Financially Understanding Affordable Housing
- 2 min
What you'll learn.
- Affordable housing options
- How to prepare for homeownership while in affordable housing
- Making smart financial habits
There’s a clear critical correlation between financial literacy and affordable housing. Affordable housing sets you up for building financial health, but part of that is having the financial literacy to do so. Affordable housing by APAH’s definition is housing, rent or a mortgage plus utility payments totaling 30% or less of a household’s gross income.
To put that percentage into perspective, APAH also reports that in the D.C. Metropolitan Region, 58% of renters are cost burdened, which is not surprising when work hours required to afford any apartment size exceeds 70 hours per week with a minimum wage.
It comes as no surprise that many Americans struggle with debt and a mere understanding of monetary values. That’s where the two worlds of financial literacy and affordable housing collide.
Financial habits don’t come naturally, it is a learned behavior. Budgeting, spending, and investing are all either taught at a young age through chores, through the school system, or even through listening to their parents discuss the value of money. Whether you did or did not learn about money at a young age, you should understand the benefits of building strong financial health.
Affordable housing options You’ve seen it labeled as “low-income housing,” but let’s put a cheerful spin on that and for this article call it "affordable housing for financial wellness" There are different types of affordable housing, here’s how the usa.gov puts it:
Privately owned, subsidized housing in which landlords are paid by the government to offer reduced rents to low-income tenants. Search for an apartment and apply directly at the rental management office.
Public Housing provides affordable rental houses or apartments for low-income families, people who are elderly, and people with disabilities. To apply, contact a public housing agency in your state.
Housing Choice Voucher Program in which you find a rental property yourself and use the voucher to pay for all or part of the rent. To apply, contact a public housing agency in your state.
No matter what you choose to build those healthy financial habits in, the options are helpful, nonetheless.
What you can proactively do while in affordable housing
This is where a firm foundation of financial literacy plays a large role for you. Now that you’ve secured a place to live and continue to grow your new money habits, you can focus on how money works. No matter what situation might have put you here, it’s a great launching pad for your future.
Budgeting is the first step to success. Find time to sit down with a notebook or excel doc and take a solid look at your income, bills and different necessities you’ll need to survive. It’s hard to figure out what you can and cannot afford but that is called budgeting, and it’s so important for financial wellness.
Saving is likely not your favorite topic either, but it is an important one. We know it’s hard to rub two pennies together when you’re living paycheck to paycheck and budgeting plays a part in this. If you sit down and figure out your budget, then you can figure out where you can cut back on spending.
Financial habits in the making
Implementing these tips into your everyday life might seem challenging at first, but with time it will become easier. Earning money, budgeting that money and saving that money really pays off in the long run. This will set you up for success financially and even get you on your home buying feet!
We’re here to help if you have more questions about the homeownership process, what it entails and the financial habits you need to get there. Call us today!