‘What if it’s not all you can do?’ This is how a mom could lose $400k on a house in her mid-30s
The average American family spends $1,400 a year on housing, according to the National Association of Realtors, but some homeowners are spending hundreds of thousands of dollars for a single home.
But what if you don’t have enough savings to pay for your home?
And what if your kids are in college, but your husband is not?
The answer to all those questions, of course, is a lot of money, according a new study from real estate firm PWC.
PWC analyzed real estate data from 2008 to 2015 and found that the average American homeowner spends $3,843 annually on their home.
That’s up from an average of $2,637 in 2008.
The average monthly payment for a one-bedroom home was $2.7 million in 2015, up from $2 million in 2008, according the report.
One in four households in the US has an annual mortgage payment of $1 million or more, according PVC.
“The average house in America costs about $600,000, but it’s a lot more for the typical home owner,” said PWC’s senior economist, Richard Greenfield.
“So if you have $400,000 or more in savings, that’s $300,000 you could spend on your home.”
“That’s an incredible amount of money to spend,” Greenfield said.
“If you have that much cash on hand, you could invest it and get a house that’s much better than what you’re paying now.”
PWC says that’s why it created this infographic that shows how much you could save if you invest your money in an asset that can grow at an accelerated pace.
“We are seeing the potential for home equity investments that are moving faster than many people realize,” said Greenfield in a statement.
Some other savings to consider: You could save a ton by putting away a home equity line of credit that will grow interest at 3% annually.
You can also get rid of a mortgage, because interest rates are set by the Federal Reserve, which sets the maximum amount of the mortgage it will accept.
If you want to buy a home in your 30s, consider saving money in your retirement savings account.
That will allow you to put away more money for retirement, Greenfield noted.
A 30-year-old could save about $8,000 per year by putting that money into a 401(k) that has a 3% annual compounded rate.
When you have kids, you’ll need to save up for their college education and health care expenses, too.
For example, if you’ve got a house and a 2-year old, you can put $10,000 into a 529 college savings plan that allows you to contribute $1.50 per month for 30 years.
In this case, you’d save $9,000 over 30 years, according PWC, which makes it the most affordable 529 college plan for a young family.
Other savings to get: When your kids get older, you may want to save money for your retirement, too, Greenwell said.
You can save for a car if you’re in your mid-40s, Greenpoint said.
If you’re younger, you don.
For a kid who’s just starting out in life, you might want to take on a new hobby, such as painting or painting with paint.
You can save up to $500 per month on your paint job, he said.
If the interest rates on your 529 college money plan aren’t good enough, you have another option.
Your state’s 529 savings plan, which you can sign up for at a bank, can save you up to 10% of your taxable income.
That means you can save more than 10% if you sign up on your own.
Check out PWC to learn more about 529 plans, which offer a way for low-income families to save and invest.
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