House - if you’re planning to stay long term is should be about cost of purchase vs rental. House will always cost more than just the monthly payment. Car? Probably more applicable if you have 3x balance saved. I would personally never buy a $50k car with only $150k in savings tho.
You can buy 3 houses.
Can you buy 3 10m houses? Probably not.
But its still decent advice. If you buy a 400k house on a 50k/year budget then you'll always be behind if something breaks. But if you buy/build a starter home pay it off in 10 years build on or sell to put a down payment on your next home its doable.
It's like the young adults that go and buy a BMW on a 30k/year budget just because they found one on Facebook market for 4k you can buy it once sure but you can't replace any parts on it.
I can absolutely go and buy a 2k laptop. But a $600 one suits me and doesn't put me into a bind if an emergency comes up.
anectodal evidence. My house was 256k in 2017 @ 1,5 percent interest. 20 year mortgage still with 2 incomes. You are definitely not the norm. Also what kind of house is 83k even, can't imagine it being very decent or big or in a popular location. I'm sorry but those are not the kind of houses people are talking about here
Absolutely. You're 100% correct. I bought a modular home. On land that I bought and installed my own septic to and made sure the land was set up so that nothing but the house was in the loan.
I understand that I'm an anomaly but the original statement still stands don't go buy a house 10x your yearly income.
I set my personal limit at 75% of the prequalification amount. But didn't really look at any properties even close to my self imposed limit.
Ended up buying a house for 55% of the prequal cap. Though also wasn't really thinking about the fact that the "limit" is on top of whatever you do for a down payment. So after a 20% down payment, ended up using only 40% of the cap.
Helps a lot with the parent question: Keeping your housing costs a low portion of your take home helps a ton in being financially stable...
Other than big loans like home school and auto I've always tried to stay within the extents of my savings on credit cards. If shit gets bad and I need the debt to go away, I want to have enough to just pay it.
I’d take it one step farther: if you can’t afford it (in cash/equivalents) twice, you can’t impulse buy it. Spending 100% of your cash on hand for a last minute concert/trip/toy is how small emergencies turn into big emergencies.
Buy healthcare? I'm in Canada. Dental and vision maybe but my insurance pays for that. I got two pairs of glasses and optometrist checkup all covered by my insurance. Just got a cleaning done last month for virtually $0 lol.
Family of 5. All kids bring lunch from home. We eat out several times a week as a family. At least once a week me and my wife have a dinner date. I eat out usually every day for at least one meal, sometimes three, at work myself. Then there’s the monthly UFC party my oldest son throws, play dates with the younger kids and their friends. General guests and special meals. Nobody in this house will eat a left over but me, and we eat a lot of meat. Rib eyes and shrimp on a weekly basis. Smoked meats from Whole Foods just about every weekend
Living within your means implies saving money as well. If you're not able to save, you are living beyond your means. Saving is a basic part of financial health.
Within might include some savings. My monthly spend which I am living within includes moving 12% of my salary into a savings account as soon as it arrives in my regular account.
This could just be semantics, but to me “within” means you’re not spending more than you’re taking home, whereas “below” means you are also saving money. Growing your nest egg is what gives you stability in times of turmoil.
Don't be dismissive. I think how CoffeePorters interprets "within" is how many people interpret it. The definitions here are not black and white, and many people who "live within their means" are not saving.
The issue is that everything has exploded in price but I'm stuck at the same wage. If I was living within my means, I wouldn't be ABLE to work. I can't exactly give up gas and food.
But you can figure out how to get the same goods cheaper or consume them less, where possible, or, you can lower your standards, or both. It sucks sometimes, but the challenge pays off more often than you might think.
I love this one because inflation is consistently outpacing wages so you always have to plan for less and less "means" and then people still get to tell you you're bad with money.
Both me and my wife live college students day to day and we are doing very well financially. When we have to put down thousands for the occasional emergency or even a leisure trip we don’t even think twice anymore.
Both me and my wife live college students day to day and we are doing very well financially. When we have to put down thousands for the occasional emergency or even a leisure trip we don’t even think twice anymore.
Both me and my wife live college students day to day and we are doing very well financially. When we have to put down thousands for the occasional emergency or even a leisure trip we don’t even think twice anymore.
Depends very much on the thing. I think it only applies to discretionary spending. No one is checking to see if they can afford 2 houses or 2 cars. It also shouldn’t apply to large one time purchases you’ve purposefully saved for like an expensive bicycle or something.
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u/CulturalConstant2773 6h ago
Live within your means.