Balancing happiness vs saving money? Advice? (San Diego, San Jose: 2015, apartment, renters)

[Gonzalez11]

Hello friendly neighborhood bay area. Was hoping to ask others in a similar situation regarding living situation and saving money to purchase a home (If ever possible). Spouse and I have lived in the same old outdated apartment in San Jose for 10 years now since college 2k rent. We both have decent jobs with decent salaries, not software engineer type salaries but in the middle combined around $170k. Combined we're able to save quite a bit of money to put away for a down payment on a home, but even saving every month/year it feels like the required amount for a home just keeps increasing. The finish line stretches further faster than we can save.

We both grew up with pets and really want a pet but cant have one in our current apartment. We're both young in our late twenties, with very minimal debt, less than 20k combined with much more in savings to cover the whole expense. Should we look at upgrading our living situation to a new apartment and try to enjoy our younger years a little more or continue to keep stuffing money away in hopes the housing market ever returns to reasonable prices at the cost of our own happiness? We have no kids (Will probably never be able to afford it) just us two wanting to enjoy life with the basics we can't have. Washer/dryer, dishwasher, parking and ability to have a pet. I work in Finance and spouse a tech coordinator. We travel sometimes but gain more joy from daily life at home vs leaving all the time.

It's gotten to the point we have considered leaving California and our families here behind completely to chase happier lives. Any thoughts on others who have said enough is enough and decided to enjoy life a little bit and upgrade their living situations? Any advice is much appreciated! Thanks!

[jdhpa]

If I were in your position I would concentrate on making more money. Maybe a home-based internet business you can run evenings and weekends.

[marcopolo666]

"Happiness" shouldn't depend on money.

Based on your housing question ...

1) Buy house that is sound structurally, but needs beautification
2) rent out rooms (let renters pay as much of mortgage as possible
3) live there 4-5 years while slowly "fixing it up", then sell it and move to a new place, start over at (1).

[Ruth4Truth]

Where are you looking to buy? Have you considered Fremont, Union City by Fremont, or farther out, like Gilroy or Scotts Valley (your wife's employer might have shuttle service from there)? How much do you save/year? Have you looked at cutting back on expenses (cheap used cars you can pay cash for (they're cheaper to insure) instead of payments on new ones, for example)? Considered a townhome with a small yard, instead of a house?

[ryman554]

I see no reason why you would have debt and savings at the same time. $20k is a *lot* of non-mortgage debt. Pay it off now.



You should be saving ~30k or so to retirement, pre-tax. You also need to save another $40k/year toward your down payment on a house. Reason: you'll need that $40k to support the mortgage and property tax payment on the house. If you can't do that, you can't afford a house here.


Unfortunately, with starter homes in the $1M+ range, it's just not affordable on your salary to get in. You can probably swing a ~$650k mortgage on that salary with these interest rates, which translate to a ~$800-850k house + 150k down payment or so. That's starter townhouse level, yes? I agree that you will have a very hard time saving to keep up with the house increases. I also agree that is seems like it is not fair.



If you want to do this, you are really going to have to sacrifice now for later to save up. No vacations. No eating out. No new cars. No expensive fun. Or move to a much lover cost of living area and sacrifice less.


It is up to you if you want to trade "fun" for the house.

[Ruth4Truth]

Originally Posted by ryman554

I see no reason why you would have debt and savings at the same time. $20k is a *lot* of non-mortgage debt. Pay it off now.



You should be saving ~30k or so to retirement, pre-tax. You also need to save another $40k/year toward your down payment on a house. Reason: you'll need that $40k to support the mortgage and property tax payment on the house. If you can't do that, you can't afford a house here.


Unfortunately, with starter homes in the $1M+ range, it's just not affordable on your salary to get in. You can probably swing a ~$650k mortgage on that salary with these interest rates, which translate to a ~$800-850k house + 150k down payment or so. That's starter townhouse level, yes? I agree that you will have a very hard time saving to keep up with the house increases. I also agree that is seems like it is not fair.



If you want to do this, you are really going to have to sacrifice now for later to save up. No vacations. No eating out. No new cars. No expensive fun. Or move to a much lover cost of living area and sacrifice less.


It is up to you if you want to trade "fun" for the house.

Or, alternatively, put all 70K and then some into their downpayment savings, which they could have been doing the last few years, postponing the retirement savings contributions until after they buy the house. They could have been much closer to their goal by now, but I don't know what their net income is, post-tax, post-health insurance deductions, and all that. It could be a very different figure they're working with.

OP, you have a tremendous advantage in having low rent. If saving for a house is a serious priority, you should be working that to the max, as in--biting the bullet for just a few years, to reach your goal ASAP. Then after you buy, you can relax a little, to enjoy. If you make a big enough downpayment, there should be enough room for both mortgage and life-enjoyment. Especially if you score a place with some potential rental income space.

[pacific2]

Maybe you should consider moving south to OC or San Diego County if you want to stay in coastal CA.

This place in Laguna Niguel is small at 965 sq ft, but doable as a starter condo at $399,000:
https://www.redfin.com/CA/Laguna-Nig...6/home/5651731

Here's a 975 sq ft/$450K condo in Aliso Viejo:
https://www.redfin.com/CA/Aliso-Viej...6/home/5610190

You could also checkout this 847 sq ft/$384,900 condo in Rancho Santa Margarita:
https://www.redfin.com/CA/Rancho-San...8/home/5417665

There're tons of other very affordable condos to also consider in OC and SD, again, if you want to stay in coastal CA.

[marcopolo666]

OP has been asking for "moving" and "financial" advice since 2015. He shows up, asks a question and interacts in flurries, then disappears for months (or years), then pops up and asks another question, flurry of responses, goes quiet.

OP has apparently been thinking about moving to Colorado. Ooops, I mean Sacramento. Oh, no - I mean close to Tahoe. Well, all of the above, actually.

"Plan to move to CO from California (Bay Area)" in Oct 2015, then a week later "Looking to move closer to Tahoe Area", then "Plan to move to Colorado. Advice and details?" in June 2017, then "Looking to move near Sacramento. Advice?" two weeks later. A few threads on financial advice over the years, including "Planning to move, looking for work/location advice?" this Feb (2018) and now this thread.

I find it a bit amusing that the guy who said in 2015 that he was in "Finance/Accounting" is repeatedly asking for info on finances.

[InchingWest]

Be frugal and save money. Knowing that you have savings is a huge stress relief, and your quality of life actually becomes BETTER the less money you spend, and especially the less you worry about it. Go find inexpensive hobbies and enjoy life. Everyone can start by ditching the television and the huge cable bill attached to it; put a nice picture in place of where your television once was.

I don't know too many people who are happy being renters well into their late 30's...40's....50's....you can just imagine putting your landlord's kids through college with all that money and buying him that nice new car or boat or that trip to Italy over the summer.

Yeah, start saving. Best to start when you're around age 15 or so, but it's never too late for most people.

[capoeira]

Originally Posted by Gonzalez11

Hello friendly neighborhood bay area. Was hoping to ask others in a similar situation regarding living situation and saving money to purchase a home (If ever possible). Spouse and I have lived in the same old outdated apartment in San Jose for 10 years now since college 2k rent. We both have decent jobs with decent salaries, not software engineer type salaries but in the middle combined around $170k.

Just leave and start enjoying life! In 85% of the rest of the country one can buy a very nice home for under $400,000. Some examples:

Milwaukee area:


Atlanta area:


Indianapolis area:


If you are in finance you might easily find a good job in the Chicago area.


Just imagine you are living in any of the above homes. Would you be missing your old apartment in San Jose?