How much do I need to save up for a $274k-300k house?

**disneysteve** · 08-03-2017, 06:26 PM

Welcome to the site.

First and foremost, I would advise not buying a home jointly with anyone other than your spouse. Will you be getting married prior to buying the house? If not, then treat this as if you are buying the house on your own. It should be in your name only and the deal needs to make sense on your income alone.

That said, I think 300K is a bit much. 275K is definitely the upper limit of where I'd feel comfortable since you also have the rental property. If it were me, I wouldn't even go that high.

How much should you save? At least a 6-month emergency fund. That EF should also include covering a potential vacancy of the rental home (or the tenant not paying rent as scheduled).

If the boyfriend stays in the picture and contributes to the expenses, that's great, but you want to be sure you'll be okay if he ceases to be involved.

**SGP20162016** · 08-03-2017, 07:47 PM

Steve, this is such solid advice. Thank you so much.

So I'm thinking for a $260,000 home...

$52,000 Downpayment

$5,000 Closing costs? Really not sure about this.

$20,000 EF

So, we should be ok with about $80k saved - right?

We're currently saving about $2k a month..we just started a few months ago and are at $12k. It's going to be a long haul! Patience is difficult, but it will pay off.

**bjl584** · 08-04-2017, 03:17 AM

Unless you are engaged to be married, or are married, then forget about your boyfriend's finances and focus on your finances only when considering a home purchase. Things could get ugly and possibly apocalyptic should that house be in both your names and you end up breaking up.

$260K seems reasonable. Closing costs could be higher or lower depending how you work the deal. You can ask the seller to cover some of them.

Yes, you'd be ok with $80K saved.

**james.hendrickson** · 08-04-2017, 07:56 AM

Hey SGP,

I wanted to pipe up here as well. BJ and Steve have given some great advice. So I thought I'd weigh in and share my thoughts.

Mostly when it comes to getting a house downpayment together, the best option in terms of your overall financial health, is to save up the downpayment. You seemed to feel that its going to be a long haul to save up the money you need, so I thought I'd offer some suggestions to help speed up the process.

If you want to accelerate your savings you can always try the following:

1. Use a savings app like Digit. I don't reccomend Didit itself because their fee structure is a bit too high, but a passive savings application like digit or acorns can help when you are feeling low energy or are otherwise having a hard time staying focused. I have that problem sometimes.

2. Try selling some of your extra stuff. For example, I have a ton of old books, plastic shelves, kids toys, etc. We are planning on having a garage sale in the next few weeks to raise some cash. So if you sell some of your old stuff, you'll have the benefits of adding to your savings as well as decluttering. A lot of the hardcore savers here on the forums do this regularly.

3. You could also try a savings challenge. Several of the forum members, like SavingsSteve, have done this successfully. In fact, I think SavingSteve has saved several thousand dollars this year. Popular challenges are the 52 week money challenge or the 365 day money challenge.

4. Get the highest interest comensurate with your risk tolerance. Since you said you had $12,000 saved up already, have you considered maximizing the amount of interest you get? For example, a lot of savings accounts and CDs are paying 1% these days. Its not lot, but on an annualized basis 1% of $12,000 is $120, so you could get $100 bucks or so a year if you moved your savings.

This may be more controversial...but I like bond funds for my medium term savings. Some good quality bond funds are paying 3%. While bonds are riskier than cash, they are less risky than stocks. So, if you have more of appetite for risk, you might consider them as a place to stash some of your savings.

5. Have you looked at your personal habits and bills? A lot of people find there effencies in changing their habits and examining their current bills. For example, we pretty much always turn off the lights when we leave the house - this habit saves us a couple of bucks a month. A lot of people are able to save on their cell phones, car insurance and other recurring bills if they shop around.

Also, thanks for posting here - these kinds of discussions are one reason why we have the forums.

**siggy_freud** · 08-04-2017, 09:33 AM

You can also structure things legally to protect yourselves, and each others interests when buying a home outside of marriage. Marriage isn't for everyone, and more and more couples are choosing not to get married, even though they may remain together for years, decades, etc. Your financial choices shouldn't need to be regulated by your marital status, though you do need to take extra steps to protect your interests.

I don't disagree with any advice given, but even with a marriage, separation and division of a house and assets can still be ugly. Marriage is no guarantee of a clean break should things sour

.

From a financial stand point, your plan seems solid. Whether or not 260k is adequate for a house will depend entirely on where you live though

.

**disneysteve** · 08-04-2017, 09:49 AM

Originally posted by SGP20162016 View Post

So, we should be ok with about $80k saved - right?

We're currently saving about $2k a month..we just started a few months ago and are at $12k.

I would stress again that this is not a joint situation. You aren't married. There is no "we" in this story.

If you want to buy a house, that's great. If he wants to contribute by paying rent, that's great. But don't make the mistake of buying it together and co-mingling your money with his money.

How much do YOU have saved for a down payment? How much can YOU afford to spend on the house?

**siggy_freud** · 08-04-2017, 10:00 AM

I'd say that if they want to buy a house together, even unmarried, it's possible, so long as they take extra steps and have some legal protections in place that would otherwise come with marriage. But I don't think marriage should be a barrier to buying a house with someone, nor do I think that it's a forgone conclusion that two people in love have to get married.

There can be a WE without a marriage. You just have to do some extra things legally to be as protected.

**disneysteve** · 08-04-2017, 10:03 AM

Originally posted by siggy_freud View Post

There can be a WE without a marriage. You just have to do some extra things legally to be as protected.

I suppose. I've never heard of any couples setting up legal protections. I've heard many, many stories of couples acting as if they were married and then getting screwed when they broke up. If there are ways to give yourselves the legal protections that come with marriage without actually getting married, then definitely do that before buying the house jointly and combining your financial lives. Until those protections are in place, though, everything should be handled individually.

**phantom** · 08-04-2017, 11:19 AM

Originally posted by disneysteve View Post

I suppose. I've never heard of any couples setting up legal protections. I've heard many, many stories of couples acting as if they were married and then getting screwed when they broke up. If there are ways to give yourselves the legal protections that come with marriage without actually getting married, then definitely do that before buying the house jointly and combining your financial lives. Until those protections are in place, though, everything should be handled individually.

There was an episode of Freakonomics that talked to a pair of economists who essentially decided to make a series of legal agreements rather than get married. It seemed like a pretty reasonable approach, and I really admired how much thought it forced them to put into how their relationship would work. But, I think accepting the default set of legal agreements that come with a marriage seems a lot easier.

Edit: I just re-listened, and you'll also want to check out part 2 for more details.

**disneysteve** · 08-04-2017, 11:58 AM

Originally posted by phantom View Post

There was an episode of Freakonomics that talked to a pair of economists who essentially decided to make a series of legal agreements rather than get married.

I wonder how difficult and expensive that was. I'm sure both parties need lawyers involved in representing their interests so that can't be cheap.

**SGP20162016** · 08-04-2017, 01:27 PM

We are planning on getting married before the home purchase. The $12k saved is mine and the $2k savings per month is also with just me saving. I didn't factor in his contribution which wood be $500/mo. I failed to mention that the figures were just mine.

I understand the legal implications. We arent planning to buy the home together until after we are married.

**LivingAlmostLarge** · 08-07-2017, 08:31 AM

$60-80k. You can buy a house unmarried. Just have a contract.

**disneysteve** · 08-07-2017, 08:42 AM

Originally posted by SGP20162016 View Post

We are planning on getting married before the home purchase. The $12k saved is mine and the $2k savings per month is also with just me saving. I didn't factor in his contribution which wood be $500/mo. I failed to mention that the figures were just mine.

I understand the legal implications. We arent planning to buy the home together until after we are married.

Somehow I missed this post.

That's good to hear. In that case, I'll repeat the answer I gave earlier:
How much should you save? At least a 6-month emergency fund. That EF should also include covering a potential vacancy of the rental home (or the tenant not paying rent as scheduled).

**Gailete** · 08-10-2017, 05:03 PM

Glad to hear that you are waiting to buy the house when you are married. One simple thing to mention. You say you have no plans on having children together, is that both of you saying that or just one of you and the other going along for the ride and deep down hoping that the other will change their minds. There are a few sure-fire things to be sure that you don't have any kids together. Total abstinence and I doubt that would be your choice. tube tying for you and/or hysterectomy. For him it is a vasectomy. I have heard of vasectomies failing and I'm sure some tube tying does as well. Just saying that is something unless done already you will have to be thinking about.

I've read about many women coming here and they seem to be grabbing their guy by the moustache and getting him out of debt whether he wants to or not. I would hate to see you in this sort of problem where you are forking out the dough for everything while because his income is lower and he has a child he is contributing much less when he should be contributing the same percentage that you are. A percentage based on income. Make sure that you really are on the same road map when discussing your plans for the future and you may also have a bit higher bump because your income is so much higher than his when the rental is thrown in. Just want you to proceed with caution.

Rather than figure out how expensive of a house you can afford, you need to make a list of what you need in a house. Even thing that may be silly - like if you are night owls, you don't want the main bedroom to have a big eastern exposure window that will be waking you at the crack of dawn daily especially in mid-summer. How many bathrooms, what kind of kitchen. Are you 'gourmet' type chefs or only use the microwave to heat up restaurant leftovers? When I buy a sewing machine, I make sure it has certain capabilities. A house is even a bigger expense and so should be looked at to be sure it is what you want. Do you garden or want to? Or would you rather do like my husband wishes he could pave the yard over and git rid of all the allergens? Then when you start looking for houses, you go from your list and start looking to see the cheapest house you can find that has all the important needs as well as some desires. If you are lucky you may find a home that is less money than you were figuring.

How much do I need to save up for a $274k-300k house?