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u/Perfect-Brain-7367

r/Money r/DaveRamsey
▲ 3 r/DaveRamsey

Moving up in house

Big picture details:

  1. 19k car debt

  2. 22k in brokerage account

  3. 25k in emergency fund

  4. 145k gross household income

  5. About 13% currently going to retirement

  6. Saving for kids futures

The Car debt:

Last year we learned we were having twins. Welcoming child #3 wasnt a surprise but #4 was. It was considered a geriatric pregnancy at my wife's ripe old age of 37 (kidding). And, mixed with the twin pregnancy, we entered stork mode since this was a bit higher risk pregnancy. Rather than deplete savings to buy a car that would fit a family of six, shortly before the twins arrived, we put 10k down and borrowed 29k. Since then, we have paid off 10k in six months with leftover stork money and expect to have the other 19k paid off in less than two years on a five year loan.

The House:

We currently own a 3 bedroom 1800sq ft house with a monthly payment of $1350 a month. This is roughly 15% of our take home pay AFTER insurance and retirement, so even less if you use gross minus taxes. Space is tight at the moment but we can manage and our monthly margin is great with such a low payment. The two older kids share a bedroom and the twins share a nursery. But our immediate goal after being debt free is to upgrade to a 4 or 5 bedroom house, target price 400k. After fees, title, taxes, etc. we expect to walk away with $105k net equity if we sell our house.

The Options:

  1. Move today, Liquidiate the brokerage, pay off the car/be debt free, sell the house, put 100k equity down on new house. Monthly mortgage payment would still be much higher than it currently is but we would still have *some* margin, even more so once the twins kick their $400/month formula habit in 6 months. But overall, monthly margin is semi-permanently reduced by quite a bit.

  2. Stay put for 2-3 years. Save $100k and be debt free. Keep our house and put ~100k cash on the new house. The property will gross $600 and after setting aside for vacancy and maintenance, net cash flow $200-300 monthly while continuing to appreciate/build equity and keeps a cheap mortgage in our portfolio should we ever decide to downsize or help our kids out with an affordable place to live.

  3. Stay put for 2-3 years. Save $100k and be debt free. Sell our house and put ~200k onto the new house. Mortgage still goes up but a much smaller amount. The cheap mortgage is permanently gone but we enter our new house half paid off and monthly margin much more intact.

  4. some in-between or new scenario you all might come up with

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u/Perfect-Brain-7367 — 3 days ago
▲ 264 r/Money

Investing for four kids... And the slow grind begins (again)

Four years ago I started brokerage accounts for my two kids (then) aged 6 and 1. Currently, I give the oldest $60 every two weeks, the 2nd child gets $33 every two weeks, and now that we just had twins its time again to start the slow grind, starting them with $20 every two weeks. Just thought it was pretty funny to see Total Gain: $1.48 (2.47%) on these new accounts. But I know slow and steady wins the race. 100% invested in SWPPX. I opted for taxable brokerages rather than 529 or UTMA so I can decide when and where to use it. Jumping from two to four kids means we'll have to get much more creative financially down the road. I might use some of the money to match any they have saved for a car when they want one. Not sure if it will be enough to fully fund four years of college, but it should be enough to make cash flowing each semester reasonable. I do suspect contributions will increase as our income increases.

Anybody else trying to make it work for a large family on an average income? I'd also like to hear success stories (or shortcomings) from those with kids 18 or older

u/Perfect-Brain-7367 — 6 days ago