We’re considering a home which checks all our boxes. 2020 build, Updated, large kitchen, in ground pool with pergola, home office, walk in pantry, large primary with large double vanity bath, walk in closets, etc. but it’s $1.1M. As a historically frugal person, at what point do you just decide to send it?
- we’re ~385k TC (230k base, 40% bonus, ~25% LTI), ~250k take-home. Single income with 2 young kids. We’re 35 & 31 years old. This will go to $450k in 2027 and then normalize around $400k + annual raises (as long as I’m employed)! This year it’ll work out to $21k /mo take home after taxes and deductions.
- ~$1.4M net worth (~$400k liquid / $620k retirement / $360k home equity).
- Currently spend ~9k / month excluding PITI but including $1.8k daycare, vacations, large purchases, etc.
- The house at $6.5k PITI would bring our monthly expenses to $15.5k/mo or call it $16.5k to account for bigger home and pool maintenance.
- That still leaves ~4.5k/mo or 55k/year surplus after all expenses, while continuing to put ~$55k+/yr into retirement ($25k our contributions + ~$30k employer).
- Our liquid assets give us ~2 years of runway. Even in a downside case (lower comp or wife going back to work), the numbers still work without major changes.
I know people say not to rely on bonus/LTI, but mine has been consistent over my career. We’ve been looking for over a year for a new home in the 800k-1m range with no luck. Is my plan sound and I just send it?