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Old 02-05-2017, 11:46 AM
 
Location: Houston
26,979 posts, read 15,851,804 times
Reputation: 11259

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Quote:
Originally Posted by LifeIsGood01 View Post
Sounds like they want to sell and move because they are in over their heads because too snobby an area is a lame excuse.

To answer the question you asked in the thread title, move to an area where homes are cheap or get a better paying job, or cut out all unnecessary expenses.
Ditto.

A 200K home with a 40K income might be possible if you live on eggs and beans and drive a 2003 Corolla.

Reasonably a 120K mortgage with that 3.3% tax rate is about the limit.
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Old 02-05-2017, 11:49 AM
 
Location: sumter
12,956 posts, read 9,606,604 times
Reputation: 10427
Their personal finances is just not any of our business to try to figure out. The bank approved them for the loan, so they must have satisfied and met all the standards that was required. The op nor anyone else will be making the payments, so why worry about it. If his friend lose his house because he can't make the payments, is he going to offer him a place to stay, probably not. I just don't see the point in worrying about other people finances, when it's no skin off your backs. If they are living beyond their means, then only they will have to deal with the consequences. What if your neighbors are all up into your personal business. Just live and let live, you mind your business and I'll do the same.
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Old 02-05-2017, 11:55 AM
 
Location: St. Louis, MO
4,009 posts, read 6,846,942 times
Reputation: 4608
Quote:
Originally Posted by ipaper View Post
Their personal finances is just not any of our business to try to figure out. The bank approved them for the loan, so they must have satisfied and met all the standards that was required. The op nor anyone else will be making the payments, so why worry about it. If his friend lose his house because he can't make the payments, is he going to offer him a place to stay, probably not. I just don't see the point in worrying about other people finances, when it's no skin off your backs. If they are living beyond their means, then only they will have to deal with the consequences. What if your neighbors are all up into your personal business. Just live and let live, you mind your business and I'll do the same.
So very true
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Old 02-05-2017, 12:19 PM
 
24,541 posts, read 18,124,000 times
Reputation: 40231
As a hypothetical, $40K and 3 kids in a $200K home with a stiff $30.00+ mil rate for property taxes is a normal 1955 middle class existence. The kids get CHIP kid Medicare and probably free dental in any ACA opt-in state. Right now, they'd have huge subsidies on health exchange insurance so the adults wouldn't be paying much. With the tax credits, they'd be paying no Federal income tax and would get their FICA/Medicare payroll taxes back at tax refund time. Two older used cars with the legal minimum for insurance. Over-the-air television. Cook all your own meals. Hand-me-down clothing for the kids. The kids don't have cell phones and the parents have really minimal cheap prepaid service. Internet is probably surfing a neighbor's WiFi. Borrow DVDs at the library. After school and for weekends/vacations, the kids are doing free stuff and taking advantage of means testing for things like YMCA memberships. The family vacation is a tent or pop-up camper at a state park. In a cold climate, they probably have a wood stove and scrounge/cut/split their own firewood. In the summer, they don't use the A/C.

They're not going to have two new cars in the driveway, five iPhone 7's, 400 channels of garbage on HD cable, broadband internet, restaurant dining, fancy prepared foods, designer clothing, and elaborate vacations.

By global standards, they're wealthy. It's only in the most wealthy parts of the first world where $40K is struggling. Their biggest worry is going to be health care access.
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Old 02-05-2017, 01:29 PM
 
965 posts, read 934,799 times
Reputation: 1933
I'm not the only one here, nor am I original, but I live WELL "below" my means.

After showing a link to a new house I had bought, someone that I thought was a friend of sorts, actually asked me if I borrowed money from my parents for the down payment!

Granted the property cost me twice what my last one did, but was still "below" my means (and he asked when I was 50 years old). I just ignored him, and I did NOT acknowledge. Seriously, it is no ones else's business.

My next house will likely cost half as much, and I might expect someone to ask me why I bought a cheaper place ::Sigh:: when I can "afford more". Retirement is on the horizon, so I have that in the forefront of my mind. Still, no ones business.

Just because someone says they don't have money, or doesn't flash, or buy a bunch of new "stuff", doesn't mean they don't have it saved (or have a rich aunt).
How anyone does it is: priorities

I haven't read, but have heard the gist of the millionaire next door. If I were ever to come into an inheritance, or win a lottery you would not have any idea. My employer would, but otherwise my life would go on as usual, ok, I'd take a lot more vacations. But I work from home now, and can take my work with me, so really no one else would ever need to know. I'd spend some to be sure but what is important to me is not conspicuous consumption (i.e. A bigger, better house/ car/waredrobe).

Op:
If you are asking because you want to know how you can do it, go to a financial planner. You are not going to be able to do it "like they are", but it might be easier for you than you think. Not exactly sure what you were really asking, except that the math doesn't add up for you?
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Old 02-05-2017, 01:40 PM
 
Location: Where the sun always shines
2,170 posts, read 3,298,864 times
Reputation: 4501
Quote:
Originally Posted by glamatomic View Post
P.S. since having 3 kids of my own, I find myself spending less on 'extras' than I did when I was working and childless. I don't often buy myself clothes, I used to get mani-pedis once a month and now it's never, I used to get my hair cut and colored once a month and now I just get it cut twice a year, we rarely go out to anywhere to eat with waiter service anymore, we never go out drinking, and hubby and I only do 1 or 2 date nights a year...

So for me, having children and staying home with them has actually been a cost saving in a lot of ways. We had more disposable income when I was working but lived a lifestyle which quickly disposed of the disposable income
Cost saving but your appearance has taken a hit and thats a big part of one's happiness

For the OP, why start a thread like this with no location listed? Are they in Flyover country, and even then , are they living in the boonies?
However they are managing, they are probably not living too well. Living tight financially is no fun
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Old 02-05-2017, 01:50 PM
 
Location: Houston
26,979 posts, read 15,851,804 times
Reputation: 11259
You do not need a financial planner.

Mortgage 900
Utilities 200
Maintenance 250
Taxes 540
Insurance 110
Total 2000

Now look at your take home pay.

At 60K you pay about 25% in taxes. You bring home 45K. 3750 a month.

You must spend less than 1750 a month on non-housing costs.

You got kids that 25% tax rate will be lower.
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Old 02-05-2017, 01:56 PM
 
Location: Houston
26,979 posts, read 15,851,804 times
Reputation: 11259
Quote:
Originally Posted by simplepeace View Post
I'm not the only one here, nor am I original, but I live WELL "below" my means.

After showing a link to a new house I had bought, someone that I thought was a friend of sorts, actually asked me if I borrowed money from my parents for the down payment!

Granted the property cost me twice what my last one did, but was still "below" my means (and he asked when I was 50 years old). I just ignored him, and I did NOT acknowledge. Seriously, it is no ones else's business.

My next house will likely cost half as much, and I might expect someone to ask me why I bought a cheaper place ::Sigh:: when I can "afford more". Retirement is on the horizon, so I have that in the forefront of my mind. Still, no ones business.

Just because someone says they don't have money, or doesn't flash, or buy a bunch of new "stuff", doesn't mean they don't have it saved (or have a rich aunt).
How anyone does it is: priorities

I haven't read, but have heard the gist of the millionaire next door. If I were ever to come into an inheritance, or win a lottery you would not have any idea. My employer would, but otherwise my life would go on as usual, ok, I'd take a lot more vacations. But I work from home now, and can take my work with me, so really no one else would ever need to know. I'd spend some to be sure but what is important to me is not conspicuous consumption (i.e. A bigger, better house/ car/waredrobe).

Op:
If you are asking because you want to know how you can do it, go to a financial planner. You are not going to be able to do it "like they are", but it might be easier for you than you think. Not exactly sure what you were really asking, except that the math doesn't add up for you?
Yes, the most precious thing is time. I am possibly 16 months from leisurely self-employment. Bought my house for 89K in 2005. It is now paid for. Health insurance is the only complication. Hopefully in 16 months I will have a good idea of what the cost for that will be for a 60 year old couple.
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Old 02-05-2017, 02:00 PM
 
Location: Houston
26,979 posts, read 15,851,804 times
Reputation: 11259
Quote:
Originally Posted by jacktravern View Post
Cost saving but your appearance has taken a hit and thats a big part of one's happiness
What? Upkeep on hair and nails is a big part of happiness?
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Old 02-05-2017, 05:07 PM
 
21,108 posts, read 13,492,959 times
Reputation: 19722
It might work out for them if they rent it out for a good rate. Like an investment property. And then live somewhere cheaper.

I watched the movie '99 homes' and confirmed my obsession with paying off my mortgage is the right thing to do and if I was a new home-buyer it would have caused me to re-think how much mortgage I wanted to take on.
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