Affording a New Home: How Much of Your Monthly Income Should Go Towards Your Mortgage? 28%? 25%? Less Than 20%?

If your family is currently considering buying a new home, one of the biggest questions should be this:

“What percentage of our household monthly take-home income should go towards our mortgage payment?”

If you depend on the unanimous results of a Google search, the answer is 28%.

If you put your faith in the results of a lender or a mortgage calculator found on the website of a new home development, you may be pleasantly surprised to see how big and nice of a home you can “afford” based on your household monthly income.

However, Dave Ramsey teaches no more than 25% of your household take-home income; in an effort to prevent becoming “house poor”; where you could afford to pay your monthly mortgage but could not live a comfortable lifestyle.

After meeting a 2nd time with our Associate Financial Consultant, Christina Tumbleson at Charles Schwab, where my wife and I recently starting investing our money, we learned that we are spending around 13% of our monthly take-home income on our monthly mortgage.

However, that number was based on the total of both of our full-time salary positions. That does not account for the monthly income I make from my 5 side hustles; for example, I made $531 last month from my two YouTube channels alone.

When we consider all my side hustle income, we can easily yet conservatively count on another 1%.

Therefore, at around 12%, we are fortunately spending a little less than half of the conservative 25% of take-home income Dave Ramsey suggests.

While it is undeniable that at age 37, my wife and I are at solid places in our careers and are being paid accordingly, we also have no other debts other than our home. I have been driving the same 2004 Honda Element for over 13 years now. Not to mention, I spend literally all my free time on my 5 side hustles; which provides passive streams income for our family.

But perhaps most important is the fact our 1900 square feet, 4 bedroom, 2 car garage home is still much more humble than it needs to be, according to popular American dream standards.

The main take-away is this: We choose to live way below our means.

If we wanted to sell our current home, we could pocket an easy $50,000 and then “upgrade” to a half a million dollar home. I could even trade in my old Honda Element for a new Toyota Tacoma.

We could “afford” to do that.

But if I am going to impress anyone by my finances, it’s not going to by how much I spend, but instead, how amazingly little.

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At Age 37, My Wife and I Have Begun Investing Our Money, Thanks to Charles Schwab

At age 37, I am fully aware that I am now at the halfway point of the average American lifespan. I suppose this is literally the most appropriate time to have my midlife crisis.

Finally, I can trade in my old paid-off Honda Element for a brand-new Jeep Wrangler, take a spur of the moment trip to Spain, and start training for American Ninja Warrior…

But instead, I am focusing all that energy into planning for the 2nd half of my life- and my wife’s, as well as our children’s future.

My wife and I got married 10 and a half years ago, right in the middle of the 2008 Financial Crisis.

The first half of our marriage was spent building our careers from entry level positions and trying to manage the tens of thousands of dollars of debt we were in; largely due to college loans and our wedding.

The most recent half of our marriage began with us finally becoming debt-free in 2013, buying the last steal-of-a-deal new home in the Nashville area, and both finding ourselves far enough into our careers and side hustles that we started making a comfortable living.

But as Maslow’s Hierarchy of Needs pyramid explains, your goals and motivations evolve as you overcome your previous more basic needs and desires.

Now the focus is… how to invest our steady stream of income into our future.

I thought it was as simple as just paying off our house, then worrying about retirement afterwards.

However, my wife has been listening to the Moneywise program on Moody Radio on the way home from work each day. She explained to me that based on our interest rate on our home, it would actually be a better investment of our money to start building our retirement now, alongside paying off our mortgage early.

My wife then set us up an appointment with Charles Schwab financial investment company, which she had been hearing endorsed on Moneywise.

Today was the big day.

Our financial advisor helped us rollover my 401K from my previous employer to traditional IRA and select a portfolio for it. She also gave us direction on determining our financial goals so we could better plan our retirement and our kids’ college funds.

This was a major milestone for us. Here’s to the second half of life!

My Wife’s 37th Birthday Gift from Me: Tickets to the Kenny Chesney Concert in Nashville on August 11th, 2018

Without question, the biggest fan of Country Music I’ve ever known is my wife, Jill; who was born and raised in northern California; near Sacramento. (I suppose there’s some irony in knowing that I myself was born and raised in Fort Payne, Alabama; the hometown of the country group Alabama.)

Her favorite artist is Kenny Chesney. And amazingly, he just happened to be having a show in Nashville (where we live) on her 37th birthday, which happened to be on a Saturday.

In other words, the stars were aligned just right for my wife to have the perfect birthday gift for her 37th birthday.

My parents came up to take care of our kids while we were out having fun for over 11 hours, so we didn’t have to worry about getting a babysitter.

We were able leave our house early enough to find a place to park and stop for dinner, without feeling rushed.

The opening acts were Old Dominion and Thomas Rhett.  They both served as perfect openers, as their style shares the same laid back rock feel of Kenny Chesney’s music.

Earlier this week leading up to the concert, my wife already stated that this was going to be the best birthday gift she’s ever gotten. She confirmed that statement throughout the concert- and a few times since we got back from it.

An interesting side note: Kenny Chesney’s show broke the all-time attendance record for the Nissan Stadium where it was held; as we were part of the 55,182 people who attended.

I’m happy that my wife loved the concert so much. Despite living in the Nashville area, it’s seldom we ever actually get to go become part of the action downtown. We had a great time together!

If only Kenny Chesney did a show every August in Nashville, I’d never again need to wonder what to get her for her birthday. I’d be set…

Here’s to a great way to start 37!

Is Age 37 Too Young for a Midlife Crisis? 1st World Problems and Maslow’s Hierarchy of Needs

I’m pretty sure that at age 37, I’m currently working my way through my midlife crisis. While at first mention, it might seem I’m getting mine out of the way a little early, consider that the average American man in Tennessee lives to be about 74 years old. So actually, I’m actually right on cue:

If I live that long, then my life is already halfway complete at this point.

Perhaps the biggest struggle I am sorting out is that, as of this year, I have officially found myself at the top of Maslow’s Hierarchy of Needs: Self-Actualization.

The way I like to explain how Maslow’s Hierarchy of Needs works is this:

If and when you are able to overcome needs in each stage of your life, they are simply replaced by new ones that you didn’t have the privilege of addressing before.

Things started progressing quickly on my journey up the pyramid, in my mid-30s, when I discovered that it was always my decision whether I allowed other people to emotionally affect me. During that same time in my life, my wife and I had become completely debt-free, other than our mortgage.

Now in our late 30s, we have found ourselves in a new income level bracket; having both progressed our ways up the corporate ladder, in addition to the aforementioned pyramid.

I think the identity crisis I am going through right now is that we both work full-time jobs in offices, in addition to side jobs online. The money simply goes to paying off our mortgage, our kids’ college funds, and our retirement.

It’s just sort of demotivating to consider how much of our time is spent working- and how little time is spent together as a family.

Plus, I really want a Jeep Wrangler. I’ve been dreaming about owning one for years. But having gone years without a car payment, and knowing that buying my dream car would only take away from our savings and our ability to pay extra each month on our mortgage, I just wouldn’t be able to enjoy it anyway.

Clearly, I have first world problems. Yet according to Maslow’s Hierarchy of Needs, they are still legitimate challenges that I am sorting out in my life.

This is my midlife crisis at age 37.

Today is My 37th Birthday, Meaning I’m Now in My Late 30s and Officially Pushing 40… And I’m Very Happy About It!

In a way, birthdays are sort of funny to me. It’s almost like “Happy Birthday” translates as “congratulations on not dying so far”; especially the further along you get to certain milestone years, like 40, which I’m now officially pushing.

But my mom, who turned 60 last week, has always been the perfect example of what it means to age with grace; to embrace and celebrate every year you’ve shared with the people who love on this planet.

I am now officially in my late 30s. And I am very happy about that.

No, I would not wish to be younger. Because I am now too reliant on all the wisdom I’ve earned by being alive 37 years.

I’m sure I used to, but I no longer fantasize about going back in time with the knowledge I have now.

That’s ridiculous. Instead, it’s about using that knowledge to make the most of the rest of my life.

What are some of these nuggets of wisdom I’ve learned in my 30s?

It’s always a personal decision whether or not you let other people offend or insult you.

Likewise, it’s always a choice whether you forgive another person. But if you take responsibility over your own emotions and don’t let the rest of the world have control over how you feel, then there’s much less need to forgive other people anyway.

I’ve learned that the default of the human experience is to allow yourself to be the victim. But it’s a proactive choice to decide to be a victor instead.

Maybe those things sound like Joel Osteen’s leftovers, but to me, they are trophies. Applying that knowledge has undeniably improved my quality of life.

And no, I didn’t learn those things from a pastor of a megachurch or a multi-million dollar motivational speaker.

I learned them from surviving my early and mid 30s. I learned them the hard way.

I lived it. I earned it. I value it.

So you can imagine, I’ve very excited about using that psychological gold for the rest of my 30s.

Alright, 40s, here I come!