credit card debt. [3:35] I would say right off the bat, it sounds like he's a very thoughtful guy and that he's, he's looking at, at, at different options. [3:44] And I do think that the, unfortunately, the whole world of getting a degree and that some sort of meal ticket is just, it's mostly a ticket to, as far as I can see, for people going, you know, graduate from high school right now. [4:00] It's a ticket into, into debt. [4:04] So I think that in a lot of ways, he's making a wise choice not to, not to go that route. [4:09] I also told John, Tyler is working on building his credit score. [4:13] Let's look at a plan to do that. [4:16] But make sure that we've got really good guardrails on that because, I mean, and I give this speech all the time, the people that show up at my door with, you know, that have, you know, like $50,000 in credit card debt. [4:31] That is not an unusual thing for me to hear is that, you know, there is a whole industry out there that is coming for you, that they want you to go down this path. [4:42] Sounds like, I mean, you're giving him credit for not being in debt, which I think is exactly right. [4:47] Yeah, absolutely. [4:49] Yeah. [4:49] And, and, but just that once you have a credit card, you, it's, it's a dangerous thing. [4:55] So let's, let's be really understanding how you're going to manage this so that, you know, it doesn't get out of control. [5:04] I asked Tyler if things were different, if he would like to one day own a home. [5:07] So it is a goal of mine. [5:09] It's just not, it doesn't seem like doable for me and my girlfriend. [5:12] I asked Tyler if he felt things were different for his parents. [5:15] I would say so. [5:16] So my parents met at 18 and 19, just like myself and my girlfriend, and bought their first house at 25. [5:27] Could I ask what they did when they were in their 20s, when they bought the house? [5:31] Yeah. [5:32] So my dad was always kind of, you know, job to job. [5:37] He was, they met and worked in like restaurants together. [5:42] And then my dad did like car sales, different things. [5:45] My mom was always in the restaurant business. [5:48] And that's kind of like where my dad ended up at the end. [5:52] That's when I asked John how the situation could be affecting Tyler's mental well-being. [5:57] He talked a little about this idea that his parents were able to buy a house in their 20s. [6:01] And here he is in his 20s really feeling like that's so out of reach, just psychologically, emotionally, you know, people of his generation kind of realizing that their lives aren't going to look like their parents' lives. [6:13] I would just validate his feelings. [6:15] This is not your fault. [6:16] This is the direction the system has gone in. [6:20] And there are routes to home ownership, but it's not a reflection on you that you haven't been able to achieve what your parents achieved. [6:31] They were operating under a whole different set of rules. [6:34] I also love your recommendation to find financial counseling and locally that is on a sliding scale or available some other way. [6:43] What you described to me is that he doesn't, he can never look at a budget or anything like that because he just feels too sad when he looks at the numbers. [6:50] I just look at that as like job one. [6:53] That's, we got to, we got to fix this for this guy so that he can feel empowered and he can manage his finances. [7:01] Before the deli and the nonprofit he's at now, Tyler worked a string of jobs, knocking on doors for different organizations. [7:07] He was even part of a mosquito squad. [7:09] I have never spent, since I graduated high school, I haven't spent a week not working. [7:15] That's not true. [7:16] I spent a week in Puerto Rico with my girlfriend's family. [7:21] And I went to my girlfriend's sister's wedding in Tennessee. [7:26] Both of those trips sent me back so hard. [7:29] I mean, it sounds like you don't even have credit card debt. [7:32] You don't have consumer debt or loans of any kind. [7:35] None. [7:36] None at all. [7:37] Because like both my parents have had lots of debt and like I just watched like what it can do to you. [7:44] It takes your home. [7:45] It can take your cars. [7:47] It can really screw you up. [7:50] And yeah, I've been very cautious of that. [7:52] Do you ever think about going back to school or getting a degree? [7:56] Does that feel like a way forward for you in terms of, yeah, either financially or just what you want out of life? [8:02] A big part of me wants to believe that like I can do what I want to do and love and figure a way out and not do something that I don't want to do. [8:12] I've always wanted to be a fireman. [8:14] And I'm going to be taking the civil service exam pretty soon. [8:19] And yeah, like I just want to I want to follow my dreams and be happy. [8:24] I don't want to in like nothing I've ever wanted to do requires a college degree. [8:29] To conclude today's episode, I'll summarize John's advice. [8:33] First, job one is to feel psychologically comfortable facing your finances. [8:38] That might mean seeking out local or sliding scale financial counseling or psychological services. [8:43] Second, avoiding student loans and credit card debt can be the right choices, even if they might seem counterintuitive, in a world where many people recommend the opposite. [8:50] For Tyler, a college degree isn't the path or priority he wants for himself, and he wants to build his credit score while avoiding falling into debt traps. [8:57] And lastly, John confirmed for Tyler that comparing himself to his parents at his age will never be a one-to-one comparison, [9:04] and that past generations experienced a different set of economic circumstances from young people today. [9:09] Acknowledging that can help with some of the self-blame and psychological burden that might come with the feeling you might not one day own a home. [9:17] I'm Cora Lewis, and this was Money Happens. [9:19] This episode was produced by Marcella Sanchez. [9:22] For more, visit apnews.com. [9:24] The information provided in this series isn't intended as financial advice, and listeners shouldn't rely on it to make personal, economic, budgeting, or investment decisions. [9:32] You may benefit from obtaining independent, professional guidance before taking action on such matters.