How Much Home Can You Afford?

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Welcome to a new edition of my Feng Shui Home Hunting Guide, all about finding a home that you can be comfortable in in every way!  How much home can you comfortably afford? It might not be what you think, but its worth looking at if you are looking to build a stable future. These days, stability is a big word I associate with feng shui. If you are not balanced in every way possible, its very hard to grow in a significant way.  

When my friend was looking for a place, she would call her conservative and rather famous financial planner and 9 times out of ten she would hear, “You can’t afford that yet.” I thought that the estimate of what she could afford was a bit outrageously low… until I looked at the statistics!

When looking for homes and rentals and real estate aplenty these days with a fervor, I have seen something rather outrageous: rents in the areas I’d want to live are completely unreal at the moment for the average person in Los Angeles. Probably,  lots of the country is being hit with this situation, as investors with cash are buying up available home inventory and driving prices up in the rental market in the process.

I know that the common “dogma” states that you should always be aspiring and just make more money to be able to afford what you want right now, but that was the mindset that created the gigantic bubble that burst and sank not only the real estate market in America, but also helped tank the country’s economy.  I wondered as I pondered a rental that was $2,600, yes, the price of a decent mortgage in most cities, (I know!), what can one really, reasonably afford? And…how can you make what you can afford also something desirable?

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So, here is the skinny on what you can actually afford from the popular real estate listing site, Trulia:  ” The US Department of Housing and Urban Development and many state housing authorities recommend that you spend no more than 30% of your gross (pre-tax) household income on housing and utilities. This means if you earn $50,000 per year, you should spend no more than $15,000 per year—or $1250 per month—on rent and utilities. The Mint, a budgeting and personal finance web site, recommends you spend no more than 33% of your gross (pre-tax) income on housing, meaning that on $50,000 you should spend no more than $16,667 per year—or $1388 per month—on rent and utilities.”

Now, of course, you and I are probably gasping for air at these statistics because you have paid or do may a lot more, proportionately.  I laughed when I first saw this, but then realized that there is a lot of wisdom in this formula. Of course, if living in an are you can “afford” means that you have to pay hundreds more in transportation, that isn’t really a deal.  If living in an area that fits the formula means that you are in jeopardy personally, well, that isn’t a real solution solver.

Lets just say you do find a place that you can afford, but its not quite as posh as you’d like. What to do then?

1. Make sure its totally stable. Stable foundation, floors, walls and plumbing.  That’s a big non-negotiable point!

2. Make sure its safe:  a less-than-perfect neighborhood with a neighborhood watch and contentious neighbors is generally better in my experience than a perfect neighborhood where people don’t care. (yep, that’s where I live now!!! )

3. Invest a few hundred bucks in deal-making, value-lifting feng shui-friendly changes to your space: amazing paint, peel & stick floor tiles to overhaul a dingy kitchen, plants, some DIY art… lots of green cleaning products & energy-shifting aromatherapy, put up curtains, add some gorgeous shelving to display collections… these are all easy but major changes.

And, of course, you will for sure be growing and prospering and you can always move to your dream home next!  Just make sure you aren’t mortgaging your happiness on it!

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