What would you do in this situation? housing/expenses/fire, optimize

[nmitb]

Hola, i found MMM sometime last year, and have been reading and saving since. This is my first post and im hoping for some helpfull advice from you smart forumpeople :)

My numbers and situation:

Life situation: Married, both 30, with a 2yr old, and want more children in the future. M/HCOL area

Monthly numbers:

Income:
5,800 combined

Expenses:
Rent: 810
Daycare: 400
Groceries: 350
Transportation: 190
Cell phone: 60
Entertainment: 50
Clothing/equipment: 100
Travel: 100
Work related: 100
Gifts: 100
Misc: 60

Total: 2,320

Assets:
Savings: 12,800
Brokerage: 41,000

Total: 53,800

Liabilities:
Student loans: 34,000 @ 3%

Im not including retirement savings.

I feel the expenses are low, but sustainable.  Anything obvious that sticks out?

We could both work more, OT/sidehustle and bring in more money, but the focus for now is healthy work/life balance,.

The rent we pay now is way below market, lease is up in 6 months, and we will be moving, transportation could be cut to zero if we find something close to work and ditch the car, rent will go up though.

NYT-calc is not really helpfull, its 50-50.

Houses range from super-low end 200,000 (small and requires  work, car commute) -  800,000+.
Newish 2-3br apartments is around 350,000 in walkable nabourhoods, rents for 1,200-1,500 if you can find one, not a lot available for rent in the area.

We have thought about buying a duplex, and rent out one part to my mother in-law, but not sure I want to deal with all that brings. And a duplex is not cheap, so i dont even know how/if we could finance something like that, cost is probably 400,000+ and a decent amount of work.

I cant see myself renting for 10 years, 5 years maybe, but the plan was always to buy a house, im not sure on the timing though, our options are also limited in this market.
3-4-500,000 for a house/apartment in my town is absolutely crazy, but so is 1,400/month in rent.

Specific questions:

What would you be comfortable paying for housing?
What would you do in our shoes?

[cal]

Is your income after taxes?
Are your loans in deferment? I don't see anything under expenses for them.

I'm new to posting, but my personal thought would be to look in that 200,000 range and aim for a 20% down payment in six months since that would allow you to skip out on PMI. It sounds like that would mean working a little more for you unless you dipped into investments. (In my own case, we borrowed from a family member to make this happen.) Curious to see how others reply.

[BicycleB]

What would you be comfortable paying for housing?

Hola!

One benchmark I might apply is 50% savings rate. I'd feel a lot more comfortable if any purchase maintained that. (I'd be thrilled if it maintained the current 60%).

Why not count retirement savings as assets? Aren't they expected to produce future income (that's the definition of an asset, right)? In part, my answer would depend on retirement expecations. And of my personal goals.

Good work keeping transport so low.

[nmitb]

Thank you for your replies!

Is your income after taxes?
Are your loans in deferment? I don't see anything under expenses for them.

I'm new to posting, but my personal thought would be to look in that 200,000 range and aim for a 20% down payment in six months since that would allow you to skip out on PMI. It sounds like that would mean working a little more for you unless you dipped into investments. (In my own case, we borrowed from a family member to make this happen.) Curious to see how others reply.

Income is take home.
The student loan is in deferment yes, and we will start paying in 6 months and the minimum payment on that will be 200/month.

Problem with those houses on the very low end, is the location. If i collect a lot of favours and spend around 50,000 i am sure they would be nice livable homes, but  Im not sure i would want to depend on the car for everything, in the long term.
I could, like you, borrow from family for the downpayment. I Could also rough out some long hours before the move, so the downpayment itself im not that worried about.

What would you be comfortable paying for housing?

Hola!

One benchmark I might apply is 50% savings rate. I'd feel a lot more comfortable if any purchase maintained that. (I'd be thrilled if it maintained the current 60%).

Why not count retirement savings as assets? Aren't they expected to produce future income (that's the definition of an asset, right)? In part, my answer would depend on retirement expecations. And of my personal goals.

Good work keeping transport so low.

Id like to maintain 60%, (that is still 12,5 years of work, YIKES!).
I have to be realistic though;

-Housing cost will og up, and deadline in 6months
-Wife is pushing for a house
- Would like more kids so not ideal to move around
- We are early in our careers, we will get raises/better jobs

If i have learnt anything from being here, Im pretty sure the answer to this is not to work longer hours and make more money, just to in the end have less time for they who matter.


Im not from the US, and the retirement savings are  already taken of my paycheck. Its basically: work->survive until you are 65->relax. We would do fine on the minimum SS-amount so i give this little thought, we will be long FIRED before that anyways.

Thanks, we have been living close to everything, thats why transport cost are low, and i would like them to stay that way.