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A new 
is right around the corner for me 
While I enjoy my $866 mortgage, the house simply isn't big enough for the growing family.
Most begin their search by googling "how much house can I afford."
DON'T DO THIS
You HAVE to understand the full picture
// Thread \\\\
is right around the corner for me While I enjoy my $866 mortgage, the house simply isn't big enough for the growing family.
Most begin their search by googling "how much house can I afford."
DON'T DO THIS
You HAVE to understand the full picture
// Thread \\\\
If you have a desire to reach financial freedom sooner in life than society's age of 65, stretching your housing costs to 28%+ is a quick way to ruin this plan.
NerdWallet tells me I could buy a ONE MILLION dollar house. I'm not even joking. That's criminal.
NerdWallet tells me I could buy a ONE MILLION dollar house. I'm not even joking. That's criminal.
Buying a house, is more than the house price.
Society will tell you to use the 28%/36% rule, which means don't spend more than 28% of your gross income on home-related costs.
This fails to recognize many often forgotten costs that you bring into your life
Society will tell you to use the 28%/36% rule, which means don't spend more than 28% of your gross income on home-related costs.
This fails to recognize many often forgotten costs that you bring into your life
Understand the concept of the Diderot Effect
One purchase often leads to subsequent purchases. It's very real, folks.
That new couch? Now you need new side tables and a new rug, a new pictures for the wall.
One purchase often leads to subsequent purchases. It's very real, folks.
That new couch? Now you need new side tables and a new rug, a new pictures for the wall.
Understand the ripple effect on your Emergency Fund
Understand how one decision can add ripples to this that you aren't planning for. https://twitter.com/DivvyUp_King/status/1323279391711989762?s=20
Understand how one decision can add ripples to this that you aren't planning for. https://twitter.com/DivvyUp_King/status/1323279391711989762?s=20
Can you afford to pay $1k more per month on your HOUSE payment, sure.
But are you considering:
- higher utility bills
- property taxes are going
- new furniture to fill the bigger house
- More things = more things that break = more repairs
You get the idea
But are you considering:
- higher utility bills
- property taxes are going
- new furniture to fill the bigger house
- More things = more things that break = more repairs
You get the idea
Changing your living situation can be exciting and refreshing, but make sure you are analyzing the FULL picture of how this single decision impacts your overall financial picture.
Buying "enough" house vs. "too much" house has a SIGNIFICANT role in your finances.
Buying "enough" house vs. "too much" house has a SIGNIFICANT role in your finances.
Most importantly, make sure your total house related expenses does not come at the expense of your long-term financial goals.
If you have a goal to invest $__ annually, remove this from your "income" before you start playing with these calculators.
If you have a goal to invest $__ annually, remove this from your "income" before you start playing with these calculators.
BONUS - when you figure out how many ripples you're adding to your emergency fund, make sure your NEW EF is fully funded BEFORE you move for extra security.
