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Nah, the school isn't like that. It just happens to be a small school where the kids get a lot of attention and as a byproduct they do well in school and love it there. The other thing is we just are not going to pull the kids from this school. We as parents kind of messed up with this house but I'm not going to make my kids pay for my mistake. Moving to a different home within the district will be enough change for them.
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Well, ok, but this little grade school will not also be their high school, or middle school. Drive by the parking lot of the high school they will be going to- are there BMWs, Range Rovers in the lot? If so, then yes your #4 ranked school district is exactly "like that."Originally posted by startover40 View PostComment
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Just a few thoughts....
$1750 a month for groceries? What are you eating? Your kids are still pretty young and cannot be eating that much food. We are a family of five with three teens, live in a high cost of living area and still only pay about $160 a week for groceries. And we eat good...lots of fruits, veggies, steak, chicken, seafood, etc....very little processed food. Just by planning your meals, you could easily save $1000 a month!
Cell Phone...pay the penalty and get out of the contract. We use Virgin Mobile for $35 a month on each phone. Includes unlimited data and texting and 300 talk minutes. For two phones you can save about $120 a month.
Pool...how much penalty to cancel. Is that going to be more than $1600 (April to Aug payment)? Save 400 a month easily.
Moving...you mention your kids. I am guessing the 8 year old is in like third grade? 4 year old not even in kindergarten. Believe me...a month after starting in a new district they won't even remember their old one. Move now...don't wait and then have to yank them in middle or high school. That they will remember a lot more. Kids are very adaptable. Make it a new exciting adventure, and they will view it as such. I have to think you can find a good school district with a few houses that don't have to cost over a half a million dollars. And truly...a 2000 sq ft house is MORE than comfortable for a family of four. Otherwise, you have way too much stuff.
Eating out...save $300 a month by not eating out. Seriously....work your food budget so that if you save on groceries that week, you can go out for pizza.
Not trying to be mean or insulting, but you are literally wasting almost $2000 a month. That is without making any huge changes.
What would you really do if you lost your job? Really consider getting your spending under control first, then work on scaling back your monthly expenses. Once you do that, you will have a ton of leftover money for fun and future savings.
I am only saying this because we are a family of five living on half of what you make and we consider our income to be quite comfortable. You are letting your paycheck run your life instead of the other way around where you control your paycheck.
I wish you the best of luck!!
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so40: It's a good that you realized things had gotten out of control and that action was needed. Perhaps you've unconsciously predicated financial decisions on Gross Income as opposed to Net Income. Is your wife in agreement with the need to reduce outstanding debt? What percentage of your net income has gone towards interest since the start of the year? How much of your mortgage payment goes to interest and how much goes to principle? What is the monthly interest added to CC #2? How are car payments allocated between principal and interest? If you added up the sums paid in interest to all the various accounts since buying your current house, you'll likely discover where all the money went!
Of all the suggestions made, which are each of you willing to action?Comment
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I can't help but react a bit to this whole "great school district" stuff. My perspective is skewed - my wife and I have no kids - but... I was a kid. My parents moved us to a bigger house when I as about 9 (with 2 younger brothers). We moved to a "great school district" area - and yes, it was nice. But... the financial strain it put on my family made things really stressful at home. My folks eventually ended up splitting up - I won't pretend it was all just about money issues, but it certainly played a part and didn't help matters at all. At the time we went from what I can assume was something like a $15-$20k house up to one that was.. $65k IIRC. We didn't have as many zeroes as your story, but it was also decades ago.
Imagine making $200k+ living in a $250k house with good schools, but being able to afford to provide pretty much anything your growing teens want or need - in cash - without worry. IMO, that would be a much better story than continually living beyond your means, always worried and spending the rest of your life servicing debt. Your kids will eventually be old enough to understand what's going on.
I look back at how we were raised, and while my parents went above and beyond to provide us with some great things, the toll it took on our family's finances (and ultimately our family) was immense. And more to the point, we, as kids, didn't *ask* for any of it. You can argue that kids don't know what they need, and parents are there to provide 'the best', but... you also need to know how to measure that.
I wish you luck and success in your journey, but would caution that while you're on dollars and cents issues right now, there may be larger issues to consider over the next few years.Comment
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Figured I would come back and provide an update. Nothing major has changed as we are still considering our position in all areas. I am very serious about the possibility of moving as this 5700sq/ft home and 15K taxes is a but much for us. We only use the kitchen and family room but do really love the newness of the home. So, found a home made in 1977 so much of it is dated, but it has a great flat lot and 3200s/ft. If we decided to move it would be about a 60% reduction in mortgage, conforming loan, no PMI, better interest rate and the taxes are half.
We are seriously considering moving as the home is in the same school district so no changes for our son.Comment
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I think you should really get out from under that house. You are living pretty far above your means. What about college savings? I can appreciate wanting the kids in good schools. It is very important to me as well. But, your living as if you have million dollar income and you make less than I do. My home is worth $250k and we paid cash. I save max for retirement and my kid is 7 and her college fund is nearly fully funded. We live on about 40% of our income and it is comfortable and secure. You will love the change.
Good luckComment
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I agree that getting out from this house isn't really an option when you/I look at the numbers, it's mandatory! I can make the numbers work for the home we are looking at. What I do not want to happen is getting into the home and immediately piling on a huge amount of debt to renovate the house, which my wife would love to do.
No college savings for the kids and that's terrible. I just kind of feel like it's time to grow up and live within a budget. Although my wife is really upset about the idea of selling this home she does understand it's what needs to be done. It helps me a lot that I really don't like our current McMansion and have enough of the bills. I'm mentally checked out and ready to move.Comment
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What I would do:
Is that a typo that says your grocery spending is $1750 a month for four people? Cut that in half, if not more, immediately! savings $875/month. Shop with lists, sales, and plan menus, coupons, and a budget!
Get rid of the pool membership savings $400 a month.
I would pay off the highest debts you have (the CCs) and the 401k loan especially if the loan comes due if you were ever to lose your job. Savings per month $1750 per month.
Don't take out more debt to buy a hybrid. There are many affordable and great gas mileage cars out there.
Then tackle the house mortgage and the loan. Throw any extra you can at the mortgage then the heloc.
Savings per month with these changes: 875+400+1200+150+400= $3025 !! Up your emergency fund savings to get to 6 months expenses, minimum.
The most important thing is that you have recognized the problem and are working on it, together.Comment
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And I think the move to a smaller house, with much less debt and overhead, is the best move you can do. It will be nice to have less stress and take care of your family for the future. I cannot imagine how it would feel to be able to care for my family and fund vacations, university, etc. and not stress about how to save for it.
Get to the idea of is this a want or a need? with every purchase, even grocery shopping, needs an answer to that question.
What have you done in terms of your budget and additional cost savings per month?Comment
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We are pretty status quo on things currently as we decide what to do. I will say that summer is expensive with 2 kids. Between swimming lessons, swim team, gymnastics camp and general summer fun it's much more expensive compared to winter time. Then the excuse in winter is holidays, dinners and the usual expenses with each holiday.
I'm trying not to freak out and hyper-focus on this but I can't help it. My wife argues that we knew this when we bought the house and now just deal with it. I want to be more practical and live within our means, even of that means doing so for the first time in a decade. We sure are used to no budget living and excess.
Thinking about our expenses makes me realize we need to move. I did a quick run of numbers, with no real aggressive plan to pay down CC and HELOC and we are around 8100-8400/mo in expenses. I'm conservative in my income but it does always fluctuate being in sales. Good year (2 in a row now) of 250K and a down year could be 150K. Even at consistent 250K I'm not comfortable with 8K/month in housing costs.
The reality is even the home we are looking at isn't inexpensive. It's going to be 500K and then comes numerous upgrades. I still feel that at 600K total it's an immediate 275K reduction in debt and the taxes would be half, utilities half, etc.Comment
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In my opinion, when it comes to life the question is what do you need?
A roof over your head, clothes, food and water, love.
Why do you need a 500k house? Why do you need upgrades that take it to 600k?
Why do you want this house? For the neighbors? to not admit to family that you made a few mistakes and want to rectify your financial imbalances?
There is no reason you need a 600+k 3100+ square foot house for four people. That is simply a want and a picture for people to think you are doing well.
Those who do well don't talk about it.
If you were to lose your job tomorrow, what would you do? move into a rental or apartment and keep your family together. It might hurt but that is the reality you face.
If you lost your job, what would you do?
You said you read "Millionaire Next Door, Ramsey books, listened to Suzie, and even read all of Jim Cramer's books" and got the message of live below your means, but it does not look like you are interested in implementing the ideas.Comment
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I've read all the books on finance from those various authors.
Guess I live in an expensive area, but we are going to stay here. All of our family is here, kids in school (ranked #3 in state) and we do like it here.
The home I am interested in was built in 1976 and nothing has been updated at all. Honestly, it'll be hard to go from new construction McMansion that is flawless to a home built in the 70's with no updating at all. So there are some things that we would want to renovate. Gotta steer the wife away from the pool with pavers and pool house! Admittedly, we are pretty spoiled but realize it's because we live beyond our means.
I can take the comments and criticism, that's why I am here. We've never been late on a payment, have great credit,etc., but want to make a conscious decision to change how we live and spend. What I don't want to do is to move to this dated home and be absolutely miserable and feel like it was a mistake. But, can I really afford to stay where I am...I think not.Comment
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I go back to one of my questions:
what have you implemented in the past 14 weeks that has saved you money? You were given lots of suggestions where you can cut from your budget and save money, did you implement any of them?
I wish you and your family great luck.Comment
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