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My house budget

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  • #16
    Up 50% since we bought. I think we are maxed out though and actually expect income decreases (by choice) within the next five years


    • #17
      Originally posted by clozareal View Post

      Thats a good perspective. This is the conversation my wife and I are having. We don't want a big house (nor can we afford one where we are looking), but being a walk or short bike ride to the beach is huge for us as we spend most of our time there. This puts us in the position to look at 2-2.5k square foot homes in the 2M range. If total salary is 550k, this home will likely be roughly 4x our income. I've tried running the numbers and after all savings, debts, recurring expenses, groceries, etc. we should have about 3.5k left each month to do whatever we want with. I really don't know if this is considered house poor or not, but it seems like a fair amount for "entertainment".
      Wow, My wife and I make ~480k (projected to make 600k after few years), and we thought 1.4M is our max. But hey, if you're saving 20% for retirement I guess its doable. Maybe I'll raise my limit.... ha


      • #18
        Does your spouse work? I think you should actually be super-conservative in house budgeting before you have children because, despite being the greatest blessing in a way you cannot imagine, they are also a money suck in a way that you cannot imagine.

        If your spouse works, then once you have kids your largest expenses will be mortgage and childcare. Don't stretch too far on the former because you weren't thinking too much about the latter.


        • #19
          The risk is the higher cash burn rate. Life changes and things can go south. High spend rate and low liquidity are a recipe for a haircut. Retirement savings are typically of little help. Those are protected assets.


          • #20
            Good luck with your purchase, I personally would go on the the conservative side, because like they say past performance is not a predictor of future performance, and you will have only 360 mortgage payments to remind you that you made a mistake.