Comments on: How to find out if you can afford something http://www.gatherlittlebylittle.com/2008/08/how-to-find-out-if-you-can-afford-something/ Proverbs 13:11 - "...he who gathers money little by little makes it grow." Sat, 21 Nov 2009 03:27:42 -0400 hourly 1 By: glblguy http://www.gatherlittlebylittle.com/2008/08/how-to-find-out-if-you-can-afford-something/comment-page-1/#comment-7290 glblguy Wed, 13 Aug 2008 01:44:26 +0000 http://www.gatherlittlebylittle.com/?p=967#comment-7290 @Steward - Excellent question. If you can't go ahead and live on those expenses, than just add them to your budget the best you can. Most expenses like that can be researched. I would just run a budget with the expect % increase. @Steward – Excellent question. If you can’t go ahead and live on those expenses, than just add them to your budget the best you can. Most expenses like that can be researched. I would just run a budget with the expect % increase.

]]> By: Financial Planners at Respond http://www.gatherlittlebylittle.com/2008/08/how-to-find-out-if-you-can-afford-something/comment-page-1/#comment-7289 Financial Planners at Respond Tue, 12 Aug 2008 11:11:08 +0000 http://www.gatherlittlebylittle.com/?p=967#comment-7289 Thanks for the great post. It will definitely help those who are going to or planning to buy home. Thanks for the great post. It will definitely help those who are going to or planning to buy home.

]]> By: Mydailydollars http://www.gatherlittlebylittle.com/2008/08/how-to-find-out-if-you-can-afford-something/comment-page-1/#comment-7288 Mydailydollars Mon, 11 Aug 2008 23:37:01 +0000 http://www.gatherlittlebylittle.com/?p=967#comment-7288 Great thinking! I agree. . . living like you've already made the purchase is a great way to test the waters. Another factor to consider when moving is the neighborhood. Will you be trading up on the "keeping-up-with-the-Joneses" factor? One thing we like about our area is the fact that it's a mixed-income neighborhood. That way we don't feel pressured to buy cars, boats, or whatever to fit in. Great thinking! I agree. . . living like you’ve already made the purchase is a great way to test the waters. Another factor to consider when moving is the neighborhood. Will you be trading up on the “keeping-up-with-the-Joneses” factor? One thing we like about our area is the fact that it’s a mixed-income neighborhood. That way we don’t feel pressured to buy cars, boats, or whatever to fit in.

]]> By: Investing For Beginners http://www.gatherlittlebylittle.com/2008/08/how-to-find-out-if-you-can-afford-something/comment-page-1/#comment-7287 Investing For Beginners Mon, 11 Aug 2008 23:13:13 +0000 http://www.gatherlittlebylittle.com/?p=967#comment-7287 maybe im a little weird, but an investment property is THE way to go. not a second home, but a rental. if you can get a mortgage as low as 700, thats awesome. have someone pay the property down for you through rents and your off to the beaches somewhere collecting excess money through depreciation! rinse repeat! ...700 mortgages??? im moving to your part of the country lol maybe im a little weird, but an investment property is THE way to go. not a second home, but a rental. if you can get a mortgage as low as 700, thats awesome. have someone pay the property down for you through rents and your off to the beaches somewhere collecting excess money through depreciation!

rinse repeat!

…700 mortgages??? im moving to your part of the country lol

]]> By: Monroe on a budget http://www.gatherlittlebylittle.com/2008/08/how-to-find-out-if-you-can-afford-something/comment-page-1/#comment-7286 Monroe on a budget Mon, 11 Aug 2008 19:59:25 +0000 http://www.gatherlittlebylittle.com/?p=967#comment-7286 I had paid off my student loans about a year before we bought our house. Instead of spending that extra money on monthly expenses, I set it aside to buy things like new dishes and new towels for the new house. Why? Because as soon as we had a mortgage, that money would be eaten up in housing costs. It was really great to move in with boxes of brand new pretty things! I had paid off my student loans about a year before we bought our house. Instead of spending that extra money on monthly expenses, I set it aside to buy things like new dishes and new towels for the new house. Why? Because as soon as we had a mortgage, that money would be eaten up in housing costs.

It was really great to move in with boxes of brand new pretty things!

]]> By: LC http://www.gatherlittlebylittle.com/2008/08/how-to-find-out-if-you-can-afford-something/comment-page-1/#comment-7285 LC Mon, 11 Aug 2008 18:37:18 +0000 http://www.gatherlittlebylittle.com/?p=967#comment-7285 Another thing to ask about whether you can afford a house is can you afford the utilities/maintenance or "standard of living increase". A significatly larger house will have higher heating bills. A house in a warmer climate (or if you never had AC before) will cost more to cool. A neighborhood that requires professional landscaping or where sprinkler systems are installed will increase your water bill. If your neighbors all send their kids to private schools or drive new cars, will it be difficult not to give into the pressure and spend more? On the other hand, some locations can decrease social pressure to spend/utilities, but it is something to consider. Another thing to ask about whether you can afford a house is can you afford the utilities/maintenance or “standard of living increase”. A significatly larger house will have higher heating bills. A house in a warmer climate (or if you never had AC before) will cost more to cool. A neighborhood that requires professional landscaping or where sprinkler systems are installed will increase your water bill. If your neighbors all send their kids to private schools or drive new cars, will it be difficult not to give into the pressure and spend more? On the other hand, some locations can decrease social pressure to spend/utilities, but it is something to consider.

]]> By: Gina http://www.gatherlittlebylittle.com/2008/08/how-to-find-out-if-you-can-afford-something/comment-page-1/#comment-7284 Gina Mon, 11 Aug 2008 15:35:44 +0000 http://www.gatherlittlebylittle.com/?p=967#comment-7284 I follow the 1/3 rule. Is the mortgage payment more than 1/3 of your take home pay? We followed the same process ... put away a "mortgage payment" for 1 yr while we were renting. It helped us STICK to our best case mortgage payment scenerio too. Good luck! Take your time. I follow the 1/3 rule. Is the mortgage payment more than 1/3 of your take home pay?

We followed the same process … put away a “mortgage payment” for 1 yr while we were renting. It helped us STICK to our best case mortgage payment scenerio too.

Good luck! Take your time.

]]> By: Steward http://www.gatherlittlebylittle.com/2008/08/how-to-find-out-if-you-can-afford-something/comment-page-1/#comment-7283 Steward Mon, 11 Aug 2008 15:11:01 +0000 http://www.gatherlittlebylittle.com/?p=967#comment-7283 Those are some pretty good tips, I especially like the one about living like you made the purchase to see if you can afford it. But I have a question, what do you think about seeing if you can afford something the makes a pretty broad impact on several areas of your finances at the same time - like relocating? When you move your income and housing, food, fuel, travel, and entertainment expenses might change. How would you recommend seeing if you can afford that? Those are some pretty good tips, I especially like the one about living like you made the purchase to see if you can afford it. But I have a question, what do you think about seeing if you can afford something the makes a pretty broad impact on several areas of your finances at the same time – like relocating? When you move your income and housing, food, fuel, travel, and entertainment expenses might change. How would you recommend seeing if you can afford that?

]]> By: Can I Afford That? at Curious Cat Investing and Economics Blog http://www.gatherlittlebylittle.com/2008/08/how-to-find-out-if-you-can-afford-something/comment-page-1/#comment-7282 Can I Afford That? at Curious Cat Investing and Economics Blog Mon, 11 Aug 2008 14:10:03 +0000 http://www.gatherlittlebylittle.com/?p=967#comment-7282 [...] is a nice post, How to find out if you can afford something, that explores when that simple concept isn’t quite enough. For example, when determining if [...] [...] is a nice post, How to find out if you can afford something, that explores when that simple concept isn’t quite enough. For example, when determining if [...]

]]> By: Funny about Money http://www.gatherlittlebylittle.com/2008/08/how-to-find-out-if-you-can-afford-something/comment-page-1/#comment-7281 Funny about Money Mon, 11 Aug 2008 14:04:26 +0000 http://www.gatherlittlebylittle.com/?p=967#comment-7281 Well said. The decisions involved in making such a major purchase are never easy, especially when you're young. My ex- and I had to stretch to buy each of the houses we purchased during our marriage. We lived in each about 15 years. We paid $32,000 for the first place and sold it for $130,000. Our payment on it was $300, which by the time we sold was pocket change. We paid $170,000 for the second, which is now worth about $1.2 million, even though it needs fix-up. The payment on it when I exited stage left was about $1,500 -- the same amount my son and I are paying on the tiny Investment House, which is worth about $270,000 (supposedly) and is located in an iffy neighborhood. What happens is that inflation soon takes the sting out of a 30-year fixed mortgage payment. Your wages go up, while the payment stays stable. In a few years, the extra $700 will seem quite affordable. Well said. The decisions involved in making such a major purchase are never easy, especially when you’re young.

My ex- and I had to stretch to buy each of the houses we purchased during our marriage. We lived in each about 15 years.

We paid $32,000 for the first place and sold it for $130,000. Our payment on it was $300, which by the time we sold was pocket change. We paid $170,000 for the second, which is now worth about $1.2 million, even though it needs fix-up. The payment on it when I exited stage left was about $1,500 — the same amount my son and I are paying on the tiny Investment House, which is worth about $270,000 (supposedly) and is located in an iffy neighborhood.

What happens is that inflation soon takes the sting out of a 30-year fixed mortgage payment. Your wages go up, while the payment stays stable. In a few years, the extra $700 will seem quite affordable.

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