OT-How much money does the average family have left over each month?

[hlane]

DH & I have decided to buy a house, actually having one built. We've found a wonderful home design, been approved, decided on options, picked a lot, done everything except sign the papers. I am very excited but even more nervous because we will be paying substantially a lot more out each month. I am just curious, how much does the average family have left over each month after figuring in house payment, car payment, utilities, cc payments, student loans, groceries, gas, and very thing else an average family pays out each month. We've sat down and figured out a budget several times so far and each time coming out showing we'll have approx $450.00-$500.00 left each month after figuring in everything we could think of and also budgeting $100.00 per month for misc. I know things always look better & simpler on paper. Does this seem reasonable? Does the average family normally have a lot more left over each month? BTW it is me, dh, & ds 3 & 4. Also the $450.00-$500.00 left over will be with us on a tight budget. Any opinions would be greatly appreciated.

TIA

 

[skiwee1]

I don't think you are going to get what you are looking for. There are too many variables to have. Let say one has a $5000 a month house payment. They might not have much left after that. Some might have only a $1000 house payment yet make a lot of money therefore having a lot left over. It all depends on your income and what your bills are.

 

[hlane]

Maybe I threw too much in there but question is just this....Does having only $450-$500 left over each month after paying bills & buying groceries & gas seem like it would be cutting it too close for a family of 4?

 

[MrsPete]

450-500 per month doesn't sound like much to me -- not when you're talking about a family of four. When your car insurance comes due, or when the kids want to go to summer camp, or when it's time for back-to-school clothes, that means you'll have almost nothing for the month. I didn't see savings in your list; it should be there. You'll need short-term savings for things like vacations, a new TV, or a downpayment on your next car. Do you have long-term retirement savings and college savings in the works?

This budget isn't something you can do for just a while; you'll be paying for this house for 30 years; that's longer than your kids will be kids. Does that sound do-able? It will be easier once the credit card debt and the student loans are paid-off; how long will that be? Judging from your hesitation, I'm wondering if you're buying "too much house".

Here's my suggestion: Start practicing now. Assume you're paying the larger amount right now; put the extra dollars into a savings account and pretend that you're living on what you will have if you buy the house. Give it a couple months. Is it comfortable for your family, or do you find yourself pulling out the credit card?

 

[disney 4me2]

That depends on alot of things... do you have good health insurance? Is there a big deductible or co-pay at the doctors office? Are your jobs stable? Do you have a savings account? Something to fall back on if one of you loses their job, or becomes sick? Are your fixed expenses like day care expected to rise? Will you need a new car in the near future?I do not think that 400-500 a month "left over".
is really very much, considering you figured your budget very close. Sometimes unexpected things come up and all of a sudden that extra money is no longer extra. I do not mean to scare you, It just seems like there always are unexpected expenses, at least with us. And it is true, the more you make, the more you spend! (or invest)Almost every month there is a birthday, or a holiday that extra money is needed for. Once the kids go to school, there are so many things they need money for, but you will save on day care expenses.My husband built our home, in fact he builds homes for a living. There are often added expenses that the homeowner decides they really want. For example, granite countertops are at least $5,000 but you can get laminate for say $200. So you may end up spending way more on your house than you first expected. Hardwood floors are more expensive than pergo, ect.. Just be sure to include all the extras that you may want into your final cost of the house.That being said, I think there is no greater joy than having your own home, built just the way you want it! You can always pick up a part time job later if you need extra income. You do not have to have everything all at once, either. We just put in a very nice kitchen, one that we could not afford a few years ago when we built the house. Interest rates are still real low, so now is a good time to borrow money.Real estate is a good investment, renting is not.

 

[patsal]

Depends on so very much. How willing are you to really go low budget? What things can you sacrifice for the home you want? I have had as little as $34.00 left over after all bills and necessities were taken care of --for nearly seven years. I did this so I could stay at home withthe kids until they went to school. I shopped places liek ALdi for groceries (I still do--now I'm making up for the savings we didn't have the abililty for when I stayed home). With very young children simple can be a very easy lifestyle. They don't notice the difference between thrift store clothes and Abercrombie. You can treat them with pocket change for McDonalds once or twice per month, parks are usually free for an afternoon of fun. Money isn't everythign, but it does make everything easier!
If you're willing to make the sacrifice and see it through, and your sure this is really what you want you'll be fine. Set up your bills so that they are dispersed throughout the month so you will not have a shortage some weeks.

 

[ducklite]

Maybe I threw too much in there but question is just this....Does having only $450-$500 left over each month after paying bills & buying groceries & gas seem like it would be cutting it too close for a family of 4?

Just make sure you've added in things like car repairs, oil changes, new tires, haircuts, newspaper delivery if applicable, etc.

I think if you've counted in all these "easily forgotten" expenses, you should be OK as long as you've got some savings to fall back on in an emergency. If you're putting in every cent of your savings to buy the new place, I'd think about your job stability, how well insured you are, etc.

Also, when we built our home we had a construction loan, so we had to pay on the draws, which towards the end was pretty much an entire mortgage payment every month. If you have this type of loan can you carry that and your current mortgage at the same time?

Anne

 

[DiznEeyore]

There are times that we would've loved to have $400 left over at the end of the month (including now, as dh is unemployed), LOL!! You can definitely get by on it, but it's not necessarily a fun way to live.

A big factor is, as other posters have stated, whether or not you've accounted for savings in your figures. Also, will you be maintaining your credit card lines and do you carry balances on them? If you pay them off every month, or if you're planning to pay them off relatively soon, no problem. Then those bills won't be with you forever and you'll slowly have more and more money left over at the end of the month.

Looking at the other side of the coin, you have to keep in mind the fact that household bills don't stay static. Our homeowner's insurance has risen steadily each year, as have our property taxes. Cost of living keeps going up and up and most salaries aren't matching the pace.

I know the idea of a home is a powerful draw, and if you feel you've accounted for all the little things that can add up and are comfortable with what you've got left, you should go for it. Houses aren't going to get cheaper, right? And of course, you can't plan for every contingency; I know several people who've had 6 months or more living expenses in savings and had it decimated by medical bills (even while insured). Ultimately, all you can do is be as responsible and realistic as you can and hope and pray the rest works out.

Good luck with your plans!!

 

[RobinMarie]

If it were me trying to figure this out:

Imagine how much I would need to put away 6 months of living expenses. How long will that take me at 500/month? Can you I with that? This is my rainy day fund.

Do these figures include putting ADDITIONAL money aside for retirement/savings? (10% of gross income)

I have a 529 for college for my child. Must figure that into calculations.

Vacation fund! (very important for sanity purposes!)

 

[LorieDisneyLover]

hlane,

It sounds like you have already accounted for all the 'bills' and are asking if $400-500 is enough for the 'unexpected' and just plain old money to spend on things. It also sounds like you are a young couple at the beginning of building your family .... nearly all young couples stretch themselves thin when buying that first house. But if you are careful and watch your budget, don't go into debt, etc you will soon find you have made an excellent decision to get into a home. In the beginning it will mean sacrificing a lot of 'extras' because $400-500 doesn't go far ... but it should be sufficient if you watch the little things. In the years to come there will probably be job promotions and increases in salary and that will allow for more disposable income.

 

[Disneycrazymom]

Also think about the extra costs of building the house. Will you want to upgrade the carpet or the kitchen cabinets? There are MANY ways to upgrade when you go to choose your colors, flooring, appliances, etc. Even lighting can cost extra. You agent should be able to tell you what the average extra cost is running for the neighborhood. Then you will have moving expenses. Once your in the house you will need some kind of window covering and landscaping. Will you want new furniture? Will the school district be ok for your son when he turns 5, or will he go to priviate kindergarten? All these things add up and you could find yourself further in debt than you would like to be, considering how tight your budget is. I am not saying you can't do it, just that there are lots of unexpected things with a new house. Many young couples start out on a pretty tight budget to buy a house. It gets easier as your wages go up.

 

[marcyinPA]

We are a family of 4 living on one income for the time being. I'm happy to have $20 left at the end of each pay period (dh gets paid every other week). Things are TIGHT with a capital T, but we are used to living this way. We own our own home, we don't drive fancy cars, we don't eat out much, and we don't do much for ourselves. We DO take care of our kids and they are dressed well, fed well, and take part in activities. We are also faithful people, so we know that we will always be provided for. We've been through 3 layoffs since we've been married (12 years) and we've never ONCE missed a payment on anything. I consider us BLESSED...even when I'm scraping up change for lunch money for my son!

Good luck!

 

[ckoncurat]

To me an extra $400 month would seem like a fortune! We put $250 a month in college funds, $600 month in 401K, $600 month in savings. We also tithe 10% of our pretax income. After mortgage, food, bills and $100 week for clothes, entertainment and misc., we barely squeak by. This is for a family of 7. We use our savings, tax refunds, and my husbands yearly bonus for vacations.

 

[ducklite]

Also think about the extra costs of building the house. Will you want to upgrade the carpet or the kitchen cabinets? There are MANY ways to upgrade when you go to choose your colors, flooring, appliances, etc. Even lighting can cost extra.

This is SO true! I spent over $40K on upgrades, and never really got near the expensive stuff! (Some of our upgrades were for energy efficiency and/or safety like TekSheild and lightning rods, so we don't even count them as creature comfort upgrades...

Then you will have moving expenses.

The truck rental, bubble wrap, packing tape, boxes if you have to buy them (I got lucky, a friend who works in retail saved hundreds of them for me--no exageration!) will cost you at least a couple hundred dollars if not more, and that's for a local rental.

Once your in the house you will need some kind of window covering and landscaping.

Again, so horribly true! Bare bones cut to fit blinds from Home Depot will still run you around $1000 for the average house. I've spent close to $10K, and I'm not done yet If the windows are large or not stock, you've got a nightmare on your hands for window treatments. If you have an IKEA near you they have inexpensive curtains for large windows if that info helps at all...

One other thing, selling your current home--almost everyone needs to put $500 or so into their current home before they list it--painting, sprucing up landscaping, even renting a storage unit to "declutter"--it all adds up.

Anne

 

[dizagain]

Hi! I think you've included all normal expenses in your break-down. It is better financially in the long run to own than rent, that's for sure! I think you sound like you're very prepared - trust me, my family doesn't always have $400 at the end of the month!! Getting a brand new home up and running is expensive with lots of hidden costs, but I still think you sound as though you're ready for that. Good Luck and trust your instincts!

 

[joestein]

When my Wife bought our house 3 1/2 years ago, we figured that we would have about $850 a month left after all our bills (We included annual bill /12 each month). I felt we were very tight!

But... over the last 3 1/2 years interest rates fell considerably...we refinanced twice. We went to a $2,900 month mtge payment to a $2,300 pymt, back up to a 15 yr $2,900.

The biggest help to us was that we were (are still) young and our salary is moving upwards and Bush gave a large tax cut to our tax bracket.

I would not worry so much about the budget as you should make more in the comming years.

 

[jenr812]

I'm like some of the others - I would be THRILLED with that much left over each month. After I graduate in 2 years, things will be much better, but right now things are TIGHT. However, I am the queen of saving at the grocery and stretching things. Plus I find ways to have fun cheaply or free. So it evens out. I think there is a lot of good advice in this thread.

 

[EsmeraldaX]

Maybe I threw too much in there but question is just this....Does having only $450-$500 left over each month after paying bills & buying groceries & gas seem like it would be cutting it too close for a family of 4?

Depends on what bills you have....

If you ARE including groceries, gas and utilities, I suppose anything you have left over is fine...

 

[mamalle]

double post.

 

[mamalle]

I think you are on the right track. I budget each bill for each pay period for dh and I for the whole year so that it tells me what we will be saving each month. I love the months that we get paid 3 times because that pays a extra mortgage payment and the other month it will go into savings. dh teaches medics at the college a few times a month and I may work extra hours sometimes and that all goes into savings. we usually have at least $1000 each month that is extra that I allocate for our savings account.