<p>^^^Maybe not according to the formulas you can use to figure out how much house you can afford, but clearly they are overspending. The house would probably be one of the easiest things to cut back on.</p>
<p>A fairly hefty mortgage and $3K credit cards??? What? That’s pretty extravagant IME. As a middle classer.</p>
<p>Va, my credit card bill is that much. Easily! But there is ZERO interest in it. Quite possible this family charges everything they buy to get cash-back.</p>
<p>As I said earlier, they could be charging groceries and medical insurance and clothing and whatnot! </p>
<p>I can see 3K credit cards. We put everything on our cards, but I don’t remember when they were that low. If someone has been living above their means or had a big medical debt, they could have much to pay down. But if all this is driving them crazy, they are going to have to do something drastic. That also sounds like a high interest rate for the mortgage, even if it includes taxes and insurance. Either that or it’s a 15 year. They could refinance at a low rate, and if they have any debt, add it on if they have equity. For some people that would help, others might feel they could spend more then.</p>
<p>Perhaps health insurance is paid with pre-tax dollars so wouldn’t be shown in this breakdown of how take home pay is spent.</p>
<p>Good that the wife plans to return to the work force - hope they plan to try to save her net.</p>
<p>Now that I actually read the article, I think they’ll be fine. And 125K is really less than 90K after taxes, according to this article. They have paid off almost 80K in student loans. Sounds like the wife will soon be working, and earning a good salary. That stuck out for me that their kids are soon to be teens, worried about finances, and she isn’t working. Get off your butt and do something, anything for money. At least she’s getting to it now, finishing her education, but she could have a part time job. A VA loan means they probably put down nothing on their home, paying a funding fee, and maybe too high an interest rate.</p>
<p>But they look to pull out of this pretty soon.</p>
<p>Regardless of whether or not the credit card amount seems high or not, they are spending roughly 96K per year. What is the after tax take home annual pay on $125K? They have zero cushion, zero ability to save for a rainy day, much less college.</p>
<p>I just don’t see how they can have $150 grocery budget. I think a college student would have trouble on that amount let alone a family of 4. </p>
<p>^It is such a poorly written article! Of course they do not have a $150 grocery budget. We have no idea what some or their other expenses could be as well! </p>
<p>I use my Discover card for everything possible and I don’t spend $3K a month. So again, to me, that seems like a lot. BUT…I don’t have teens at home. I did not read the article. There are a LOT of variables of course. Especially with children at home.
Also, I am a cheapskate. LOL.</p>
<p>This article is ridiculously written. There is a HUGE difference between a $3000 credit card debt, meaning paying $3k a month to pay down your balance (ie no new spending) and having run up $3k in expenses each month that you pay off. </p>
<p>If they are just using the credit card to pay all their bills, as Bunsen mentions, then that $3k should really be divvied up into the appropriate line items like groceries, clothes etc. </p>
<p>Removed bad joke.</p>
<p>What’s on those credit cards? Food, toiletries, drugs, car repair? I really think you must break down the spending and not just call it “credit cards” to see what’s happening. </p>
<p>House is way too expensive for them now! One needs a modest house until debt is paid off.</p>
<p>“Removed bad joke.”</p>
<p>Oh, but why?</p>
<p>I have to think the credit card payment includes paying down credit cards. The articile mentioned they ran through all their savings when their baby was so ill.</p>
<p>Yeah, they have interest. And, there is no room in that budget for real life. Car repairs. Kid expenses. Daily whatever. It’s all going on the cards. That’s not at all unusual, though. And, I agree about the mortgage. It’s way too high.</p>
<p>Bus, your comment about get off her butt and do anything reminded me of the SD/SB thread and that’s where I had a bad joke.</p>
<p>And now I can’t remember what thread that is. Same brain, just slower memory retrieval.</p>
<p>It’s on the parents forum where sugar daddies pay for sugar babies monthly stipend for spending time with them.</p>
<p>Ah, I didn’t really read that one.</p>