Money Matters
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how much $ to commit while unemployed?

H is unemployed, but still receives income plus his unemployment (legally).  I work at a very unstable job.  We have an excellent opportunity to move, but would have to increase our housing expenses.  With 2 children, would you commit an additional $200 for rent if the budget looks good on paper?  We would be able to sell the current house and rent for well below market value, plus be given the house free and clear at some point down the road.  We just have to decide NOW or the offer is gone.  I figure even if it's tight now (with a potential budget of both of us on unemployment), our income is only going to go up since I have finished college and H will eventuall be working again.  Right?

ETA: The new payment will be 15% of our current net pay and 20% if I am unemployed.  It's seems very doable, but it feels weird moving up while making less.

ETA2:  Also, gas for the car will be less since it is closer to my work and tv/internet/utilities will be slightly less because of the location.

Re: how much $ to commit while unemployed?

  • For housing costs, the general rule of thumb is to never spend more that 30% of your pretax (gross) income on housing.

    So, if you earned $100k annually...30% is $30k, which means monthly ($30k / 12 months) you should spend no more than $2,500 on housing. You can figure this using yours and your DH's income...I picked $100k because it is a round, easy number.

    But, you may want to figure it on his income only since you said your job is unstable.

    If moving still keeps you within this range, then go for it.

     

  • I am more conservative with my money advice and keep housing to no more than 25-28% of TAKEHOME pay for rent/mortgage+insurance+utilities +(PMI + taxes+HOA if applicable)

    HCOL area 30-35% for the above.

    Include your other expneses of personal care, clothiing, gifts, vacations etc in your budgeting.  If you have not been operating on a budget - start tracking EVERY dollar.

    If you move and rent - can you afford both the rent and the mortgage payment until it sells?

    Do you have the cash to cover moving expenses?

     

     

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