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Old 01-19-2019, 09:53 AM
 
6,116 posts, read 11,165,872 times
Reputation: 2812

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Quote:
Originally Posted by Need4Camaro View Post
How long ago did you purchase?

Currently the cheapest mortgage with Property Tax, HOA fees, and so forth included that I've seen is about $1,850 monthly for a $220k House near Liberty Hill. Currently the metro's average home costs approximately $360k:
https://www.zillow.com/austin-tx/home-values/
and its only going up.

55k / 60k will get you by, but with luxuries? I doubt it.

Even bringing home $1,950 twice per month - $1,500 of that is your mortgage meaning instantly, one pay check is erased given you also will have to take expenses to survive for the next two to three weeks. A very generous estimation is $250 for food / gas combined to survive until your next paycheck. Thats $1,750 - Then you'll have utilities, Electric, Gas, Water ... Electric and Water will probably get paid, Gas probably will not - On the next round, you have car note, insurance, gas and food again, your remaining utilities, cellular phones, internet and possibly unexpected expenses if you're a home owner. Once again...easily $1,950. Ontop of which if you have health insurance (which is technically illegal not to) thats easily another $200 - $300 monthly if your employer doesn't provide it.

From what I've seen anyone wanting a payment of $1,500 or less, will either need a substantial down payment, or will have to choose an apartment.

Austin in general has a much higher CoL than most of the country, although still pales to California, New York, Massachusetts, New Jersey, Washington D.C. ect... its not exactly the cheapest place to live.
You are setting up a straw man. Someone with a 70K salary should absolutely not buy a 360K home.

There are many condos within the city for much less than that. An apartment/duplex can cost a lot less.

Someone making 70k should not have a new car. They should spend about 2-3K on a solid used car with no car payment. Insurance on such a car will be relatively inexpensive.

Here is a sample budget:
pretax $5416
take home $4369
Apartment $850 (e.g. 624 w 37th in brykerwoods, 400 sq ft)
Utilities $100/month
Internet 50/month
cell phone $40/month (500mb data)
Groceries $150/month
Car (paid for) - repairs - 100/month (2008 prius is $3200)
Car insurance $75/month
Car gas($2/gal, 20 miles/day, 35 mpg) 35/month
Medical - $75/month (generally a 65K will have some employer paid)
Eating out $200
Misc entertainment $200
Total spend 1875
Total savings 2494 (goes up by 29% if they do IRA, 401K etc)

I recommend people save 30% of their pretax income for retirement
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Old 01-19-2019, 10:06 AM
 
6,116 posts, read 11,165,872 times
Reputation: 2812
Quote:
Originally Posted by Need4Camaro View Post
Making ends meet means clearing the bills. Nothing more, nothing less. That's exactly what 55-65k will do here. If you want to amenities, luxuries, have toys or enjoy going out, you need at least $70k to do that without pinching yourself here. And that is what the OP requested. He didn't ask what you could survive or get by with, he wants to know what's comfortable as in permitting enough for him to enjoy other things outside of paying the bills.

As far car notes. I personally have never have a loan under $400 a month for vehicles even several years old, although I also dont extend my loan out for 72 months (aka eating interest) so I tend to stick around 3 or 4 year loan periods. I personally dont see $500 as alot of money either. Let's say for example (and this really happened to someone I know) you purchase a 2008 Mitsubishi and obtain a $250 monthly payment vs a 2016 Kia with a $450 monthly payment. The difference in payments is $200 monthly. The difference is, the Kia comes with a warranty, the Mitsubishi does not. It turns out on this specific model that there is a flaw in the timing chain. It snaps and leaves you stranded. In just one tow you have already paid the difference between monthly payments, then at the repair shop they have to dissect the engine, replace the timing belt, and put it back together. About $4,000 parts and labor. Already your Mitsubishi has accumulated the sum of TWENTY MONTHS (or nearly TWO YEARS) of the same payments as the 2016 Kia. (The difference between the Kia and Mitsubishi is $200 monthly. Divide $4,000 by $200 and that gives you the equivalent of 20 payments being rolled into your loan.) And do you think it will stop there? No. There will be other failures. In summary, you end up paying the same in the end, the difference isn't what you pay, but when you pay it.
What you are describing is a typical american that has a really bad relationship with money. You are making up low probability scenarios to justify wasting money on expensive cars. If you buy a 4-5 year old toyota/honda it will likely be trouble free for *many* years. Every toyota/lexus/honda (5 of them, obviously not sequentially, and anecdotally) I have ever owned has never needed any major service for the lifetime of the car (some bought used, some bought new)

I have lived on 12K (25 years ago) and still managed to save about 1K/year.

In austin when I made 70K I saved 30% of my money. The easiest way to keep your rent down is to have roommates. In my case I bought a 360K house with 3 roommates who completely paid my mortgage.

I make quite a bit of money now, but still drive an 8 year old car and have no payment. I try to never pay over about 35K for a car (used or new)
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Old 01-19-2019, 10:24 AM
 
665 posts, read 623,108 times
Reputation: 893
Quote:
Originally Posted by Austin97 View Post
What you are describing is a typical american that has a really bad relationship with money. You are making up low probability scenarios to justify wasting money on expensive cars. If you buy a 4-5 year old toyota/honda it will likely be trouble free for *many* years. Every toyota/lexus/honda (5 of them, obviously not sequentially, and anecdotally) I have ever owned has never needed any major service for the lifetime of the car (some bought used, some bought new)

I have lived on 12K (25 years ago) and still managed to save about 1K/year.

In austin when I made 70K I saved 30% of my money. The easiest way to keep your rent down is to have roommates. In my case I bought a 360K house with 3 roommates who completely paid my mortgage.

I make quite a bit of money now, but still drive an 8 year old car and have no payment. I try to never pay over about 35K for a car (used or new)
Couldn't have said it better! I'm scratching my head that someone making $70k a year will be eyeing a $360k house. That is just an epitome of the bad relationship with money that a lot of people have. Our family income is multiple times more than that, and we have children yet when we moved here, we bought a house just a bit more than that because we didn't want to be house poor. We have also never paid $500 car note and I can't fathom why someone making $70k would want to do that.

Infact, a young lady that just started on my team, she graduated last year from college, she bought her first car, a 2 year old Toyota Corolla for about $15k, had only 20k miles and she put down $3000 or so and financed the car for 48 months paying $300/month. She lives somewhere in East Austin where she pays $1,250 for her 1br. I talked to her yesterday and she was shaking her head to hear that it was that difficult for a person to survive on $70k in Austin and she still goes out and has a nice time with her friends and still manages to save.

I know a ton of people doing this and since with kids too.

But to each their own!

Last edited by COCUE; 01-19-2019 at 11:37 AM..
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Old 01-19-2019, 11:07 AM
 
Location: Murrica
2,638 posts, read 1,535,024 times
Reputation: 1434
Quote:
Originally Posted by Need4Camaro View Post
Making ends meet means clearing the bills. Nothing more, nothing less. That's exactly what 55-65k will do here. If you want to amenities, luxuries, have toys or enjoy going out, you need at least $70k to do that without pinching yourself here. And that is what the OP requested. He didn't ask what you could survive or get by with, he wants to know what's comfortable as in permitting enough for him to enjoy other things outside of paying the bills.

As far car notes. I personally have never have a loan under $400 a month for vehicles even several years old, although I also dont extend my loan out for 72 months (aka eating interest) so I tend to stick around 3 or 4 year loan periods. I personally dont see $500 as alot of money either. Let's say for example (and this really happened to someone I know) you purchase a 2008 Mitsubishi and obtain a $250 monthly payment vs a 2016 Kia with a $450 monthly payment. The difference in payments is $200 monthly. The difference is, the Kia comes with a warranty, the Mitsubishi does not. It turns out on this specific model that there is a flaw in the timing chain. It snaps and leaves you stranded. In just one tow you have already paid the difference between monthly payments, then at the repair shop they have to dissect the engine, replace the timing belt, and put it back together. About $4,000 parts and labor. Already your Mitsubishi has accumulated the sum of TWENTY MONTHS (or nearly TWO YEARS) of the same payments as the 2016 Kia. (The difference between the Kia and Mitsubishi is $200 monthly. Divide $4,000 by $200 and that gives you the equivalent of 20 payments being rolled into your loan.) And do you think it will stop there? No. There will be other failures. In summary, you end up paying the same in the end, the difference isn't what you pay, but when you pay it.
Having a very expensive car, when you're just starting out, isn't the best financial decision. In fact, it's pretty bad.

I might suggest you get your financial house in order before dispensing advice to others.
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Old 01-19-2019, 11:15 AM
 
211 posts, read 114,987 times
Reputation: 297
Quote:
Originally Posted by Austin97 View Post
You are setting up a straw man. Someone with a 70K salary should absolutely not buy a 360K home.

There are many condos within the city for much less than that. An apartment/duplex can cost a lot less.

Someone making 70k should not have a new car. They should spend about 2-3K on a solid used car with no car payment. Insurance on such a car will be relatively inexpensive.

Here is a sample budget:
pretax $5416
take home $4369
Apartment $850 (e.g. 624 w 37th in brykerwoods, 400 sq ft)
Utilities $100/month
Internet 50/month
cell phone $40/month (500mb data)
Groceries $150/month
Car (paid for) - repairs - 100/month (2008 prius is $3200)
Car insurance $75/month
Car gas($2/gal, 20 miles/day, 35 mpg) 35/month
Medical - $75/month (generally a 65K will have some employer paid)
Eating out $200
Misc entertainment $200
Total spend 1875
Total savings 2494 (goes up by 29% if they do IRA, 401K etc)

I recommend people save 30% of their pretax income for retirement
The key point where this budget works is the rent. It's harder and harder to find the rent that low in downtown or it's vicinity, especially in the new buildings where rent will go for a MINIMUM 2200 a month for a small 400-500 sq ft. Unless if you share with someone, but who wants roommates, the rent is the key point in the budget. It's just not downtown but rent has been rising consistently where it appears a salary of 60k would be just enough to get by.

So, taking your sample budget, if you're paying downtown rent and increase your car payment couple hundred a month, for those who still have a payment, your savings went right out the door and a minimum of 70k would be required with minimum to spare.
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Old 01-19-2019, 11:43 AM
 
665 posts, read 623,108 times
Reputation: 893
Quote:
Originally Posted by scot892 View Post
The key point where this budget works is the rent. It's harder and harder to find the rent that low in downtown or it's vicinity, especially in the new buildings where rent will go for a MINIMUM 2200 a month for a small 400-500 sq ft. Unless if you share with someone, but who wants roommates, the rent is the key point in the budget. It's just not downtown but rent has been rising consistently where it appears a salary of 60k would be just enough to get by.

So, taking your sample budget, if you're paying downtown rent and increase your car payment couple hundred a month, for those who still have a payment, your savings went right out the door and a minimum of 70k would be required with minimum to spare.
Not being snarky or anything like that, but I'm really having a hard time understanding why living downtown is a right or is the only way to live. The first time in my life (years ago) that I lived in a downtown apartment in a city more expensive than Austin, I was making 2x the salary in question here and I still understood that I had to manage my money well to enjoy that privilege so I didn't have a car because I walked to work or used public transportation. Before that time when I made way less money, I had roommates or lived further out and commuted. And my life wasn't the pits either during that time.
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Old 01-19-2019, 12:25 PM
 
Location: Austin, TX via San Antonio, TX
5,785 posts, read 8,247,643 times
Reputation: 3038
Quote:
Originally Posted by petsounds View Post
Thanks for all of the input. As much as it killed me, I declined the interview. I talked to my property manager last night and I couldn't break my lease... with seven months left. That was the tipping point. I'm not gonna pay like $7,000 not to live here.

If I was a 20-something with nothing to lose, it might be different, but when you're older with savings, living comfortably, no debt, retirement plans, etc., it's much harder to do things on a whim.
I hope all this back and forth is fun for everyone because after page 2 all the advice is moot because OP decided NOT to interview for a position in Austin.
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Old 01-19-2019, 12:41 PM
 
211 posts, read 114,987 times
Reputation: 297
Quote:
Originally Posted by COCUE View Post
Not being snarky or anything like that, but I'm really having a hard time understanding why living downtown is a right or is the only way to live. The first time in my life (years ago) that I lived in a downtown apartment in a city more expensive than Austin, I was making 2x the salary in question here and I still understood that I had to manage my money well to enjoy that privilege so I didn't have a car because I walked to work or used public transportation. Before that time when I made way less money, I had roommates or lived further out and commuted. And my life wasn't the pits either during that time.
Perhaps you misunderstood what I was trying to say. Never said living in downtown was a right or only way to go. However, the OP was looking to be in the vicinity of it but decided not to move here.

So, for general arguments sake for living in Austin, my point was, it's not so far fetch to believe, one needs 70k to live here for basic needs even without frivolous spending. The key element would be low housing cost but it's harder to find places here around Austin with low housing cost, not just in downtown.
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Old 01-19-2019, 03:29 PM
 
Location: Round Rock, Texas
10,345 posts, read 9,619,697 times
Reputation: 13458
Quote:
Originally Posted by Need4Camaro View Post
Making ends meet means clearing the bills. Nothing more, nothing less. That's exactly what 55-65k will do here. If you want to amenities, luxuries, have toys or enjoy going out, you need at least $70k to do that without pinching yourself here. And that is what the OP requested. He didn't ask what you could survive or get by with, he wants to know what's comfortable as in permitting enough for him to enjoy other things outside of paying the bills.

As far car notes. I personally have never have a loan under $400 a month for vehicles even several years old, although I also dont extend my loan out for 72 months (aka eating interest) so I tend to stick around 3 or 4 year loan periods. I personally dont see $500 as alot of money either. Let's say for example (and this really happened to someone I know) you purchase a 2008 Mitsubishi and obtain a $250 monthly payment vs a 2016 Kia with a $450 monthly payment. The difference in payments is $200 monthly. The difference is, the Kia comes with a warranty, the Mitsubishi does not. It turns out on this specific model that there is a flaw in the timing chain. It snaps and leaves you stranded. In just one tow you have already paid the difference between monthly payments, then at the repair shop they have to dissect the engine, replace the timing belt, and put it back together. About $4,000 parts and labor. Already your Mitsubishi has accumulated the sum of TWENTY MONTHS (or nearly TWO YEARS) of the same payments as the 2016 Kia. (The difference between the Kia and Mitsubishi is $200 monthly. Divide $4,000 by $200 and that gives you the equivalent of 20 payments being rolled into your loan.) And do you think it will stop there? No. There will be other failures. In summary, you end up paying the same in the end, the difference isn't what you pay, but when you pay it.
And again I disagree, as I've explained before.

If you can't "clear bills" making 55-65k, then it's your spending habits plain and simple. Some people need to make more money to compensate for their money management. I get that. But presuming not everyone is in that same situation (like the OP, who has no debt as far as I recall), then what I said applies.

I've given sufficient examples of how you can live comfortably, but your idea of comfort might be different than mine. You absolutely do not need 70k to enjoy amenities, have toys, whatever.

Also, my first home purchase was a condo apartment that was below $200k. I also saved up. Working 70 hour weeks to get a bigger downpayment. There are still condos that are below 250k and as a single person, you don't have to own a house. You can own an apartment if you want to live closer in, or a townhome or maybe even a smaller house if you're willing to live farther from the urban core. There's still deals in 78729. Then there's the suburbs, if you want more space for your money. If you want a (below 1400 sq ft) small house, then the suburbs still are affordable with offerings in the 220s-230s. yeah, you'll commute but so what, if you want to own and have a house then you'll do what you need to do. A lady I knew, a state employee made less than $60k and bought herself a nice, small home for $200k just across the city line in Round Rock. She has lots of equity now.
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Old 01-20-2019, 09:35 PM
 
Location: Central Texas
20,100 posts, read 36,916,461 times
Reputation: 21919
Quote:
Originally Posted by Need4Camaro View Post
Making ends meet means clearing the bills. Nothing more, nothing less. That's exactly what 55-65k will do here. If you want to amenities, luxuries, have toys or enjoy going out, you need at least $70k to do that without pinching yourself here. And that is what the OP requested. He didn't ask what you could survive or get by with, he wants to know what's comfortable as in permitting enough for him to enjoy other things outside of paying the bills.

As far car notes. I personally have never have a loan under $400 a month for vehicles even several years old, although I also dont extend my loan out for 72 months (aka eating interest) so I tend to stick around 3 or 4 year loan periods. I personally dont see $500 as alot of money either. Let's say for example (and this really happened to someone I know) you purchase a 2008 Mitsubishi and obtain a $250 monthly payment vs a 2016 Kia with a $450 monthly payment. The difference in payments is $200 monthly. The difference is, the Kia comes with a warranty, the Mitsubishi does not. It turns out on this specific model that there is a flaw in the timing chain. It snaps and leaves you stranded. In just one tow you have already paid the difference between monthly payments, then at the repair shop they have to dissect the engine, replace the timing belt, and put it back together. About $4,000 parts and labor. Already your Mitsubishi has accumulated the sum of TWENTY MONTHS (or nearly TWO YEARS) of the same payments as the 2016 Kia. (The difference between the Kia and Mitsubishi is $200 monthly. Divide $4,000 by $200 and that gives you the equivalent of 20 payments being rolled into your loan.) And do you think it will stop there? No. There will be other failures. In summary, you end up paying the same in the end, the difference isn't what you pay, but when you pay it.

And I've never had a car note, period (have always paid cash, regardless of age - we don't believe in debt for disposables and haven't since we were young and poor; the biggest problem in getting a mortgage when we bought the ranch and put 60% down was our debt/income ratio - we didn't owe enough for our income and they thought something was off, but it was just paying cash), and have never had excessive mechanic's bills. (We tend to keep the same mechanic for decades, choose vehicles for reliability rather than flash, and they feel no need to charge me for anything the vehicle doesn't need.) Not everyone "needs" a brand new car and accompanying car payment or if they do, they save up until they can pay cash for it and not pay a heck of a lot more for it than the price of the vehicle itself.
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