Just bought an $800,000 house on a $186,000 salary and now I'm panicking....

[Anonymous]

Anonymous wrote:This makes me panic. There is now way after taxes and retirement savings you still have 70% of your take home. You should not count on the pension or kids going to in state college. There are all unknowns until she actually retires and college is next year.

You must have posted here because you know this wasn’t a good move. Done deal?

Yeah I"m someone that said I think they will be okay, but have a smilar income and don't understand how they are taking home so much (and one of us is a fed too. soo much gets taken out of my fed salary it seems from the pension etc.)

[Anonymous]

Anonymous wrote:This makes me panic. There is now way after taxes and retirement savings you still have 70% of your take home. You should not count on the pension or kids going to in state college. There are all unknowns until she actually retires and college is next year.

You must have posted here because you know this wasn’t a good move. Done deal?

PP, you are right, and I should have clarified....the $15,500 gross salary is gross after pre-tax deductions of retirement savings and health insurance costs. Once taxes are taken out, net is $11,000.

[Anonymous]

You’ll be fine, OP. Just make sure you have a budget and you stick to it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We weren’t comfortable with more than a $200k house on a HHI of $100,000/yr so that would be a big no from us. But we are resisting the two income trap and live in the Midwest.

This is how you can live in a 200k house. It’s not the 2 income trap It’s that there is actually housing stock that only cost 200k. Around here 200k gets you a non-updated 2 BR/1BA condo with HOA fee way outside the beltway. Maybe not even in a good school district. You’re not better with money, you just live somewhere cheaper. Also, you will probably never see the home appreciation we have around here. My house has gone up more than your entire annual income (125k) in less than 2 years. There are trade offs either place. I’m not knocking your choices. But it’s not like people are spending more on housing here because we fell into some sort of keeping up with the Joneses crap.

Your appreciation rate will not last, nor is it likely to outpace this Midwestern poster in the long run.

Also, she arguably IS better with money because they were able to find a life that works better for them.

Signed, DC area resident.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is your income after a 401k contribution, and if so how much?

And how much emergency fund do you have?

And are any of your kids in paid child care or private school?

OP again - yes, income is after 401k contributions (we each contribute 5%, and get a 5% match), and DW is a fed who will qualify for a pension.
We are done with paid child care, kids are in public school, and will attend in-state public college.

do they know this?

They can tell their children that they will pay for the equivalent of in-state public college. Kids can then make the decision if they would like to pay for / take loans out for any remaining tuition as a result of making a different choice. I have a similar agreement with my children.

[Anonymous]

You’re pushing it OP

[Anonymous]

Just curious, what exactly makes this a bad idea? I figured OP is more or less the average buyer for an 800k house in this area...but maybe I’m wrong?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is your income after a 401k contribution, and if so how much?

And how much emergency fund do you have?

And are any of your kids in paid child care or private school?

OP again - yes, income is after 401k contributions (we each contribute 5%, and get a 5% match), and DW is a fed who will qualify for a pension.
We are done with paid child care, kids are in public school, and will attend in-state public college.

do they know this?

They can tell their children that they will pay for the equivalent of in-state public college. Kids can then make the decision if they would like to pay for / take loans out for any remaining tuition as a result of making a different choice. I have a similar agreement with my children.

I bet you haven’t had to cross that bridge yet. It’s not that easy. It’s not that simple.

[Anonymous]

Anonymous wrote:

Anonymous wrote:This makes me panic. There is now way after taxes and retirement savings you still have 70% of your take home. You should not count on the pension or kids going to in state college. There are all unknowns until she actually retires and college is next year.

You must have posted here because you know this wasn’t a good move. Done deal?

PP, you are right, and I should have clarified....the $15,500 gross salary is gross after pre-tax deductions of retirement savings and health insurance costs. Once taxes are taken out, net is $11,000.

I don't think you're saving enough for retirement or your kids' college tuition.

One or both of you needs a raise.

[Anonymous]

Anonymous wrote:Just curious, what exactly makes this a bad idea? I figured OP is more or less the average buyer for an 800k house in this area...but maybe I’m wrong?

We had the same joint HHI, only have 1 kid, and took out a $450K mortgage. We could have gone SLIGHTLY up, but nowhere near $700K and felt like we were able to save.

Grandparents are paying for our child's college costs.
We each put 15% towards retirement.

[Anonymous]

Percentages are irrelevant. What matters is your net non-housing income and non-housing expenses. As others pointed out, your $7,000/mo income (after housing, after taxes, after retirement and health premiums) is significantly more than the gross median national household income. You will be fine.

There is a separate question of how you split your income between housing and everything else. There's no wrong answer. Some people like vacations, or to retire early, etc., and others a nicer (or bigger, or better located) house.

You fell in love with the house; you can afford it; enjoy it. Don't worry about comments from people who made different decisions.

[Anonymous]

It's a good investment, don't worry. You will be ok.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is your income after a 401k contribution, and if so how much?

And how much emergency fund do you have?

And are any of your kids in paid child care or private school?

OP again - yes, income is after 401k contributions (we each contribute 5%, and get a 5% match), and DW is a fed who will qualify for a pension.
We are done with paid child care, kids are in public school, and will attend in-state public college.

do they know this?

They can tell their children that they will pay for the equivalent of in-state public college. Kids can then make the decision if they would like to pay for / take loans out for any remaining tuition as a result of making a different choice. I have a similar agreement with my children.

I bet you haven’t had to cross that bridge yet. It’s not that easy. It’s not that simple.

So, I am about a year out from having #1 go to college. He has been aware of our position on this since he was a small child. I believe it is my responsibility to ensure he gets an education, but that doesn't mean he gets to go anywhere he desires with me footing the bill. Life is made up of hard choices and this is the first one he'll have to make. Also - having your parents foot the bill for state college is a LUXURY, and one that most kids don't get.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is your income after a 401k contribution, and if so how much?

And how much emergency fund do you have?

And are any of your kids in paid child care or private school?

OP again - yes, income is after 401k contributions (we each contribute 5%, and get a 5% match), and DW is a fed who will qualify for a pension.
We are done with paid child care, kids are in public school, and will attend in-state public college.

do they know this?

They can tell their children that they will pay for the equivalent of in-state public college. Kids can then make the decision if they would like to pay for / take loans out for any remaining tuition as a result of making a different choice. I have a similar agreement with my children.

I bet you haven’t had to cross that bridge yet. It’s not that easy. It’s not that simple.

So, I am about a year out from having #1 go to college. He has been aware of our position on this since he was a small child. I believe it is my responsibility to ensure he gets an education, but that doesn't mean he gets to go anywhere he desires with me footing the bill. Life is made up of hard choices and this is the first one he'll have to make. Also - having your parents foot the bill for state college is a LUXURY, and one that most kids don't get.

Yup. Agreed. Not OP but we are already setting the expectation of in state public school. Both DH and I went to state schools and have done great. Private schools are overrated. I’m also not opposed to having my kids borrow a modest sum. Federal student loans are ridiculously generous in terms of repayment and an excellent way to build credit.

[Anonymous]

Wow. That was a bad idea.