[ridesthemiles]

A couple of weeks ago, a segment was on the nightly “news” show about a couple in the SE that was having a hard time making ends meet.
As best as I can remember: The two adult parents were both working and their combined income was $80,000 a year. They had 2 teen age sone.
That adds up to 2 exemptions, and with a house, I am going to think they are filing long form 1040 tax return. Let’s say that after income taxes at both the state and fed level they are taking home at least $60,000, to be very conservative.
Their adjustable house payment just went to $24,000 a YEAR on a house they bought for about $175,000. I think I heard the house was fairly new if not new.
$60,000 less $24,000 leaves $36,000 a year. That is $3,000 a month.
What in the world can they be spending money on if a family of 4 cannot make ends meet on $3000 a month?????

[rbg81]

Bet they got lots of credit card debt. $2K per month for a $175K mortgage is way out of wack too. Probably got a home equity loan or two or three.

[colinhester]

Throw in a couple of car payments, a vacation or two a year, a few credit cards, and there you go - an easy $3,000 per month.....C

[boop]

Do you ever see the show Big Spender? Larry Winget goes in and finds out why people are in debt and shows them how to get out of it. He puts it in black and white why they are in trouble. I saw one where some couple made 2600/month but was spending 5-6000/ month. He went into one woman’s closet and found over 100K in clothing most of which still had the tags on it. She was getting $80/day spa treatments. They had multiple mortgages, took out “personal loans” and lines of credit. He tries to put these people on a budget, but they just won’t stop wasting money.

[JasonC]

$175k houses to $80k income families are not the problem. In the NE it is $550k houses to $75k families, and in the SW it is $350k houses to $50k families. It is a stretch to get to 4 times pretax income. Half the houses in the country are up at 7 times, instead.