Reality Check - Good Thing!
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  1. #1
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    Default Reality Check - Good Thing!

    One of our goals is to buy a house before my son (9 months next week) starts school. Given the area we live in (central MA), we've decided that we willing to spend $200K-$250K on a house. Obviously we'd like to stay closer to the $200K end of that range, but we're trying to be realistic (average selling price in the town I grew up in is $400K - just to give you an idea of what our current real estate market is like). We'd like to put 20% down to avoid PMI and not have to finance as much. So realistically, we're looking at trying to save $50K.

    Right now we have $4K in the bank. So we figured last night that in order to save $46K by the time our son is 5 years old we'll have to save $900/month. We are currently saving $400/month towards a house. Now we know that we only have to come up with an additional $500/month. I know that seems like a lot of money, but I found it very re-assuring - for me, $500/month seems a lot more doable than coming up with $50,000! Sometimes I get scared of running the math, but this time it just made me feel a lot better.

    We also figured that we're already 10% of the way towards paying off the car and 8% of the way towards our down payment - I also find that re-assuring.

  2. #2
    Registered User Cricket1's Avatar
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    Good for you! You're on your way. It's great that you're planning ahead.

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    That's great news. I always feel much better when I can put things in perspective, too. "Baby Steps" =)

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    That's great Sara!

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    Registered User geckoace's Avatar
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    thats great, an additional 500 a month (though a lot) is at least a tnagible goal and it does sound less scary then 46K WTG!

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    Master Dollar Stretcher aka AmyBob AmyMCGS's Avatar
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    Numbers always scare me, LOL.

    Sounds like you have a great plan!

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    Registered User Michelle's Avatar
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    I think it's great that you have a plan. Where will you come up with double the amount that you're already saving? Do you know where you'll take/earn that from?

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    I always like to do the math, too, when setting a goal. I know your determination and you'll get there.

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    Sounds like a plan. What does $200,000 buy where you live. Where I live in north Louisiana that's a $2,500 to 3,000 sqare foot house.

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    In my area, $2k might buy a 900 sq ft "condo" ie apartment.

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    lol, make that $200k

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    Right now in the MA area it's running for a lot... a single 1 floor house with 4 bedrooms and 1 bath is about $700,000

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    Looking at the listings, assuming that we don't want too many extras (say, fireplace and hardwood floors) $200K - $250K will probably get a 1300-1500 sq. foot house in some (not all!) of the smaller towns outside of the city we live in. We're hoping that when the housing bubble continues to collapse, that prices will fall a lot more and we'll have more houses to choose from.

    As far as where the $500 will come from - well, we do have a bit of a surplus now. This month a lot of it was spent on my cat's dental bill ($400). We've also been making catch-up contributions to DS's 529, so we'll have an extra $100 in four months. It will be a long time before the car or my student loans are paid off, but we have no other debt. We've also agreed to watch our eating out budget better. DH reduced his contributions to his 401K from 15% to 6%. Since we generally have extra money at the end of the month, it's also kind of hard for us not to spend it since we know we have it - so we've agreed to be better about recreational spending in general.

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