Today’s post is part of a new series called “Life by De$ign,” which explores non-traditional choices that women make in order to make their finances work.
I’m a 33-year-old financial advisor, and you can call me Joanna. I invest andmanage millions of dollars for people.
So why am I moving my husband and two toddlers into my dad’s house?
Because we’ve been living beyond our means, (LBOM). Like the shoemaker’s kids who go barefoot, I tell other people what to do with their savings while my family has none.
LBOM, or the “L-Bomb,” as I like to call it, began when my husband and I bought our first house in 2005. We thought that to be “real adults” we had to buy a house. It was the height of the market, and we’d been outbid on four previous offers. Our desperation to buy caused us to act irrationally.
After using all of our savings for a 5% down payment, we took on a mortgage payment that ate up 30% of our net monthly income. I suggest to clients that it should never be more than 20%.