After all of the recent drama with our landlord, my husband and I have said enough and applied for a mortgage. We've been preapproved but we're still kind of dragging our feet because I'm just nervous that even though we have been completely miserable here for the past four years, that we're still being too hasty.
Income wise, I guess we're doing OK. We make a little over $92k a year but it hasn't always been that way and we ended up filing Ch 7 last year. We've built up some savings, but not as much as I'd hoped. Our debt consists of my student loans ($35 per month min.) and a loan we took out from my in law's a couple of years ago with a $130 a month payment that will be paid off in Feb 07.
Here's the budget I think we'd be looking at if we bought a house:
Monthly take home: $5475
Mortgage + taxes & insurance: $1800 This is the worst case scenario- please keep in mind that just property taxes accounts for $450 per month. We're thinking of crossing over to Indiana where the houses are MUCH cheaper and the property taxes aren't even half of what they are here.
Daycare: $960 We are going to be dropping this down this fall to around $500-$600 a month but until that happens, I'm leaving it alone
In law payment: $130
Groceries: $400
Gasoline + tolls- $300 Again, worst case scenario.
Phone (incl dsl) $65
Cable- $90
Electric- $150 (our bills are like $45 a month now...this is a guesstimate)
Natural gas/heat- $200 on average?
Student loans: $35
Netflix: $18
Water/garbage/sewer: $80
Car insurance: $41
Pocket money: $80
Cell phones: $75
Christmas/Birthdays: $120 (This should probably be less)
Clothing: $75
Oil changes: $15
License plate renewal: $12.50
Medical: $50
Car repairs: $50
Haircuts: $20
Entertainment/Fun: $100
Home maintenance/repairs: $100
Back to school registration/clothes/supplies: $70
Savings: $200
Which only leaves us $238.50 per month...which makes me really nervous. I've tried to account for everything and it all seems to be covered but I'm just worried. We would still have money in savings to cover emegencies as they came across and would still be contributing a small amount each month towards it. I also receive a bonus of around $1.5-$2k each year but I never include that in the budget.
Things will be GREAT once we can drop the daycare and my FIL is paid off, which both should happen in about a year. I know that it makes more sense to wait to buy until then but the situation with our LL has gotten worse and I just don't feel like dealing with his ineptitude anymore. Not to mention we're all driving each other nuts being crammed together here.
What do you think? Is this unrealistic?
Full Version: Is this budget cutting it too close?
May I approach this as if you and I were friends and you were bouncing this off me? When a friend approaches me with such situations, I try to first understand their motivations and how those motivations have shaped their question.
I would ask you if this move, at this time, is really about a well-thought-out plan to buy a house, or is it about getting away from a LL that is making you miserable? I just hear that between the lines (mixed metaphor intended), that you just really want out now, even though you admit that you would be in a better spot after the payment for day care and to the in-laws is ceased.
I hope that doesn't offend, because I know that on the surface, that's not the question you're asking. As for your budget, your estimate of $1,800 for payment, taxes, and insurance, added to your estimate of $100 for monthly upkeep, makes the cost of the home 35% of your take-home pay. That spreads your budget very thin. You're committing over one third of your pay to your housing costs. And I believe your estimate of $100/mo for upkeep is too low. My experience as a homeowner is that your commitment will be more like $3,000/yr or $250/mo. When you set that budget bar too low, you will tend to put off needed repairs, which just makes things more expensive down the road. I welcome the opinion of other homeowners on that point. At $250/mo, you're now looking at 37% of your take-home, and that's just really big. There will be little wiggle room in your budget.
I would ask you if this move, at this time, is really about a well-thought-out plan to buy a house, or is it about getting away from a LL that is making you miserable? I just hear that between the lines (mixed metaphor intended), that you just really want out now, even though you admit that you would be in a better spot after the payment for day care and to the in-laws is ceased.
I hope that doesn't offend, because I know that on the surface, that's not the question you're asking. As for your budget, your estimate of $1,800 for payment, taxes, and insurance, added to your estimate of $100 for monthly upkeep, makes the cost of the home 35% of your take-home pay. That spreads your budget very thin. You're committing over one third of your pay to your housing costs. And I believe your estimate of $100/mo for upkeep is too low. My experience as a homeowner is that your commitment will be more like $3,000/yr or $250/mo. When you set that budget bar too low, you will tend to put off needed repairs, which just makes things more expensive down the road. I welcome the opinion of other homeowners on that point. At $250/mo, you're now looking at 37% of your take-home, and that's just really big. There will be little wiggle room in your budget.
My question is - what are you currently paying for rent? I reserve my opinion until I know that answer. 
QUOTE(TxQuiltGirl @ Apr 4 2006, 07:11 PM) 
My question is - what are you currently paying for rent? I reserve my opinion until I know that answer.
Excellent point.
QUOTE(TxQuiltGirl @ Apr 4 2006, 08:11 PM)
My question is - what are you currently paying for rent? I reserve my opinion until I know that answer.
$1100
QUOTE(smontoya5 @ Apr 4 2006, 07:42 PM)
QUOTE(TxQuiltGirl @ Apr 4 2006, 08:11 PM)
My question is - what are you currently paying for rent? I reserve my opinion until I know that answer.
$1100
Well then ... I would suggest that you stick the $700 over what you're paying in the bank for a couple of months while you're looking around and see if you can live with that ... actually, put the $800 (the extra housing plus the repair money) in there and see how that affects you.
I can tell you though ... buying a house in desperation can only lead down one road - disaster. I did that back when TS Allison forced me out of my home in June 2001. I qualified for additional FHA help due to the displacement, and thought, great! A house! But back then, in my price range I could only get houses that were old. I bought a house built in the 1950s - looked GREAT but behind those new drywalls was aluminum wiring and other 1950s era problems. I ended up losing the house because I wasn't ready for the jump in property taxes - the title company had misfigured them to the tune of $300 month - and I was struggling back then to pay $1150/month for a $89k house!
Now I'm paying $1200/month in rent, and I can easily afford up to $300 more a month. But I'm waiting - I have a good line on a promotion later this year that would add at least $400/month to the coffers. That would more than cover the increase in housing.
Just don't cut your nose off to spite your face.
Some great advice here...
Another thing to consider... where is your retirement savings & savings for the kids college here? How are you going to do car replacement? Furniture replacement?
You are going to either be driving complete junk in few years, or you are going to be having to add car payments... and there ain't space for a car payment to be added to this budget... and I don't believe in the car fairy.
Another thing to consider... where is your retirement savings & savings for the kids college here? How are you going to do car replacement? Furniture replacement?
You are going to either be driving complete junk in few years, or you are going to be having to add car payments... and there ain't space for a car payment to be added to this budget... and I don't believe in the car fairy.
QUOTE(Uncle Buck @ Apr 4 2006, 08:04 PM)
May I approach this as if you and I were friends and you were bouncing this off me? When a friend approaches me with such situations, I try to first understand their motivations and how those motivations have shaped their question.
I would ask you if this move, at this time, is really about a well-thought-out plan to buy a house, or is it about getting away from a LL that is making you miserable? I just hear that between the lines (mixed metaphor intended), that you just really want out now, even though you admit that you would be in a better spot after the payment for day care and to the in-laws is ceased.
I hope that doesn't offend, because I know that on the surface, that's not the question you're asking. As for your budget, your estimate of $1,800 for payment, taxes, and insurance, added to your estimate of $100 for monthly upkeep, makes the cost of the home 35% of your take-home pay. That spreads your budget very thin. You're committing over one third of your pay to your housing costs. And I believe your estimate of $100/mo for upkeep is too low. My experience as a homeowner is that your commitment will be more like $3,000/yr or $250/mo. When you set that budget bar too low, you will tend to put off needed repairs, which just makes things more expensive down the road. I welcome the opinion of other homeowners on that point. At $250/mo, you're now looking at 37% of your take-home, and that's just really big. There will be little wiggle room in your budget.
I would ask you if this move, at this time, is really about a well-thought-out plan to buy a house, or is it about getting away from a LL that is making you miserable? I just hear that between the lines (mixed metaphor intended), that you just really want out now, even though you admit that you would be in a better spot after the payment for day care and to the in-laws is ceased.
I hope that doesn't offend, because I know that on the surface, that's not the question you're asking. As for your budget, your estimate of $1,800 for payment, taxes, and insurance, added to your estimate of $100 for monthly upkeep, makes the cost of the home 35% of your take-home pay. That spreads your budget very thin. You're committing over one third of your pay to your housing costs. And I believe your estimate of $100/mo for upkeep is too low. My experience as a homeowner is that your commitment will be more like $3,000/yr or $250/mo. When you set that budget bar too low, you will tend to put off needed repairs, which just makes things more expensive down the road. I welcome the opinion of other homeowners on that point. At $250/mo, you're now looking at 37% of your take-home, and that's just really big. There will be little wiggle room in your budget.
Well, our landlord bought this building a few years ago and is just completely over his head. It's an older building, things break and he just never bothers to do anything about it until he's forced to. Two weeks ago, we didn't have water for over 30 hours because the old hot water heater, which had been leaking water all over the basement for two weeks prior, finally went out and he tried to install the new one himself. He eventually called in a plumber when we threatened to report him to the county for having the water off for so long.
The week before that, we didn't have heat for a couple of days because the furnace broke down and once again, he didn't have time to come over here himself right away and he didn't want to pay a professional to do it.
I tore down the wallpaper in the main bathroom because it was falling off the walls and just looked horrible (it had to of been 30+ years old), with the intention of just painting it myself. Behind the wallpaper? Huge patches of black mold and the drywall is falling apart in places because there is no ventilation in that room. I've called him so many times asking him to come out and take a look at it and to just LET ME KNOW what he wants done to fix it. I'm willing to do it myself but you can never get him over here unless it's the 1st, and then he's in and out to pick up everyone's rent check. I'm not going to invest a lot of money into this place but I'm willing to buy spackle and paint and such.
We do not have CA, just one old wall unit that died towards the end of the summer last year. That was 7 months ago...it's still broken. Granted, we're not using it over the winter but COME ON...do we have to wait until it's hot and humid out?
Appliances are included in the apartment, with the exception of laundry which is pay-per use. I spend easily $80 per month doing my laundry here. There are no laundrymats anywhere in this town. Last month, the 30 year old fridge finally died. It took us calling his house 4-5 times a day for a week to finally get it replaced...with a tiny used one that we can't even fit all of our groceries in.
He never shovels, salts the walkways or rakes. I usually end up doing all of this in the winter so that myself, my kids and the older lady who lives across the hall doesn't kill ourselves trying to get to our cars. Last summer, he mowed the lawn a total of TWICE. The city had to come out and mow a couple of times and charged him a bundle to do it. We've offered to do these things if he'll knock something off the rent but he "can't afford it".
If he actually has to repair something, he raises our rent. When we moved in here, our rent was $800 per month.
Now, the neighborhood. Some of the landlords in the buildings surrounding us have started leasing to people who are just trash. We have kids running around unsupervised destroying things, getting into fights with my kids, painting graffiti all over the park equipment and out in the streets until all hours of the night. Their parents have people going in and out of their apartments until 2-3 o'clock in the morning...standing in the front yards partying and being so loud I've had to call the police a few times so my kids could go to sleep. I can't tell you how many times I've found broken beer bottles in the front yard and have had to clean it up. This place is turning into a ghetto and I refuse to go down with it. Last summer, one of these kids threatned to stab me when I caught him trying to throw my daughter's shoes on top of the roof to his building. His parents did nothing. I called the police again and a report was filed but that was about it. Oh! About a year ago, my daughter was shot by one of these ingrates with a BB gun. Again, no consequences.
I've put up with this all the while with 5 of us crammed into a tiny apartment. There's no point of moving to another rental because we'd pay at a minimum- $1300 + heat for something with 3B's from a landlord who actually takes care of his property.
At this point, I don't know what the right answer is. I cannot put up with this place any longer but I'm still scared to jump into a mortgage payment. If we moved to IN, we could find a place for $1300 a month combined but then our commutes are going to increase...and we're both already driving 60+ miles a day as it is.
Cable - $90 - What about switching to a cheaper plan? $50/month should be enough for extended cable.
Oil changes - $15 - This shouldn't be every month unless you're putting 3000 miles on the vehicle every month. I would say $15 every three months at the most.
License plate renewal - $12.50 - Is it $150/yr to renew?
Phone - $65 - Figure $35 for DSL, and $15 for local service... use your cellphones for long distance, save $15 there, too.
Yeh, little things, I know, but still..
Don't forget being able to write off your mortgage interest on your taxes, that'll free up another $100-$150/month (I think).
Oil changes - $15 - This shouldn't be every month unless you're putting 3000 miles on the vehicle every month. I would say $15 every three months at the most.
License plate renewal - $12.50 - Is it $150/yr to renew?
Phone - $65 - Figure $35 for DSL, and $15 for local service... use your cellphones for long distance, save $15 there, too.
Yeh, little things, I know, but still..
Don't forget being able to write off your mortgage interest on your taxes, that'll free up another $100-$150/month (I think).
QUOTE(sabbath999 @ Apr 4 2006, 09:08 PM)
Some great advice here...
Another thing to consider... where is your retirement savings & savings for the kids college here? How are you going to do car replacement? Furniture replacement?
You are going to either be driving complete junk in few years, or you are going to be having to add car payments... and there ain't space for a car payment to be added to this budget... and I don't believe in the car fairy.
Another thing to consider... where is your retirement savings & savings for the kids college here? How are you going to do car replacement? Furniture replacement?
You are going to either be driving complete junk in few years, or you are going to be having to add car payments... and there ain't space for a car payment to be added to this budget... and I don't believe in the car fairy.
Retirement savings is just what's already taken out of our paychecks for our 401k. We're putting in around $500 a month combined. I know it's not enough but it's something for now.
What kills our budget is daycare, I know this. My Dad watches the kids while we're at work and although he's here for some pretty screwy hours, we're paying him wayyyyy too much. If we didn't have that, I think we'd be fine. Now that I'm not working nights and can be home within 30 minutes of the kids getting home from school, I think after the summer we're just going to have to tell my Dad that we just can't afford to continue to have him.
QUOTE(Dwayne @ Apr 4 2006, 09:35 PM)
Cable - $90 - What about switching to a cheaper plan? $50/month should be enough for extended cable.
Oil changes - $15 - This shouldn't be every month unless you're putting 3000 miles on the vehicle every month. I would say $15 every three months at the most.
License plate renewal - $12.50 - Is it $150/yr to renew?
Phone - $65 - Figure $35 for DSL, and $15 for local service... use your cellphones for long distance, save $15 there, too.
Yeh, little things, I know, but still..
Don't forget being able to write off your mortgage interest on your taxes, that'll free up another $100-$150/month (I think).
Oil changes - $15 - This shouldn't be every month unless you're putting 3000 miles on the vehicle every month. I would say $15 every three months at the most.
License plate renewal - $12.50 - Is it $150/yr to renew?
Phone - $65 - Figure $35 for DSL, and $15 for local service... use your cellphones for long distance, save $15 there, too.
Yeh, little things, I know, but still..
Don't forget being able to write off your mortgage interest on your taxes, that'll free up another $100-$150/month (I think).
Yes, we do need to drop down to a cheaper plan.
I've worked out a few of those "income tax calculators" trying to figure out where we'd be at if we could itemize the interest and the property taxes. According to that, we should be getting back a refund of $4,000 per year but I really need to talk to an accountant to see how accurate that is.
I think what we're going to do is wait until the end of summer, right before school starts, to buy. We'll have more money in the bank...if I accelerate my in law loan payments- that will be paid off.
But, most importantly, we'll have another $960 a month freed up in the budget because at that point, my kids will be 13, 10 and 8 and should be able to get themselves off to school in the morning without burning the house down.
But, most importantly, we'll have another $960 a month freed up in the budget because at that point, my kids will be 13, 10 and 8 and should be able to get themselves off to school in the morning without burning the house down.
QUOTE(smontoya5 @ Apr 4 2006, 10:17 PM)
...if I accelerate my in law loan payments- that will be paid off.
I just hate the sound of "in-law loan payments."
Would you eat up the savings by moving to Ind in gas over the extended commute? How much further are you talking?
Sales tax lower there? Higher? Schools better? Worse?
What's the annual rate of increase in the prop. taxes there, Vs. where you are now?
I see why you need to get out of that apartment. What a headache.
The reality for me- regarding homeownership- is that maintainance hasn't been all that bad. A lot of the stuff people call "maintainance" is really optional stuff- deck is too small, carpet is ugly (but functional) etc.
The only major failure I've had in 10+ years in this house has been a water heater. Everything else has been "optional".
Unless you buy a house with major structural problems, I don't see it as being a huge ongoing expense. (Pay for a thorough inspection)
Sometimes a realtor can get you historical heating/electric costs for a property you are interested in.
Check the water rates too.
Here where I am, I'm paying $150 (!!) per month for water/sewer.
2 miles down the road in the next town, they pay a flat fee of $25/month.
Funny part is, it's all from the same water system.
Sales tax lower there? Higher? Schools better? Worse?
What's the annual rate of increase in the prop. taxes there, Vs. where you are now?
I see why you need to get out of that apartment. What a headache.
The reality for me- regarding homeownership- is that maintainance hasn't been all that bad. A lot of the stuff people call "maintainance" is really optional stuff- deck is too small, carpet is ugly (but functional) etc.
The only major failure I've had in 10+ years in this house has been a water heater. Everything else has been "optional".
Unless you buy a house with major structural problems, I don't see it as being a huge ongoing expense. (Pay for a thorough inspection)
Sometimes a realtor can get you historical heating/electric costs for a property you are interested in.
Check the water rates too.
Here where I am, I'm paying $150 (!!) per month for water/sewer.
2 miles down the road in the next town, they pay a flat fee of $25/month.
Funny part is, it's all from the same water system.
QUOTE(radi8 @ Apr 5 2006, 02:16 AM)
Would you eat up the savings by moving to Ind in gas over the extended commute? How much further are you talking?
Sales tax lower there? Higher? Schools better? Worse?
What's the annual rate of increase in the prop. taxes there, Vs. where you are now?
Well, my husband would be looking at a 100 mile commute each day rather than 60 whereas my commute would be about 10 miles more. We'd probably still come out ahead.
Sales tax is MUCH lower there...the schools can be as good in certain areas.
As far as how much the tax increase is I'm not sure. I know that my parent's house is up for a reassessment, whih I assume is the case for the majority of the county.
I see why you need to get out of that apartment. What a headache.
The reality for me- regarding homeownership- is that maintainance hasn't been all that bad. A lot of the stuff people call "maintainance" is really optional stuff- deck is too small, carpet is ugly (but functional) etc.
The only major failure I've had in 10+ years in this house has been a water heater. Everything else has been "optional".
Unless you buy a house with major structural problems, I don't see it as being a huge ongoing expense. (Pay for a thorough inspection)
Sometimes a realtor can get you historical heating/electric costs for a property you are interested in.
Check the water rates too.
Here where I am, I'm paying $150 (!!) per month for water/sewer.
2 miles down the road in the next town, they pay a flat fee of $25/month.
Funny part is, it's all from the same water system.
Sales tax lower there? Higher? Schools better? Worse?
What's the annual rate of increase in the prop. taxes there, Vs. where you are now?
Well, my husband would be looking at a 100 mile commute each day rather than 60 whereas my commute would be about 10 miles more. We'd probably still come out ahead.
Sales tax is MUCH lower there...the schools can be as good in certain areas.
As far as how much the tax increase is I'm not sure. I know that my parent's house is up for a reassessment, whih I assume is the case for the majority of the county.
I see why you need to get out of that apartment. What a headache.
The reality for me- regarding homeownership- is that maintainance hasn't been all that bad. A lot of the stuff people call "maintainance" is really optional stuff- deck is too small, carpet is ugly (but functional) etc.
The only major failure I've had in 10+ years in this house has been a water heater. Everything else has been "optional".
Unless you buy a house with major structural problems, I don't see it as being a huge ongoing expense. (Pay for a thorough inspection)
Sometimes a realtor can get you historical heating/electric costs for a property you are interested in.
Check the water rates too.
Here where I am, I'm paying $150 (!!) per month for water/sewer.
2 miles down the road in the next town, they pay a flat fee of $25/month.
Funny part is, it's all from the same water system.
Thanks Radi8!
I'd have to agree with the maintenance thing...I dont recall who said it, but 250 a month???? Sheesh what kind of maint. are we talking about?! I think we should elaborate on what exactly some folks consider maintenance.
When it comes to heating, many companies offer a budget plan that will average out your usage and divide by 12, which can help through the winter months. Here in PA, the worst for us are Nov-Mar where, at times, my bills were closer to 300/month. And my house is NOT big (3 up, 3 down starter house). Be careful not to underestimate that cost, esp with the gas prices the way they are...
Cable-$90 a month and you still need Netflix??!?!?!?!?! If you guys are watching that much TV, what the heck do you need $100/month for entertainment for??? LOL We have Directv, and dont pay that much for the premium package that gives us basically every station available (aside from the naughty ones). If you're paying for premium stations (and at that price I assume you are), then you should give up the Netflix...or do vice versa and keep the Netflix but go back to a more basic cable package. JMO...
I have to say regarding daycare...if the worst your Dad is doing is hanging out with pre-teens and an 8 year old...he's not earning almost a grand a month. I mean come ON...he IS your dad too, and their grandfather...I understand making sure you pay him back for any food your kids eat at his place (I'm assuming that they go to his place) but $960 a friggin MONTH!?!?! WOW I know its NOMB but if my Dad charged me that much to hang out with his own grandkids I'd tell him to kiss my butt... Daycare for completely helpless infants and small children runs about the same around here. And they're LICENSED...
When it comes to heating, many companies offer a budget plan that will average out your usage and divide by 12, which can help through the winter months. Here in PA, the worst for us are Nov-Mar where, at times, my bills were closer to 300/month. And my house is NOT big (3 up, 3 down starter house). Be careful not to underestimate that cost, esp with the gas prices the way they are...
Cable-$90 a month and you still need Netflix??!?!?!?!?! If you guys are watching that much TV, what the heck do you need $100/month for entertainment for??? LOL We have Directv, and dont pay that much for the premium package that gives us basically every station available (aside from the naughty ones). If you're paying for premium stations (and at that price I assume you are), then you should give up the Netflix...or do vice versa and keep the Netflix but go back to a more basic cable package. JMO...
I have to say regarding daycare...if the worst your Dad is doing is hanging out with pre-teens and an 8 year old...he's not earning almost a grand a month. I mean come ON...he IS your dad too, and their grandfather...I understand making sure you pay him back for any food your kids eat at his place (I'm assuming that they go to his place) but $960 a friggin MONTH!?!?! WOW I know its NOMB but if my Dad charged me that much to hang out with his own grandkids I'd tell him to kiss my butt... Daycare for completely helpless infants and small children runs about the same around here. And they're LICENSED...
OH mY GOODNESS, Your landlord is a slumlord. You need to get your family out of there. Your rent is so high. I guess your area must be like that. I live in the midwest and we rent a huge 4 bedroom house on a culdesac with a big fenced in yard in a great neighborhood - 835.00 a month. oh..and an attached two stall garage. I am a property manager and I would be fired if my tenants were treated like you. He needs to be reported. Keep your chin up, listen to the great advice everyone is giving you. There are some wise ones on this board. It may not be time to buy, but get yourself into better housing for the sake of your kids, they may be older but the home environment is even more important at their age then a toddlers. And the influences of the other kids in the neighborhood. I would be selling everything to get out of there. Your treasure is your kids.
QUOTE(PAInsuranceGal @ Apr 5 2006, 11:27 AM)
I'd have to agree with the maintenance thing...I dont recall who said it, but 250 a month???? Sheesh what kind of maint. are we talking about?! I think we should elaborate on what exactly some folks consider maintenance.
When it comes to heating, many companies offer a budget plan that will average out your usage and divide by 12, which can help through the winter months. Here in PA, the worst for us are Nov-Mar where, at times, my bills were closer to 300/month. And my house is NOT big (3 up, 3 down starter house). Be careful not to underestimate that cost, esp with the gas prices the way they are...
Cable-$90 a month and you still need Netflix??!?!?!?!?! If you guys are watching that much TV, what the heck do you need $100/month for entertainment for??? LOL We have Directv, and dont pay that much for the premium package that gives us basically every station available (aside from the naughty ones). If you're paying for premium stations (and at that price I assume you are), then you should give up the Netflix...or do vice versa and keep the Netflix but go back to a more basic cable package. JMO...
I have to say regarding daycare...if the worst your Dad is doing is hanging out with pre-teens and an 8 year old...he's not earning almost a grand a month. I mean come ON...he IS your dad too, and their grandfather...I understand making sure you pay him back for any food your kids eat at his place (I'm assuming that they go to his place) but $960 a friggin MONTH!?!?! WOW I know its NOMB but if my Dad charged me that much to hang out with his own grandkids I'd tell him to kiss my butt... Daycare for completely helpless infants and small children runs about the same around here. And they're LICENSED...
When it comes to heating, many companies offer a budget plan that will average out your usage and divide by 12, which can help through the winter months. Here in PA, the worst for us are Nov-Mar where, at times, my bills were closer to 300/month. And my house is NOT big (3 up, 3 down starter house). Be careful not to underestimate that cost, esp with the gas prices the way they are...
Cable-$90 a month and you still need Netflix??!?!?!?!?! If you guys are watching that much TV, what the heck do you need $100/month for entertainment for??? LOL We have Directv, and dont pay that much for the premium package that gives us basically every station available (aside from the naughty ones). If you're paying for premium stations (and at that price I assume you are), then you should give up the Netflix...or do vice versa and keep the Netflix but go back to a more basic cable package. JMO...
I have to say regarding daycare...if the worst your Dad is doing is hanging out with pre-teens and an 8 year old...he's not earning almost a grand a month. I mean come ON...he IS your dad too, and their grandfather...I understand making sure you pay him back for any food your kids eat at his place (I'm assuming that they go to his place) but $960 a friggin MONTH!?!?! WOW I know its NOMB but if my Dad charged me that much to hang out with his own grandkids I'd tell him to kiss my butt... Daycare for completely helpless infants and small children runs about the same around here. And they're LICENSED...
Yeah, we do need to drop our cable package down. We have the platinum digital w/ DVR and I watch maybe 2 or 3 hours of TV a week? I don't know what I was thinking. As far as the entertainment, we never spend that much but I tried to put some "fat" into the budget just in case.
The situation with my father is a very complicated one. When he started watching the kids for us a couple of years ago, my husband and I were both working 2nd shift and I refused to have a stranger watching my kids at night. So, he stepped in when really...who else was I going to find to babysit from 2pm until 4am?
However, when my husband went to days we kept paying him the same amount because we figured well, he's totally reliable and we trust him with the kids so we'll just suck it up until the kids are older. Plus, we had gone with private providers before (we always have them watch the kids out of our apartment) and they called off or couldn't be flexible with their schedules- which is a must for us. I really can't call off from work because I have daycare issues and we're both having to constantly work OT on little to no notice.
Well, now I'm gone at work from about 3:30 AM until about 3 PM but my husband is here until 6:30 AM or so. We've kept my Dad on even though we don't really need him right now because we know we'll need him in the summer and I can't expect him to just sit at home for few months until I need him again. But, now I'm at the point where I do feel like I'm paying way too much for something that I'm not even sure we need anymore. I'm just stressed because this is going to have an impact on them financially but I can't sacrifice my own well being for theirs.
My family dynamic is just screwed up...I could go on and on but I won't any more than I already have. His whole logic on why he won't watch them for less is that he needs to make an income- if not through me than he's going to have to get another job. Well, I believe that day is coming very soon.
QUOTE(sabbath999 @ Apr 4 2006, 08:08 PM)
Some great advice here...
Another thing to consider... where is your retirement savings & savings for the kids college here?
Another thing to consider... where is your retirement savings & savings for the kids college here?
IMO, retirement is a lot more important than college savings. Kids can get scholarships, loans, grants,etc. In many states there are pretty good public universities that most residents can attend for free or peanuts. They can get summer jobs all throughout high school and in college,etc. However, no one is giving out grants and scholarships to help pay for their parents retirements.
As far as other things, I would rather invest money in houses than cars and renting. but that's jusst me.
Other than that, I don't think the budget is cutting it too close. It is pretty detailed and thorough and there is a couple hundred leftover after even accounting for savings. Most budgets, IMO pretty much zero out because they account for everything including savings, cushion,etc. Not to mention loans that will be paid off soon, reduction of daycare,etc. It is very workable.
The most glaring thing IMO, is the low amount of savings and investment relative to income.
I also dont think 35% of net income is very high for housing. I always thought that around 30% of gross was pretty common, and this figure including taxes is less than 25% of gross. A lot of these things are all relative. Frankly I could afford to spend 75-80% of my income on housing or more because it's really my only major expense ( no daycare, no tuitions, no outstanding loan debts, I dont finance cars,etc.) besides retirement investing. Some people may only afford 20%( like people that live in trailers but drive $30k SUVs).
QUOTE(gregcjackson @ Apr 5 2006, 06:33 PM)
. Some people may only afford 20%( like people that live in trailers but drive $30k SUVs).
Or people raising several children with the attendant medical, grocery, clothing and utility bills....
QUOTE
IMO, retirement is a lot more important than college savings. Kids can get scholarships, loans, grants,etc. In many states there are pretty good public universities that most residents can attend for free or peanuts. They can get summer jobs all throughout high school and in college,etc. However, no one is giving out grants and scholarships to help pay for their parents retirements.
I agree 100% with that. I've had no problems financing my son's college with grants, scholarships and a small student loan. Retirement OTOH- you're on your own with that one.
If you only watch 2-3 hrs of TV per week drop cable ENTIRELY and get an antenna. Most markets can receive all 6 major networks and a few independent channels.
QUOTE(smontoya5 @ Apr 5 2006, 04:36 PM)
QUOTE(PAInsuranceGal @ Apr 5 2006, 11:27 AM)
I'd have to agree with the maintenance thing...I dont recall who said it, but 250 a month???? Sheesh what kind of maint. are we talking about?! I think we should elaborate on what exactly some folks consider maintenance.
When it comes to heating, many companies offer a budget plan that will average out your usage and divide by 12, which can help through the winter months. Here in PA, the worst for us are Nov-Mar where, at times, my bills were closer to 300/month. And my house is NOT big (3 up, 3 down starter house). Be careful not to underestimate that cost, esp with the gas prices the way they are...
Cable-$90 a month and you still need Netflix??!?!?!?!?! If you guys are watching that much TV, what the heck do you need $100/month for entertainment for??? LOL We have Directv, and dont pay that much for the premium package that gives us basically every station available (aside from the naughty ones). If you're paying for premium stations (and at that price I assume you are), then you should give up the Netflix...or do vice versa and keep the Netflix but go back to a more basic cable package. JMO...
I have to say regarding daycare...if the worst your Dad is doing is hanging out with pre-teens and an 8 year old...he's not earning almost a grand a month. I mean come ON...he IS your dad too, and their grandfather...I understand making sure you pay him back for any food your kids eat at his place (I'm assuming that they go to his place) but $960 a friggin MONTH!?!?! WOW I know its NOMB but if my Dad charged me that much to hang out with his own grandkids I'd tell him to kiss my butt... Daycare for completely helpless infants and small children runs about the same around here. And they're LICENSED...
Yeah, we do need to drop our cable package down. We have the platinum digital w/ DVR and I watch maybe 2 or 3 hours of TV a week? I don't know what I was thinking. As far as the entertainment, we never spend that much but I tried to put some "fat" into the budget just in case.
The situation with my father is a very complicated one. When he started watching the kids for us a couple of years ago, my husband and I were both working 2nd shift and I refused to have a stranger watching my kids at night. So, he stepped in when really...who else was I going to find to babysit from 2pm until 4am?
However, when my husband went to days we kept paying him the same amount because we figured well, he's totally reliable and we trust him with the kids so we'll just suck it up until the kids are older. Plus, we had gone with private providers before (we always have them watch the kids out of our apartment) and they called off or couldn't be flexible with their schedules- which is a must for us. I really can't call off from work because I have daycare issues and we're both having to constantly work OT on little to no notice.
Well, now I'm gone at work from about 3:30 AM until about 3 PM but my husband is here until 6:30 AM or so. We've kept my Dad on even though we don't really need him right now because we know we'll need him in the summer and I can't expect him to just sit at home for few months until I need him again. But, now I'm at the point where I do feel like I'm paying way too much for something that I'm not even sure we need anymore. I'm just stressed because this is going to have an impact on them financially but I can't sacrifice my own well being for theirs.
My family dynamic is just screwed up...I could go on and on but I won't any more than I already have. His whole logic on why he won't watch them for less is that he needs to make an income- if not through me than he's going to have to get another job. Well, I believe that day is coming very soon.
This is just the way that I see it so take it with a grain... By spending such a huge chunk of money on unnecessary daycare (you said yourself, you dont REALLY need it anymore), you are putting yourself into the same financial position that they apparently ARE in if they need such large monthly supplemental income. I'm not sure of your parents ages but I'm assuming since he has the time to watch the kids, he's retired. By funding THEIR retirement, you are setting yourself up to not have any funding for your own...you don't want to end up in the same position that they are in do you?
I think its time to have a sit down with dear Dad and let him know that as much as you have appreciated his help in the past, you can't afford it into the future. I truly hope it works out, but honestly, he can't expect that you will continue this until they are all in college lol
i bet you don't work in an area where you can take the train into work because that's just Murphy's Law. if you moved to Indiana and worked near the trains (and lived somewhat close) you could take the South Shore. yeah you lose some time but it's cheaper and less maddening than all that horrific construction on the highways!
QUOTE(invisible assistant @ Apr 6 2006, 07:44 PM)
i bet you don't work in an area where you can take the train into work because that's just Murphy's Law. if you moved to Indiana and worked near the trains (and lived somewhat close) you could take the South Shore. yeah you lose some time but it's cheaper and less maddening than all that horrific construction on the highways!
I work way down south in Kankakee County and hubby works way up north by O'Hare. I believe the Metra runs into the town where he works but he'd still have to ride into downtown and then take a transfer. I should probably check it out, though, because you're not kidding about the construction. He'd have to take 294 N which is a complete disaster right now.
Have you looked into moving to Indiana? I don't know about northern indiana, but I don't even know if you could find too many homes around here that would take $1800/mo for a mortgage payment, and I live in west central Indiana.
I bought my house about 8 months ago. 3br, 2.5 bath, finished basement, 1 acre, in the country. Everything is totally remodeled inside and out, and it only cost me $98000, and the prop. taxes are only $700/year. This puts my payments at about $715. If you were to find something like that you would have plenty of money in your budget, and you could always move a few years later if you decided you weren't satisfied/wanted something better.
I bought my house about 8 months ago. 3br, 2.5 bath, finished basement, 1 acre, in the country. Everything is totally remodeled inside and out, and it only cost me $98000, and the prop. taxes are only $700/year. This puts my payments at about $715. If you were to find something like that you would have plenty of money in your budget, and you could always move a few years later if you decided you weren't satisfied/wanted something better.
Might I suggest that for now, you just look for a better place to rent?
About your monthly bills, did you figure Christmas gifts into the equation?
As for 401K/College Fund - Suze Orman(Iknow Iknow) said something once that I took to heart.
"No lender is going to lend you money for your retirement." Don't take care of your kids until you take care of you. Your kids can get student loans that you can help pay off should you so choose. So make sure you are preparing for retirement first and foremost.
About your monthly bills, did you figure Christmas gifts into the equation?
As for 401K/College Fund - Suze Orman(Iknow Iknow) said something once that I took to heart.
"No lender is going to lend you money for your retirement." Don't take care of your kids until you take care of you. Your kids can get student loans that you can help pay off should you so choose. So make sure you are preparing for retirement first and foremost.
QUOTE(marilynk @ Apr 15 2006, 02:37 PM)
Might I suggest that for now, you just look for a better place to rent?
About your monthly bills, did you figure Christmas gifts into the equation?
As for 401K/College Fund - Suze Orman(Iknow Iknow) said something once that I took to heart.
"No lender is going to lend you money for your retirement." Don't take care of your kids until you take care of you. Your kids can get student loans that you can help pay off should you so choose. So make sure you are preparing for retirement first and foremost.
About your monthly bills, did you figure Christmas gifts into the equation?
As for 401K/College Fund - Suze Orman(Iknow Iknow) said something once that I took to heart.
"No lender is going to lend you money for your retirement." Don't take care of your kids until you take care of you. Your kids can get student loans that you can help pay off should you so choose. So make sure you are preparing for retirement first and foremost.
Marilyn,
Here's the thing. At least with living here, our rent is relatively low for the area and we do not pay for natural gas(it's incl. in our rent). This way, we're able to sock away a ton of money over into savings so that if and when we';re eventualy able to buy- we have a little nest egg.
If we moved to a better rental, we'd be looking at $1300 a month MINIMUM plus we'd pay heating, garbage and water & sewer so we'd be pretty close to what we'd be paying for a mortgage. The amount we could save would be greatly reduced so then in a couple years we'd be right back where we are now...renting without a ton of savings.
QUOTE(Dwayne @ Apr 4 2006, 08:35 PM)
Cable - $90 - What about switching to a cheaper plan? $50/month should be enough for extended cable.
Oil changes - $15 - This shouldn't be every month unless you're putting 3000 miles on the vehicle every month. I would say $15 every three months at the most.
License plate renewal - $12.50 - Is it $150/yr to renew?
Phone - $65 - Figure $35 for DSL, and $15 for local service... use your cellphones for long distance, save $15 there, too.
Yeh, little things, I know, but still..
Don't forget being able to write off your mortgage interest on your taxes, that'll free up another $100-$150/month (I think).
Oil changes - $15 - This shouldn't be every month unless you're putting 3000 miles on the vehicle every month. I would say $15 every three months at the most.
License plate renewal - $12.50 - Is it $150/yr to renew?
Phone - $65 - Figure $35 for DSL, and $15 for local service... use your cellphones for long distance, save $15 there, too.
Yeh, little things, I know, but still..
Don't forget being able to write off your mortgage interest on your taxes, that'll free up another $100-$150/month (I think).
Yep...$75 per car X2
I've dropped the long distance through my local phone provider and the "line maintenance" protection. Why I paid for that for years...I don't know. It's not my house and therefore, not my lines! Anyway, that bill is down to $42 a month.
Cable, I went down to basic digital w/ just the HBO. I HAVE to be able to watch the Soprano's..not an option. So, I was able to knock off another $30 a month there.
QUOTE(bluemoon2 @ Apr 6 2006, 10:28 PM)
Have you looked into moving to Indiana? I don't know about northern indiana, but I don't even know if you could find too many homes around here that would take $1800/mo for a mortgage payment, and I live in west central Indiana.
I bought my house about 8 months ago. 3br, 2.5 bath, finished basement, 1 acre, in the country. Everything is totally remodeled inside and out, and it only cost me $98000, and the prop. taxes are only $700/year. This puts my payments at about $715. If you were to find something like that you would have plenty of money in your budget, and you could always move a few years later if you decided you weren't satisfied/wanted something better.
I bought my house about 8 months ago. 3br, 2.5 bath, finished basement, 1 acre, in the country. Everything is totally remodeled inside and out, and it only cost me $98000, and the prop. taxes are only $700/year. This puts my payments at about $715. If you were to find something like that you would have plenty of money in your budget, and you could always move a few years later if you decided you weren't satisfied/wanted something better.
We've been looking in NW Lake County. We'd like to stay as close to the IL/IN as possible because of the drive so we've narrowed our search down to Munster, Dyer, St John and Highland. I'd love to be able to go as far east as Crown Point but that would just be too far for hubby...unless he bought a boat and just cruised across Lake Michigan into Chicago hehe.
We're looking at some properties on Monday but I'm really excited by what I can see in their listings. One house in particular in Highland has been completely remodeled...is about 1600 sq ft...$800 a year in property taxes and is listed for $154k!
i hope your search goes well! keepin my fingers crossed for ya! 
QUOTE(smontoya5 @ Apr 21 2006, 06:51 PM)
Yep...$75 per car X2
I've dropped the long distance through my local phone provider and the "line maintenance" protection. Why I paid for that for years...I don't know. It's not my house and therefore, not my lines! Anyway, that bill is down to $42 a month.
Cable, I went down to basic digital w/ just the HBO. I HAVE to be able to watch the Soprano's..not an option. So, I was able to knock off another $30 a month there.
I've dropped the long distance through my local phone provider and the "line maintenance" protection. Why I paid for that for years...I don't know. It's not my house and therefore, not my lines! Anyway, that bill is down to $42 a month.
Cable, I went down to basic digital w/ just the HBO. I HAVE to be able to watch the Soprano's..not an option. So, I was able to knock off another $30 a month there.
Very nice!
If you don't mind my asking, what are your salaries separately? I know together you make 92k. Could the lower salaried person drop to part time while the kids are in school so you wouldn't have to pay day care?
On another note, I'll watch those kids for a lot less than that! Call me!
On another note, I'll watch those kids for a lot less than that! Call me!
QUOTE(marilynk @ Apr 24 2006, 01:29 PM)
If you don't mind my asking, what are your salaries separately? I know together you make 92k. Could the lower salaried person drop to part time while the kids are in school so you wouldn't have to pay day care?
On another note, I'll watch those kids for a lot less than that! Call me!
On another note, I'll watch those kids for a lot less than that! Call me!
I make 55k a year and my husband makes 37k a year. We've talked about him going down to PT before or just trying to make it on my salary alone before. But, we're going to be cutting our daycare expenses at least in half here in a few months so we're just going to keep on keeping on. The time to do it would have been a couple of years ago when the kids were younger but my husband was hesitant to give up the security of his job.
QUOTE(smontoya5 @ Apr 4 2006, 06:10 PM)
Daycare: $960 We are going to be dropping this down this fall to around $500-$600 a month but until that happens, I'm leaving it alone
In law payment: $130
Groceries: $400
Gasoline + tolls- $300 Again, worst case scenario.
Phone (incl dsl) $65
Cable- $90
Electric- $150 (our bills are like $45 a month now...this is a guesstimate)
Natural gas/heat- $200 on average?
Student loans: $35
Netflix: $18
Water/garbage/sewer: $80
Car insurance: $41
Pocket money: $80
Cell phones: $75
Christmas/Birthdays: $120 (This should probably be less)
Haircuts: $20
Entertainment/Fun: $100
In law payment: $130
Groceries: $400
Gasoline + tolls- $300 Again, worst case scenario.
Phone (incl dsl) $65
Cable- $90
Electric- $150 (our bills are like $45 a month now...this is a guesstimate)
Natural gas/heat- $200 on average?
Student loans: $35
Netflix: $18
Water/garbage/sewer: $80
Car insurance: $41
Pocket money: $80
Cell phones: $75
Christmas/Birthdays: $120 (This should probably be less)
Haircuts: $20
Entertainment/Fun: $100
Cable: you downgraded...which is good. I was gonna suggest cutting it out completely and watching regular tv for a while.
Haircuts:...could you go without one for a while OR cut your own. My sister saves by cutting my nephews and my bil's hair...it may be worth it.
Electric and Gas Bills: You may want to get on a budget plan if your company has one. That's what I use. My bills are roughly $77 and $57 each month...all year...respectively. It helped me out A LOT!
Pocket Money: You may save more using a debit card than carrying cash. At least for me, that works better because for some reason, cash just flies out of my hands...and half the time, I can't tell you where it went.
Christmas/bday and Entertainment/fun: You can cut that in half. Do more "family" events instead...such as bbq at home, game nights, blockbuster nights, etc.
Just a few suggestions
Your list is pretty thorough. But do YOU think you are cutting it to close? No one knows how you are with money but you. Are you a good saver? Can you live on a tight budget? Or are you an impulse buyer? Do you ever buy things without thinking it through?Be really honest with yourselves and you should know the answer.
As for me, I would be cutting it too close. I always over spend at the grocery store. I like a latte at Starbuck's a little too much. I'm a lousy spendthrift. But I am very good at spending.
But just curious, how many hours a week does your dad watch those children for $960 a month? I think that day care is a lot cheaper.
As for me, I would be cutting it too close. I always over spend at the grocery store. I like a latte at Starbuck's a little too much. I'm a lousy spendthrift. But I am very good at spending.
But just curious, how many hours a week does your dad watch those children for $960 a month? I think that day care is a lot cheaper.
My 2 cents is if you can swing purchasing a house you should go for it.
Every month you are pissing away $1,100.00. It may cost a little more monthly but at least you are getting an investment. Maybe you could look for a house in a better price range that may need some work.
Every month you are pissing away $1,100.00. It may cost a little more monthly but at least you are getting an investment. Maybe you could look for a house in a better price range that may need some work.
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