I’ve committed to remaining in our $2500/month one bedroom apartment for as long as we can stand it with our soon-to-be child. I’ve even gotten to appreciate the forced closeness we’ll have living in a small space with kiddo, especially in the first year when it’s recommended baby sleeps in the same room with parents…
However, I’m very concerned about what happens “next.” Yes, we can leave this overpriced corner of the country and live somewhere that a much lower salary would enable home ownership. I don’t even care about “owning” so much as I care about being able to afford some sort of residence that feels less like an apartment and more like a home. A townhouse would be perfectly fine, especially if it has a little grassy area in the back, and a community park nearby…
But renting a townhouse — say a 2 bedroom, 2 bath — would still be $4000 a month, a $1500/month increase from our current rent. Mentally, I feel like once we’re paying $4000 a month in rent, we should be considering owning (even though owning said townhouse would be more like $6000+ per month, I think.) And ownership has lots of issues that go with it that I’m unsure I want, especially while figuring out how to be a parent. A condo/townhouse makes a lot of those issues easier (not much property to deal with) but you still have to fix things when they break and such, and those costs add up too.
I’m sad about not having a home to invite people over to… even though we don’t know that many people. Well, our one bedroom apartment still looks like “just-graduated-from-college” people live here, so we have to fix that. But even when we get a new couch and upgrade the rest of the furniture a bit, it’s still a one bedroom apartment. There just isn’t a lot of space. There’s a balcony we don’t use but it doesn’t have privacy–it could be decorated nicer for sure (you know, my dead plants don’t really do it justice) but this place just doesn’t have all that much potential for a long-term abode.
What’s most upsetting, in true first-world problem style, is that I have this job that pays pretty good money (even my base is over $150k and with bonus and stock it could end up being closer to $250k this year) I can’t afford a house. I can’t afford a house because my base on its own is not enough to afford a house and I can’t afford a house even more so because I’ll never feel stable in a job and it’s impossible for me to commit to earning $150k+ for the next 30 years of my life with no break…
Even with that salary, that’s about $7000 a month take home after tax… well, houses around here, the basic ones, cost that much a month in mortgage plus basic repairs (and HOA if buying a townhouse or condo.) My husband does make money too — but he makes about $4000 a month after tax and if he switches careers like he plans, that will be more like $2500 a month after tax. So, let’s say even if we do both continue working and making what we expect to make for the next 30 years, we’ll be at about $9000-$10k a month after tax. That’s not bad at all… but you can’t have a $7,000 month mortgage on $9000 after-tax pay per month. I mean, you can but you’re screwed if either of you loses a job (or decides to take time off) and you’re certainly living quite frugally to afford just owning a home.
What I’d hope — in going into buying a home — or even looking at living in a more expensive rental unit for longer term — is that my husband or my salary alone would reasonably cover the cost of the rent/mortgage. So, my salary would be ok if we were to have a rental that costs $4000 a month. We’d have to cut back a lot, were my husband not to work, but it would be doable. My husband’s salary, assuming he’ll be taking home $2500-$3000 a month after tax, will not cover a $4000 a month apartment–it would barely cover our current $2500 a month one bedroom (assuming we supplement our costs for a while with savings to eat and such.) Given my husband’s career plans, I do not feel comfortable moving into a place that costs more than $2500 per month. My job will never be stable enough to support that decision.
And, this is why I’m feeling sad. I’m feeling sad because I look around at my one bedroom apartment, and in a spoiled sort of way, I wish I was able to have more space–especially a little backyard with privacy where I can sit outside and read and feel the rays of the sun on my back and not be bothered by other people nearby. A place for my kid to run around a bit outside without having to “walk to the park” to have this freedom.
Maybe when I hit $1,000,000 in savings/stocks, I’ll start considering buying a house or spending more on rent. The problem is that the costs are going up so fast around here… a house that costs $1.3M now will probably cost $1.8M then (in 4-5 years, when I plan on having $1M if all goes well.) So, then we basically have to make the call to move somewhere that we can afford a house. I don’t want to leave this area, but it’s just impossible unless I can commit to earning $250,000 a year for the rest of my working life. With base salary around $150k, it’s just not possible to commit to that, even now, even if I may actually end up taking home much more if I can maintain my job and my employer likes me and opts to give me lose to my full bonus and I am able to vest my stock grant fully.
Theoretically I could get really good at my job and get promoted and make more money and eventually, in the next five years, move into a vice president role, either at my company or another. That could come with a base salary of $200k-$250k (I’m not really sure) but I know myself and I’m not vice president material. I’m not good at managing or delegating and my true value is in doing the work. People who do the work don’t get paid $200k-$250k (unless you’re an engineer. I’m not an engineer.) Those who make more money have huge responsibilities and are consistent in ensuring their team hits deliverables and achieves results. I just don’t see how my role ever is worth that much. I still think I’m overpaid, but then for this area and for a company doing well, I think my base is pretty reasonable. I trust my boss gave me a good offer and opted to not negotiate at all, which was the right decision. Even an extra $10k a year would not suddenly make it possible for me to afford a nicer place to live in the long term, so it’s just not worth it. The only way I’m going to afford a nicer place to live is figuring out how to keep my job for a long time.
But I do think a lot about–how could I earn $250k base a year–which is what I really need to afford staying here. I still wouldn’t feel comfortable buying a house on that– but with $14k or so in take-home after tax, I could spend $4k in month on rent, put a lot into savings to make up for any time that I was out of work and my husband’s salary could not afford the rent. I think I’d really need that $250k base to ever feel comfortable leaving this one bedroom apartment. Maybe $220k or something, but it has to be in that ballpark. I just can’t count my bonus or stock into my income, because I know very well I could be fired or laid off a week before I’ll be paid for all that, and then it’s gone.
In my career, though, I do think the only way to earn that kind of money is to be a vp, which, again, is not something I’m capable of (and, quite frankly, probably not something I want when I have kids.) So, I just don’t understand how my salary increases work from here-on-out, other than “cost of living” increases if I’m so lucky. I can definitely see being bumped up maybe to $170k, then $180k, then $190k… but there’s no reason for someone in my role, for what I contribute, to make more than $200k. If anything, I’ll be let go, and go to another org where my skills will be considerably worth less to start.
Again, it’s not that I make a bad salary — for perspective, if my husband goes back to become a teacher he’ll be making $50,000 a year to start and after many years of teaching, he’ll maybe get to $120,000. I make good money. I’m not complaining about my income at all. I just don’t know how to make the life I want work here on this. If we’re taking home $10k a month after tax–what should our lifestyle be? Am I being ridiculous in not moving to a 2 bedroom apartment now since that would cost $1k more a month and we can afford that? Or, am I right to stay in this one bedroom apartment because if I lost my job, living on my husband’s salary and paying $3500-$4000 a month would just be unreasonable–requiring dipping too deep into my savings and getting in the way of all these seemingly more important longer term goals.
I’m sure I’m not the only one here wondering about all of this. I assume most people who have two parents each earning $150k, with a take-home of $14k a month joint, are able to afford a $4k-$5k a month rental or $6k mortgage without it feeling quite so scary. It’s still ridiculously expensive, but that seems more doable. Although it would be nice if my husband were to make more money, I know his heart is in teaching, and the world needs more passionate teachers like him. I’d rather him be happy then I force him into a career he hates just so he makes $150k a year.
But the pressure I have to figure this out… to try to somehow find a path to a $250k-a-year role in the next five years or so, well, I lose a lot of sleep over it, because it feels and might actually be impossible. I can’t really talk to my husband about it… he’d like to live in a nicer place, but I know he also feels like it’s just impossible so it’s not worth discussing or we’ll figure it out when we get there. I wish I could talk to him more about all this, but I understand it’s just not worth talking about when it is what it is– he knows my job stability is non-existent (the man has seen me get fired from 7 jobs over our relationship) and he has no interest in pursuing a career that earns a substantial salary. So what is there to talk about? If I can’t hold a job, I certainly must value that he’s maintained his $80k-a-year contract role for pretty much the entire time I’ve known him. How can I judge or ask any more of him? I can’t. I have to figure this out on my own.