budget/expense question

We are trying to plan our future, including a house, new baby, and all the expense that go with it.

But when I make an estimation of expenses, it's over what we can afford?

Anyone elses numbers not add up?

Do you find a way to make it work?

Message edited 1/3/2008 3:21:43 PM.

Re: budget/expense question

if the numbers do not match...I would not go by the "we'll make it work theory." IMHO, that's very risky. If the money is not there, it's not there.

Re: budget/expense question

When we started looking we were considering houses above our means and the #'s definitely didn't work.
So we decided on something smaller and afordable. Worked for us.

Re: budget/expense question

We worked backward for our budget. We took what we make and allocated a % to savings, % to housing, and so forth. The % to housing was broken down further which gave us our monthly budget for a mortgage, taxes, insurance and small misc. costs and that led us to our price range of houses to look at. Maybe that method helps? It is tough though, everything seems so expensive! Just keep it real and be honest with yourselves or you could get in over your head.

Re: budget/expense question

i'm confused....are you currently house hunting or do you already own? how did you come up with your budget?

DH and i just started house hunting and i set up a budget for us to figure out how much we could afford for a house. we included:

-mortgage
-taxes
-insurance
-utilities (heat, electric, cable, phone, water)
-car payments and insurance
-food
-gas/transportation
-money for holidays and birthdays
-student loans
-savings
-entertainment, gym membership, etc

if you have a baby on the way, you will need to figure out costs for day care (if applicable), diapers, food, etc.

Re: budget/expense question

Re: budget/expense question

well, we have out known expenses (car, loans, etc.) but a lot of estimations (baby, utilities for a house, spending money, day care, baby costs, etc)

So I am not sure if I am over estimating.

We are house hunting (have a good idea of what a mortgage will be). We definitely DON'T want to get in over our head! We would love to be in a house before is born, so we are trying to get an idea of what we realistically can afford.

Re: budget/expense question

I would say go to a bank and get pre-qualified. That will help you figure out what you can afford. Keeping in mind that most banks over estimate, our comfort zone was around $100,000 LESS than what they said they would give us for a mortgage.

cnnmoney.com also has some great calculators that can help you estimate how much you can afford. We were closest to their estimation, believe it or not.

Re: budget/expense question

we have been preapproved, it's the other expenses-to-be that I am not sure if I am overestimated.

So I wondered if anyone was in the same situation when trying to figure out their budget?

Re: budget/expense question

If numbers don't work out, don't try it.

We actually eliminated some items off our list as wants, not needs, and that released money to us.

Re: budget/expense question

When we first got married back in 2004, there was no way we could afford a house. The numbers def did not add up. So we rented. I was even willing to buy a condo or co-op, but even they were out of reach, price wise, back then.

So, we rented and saved...and now 4 yrs later, the market has shifted and we're ready to purchase.

Not that prices will EVER be cheap out here on LI, but you really just have to crunch those numbers and be really honest with yourselves about what you can afford. You may not be able to get that 4 BR colonial split in Babylon Village, but maybe start smaller and trade up in time.

Good luck!

Re: budget/expense question

We did the same as you...added everything up and judged by that what we could afford....although we were approved for a much bigger mortgage, we didn't want to go over our heads, being that it was our first house and we didn't know what to expect.
Remember size of the house isn't everything and down here you can get A LOT for your money.
Our number one concern was what can we afford if one of us lost our job...and we went by that.
And as you will see one day...we did do too bad...(we have a 5 bedroom house)

Re: budget/expense question

Unless you are certain your financial situation is going to change for the better, I agree with the OP if the #'s don't work try to re-think things. You don't want to put yourself and family in a bad position or wish you did not make the decisions you did.

Just try to cut back on certain things where you can, look at more affordable homes and you can always expand in the future.

Best of luck