Current Events > Ready to make an offer on a house that pushes our budget...

(+) Yeah! (+)

VHCOL area.

Mortage + property tax + home insurance + bills + home maintanence expenses will end up being 60% of my take-home pay (Not including wife's income)
Student loans will be 15% of my take-home pay.
My usual credit card (gas, my own food, etc and willy nilly spending) is about 5% of my take home pay

That leaves me 20% to save.
Wife works part-time so all of her paycheck will go towards groceries, kids expenses, and her own expenses.

Honestly, it'll be a bit tight but in about 18 months I get a 35% raise. At that point I calculate my savings to be about 30% of my take home, the home expenses should to 45% of my take home.

And if I refinance in the future, my "home expenses" drops to about 37% of my take-home with the mortgage alone being about 30% of take home.

So I'll be living tight for a few years but I'm only 33. I'm sacrificing a few years of investing (dollar-cost-averaging into index funds) for owning a dream home that we'll raise our family in and live in for the rest of our lives. We don't ever anticipating moving, like literally, its an amazing house.

Just typing this all our to organizing my thoughts. I've been doing this verbally with family and friends just to see if going over it again may make me think of some new factor that pushes me in either direction. I've been on the fence about whether I should pull the trigger.

18 months is a long time to wait for a raise. Many, many things can happen in the meantime that may make the company decide not to give you such a raise.

sauceje posted...

18 months is a long time to wait for a raise. Many, many things can happen in the meantime that may make the company decide not to give you such a raise.

While this is very true, I've already talked to many of the partners and its pretty much a lock that I'll become a partner at that time, and thats how my salary will increase. Plus I know my value to them and its well worth it for them. Objectively speaking they would be stupid to not offer partnership to me. I don't want to get into details so I'll keep things extra vague but I've been instrumental for them in starting up a huge project that is going to ultimately carry them to alot of success and no one is more knowledgeable about this project than me in this entire group. One of the senior guys said they may even make an exception and offer early partnership to me about 6 months before my contract is even up.

Enjoy being house poor!

Is this supposed to be a demonstration of the thought processes that lead people into debt because they feel the need to live beyond their means?

I mean I can still save 15-20% of my take-home as a worst case scenario. And if my wife does that travel assignment as a nurse which lasts 2 months, then we have our cushion for major unexpected expenses.

[LFAQs-redacted-quote]


18 months, and potentially only 12 months, away not 3 years away.

Your mortgage will stay the same while you and your wifes salary will generally increase. It will only get easier to pay for monthly expenses as long as you both stay employed.
Not sure why youre bringing up refinancing when there isnt an indication that interest rates will be lower than they are now anytime in the next 10 years.

Im not sure youve properly thought through childcare expenses. Daycare is HUGELY expensive. If your wife works part time, does she even make more than what daycare for 2 kids would cost? If shes going to work, requiring you to pay for daycare, then ideally shed be working full-time.

Obviously it would be better to have a cheaper home, but thats not really the world we live in.

radical_rhino posted...

Your mortgage will stay the same while you and your wifes salary will generally increase. It will only get easier to pay for monthly expenses as long as you both stay employed.

This. Since we've had our house (2018) our budget has become way more laid back. Just having a fixed rate mortgage is a massive advantage.

radical_rhino posted...

Your mortgage will stay the same while you and your wifes salary will generally increase. It will only get easier to pay for monthly expenses as long as you both stay employed.
Not sure why youre bringing up refinancing when there isnt an indication that interest rates will be lower than they are now anytime in the next 10 years.

Im not sure youve properly thought through childcare expenses. Daycare is HUGELY expensive. If your wife works part time, does she even make more than what daycare for 2 kids would cost? If shes going to work, requiring you to pay for daycare, then ideally shed be working full-time.

Obviously it would be better to have a cheaper home, but thats not really the world we live in.

Right now we utilize her parents alot for childcare. They live like 45 min away and they'll come over on days that she works. We have a babysitter who will fill in for 4-5 hour chunks at a time as well randomly and she's pretty cheap. She'll probably continue part time forever tbh but just pick up shifts as needed.

And I disagree on rates not decreasing. Historically these may not be high but times have changed, banks may have issues if rates go higher, we're seeing cracks in the system already. I'm not sure if it can sustain like this.

I wish I had stretched myself more on my first house. I could have afforded $350k but bought a place for $220k.

If you see the light at the end of the tunnel, be house poor.