Getting married, moving in, what to spend on rent?

[red92s]

Getting married in late March to a great girl. We don't currently live together, and neither of us have every lived with a significant other (tons of roommate experience on both parts though).

We are struggling with where to cap our budget when looking for housing, and I'm hoping to get a bit of advice or insight.

Short Term Goals (in no particular order):
Buy a home of our own, preferably with 20% down, requiring about $40k.
Survive the first few years of marriage.

Neither of us are really squeezed by our current budgets. Bills are paid, retirement accounts are funded, and savings are squirreled away on both sides. Currently we pay about $1700 in combined rent, and double utilities on top of that. Combined annual gross is around $130k. Combined emergency savings is around $25k; while combined debt (car+student loans) is around $20k. The seed fund for the house has around $2k in it. I expect (although, not depending on) a windfall in the mid 5-figure range within a couple years. We are both on the downhill side of our 20's.

I can see two primary schools of thought here:
1) Do whatever, within reason, gets you to the "ultimate goal" of buying a house first. In this case that would mean renting a 1 bedroom apartment for about $800/month, while paying off the debt and saving truckloads towards a house. With 2 cats, a whole slew of wedding gifts, and two people's stuff, we'd be tripping over each other. But we'd also be tripping over the stacks of cash all over the place.

2) Do whatever, within reason, cultivates the least stressful first years of marriage. In this case that might mean renting a 2 bedroom house for about $1,200-$1,300/month, while still paying down debt and savings towards a house faster than current, but slower than option 1. More room to get away from each other when needed, have friends over, do laundry, etc.

Realizing what a stresor money can be in a relationship; I recognize that option 1 could very well end up being a less stressful environment.

[ecoadapt]

Realizing what a stresor money can be in a relationship; I recognize that option 1 could very well end up being a less stressful environment.

I also would pick this option. It would be more practical and less stress in the future!

[MonkeyMama]

Personally, my dh and I chose to put off getting married many years while he lived at home and I lived with roommates. We were saving about $800+/month and living in MUCH nicer digs with this strategy. But saving $10k per year of our $20k-$60k income was VERY significant!

So, I have totally done the extreme money saving living arrangement thing, and it was TOTALLY worth it.

That said, I didn't do it for the heck of it. I did it to save a TON of money and a HUGE percentage of my income.

Option #2 is merely 12% of your income. Um, I think I'd go for option #2. I just don't see it making that much of a difference to your bottom line. In fact, you will be saving money over current circumstance? Enjoy the extra space. (IT's a rental, so if something happens to your income, you can move. Right?)

P.S. I also bought a 5-bedroom home when I was 25. It didn't cost us anything significantly more than a smaller home, and it was worth it - no complaints 10 years later. I think I have made decision on both sides of the extreme. Sure, we could live in a MUCH smaller space, but there isn't any significant cost savings to be had. So, why bother?

[kork13]

First of all, CONGRATULATIONS!!!

Honestly, I'd recommend a solid "both." Before I even looked at your two possibilities (which are terribly funny, btw...particularly #1), I was thinking: look for a 2-bedroom apartment for around $1k/mo, scrimp and save as much as you reasonably can while still taking opportunities to enjoy your first few years of marriage. I'm sure the cats and laundry will manage in either case.

You're really in a very good place. You make a great combined income, your total housing expenses will drop nearly in half (no matter what you do), and you really have relatively little debt. Budget your savings, enforce a monthly "fun" fund, and do what you will with the rest -- you'll do great.

Just an idea as well... I assume as late-20's individuals, your households are probably quite fully furnished... When it comes time for wedding bells, ask for cash, stating specifically that any/all cash gifts will go toward a home downpayment in the future. Sure, you'll probably still end up with 4 toasters, but some will likely appreciate the idea of saving for a DP, and give your home savings a good boost.

[red92s]

Originally Posted by kork13

First of all, CONGRATULATIONS!!!

Honestly, I'd recommend a solid "both." Before I even looked at your two possibilities (which are terribly funny, btw...particularly #1), I was thinking: look for a 2-bedroom apartment for around $1k/mo, scrimp and save as much as you reasonably can while still taking opportunities to enjoy your first few years of marriage.

Just an idea as well... I assume as late-20's individuals, your households are probably quite fully furnished... When it comes time for wedding bells, ask for cash, stating specifically that any/all cash gifts will go toward a home downpayment in the future. Sure, you'll probably still end up with 4 toasters, but some will likely appreciate the idea of saving for a DP, and give your home savings a good boost.

Future-wife is a fairly traditional girl, hence the reason we don't yet live together. That also means our registry can be split into three primary categories: linens, china, and kitchen. That also means there is no way in hades she'd ask for cash. I sort of agree with your suggestion, and would have explored it. But, I realized early on that things like the Kitchen Aid mixer, formal gravy boat, and nice towels were non-negotiable. Pick and choose battles wisely, I suppose.

I've moved around quite a bit, and consequently have purged most of my possessions on a regular basis. She lives in a 600 square foot studio, so her life is also relativity "compact". We will duplicate little when we merge, primarily because I am bringing lots of tools and car parts into the relationship, and she is bringing lots of clothes and shoes. Unfortunately, both need a home. As hard as I try, I can't convince her that my transmission and her suit pants can coexist in one closet.

Originally Posted by MonkeyMama

Option #2 is merely 12% of your income. Um, I think I'd go for option #2. I just don't see it making that much of a difference to your bottom line. In fact, you will be saving money over current circumstance? Enjoy the extra space. (IT's a rental, so if something happens to your income, you can move. Right?)

Yes, either way we'd see a net drop in living expenses versus today. There are a couple other reductions we'd see once living together as well. We currently spend a lot of time and gas driving between apartments each month, which vanishes. I also spend waaay more than I should on food, consuming primarily food from a bag in the freezer, because I'm lazy. She much prefers to cook, I much prefer eating her food, so I think our total grocery bill will drop as well.

Having been unemployed for 6 months from 2009-2010, I'd never say our jobs are "stable" or "secure". I'm well acquainted with how fast that can change. We'd likely be on a 12 month lease in either case. Losing one income wouldn't be a dire situation, as we are close to a 50-50 split in terms of pay.

[dojo]

You can sell all the extra-gifts on ebay

I'd go for a smaller rent space in the begining, yuo really don't need all the junk. I see it myself. We've been staying in a room at some friends for almost 1 year these past 2 years and we were VERY happy without all the clutter. If you can save even more, that's awesome, since it would mean financial freedom soon and a nice cozy house pretty soon

[snafu]

I'd side with Kork, 2 bd, 2 bth apt. since you can afford it. There has to be give and take on both sides so bride-to-be needs to update her thinking. I hope you're not planning to marry daddy's 'little princess' spoiled brat.

Modern women find one set linens in use, one in cupboard, one in laundry adequate + one set for guest [air] bed in bdrm # 2. The rest is clutter that doesn't serve your needs. Suggesting gifts that advance your desire to buy a house is far easier for your guests and ensures you don't need to deal with 4 toasters and weird items that caught someone's eye.

[artwest]

Since I didn't see where you mentioned who was paying for the wedding, I'll assume that it isn't you. I also didn't see anything about a honeymoon.

In my opinion you should both continue to pay off your debt and save as much as possible. Using your current figures (which should be better by March), I would take $20k out of the EF and pay off all of your debt. That will leave $5k in your EF. Take the $2k in the house fund and have a nice honeymoon. You will be sitting completely debt free and have 5k in an EF to start your married life with. That is excellent in today's world.

Rent a 2 BR house for $1200-1300 and save up as much as possible to build an EF and to make a down payment on a house. By my calculations your EF should be at least $30k. Be patient, stay our of debt and invest at least 10% of your income in IRA's or 401k's and you should be able to retire a very wealthy couple.

[photo]

Originally Posted by kork13

ask for cash,

Please don't. It is considered extremely poor taste to ask for gifts at all, especially cash. Registries are fine and can be given when asked. But to invite people to a wedding and then ask for money is insulting to your guests.

[jpg7n16]

Option 2 - Prob should give that some time, and figure out what you both want from a house, before jumping right into that. Rent in an area you like, search out homes in the area while you pay down debt, and build up the DP.

Setting the cap on housing is easy: take your pretax salary x 3

$130k * 3 = $390k

That's the most you should spend on the purchase price of the home, for the payment + insurance + taxes to be under 28% of income.

Since you're considering $40k as a 20% down ($200k home), you'll be just fine. And will have plenty of room in the budget for the other things in life. With a $130k income and a $200k home, you'll likely be around 15% of your income on housing.

[kork13]

Originally Posted by photo

Please don't. It is considered extremely poor taste to ask for gifts at all, especially cash. Registries are fine and can be given when asked. But to invite people to a wedding and then ask for money is insulting to your guests.

I'm sure in some areas/families, it truly would be insulting. Certainly, it's not the expectation that "you came to my wedding, so give me something." But in most cases, people ask what you want or need, and so at least In my family and circles of friends, when someone asks what we want/need for gifts, we tell them frankly. Sometimes it's stuff, sometimes it's cash. Different way of looking at things, I suppose. Honestly (at least for us), for weddings, graduations, and similar once-in-a-lifetime events, cash is the standard -- my family gives physical STUFF only when you specifically ask for it.

[red92s]

Originally Posted by artwest

Since I didn't see where you mentioned who was paying for the wedding, I'll assume that it isn't you. I also didn't see anything about a honeymoon.

Rent a 2 BR house for $1200-1300 and save up as much as possible to build an EF and to make a down payment on a house. By my calculations your EF should be at least $30k. Be patient, stay our of debt and invest at least 10% of your income in IRA's or 401k's and you should be able to retire a very wealthy couple.

We are fortunate in that her parents are footing a large chunk of the wedding bill. We are certainly contributing, and picking up the honeymoon tab on our own. The big ticket items like plane tickets and hotel stays are booked and paid for (not on a card).

Currently we both contribute to 401K's to the extent we hit our employer-match limits, and partially fund Roth's.

[QueenOphelia]

Originally Posted by photo

Please don't. It is considered extremely poor taste to ask for gifts at all, especially cash. Registries are fine and can be given when asked. But to invite people to a wedding and then ask for money is insulting to your guests.

Wow..where are you from? I live in the NE and have NEVER been to a wedding where the guests actually gave anything BUT cash. Gifts are for the engagement...NOT the wedding.

What do people do...drag gifts dressed in their black-tie outfits to the reception? It's narrow minded and quite absurd for to say it's in poor taste to accept cash. You don't ASK for cash...your guests just give it to you in an envelope...just like in The Godfather or Good Fellas!

Hooray for Cash!!!!!!

[gattaca]

Hehe! I am also from New England and almost everyone gives cash at a wedding. I never heard about it being rude to give cash at a wedding until I worked with someone from the South Carolina.

[red92s]

Originally Posted by QueenOphelia

Wow..where are you from? I live in the NE and have NEVER been to a wedding where the guests actually gave anything BUT cash. Gifts are for the engagement...NOT the wedding.

What do people do...drag gifts dressed in their black-tie outfits to the reception?

Yes, that is exactly what they do. Or, have them mailed to the residence beforehand.

Certainly nothing wrong with accepting cash, or giving it. Asking for it might be a different story to some people. I'm somewhat indifferent on the matter, and realize that socitial conventions have shifted quite a bit. People in their 20's might not care at all, people in their 40's might.

[red92s]

Just as an update to this. We recently signed a lease on a small 2 bedroom, 1 bathroom house. It's only about 800 square feet, but has additional storage in the attic as well as a shed. Great backyard and deck, and nice off-street parking. I think it'll meet all of our needs very nicely. Rent is $1,300. A bit more than our very-arbitrary initial limit of $1,200, but I don't think it'll stress us.

[riverwed070707]

Cute house!

[DebbieL]

What a cute house and nice little backyard! Best wishes to you.

[graceful]

CONGRATULATIONS!!! Very cute house! Seems like you are both on the right track and attitude. Wishing you both much health and happiness.

[MoneyMogul]

I'm glad you went with a bigger space. T

hings were going great with my husband and I up until we actually moved in together after the honeymoon. I discovered that I need more alone time. Now I send my husband to the other side of our house so that I can get some peace and quiet.