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What Does it Mean to Be House Poor? (and 5 Tips to Avoid it!)

by Becca Stewart - April 26th, 2022

What Does it Mean to Be House Poor? (and 5 Tips to Avoid it!)

Buying a house is exciting. Getting the keys! Painting the walls whatever color you want! (Goodbye, military housing white). No answering to landlords!

But when you buy a house you really can’t afford, the fun doesn’t last long. What does it mean to be house poor? How can you avoid it? And what can you do if you’re already there?

What does it mean to be house poor?

We’ve all heard the term, but what does it mean to be house poor? There’s no official definition, but being house poor means the costs associated with your home – mortgage, utilities, taxes, and maintenance – make it difficult to save money or afford other necessities. If you’re struggling to afford groceries after paying the mortgage, you might be house poor.

Military home buyers and military BAH

Mortgage lenders and other financial experts suggest spending 30% or less of your monthly income on housing. That includes everything: mortgage, electricity, water and sewer, HOA fees, maintenance costs, taxes, insurance – the works. 

Military BAH (basic allowance for housing) is intended to cover the amount you’d expect to pay for housing. Your BAH is determined by the military member’s rank, marital and familial status, and the zip code at the current duty station. Areas with higher housing costs will have a higher BAH.

Your BAH can help guide your home buying process. Purchasing a home far above your monthly BAH is one sure-fire way to become house poor.

What’s your BAH? Use our BAH calculator to determine the housing allowance at your next location

How to avoid being house poor: 5 tips for military families

You don’t have to be house poor, even if you’re moving to a high-cost area. Here’s how to avoid being house poor with your next home purchase:

1. Pay down debts

Before your next PCS, pay down your outstanding debts as much as possible. Not only will this free up some added cash, but it will also improve your credit score. Mortgage lenders use your credit score to determine your eligibility and set your interest rate. A higher credit score means a lower interest rate, adding up to significant savings.

2. Buy below your BAH

Your monthly BAH should cover your mortgage, plus your utilities and other expenses. Before you start house hunting, set a budget – and stick to it. Be upfront with your real estate agent about your budget and ask to only see homes within your designated price range.

Buying below your BAH prevents you from being house poor. When you spend less on your home, you can spend more money exploring your new location or spending time with new friends. 

3. Put more money down

Once you’ve paid down your debts, consider saving money for a down payment. Loan programs like VA or FHA loans don’t require a down payment. But putting more money down up front means a lower monthly payment, freeing up cash for other expenses.

4. Be realistic about expenses

Speaking of expenses, know what you’re up against before buying a home. Ask the current homeowners for their average monthly electric, water, and gas bills. Research the cost of living at your next duty station. Make a list of every expense, including insurance, HOA, trash removal, internet, and taxes. Then, pad your budget to account for maintenance costs, both routine and unexpected. 

Knowing your monthly expenses ahead of time will help you make a more informed home buying decision.

5. Have an emergency fund

Buying a more affordable home also allows you to set money aside for when something inevitably breaks. Let’s face it: nearly every home will face some kind of unexpected calamity (probably during a deployment, too). If you live below your means and create a nest egg for emergencies, these household mishaps won’t be so financially damaging. 

Bonus tip: Getting the best mortgage loan at the best possible interest rate can save you money every month. Know your loan options before you start house hunting. Shop around to find an experienced lender who can get you a great rate. Find military-friendly mortgage lenders here

What if we are already house poor?

It’s no fun to have all your money tied up in your home. If your house is stealing your joy – and your bank account right along with it – here are a few ways to take back the control:

Create a budget

Sometimes the best solution is the simplest. Take a hard look at your monthly spending, see where you can cut back, and then stick to your budget. 

Reduce monthly expenses

While you’re making your budget, find places to trim your spending. Can you get rid of streaming services? Make more meals at home? Exercise for free at the on-base gym instead of paying an off-base membership fee? Trade in your expensive car for something with a lower monthly payment?

Reducing monthly expenditures can help pad your bank account, keeping you from feeling quite so house poor.

Consider moving

In some cases, there’s no better way to prevent being house poor than moving to a more affordable place. While this option isn’t realistic for everyone, those with significant financial difficulties might consider it. 

Get handy

Reduce maintenance costs and service call fees by learning to fix things yourself. YouTube is a great teacher; you can find tons of home improvement and maintenance videos to help you tackle projects yourself.  

Rent it out

If you have an extra room or two, consider renting them out to help pay the mortgage or other monthly housing expenses. If you live near a military installation, consider renting out rooms by the week or month to give other military members a place to stay during long TDYs or while they geo-bach

Luckily, we are military families. Most of the time, that means the house we’re in now isn’t the house we will live in forever. If you’re only a year or two away from another PCS, your best option might be to grin and bear it. Reduce expenses where possible, consider supplementing your income if necessary, and follow the above rules the next time you PCS

headshot of Becca Stewart

Becca Stewart

Becca Stewart is an Air Force Spouse, mother of two, freelance writer, and sufferer of Wanderlust. Originally from Colorado, she enjoys anything outdoors, especially if there’s snow involved. She is a travel fanatic, always looking for her next great adventure. As a full-time writer, Becca works closely with several nonprofit organizations and is a passionate advocate for human rights and military families. Learn more at