Worried and Confused

[ImaloneJill]

Originally Posted by ofcjim40

Not sure why people would think this was a joke? Not like they said they clear $200,000 a year, after taxes they clear about $4,800-5,000 a month. That's good, but not crazy money. Let's say mortgage and utilities is $2500 a month. Let's say they have a car payment and one paid off car. With car insurance and gas let's say $600 a month. So that leaves $17-1900. So you are feeding and trying to entertain 5 people in a family. Will they be struggling, no. But there's this crazy thing called putting money into savings. I know, crazy concept for some! So maybe they'd like to put a few hundred a month into savings to try to prepare for THREE future college aged kids. Just sayin'. I don't think the question was that off base or like they were bragging.

Yes! Also, it always seems like whenever you start to get ahead, there is some unforeseen obstacle: car needs repair, root canal or braces for the kids, refrigerator and washing machine both stop working at the same time. God forbid someone gets sick or breaks a bone and can't work for a while. Something.

[MannheimMadman]

Originally Posted by ofcjim40

Not sure why people would think this was a joke? Not like they said they clear $200,000 a year, after taxes they clear about $4,800-5,000 a month. That's good, but not crazy money. Let's say mortgage and utilities is $2500 a month. Let's say they have a car payment and one paid off car. With car insurance and gas let's say $600 a month. So that leaves $17-1900. So you are feeding and trying to entertain 5 people in a family. Will they be struggling, no. But there's this crazy thing called putting money into savings. I know, crazy concept for some! So maybe they'd like to put a few hundred a month into savings to try to prepare for THREE future college aged kids. Just sayin'. I don't think the question was that off base or like they were bragging.

It's not off based at all, but plenty of people in Oswego live their lives with PLENTY less disposable income than that.

If the original poster had asked this question in NYC or Southern California, yes, he should be worried.

Even if the OP has a 10% down payment on a $250K home, the mortage would come out to roughly $1200 or so. Add slightly more if you want to roll taxes in.

I'm just saying - that is PLENTY of money to be comfortable. My parents made 51K combined and we lived in Naperville. QOL is very different from person to person, but not many people will tell you 86K is not enough to make it.

[BRU67]

Originally Posted by ofcjim40

Not sure why people would think this was a joke? Not like they said they clear $200,000 a year, after taxes they clear about $4,800-5,000 a month. That's good, but not crazy money. Let's say mortgage and utilities is $2500 a month. Let's say they have a car payment and one paid off car. With car insurance and gas let's say $600 a month. So that leaves $17-1900. So you are feeding and trying to entertain 5 people in a family. Will they be struggling, no. But there's this crazy thing called putting money into savings. I know, crazy concept for some! So maybe they'd like to put a few hundred a month into savings to try to prepare for THREE future college aged kids. Just sayin'. I don't think the question was that off base or like they were bragging.

Yes, one would be suprised at how fast money goes when you own a home and, especially, have a family. The general guideline is that you should spend no more than 30% of your after tax income on housing (mortgage, property taxes and insurance).

It shouldn't be hard for the OP to figure out what they can afford. The after tax income on $86k would be about $60k per year, or $5k per month. 30% of that is $1,500 per month.

Where they can afford to live will depend on a lot of factors -- including their credit score and property taxes in the given community. But assuming a 30 year fixed rate mortgage at 6% and property taxes of $4,500 a year, such a family could afford to borrow about 165-70k, or a house in the 200k range with 20% downpayment.

[chet everett]

I don't consider the OP's comments a joke at all. In fact I tend to agree with those that worry that housing prices are still rather high in the greater Fox Valley region. Given the relatively small number of high paying jobs that are in the area it does make it hard to see how folks can keep things together.

Realitisically $86k for a family of five is not a particularly paltry amount, but if the OP is relocating with little or no equity (not at all uncommon currenly...) and giving up the "free" support of family / friends that might currently be helping with childcare and such then they will need to reset their budget expectations, including making provisions for Illinois tax structure that tends to be very uneven. Huge variances in property tax are not uncommon, and sadly the folks with the best schools tend to have the lowest rates, but due to high valuations large bills ...

If the OP is smart about shopping for a house that is underpriced either due to a distressed situation or lack of updating that would go a long way to making their financial picture more positive.

Additionally I would suggest doing a rather detailed investigation into the value of the homes they are shopping for relative to what other homes in the surrounding area worth and what they are assessed at. Not only would this give them a better bargaining situation but should taxes spike up it would give them ammunitionq for an appeal.

Depending on where the OP is used to living the benefits of the relocation may need to be questioned, but having known lots of folks that successfully transfer to the area I think the success factors go beyond money. If the folks you leave behind mean more to you thnthe folks you meet that will not bode well. If the kids prefer their old activities more than those in the new area that will make things triply tough. If the work situation is not as promissed as the propect to go back is more attractive at can keep everything from gelling ...


On the plus side the whole Chicago region does have a huge range of towns to choose from, and wide variety of employment situations. The selection of housing options is first rate, as are the cultural / entertainment options and even transportation for those that can master the tricks.

More details about the ages of you family and interests may help us quell some doubts.

Good Luck!

[BRU67]

Another thing to keep in mind about exburbs is that while you can get more house for the money, they often aren't particularly accessible to the Loop, which is the region's largest job base. It's best to try to get within 30 minutes of the Loop if you can. And if you can also locate yourself in a place where you're also accessible to the other job corridors off the major expressways (e.g. I-294), you're even better.

You never know when you may have to get another job so ideally, you'll situate yourself so you have as many options as possible if that happens.

[TempesT68]

It will be tight but i don't see any reason why you wouldn't be able to pull it off. Housing is cheap right now, especially in the oswego/montgomery/plano areas.

[04JETTA]

I think you'll be fine

[AuDiBelle]

I'll just echo the other posters' sentiments and say you should be just fine assuming you have a decent downpayment and not a lot of other outstanding debt. Probably the biggest difference in cost of living is going to be tied to your house (including property taxes). If you know how much you are planning to mortgage, and you know how much the property taxes are, it should be pretty easy to calculate out. I can't see groceries, utilities, insurance, etc. being THAT much higher to warrant unnecessary concern. You won't be living the high life and vacationing yearly in Tahiti, but I think you should be fine on that salary.

[linicx]

Generally speaking grocery tax is 1% and Illinois income tax is a flat 3%. What I've been hearing latel is the housing market has not bottomed out yet. The US Treasury Special Master said that yesterday. I tend to believe it but I also beieve that every area was not affected the same and therefore they will recover differently. I'd probably sit tight and not get too anxious to buy unless I found a house I could not live without and the taxes were reasonable.