Ok Financial guys, what am I doing wrong?

As a 36 year old college educated professional I watch these home improvement and real estate shows and often wonder what have I done wrong.

I am constantly seeing young couples with 2-3 children and some even have only a single income coming in. Yet their budget for purchase or renovation is in the 500k-999k range.

We make above 100k yearly and I know for a fact even if we trimmed the fat our max budget would be about 400k. And that is if we wanted to be debt poor and have a house to compete with the Jones’s. However we are realistic and intend to keep the next home below 200k renovated.

My question is this. WHAT AM I DOING WRONG? How is it I am perceiving so many young couples out there dropping insane amounts of money for dumpy homes in crowded neighborhoods. Are these people rich with family money? Do they have better jobs than Nicole and I do?

I know what homes cost, boats cost, trucks cost, etc. I am constantly surprised to see so many guys with new trucks with high dollar boats/wheelers/sleds/wheel houses, etc parked in front of high dollar homes. Don’t even get me going on grocery budget and living costs. I micro manage the bills to make sure we are saving every dollar we can. The show I am watching now…the wife is a stay at home mom with 4 kids. The dad is a teacher. Their budget is 700k. I don’t know how they feed those 4 kids let alone buy/renovate a 700k home.

I just can’t help but wonder what choices I have made incorrectly.

I dunno sounds to me like ur doing just fine. Just be happy with what u got. It could be way worse.

Stop wondering what others are doing, and what you are doing wrong. As long as you have a sound financial plan and live within your means, and have enough to be safe and happy to do the things you want. Who care what others are doing. Envy can be an evil thing. Work hard and do your best to enjoy what you have, and in the long run you will be much happier. If this doesn’t work to tell yourself that the others that have what you wish you could have are financed to the edge, and they are close to putting their heads in the oven.

They are all faked shows. Your problem is you are “trying to save”

Read the book “The Millionaire Next Door”. They studied a large number of millionaires and found some interesting trends. Most all of the people living in the big houses, driving the latest cars, etc aren’t millionaires. One of the biggest surprises when I read the book is that very few Doctors as a percent have a net worth of a million dollars even given the high rate of pay. I read this book when it came out in 1998 with my wife and it changed our thinking, lifestyle and habits. Thankfully our hard work paid off reaching this milestone by age 40. There is no quick, easy answer to wealth because it takes a ton of discipline, hard work, and even some luck.

Wade, I have a neigbor with a stay at home wife, 4 kids, snowmobiles,$350k house that drives a truck. Someone inherited!or they’re in debt to their eyeballs! You’re smart-keep saving! Steve

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Wade, I have a neigbor with a stay at home wife, 4 kids, snowmobiles,$350k house that drives a truck. Someone inherited!or they’re in debt to their eyeballs! You’re smart-keep saving! Steve

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More than likely up to their eyes in debt like most in the our country.

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As a 36 year old college educated professional I watch these home improvement and real estate shows and often wonder what have I done wrong.

I am constantly seeing young couples with 2-3 children and some even have only a single income coming in. Yet their budget for purchase or renovation is in the 500k-999k range.

We make above 100k yearly and I know for a fact even if we trimmed the fat our max budget would be about 400k. And that is if we wanted to be debt poor and have a house to compete with the Jones’s. However we are realistic and intend to keep the next home below 200k renovated.

My question is this. WHAT AM I DOING WRONG? How is it I am perceiving so many young couples out there dropping insane amounts of money for dumpy homes in crowded neighborhoods. Are these people rich with family money? Do they have better jobs than Nicole and I do?

I know what homes cost, boats cost, trucks cost, etc. I am constantly surprised to see so many guys with new trucks with high dollar boats/wheelers/sleds/wheel houses, etc parked in front of high dollar homes. Don’t even get me going on grocery budget and living costs. I micro manage the bills to make sure we are saving every dollar we can. The show I am watching now…the wife is a stay at home mom with 4 kids. The dad is a teacher. Their budget is 700k. I don’t know how they feed those 4 kids let alone buy/renovate a 700k home.

I just can’t help but wonder what choices I have made incorrectly.

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We also watch those shows and wander wtf are we doing wrong also. only thing I can come up with is the cost of living where there buying? Otherwise, there fake. Another thing I can’t under stand is let’s say they have $20,000 to redo their kitchen and they end up paying $30,000 and there like that’s not a big deal

Where are these people from? There’s a big difference in west coast money vs midwest money. My company will double my income to move to LA or Seattle, but my cost of living will likely triple. The east coast (major cities) also has higher costs of living, as well as higher wages.

what are you doing wrong ?? asking a financial question on a fishing site ?

I just don’t get how they are doing it “responsibly”. If you look at a 500k loan at 4% for 30 years that is a $3100/month payment with a 1.25% realestate tax rate. That just seems unbelievable for me. Especially with student loans, auto loans, living expenses, etc piled on top.

Just do you. Like others have said, a ton of people want to keep up with the jones’s and have major debt. In a lot of cases they will die with it. Stay on your course.

Some people buy a home and pay interest only… with no intention of using the home as a means of investment. How much home could you afford interest only ? Also, like you said, do you buy a big house, to sit in it all the time and not get out and enjoy life ? Trying to keep up with the jones is an expensive foolish game, I won’t play… I consider our lifestyle “rich” already, but we will own our home in less than 9 years Then we will truely be “rich” $$$ We always pay as we go… no credit card bills or car payments

Of course I am looking at these numbers based of a 30 year fixed mortgage. I wouldn’t not ever consider any other mortgage type. Perhaps they aren’t doing it on a 30 year fixed.

ARM perhaps? 40 year fixed? Who knows?

No need to worry about all the others, the government does that for us. Take care of yourself and your family. Spend what you are comfortable with. Stash any cash away that you can but like G said enjoy life. It does no good to be the richest guy in the cemetery.

Obsession is never a good thing. Don’t obsess over money, sports, fish, cars, boats, women or drugs.

It’s not worth trying to keep up with the Jones’ cause theirs always gonna be somebody else who’s got a little bit more than you

Just get what you can comfortably afford

What good is it to have a nice house, if you can’t afford a boat or to go on vacation

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what are you doing wrong ?? asking a financial question on a fishing site ?

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I can’t say I am interested in keeping up with anyone. I just can’t for the life of me figure out how these people can afford all this in a responsible fashion.

Lots of people spend$ they don’t have, to buy crap they don’t need, to impress people they don’t like

I figured it out. I must get 10 e-mails a day telling me I won 500k to 1 million. I just need to answer one of them. Then I can have what I see on TV.

You keep saying “responsible” this leaves alot of room for a definition. Maybe their idea of responsbile is using 60 % of their disposable income on making a mortgage payment, on something they will never own. The somewhat obvious answer to me, is to not believe everything you see on TV or simply turn it off

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I just don’t get how they are doing it “responsibly”.

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Simple answer, they’re not doing it resposibly. As mentioned in this thread, it’s very possile it is interest only loan. I don’t think that could ever be viewed as resposible.

If they did a show following up on a lot of these people, I think you’d be surprised how many are still in the home, how many defaulted on the loan, or how many filed bankruptcy.

Too many people buy way beyond their means.

I have always said you can have whatever you want, it is simply where you choose to put your money. I know a number of guys who have a $30,000 Harley, and live in a run down 1960’s era trailer house

If you are interested there is some good reading from Dave Ramsey on getting out of debt and living well. I don’t follow what he says 100%, but it does make you think about what you are doing with your money. He is an advocate of eliminating ALL debt, paying off your mortgage, and living well. Stop and think if you did not have your mortgage payment how much extra money you would have each month.

It has already been said, but be happy with what you have, work hard for what you get, and enjoy the time we get becuase it can be gone before you know it. Keeping up with the Jones will get you with more debt than can be paid in 3 lifetimes and always trying to keep above water.

The are not living responsibly, they probably are up to their eyeballs in debt, maxed cards, live in a house they will never own, have multiple cars they are missing payments on, all to impress people they never meet.

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If you are interested there is some good reading from Dave Ramsey on getting out of debt and living well. I don’t follow what he says 100%, but it does make you think about what you are doing with your money. He is an advocate of eliminating ALL debt, paying off your mortgage, and living well. Stop and think if you did not have your mortgage payment how much extra money you would have each month.

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I have read all of Dave Ramsey, Robert Kiyosaki, Susie Orman, etc. I do most my own money management and budgeting. It never hurts to ask outsiders their opinion and get fresh ideas.

FWIW I do not fully agree with Ramsey. Good idea in principle but I think he takes it to far.

We watch some of those shows as well. Many of them are filmed on the East and West coast. My friends will go out there from time to time to work storm clean up because they make double their hourly wage here plus usually can get 70-80 hours in per week. Same job they do here just a different pay scale.

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Lots of people spend$ they don’t have, to buy crap they don’t need, to impress people they don’t like

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I couldn’t have said it any better myself

My friend is single, at 35 years old he bought a million dollar home. He lives within his means, made over 6 figures and put down over half a million of cash.

A lot of people might have a lot of investments and or equity and want to invest a large chunk into their home.

Looking back at the 90’s to about 2005, most customers that I worked with had substantial investments. I never got in-depth to any of the details. But working on homes that ranged 700’s to 1.X mil, most never borrowed more than half. Very often, they were very concerned over draw dates and having the ability to shift money around. As a General, when the bank says the money is there, and the title company says I can start, I didn’t ask many questions. I know a few of them played the home market with flipping houses. I also know a lot of people that got caught and lost everything.

The answer to your qestion….two words…Dave Ramsey.

I see that you said you do not fully agree with him and he takes it too far. I agree with you but you can follow the basic concept and do well over time. It seems the most important lesson Dave provides to start with is to stop wishing for what others have and be thankful for what you do have.

Me, I really, really don’t give a sh@t what my neighbors have and certainly not some make believe TV people. I don’t have a boat, yet I fish year round one way or another. I duck hunt, with my son from a canoe. I deer hunt (with my son) on .13 acres of land I own behind my house which has a bike trail beside it. Yes, I said .13 acres….Farmboy could confirm that….he lives down the road from me.

My point is that you don’t need all of the fancy stuff to enjoy life. I have a very nice house but I don’t have toys and I am OK with that.

One final suggestion that has really helped me. My wife and I sit down and budget every two weeks becuase we get paid every other week. This makes it a lot easier for us to determine where our money is going. We have also spread out our bills so the two weeks are balanced. We also find it much easier to quickly do this on that shorter time line. Financially this has really helped us over the last 2 years. I only wish someone had told me about Dave Ramsey when I was in my 30’s. I also read Robert Kiyosaki and others but for some reason they didn’t help me. Ramsey’s simple concept for budgeting, paying down debt (starting with the smallest first) and keeping out of debt has been easy to follow.

My family has badly needed another car for the last couple of years. We have 2 cars and 3 drives….soon to be a 4th driver….and both cars are rusty with over 145,000 miles. When we finally do buy a car I will be paying cash and spending less than $10,000. It won’t be a new car but we are OK with that.