u/Requirement-Clean

Hey everyone just a little anxious so figured I would make a post asking for some clarity.

So was in an accident where I was deemed not at fault by the officer, and both insurance companies. Now the other drivers have got an injury attorney seeking compensation through my insurance. I know I don’t personally have anything to do now it’s their job to protect me.

But I stupidly only got 50/100 coverage as this was my first plan and I didn’t know any better (now I do). This is causing me anxiety and stress at an already stressful time but gotta deal with it. Anyone else had something like this happen? And what are the odds they would be looking to get more than my insurance can cover even if I wasn’t at fault?

So my wife and I early 20s and one month old baby. We are in an apartment, but we would love to get into a house here soon.

Thankfully, we do live in a relatively LCOL area, but daycare is obviously eating a big chunk of our income, so I wanted some advice on our financial situation and whether or not getting into a house is dumb or not for us. While I am very financially conscious, as is my wife, we did have a habit of spending a bit more than we should have before the baby; however, we have obviously cut back on much of that now. And I do know the idea of rent being the max and mortgage being the minimum, but with the baby now, our priorities of wanting our own place have sort of changed, obviously.

Here is our general situation in the apartment currently (I did have AI help write this out, but numbers are accurate on a general basic month):

Income (monthly take-home after all deductions): ~$4,900

Fixed expenses:

• Rent + utilities (power, water, sewage, trash, pet, package, internet, cable): $1,700
• Daycare (net after DCFSA, which I didn't count in income, so didn't want double impact): $773
• Car insurance: $168
• Renters insurance: $11
• Subscriptions: $75

Variable expenses:

• Groceries: $600
• Eating out: $200
• Baby supplies (no formula, mostly diapers, wipes, food when we get there, occasional clothing): $250
• Gas: $200
• Car maintenance: $100
• Household misc: $200
• Pet expenses: $40

Total monthly out: $4,317

Monthly surplus: $621 (for all other aspects, I may be missing)

For reference, we have absolutely $0 in debt at the moment

Retirement:

• Your 401k: $462/mo with match
• Wife's 401k: $140/mo, no match
• Annual employer match: 3% of salary, about $2500 or ~$200/mo equivalent
• Total retirement savings: ~$800/mo

Other benefits running in the background:

• HSA: $300/mo
• DCFSA: $300/mo (already reflected in daycare net)
• Savings: $43,500

This is our setup right now, and obviously, with a new baby, it can fluctuate, but I have generally covered everything that consistently occurs.

Another thing in our situation is the LCOL area we live in, where houses aren't per se affordable, but they are for us. We are looking in the $200k area and finding good options. The down payment will be fully covered elsewhere and is not important in this scenario, nor are the closing costs; and the initial work that the house may need is covered as well (not extensive, but obviously a $200k house won't be perfect, but so far the ones we have toured are generally sound, just needing minor cosmetic work here and there). All things considered, working with our financial lenders, we are looking at a monthly PITI that is similar to what our base rent is, if not a little cheaper, around $1200, whereas base rent for us is $1300.

So my main question here is, let's assume the house comes out a little more for our monthly expenses, and we have about $500 leftover for the maintenance fund. How unreasonable would it be for us in that scenario to go ahead with the home, knowing how extensive maintenance and unexpected repairs can be/occur?

Would love some overall feedback on this and to hear any thoughts about how dumb we would be if we took this risk. As a financially anxious person, I take this stuff very seriously and take the time to think of it all before making any decisions because I honestly overly obsess on these types of things, but would love an outside perspective.

Thank you all in advance for the help!