Several Money Curiosity Questions..

We could afford a much bigger house than our current comfortable home with all kinds of fancy cars, big vacations and private schools but we LOVE the feeling of security. We have a good sized emergency fund, healthy retirement savings and piece of mind. I love to find bargains at resale stores and get excited to use coupons when I remember them. I don't have a cleaning service or pay for babysitters. We buy used cars and don't have smart phones. Haven't been on a plane since pre 9-11. My children are saving their own money for some bigger wants. We have some luxuries of life but don't go overboard. Money is all about choices. My favorite money book (and mantra) is The Millionaire Next Door by Thomas Stanley.

It sounds like you are seriously looking at the cost of this new home but don't underestimate the importance of peace of mind. Don't get caught up in the "Keeping up with the Jones" mentality. It's dangerous and a recipe for financial ruin. Do some serious research on what a safe housing expenditure expense should be.

Good luck to you and your family!!

Two things:

1) Set aside the money you will be spending on your future house payment NOW. See if you can do it for 6 months. If you can, you are ready for the expense.

2) NEVER factor a "possible" promotion into your financial planning. Only go with what is certain.

And to answer a few questions - yes, we have savings, etc. We are a cash only family, no credit card debt, but we do have other debt (house, car, student loans from two professional degrees - ouch!). I don't focus a lot on savings until our other debts are paid off. We do have an emergency fund of several thousand, but our savings is not what it will be once we have eliminated all debt.

Our house payment is VERY minimal compared to our income, but we also are outgrowing our home.

Be careful about PMI - if you don't have 20% to put down, you may have to pay it.

GOOD LUCK!!

We are debt free with exception to the mortgage which is crazy low for our area. I see you are in Allen as well and the prospects for TX are fantastic. We are not in the crunch that many states are in right now.

We both work because we both own our company. I also substitute teach and volunteer. We believe in DELAYED GRATIFICATION and multiple income streams.

We started daughter's college fund before she was born. She is now 16 and should be fully funded. We are actively visiting colleges now.

We both are covered for retirement as well.

It sounds like you have a lot of mouths to feed, clothe, etc.

Hopefully your hubby can get the promo but instead of biting off more, why not get rid of loans, have a savings stash.

Building a home is great, we've built 2 but it is also very time consuming and you bet you will pay more than you plan on something. You have upkeep, maintaining everything, property taxes, insurance, etc.

If you do build and get a loan, forget escrow... if you are willing and able, put down the minumum 20% or so and you have control of that money. Yes, we know it is due at the end of the year and when, we are planners and we prefer to make interest on our money instead of letting the bank have it.

We are fortunate, especially in this economy to have a thriving business, great home, cars and have the option to travel, spend extra money on some little things.

Don't forget about all the things that pop up that maybe you are not ready for financially... Example... my daughter is a great violinist (who knew... we certainly didn't) and to better her education with that we purchased her violin (not cheap... $3000) and she is a cheerleader for JV and the basics including private coaches, etc run up around $2500/year. There are tons of expenses that creep up with children as they go through school. ESPECIALLY the Plano/Allen area.

That is just a few thoughts from me.. Whatever decision you make has to be the one right for your family. Good luck!! We love the Plano/Allen area, we've been here since 1989!

I would listen to Dave Ramsey's radio show (you can get the podcast for free) and read his book the Total Money Makeover before making any big financial changes. It will change your perspective. I've always been good with numbers and budgets and avoided debt at all costs and my husband makes a very comfortable income, but I viewed a mortgage as acceptable debt and so I didn't worry about owing the bank so much. 30 years to pay off a house seemed very overwhelming to me, but everyone else is doing it so I went with it. Dave has changed my perspective and my husband and I live on way less than he makes and are now throwing any extra money we can (after saving for retirement and college funds) towards paying the house off as quickly as possible. I CAN'T WAIT TO NOT OWE ANYONE ANYTHING!! So I'm actually a little envious of your small house payment and wish I'd had this perspective change before getting stuck in a high mortgage (I say stuck since the house is so upside down that we can't sell it for even close to what it's worth).

To answer some of your questions, we have 4 people in our family (2 kids), my husband works while I am a SAHM, we spend between $400 and $440 a month on groceries and anything I'd buy at Walmart or Costco, and than an additional $175 a month on miscellaneous items like haircuts, school supplies, etc. My husband and I each get $125 a month as personal money, we get an additional $125 a month to spend on dates, and then $125 to spend on outings with the family or other fun kids activities like when I take them to BounceU with my moms club or something. The amount we spend on fun stuff has changed throughout the years as we've made more money, then went back to college, then had more kids, and it's recently decreased as we've decided to buckle down and pay off the house sooner than later. I would decrease it even more but my husband says we have to enjoy the getting there. We also have an annual vacation/big purchase fund, presents/gifts fund, and personal development fund (we take out of that for my kids to take piano lessons and I take the occasional cooking class and my husband plays soccer). I really wanted to put my son in soccer again and start my daughter in dance, but I think that will wait until we pay the house off. The numbers really depend on how much you make and a myriad of other factors like how many kids you have and your house payment.

You're asking a lot of specific questions and all I can tell you is it really doesn't matter what works for anyone else...it matters what works for you! Please read on...
I bought my first house when I was single, 30, and making low 30's income working FT. The bank approved me for a $1000/mo (+ taxes!) mortgage payment. Well, it didn't take rocket science for me to realize that there was NO WAY on God's green Earth I was going to able to afford that with a car payment, car insurance, utilities, credit card payments, repairs, etc. I bought a house with a monthly mortgage of $500. I honestly don't know WHERE I would have scraped up another $500+ per month. Thank God, I used my head and common sense.
The point is, YOU have to look at your bills, your income, your outgo. Eliminate any & all credit card debt if you have any. Then look at your accounts for monthly bills for utilities, etc. Chances are, you "know" approx what you spend per month in food, gas, lunch, mad money etc....

Bottom line: listen to what you KNOW you can afford--not what a stranger tells you you can!

And I would never factor in a *possible* promotion and/or overtime when determining a budget.

Do you know about Dave Ramsay? He offers very good, sound, common sense about personal finance. And you can get a book (free) at the library or used on Amazon for a few bucks.

Good luck on building your home!

***ETA*** I believe Dave recommends %25 of your income (after taxes--i.e. 'take home pay') should be your max mortgage payment, right? It's been awhile and our house is paid off!

For the record, I was going to give more specific answers but said something to my husband about our mortgage to salary ratio, and he flipped out about me giving out that information online. Soooooooo.... in general,

It's recommended that you not pay more than 30 percent of your monthly salary on a house note. Dave Ramsey recommends lower, more like 25% including all the extras that can come along (PMI, insurance, etc.). If you are interested in very sound budgeting information, Dave Ramsey has excellent guidelines. We try to adhere to the budgeting principles he outlines. My husband also keeps a very detailed spreadsheet of all our expenses, which makes it very handy to figure out a good budget from year to year since we know exactly how much we've needed for, say, medical expenses, car repairs, etc.. We've never really had any issues with not having enough funded when expenses arise, although I have had to campaign for more funding for specific areas (like children's clothing and Christmas gifts).

We have a houseful as well, and I'm a stay at home mom, so yes, money can be tight at times. But on the plus side, it's tight because we have made the decision to be disciplined in our spending. So it's more a case of choosing not to spend the money than in not having it at all. That's the beauty of making and keeping a budget. :D

Okay - I'll answer in some way that makes sense.

We were approved back in 1996 for $250K mortgage...even then we knew we could afford it - but things would change and we chose a house for $176K...

We don't know the way you spend, save or anything else. You need to do what's right for your family and not what we do....

You need to know what you can afford to spend...even if some bank says you can spend $500K - can you afford the $2500 a month payment? If the answer is no - then you need to find a cheaper home.

You need to put YOUR stuff together and see if there are ways to cut back to save for a new home.

You cannot count on your husband's promotion UNTIL he gets it..until then it's just an "IF".

You also have to consider your personal needs, car/health insurance, groceries for YOUR area, gas costs, utilities, etc. in YOUR area. They are different all over the place.

1. I do not HAVE to work. When we married 14 years ago - we did everything solely based on my husband's income at the time.

2. We spend roughly $500 a month on groceries - this does not include beer or cigarettes (my husband drinks beer and smokes!)

3. There are four people and two dogs living with us (one dog is a temporary house guest!)

4. We have a 5 bedroom, 3 full bath, 2 car attached garage - semi-detached home....we have 3K square feet of living space - a formal living room, dining room, family room...we had wanted 4 kids so we figured 5 beds would work for us...

5. My husband's income for the month is nice...after taxes and benefits - at least I think it is...i can inbox your more information if you would like. My hubby would not like it broadcast for the world to see.

6. We have DirecTV ($100), Verizon wireless ($165 - I know WAY expensive...we have family with Verizon and if we went with a different company it would mess so much up!!) and Comcast bundled ($99) (a repeat on cable - but it was cheaper to it is this way).

7. Our water, electric, gas vary each month or quarter depending upon the bill...we live in an "association" township so we have owners fees due at the beginning of each year and quarterly for our trash, snow, recycling and overall "CLUSTER" fees...it's a pain in the rear - but we love where we live so we deal with it.

8. We don't allot money each month for dating anymore - we don't budget it - I should say - we go with our needs at the time. For example - we were surprised by one of our friends having our boys over for a sleep over and we went out - we spent almost $100 on that dinner...it was nice! :)

9. We have more than 6 months of my husband's wages in savings as well as other investments, 401K, etc. We also have a back up "emergency" reserve...about $3K. We put money into savings and investments on a monthly basis...not a set amount - I know, bad - but sometimes we fly by the seat of our pants!! :)

10. Other than our mortgage we are a debt free family. And even if we had the mortgage paid off - I believe we would still take a loan out on it so we have the interest write off for taxes. We have no car payments, no credit cards....I really do miss the credit cards because I can SHOP BABY!!! :) but I'm doing better at getting rid of stuff and not living in excess!! YAHOO!!!

Did I answer them all?

ok, 2 adults, 2 kids, a big dog and a cat.
Hubby is self employed, I work part time at basically minimum wage for 9 mo of the year. i was a SAHM for 4 yrs when my kids were 1-5. And we have family around to help with childcare occasionally.

hubby makes these crazy detailed spreadsheets on our expenses and budgets them out a year in advance. I have tried and tried and cannot understand what those little numbers mean. to him instead of saying our car payment is $200 a month he goes on and on for twenty minutes talking about how in months were there is an extra week the payment is less (or more?) and because feburary is a short month blah blah blah blah it makes no sense to me. And because his income fluctuates from week to week, that adds another layer of chaos. so he takes care of our bills etc. We have a nice big 3 bedroom house in a great school district, that we moved to 3 yrs ago from our little cheap starter home. We had 3 yrs of no car payments and just recenty bought a new SUV. but just recenty payed off student loans. just generally speaking morgage, business expenses and the car payment are the big expenses.

Hubby likes to say we pay $300 per month for groceries, but we haven't stuck to that for over 2 years and even before it never took into account weekly runs for milk bread and eggs. so maybe $400, He likes to do the shopping so he can control the money.

hubby and i were raised differently and have very very different views on money. I was poor and am very very scared of being poor again, so I never spend money on myself, I woudl never buy suveniours on vac, I don't buy starbucks coffee ever, I brings snacks for the kids so i don't have to stop at mcd etc. Thankfully hubby things its very important that we take an anniversary weekend each year, take the kids to teh waterpark, or the ball game, he spends alot on sporting events for himself with buddies and some with us as a family. If he had his way we would eat out every week like his parents do, I prefer 1-2 tiems a month. he also splurges on lunches out for himself everyday and his waist line is paying the price of that.

He gives me $60 a month for my "incedentals" but if we go out to eat he pays. I'd love to see him stick to $60 a month but that will never happen, usually I tend not to spend much, so the $60 lasts me, but If I were to get together with girl friends one evening out would be half my money for the month! I tend to use it to buy birthday stuff for parties the kids are invited to, and I like to so some limited super couponing so i might use $5 to buy toiletries at CVS and then get extra care bucks to use like cash on my next purchase, if i'm lucky i can roll them for several months, for just that initial $5.

grandparents give bonds to the kids for bday and christmas, we do need to be supplimenting that but haven't. I think they have about $500 each.

we do save and tithe, but i don't know how much.

As for comfortableness, I would be comfortable if hubby wasn't as free with the money and our morgage and car payment were much lower. although he has plans to pay both off early, somethign to do with those extra paydays in certain months (hee hee)

can't answer the income, vs house. because i don't know and because with his income fluctuating sooo much it's really hard to tell.

If i could share my personal experiences, Life will find a way to bite you in the butt. six months after finding out I was pregnant with my first, hubby lost his job, due to goverment budget cuts. We scrambled around made it through, when it was time for the kids to start school and we knew we needed to move to a better school district we took a risk paid asking price for this house which was the absolute limit of what we could afford. But it was a great deal and alot of house for the money. moved in and one month later He lost a huge contract and our income was cut in half, I went back to work and we made it through. so no i don't feel comfortable, about money, I keep waiting for something bad to happen now that we bought a new car. oh and i remember our home loan officer commenting that when people mover to bigger homes usually their life style changes and they spend more on new furniture, cars etc And as smart and good with money as DH is, I do see our lifestyle creepign up and up and up? so you might want to consider extra in your budget for things you can't even imagine rightnow.

You made it very clear in your post that you weren't doing anything until the promotion was a reality, and you made it very clear that you weren't rushing into anything. I don't know if what I've shared will help at all, but i wish you luck and if you are resonably smart enough to make budgets and stick to them you should be free enough to enjoy your life.

We only live (expense wise) off of what I feel I could make if I had to get a job. Because we have already been in the situation that no-one thinks we could ever be in (we didn't) and things happen. So if my hubby were to loose his job we know that we could still make ends meet if need be. To each there own but sounds like you would be building your dream home but most people cant actually afford to comforatble live in there dream home. My thoughts.

We moved into our current home, probably a forever home, in '99. I was told I could buy up to a $275,000 home with a $25K down payment.

My wife and I looked at what we spend and what we wanted to save. My goal was a $200K home or less. We had 6 kids at home, 4 boys and Two girls. The oldest was in college, the youngest in Jr. High. We knew we weren't going to have them long so we opted for a smaller home. (Now, all my kids are married, living on their own.) My wife told me, "Find us a home, and I'll sign the papers. I don't need to see it. I trust you. You've always made wise decisions."

I found a three bed 2 bath home with large bedrooms. It was a nice older home in a real good new neighborhood with no registered sex offenders within 1/2 mile.

My wife and I both worked at the time. Me full time, Her part time.

We spent about $15 per person per week for groceries at that time. I do 99% of the grocery shopping. I'm a very good bargain hunter. I change out weekly menu depending on what "manager's specials" I find at the grocery store. Now I spend about $25 per week per person for my wife and I. That includes, dog food, toiletpaper and other non-edibles.

My wife and I have about $150 per month we each spend on "what ever". I usually buy presents for my wife or to help out my kids. They call my pantry, "The Mom and Pop Shop". Its not uncommon for some one or the other to ask if I have a this or a that and if they can have some.

Our cars were bought new because we bought them at dealer's cost or lower and paid for them with almost 0% loans and the manufacturer rebates. (I have a 800+ credit score and used the 0% credit card offers to pay off my car and truck early with next to no interest.) The only bills we have are credit card bills which we pay off at the end of each month.

Our house was origionally 45% of our income. Its now 20%. We have no other debt, except debts of gratitude.

If I can find investments that pay more than the home interest, we invest. If the investments pay less than the home interest, we pay off the home. Right now, the investments are paying over twice as much as the interest on the home.

Hope that answers all your questions. If not, e-mail me. Good luck to you and yours.