PDA

View Full Version : So many questions! Not use to budgeting.


Eeyoreloverforever
09-02-2008, 04:33 AM
Right now we live in a duplex and are saving for our first house, so we are trying to cut back on things. Mostly it is me trying to shop and buy things we don't really "need", or at least in dh's opinion. LOL

We were originally planning on buying a large house as I want the space, but now I am questioning if that is the best idea as I don't want to be "house poor". We enjoy travelling and I like the inside of my house to be decorated nicely and I like our family to be dressed nice. But I am torn, because I feel we need the space. The homes we were thinking of would have 4 bedrooms, double garage, likely formal living room, etc (that I could live without) and a basement. And the rooms are usually large in size. We could go to a smaller home, but we would likely have to sacrifice the size of the rooms, the double garage and the size of the basement. I was mostly looking forward to the larger rooms and the larger basement. Dh says we can afford the larger home, but we have had some major expenses creep up this year that we weren't expecting or didn't plan for (dh was diagnosed with stage 1 kidney cancer and the cost of treatment is eating away at our budget, but we will gladly pay it. And we are enrolling dd's in Sylvan learning center as we are finding the school is not meeting some of our needs.)

Also, how do you determin a need? I think we need new dishes and more of them as we like to entertain and just don't have enough dishes to do that. As well as we don't have coffee and end tables. Dh sees things things as wants and I see them as needs.

And how much clothes do you buy? For the summer I only got us each about 4 outfits since when we stay home I do laundry enough that we don't need more, but then I discovered with us travelling a few times this year for a week at a time that we don't have enough clothes to make it that long without finding a way to do laundry. But yet, when we are staying home that seems like a waste of money to have all those clothes.

And what about having your home nicely decorated. Dh thinks that as long as you have TV, computer and comfy furniture you are good to go. But I like it to be nicely decorated.

This is harder than I thought. I thought I would easily be able to tell a want from a need.

Kim1964
09-02-2008, 05:03 AM
IMHO, a need is really the basics....food, clothing, shelter. Within those categories, there are relatively few true needs and many, many wants. Examples from my life include things like this. In the food category, we need milk to meet the nutritional needs of our children. We do not need soda as it has no nutritional value at all. When we buy soda, it is because we want it, not because we need it. In the clothing category, the kids are still growing so they outgrow clothes and need new ones. Meeting this need can be accomplished without the high price tag of designer clothing (in the case of DD#2, it can mostly be met by "shopping" in the basement where I store DD#1's outgrown clothing). In the shelter category, we used to live in a pretty small house. It had working utilities, a place to park our cars, and it protected us from the elements. It met our basic needs. When we chose to upgrade to our current home, it was a conscious decision to start satisfying a few of our wants (a fireplace, central air conditioning, a garage).

If you are honest with yourself and get used to asking "Is this a need or a want?" you'll get the hang of it. In the case of the new dishes, I would classify that as a want because, unless you have to entertain as part of yours or your husband's job, entertaining itself is a want, not a need. As long as you have enough dishes to use for the people living in your home, anything else is extra. I'd also put the coffee and end tables into the want category. Yes, they are nice to have but they don't serve the purpose of providing for a basic need.

Being house poor is a lousy way to live. I've been a loan officer and I've been a real estate appraiser and I've seen a lot of people make that mistake.

Good luck with trying to work this out for yourself. There are tons of websites out there about frugal living that can help you.

Dashzap
09-02-2008, 06:26 AM
Mostly it is me trying to shop and buy things we don't really "need", or at least in dh's opinion. LOL

You and DH having differing opinions can be a serious problem. Talk it over carefully and thoroughly with DH, or one or the other of you will end up with a whole lot of resentment over the years.

wickywinn
09-02-2008, 06:58 AM
I agree with the first replier. Needs are the obvious things and wants are everything after. Then again, sometimes you just have to give in to some wants, every once in awhile, to make life enjoyable, as a treat. There are also compromises and ways to save money on the wants. Shop consignment stores, yard sales, estate sales (dishes), etc. Even look in your local goodwill or resale shop. Buy your childrens clothes at a consignment store or biannual sale like I do. You'd be amazed at how much money you save and, probably, for much better high quality things than paying retail. It's not only people trying to stretch a buck who use these methods now. Everytime I drive by the Goodwill store by us I see luxury cars parked looking for a good find. You can really find some great treasures.

dvcgirl
09-02-2008, 07:11 AM
Here's a really basic way to start a budget where you won't be house poor. These are good round numbers to keep you on track.

At least 20% towards retirement (from your combined income). A lot of experts will call for 10-15% but I don't think it's enough. If your employer throws in 5% though, you only need to make up the difference to get to that 20%. So hopefully you get a match.

No more than 25% of your take home pay should go towards your housing costs (mortgage/taxes/insurance).

And then look at all of your "Must Haves" in life (housing costs, utilities, insurance, transportation, groceries and basic clothing needs)......all of that should be 50% or less of your net pay.

With the other 50% we've already determined that 20% goes towards retirement/savings, and that leaves 30% of your take-home pay for "wants". That's the fun stuff.

Stick to this formula and you can't go wrong.

StillPinballFamily
09-02-2008, 07:41 AM
Check out www.notsobighouse.com.

This author is wonderful - you can also read her books (from the library!).

Her writings really get you thinking about what is important to you in a home - not just a house - and there is a difference. It is a very thought-provoking process.

Good luck -

minnie1928
09-02-2008, 07:50 AM
I think you've gotten some great advice on want vs. need. Just to throw my recent experience into the conversation:

Last December DH receives a big promotion, but we have to relocate from a very cheap cost of living area to a very expensive one. In March/April we spent 2 weekends looking at houses in the new area and found a neighborhood that had everything we were looking for. Prices ran from $650,000 to $1.3million. During the process the mortgage lender was assuring us that we could afford a MUCH bigger mortgage (variable rate too:sad2: ), but DH and I had discussed what size mortgage payment we were comfortable with (at a FIXED rate) and found a nice house that fit the bill (no pun intended) and closed in June.

Since then, we've discovered many things that needed to be repaired/replaced and or newly installed (garage doors (2), water softener, carpet stretched, drywall repaired, radon system, attic insulation,etc.). Had we gone the the higher mortgage payment, we would not be able to afford to have had all this work done.

House poor is a dangerous game, and do you really want to resent your house if/when you can't afford to buy more clothes or travel the way you used too?

GraysMom
09-02-2008, 08:09 AM
Something else to consider about the big house-it means more house to clean.

moredisneyplease
09-02-2008, 08:14 AM
I certainly would rather have a smaller home and be financially OK than a larger home and be poor! I know that if my DH and I had a house and we couldnt afford to do anything (vacation, fix stuff, spend a bit here and there) that we'd go nuts. Of course we could use a larger place and have an official guest room and official dinning room but we dont think its worth the extra financial strain!

Floridagal23
09-02-2008, 09:42 AM
Just remember that when you buy the house, it is a big purchase and it is often not reasonable for many reasons to have it 'nicely decorated' right away. Even if you are financially able to do it..things do not come in on time, sometimes it takes awhile to find the perfect couch or table, etc.

My mom's motto was always one room at a time - and I would classify my parents as extremely comfortable people. These things are big purchases for anyone, no matter their budget!

Juliegirl1
09-02-2008, 10:44 AM
You have received good advice about the differences between wants and needs. Some ways you can fulfill your wants inexpensively would be to scour ads and resale shops for what you are looking for. Check out Craig's List and go garage saleing for coffee table and end tables. Really check out the furniture you find and see if you can paint it or strip it and restain it for your needs. You would be surprised at what you can find on a budget!

When I purchased my house after a divorce I had to furnish it from scratch. There are some items you shouldn't skimp on like mattresses or be careful with upholstered furniture but hard wood/glass items like tables, shelves and dressers are easy to find and easy to change to fit your needs. I purchased quite a bit from garage sales and you would never know to look at the pieces. I refinished some and left others as is. Once I could really afford to purchase new I bought some things but I'm perfectly happy with most of my repurposed furniture.

Luv2Scrap
09-02-2008, 11:10 AM
I totally get what you mean. I would love for things to be a certain way too. But it's really not in my budget. If I wanted it to be, I would use my blow money for that and buy what I could little by little. I'm choosing to use my blow money for what is most important to me, and you'll do the same. Nobody but you and your husband really knows your budget what what you can *honestly, without going into debt* afford to do. Everyone's budget and expenses are different, but the most important thing is to live within it so you don't end up with thousands of dollars worth of credit card debt that you struggle to pay off just so you can look like you are living a wonderful life when you have your friends come over. (been there, done that, working very hard on fixing it now!)

Luv2Scrap
09-02-2008, 11:12 AM
You have received good advice about the differences between wants and needs. Some ways you can fulfill your wants inexpensively would be to scour ads and resale shops for what you are looking for. Check out Craig's List and go garage saleing for coffee table and end tables. Really check out the furniture you find and see if you can paint it or strip it and restain it for your needs. You would be surprised at what you can find on a budget!

When I purchased my house after a divorce I had to furnish it from scratch. There are some items you shouldn't skimp on like mattresses or be careful with upholstered furniture but hard wood/glass items like tables, shelves and dressers are easy to find and easy to change to fit your needs. I purchased quite a bit from garage sales and you would never know to look at the pieces. I refinished some and left others as is. Once I could really afford to purchase new I bought some things but I'm perfectly happy with most of my repurposed furniture.


This is excellent advice! I recently bought a one year old dining set that I just love that originally came from the most popular furniture store in town for 1/3 of the price on Craigslist! the couple had moved and it didn't fit in their new house so they just needed it out!

crisi
09-02-2008, 11:18 AM
One of the big tricks to budgeting is to prioritize. Most of us cannot have it all - so you have to decide what you do want. Is the extra dishes more important than more space? Is more spece more important that retirement? Is retirement more important than vacations? It may be that you decide retirement, vacations, and a nice home are all important - now you need to balance - so you might take cheaper vacations, plan for a simplier retirement, buy a smaller home in order to have all of them. Remember that all money spent (even the dollar menu at the fast food window) is money that isn't available to you to do something else with.

Do learn to seperate wants from needs, but then understand what level your wants occur at, and make plans and take actions to make sure your long term wants are not always delayed for your instant gratification wants. If you choose to spend money on dishes this week, that is money you won't have to put towards new furniture. If you choose new furniture this season, that's money you won't have to take a vacation next year.

Marla Hellwig
09-02-2008, 11:22 AM
When I moved into my house - I did my 'shopping' at the relatives - nothing like basement or attic furniture - I did buy some new things - like bed etc,.

But I was lucky in the fact that relatives were downsizing themselves and couldn't take some stuff etc

Pamlur
09-02-2008, 11:28 AM
DH and I have been married almost 30 years; in that time we have pretty well figured out how our life runs. We feed a house full on Thanksgiving, minimum of twelve and varying on upwards. We prefer smoked turkeys, those only need to be heated through to bring out the flavor. I make a huge amount of cornbread dressing because everybody counts on taking home leftovers. I make all of that in the throw-away aluminum pans.

We serve buffet style, with plastic plates and flatware. Yes, I have nice dishes and flatware, but not in the quantities we'd need for all those people. If they want to use the real thing, they know where it is. We do use regular glasses because they are handy and more spill-proof.

We are building a new house, and plan to move in next month some time. I'm not decorating ahead of time, because I want to live there and see what I feel would look best, where.

I would personally buy only what I could comfortably afford the mortgage on. You can buy decorations, dishes, etc., over the years. That's one of the fun parts of home owning; don't get ahead of yourself and try to cram it all in at once. Also, with your husband's illness, you really need to be very, very cautious right now.

jnzimm
09-02-2008, 03:28 PM
There is nothing wrong with living below your means in an effort to be financially stable. My wife and I can afford to live in twice the size house as we have now, but for what? To impress people? Take the safe way. A larger house means more to clean. A larger house means family spreadin out through out the house and less quality time spent.

disneymom3
09-02-2008, 06:51 PM
The other thing to consider with being house poor is that the market is still dropping in many areas and you don't want to end up with more debt than house. It could still happen. The bigger the downpayment the better.

I also wanted to offer one piece of advice to perhaps help cover costs. See if there is a teacher in your area who does some tutoring. Private schools are a good place to check as their teachers are often paid less. The other option is if you live near a college to post a notice on their job board or even a highschool. By senior year, I was fluent in Spanish and I tutored a couple of kids in Jr High in Spanish. My sister was a 5th grade teacher at a private school and had 4 or 5 kids that she tutored. I KNOW it was far less than Sylvan so it might be really worthwhile to check out.

Also, I hope your DH is doing okay and feeling better.

robsmom
09-02-2008, 07:04 PM
A larger house means family spreadin out through out the house and less quality time spent.

As i type this my husband is watching some TV and my DS is playing violin - all 3 of us in the family room. Makes me wonder why i have other rooms because we always all end up together!!

OP - one other thing that i do about wants and needs is to wait a month or two. If i really want something i wait a month or two to see if i still want it and do i want that exact item, do i really love it. If i can not possibly wait to buy it then i know that it is probably a need. If i wait and realize i do not want to buy it, then i have saved myself the money!!

DisBride2007
09-02-2008, 07:43 PM
When it comes down to it the difference between a want and a need is what you can and cannot live without. You cannot live without food, water, clothing, and shelter. You can live without a set of matching dishes, furniture, a big house, a nice car, a garage, a closet full of clothes, etc.

We bought our first house a year ago. It's just me and DH right now but we have a 3BR house that's 1500 square feet. We looked at some houses up to 2800 square feet. I was a little apprehensive than this house would be too small for us but believe me it is more than big enough! We actually only use three of our rooms on a daily basis - our bedroom where we sleep, a second bedroom where we keep our TV and laptop (and also usually eat), and the kitchen, which is not even an eat-in-kitchen. It's more than enough house for me to clean though. ;)

As to decorating, I love decorating too, but I don't want to spend too much money on it. We buy one item at a time, take advantage of sales and discount stores. In our living room, we started out with just a loveseat. About three months later we added two chairs from Target. Finally after living in the house for a year, I got my coffee table from JC Penney. I actually find it more satisfying to find something for a great bargain than to buy the most expensive item in the store.