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No, the car payment isn't more. The wife going back to work is just going to increase their costs--day care isn't cheep but maybe working evenings/weekends or something. I think she just needs to cut back on the spending and they should be fine. 200K is MORE than enough for a family to life off if they are reasonable with their spending....
I agree.
Adding daycare costs for two kids in a high cost area would be a huge mistake. Also, the wife's income would be taxed at the highest marginal rate because it would be on top of OP's $200k.
Your wife's time will be better spent cutting expenses - she can start now, no need to wait for a home sale.
Have her reduce the grocery bill by $700 through home cooking and fewer packaged foods. She should also take the kids to cheaper activities instead of $400/mo sports camps. Cut back the cable/internet/phone bill and the home alarm,and you'll be in good shape.
I agree that you should sell the house; maybe rent a townhouse while paying off the credit cards.
I noticed you said you had identified only one house "in the same school district" and your wife doesn't like it. Are you insisting on staying in the same school district because you're afraid the kids can't adjust or is that is the only decent school district in your region?
I mention this because so many parents think their kids are made of glass when they are much more adaptable than adults.
Also, I'm wondering why a 2500 sq ft house isn't enough for 4 people? That's twice as big as what people used to raise 2 kids in.
You guys are living way beyond your means and headed for a pretty bleak financial future if you don't ditch the house soon. Beyond that, the expenses all the way down the list look out of line with what you're bringing in. Too much on utilities, too much on cable/internet, too much on phones, too much on kids sports memberships for a 4 and 8 year old especially if your wife is a SAHM, too much on groceries and too much on going out. You're trying to live a 350k annual salary lifestyle on about half that.
If it was me I'd sell the house and rent an apt or townhome until you've dug out of this mess (and I already know what your wife would say, but there are apts in Beverly Hills, Santa Monica, NYC, DC and every other expensive city I've ever seen so I don't want to hear that you have to buy or there's nothing to rent or it's more expensive to rent than buy, that's bunk). If you buy this other house for 500k and she 'needs' to renovate it to the tune of 150 or 200k then you're barely any better than when you started. She'll survive with laminate countertops rather than Italian marble ones.
Dude you're spending OVER $40,000 per year on interest alone, that's insane!!!
It sounds like you're ready to make the sacrifices necessary but she isn't. Maybe you two need to sit down with an independent financial advisor who can tell her from an outsiders perspective that what she wants is going to ruin her family financially. I know Dave Ramsey isn't for everyone, but I think that'd be a good route for you two to go, cut up the credit cards and don't look back.
You've got such great potential with your earning ability, you can have an awesome life and awesome future but the track you're on right now is going to ruin you. Good luck and keep us posted, you can be a great success story if you make the right choices!
I gotta think that qualifying for another house loan is going to be a huge, huge issue. I'd go speak to a loan officer before spending any more time thinking about buying another house.
I personally think that you should sell then rent something for now.
Your wife's job right now should be doing anything and everything to trim expenses.
And I also think you need to sit down and create a spreadsheet. You need to create a column for worse case scenario. That alone will scare you enough to do something now.
When my husband lost his job, nothing was sacred. And that was with having 6 months of emergency savings. Thank goodness for that. Even now, years later, that is always in the back of my mind. There are somethings we never started paying for again afterwards and don't miss it. Such as tv.
My husband is also base plus commission. We try to live off of base and anything else goes into savings and our son's college tuition.
Compromise with your wife and rent a home in the area that she wants to live, then save and search for a home she's happy with. I agree about changing schools too, kids are adaptable.
If you've been together a long time you probably started out without very much. I know my husband and I shared a broken down apartment in Brooklyn with a roommate when we were first married. Many adults have a similar story. Remind her that you started with very little together and it was fine (sometimes I even miss those days) and that you can start again financially and it will still be fine.
Btw I think it's great that you're taking responsibility for your position and not just blaming it on your wife.
Impress upon her that if this move doesn't happen now...
it WILL happen in the future (you cannot continue like this), and the houses available at that time may not be as nice as the one you found now.
We are at the point where we realize moving would be best but not 100% sure on this particular house. Problem is our required location is very small, limited budget and little home inventory available. I've looked for about 3 years and kind of feel that this particular home is as good as it gets. It's a hard pill to swallow, especially for my wife who is used to a huge new construction home decorated in Ethan Allen furnishings. Gotta admit, I'm pretty used to it as well but am ready to make a conscious change for the better of our finances and future.
You don't want to hear it, but some people are just spoiled high-maintenance brats and your wife seems to be one of them. Not only would I suggest joint financial counseling, but I would also suggest couples counseling as well. She is on the equivalent of an alcoholic bender and in denial of any problem.
Just to give a single idea of how real people live, I've had to live in a third floor walk-up, a shared apartment with four strangers, an old mobile home with insulation so thin that the walls would have ice on them inside in winter. I had to move out of a house I had bought within six months of moving in because of losing a job. When I read that your wife is in tears over a move to a house that I never in my life could have afforded, and you don't have the cohones to make a decision that will save your financial lives, I am INCREDULOUS. Tell her it is temporary, and that once you move she can keep looking. I don't normally suggest it, but you might need to just do it and spring it on her.
Here is the clue. You don't do it, and you will eventually find yourself out on the street and destitute. I don't care what job you have - NO ONE is irreplaceable. As your financial situation deteriorates, you will eventually become a liability to any company.
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