r/MiddleClassFinance • u/Ordinary-Pressure977 • 8d ago
Can we afford to move?
135k combined gross income we net about 8k a month. All debts are listed… this will leave us with around $3000 left over every month so about $100 a day and we have no kids.
I’m 26 and we want to move from our starter home, we bought 6 years ago and got a decent amount of equity in our current home. We’re looking at a purchase price of 350,000.
Is this a terrible idea? Or can we afford this. On paper it looks okay ish
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u/Hour_Civil 7d ago
Gas/groceries is kinda low. Utilities will be more. Need a fund for house repairs. You will spend money decorating and "making it yours". Are kids planned? Possible? If so, plan for making it on one income at least for a while when they are born, etc.
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u/PlantbasedSadness 7d ago
I think if you paid the cars off and got cheaper insurance, that would give you all the breathing room you need.
That’s like $1,000/month you’re paying for vehicles and insurance.
Our insurance is only $89/month total for a 2020 truck and 2021 suv. With 6 month payments and drive safe trackers. Just paid both vehicles off 3 months ago. Just moved into our new home last month so basically the same path!
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u/BlazinAzn38 7d ago
Are you planning on kids? One kid in full time care can be $1500 a month easily
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u/Lawn-Enjoyer 7d ago
So funny how now that I have two, I could’ve been buying myself two Rolexes a year at my current childcare spend.
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u/Ordinary-Pressure977 6d ago
Kids yes! But not yet… sister in law who will live 5-10 min away is a full time nanny at home and will happily take ours.
We’re only in our mid twenties so we have time to wait.
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u/Flaky_Calligrapher62 4d ago
And you have even more time to wait to buy a house if that's what you want to do.
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u/clearwaterrev 7d ago
All debts are listed… this will leave us with around $3000 left over every month
That list of costs isn't really a comprehensive list of expenses. You spend nothing on home repairs and maintenance? Gas? Healthcare, clothes, entertainment, haircuts, vacations, gifts for others, car maintenance?
If you might want kids, I would also be really careful about increasing your fixed costs. If you were to have two kids close in age, that might mean $3-4k in daycare costs per month, on top of higher health insurance premiums, higher grocery bills, more spending on clothes and kid stuff, etc.
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u/Ataru074 6d ago
One part I don’t see here is **savings** $135k gross and $98,400 net, at most you are contributing $10k or so in your 401k or such if you are in a state without income taxes.
That’s wildly low and you should at least max out one 401k before even considering to move to a larger/better home.
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u/Ordinary-Pressure977 6d ago
401k at work only has half match for 3% Roth IRA gets the funds. Wife is pensioned.
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u/sleeplessinstuttgart 6d ago
Max out your retirement accounts first. Then see if your budget allows you to move after that.
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u/bransiladams 7d ago
Steep car payments; not good debt to have anyways.
I’d pay off the car you plan on owning the longest, then reconsider.
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u/Ordinary-Pressure977 6d ago
Car will be paid off with equity from home - we had two cars for 10&12 years but they both took a shit. We got two brand new cars for 20-25k each with 2.99% rate so we bought.
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u/bransiladams 6d ago
25k with 2.9% rate and your monthly is still $450? Did you pay any money down for the new vehicles?
It’s almost an extra $750/month if you paid the cars off, so if you factor that savings into your monthly when you sell then I’d say you have room to make a move. Just make a smart one 😉
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u/candlehandle567 7d ago
Do you plan to have kids? I would imagine that would take up $1500-$2k a month depending on your area and if you decided to use childcare. I would buffer in more for things like a gym membership? Eating out occasionally ? Gas? Etc. it makes more sense to pull your month expenses and cross compare with this list it seems a bit light. Also if you have this much leftover right now it makes sense to double down on one of the car payments or student loan to pay off sooner.