Some Surprises in What You Must Earn to Buy in 25 Cities

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What you must earn to buy a house

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I love spending time on MSN Money and MSN Real Estate.  So many things to do and see! One of the more interesting things I have found lately is “What You Must Earn To Buy in 25 Cities”.  Basically, what salary you must earn to be buy a house that would leave you able to afford the principle and interest payments on a median-priced home in 25 cities in the United States?  Let’s face it, I just wanted to see where St. Louis landed on the list.  Call it morbid curiosity ;-)

How did they come up with this data?

“To find out, took the National Association of Realtors’ fourth-quarter data for median home prices and’s fourth-quarter average interest rate for 30-year, fixed-rate mortgages to determine how much of your salary it would take to afford the base cost of owning a home — the principal and interest — in 25 metro areas.”

They used industry standard 28% as the calculation for “front-end” debt ratios (the percentage of take-home income that could be tied up by a mortgage payment) and a 20% down payment.  I do not agree with this “standard” calculation, but HSH did mention that a higher income would absolutely need to be much higher to support taxes, insurance and maintenance required by owning a home.

At the low end:

Cleveland, OH, where the median home price is $112,800, mortgage rates are sitting at 4.43%, and the salary needed to support a mortgage was $19,435.17.  The monthly payment would be $453.49, but with take-home pay sitting somewhere around $1,375, I would not be comfortable with that payment AT ALL! That payment would be way too much for the average American family that was already in debt!

St. Louis – my city! As number 3 on the list, with the average home price clocking in at $130,300 and the income needed at $22,397.54.  How does this make me feel?  Thank you for asking!  First, I am gloating because I bought my home for $46,000 and it just appraised for $124,500.  Whoop Whoop!  Second, I make twice the income needed to buy in St. Louis, and even on my income I would NOT purchase a home at $130K!

Some Surprises -

Chicago (#10), with a median home price of $187,100 and income of $32,388.90 needed to buy.  I thought Chicago would be more expensive, but I suppose that homes in “bad” areas really don’t sell for all that much, which lowers the average home cost.

Pheonix (#11), with a median home price of $192,700 and necessary income of $32,811.94.  We thought about moving to Phoenix a year or two ago, and when we looked at houses, there were tons of brand new never-lived-in houses for $80K or less.  Maybe home prices have risen in the last year and a half, which is good news for the economy in Phoenix!

Washington DC – clocking in at #20, the median home price was listed as $368,000.  I have never been to DC, nor have I priced homes there, but doesn’t it seem as if that should be higher?

New York, NY – with a median home price of $386,300, again, shouldn’t that be higher?  Isn’t New York know for having an extremely high cost of living?

Most expensive

San Francisco with a median home price of $682,410 and income needed at $115,510.06. I totally thought that New York would be the big winner!

Some flaws – Big cities, as these all are, tend to have “good” and “bad” areas to live in.  Logically, in the “good” areas home prices will be significantly higher, and in the “bad” areas they will be dirt cheap.  While I am sure that there are some homes in the median price range, I get the feeling that most homes are either expensive or cheap, meaning you either have to pony up more cash, or live in a less than desirable area.  This flaws the median home price to be something unattainable.

What do you think?  How do home prices stack up in your area?




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My 7 Best Financial Moves

7 Best Financial Moves Retired By 40

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As you know from my 7 Worst Financial Mistakes, I have made some doozies!  I have also made some really good finances moves, and I believe that it is important to recognize the things we do right.  Most of my best financial moves center around school and career choices, but that’s where I’m at in my life, right now.  I graduated college in December of 2012, started my job January 2013, and life has been crazy ever since!

1. Taking advantage of the largest scholarship: Shopping around for colleges was not stressful for me.  I had two criteria: 1) the college must be at least 2 hours away from home and 2) find the absolute largest scholarships.  Luckily, I had an excellent ACT score, which made it easy, but I still comparison shopped. I chose the college 3 hours away and that offered me a $40,000 scholarship simply for attending.  I still ended up with $15,700 in student loans, but that is not too bad considering the school was around $32,000 per year!

2. Not switching majors: I think most people believe it is normal for college students to switch majors many times.  I have heard that in college you are supposed to “discover yourself” and the like.  I even knew a girl who changed major EIGHT times! However, I went in to college knowing exactly what I wanted to do (accounting) and I had specific goals set to get there.  In fact, not switching my major at all was one of the things that allowed me to graduate a semester early, saving even more money!

3. Taking dual credit-courses: Over the course of my junior and senior year of high school I managed to take 14 credits of dual-credit courses, earning me 14 college credits as well as 14 high school credits.  While they did cost me some money, the prices were at the community college rate – much cheaper than private college costs!  When I went to my 4-year college, all of those credits transferred towards my general studies courses!

4. Co-op program: This one is kind of along the same vein as dual-credit courses.  During my senior year of high school I had enough credits to graduate early, or I had the option to take half days at the community college in a career program.  I chose the EMT program out of several options available.  For the first half of the day, I attended college, and the second half was spent taking courses at my high school.  I learned valuable skills, and best of all – it was free!  Of course I picked up quite a few elective  college credits  along the way!

5. Getting married – One apartment instead of two, cooking for two people at the same time, one utility bill instead of two.  Well, you get the idea.  I got married at 19, which means I have saved a bunch of money! Saving money is never a reason to get married. but it certainly is a nice perk!

6. Using coupons – Some people fall into the “coupon trap” (buying things just because they have a coupon) but not me!  I use coupons for items that I am going to buy whether or not I have one, and put the difference in savings.  That coupon savings fund has come in handy more times than I can count!

7. Getting a job early – At 14, I marched myself into the office of my high school to get my worker’s permit.  From there, I started working as a waitress, and did that for the next 7 years, all through high school and college.  I got my current job as an accountant 2 weeks after graduating college – and for that I count myself very blessed.  Having a job taught me an excellent work ethic as well as the value of money – both of which have to be learned through experience.





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The eMeals Experiment


Photo Credit: eMeals

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Lately, our food budget has been a bit out of control because we have been so crazy busy, so when I saw a whole year of eMeals on Amazon Local for only $29 (normally $59), I jumped on it! Worst case scenario is that we hate it, and if that happens, I am okay with losing the $29.   While I am working 10-hour days, the Big Guy is in school and watching the baby, we have found that our nutrition, as well as our food budget has been suffering.  I was hoping that eMeals might be at least a partial solution to our problem.

Some Background on eMeals:

“Both Jane and Jenny are active moms, devoted wives, and very, very busy. Jane was frazzled over trying to pull off dinner for the family week after week. Her meal plans were scribbled on napkins and lost in her purse. So she went to work creating a better way to make meals happen. Along the way, Jane recruited Jenny, who is not only a fabulous cook, but also happens to be her sister.

Working with a talented team of professional meal planners, experienced home cooks and technical gurus, they developed eMeals to feed their families and preserve their sanity. Hundreds of thousands of relationships later, Jane and Jenny built a way to make moms’ lives easier — and to bring families together at mealtime.”

How Does it Work?

First, you pick your eating plan and your family size.  There are many different meal plans to choose from including Classic, Gourmet, Slow Cooker, and Portion Control.  Under some of the plans, you can even choose your favorite grocery store!  Personally, I love ALDI, so I chose that.  What is amazing about eMeals is that when you choose your grocery store, it puts that store’s prices on your grocery list, giving you a good idea of how much you are going to spend.  I have found this price list – at least at ALDI – to be fairly accurate.  If anything, the prices are lower because an item went on sale!

Simplify your busy life with eMeals

Second, each week a full meal plan as well as shopping list arrives in your inbox.  You can also log in and print it from you eMeals account.  While in your account you can also change your meal plan – anytime you want!

Third, shop according to the included shopping list.  The ingredients are divided into sections of the grocery store, and the list even includes “pantry staples” along one side that the recipes assume you have.  A quick glance at the staples tells you which ones you need to pick up and which ones you have on hand.

eMeals is endorsed by Dave Ramsey, and runs under the assumptions that $75 a week can feed dinner to a family of 4.  (Personally I think you could feed the family cheaper, but this is an excellent way to help when the budget is out of control). The choices and options from eMeals gives you a complete meal plan as well as a shopping list simplifying the meal process for me!

We are totally loving it!  The Big Guy is not good with meal ideas, but he can shop off a list and follow a recipe like a champ.  I cannot tell you how wonderful it is to not wonder “What’s for dinner?” Makes my life much simpler, that’s for sure!

Is your grocery budget out of control? Check out eMeals!




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