How to Budget Like a Millionaire

A solid spending plan is the non negotiable foundation here, because if you don't spend it, you can invest it. I am personally trying to become a multi millionaire a s a p. And my approach to spending helps make that possible. So i'm sharing my specific step by step process via my signature take at your own pace, on demand course. Budget like a millionaire with over 500 graduates so far. This is my post season playoff game. Get out your nopads and your tissues and strap in. Prepare yourself for a wild ride. We will be right back after this short break.

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When I did a rent (and invest) vs. buy analysis back in January 2021 with a 2.6% interest rate, the results were pretty neck-and-neck. As rates climbed this year, I figured it would be fun (I’m using the word “fun” loosely) to revisit the exact same scenario with the higher rate.

Depressingly, when we recorded this episode just last week, the rate was 5.95%. In the course of a single week, it’s now surpassed 7% as of publish (9/27/2022). How have the rates changed the math now and how does one realistically budget for a median home in the US today with 6+% 30-year fixed rates? Let’s find out.

I'm also joined by Andy Taylor, VP & GM of Credit Karma Home (https://www.creditkarma.com/) to discuss breakeven costs, refinancing, and borrowing against home equity.

Episode transcriptions can be found at https://www.podpage.com/money-with-katie-show/.

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Mentioned in the Episode

Summer 2022 interest rates: https://www.forbes.com/advisor/mortgages/mortgage-rates-08-31-22/
Early 2021 rent vs. buy analysis: https://moneywithkatie.com/blog/when-the-math-supports-buying-your-primary-residence-instead-of-renting
"Average net worth of homeowners," from CNBC: https://www.cnbc.com/select/average-net-worth-homeowners-renters
Quit Like a Millionaire by Kristy Shen: https://www.penguinrandomhouse.com/books/592323/quit-like-a-millionaire-by-kristy-shen-and-bryce-leung-foreword-by-jl-collins/
Data on home ownership averages: https://www.ngpf.org/blog/economics/qod-how-many-years-has-the-typical-american-homeowner-been-in-their-current-home/
Average median home value, from The Motley Fool: https://www.fool.com/the-ascent/research/average-house-price-state
Private mortgage insurance: https://www.investopedia.com/mortgage/insurance/
Average homeowners insurance: https://www.investopedia.com/insurance/homeowners-insurance-guide/
Average property tax rate: https://smartasset.com/taxes/texas-property-tax-calculator#UMznyF9L22
Average mortgage rate for 30-year term: https://www.bankrate.com/mortgages/todays-rates/mortgage-rates-for-monday-july-25-2022/
Amortization calculator: https://www.bankrate.com/mortgages/amortization-calculator/
Paying interest first in mortgage payments: https://www.investopedia.com/ask/answer/07/mortgagepayments.asp
Average broker's commission: https://www.ownerly.com/real-estate/average-commission-for-real-estate-agent/
Average closing costs: https://themortgagereports.com/35800/guide-to-mortgage-closing-costs-what-average-mortgage-costs-are-and-how-to-keep-yours-low
Average 3% rental increases: https://www.apartmenttherapy.com/average-rent-increase-percentage-268659
IRS Standard Deduction: https://brighttax.com/blog/irs-standard-deduction-expats
Rule of 150: https://www.businessinsider.com/renting-versus-buying-a-house-advice-math-rule-2019-9
28/36 Rule: https://www.investopedia.com/terms/t/twenty-eight-thirty-six-rule.asp