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Old 02-27-2011, 10:48 AM
 
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its common to put money away in an emergency fund in case you need it.

my question is this, what if i dont know what my expenses are?

i mean i currently know what they are, but i wont know what they are down the line when i eventually get a house.

is it just based off what your expenses are now, or do you kind of predict what theyll be down the line.

thanks.
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Old 02-27-2011, 10:55 AM
 
Location: Bradenton, Florida
27,236 posts, read 41,379,780 times
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Quote:
Originally Posted by tropolis View Post
its common to put money away in an emergency fund in case you need it.

my question is this, what if i dont know what my expenses are?

i mean i currently know what they are, but i wont know what they are down the line when i eventually get a house.

is it just based off what your expenses are now, or do you kind of predict what theyll be down the line.

thanks.
I don't expect to get a house...

but I understand that, even with taxes, a house payment should be less than the rent you are paying now.
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Old 02-27-2011, 11:00 AM
 
5,748 posts, read 10,762,074 times
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Work with your current expenses, and adjust if they change.
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Old 02-27-2011, 11:44 AM
 
11,935 posts, read 20,383,027 times
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Quote:
Originally Posted by TKramar View Post
I don't expect to get a house...

but I understand that, even with taxes, a house payment should be less than the rent you are paying now.
That's not true. If you're renting a one bedroom 400 square foot apartment and buy a 4 bedroom 2500 square foot house, you cannot possibly think your house payment would be less than your rent.

If you want to use that formula, then at least calculate the amount by square footage.

To the OP -- use your current expenses. Update them yearly.

It's old school, but because I do everything via auto-deduction instead of going into my accounts and generating a payment, I write all my fixed expenses down on a calendar on the dates they are taken from my checking account. My calendar becomes my current expenses list.

As I list the amounts in my check register (I am old school -- I still keep everything on paper, as I HATE quicken), I run a line through the amount on the calendar so I know I wrote it down in my checkbook. I run the line cross wise like one half an X, so I can still read the amounts.

I keep my calendars as part of my taxes (I write mileage down on them) so I have a few years worth....
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Old 02-27-2011, 11:49 AM
 
4,554 posts, read 9,746,566 times
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Quote:
Originally Posted by formercalifornian View Post
Work with your current expenses, and adjust if they change.
Exactly.

I have two budget sheets. One that shows the bare minimum expenses. What we absolutely have to cover if there is a job loss (which we recently went through). I do not take into account anything like payments from unemployment. I also don't take into account the rental income we get from a building we own. I've planned emergency expenses as if we had to pay that out of pocket. After all that, I round up a tad.

Then I have my regular budget.
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Old 02-27-2011, 12:21 PM
 
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That's how we do it, too, jkcoop.
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Old 02-27-2011, 12:22 PM
 
Location: Bradenton, Florida
27,236 posts, read 41,379,780 times
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Quote:
Originally Posted by Tallysmom View Post
That's not true. If you're renting a one bedroom 400 square foot apartment and buy a 4 bedroom 2500 square foot house, you cannot possibly think your house payment would be less than your rent.

If you want to use that formula, then at least calculate the amount by square footage.

To the OP -- use your current expenses. Update them yearly.

It's old school, but because I do everything via auto-deduction instead of going into my accounts and generating a payment, I write all my fixed expenses down on a calendar on the dates they are taken from my checking account. My calendar becomes my current expenses list.

As I list the amounts in my check register (I am old school -- I still keep everything on paper, as I HATE quicken), I run a line through the amount on the calendar so I know I wrote it down in my checkbook. I run the line cross wise like one half an X, so I can still read the amounts.

I keep my calendars as part of my taxes (I write mileage down on them) so I have a few years worth....
If your house payment is more than your rent, then you would be living beyond your means. Get a smaller house.
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Old 02-27-2011, 12:36 PM
 
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Or it could be that you were living significantly under your means while renting. It's quite possible to increase your housing costs while still .aintaining a reasonable debt ratio.
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Old 02-27-2011, 01:32 PM
 
11,935 posts, read 20,383,027 times
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Quote:
Originally Posted by TKramar View Post
If your house payment is more than your rent, then you would be living beyond your means. Get a smaller house.
That only works if you are renting similar houses. Look at it this way... if you buy an orange, you can pay 25 cents for it. you can't expect to 25 cents for a four pound chuck roast, even though they are both food.
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Old 02-27-2011, 04:45 PM
 
Location: Bradenton, Florida
27,236 posts, read 41,379,780 times
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Quote:
Originally Posted by Tallysmom View Post
That only works if you are renting similar houses. Look at it this way... if you buy an orange, you can pay 25 cents for it. you can't expect to 25 cents for a four pound chuck roast, even though they are both food.

If you have $4 bucks to spend on dinner, it doesn't matter if you eat at Sardi's or McDonald's. You still have the same amount of money to work with.

You'll probably get more to eat at McDonald's though.

If you're spending $1000 on rent, then you have that much to spend on mortgage+taxes, and no more. You buy what you can afford to.
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