My mtg payment is $6K/month on a 15 year loan. So I am very house poor at the moment, but I disagree on how much space you need. People get along a lot better in a 3,000 sf house (assume 2 kids and a pet) than in a 1,500 sf house. I can go to my home office and read quietly for 45 minutes, the kids have a big playroom in the basement. We have separate closet space and separate bathrooms, etc. Just makes things easier in my opinion. Now once you get over 3,000 than it is just luxury, but that is fine if you can afford it.

We also have an acre lot in Vienna, but that is mostly a waste. Save the money and get a 1/4 acre and just go to parks ....

Anonymous wrote:Good for you, Frugal Poster. I've never lived a bare bones budget and have no intention of doing so. Half of what we spend is discretionary, and I'm fine with that. Different strokes.

This. I spend about $2000/month on what is labeled as "junk" in my spreadsheet (includes nice vacations, gifts, eating out, clothes, books, yardwork by a company, and for some reason my cell phone.). I wish I could spend more, but I really admire people who are happy with almost nothing.

Anything over 1500sq feet is huge. Talk about a waste of space---each kid has their own room, there's probably three bathrooms, and all sorts of crap. People elsewhere live well in much less space.

No, in twenty years you will have moved twice, still be paying a mortgage, have spent at least a year ago using because your house won't sell, probably lost money and have spent a minor fortune remodeling. One of my questions is why you need/want such huge houses and so much stuff? It isn't necessary. At all. Stop working for things and spend time with your family.

Just a wealth of unfounded assumptions in here. Without addressing them all, what gives you the impression I live in a huge house, and have a lot of stuff?

Anonymous wrote:In order to ascertain whether we can realistically live on one income or not, DH and I have spent the past nine months recording all of our expenditures. We have also made efforts in several areas to cut the fat from our budget -- especially food costs. We are shocked to find that our absolute bare-bones monthly budget (for us and our toddler) is still 5K after taxes! This figure does not include any savings for retirement or college, daycare expenses, or the medical insurance premiums that are deducted from our paychecks. I should also note that we have a relatively small mortgage for the area (2K including escrow), that we have NO commuting costs (we use Metro and both have Metro subsidies), that we rarely eat out, and that DH and I both tend to wear holes in our clothes before buying new ones. We spend $2500 total for yearly trips to see out-of-state family; no other vacations.

Has anyone else recently calculated their bare-bones budget? We consider ourselves to be a frugal family and are stunned to know what it costs just to keep the lights on in the DC area.

If your mortgage is only $2,000 I dont get how your monthly is $5,000. Where is the other $3,000 going?

I make no money and we are definitely at 10K/month bare-bones. Oh well.

I rent because I've owned and kept up houses and don't intend to any more. What a waste of time. So yes, I expect my lawn to be mowed, and I rent places that do so.

Anonymous wrote:Just have to comment on the renter who expects the landlord to mow the lawn.

You're why tenants get a bad name. I rent our my rowhouse and came back one year to find the weeds higher than the fence -- in a "yard" that's about 6' x 3'.

Not the PP but some people rent because they don't like to do upkeep. I don't think I would clean the gutters if I was a tenant either.

Just have to comment on the renter who expects the landlord to mow the lawn.

You're why tenants get a bad name. I rent our my rowhouse and came back one year to find the weeds higher than the fence -- in a "yard" that's about 6' x 3'.

Anonymous wrote:

Anonymous wrote:What I don't understand is why you buy such dreadfully expensive properties. I would rent. I've owned houses, and lived in apts, and rented houses. I'd much rather rent, and let someone else have the hassle of lawn mowing, and snow removal, and broken crap. It takes so many variables out of the equation as well---you can live in one place for conveniece when the kids are little and move for schools later.

In that area, you can even get a plot of land in the community garden and grow your own food!

Great. Come back in 20 years and talk to me. You'll still be paying rent, and I'll be living in a paid-up home with minimal costs each month. Plus, my mortgage is significantly less than the rent on a comparable property would be. It's not as simple as that of course, but neither is buying a house (even an expensive one) the terrible decision you make it out to be.

No, in twenty years you will have moved twice, still be paying a mortgage, have spent at least a year ago using because your house won't sell, probably lost money and have spent a minor fortune remodeling. One of my questions is why you need/want such huge houses and so much stuff? It isn't necessary. At all. Stop working for things and spend time with your family.

Anonymous wrote:

Well, that depends on how you look at it. True, we could legally pay less on a monthly basis. But, we are obligated to the total debt, not just the monthly payment. That we could get away with paying less on a monthly basis without being thrown in jail (or whatever) doesn't change the fact that we still owe the total. Plus, every month that large amount sits there, it gains compound interest and makes it harder and harder to pay back and we end up paying more and more to borrow the principal. So, I don't consider it truly optional to not pay as much as we can. Just because the bank won't repossess or throw us in jail because we paid only the minimum doesn't mean the consequences aren't very, very serious and very immediate. Every month when I see that interest statement it becomes clear that paying the minimum is not a choice. It's just a question of choosing which terrible consequence you face.

I hear what you're saying, and as I said, I agree with your strategy. But sorry, significantly prepaying an obligation simply isn't a part of a bare-bones budget assessment. I get that you don't like to see the interest payment, and that since you have the means to avoid it, you do. But it certainly is a choice. The alternative is very unpalatable, but you have no legal or moral obligation to prepay the debt. Extremelyadvantageous =/= necessity. Under this theory, I (or anyone) could claim that my bare-bones budget absolutely requires that I pay an extra $5000/month on my mortgage, and save another $3000 each month because it's advantagous to do so. If I posted that, you'd all think that was a silly argument. How is this any different?

Sorry, but I disagree. In our situation, every dollar we pay is lost forever and then some. We lose $15k on that property every year because we can't rent for what we owe on a monthly basis. We will never get that money back and we have to cover it out of pocket every month. The true monthly cost of that place is what we lose every year renting it plus some monthly contribution to the negative equity (which absolutely *must* be paid before we can get to the point that we can stop losing money on the interest/taxes/principal/insurance/condo fees). I pay as much as we can to get us to zero on the negative equity as soon as we can so we can stop losing $15,000 a year. At our "best rate" we will pay another 45k before we will have the privilege of selling at a 35% loss. What I pay "in advance" is not optional or simply advantageous. I am accounting for the real economic cost of the property and you are not.

FWIW, I've been doing the same exercise as we are expecting our first baby and I'm trying to decide if I could/should/would quit my job, or just go back 2 days a week.

These are averages over the last 3 months. We've tried not to be extravagant, but we aren't frugal.

Home:
mortgage/condo dues/insurance/taxes on dc condo and rental property out of state
$2500

Food:
grocery and eating out
$1000
(I know we could cut way back here)

Phones & cable
$400

Student loans
$2150
(Yep, 2 PhDs and trying to aggressively pay down, might benefit from new consolidation plan)

Travel
$400
(Annual trip abroad to see family and 1-2 trips to US cities for family. No "vacation" in years.)

Car
$400
Parking and the average of upkeep costs. Last month $500 for brakes

Health & fitness
$400
gym membership, prescription and otc meds, etc.

Shopping
$300
(This is in the last 3 months, so has included mostly buying in prep. for baby.)

Financial
$30

Entertainment
$100

Personal Care (Haircuts, manicures)
$100

Pets
$50

Gifts
$20

Business expenses
$100

Cash
$400

(Health insurance and retirement come directly from DH's salary, so those are taken care of.)

Total NOT bare-bones: $8350--eek!

My hope is to cut this down to about $6000, but I don't see how it could go much lower than that.

We bring in about $13000 now, but if I stop working, that'll go down to $8,000. But with no family in town to help with baby and a very small new network of friends, I'm not sure if it's worth finding and paying a nanny and being so tired that I imagine I'd hardly have time to focus on cutting back on our spending...

Before I started tracking and categorizing our spending on Mint.com, I thought our spending was about $6000, but once you start tracking the car breaking down, having to go see sick family, getting emails from needy family members abroad asking you to send a box of vitamins.... life is expensive.

Anonymous wrote:What I don't understand is why you buy such dreadfully expensive properties. I would rent. I've owned houses, and lived in apts, and rented houses. I'd much rather rent, and let someone else have the hassle of lawn mowing, and snow removal, and broken crap. It takes so many variables out of the equation as well---you can live in one place for conveniece when the kids are little and move for schools later.

In that area, you can even get a plot of land in the community garden and grow your own food!

Great. Come back in 20 years and talk to me. You'll still be paying rent, and I'll be living in a paid-up home with minimal costs each month. Plus, my mortgage is significantly less than the rent on a comparable property would be. It's not as simple as that of course, but neither is buying a house (even an expensive one) the terrible decision you make it out to be.

What I don't understand is why you buy such dreadfully expensive properties. I would rent. I've owned houses, and lived in apts, and rented houses. I'd much rather rent, and let someone else have the hassle of lawn mowing, and snow removal, and broken crap. It takes so many variables out of the equation as well---you can live in one place for conveniece when the kids are little and move for schools later.

In that area, you can even get a plot of land in the community garden and grow your own food!

Well, that depends on how you look at it. True, we could legally pay less on a monthly basis. But, we are obligated to the total debt, not just the monthly payment. That we could get away with paying less on a monthly basis without being thrown in jail (or whatever) doesn't change the fact that we still owe the total. Plus, every month that large amount sits there, it gains compound interest and makes it harder and harder to pay back and we end up paying more and more to borrow the principal. So, I don't consider it truly optional to not pay as much as we can. Just because the bank won't repossess or throw us in jail because we paid only the minimum doesn't mean the consequences aren't very, very serious and very immediate. Every month when I see that interest statement it becomes clear that paying the minimum is not a choice. It's just a question of choosing which terrible consequence you face.

I hear what you're saying, and as I said, I agree with your strategy. But sorry, significantly prepaying an obligation simply isn't a part of a bare-bones budget assessment. I get that you don't like to see the interest payment, and that since you have the means to avoid it, you do. But it certainly is a choice. The alternative is very unpalatable, but you have no legal or moral obligation to prepay the debt. Extremelyadvantageous =/= necessity. Under this theory, I (or anyone) could claim that my bare-bones budget absolutely requires that I pay an extra $5000/month on my mortgage, and save another $3000 each month because it's advantagous to do so. If I posted that, you'd all think that was a silly argument. How is this any different?