- 6 years ago
- Wedding: December 2011
My husband and I are starting to dip our toes into the home buying process.
I am very scared, though. During my childhood my parents made many financial mistakes, but the biggest was buying “too much house.” Always, always we were house poor. They are in the process of losing the home I grew up in because finally they were not able to stay one step ahead of their creditors after all these years. The house is in terrible condition because there was never money to fix things that broke. The house is approaching 20 years old, three dogs have lived there and it has the original carpets. It was very traumatic and stressful growing up. I swore to myself I would never ruin my life that way.
I will come out and say that after health, dental and life insurance, 401k and taxes, and a $300 automatic deduction to a savings account, we net about $4,000 a month. The houses we are looking at, including insurance, taxes, mortgage etc at a 5% interest rate, would be about $950 a month – without any price negotiations. We currently pay $710 a month for an efficiency apartment and one garage parking spot.
We have $200/month student loan payments. I have a $158/month car payment and a year and a half left on the loan. Husband’s car is paid off. Hopefully won’t have to replace it for at least 2 years. He intends to run it into the ground. No credit card debt – but I did just get a big $1,300 hospital bill from my recent miscarriage.
I know that the standard rule is that housing should be 25% of your gross pay and 35% of your net pay. $950 a month is below 25% of our net! And that doesn’t count the $200 bonus I get a month, the $2,000 performance bonus he gets.
And for an extra $240 a month it would be so much more room… instead of what we have now, where our freaking bed is in the same room as our freaking kitchen table.
Part of it is my anxiety disorder where I live in fear of unemployment and financial ruin. I have thought exercises I am supposed to do where I counter my irrationality with facts: the unemployment rate for college grads is much lower. The chances of being long-term unemployed are extremely low in spite of the stories you hear. The unemployment rate where we live is about 6.7%, not that bad at all.
But I’m still scared. I don’t know why I don’t feel this way about the apartment when our rent payment is almost as high.
Does anybody else feel this way? And what percentage of your take home pay do you spend on housing?