Anonymous wrote:

Anonymous wrote:Simple answer
NO EXTRAS. ZERO. HARD BUDGET.

Figure in higher home insurance, property tax, utilities, those sneak in quick with no notice.
Would I do it ? No.

This thread all seems very subjective. Interesting topic we've been thinking about... Wouldn't it be more helpful to consider it in terms of percentage of after-tax income, or something like that, for some perspective?

We currently live in a house that's worth about $1.1M and do private for two kids... The place is perfectly fine, but for our forever home we have a number of "wants" (one is good public schools) and it would be about $2.3-$2.5. Our current mortgage is about 20% of monthly net income of $21k; the more expensive place would be ~40% (w/current interest rates)... only other monthly expenses are 529s. We have a sizable TSP and IRA but otherwise stopped saving for retirement due to a generous defined benefit retirement plan. Risky? Thoughts? We are very thankful for this first world problem FWIW.

Likelihood of $380 HHI getting a 75% LTV jumbo mortgage on a $2.5MM house without very substantial cash reserve is very, very low.

Anonymous wrote:Simple answer
NO EXTRAS. ZERO. HARD BUDGET.

Figure in higher home insurance, property tax, utilities, those sneak in quick with no notice.
Would I do it ? No.

This thread all seems very subjective. Interesting topic we've been thinking about... Wouldn't it be more helpful to consider it in terms of percentage of after-tax income, or something like that, for some perspective?

We currently live in a house that's worth about $1.1M and do private for two kids... The place is perfectly fine, but for our forever home we have a number of "wants" (one is good public schools) and it would be about $2.3-$2.5. Our current mortgage is about 20% of monthly net income of $21k; the more expensive place would be ~40% (w/current interest rates)... only other monthly expenses are 529s. We have a sizable TSP and IRA but otherwise stopped saving for retirement due to a generous defined benefit retirement plan. Risky? Thoughts? We are very thankful for this first world problem FWIW.

OP, what you are describing, even in the short term, doesn't sound like being house poor to me. To me, it's more extreme and means not being able to save as much as you should and not having the cash cushion you described. It also means not being able to go on nice vacations or make upgrades, etc...that others have described. Keep in mind if your neighbors are able to comfortably afford their homes, you and your children will be surrounded by people who can do all those nice things and your children will eventually notice.

Anonymous wrote:

Anonymous wrote:

No eating out. No vacations. No activities for your kids. No splurges. No new clothes. No going to the movies. No replacing things that get broken that aren't necessities. No upgrading phones. No streaming services.

This is how I grew up. Nice house. Nothing else. It also means extreme stress in every recession or downturn. Even as a kid, I constantly worried that we'd end up homeless because there was no padding. It was our really nice house or, if my dad lost his job, our car.

OP said it would be tight for a year or so. I agree with you if it’s for several years, but I’d happily forego a year or two of vacations and extras to trade off for a house. Especially now that we’re home so much.

OP if you are 30 and your income will go up a lot and this will allow you to avoid needing to move again in five years, I would go for it. Hassle of being stretched for a few years is countered but avoiding headache and cost of another move. But if you are 45 and your income won't go up much, I would think really hard about it.

We were like this growing up on Long Island. My parents did one house-upgrade per year. As in, re-carpeting the den one year. The next year re-carpeting my brother's room. The next year re-wall papering the downstairs bathroom. So it took seven years until it was my turn to get rid of the 70's bright orange carpeting in my bedroom.

We went on shitty vacations, and they weren't quite each year. Everyone else flew to Florida and the Caribbean and other places. We went to Shawnee PA. And then two years later we went to Lancaster, PA. A lot of week-long vacations we just went to the library on the first day of vacation and then laid around reading and watching tv. We ate out once a month, at the local diner. Other kids routinely went into Manhattan for dinners. Other kids went to baseball games - a few each season. We went to one. Once. I never saw Cats or Les Miserables. Everyone else did. Everyone else had a cleaning lady who came once a week, MINIMUM. I had to turn down playdates because I had to clean. When we'd host a family party at home, I had to clean for hours before because (company is coming!) and then clean after they left. This explains why I hated hosting for the first 10 years of my adult life.

If we'd lived one town over, I'd have grown up feeling either on par or a smidge richer than other kids. I worked full time AND part time to put myself through college, and my parents charged me rent while I lived at home doing that. My sister didn't live at home, but took out a lot of loans and worked part time.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

No eating out. No vacations. No activities for your kids. No splurges. No new clothes. No going to the movies. No replacing things that get broken that aren't necessities. No upgrading phones. No streaming services.

This is how I grew up. Nice house. Nothing else. It also means extreme stress in every recession or downturn. Even as a kid, I constantly worried that we'd end up homeless because there was no padding. It was our really nice house or, if my dad lost his job, our car.

As a a kid, why were you burdened with the knowledge of your parents' finances? My kids are completely unaware of our financial situation.

NP. I prefer my kids don’t think or worry about money, but, I’ve made them aware by saying things “no, that too much money. Let’s get the less expensive one.” Or, they’d want to go someone nice, and I’d say, “no, that’s out of our budget.” Or they wished we had a nicer house, and I’d say, “well this is what we can afford.” Now my older one has a really weird relationship with money. Lots of anxiety over it, even though I never have anxiety. I’m just straightforward and honest when she pushes me on something. In an ideal world, kids never worry about it, but that’s just unrealistic I think. Unless you make up fibs for them.

My parents were stingy. Our house was ok, good neighborhood but they could have done a lot more for us (but they did pay for college and graduate school in full so its all relative).

We regularly talk about money. We are clear we are comfortable, we have everything we need, we talk about getting a bigger/nicer house but also talk about balancing that with fully paying for college and graduate school and about choices: we'd have to cut back on activities, eating out (which now we did anyway) and other things we enjoy and it becomes a family decision. Ours know anything they need, we can comfortably get them without an issue. Anything they want is a parenting decision but they don't ask for much so we usually get it as its rare they ask for anything so we know its a real want.

I'd buy a second home (actually 3rd for us) over being house poor.

Keep in mind that there’s nothing like being in a new space that’ll make you think - our old couch doesnt fit this living room; our old tables look shabby in this shiny fancier place; we need curtains for 20 more windows ... etc. That’s what really gets you.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

No eating out. No vacations. No activities for your kids. No splurges. No new clothes. No going to the movies. No replacing things that get broken that aren't necessities. No upgrading phones. No streaming services.

This is how I grew up. Nice house. Nothing else. It also means extreme stress in every recession or downturn. Even as a kid, I constantly worried that we'd end up homeless because there was no padding. It was our really nice house or, if my dad lost his job, our car.

As a a kid, why were you burdened with the knowledge of your parents' finances? My kids are completely unaware of our financial situation.

NP. I prefer my kids don’t think or worry about money, but, I’ve made them aware by saying things “no, that too much money. Let’s get the less expensive one.” Or, they’d want to go someone nice, and I’d say, “no, that’s out of our budget.” Or they wished we had a nicer house, and I’d say, “well this is what we can afford.” Now my older one has a really weird relationship with money. Lots of anxiety over it, even though I never have anxiety. I’m just straightforward and honest when she pushes me on something. In an ideal world, kids never worry about it, but that’s just unrealistic I think. Unless you make up fibs for them.

I guess I am just of the mindset that children should be shielded, at all cost, from the bad decisions of their parents. If mom and dad made bad decisions with finances, sharing the information and having anxious kids as a result is yet another bad decision. There is nothing wrong with telling your kids "no" but the kids having specific knowledge and angst over finances is poor parenting.

Well my DD does get anxious about money, so I guess I’m a poor parent? No pun intended. I don’t think we’ve made bad decisions, but most people have budgets that they have to live under.

We did this. It was tough, but worth it in the end. It was tight for the first year, but we knew that would be the case going in. We’re both in stable, secure jobs and were able to correctly forecast how our budget would change in our favor to give us more breathing room, namely that our childcare costs would drop dramatically.

I have no idea. I inherited my father's Capitol Hill rowhouse.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

No eating out. No vacations. No activities for your kids. No splurges. No new clothes. No going to the movies. No replacing things that get broken that aren't necessities. No upgrading phones. No streaming services.

This is how I grew up. Nice house. Nothing else. It also means extreme stress in every recession or downturn. Even as a kid, I constantly worried that we'd end up homeless because there was no padding. It was our really nice house or, if my dad lost his job, our car.

As a a kid, why were you burdened with the knowledge of your parents' finances? My kids are completely unaware of our financial situation.

NP. I prefer my kids don’t think or worry about money, but, I’ve made them aware by saying things “no, that too much money. Let’s get the less expensive one.” Or, they’d want to go someone nice, and I’d say, “no, that’s out of our budget.” Or they wished we had a nicer house, and I’d say, “well this is what we can afford.” Now my older one has a really weird relationship with money. Lots of anxiety over it, even though I never have anxiety. I’m just straightforward and honest when she pushes me on something. In an ideal world, kids never worry about it, but that’s just unrealistic I think. Unless you make up fibs for them.

I guess I am just of the mindset that children should be shielded, at all cost, from the bad decisions of their parents. If mom and dad made bad decisions with finances, sharing the information and having anxious kids as a result is yet another bad decision. There is nothing wrong with telling your kids "no" but the kids having specific knowledge and angst over finances is poor parenting.

Anonymous wrote:

Anonymous wrote:

No eating out. No vacations. No activities for your kids. No splurges. No new clothes. No going to the movies. No replacing things that get broken that aren't necessities. No upgrading phones. No streaming services.

This is how I grew up. Nice house. Nothing else. It also means extreme stress in every recession or downturn. Even as a kid, I constantly worried that we'd end up homeless because there was no padding. It was our really nice house or, if my dad lost his job, our car.

As a a kid, why were you burdened with the knowledge of your parents' finances? My kids are completely unaware of our financial situation.

NP. I prefer my kids don’t think or worry about money, but, I’ve made them aware by saying things “no, that too much money. Let’s get the less expensive one.” Or, they’d want to go someone nice, and I’d say, “no, that’s out of our budget.” Or they wished we had a nicer house, and I’d say, “well this is what we can afford.” Now my older one has a really weird relationship with money. Lots of anxiety over it, even though I never have anxiety. I’m just straightforward and honest when she pushes me on something. In an ideal world, kids never worry about it, but that’s just unrealistic I think. Unless you make up fibs for them.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This thread perfectly illustrates why people are choosing to leave HCOL cities like DC and NYC. Why be house poor and stretch your budget just to make sure your child goes to a good school or you have access to good restaurants or things to do? Reading this thread has really reaffirmed my desire to leave this area and WFH permanently. Thankfully I am in an in demand field and no matter the state of the economy finding a remote job in the event I ever get laid off or fired will be very easy. And like a previous poster said 2020 and the next few years is not the time to be burdening yourself with high house payments or any other liability really. The economic fallout of this crisis has yet to be fully felt and you never know what will happen in the coming months to years.

Great to be optimistic about your skills. However there is one variable that is very difficult to control - HEALTH!

Please elaborate. You don’t have to be in a major city to get covid treatment, if that’s what you’re implying.

What I am saying is that major health events such as cancer do happen and are costly both socially and economically. I am speaking from experience. My wife went through a major health even and despite excellent heath insurance we faced 100k in medical bills over several years. I had to leave my job and when I came back I simply wasn’t the most attractive candidate. But this is life. We should always be optimistic about the future, but we need to be careful as well.

+1. But like someone said earlier that’s just not who we are. Being American means extreme optimism. Burden myself today because and tomorrow most likely all will be fine....That’s the mantra

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

No eating out. No vacations. No activities for your kids. No splurges. No new clothes. No going to the movies. No replacing things that get broken that aren't necessities. No upgrading phones. No streaming services.

This is how I grew up. Nice house. Nothing else. It also means extreme stress in every recession or downturn. Even as a kid, I constantly worried that we'd end up homeless because there was no padding. It was our really nice house or, if my dad lost his job, our car.

As a a kid, why were you burdened with the knowledge of your parents' finances? My kids are completely unaware of our financial situation.

Different scenario, but growing up poor I was very well aware of our financial situation. It would have been impossible not to be. We were "school poor"-my parents spent all of their (little) extra money on private school. Not worth it IMO.

Anyway for the OP, NBD for a year or a couple years. For an extended period, not worth it.

My kids are all grown now, but if I could redo one thing, it would be the decision to place our kids in private school over moving to a better zoned public school district. I'm not sure what we were thinking, but in hindsight it would have saved us thousands to simply move and make use of the public schools that our taxes paid. Duh.