We need more space!
What to consider: You don’t need to move right away.
Pre-babies, my husband and I lived in tiny apartments. The thought of owning a home with multiple bedrooms had never occurred to us. However, once I became pregnant, I worried we needed more space, but we weren’t financially prepared for a big move.
Thankfully, a friend, pregnant with her second child, reminded me that I had plenty of time before I needed to move. There was the remainder of my pregnancy, followed by the months our baby would bunk with us in our bedroom. Rather than rush into something, we took some time to save up for a down payment and closing costs, and consider the factors that were important to us in a first home.
How to budget:
Experts generally recommend keeping housing costs capped at around 30% of your gross monthly income, but there’s more to it than that. “Be diligent in making sure your other financial goals are met first, like your emergency savings,” said Ashley Dixon, CFP®, associate planner at Gen Y Planning. “There are a lot of unpredictable expenses with children and homeownership.”
If you are looking at a bigger house, take into consideration additional expenses such as a larger mortgage payment, more property taxes and insurance premiums. Dixon recommends setting aside these additional expenses before you move to see if you can swing them. If not, readjust your expectations. Once you have a better handle on what you can actually afford every month, you can start looking toward a move with more confidence.