According to MP Dunleavy in her follow-up article to buying a new house, she says there are times when the money rules don't apply. Sounds like the typical mindset of many Americans, that they deserve the new car, bigger house, vacation, eating out, etc and they deserve it now.
Now in the article MP suggests they didn't do the math before they lept but they thought about it afterwards. I have to say that's a for sure reciepe for disaster, looking after you leap.
First they bought a house about 2x what their current mortgage is. Not a big deal if they were selling their first house, but they aren't.
Second they spend $5k/year in repairs on their current home. But somehow, MP suggests this $5k in repairs is no longer their worry. Hmm..interesting because renters ususally don't pay for repairs. Nor does she mention how she'll pay for it. Instead she says her new house doesn't need repairs. For now, I would say she'll love her new house, until something breaks and she hates it.
Third, her husband found a part-time job to cover the extra costs. Sounds to me like she is expanding their budget to fill all areas of their incomes instead of using the extra money to pay off debt, save for retirement. Getting caught up again in the two income trap.
Fourth, if you read her Women in Red updates here is the most recent. MP still has $7700 in consumer debt, and her retirement is at $16k for a couple in their 40s. They are only saving 8% of their income for retirement while saving instead of fancy vacations. I also don't see a 6 month cash Emergency Fund in place. This is a must for someone whose about to become a landlord. Also since she has a new baby, I also don't see any college savings, which is not necessary, I'd put over taking an annual vacation to Spain.
If I were a financial planner, I'd tell her she's crazy. She hasn't got the cashflow or cash on hand to whether any issues that may arise from landlording. She is still in debt, and way behind on her retirement savings. They need to stop going on vacations and start paying off debt seriously, and get into saving for retirement.
She previously stated she makes $80-90k/annually, but looking at her vital statistics they sure havn't saved like they have made that much.
So do the money rules not apply? Or is she just making excuses to have them not apply?