Preparing a personal budget is a great first step toward control over your personal finances. It is especially useful to prepare a budget when you face a big decision. For most people, the biggest decision they will ever make is whether to purchase a house.

Before purchasing a house, you should first consider whether buying it is the best choice for you. Suppose you just graduated from college and are moving to a new community. Should you immediately buy a new home?

YES: If I purchase a home, I am making my housing cost more like a fixed cost, thus minimizing increases in my future housing costs. Also, I benefit from the appreciation in my homes value. Although recent turbulence in the economy has caused home prices in many communities to decline, I know that over the long term, home prices have increased across the country.

NO: I just moved to a new town, so I dont know the housing market. I am new to my job, so I dont know whether I will like it or my new community. Also, if my job does go well, it is likely that my income will increase in the next few years, so I will able to afford a better house if I wait. Therefore, the flexibility provided by renting is very valuable to me at this point in my life.

Instructions

Write a response indicating your position regarding this situation. Provide support for your view.