arteg

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I'm starting my residency in July, so I'm looking for housing, I found this wonderful townhouse which is a 5 minute walk from the hospital, my wife really likes it, she likes the privacy of the townhouse. the thing is, the rent is $1150, adding utilities this would mean spending $1300 just for housing. we'll be depending on my income only which is around $2200/month after deductions. would we be able to survive with the remaining $900? I have no school loans, no car payments & no credit card debts. I also have some savings which I'll use for furniture....etc. the other regular monthly expenses I can think of are around $300 ($150 car expenses (gas,insurance...etc) - $150 for cell phones,cable,internet) so after adding those $300 to the $1300 housing we are left with $600, can we survive with this kind of money?
 
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arteg

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would you please give me your input or experience on this subject.

Thank you guys.
 

mpp

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I'm not sure how we are supposed to know if you could live on $600 per month.

How much money do you spend now after rent, car, phone, cable, internet expenses? If it is more than $600 then my answer is no, if it is less than $600 then my answer is yes.
 

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As a general rule of thumb, your rent/mortgage payments should be about 1/4 of your monthly income. So it would not work with the townhouse that you are looking at. Also, consider all the bills that you will have and any loan payments that you have to make.
 

tlew12778

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Whether or not you can live on $600 a month really depends on your lifestyle IMO. If you like going out to dinner and whatnot, I think you will be hard pressed to live on $600 comfortably.

I mean, how much do you two spend on food and household supplies at the grocery store? I budget in 100/week for the two of us... so that's already 400 a month... then I budget in 100/month for dining/entertainment, but we often go over that (I should probably adjust our budget). What about clothes? And lunches out while you are working? What will your wife be doing during the day? Does it cost money?

What about saving? I assume you two want to buy a house someday. Don't you want to save for the down? Or what about an emergency fund? Like what if something goes wrong with the car or in the townhouse?

Basically I think it could probably be done but you'd have to budget pretty tightly.
 

robo77

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I am sorry to sound rude, but can anyone know if whatever dollar amount is enough for you to live on?

arteg said:
I'm starting my residency in July, so I'm looking for housing, I found this wonderful townhouse which is a 5 minute walk from the hospital, my wife really likes it, she likes the privacy of the townhouse. the thing is, the rent is $1150, adding utilities this would mean spending $1300 just for housing. we'll be depending on my income only which is around $2200/month after deductions. would we be able to survive with the remaining $900? I have no school loans, no car payments & no credit card debts. I also have some savings which I'll use for furniture....etc. the other regular monthly expenses I can think of are around $300 ($150 car expenses (gas,insurance...etc) - $150 for cell phones,cable,internet) so after adding those $300 to the $1300 housing we are left with $600, can we survive with this kind of money?
 
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arteg

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Thanks guys, I really appreciate all your informative input. I know that to ask if we can survive on a specific dollar amount sounds silly & not very reasonable to ask, but the thing is, I came here to the states from overseas to do my residency, so I've been in the country just for a couple of months, that's why I'm asking in the 1st place because I donno actually how much our budget would be. So I tried to ask you guys because u r all residents & medical students who have similar income level, some of you are couples who are surviving on a single income. I just wanted to get an idea & to make sure I won't take any stupid financial decisions which I would regret later.

Thanks dear friends. :)
 
B

Blade28

I was going to say, what was your budget throughout med school? How much were you spending a month then?

But if you just came to the US, that's different.
 
B

Blade28

OK, now I'm confused - in a previous post written last month, you said:

arteg said:
I just moved to the states about a year and a half ago, I was here as a visitor & then started work in research 6 months ago. Now I'm starting residency in July.
(Your username sounded familiar, so I had to do a quick search.) So I have to ask - if you've been living here for 18 months already, how much have you been spending every month for food, entertainment, bills, etc.?
 
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arteg

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Blade28 said:
OK, now I'm confused - in a previous post written last month, you said:



(Your username sounded familiar, so I had to do a quick search.) So I have to ask - if you've been living here for 18 months already, how much have you been spending every month for food, entertainment, bills, etc.?
as I mentioned in the earlier post, I came here 1st as a visitor to do some rotations during my final year of medical school. I didn't have much expenses back then because I was single, stayed with roommates & was spending from my family's savings. now I'll be starting as a resident with a resident income & I'm getting married next month. so I have to get my own place (no more roommate thing.. lol) & my fiancee really hates apartments because she prefers more privacy.
 

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1. see if you can qualify for a residency relocation loan 2. look harder for a place that is creaper by a hunderd or so 3. Is your wife willing to work or can she? 4. Take the relocation loan money and spread it out for at least the first 2 years 3. put any money left over from your pay check in a seperate account ( emergency account) or wise investment and use that to pay off the loan when the time comes, your salary will generaly increase over the time you spend in residency. 5. Residency should be a difficult time with limited funds anyway, but if you manage your money wisely and watch it like a hawk it shouldnt be so bad.
Again the last item is easier said than done but its worth a try
 

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Just my 2 cents here- for all it's worth. Do everything as cheaply as you possibly can. The fact is that unexpected expenses do happen, and they can happen to you in the future. For example, are you going to have children during residency? And if your wife is new to this culture, from what I can discern simply from your post- she may be the "unknown" in your budget equation. Only you can answer this, but examine her relationship to spending/materialism, etc, and decide for yourself. You will be working you butt off with little time to spend your limited income, she will have more time on her hands. You really do NOT want to take on more debt, or develop poor credit- which is a VERY bad thing. From what I am reading thus far in you post, I would advise you find as cheap a place as possible for the first year or two, watch your budget and then decide for yourself after some time here.
 

DebDynamite

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Also, DasN has some good advice about the residency relocation loan, etc..above I was trying to point out that specifically CREDIT CARD DEBT IS BAD. Do the math and decide for yourself procatively that it is a nasty, viscious cycle not worth getting into. The budget you outlined above really leaves little for savings (unless you are both careful w/the money), which is scary.
Good Luck.
 

la gringa

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$1150 sounds like a lot of rent for 2 people in CLEVELAND... if you had said dc, philly, chicago ok.... but cleveland???? i would think you could do better and not have these worries about other expenses.
 
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arteg

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Hi guys,
Just wanted to update you with my "rent" situation, I actually found a better deal which is BUYING! yes, I found a deal on a house which is exactly the same (2 bedroom townhome, walking distance from work, new & clean...etc) my mortgage deal is about $1150 (mortgage+taxes+PMI+insurance+maintenance fees), which is similar to what I was gonna pay in rent, not to mention getting about $130 every month as tax benefits & also building equity. these payments are based on an FHA loan with 5% down & fixed rate of 6.25%, seller will help with closing costs.

I think I'll keep shopping for better mortgage deals, the only thing is that I'm still new in the states, so my credit history is only 13 months old (one credit line through my fiancee), my score is now in the 680's. so let's see if I can qualify for another better loan program & save some extra cash on my monthly payment. plz let me know guys if you have ideas.

Thank you!
 

DebDynamite

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Assistant said:
As a general rule of thumb, your rent/mortgage payments should be about 1/4 of your monthly income. So it would not work with the townhouse that you are looking at. Also, consider all the bills that you will have and any loan payments that you have to make.

arteg,
the above is, in my opinion, really, really good advice. Regardless of the rent vs. buying issue, the above rule of thumb is a VERY solid one.
 
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arteg

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DebDynamite said:
arteg,
the above is, in my opinion, really, really good advice. Regardless of the rent vs. buying issue, the above rule of thumb is a VERY solid one.
DebDynamite,
I really respect your advice, may be it's true for a typical medical school graduate who has school loans & other debt like car & credit payments....etc. the thing is, I really don't have any loans, car payments or credit card debt to pay. it's gonna be only the regular bills, food, dining, car gas....etc. plus I'll have a couple of grands in savings in case I need to spend any more money. when I did my math I found that the total housing cost (mortgage+taxes+insurance+maintenance fees+utilities bills) will run around $1200-1300. and also I'll get about $150 back as tax benefits. so this is gonna leave me with $1200-1300 for all my expenses, I don't think that's bad. I know guys who are married with kids & they manage to live comfortably at this income level & even save some money. I think also that the house is gonna be a good investment since I'm buying a new house in a good area, I did some research on it & the average appreciation in this area is at least 5% annually. so this could generate some cash when I sell at the end of my residency.
That's my thought process in this whole housing issu. I appreciate your input guys. It's a nice opportunity to exchange ideas & experiences.

Thank you.
 

impetigo

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arteg said:
would you please give me your input or experience on this subject.

Thank you guys.
It's going to be really difficult if you're supporting yourself and your wife with your resident's salary. Plan on counting pennies and cutting out coupons for the next several years...
 

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My 5 cents:

- $1300+ for housing out of a $2200 paycheck will make for a lot of pasta with tomato sauce. As a resident, you will have some additional expenses you want to add into the equation: licensing, books, conferences (board exams alone in my specialty where about 3k)

- buying is generally a good idea, but YOU will own the place. So, in addition to the monthly numbers the savy mortagage broker and real-estate agent will give you, you should add 20% for the stuff that will break and other unplanned expenses. (you mentioned that it is a new place. If that is the case, make sure you can put about 2k into an account for the attorneys retainer once you sue the builder)

- I know, everybody is in a buying frenzy because they seem to anticipate the interest rates to rise to 1981 levels within the next year. But it might be advisable to hold off on the purchase for a year. That way you will get a better feel for the local real-estate market and an idea whether the 'deal' is really one. Also, if you are managing your credit wisely, you might be able to bump it into the mid 700s within a year giving you access to better rates and lower 'points'.

- building equity is good, but look at how much of your payment actually goes towards equity in the beginning, not too much if you ask me.

- with a 680 FICO the lenders assume that your risk of defaulting is something like 20%. With the 5% down, 6.25% doesn't sound too bad given that score.

- With a two person household on a 40k salary, you won't be paying too much taxes in the first place. Be sure to calculate the anticipated tax savings carefully (with the 9k standard deduction, you might not even make it into the range were itemizing helps you)

- what are your wife-to-be's plans. Is she planning to go to school, does she have a profession which will allow her to find work ? Sitting at home, watching Oprah and waiting for hubby to come home can get pretty old pretty fast. (Sitting at home and doing nothing ain't too bad if you have money in your pockets, if you have to live on a shoestring budget, it sucks. A latte in the Barnes&Noble cafe is $3.39, put two/day in the budget if you plan on having her sit at home.)

- I don't know the Cleveland rental market, but maybe a two-bedroom rental in the $900 range would give you less risk and a bit more more financial leeway.
 

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arteg said:
I'm starting my residency in July, so I'm looking for housing, I found this wonderful townhouse which is a 5 minute walk from the hospital, my wife really likes it, she likes the privacy of the townhouse. the thing is, the rent is $1150, adding utilities this would mean spending $1300 just for housing. we'll be depending on my income only which is around $2200/month after deductions. would we be able to survive with the remaining $900? I have no school loans, no car payments & no credit card debts. I also have some savings which I'll use for furniture....etc. the other regular monthly expenses I can think of are around $300 ($150 car expenses (gas,insurance...etc) - $150 for cell phones,cable,internet) so after adding those $300 to the $1300 housing we are left with $600, can we survive with this kind of money?
I think you should put your wife to work, she'll make enough money for the rest of the expense plus since you have to spend many hours at the hospital she will need something to do.