Brought to you by the EveryDollar app. Start budgeting for free today. My girlfriend going to be fiance and I are going to be building a house costing around $700,000, and we want to know if we're way over our heads or if this is actually feasible. Numbers aside, you're in way over your heads.
There's not even a ring on the finger, and you're going to sign up for a mortgage and put your names on a deed together? No, by the time the deed is there, there will be a ring on the finger. So this is going to be a new build, and you're just hoping that all the plans work out perfectly. Yes, we do have the ability to live with either of our parents rent-free.
Obviously, that's not ideal, but we're going to have to do that. Why do we have to do any of this? Let me lay out a different path to tell me why it doesn't work for you guys. Why not get engaged, get married, rent together, save up on your own, and then purchase a house or build when you're financially ready?
Yeah, what's the rush? So we would like to start a family early, around 2028, 2027. And our initial thoughts are renting is putting money into a place that doesn't build us wealth, so we might as well put it towards a house that's going to be building us wealth. And if we have to live with our parents for a year or two, we're perfectly fine with that because we do have stable jobs that we're able to...
How much money do you guys have right now? Meet EveryDollar budgeters, Christy and Steve. They used to fight about money. I'm the spender.
I'm definitely the saver. Now that they budget with EveryDollar, they're on the same page. Money is definitely one thing we do not ever fight about. Having a budget gave me the permission to spend.
Knowing that the money is in each category, it just allowed us to work together better. Now that's what we call a win-win. Now we just have to pick paint colors. Uh, we can't help you with that.
EveryDollar, create your free account today. How much money do you guys have right now? Right now we have about $60,000 in savings and then a little bit more in checking. How much do you plan on putting down on this $700,000 house?
So we are looking to put down around between $100,000 and $130,000 down on the house, and then her parents are extremely wealthy, and they were planning on matching whatever we put down. Whatever you put, so $260,000? Yes. OK.
And why do you need a $700,000 home as newlyweds in Pittsburgh? We are looking to have kids, so it's in the suburbs, and we're going to be building so that we don't have as many maintenance house issues. Simply what we're trying to do is set ourselves up for the future where we don't have to move. We don't have to do all these other things.
We're just on that path of get a house and live there. What's your income? It's not a custom build. Our income, we are both around $32,000 to $35,000 a month.
A month? Yes, and that is not including commission. $3,200. Good.
Oh, I was about to say. I'm so sorry. So it's like, wait, you guys are making a million dollars. OK, so you're making like $70,000.
And how are you going to afford a $5,000 a month mortgage? Yeah, that's what I'm doing because we both did the math. That's $25,000. She also, so we also, she has commission that she's an insurance agent, so she has commission coming back for her.
I also own my own company that brings in $2,000 to $3,000 as well on top of that a month. So you're at $10,000 a month? About that, yes. So we're already setting ourselves up where half of our take-home pay goes toward the mortgage.
Yeah. You're still at half. Before you were even worse, but even with the $10,000, what I'm seeing on here, $4,500 for the mortgage if you put down $260,000 on a $700,000 house. Your house poor.
Right. Right. And you're fine with that? No, we're not fine with that at all.
We're obviously going to be expanding our income. We're trying to see if this is feasible now because we do have career projections going forward that it won't be anywhere close to that, as well as my business and her commission are expected to double. Everything you're saying, Joseph, I'm with you. I love dreams.
Like, I love a good dream. I love the plan. I love goals. But you're setting yourself up in a situation where everything must go as planned for this to work out.
And even if it does go as planned, you're still setting yourself up for several years of a situation where your house is 50%, where you're house poor for several years. So even if everything is perfect, you're still setting that up, which is not good. I truly, truly would love for you to slow down a little bit on this and say, okay, let's do all of this, but let's just do it in the right order and at the right time. Let's get married.
Then if you want to live with your parents, that's your prerogative. I wouldn't do it. But if you want to live with the parents to save more money faster, like that's y'all's choice if you want to do that. And then save up.
Make sure when you do buy a house when it's time that it's the right percentage of your take home. Make it to where you're not house poor. You have this amazing deal where your in-laws are going to match that amount. That's awesome.
Milk it for all it's worth and make sure you get to a point where you can get this thing to 25%. Okay, then you're in a situation. I'm fine with you guys doing this thing, believing that this is going to be the only house you ever buy for the next 20 years. If you want to believe that, that's okay.
But let's, can we just do it right? Can we pump the brakes just a little so it's all done in the right time? Yeah, this is the thing where we need to increase our incomes first or a savings and emergency fund type deal. I think it's both and.
You said that there's a path where both of you guys earn more and it's as you do that, you're saving up more too, right? Because I'm also looking at this on a 15-year fix. My guess is that you were looking at it on a 30-year. Am I right?
I have both in front of me, but yes, I was looking at a 30-year fix. And again, all that, you're doing that because you're trying to go fast. I want to go fast. Why?
You have your whole life together. I get it. I know. I get it too.
So we are both 21. Who told you it's too late? Who told you you have to rush into this or else and you've got to do this by this time and we're going to make this much? I just think we're, there's something else going on here where you're wanting to rush the process and leapfrog into a lifestyle that you just can't afford yet.
No, we've been dating for about four years and going to be graduating this upcoming May from college. I'm working around 50 to 60 hours a week. She's working 30, going to be 40 this upcoming semester. It was just one of those things where we were looking at it.
Yes, we were dreaming big and we saw that we could afford it and we would still have extra income coming up that. You can't afford it. It's already artificially propped up with the in-laws money. And so I would go with what you guys can afford.
And if you can get a $400,000 three bedroom, I would do that and have a small mortgage that you can knock out quickly and you can upgrade over time. Because the truth is you're going to hate your house five years from now for whatever reason. And you're going to move. It's okay to move six years from now as your life changes.
But we don't need to plan for, well, one day we're going to have five kids, so we might as well get the five bedroom now and just get ahead of it. We don't even have a ring on the finger. So I would just do things in order and I love how excited you are. You're a planner.
You're futuristic. I have a lot of that in me, but I know I fall flat on my face when I make too many plans and one domino doesn't work out. What if she stays home once you guys have kids and you go, oh my gosh, well, we projected that her income would be $100,000 by now. This totally screws up our plan.
So I would move real slow and realize you don't need the lifestyle that her parents have today at 21 years old. It's okay for it to take a while. That's actually healthy. Create your free EveryDollar budget today, the simplest way to budget for your life.