Hi Money Minder,
Hey there, I’m a recent divorcee starting fresh in terms of my living situation. Currently crashing with my folks due to lawyer fees and unexpected expenses hitting me hard this year. But, thanks to my military background, I have access to the VA Home Loan which means I only need to worry about closing costs. I’ve crunched the numbers for a potential budget and now I’m trying to figure out if the house I have my eye on is within reach or way out of my league.
Here’s a breakdown of my budget so far:
- Mortgage: $1,187 – $1,260 (depending on property tax scenarios)
- Internet: $100
- Home Insurance: $108 (quote from All State)
- Electricity: $200
- Heating (Natural Gas): $50 (gonna shoot up in winter, but electric bill will drop)
- Water + Sewage (City): $40
- Car Payment: $206
- Car Insurance: $152 (quote from All State)
- Cell Plan: $92
- Gas: $100 (working remotely, so not driving much)
- Student Loans: $203
- Dog Food: $80 (including tick medication)
- Groceries: $250
- Cloud Storage: $11
- Charity: $45
- Haircuts: $25
- Clothing: $30
- Car Maintenance: $30
- Fun Money: $100
After all these expenses, I’m left with roughly $198 – $272 for emergencies, unexpected costs, and saving for both my emergency fund and home improvement projects. I’ve never lived on my own before, and my finances were all over the place when I was married. Is this buffer too slim? Renting a two-bedroom apartment in my area wouldn’t save me much money. I know I’m not following the 50-30-20 rule, but without a roommate or buying a rundown house in a sketchy neighborhood, it seems out of reach. Am I way off track with my budget? Is the house too pricey? I’m open to any advice or thoughts the community has!
Thanks a bunch,
Financial Newbie
Response from THE MONEY MINDER:
Hello There,
I’m sorry to hear about the challenges you’ve faced this year, but congratulations on taking steps towards a new beginning by considering buying your own home. It’s important to carefully assess whether the house you are looking to buy fits within your budget and financial goals.
Looking at the budget you provided, it seems like you’ve put together a detailed breakdown of your expenses, which is a great start. You have accounted for essential expenses such as mortgage, utilities, insurance, and loan payments, which is commendable. However, it’s crucial to ensure that you have a realistic margin left over for emergencies and savings.
Given that you’ve never lived on your own before, it’s understandable to feel unsure about whether the margin you’ve calculated is adequate. It’s wise to err on the side of caution when it comes to budgeting for a new home, as unexpected expenses can arise. It might be helpful to consider cutting back on some non-essential expenses temporarily to build up your emergency fund and savings.
In terms of affordability, it’s important to remember that being a homeowner comes with additional responsibilities and costs. While renting may not offer much savings in your area, owning a home requires upkeep and maintenance that should be factored into your budget.
Before making a decision, I would recommend seeking advice from a financial advisor or housing counselor who can provide guidance tailored to your specific situation. They can help you assess whether the house you are considering aligns with your financial goals and help you navigate the complexities of homeownership.
In conclusion, it’s essential to strike a balance between your desire for homeownership and financial stability. Taking a practical and realistic approach to your budget and expenses will set you up for success in your new chapter. All the best from THE MONEY MINDER as you navigate this important decision.
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