Can we afford a $800k+ home, or am I delusional?

You're getting a lot of shit because you're projecting, and your phrasing sounds like you want the status of an expensive house, but I'm not in a completely dissimilar situation so here's what I'm thinking about.

Husband and I are ~35 and currently making ~180K with another $50-80K in stock options every year. We have a baby and currently rent. We live in urban Seattle and have no intention of a long commute. Current net worth is ~200K, half in retirement, got out of debt 6 months ago! We have a 100K down payment now, but aren't ready to buy until some work changes settle.

So, since we want to buy in urban Seattle (with a kid and plans for another) we're starting in the 600K range. The things we really want are

  • good commuting by public transit
  • good schools (or I'm paying another 30-40K a year for private school)
  • basement or garage for shop space
  • enough yard for gardening and playing and maybe a greenhouse

Those make the house more like 800K+. Maybe 1M. Not because I want to be fancy and special and have lots of chandeliers, but because I don't want to spend my baby's childhood stuck in traffic.

To look at affording this house realistically, I use our data from something like Mint where I can see the category breakdown of our spending. I've created a spreadsheet where I can put our current spending in, then make some extrapolations about income, and play with the numbers. Do we want to increase our retirement contributions? Do we want to travel the same or more? Do we want food to stay the same or go up? If we have 2 kids in daycare (or a nanny) can we afford that and the house? What happens to our savings rate if I have the mortgage from the 800K range vs. the 1M range? What happens to our runway if one of us is out of work for a while?

Are you going to have a kid? Do you know that daycare in Boston is ~2K a month??? (I didn't!) A calculator online doesn't know ANYTHING about how you actually live your life. We have 1 car that's paid off. Are you planning on buying a car with a payment? That'll have an impact. Fantasizing is fun, but digging into the numbers helps you get realistic.

/r/personalfinance Thread