EDIT: After writing this out, it's longer and more detailed than I expected and I'm inclined to believe this should be in case studies instead. Can I get it moved by a mod?
I'd like to make some spreadsheets, and am working on them, but trying to budget one's entire life with changeable variables is unsurprisingly complex. Numbers provided are rounded, but fairly representative:
-Student debt is $100,000, at 5% interest. It could be paid off in 5 years at $1,900 per month, 10 years at $1,000 per month or 15 years at $800 per month.
-A 3 bedroom house may be purchased at $150,000. A 30 year mortgage at 4% interest is around $725 per month, 15 year is ~$1,100 per month, and 10 year at $1,500 per month. Property taxes are ~$250 per month / $3,000 per year. Home owner's insurance unknown, assuming $1,000 per year (?). 1-2 rooms in the house may theoretically be rented out at $500 per month. The alternative is renting at $650 per month.
-Take-home income is around $2,800 per month (after 401k, health insurance, federal and state taxes, etc.), or $34,000 per year.
-Car is owned, high fuel economy, high miles but runs well. I have no costly bad habits. A nice round number for "everything else" (utilities, food, car insurance) might be as high as $800 per month or as low as $500.
-Total liquid assets is approximately $20,000. Assume minimum $5,000 liquid desired at any given time.
So, with $2,000 per month in discretionary spending, how do you distribute it? Continue renting at $650 and paying $1,350 on the loans with an expected "out of the hole" date of ~8 years, assuming no rise in income (which is almost guaranteed, but best not to bank on)? Or, do you buy the house with a long mortgage, fill it with roommates, build some equity? Or, a shorter mortgage and slow down on the student debt payoff?
Again, numbers are approximate, but fairly representative. I can probably bring my monthly expenses down toward the $500 end - for instance I dumpster dive for vegetables sometimes, and bike when I can - but there are items like unplanned car maintenance may crop up, and there's more flexibility/safety without a mortgage or the risk of losing tenants. I'm unsure how to figure "flexibility" into my spreadsheets. Additionally, I bike to work 9 months out of the year from my present rental (only drive when it's below maybe 10F or snowing hard / very slick), but would not be able to from any house I could afford.
I'm not starting from the greatest place and it's tough to talk about sometimes, but I've been getting things in order for the last year or so and am finally able to commit to a path. I like my job and there's room to grow here, both in income and in skills. I like where I live, but it's high COL and I'm also not opposed to moving for a better job in a year or two, so long as quality of life factors don't suffer (e.g. ability to bike/walk, access to nature, less supportive local culture).
Thoughts?