Morfiend
You're right, the exception to the cash-only rule is the house mortgage. You can minimize the impact on your life by going with a 15 yr mortgage, and again accepting the hard reality that if you can't make the payment for a 15 yr mortgage, then maybe you need to wait a bit longer to build up the down payment, or pick a smaller house.
That said, I recently had to both buy a new house and refinance another house I own and am having trouble selling. To make that work, I did the re-fi at 15 years and the new purchase at 30 years. I'm putting whatever I can budget against the 30 yr mortgage to get it closer to that 15 yr term, but I also know that I broke a basic rule of thumb. By "the rules", I would have been better off renting a smaller house until I settled the old house by selling it or getting it stabilized as a rental, and only then buying the new house. But I landed in Las Vegas at the very bottom of a huge housing market crash, and gambling mentality is so freaking infectious that I couldn't resist buying at the low point. So I'm stuck with 2 mortgages and my renters just moved out. So now I'm double glad I never got the vette, haha.
Well, there is one other exception to cash only... If you can't keep food on the table or the power/water on in the house, you do what you gotta do including feeding the kids on credit and just not paying off the CC until you figure something out or increase income or sell everything non-essential, move to a cheaper place, etc etc. But someone feeding their kids on credit probably shouldn't own any car but a $500 beater, shouldn't own a TV or smartphone, shouldn't have cable tv service, etc. Lots of "essentials" really aren't, and those should be ditched long before it gets to that point.