A few weeks ago I had the opportunity to speak with a group of young couples and I discovered something I’d suspected but never really knew to be true.

During that evening we discussed at length the importance of using guidelines for their necessary expenses. We’d been talking about how to eventually get to living debt-free. Over half the room hadn’t heard about housing expense being no more than twenty-five percent of your take home pay. They were simply unaware.

As explained in length on page eighty-eight of No Balance Due, you can choose to use the old twenty-five percent number or not. I’ve tried it both ways. Life simply goes easier when we haven’t spent over the twenty-five percent guideline.

It’s been around for centuries. And that’s the point. Even though television and sometimes even the lenders tell us we could spend more, it’s best not to.

After this talk, the nicest young man came up to speak with me. He announced that he knew his grand-parents owned their home free of debt during their retirement. He also stated he thought his parents would probably be able to pay for their home by the time they retired.

He emphatically professed that his generation wasn’t going to be able to do that. He said I wasn’t aware of the reality of how life is for young families in America economy.

After a few minutes of visiting with him we discovered a few things he hadn’t remembered too well. I asked him about what size home he’d grown up in. He said he thought it was about a 1200 square foot home with three small bedrooms and one and one-half bathrooms.

He also remembered that his mom cooked on an oven-stove combo and they had an older model refrigerator. Next he volunteered that their wasn’t much counter space to prepare meals and they used the stove top to do a lot of that.

I next asked him what size home he and his family were in. He proudly told me they were in a twenty-nine hundred square foot, four bedroom home with a thirty-five thousand dollar custom built kitchen that they are only using three or four times a week because they are dining out the rest of the time.

All of a sudden it hit him. I didn’t say much. I could see his expressions and his tone changed. He said they’d been so busy creating their dream life-style they were putting themselves into their own debt troubles. All of a sudden he realized it had taken his parents over a quarter century to have the nice home and appliances and vehicles they have now.

He said he’d simply forgotten. I told him there are always less expensive alternatives in any given school district for their children. He admitted they are so busy keeping up with everybody else, they simply weren’t thinking about their future.

It doesn’t matter what everybody else does. My mother used to tell me something your’s may have told you. Just because so and so jumps off a cliff, does that mean you have to do it too?

Housing expense should not exceed twenty-five percent of your take home pay. One weeks pay for housing. That’s the way my father-in-law told his children. The other weeks are for you to live. Check out the first part of Chapter eight of No Balance Due.

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