Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Life's too short to be conservative. Conservatives generally are narrow-minded thinkers and live cautious, unfulfilling, and sheltered lives. Not for me.

People like you are why we had so many foreclosures in the area in 2007-2009. There were tons of people in my neighborhood who had great jobs in secure fields who suddenly found they were one of thousands being laid off from secure fields. All these people who had no backup plan. I also got laid off in 2009, but we had plenty of savings and used about 15% of our emergency funds for the six months that I was laid off.

And FYI, we paid 18% gross, about 30% net of our income for our mortgage.

Well if something catastrophic like that happened it would effect everyone including you and the government would intervene

Ha ha. I feel like you missed most of the last 5 years. Some people did really well during the contraction. And it was those who had lots of rainy day money to buy assets very cheaply.

Not really, I bought again recently without a rainy day fund and borrowed.

Right. You bought during a bubble and over paid. Genius!

This thread is making me feel so much better. We recently moved to a bigger house and increased our PITI by about $1100, bringing us to spending 25% of our net whereas in our old house we were spending maybe 15% of net on PITI, especially since we refinanced last year. I was worried about going back up to 25% but it sounds like that is considered average. We definitely ran numbers and didn't make the purchase until we knew we could comfortably afford it and had enough savings built in (plus we made some money on the sale of our old house) but still, it's always a little scary when a major expense goes up like that.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Life's too short to be conservative. Conservatives generally are narrow-minded thinkers and live cautious, unfulfilling, and sheltered lives. Not for me.

People like you are why we had so many foreclosures in the area in 2007-2009. There were tons of people in my neighborhood who had great jobs in secure fields who suddenly found they were one of thousands being laid off from secure fields. All these people who had no backup plan. I also got laid off in 2009, but we had plenty of savings and used about 15% of our emergency funds for the six months that I was laid off.

And FYI, we paid 18% gross, about 30% net of our income for our mortgage.

Well if something catastrophic like that happened it would effect everyone including you and the government would intervene

Ha ha. I feel like you missed most of the last 5 years. Some people did really well during the contraction. And it was those who had lots of rainy day money to buy assets very cheaply.

Not really, I bought again recently without a rainy day fund and borrowed.

Anonymous wrote:

Anonymous wrote:eh, it's hard to use any guidelines off of net. Most guidelines you see are something like 28-33% of gross for mortgage and no more than 36% max for all debts. Net changes dramatically for individuals depending on tax witholdings, health care costs, retirement contributions, etc etc etc.

+1. Not sure why people are posting in net.

Because OP asked about "percentage of 'take home' which is construed to be net.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Life's too short to be conservative. Conservatives generally are narrow-minded thinkers and live cautious, unfulfilling, and sheltered lives. Not for me.

People like you are why we had so many foreclosures in the area in 2007-2009. There were tons of people in my neighborhood who had great jobs in secure fields who suddenly found they were one of thousands being laid off from secure fields. All these people who had no backup plan. I also got laid off in 2009, but we had plenty of savings and used about 15% of our emergency funds for the six months that I was laid off.

And FYI, we paid 18% gross, about 30% net of our income for our mortgage.

Well if something catastrophic like that happened it would effect everyone including you and the government would intervene

Ha ha. I feel like you missed most of the last 5 years. Some people did really well during the contraction. And it was those who had lots of rainy day money to buy assets very cheaply.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:40% of net. I thought the rule was for gross. We are 25% of gross.

Yeah, but that rule is what gets people in trouble. 40% of net is a lot. What would happen if one or both of you lost your jobs?

some of us are in careers that are in demand.

So am I, but nothing is guaranteed. I'd rather be conservative.

Life's too short to be conservative. Conservatives generally are narrow-minded thinkers and live cautious, unfulfilling, and sheltered lives. Not for me.

Me thinks you don't understand being financially conservative v. politically conservative. So sad.

Anonymous wrote:

Anonymous wrote:Life's too short to be conservative. Conservatives generally are narrow-minded thinkers and live cautious, unfulfilling, and sheltered lives. Not for me.

People like you are why we had so many foreclosures in the area in 2007-2009. There were tons of people in my neighborhood who had great jobs in secure fields who suddenly found they were one of thousands being laid off from secure fields. All these people who had no backup plan. I also got laid off in 2009, but we had plenty of savings and used about 15% of our emergency funds for the six months that I was laid off.

And FYI, we paid 18% gross, about 30% net of our income for our mortgage.

Well if something catastrophic like that happened it would effect everyone including you and the government would intervene

Anonymous wrote:Life's too short to be conservative. Conservatives generally are narrow-minded thinkers and live cautious, unfulfilling, and sheltered lives. Not for me.

People like you are why we had so many foreclosures in the area in 2007-2009. There were tons of people in my neighborhood who had great jobs in secure fields who suddenly found they were one of thousands being laid off from secure fields. All these people who had no backup plan. I also got laid off in 2009, but we had plenty of savings and used about 15% of our emergency funds for the six months that I was laid off.

And FYI, we paid 18% gross, about 30% net of our income for our mortgage.

Anonymous wrote:I don't think talking about it in terms of gross helps. We net about 1/2 of our gross, but others net a lot more. So, 10% of our gross is 20% of net, but for someone else, it could be very different. Isn't the point to figure out if people feel cash strapped or ok at various percentages? Net helps with that. Gross does not.

Bingo.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:risk avoidance is avoidance of sucess

Boy, there are a lot of uneducated platitudes being thrown around on here. I am not risk averse. I am smart. I am 100% risk tolerant in my investments because I have a long time horizon for retirement and I can afford to be. But in terms of household budgeting, I refuse to mortgage myself to the hilt at the expense of retirement, savings, investment - and yes, the ability to have money for fun. We have chosen to do it all because we did not buy anywhere near the top of our approved amount. What is not to understand here?

A house is an investment

To some. Try telling that to all of the people who took that attitude and are underwater or were foreclosed upon when the market tanked. I bet they're not feeling very positive about their "investments" now.

I don't think talking about it in terms of gross helps. We net about 1/2 of our gross, but others net a lot more. So, 10% of our gross is 20% of net, but for someone else, it could be very different. Isn't the point to figure out if people feel cash strapped or ok at various percentages? Net helps with that. Gross does not.

Anonymous wrote:

Anonymous wrote:risk avoidance is avoidance of sucess

Boy, there are a lot of uneducated platitudes being thrown around on here. I am not risk averse. I am smart. I am 100% risk tolerant in my investments because I have a long time horizon for retirement and I can afford to be. But in terms of household budgeting, I refuse to mortgage myself to the hilt at the expense of retirement, savings, investment - and yes, the ability to have money for fun. We have chosen to do it all because we did not buy anywhere near the top of our approved amount. What is not to understand here?

A house is an investment

8% of gross.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I post in net because I only budget off of the money I can actually use to pay bills. We don't see the money we pay toward health insurance or into a couple of our retirement funds in our band account.

Our mortgage is about 30% of our monthly take home. It is tighter than I would like, but we manage. We had to cut some of our savings last year when I was cut back in hours last summer because of a dry spell for my company, but we were able to make our mortgage on just my DH's salary.

+1 to this. You are smart PP.

well, shucks I think it just seems very common sense, right? Money in the bank is the money you work with. Since our HHI is not all that high for this area, we try to do our best to pay the bills and also put some money aside. Buying a house has stretched us a bit, but rent would have been about the same as our mortgage payment.

We were in the same boat. Keep plugging away - we're meeting some goals and it's getting better every year!

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:eh, it's hard to use any guidelines off of net. Most guidelines you see are something like 28-33% of gross for mortgage and no more than 36% max for all debts. Net changes dramatically for individuals depending on tax witholdings, health care costs, retirement contributions, etc etc etc.

+1. Not sure why people are posting in net.

Because some of us are more financially conservative than others in this respect. We are at 15% of gross/25% of net and bought about $175K less worth of house than we were approved for. Lenders don't take into account things like childcare and other household expenses when calculating your approved loan amount. It was people buying at 100% of their approved max limit and not taking into account other household expenses that brought down the housing market in the first place.

I have no idea why you think someone who budgets off of gross automatically bought at their max and didn't take into account other household expenses.

I don't. Someone asked why people were posting in net. I explained why we did. If others calculated differently and it works for them, great. But I don't get why people are getting so defensive and attacking me for taking a conservative financial approach. Maybe they're feeling touchy about how much risk/debt they took on and are projecting that defensiveness on me?