We're living beyond our means...

[jrandom]

Any one able to give me some real life sample weekly/monthly mortgage payment numbers?

Ask one of your IT job candidates to show you how to use Excel!

"Take the example of a couple in their early 30s, earning $155,000 between them. They owe $360,000 on a $370,000 house, and $40,000 on other debts. They are struggling to pay the mortgage, leaving little room for bills."

Let's say the man earns $100,000 and the woman earns $55,000.

The IRD's online PAYE calculator says that he gets $5,694 after tax each month and she gets $3,434. Total, $9,128.

A $360,000 mortgage at 9% interest over 10 years (they're trying to pay it off, not effectively just pay rent to the bank) as a P&I table loan costs $4,560 per month.

That other $40,000 of debt at, say, 16% over 5 years will be costing them $972/month.

So, after debt repayments, they have $3,596 per month to live off. Before they can start spending any of that on anything, they have to cover house, contents, vehicle, medical, life, disability and income insurance, rates and utilities (power, home phone, mobile phones, internet connection, Sky subscription).

Say another grand per month all up.

$2,500 per month left (or $576 per week, if you prefer) to cover everything else.

And then the bike needs new tyres, the car's radiator just sprung a leak, they have a funeral at the other end of the country to attend, and the roof on the house needs repair.

They're not left feeling wealthy by any means.

Of course, they could have more money in their pockets if they stretched their mortgage out to 30 years, but then they might as well rent.

I'm guessing your mortgage is over a term of 20 years or more?

I cannot understand how this couple made thier money in the first place with such bad money skills.

What an odd statement to make.

I, f'rinstance, have spent my entire working life talking the rest of the world into giving me money in return for writing computer programs.

What I do with that money has no effect on the worth of the programs I write, and therefore no effect on my ongoing income.

[geoffm]

I've been in the same place all my life (apart from a few years renting) - I bought the house from my parents estate. It's a very ordinary 3 bdrm stucco on 1/4 acre in Upper Hutt
They paid 3000 pounds for it in 1952. I paid $16000 in 1982 (bought from my two brothers, so each of us had an $8k share). The current valuation for it is $300,000. I have no idea how 3000 pounds would relate to a 1950s electricians annual income. This what you're asking?

Goto http://www.rbnz.govt.nz/statistics/0135595.html
3000 quid = $149,191.47
$16,000 in 1982 is $49,215.78

So it appears it dropped in real terms between 1952 and 1982, probably due to the huge inflation in the 70s and 80s (thanks Piggie), but you ahve dun good since then.
G

[peasea]

Bit simplistic, I thought. Also disagree about telling that couple to sell the house and save. Once you are out of the property market, especially in Auckland, its hard work getting back in.

.

In Auckland, who'd want to????????

[peasea]

I, f'rinstance, have spent my entire working life talking the rest of the world into giving me money.

Bravo.
I am terrible with money, never cared about it and rarely read bank statements etc, I just don't care. However, I am not on the dole and what I do with my money is my business and how I get it is my concern. If I get in the shit, that too is my concern. I have come close to being broke, saw it coming and did something about it. How people get into Mortgagee Sales is beyond me; you can't tell me they didn't see it coming.

I have some debt, I also have some assets and when I fall off my perch I won't leave my kids with bills, what else matters?

[peasea]

AND!
Don't forget the 'No Assets Procedure'

There's no 'accountability' these days.

Oh that's so faaarkin' ironic it hurts.

[scumdog]

I have some debt, I also have some assets and when I fall off my perch I won't leave my kids with bills, what else matters?

Sums up my attitude.

"Sustainable level of debt".

[peasea]

Sums up my attitude.

"Sustainable level of debt".

Yes, mine/ours is totally sustainable and it's about to go UP! FFS, spring is just around the corner, gotta make plans, freshen things up and clear the sinuses.

[scumdog]

Same here.

Two tyres for the bikes - plus regos..

HPC coating for the F100 headers.

New floor-mats and shit for the Thunderbird

Zorst for CBs Compact.

Priorities, people, priorities, with summer looming we've a shit-load of priorities.

[peasea]

Same here.

Two tyres for the bikes - plus regos..

HPC coating for the F100 headers.

New floor-mats and shit for the Thunderbird

Zorst for CBs Compact.

Priorities, people, priorities, with summer looming we've a shit-load of priorities.

We thought we'd up-grade, so we get on the blower...(so to speak....)
"Hi, Mister Bank, we'd like some cash"
"Sure, how much?"
"Erm, dunno, enough I guess...."

"How does 300+ grand sound?"


Ya fukn what?
No wonder people get in the shit.

[Winston001]

......I have come close to being broke, saw it coming and did something about it. How people get into Mortgagee Sales is beyond me; you can't tell me they didn't see it coming.

No simple answer but imagine a couple who buy a house on 100% financing for $300,000. Both working modest jobs. Life is tough but hey, they got a house.

Then she becomes pregnant, has to finish work. He gets made redundant with a small lump sum. No dole until he's been off work for a few weeks.

Or alternatively one of them gets sick - no ACC for that - and they are down to one income.

These things happen. Decent people drawn in to paying too much for a home because they feel desperate, and waiting just seemed to make the prices go higher.

[peasea]

No simple answer but imagine a couple who buy a house on 100% financing for $300,000. Both working modest jobs. Life is tough but hey, they got a house.

Then she becomes pregnant, has to finish work. He gets made redundant with a small lump sum. No dole until he's been off work for a few weeks.

Or alternatively one of them gets sick - no ACC for that - and they are down to one income.

These things happen. Decent people drawn in to paying too much for a home because they feel desperate, and waiting just seemed to make the prices go higher.

Now that is a sad scenario and I saw it happen years ago when Fletcher Challenge over-priced homes and financed employees into their schemes. I saw it coming but a mate didn't and he lost everything after getting sick. The house was over-valued, they foreclosed on a freakin' long-standing employee and it sucked.

Yes, these things do happen and don't get me wrong; I feel for those who get sucked into the vortex. For them there needs to be a social 'net' to fall into but when you get one started the bludgers deliberately fall (jump) into it. Just like the current scheme on TV.

I'm no good at sums but I pay my bills first, what's left is fun. Sometimes there's not a lot of fun and many people don't have that discipline, that's what's lacking in a lot of cases.

I get your point tho.

[scumdog]

No simple answer but imagine a couple who buy a house on 100% financing for $300,000. Both working modest jobs. Life is tough but hey, they got a house.

Then she becomes pregnant, has to finish work. He gets made redundant with a small lump sum. No dole until he's been off work for a few weeks.

Or alternatively one of them gets sick - no ACC for that - and they are down to one income.

These things happen. Decent people drawn in to paying too much for a home because they feel desperate, and waiting just seemed to make the prices go higher.

Hmm, if I had the money and foresight (instead of investing my $$ on hot-rods and motorbikes) a few years ago I too may have been 'burned' like that.

But after the Fortex fiasco and seeing bright, promising couples being decked by a double redundancy after being dumped by the insolvency of Fortex I got a tad more circumspect about these things.

[peasea]

Hmm, if I had the money and foresight (instead of investing my $$ on hot-rods and motorbikes) a few years ago I too may have been 'burned' like that.

But after the Fortex fiasco and seeing bright, promising couples being decked by a double redundancy after being dumped by the insolvency of Fortex I got a tad more circumspect about these things.

It is written in the book of Earnest:
Chap 1, V2;

"Should the glove of fiscal burdon smacketh one upon the cheek in the ugly fashion, then that cheek should be given smirk by way of increased but favourable debt. The joyous toys that are maketh possible by way of such debt should be enjoyed in maximus ad infinitum, for tempus fugit and therein corpus doth most verily knocketh."

[scumdog]

It is written in the book of Earnest:
Chap 1, V2;

"Should the glove of fiscal burdon smacketh one upon the cheek in the ugly fashion, then that cheek should be given smirk by way of increased but favourable debt. The joyous toys that are maketh possible by way of such debt should be enjoyed in maximus ad infinitum, for tempus fugit and therein corpus doth most verily knocketh."

Damn, if I could understand that lot I bet I would agree!!

[Boob Johnson]

Ask one of your IT job candidates to show you how to use Excel!





Let's say the man earns $100,000 and the woman earns $55,000.

The IRD's online PAYE calculator says that he gets $5,694 after tax each month and she gets $3,434. Total, $9,128.

A $360,000 mortgage at 9% interest over 10 years (they're trying to pay it off, not effectively just pay rent to the bank) as a P&I table loan costs $4,560 per month.

That other $40,000 of debt at, say, 16% over 5 years will be costing them $972/month.

So, after debt repayments, they have $3,596 per month to live off. Before they can start spending any of that on anything, they have to cover house, contents, vehicle, medical, life, disability and income insurance, rates and utilities (power, home phone, mobile phones, internet connection, Sky subscription).

Say another grand per month all up.

$2,500 per month left (or $576 per week, if you prefer) to cover everything else.

And then the bike needs new tyres, the car's radiator just sprung a leak, they have a funeral at the other end of the country to attend, and the roof on the house needs repair.

They're not left feeling wealthy by any means.

Of course, they could have more money in their pockets if they stretched their mortgage out to 30 years, but then they might as well rent.

I'm guessing your mortgage is over a term of 20 years or more?



What an odd statement to make.

I, f'rinstance, have spent my entire working life talking the rest of the world into giving me money in return for writing computer programs.

What I do with that money has no effect on the worth of the programs I write, and therefore no effect on my ongoing income.

A solid argument JR........as always. But what the good man is getting at is there is a HUGE amount of wastage goin on. It all comes down to priorities. There are SOOO many ways to save a few $$$ & when put together make a significant differnece. If you or anyone else can be bothered here is a shit hot article outlining just that!

Living beyond our means, springs to mind. We all seem to want/expect it all to happen in a nano second. In our granparents day they waited years before any luxuries arrived, some of us expect it ALL to fall into our laps in 30 seconds. Im not suggesting we should follow that example to the T (as in return to the 20's) but hell, live within your means. A fool & his money soon part, terribly cliche I know but who in their right mind could argue with that?

Bravo.
I am terrible with money, never cared about it and rarely read bank statements etc, I just don't care. However, I am not on the dole and what I do with my money is my business and how I get it is my concern. If I get in the shit, that too is my concern. I have come close to being broke, saw it coming and did something about it. How people get into Mortgagee Sales is beyond me; you can't tell me they didn't see it coming.

I have some debt, I also have some assets and when I fall off my perch I won't leave my kids with bills, what else matters?

Mediocrity is something I find hard to celebrate when it comes to this subject.

But in saying that there are somethings I don't as well as I could if I applied myself. I tend to (these days) prioritise what is important to me & what isn't. I don't love money, but I do like maximising what I have as every bit extra I have I can use it to enrich mine & my families lives & THAT is worth giving a shit about.