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Not sure what is your point?? If you like vacations and can afford them... great.
My point is that a parent who doesn't want to pay for something... a particular vacation, car, phone, etc... shouldn't put their kids in an environment where they'll constantly be around others who have those things. Don't assume they will be happy merely because they get to live in a "nice" house and go to a "good" school.
Quote:
Originally Posted by Aredhel
Hikernut gets it. To most kids, school is just school and a house is just a house. They are like fish who don't notice the water they are swimming in; that stuff's just in the background for them. What they pay close attention to are their peers: what they have and how they act. If they are significantly out of step with their peer group, they're not likely to be happy about it no matter how nice the house and the school are.
this is insane. any school is going to have people who have more than others and people who have less than others. avoiding better schools to avoid this difference in economic resources is a bad idea. most kids have no problem dealing with the fact that they cant afford everything everyone else has. the kids who cant probably have parents like hikernut and aredhel that just whine about other people competing with the joneses and complains about what other people are buying their kids.
Not sure what is your point?? If you like vacations and can afford them... great.
My point is that a parent who doesn't want to pay for something... a particular vacation, car, phone, etc... shouldn't put their kids in an environment where they'll constantly be around others who have those things. Don't assume they will be happy merely because they get to live in a "nice" house and go to a "good" school.
This is what my clients do each year. We live amongst them too, but we don't live like this. My kids, well, more like one kid has definitely complained a bit about it. And it's not like we haven't done anything, but just not at the frequency of others. So I sorta agree with you... However this is where parents step in. We can help them and guide them and show how the grass isn't always greener on the other side, or in some cases, how life is simply less unfair. My kids obviously know we don't live in the biggest house or drive the best cars, but they are old enough to understand the concept of true wealth. And true contentment. I think bringing in concepts from Trent Hamm's Simple Dollar blog has helped me tremendously with frugal parenting in an affluent neighborhood.
1) Is the million dollar house the cheapest one you can get to buy in to the school district you want?
2) I'm amazed that people think being "cramped" in a house is worth putting themselves in a tenuous/risky/less than ideal financial situation. How on earth did generations survive sharing a bedroom or bathroom until they left for college? God forbid a kid doesn't have his own room from birth to 18.
3) It sounds like the OP is the one who wants to keep up with the joneses. Not his kids.
4) The OP wants the house (or does he, he's not even sure). The kids will want what their rich friends have. And people wonder why so many young people are snowflakes. Partly because parents don't know how to say "no." No you can't have designer whatever. I don't care that your friends Austin or Buffy have whatever, WE don't live like that."
5) What about the peace of mind of financial security for the family as a whole. OP, I sure hope you have a lot of life insurance on yourself. Your situation seems precarious to me. But I'm not a risk taker financially.
Folks, for those that have provided productive feedback (for or against my decision), i thank you.
Assuming i go through with the purchase, what are some Risk mitigation strategies you think i can take advantage of?
Thinking:
- Sell the home asap, even if it means reducing to 600 or so. Just so we can reduce that huge 800k mortgage asap.
- American Home shield or similar for appliances, etc.? 500 a year, plus 100 deductible. may be worth a look, but all appliances seem relatively new.
- HELOC as soon as i pay down the mortgage to the 200k mark. there'll be about 800k equity, which would mean a good 400k or so worth of HELOC that i can get as a last resort emergency line.
- any excess money will go into the market to try to grow my nest egg again.
- sucks because the 150-175k that i've pulled out of the market won't grow anymore (obviously). hopefully the home will appreciate at a rate that'll make the pain of losing out on the stock gains more bearable.....
- Wondering if I should build 6 or 12 months of Emergency fund before investing in the market....my gut says no; especially given the HELOC i'll have and credit cards that'll be laying around and available.
What this shows is the importance of checking out a neighborhood; they're not all the same (even when the house prices may be identical). In your district the wealthier kids aren't being encouraged or permitted to flaunt their families' money (possibly because the neighborhood has such a wide mix of incomes), so the peer group isn't engaging in a lot of competitive consumerism. In other neighborhoods "if you've got it, flaunt it!" may be the rule. It's obviously easier to rein in kids' consumerist tendencies in Neighborhood #1 than Neighborhood #2.
Nah, I don't think so. In my experience, the only thing kids care about today is getting on their phones and the internet. They are so absorbed in that, they don't care about being consumers.
Folks, for those that have provided productive feedback (for or against my decision), i thank you.
Assuming i go through with the purchase, what are some Risk mitigation strategies you think i can take advantage of?
Thinking:
- Sell the home asap, even if it means reducing to 600 or so. Just so we can reduce that huge 800k mortgage asap.
- American Home shield or similar for appliances, etc.? 500 a year, plus 100 deductible. may be worth a look, but all appliances seem relatively new.
- HELOC as soon as i pay down the mortgage to the 200k mark. there'll be about 800k equity, which would mean a good 400k or so worth of HELOC that i can get as a last resort emergency line.
- any excess money will go into the market to try to grow my nest egg again.
- sucks because the 150-175k that i've pulled out of the market won't grow anymore (obviously). hopefully the home will appreciate at a rate that'll make the pain of losing out on the stock gains more bearable.....
- Wondering if I should build 6 or 12 months of Emergency fund before investing in the market....my gut says no; especially given the HELOC i'll have and credit cards that'll be laying around and available.
anything else you can think of?
For the love of God.. DO build AT LEAST a 6 month EF. You are a single income family. DO not dare depend on DEBT to get you through a hard time.
For the love of God.. DO build AT LEAST a 6 month EF. You are a single income family. DO not dare depend on DEBT to get you through a hard time.
Yeah...leaning towsrds this
Maybe around 30k cash or about a year of saving before the market investing.....or maybe a combination. I have 15k sitting in cash that's sort of an EF (mattress $$) so maybe just add some more. I think $$ in the market in safer investments could be considered as an EF.....but what do i know...
I think if you’re still saving a lot, you get the better house and never look back. I know I just said “yes” to a house with a $250K mortgage instead of a $50K mortgage and my expenses will rise somewhat but I’m still saving a ton of money so I didn’t think twice about it. Money is a tool and it’ll be used to make my life better now, it won’t be hoarded for a future that isn’t ever guaranteed. That aside there is plenty for the future. It sounds like the same is true with you and I wouldn’t want to be cramped in a house.
I respect everyone uses a house differently but I need lots of space to be happy as I use my house for gym, work, and fun and it must accommodate all of those diverse needs including having the space for two people to be doing different things that create noise without one person wanting to kill the other. In your case you use your house for a good sized family and want everyone to have a good life and not be in each other’s hair. That happiness is worth the price if you ask me. It would be different if you told me you were making $6,000/month and you’d now be spending $5,800 lol that would be a terrible financial decision you just can’t make. But provided you’re saving a good chunk, then go for it!
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