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Welcome to Millennial Real Life Budget Review where we review a real millennial’s budget anonymously. Today we are looking at a marketing and communications director taking home $6,000 a month and spends nearly 40% of their income on their mortgage!
CHAPTERS
0:00 Intro
1:10 Financial Struggle
2:20 Monthly budget
2:42 Debt
3:41 Mortgage
7:00 Rocket Money
10:50 Fixed Expense
14:35 Investing
17:20 Roth IRA
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In the latest episode of Millennial Real Life Budget Review, we take a closer look at a young couple living in Fort Worth who are facing a common financial dilemma – spending too much on their mortgage.
The couple, both in their late 20s, purchased their first home two years ago in a desirable neighborhood in Fort Worth. At the time, they fell in love with the charming bungalow and didn’t think twice about stretching their budget to make it work. However, as time has passed, they have come to realize that their mortgage is eating up a significant portion of their monthly income, leaving little room for savings or other expenses.
Upon reviewing their finances, it became clear that the couple was spending nearly 40% of their take-home pay on their mortgage, well above the recommended 25-30% range. This high percentage left them feeling stressed and overwhelmed, as they struggled to keep up with other bills and expenses each month.
In order to address this issue, the couple sat down with a financial advisor to discuss their options. The advisor suggested a few potential solutions, including refinancing their mortgage to obtain a lower interest rate, downsizing to a more affordable home, or finding ways to increase their income through side hustles or career advancement.
After weighing their options, the couple decided to pursue the refinancing route, as it offered the most immediate relief in terms of lowering their monthly mortgage payments. They worked with their lender to secure a new loan at a lower rate, which resulted in a significant reduction in their monthly payment. With this extra breathing room in their budget, they were able to allocate more funds towards savings, emergencies, and other financial goals.
Looking back on their experience, the couple acknowledged that they had made a mistake in overextending themselves with their mortgage. They learned the importance of budgeting and living within their means, and vowed to be more mindful of their financial decisions in the future.
The episode serves as a valuable lesson for other millennials who may be facing a similar situation. It underscores the importance of being realistic about your financial situation, seeking professional advice when needed, and taking proactive steps to address any issues before they spiral out of control.
In conclusion, spending too much on a mortgage can have serious implications for your financial health. By taking a proactive approach and seeking out solutions, you can avoid the stress and strain that comes with living beyond your means. Remember to prioritize your financial well-being, and make adjustments as needed to ensure a secure and stable future.
I live in Fort Worth, this is not high for our area. The Texas Triangle is the new California it’s like $90k an acre for land alone right now. New construction is $400k+
Is the stated income gross?
You cannot max out a Roth IRA and then contribute to a traditional ira. The Ira contribution limit is total contribution amount across all IRAs. So after maxing out Roth IRA and 401k, they would have to then either do after tax contributions (and conversions/rollovers) if the plan allows it or contribute to a taxable brokerage account.
I think you should require people to fill out both the budgeted and actual columns. Because people can budget whatever they want, but what are they actually spending in a month?
cut out the fun money and her credit card is gone in less than 2 months
yea that’s fine for really good dog food. i pay about the same for a great dane mix and pitty mic
What about the $1600 extra income needed?
You just turned it to 11 for me after you brought up the New Heights podcast. Respect!
I do like these videos. Low key and solid.
It's eating into my budget, and I'm worried about how it might affect my finances in the long run.
We’re DINKS, don’t have any debt other than our mortgage. We live in CA. Our household monthly net is $10k and our mortgage is $3600/mo but we’re adding $600 to our principal monthly making it $4200/month. After our fixed and variable expenses, we still end up being able to invest $500 a month and save $1800 a month for short term goals/travel. We have $20k in emergency fund and automatically invest 15% of our gross monthly salary into mine and my husband’s employer sponsored roth 401k. This is the beauty of being debt free. And not having kids. Lol
Love watching your advice, so levelheaded and without bias! Can't wait to see my budget reviewed!
She really should look at increasing her income first and foremost.
If the dog is 80lbs or more, that's a very reasonable price for quality dog food. Feeding big dogs is very expensive! Purina is a quality pet food brand, so they could price compare with any of their products to get comparable quality.
The IRA contribution limit is aggregate- you can split the limit between Roth and traditional but it is one limit (7k for 2024) not a separate bucket to fill up.
can you go upto 40% net pay for mortgage if you dont have any debt?
A side hustle is feasible
In 1945 a minimum wage job paid .45 cents and in most cities a house cost $4,300. Today that would $100 minimum wage since a house cost $1 million dollars in most cities. The banks, politicians and corporations have people fighting over dog scraps. My great-grandfathers were doing day labor jobs and on that single low wage were able to buy a house and raise 4-6 kids.
For your budget toolkit template is the income Gross or Net?
It's way cheaper to just homecook a big batch of dog food, freeze, and thaw as needed. Audible sub is probably not needed as Spotify has audiobooks now.