Meet Fritz
Age: 27
Salary: His $67k – Hers $100
Employment: His Accounting – Hers Pharmacy
Savings and Investments:
- $167,000 Retirement
- $30,000 Emergency fund
Debt: $0
Fritz’s main concerns, in his own words
Thanks to people like you speaking truth in my life, my wife (age 27) and I (age 29) are debt free, including a starter home (FMV ~ 150k), two cars, college educations, and a pet chinchilla (I’m kidding about the the chinchilla). With $160k in retirement, emergency fund of $30k, and a combined salary of $167k, we are walking towards buying our “dream/forever” home – where we will hope to raise a family over the next 30 or so years. In essence, we are trying to skip over the middle home. We both are employed in very stable industries.
I want to make a wise decision, balancing buying a house that we will be nice / big enough to fit our life for the next 20 – 30 years, but also not stretch things so that we put our family in unnecessary risk. When the baby train arrives, my wife will jump down to a .6 FTE and without considering future raises – that would put us at $110k take home. I know ideally 25% is the guideline you recommend, but with our situation do you think we would be unwise to go a little north of that?
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Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.