- 8 months ago
So, the budget my SO drew up for me to offset average living expenses against my salary takes into account the following:
Car (loan, insurance, gas, tolls); retirement savings; pet costs (food, usual vet care, pet sitter), utilities (cable/internet, electric, water), lawn care; food (groceries and restaurants); health insurance; gym.
These are all relatively predictable costs, some are fixed and the others are constants even if they vary slightly. We estimated slightly high.
If my mortgage were at $300k (including principle, interest, taxes, home insurance, and pmi), my net each year would be about $10k. That would give me $10k per year for anything beyond necessities. The only savings that are taken into account above would be my retirement, not personal or emergency. It doesn’t take into account clothes, home improvement, furniture, decorations, travel, or weekend activities.
I’m thinking to myself… if my AC goes and I have to replace it, there goes a third of my yearly net. If the dog needs surgery, there goes another $2k. If the electrician comes, there goes $500. I can see burning through my “buffer” so fast at that amount. I wouldn’t even be able to buy myself a new dress and go to the theatre on that budget.
I’m pretty sure that’s what “house poor” is.
I lost most of my savings paying for my divorce three years ago (seriously the best money I’ve ever spent), and my current savings account is not where I’d like it. I won’t even consider cutting into it for a new home; I’m using the proceeds from my current home for a down payment to avoid draining savings.