Tonight we crunched numbers for last year’s income and expenditures. We hadn’t done that in a long time. When both of us worked and with Husband’s extra income from his little software business, there was enough money for basics and extras. But it’s a new reality we are facing, and it was sobering.
The places we are looking at run from $2,100 to $2,500 (and believe me, they run much much higher too). The 3-bedroom homes we find less than $2,100 are often in poor condition and in neighborhoods we don’t like. If we were looking for a 2-bedroom abode, we could find nice ones for $1,700-$1,900. But we hope to start a family and still have room for guests for visit. The latest house — which we really like as it has been immaculately maintained, is spacious (1,600 square feet), and in a lovely quiet neighborhood, is $2,300 per month, not including utilities. This would be a 40% increase in rent for us.
I am not working, and we don’t plan for me to work while we pursue fertility treatments, and assuming I successfully bear a child, I’ll be a stay at home mother. So we did some math to see if we could afford this. Yes, Husband works in high-tech. Even so, most people here live on two incomes and that’s how they afford it. We can no longer count on the income from his software business, as this may go away (it’s been decreasing steadily over time).
I don’t know what we’re going to do. We either need to reduce the size of place we’re looking for and accept this, or we need to drastically reduce our hobby, entertainment, gift expenses, or I need to work, or some permutation of these. We tend to be really generous with charity and presents to friends and loved ones. And of course I spend more than I should on yarn and craft supplies. It’s got to stop. Especially if we have a child; our research shows it costs about $27,000 a year to raise a child from birth to 18 and then pay for 4-year public college. Time to simplify, pare down.
It’s really frightening, though, to have the kind of income we do and still learn that it may not be enough to live on.
[cross-posted at Knit Together]
I seem to think that’s the range of what we’re paying in mortgage up here. Lisa frets endlessly about this because she’s a) a CPA, b) blowing through loans for school like it is going out of style, c) not working, and d) a paranoiac.
Frankly, I’d look at smaller places. The people who would be staying with you understand this. There are also ways to make nurseries serve double duty as guest rooms (like chairs that double as twin beds), if the need arises.
I think the daily, practial need outweighs the “might happen for a week at a time once in a while.”
Just my $.02 🙂
I have to agree with Eden. We plan to put a twin bed, maybe a trundle bed, in the baby’s room (when we have a baby and a baby’s room). When guests stay with us, the baby can sleep in our room and the guests can stay in the baby’s room. It’s imperfect, but the NYC housing market is similar to the Bay area, and you have to cut some corners to make it work.
A lot of people who work hard and make what appear to be decent incomes for a modest lifestyle are finding the same thing that you are. I’d worry less about having a place for guests to stay–you’re not running a hotel.
I should probably not be commenting since (from my post about a break-in at our second home) housing worries are not present for us (now), but you are a friend, and I worry about you.
Consider living in the East Bay. Hayward, Newark, Fremont, San Lorenzo, San Leandro, and Castro Valley have some reasonably-priced housing areas, as well as some expensive areas and some not-so-safe areas (like most cities). There are libraries, bookstores, coffee shops, and all sorts of other amenities, just like those on the west side of the Bay, but with less expensive rent/housing costs. For example, the 3-bedroom house next to our home rents for $1,800 a month (it’s not available at this time though).
The habit of living as though you are poor, helps to make ends meet, and automatically eliminates the choices associated with “discretionary income”. No such expenditures are allowed. A guest bedroom is absolutely unnecessary in a tight housing market…your visitors can stay at a motel. You can store your knicknacks and extra furniture in a rented storage garage place; there does need to be an assigned space for the new baby bed (maybe even a corner of a dining room, an office room, or a living room). Rentals are veery high but house prices, and house rental prices, have leveled off, and will go slightly downward, while salaries will continue to climb. Take maximum stock options and plan to retire at age 50 to the country…where housing can be had in any size and at a trivial price!
Bill
Sorry to hear about your housing woes. We’re East Coasters and face much the same thing. My husband and I own our house, but we faced some of the same challenges in terms of finding the right size and place and ended up opting for a smaller two-bedroom house in a really nice neighborhood rather than a three- or four-bedroom house in a not-so-nice-but-more-affordable neighborhood. I wish you the very best as you search for a new home.
I live in the moderately priced midwest (at $600 monthly, we’re renting at the upper end of rents in our town), and even here one income families are pretty rare.
What we have found is that living on one income has meant having a different standard of living then many of the other people we know. I won’t say worse, or better (though I think it is better, and other people think it is worse) — but it is different. We only have one car, for example.
Good luck on both your financial and your family planning – I hope you are able to find a way to make everything work the way you want it too. If you are interested in the more rigorous path of belt tightening, check out Amy Dacyczyn’s Tightwad Gazette books. They helped our family stay a one income family when that one income was 8 dollars an hour, and only 30 hours a week.
When we began to build onto our bitty 2-bedroom, wishing for a guest room and office, our architect, the legendary, late Don Hensman, on a mission of mercy, asked, “Who are these guests and how long will they stay?” We instantly realized that we only need what we can use, not what we think we can use on some distant day. For many of us, there is no place for that kind of thinking. Sofa beds work too.