I’ve been talking about the house and budgeting a bit and I wanted to get into some discussion about budgeting and housing. This will be more about how I ‘think’ about it it terms of my budget more then anything, you’ll find it will kind of pan out the same. I’m not doing anything magical, but I still think the discussion is important.

I’ve mentioned before that in our month to month budget we’ve allotted $400 to cover rent and all utilities (internet, phone, gas, electricity). In the past we’ve lived with other people, making this possible in multiple different renting situations. Now, we’ve purchased our first home, but I still see it in a similar way.

Each month we have a $400 budget to cover the cost of our utilities and other recurring house costs, like taxes and Mortgage insurance. Even though tax and MI is added into our mortgage payment each month I think of them separately because they are costs that will be recurring even after we’ve paid off our mortgage.

The rest of the mortgage payment, I think of as an investment. Currently, my wife and I are making a lot more money then we ever have before and a ton more then we’ve needed to live on our month to month budget. The question, as I’ve asked before, is what to do with that money. After considering it last fall, we felt that it would be wise to invest that money in a house. Sounds familiar doesn’t it?

We could’ve taken that money and invested it in the stock market, or we could have given it all away, but the opportunity to pay off a house and never have ongoing housing costs (minus the $400 or so recurring) seems like a wise investment.

So, in my month to month budget we obviously have a mortgage payment, but I’ve only been considering the recurring costs as part of the equation. It might seem silly, but it makes sense to me. (did it make any sense to you?)