Can we afford this? (How could I forget to include this)

I'm torn. DH & I don't know what to do. We need a fence but do not want to put 4500 dollars into the house and yard if we are selling it in 6 months to a year. We want to upgrade. We live in a 3br/2.5 bath ranch we want to move to a 2 story colonial with an inground pool, full basement, master suite bath, walk in closets. On paper we can do it. Cover all the bills. I am a SAHM. On paper we can afford this, and be left with 760 dollars at the end of the month. That money would go towards gas, food shopping, and all expenses. Can we afford it or no? I already took into account a bigger electric bill, fuel oil bill, and a mortgage at 7% interest cause you just never know. Honest opinions please!!!!


UPDATED!!!!!!!!!!-----------------------
I'm so sorry I should have included this. DH gets a raise in July for $200 more a month also. And also, his overtime comes to about 2500 extra a month that would be going into savings but if necessary we would use a portion of it to live on (i dont want to count on overtime though) Right now where we live our living expenses come to 160 a week. That is including gas, food shopping and extras.

Message edited 4/21/2010 2:14:57 PM.

Re: Can we afford this?

it doesn't sound like enough cushion to me.

Re: Can we afford this?

To be honest, in this economy I would err on the side of caution. Especially since you are a SAHM.

$760.00 left over is really not a whole lot, especially when you consider emergencies and unexpected expenses that DO come up.

Both DH and I are employed and I had over $700.00 in repairs on my car this month alone.

Re: Can we afford this?

I would want a lot more left over at the end of the month, God Forbid something happens, paper is different then real life, def don't live that tight you may regret it later on.

Re: Can we afford this?

Yes but how much do you typically spend on food, gas, etc. per month? I would want to be saving at least that much. I guess if you have a big savings cushion it could be different but it sounds too close for me. I lived on less than that when I was single and renting an apt, but with a family and a mortgage that would be way too close for comfort for me.

Re: Can we afford this?

i would want more than that left over to feel comfortable...geez, there are some months we probably spend close to that going to the supermarket/ordering take out and going out to eat (at places like chilis) for just 2 of us....

if you had that much left over AFTER groceries that would probably change my mind...but i budget $400 for food/grocery/cleaning products/TP/etc. a month for just 2 people...doesn't mean we always spend it, but some months we seem to rack up a lot in toiletries, cleaning products, paper goods, and meat...

Re: Can we afford this?

Also, just wanted to add.......I don't know where you live, but people I know who are SAHMs for the most part on LI anyways, can afford it because they sacrifice the big home and other types of large expenses.

Maybe down the road, once your kids are older and in school, you can go back to work, and then get the dream home.

You definitely don't want to be house poor and god forbid your DH loses his job or has to go out on disability and you have a hard time finding work.

Re: Can we afford this?

I woudl def want more of a cushion!!! Life can throw some unexpected things ur way and I'd want more to be able to rely on as well as have some money to put into savings as well

Re: Can we afford this?

Im confused - $760 a month and its supposed to cover gas, food and expenses

We spend close to $300 a month on gas and $500-600 month for food. Plus at least $500 on misc expenses

But basically i guess in order for you to know if you can afford it -- what do you typically spend on those expenses each month and do you have savings to fall back on in case.

Re: Can we afford this?

no way. if you had 760 left over after ALL expenses, including food, gas, etc, it would be a little bit better, but i would not even think about doing it with that tight of a budget.

Re: Can we afford this? (How could I forget to include this)

lol, I think you can totally do it! Would it be the smartest thing, no - but you can do it. My dh and I both work, have a house and a baby and we live on less then that after bills. A pp said how she spends that on going out to eat and stuff - well, if you dont do that kind of stuff then you dont have to bulid that into your budget. Also you are a SAHM so I'm sure you dont have a huge gas bugdget too. It can be done.

Re: Can we afford this? (How could I forget to include this)

I would not be comfortable with that amount.

From my own experience- DH and I went through a long stretch where it seeemed like the universe hated us. A tree fell onto our deck, the dog got cancer, the cat got cancer ($2k just for her), my car needed a lot of work, the clothes dryer went, etc. It seemed like we were always shelling out at least a few hundred bucks if not more

We said more than once that we were very lucky to have a good cushion and to have bought a house well within our means. You just can't plan on emergencies.

Re: Can we afford this? (How could I forget to include this)

You can do it but I think you would be "house poor". DO you need to move? IMO I would rather have a smaller house and live without scrimping on things and be able to put more into savings.

Re: Can we afford this? (How could I forget to include this)

what happens if his over time is cut?

are you able to get a job?

I am impressed that you guys only need $160 a week to live on

what about bills like Car ins?

no debt I assume?

no car payments?

Re: Can we afford this? (How could I forget to include this)

I wouldn't do it , esp. being a SAHM. if your DH loses his job or you are hit with a big expense for whatever reason, you don't want to be forced to go back to work before you choose to KWIM? DH can afford a nice large home on his salary, but it's important to me to be able to stay home w/my kids. I don't want to be forced to return earlier than I am ready to.

Re: Can we afford this? (How could I forget to include this)

Re: Can we afford this? (How could I forget to include this)

my only concern....is counting on the overtime

the bank isn't going to count that towards a mortgage DTI

depending on what you sell your current home for and what you have for a down payment on the new house- you might not be able to get approved

Re: Can we afford this? (How could I forget to include this)

Re: Can we afford this? (How could I forget to include this)

the rule of thumb is you should have 6-12 months in "living expenses" in savings.

If you don't have that, I would certainly not upgrade a house...

Re: Can we afford this? (How could I forget to include this)

Be Careful! 'on paper' is not always reality, 'on paper' DH and I should be able to put a good amount into savings every month. But it never works that way. - maintence with cars (new tires can run over $400 and registration is now up to $150 ) medical expences (I ended up in the hospital last month so the bill from that and all the follow up appointments), not to mention is something breaks, (our dishwasher is sooooooo on its way out) especially with a new house, you never know what shape the appliances would be in until you are living there, plus paint would be about $20 a gallon, but you will need to spend small amounts fixing up the house to sell and the new one, (things like $ for speckel for any nail holes and lightbulbs) plus for us, 3 of our siblings are getting married this year so there are all the expenses with that various months of the upcoming year. so don't forget the expenses of wedding or bridal shower or baby shower or birthday or Christmas or anniversary gifts. Make sure you think of the unexpected things when planning a budget

Re: Can we afford this? (How could I forget to include this)

We rent, so we don't even have to pay for our oil or water.

But that is NOT enough. After all bills, we are generally left with $1400 a month and we are BROKE the day before payday!

My DH has a job where he can get OT too, but it has been dry for months, so you can't count on that

Re: Can we afford this? (How could I forget to include this)

Two words: House Poor

Re: Can we afford this? (How could I forget to include this)

From personal experience I would advise you not to.

Sit down and talk to an accountant though. You need to do some financial planning before you do this.

Unless you have at least a year of salary in the bank, I wouldn't do it. If he loses his job, what are you going to do?

Re: Can we afford this? (How could I forget to include this)

Re: Can we afford this? (How could I forget to include this)

I would really analyze all expenses for past few months. I would also consider how steady OT is, like my husband works a lot of OT and has a PT job that are very steady and so we count on some of it.
If you think you can do it I say go for it!