Soon to be 32 year old here... trying... for the life of me... to figure out, how in the world my peers are able to afford building a new house, having a car payment, getting the new iPhone every time one is released, and taking vacations.
Now don't get me wrong, I'm not here to play Keeping Up With the Joneses. I have no intention of getting myself into unnecessary debt or being house poor in an effort to keep up appearances.
I do, however, wonder how in the hell the people around me are able to do it.
This isn't a rant, and I'm not throwing anyone under the bus. This post is out of genuine curiosity.
Coming from someone that is currently shopping for a house, would like to start a family in the near future (5 years?), and bring down a modest salary, I just don't see how my friends are doing it.
Luckily, my girlfriend and I are both fiscally responsible adults. Our vehicles are paid off... our credit cards are paid off every month... we have a combined $10k in student loans remaining... and while we treat ourselves to nice dinners on occasion and one or two modest vacations per year, we aren't out blowing through cash like it grows on trees.
Anyway, here I am trying to make some important life decisions like house hunting, marriage, family, etc etc etc, and I'm just struggling as to how its gonna work out for us and how some of my peers are able to do it. Perhaps they're just bringing in significantly higher salaries than myself.
--Currently--
Monthly Salary - $3,000
Apartment Payment - ($650)
Health Insurance - ($150)
Car Insurance - ($125)
Cell Phone Plan - ($65)
Student Loans - ($135)
Living - ($600)
Not too bad right? But this is paying for myself in a 700 sq ft apartment. Add a family in the mix... things start to look quite a bit different.
First, we will need a house. We're already house hunting as it is, to get out of our tiny apartment, but still- with a family, I don't want to live in an apartment. We live in a city with a starting price of around $200,000 for a modest 3 bedroom. Leaving room for a small upgrade, and being conservative with my estimates, let's say we end up with a $250,000 mortgage.
Next, it's already been discussed that until the kiddos start school, my then wife would be a stay at home mom. Before the new era feminists of the world start attacking me, it should be noted that this is what we both want for our future kid/s. So all current expenses would fall to me, on a single salary.
The final item addition is the children themselves. In 2015, the final cost of raising a child over 18 years is a staggering $233,000!
This, of course, includes housing costs, but there's always the potential that we have more kids than expected and are forced to move to a larger house. For that reason, we'll go ahead and include the amount in our calculation.
--5 years from now with a family--
Salary - $3,500
House Payment - ($2,000)
Family Health Insurance - ($850)
Car Insurance - ($225)
Cell Phone Family Plan - ($125)
Children - ($1,082)
Living - ($1,000)
This is including the additional cost of having an older vehicle, but not a car payment itself, which is inevitable. All of a sudden, there's no extra money for saving, no extra money for vacations, no extra money for nice date nights.... and once the kiddos' sports/art/music seasons hit us, Lord help us!
And since we're talking about marriage and having kids, we may as well go ahead and throw in the thousands of dollars that it costs to have a wedding now-a-days!
I think some serious lifestyle changes will be in order for me... coming up with a plan to increase my salary through professional development, side hustles, getting into REI while I can, and praying some of my investments have good returns!
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