Newbie - Need Budget advice

[snafu]

I suggest you check the details of the PMI as this is an expensive add-on insurance that only benefits your mortgage holder. It's important to track mortgage payment allocation. You need to know how many dollars go to principal, interest, taxes, PMI, HOA [if applicable], homeowner insurance [if you've chosen to make it part of your payment]. Try to follow Zillow type evaluation since some areas escalate faster than others and you need to prove you've reached 20%.

With 3 vehicles, I suggest checking with an insurance broker for best discount adding home owner's insurance. Ask your insurance agent to meet best deal since all insurance is held by the large re-insurers; the difference is the commission garnered by the agent.

[Gailete]

With 3 vehicles, I suggest checking with an insurance broker for best discount adding home owner's insurance. Ask your insurance agent to meet best deal since all insurance is held by the large re-insurers; the difference is the commission garnered by the agent.
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Don't forget to ask for other types of discounts as well. We get a discount due to where my husband went to college.

Also with the PMI as Snafu said, you have to be the one keeping a look out on it. Don't wait for your bank to tell you when it is done. If no other way you can tell by an amortization schedule when you hit 20%. I don't know how you deal with it if trying to prove via increased value in your home. But if you wait for the bank you can end up paying a lot more than you need to with no refunds.

[Burning]

I suggest you check the details of the PMI as this is an expensive add-on insurance that only benefits your mortgage holder. It's important to track mortgage payment allocation. You need to know how many dollars go to principal, interest, taxes, PMI, HOA [if applicable], homeowner insurance [if you've chosen to make it part of your payment]. Try to follow Zillow type evaluation since some areas escalate faster than others and you need to prove you've reached 20%.

With 3 vehicles, I suggest checking with an insurance broker for best discount adding home owner's insurance. Ask your insurance agent to meet best deal since all insurance is held by the large re-insurers; the difference is the commission garnered by the agent.

Thanks for the tip. For the insurance broker, State Farm has the lowest insurance rate for me for the vehicles and even with them bundling the auto and home the home rate is still 15-20 bucks more a month than the people im going to use. And the people im going to use for home want 2x as much as state farm for car insurance.

Don't forget to ask for other types of discounts as well. We get a discount due to where my husband went to college.

Also with the PMI as Snafu said, you have to be the one keeping a look out on it. Don't wait for your bank to tell you when it is done. If no other way you can tell by an amortization schedule when you hit 20%. I don't know how you deal with it if trying to prove via increased value in your home. But if you wait for the bank you can end up paying a lot more than you need to with no refunds.

[Starry436]

You may want to check, but I think with a USDA loan that PMI or the USDA annual fee does not go away for the life of the loan, the amount of the fee just decreases as the balance decreases.

[Sammydabullz]

Our goal is to be in this house for 10-15 years

Then why did you buy so much house if your not planning on living in it until retirement? I just don't understand why young people buy 150k-200k houses without the intention of it being a forever home. 20% of your annual net income is the house payment. That's gonna put a whole lot of unnecessary stress on your life. If you don't want to live in your area and plan on moving to new location anyways. Buy a smaller house and free up the cash. But now it's too late since you already bought the house.

[LivingAlmostLarge]

Because sometimes the house you buy was never meant to be long term. Maybe 5-7 years. Our first 1 bd condo cost more than many people's homes. And it was small 500 sq ft. We always planned on moving up. Then a 3 bd townhouse also small cost more than most people's home for sure. Depending on where you live it's not uncommon to do something like that because who can afford a home first time out? We certainly couldn't. And even now I think we got ahead of many of our contemporaries because we made those sacrifices. Don't judge until you understand why people make the choices they make.

[Sammydabullz]

Don't judge is fine with me. It is a valid question tho. There is no good reason to put yourself in a horrible financial position if your not planning on staying in it for the long haul. Owning a home in an area that you don't want to live is already stressful on the relationship. Been there, done that with my wife. Let alone a monthly payment that will make saving difficult will only put even more stress on the relationship. And then there is no guarantee that you will easily unload the house when you decide it is time to move. You will be torn between deciding to move anyways and paying two house payments, renting and paying a house payment, or remaining unhappy in your original home. Been there, done that too.

[LivingAlmostLarge]

No Sammy you don't get it at all do you? Many people buy something because they want to stay long term. I certainly did all three times now. But all three times were compromises. I want to stay in the area this final time but the houses weren't quite what I wanted. So we'll see how long we stay. Do we realize what we did? Yes.

But previously we couldn't have afforded a house. So bought something we knew would work for 5-10 years and it did. Enough to have kids in, great area but long term wasn't what we wanted.

Plus sometimes people make a decision and say I am buying a house for 7 years. I am going to have 2 kids and move when the kids are school age to something bigger. Well what's wrong with that?

[Gailete]

When I bought my last home, I had full expectations of living there the rest of my life, so I found what was literally the cheapest house in town. It was big enough for my needs. I have a sewing hobby that has expended to the point that since around 25 years ago I have needed a full bedroom to contain it all! It was also one floor which I needed as I already had one nee replaced at that point. I knew the possibility that I might have to quick working sooner that I would like (I NEVER expected it to happen less than a year after I bought the house!). Then the man who had become just friends with, became more than that and when we realized that we could be getting married, we had some decisions to make. Should he finish off the house he had been building that was attached to his workshop or should we stay in my house. Staying would mean paying on two mortgages, two sets of utility bills, etc. He finished the house and we moved, selling my house for exactly what I had paid for it, so essentially 5 years rent free. I have serious doubts that I could even begin to maintain this house if something happened to hubby, so I am happy to know that if needed I'm old enough for senior housing which is a lot cheaper.

The point is that plans can change in an instant. When I was first married the first time, we moved into a new construction 1000 sq ft house in a new subdivision. 6 years later, meeting the mortgage payment was getting to be too much to much to handle - and don't I wish that was our mortgage today! So, we sold that house and moved into one that by renting out the top floor we could afford it. After I finished nursing school we took over the whole house. But that first 'starter' home, I would have been content to live in it for a very long while, until I was granny age. Plans can change and even if you think that you will be in a house long term, you may find yourself somewhere else.

[FLA]

I think you're doing great for your age. The one thing I wonder about is how much you spend on food for 2 people, that seems high.

I don't judge, but after listening to Dave Ramsey enough, he'd probably say sell the Mustang and put it towards getting rid of PMI or there debt. But you probably love that car.

I started aggressively saving for retirement at 22. Thank God I did because I became disabled at 46. You never know what life has in store. When your debt is paid off, I would try to save 15 % in retirement savings, like a Roth IRA. I'm not an investment expert, but I have read over and over, don't just be invested in your company and dependent on its returns.

Good luck continuing on a well thought out plan!

[Burning]

Then why did you buy so much house if your not planning on living in it until retirement? I just don't understand why young people buy 150k-200k houses without the intention of it being a forever home. 20% of your annual net income is the house payment. That's gonna put a whole lot of unnecessary stress on your life. If you don't want to live in your area and plan on moving to new location anyways. Buy a smaller house and free up the cash. But now it's too late since you already bought the house.

I bought that much house because i can afford to. I can afford to, and still put money away towards retirements and allowances. Once my student loan is paid off, all of the additional money will go towards the PRINCIPLE of the home loan. By the time we sell the house the amount remaining will be relatively low. Also one of the reasons we are only planning to be here for that time duration is because there is opportunity in my company that will potentially land me back in NC during that time.

I think you're doing great for your age. The one thing I wonder about is how much you spend on food for 2 people, that seems high.

I don't judge, but after listening to Dave Ramsey enough, he'd probably say sell the Mustang and put it towards getting rid of PMI or there debt. But you probably love that car.

I started aggressively saving for retirement at 22. Thank God I did because I became disabled at 46. You never know what life has in store. When your debt is paid off, I would try to save 15 % in retirement savings, like a Roth IRA. I'm not an investment expert, but I have read over and over, don't just be invested in your company and dependent on its returns.

Good luck continuing on a well thought out plan!

All of our budgets are just preliminary so we really have no idea on hard numbers as of yet. Luckily for me the SO has a uncle who works for a very large investment company here in Louisville so when we have the budget for retirements and investments solidified we will be going to him to see what he suggests. I do not count on the ESOP being there when i retire, although it would be nice if it does. So saving for future let downs is pretty high on the list.

[Sammydabullz]

@ almostlivinglarge and @ gailete your feedbacks are true and goes to show that my question is still valid. And yes I do understand the point of not planning on living somewhere. What I have done in my first home purchase was buy a fixer upper Acreage for 39k. Spent less than 5k to remodel it all myself. I went to college full-time and worked a job, my wife was also full-time college and worked a job. Yet we still found time to fix up the place. After two years we needed to move to a new state. The house was completed being remodeled. I sold the house for 65k. My second house I purchased the same way, it's a fixer upper that I purchased for 45k in an area that sells for 75k+. Both my wife and I are working full-time now raising a kid. And I still find time to remodel the house by myself. No one has to buy a turn key property.... why not buy something that you will easily build equity into if your planning on moving anyways.

Edit: I have lived in the states of Pennsylvania, Maryland, Ohio, Kentucky, Kansas, Iowa, Missouri. I know all about moving around. That's why I plan ahead and buy houses I believe I can sell for more.

[Burning]

@ almostlivinglarge and @ gailete your feedbacks are true and goes to show that my question is still valid. And yes I do understand the point of not planning on living somewhere. What I have done in my first home purchase was buy a fixer upper Acreage for 39k. Spent less than 5k to remodel it all myself. I went to college full-time and worked a job, my wife was also full-time college and worked a job. Yet we still found time to fix up the place. After two years we needed to move to a new state. The house was completed being remodeled. I sold the house for 65k. My second house I purchased the same way, it's a fixer upper that I purchased for 45k in an area that sells for 75k+. Both my wife and I are working full-time now raising a kid. And I still find time to remodel the house by myself. No one has to buy a turn key property.... why not buy something that you will easily build equity into if your planning on moving anyways.

Edit: I have lived in the states of Pennsylvania, Maryland, Ohio, Kentucky, Kansas, Iowa, Missouri. I know all about moving around. That's why I plan ahead and buy houses I believe I can sell for more.

For some reason my posts have to reviewed now to be posted, but to answer the last bit of your question...

I work in Commercial construction dealing with projects in the upwards of 50+ million dollars. One of the reasons I went with a much more expensive house is because i simply DON'T have the time to deal with a fixer upper. My work day starts at 6:00 AM and ends usually around 7:00 PM. One of the deciding factors was that we wanted a house that was as new as possible for multiple purposes. i don't have to worry about replacing a roof in 2 years, i don't have to worry about hiring an electrician, plumber, drywall hanger, drywall finisher to do any renovations, i don't have to worry about bringing the home up to code. I simply didn't want to come home from my already stressful and tiring job then do some more work. The little time i have at the end of the day i like to enjoy with my Fiance, and going a walk with my dogs.

I paid more money upfront for a new home because my time is much more valuable outside of work.

[Burning]

I think you're doing great for your age. The one thing I wonder about is how much you spend on food for 2 people, that seems high.

I don't judge, but after listening to Dave Ramsey enough, he'd probably say sell the Mustang and put it towards getting rid of PMI or there debt. But you probably love that car.

I started aggressively saving for retirement at 22. Thank God I did because I became disabled at 46. You never know what life has in store. When your debt is paid off, I would try to save 15 % in retirement savings, like a Roth IRA. I'm not an investment expert, but I have read over and over, don't just be invested in your company and dependent on its returns.

Good luck continuing on a well thought out plan!

Thank you, as stated in the first post most of the values do not have hard numbers yet. The food budget, gas budget and most of the expendable items will not be set in stone till probably 3 months after we move in. After that i will go in and adjust accordingly.

Dave Ramsey would tell me to sell that car, however i think that since its paid off and the return i would get is not enough to justify it being sold. Once we move it will be coming off insurance since it will not be driven (also allows me to do some small modifications to it with my pocket/hobby money).

Luckily we are still having a decent amount go in the retirement plans even when paying off a student loan. I'd like to raise that area up to 1000 a month after the credit cards are paid, but i will have to play with the numbers to see what we can afford. And like you said, i am not counting on my ESOP for retirement that is why we have that separate allowance each month.

[Burning]

Then why did you buy so much house if your not planning on living in it until retirement? I just don't understand why young people buy 150k-200k houses without the intention of it being a forever home. 20% of your annual net income is the house payment. That's gonna put a whole lot of unnecessary stress on your life. If you don't want to live in your area and plan on moving to new location anyways. Buy a smaller house and free up the cash. But now it's too late since you already bought the house.

Didn't see this before my last post. No where in my post did i say that i didn't want to live here. The facts are that when i have 10+ years of experience, and around that time a branch of our company will be opening up where I am from in NC.

The home i have bought is a nice starter home, and that's exactly what it will be. Not many young people like me can afford to buy a home, so i am very fortunate to be able to. Its not going to be any more stress than i already have... if i decided to rent it would be much more here to rent that buying a house. A buddy of mine lives in a one bedroom apartment and pays 950 a month... another in 2 bedroom apartment pays 1250 a month.

Why would i want to throw money away at something like housing in which i would have no return? By buying a house, I am investing in my property and home. When I can roll over money to the next bigger house. If i ended a lease..i get nothing back.