Just bought our dream home — but we only have $200/month left after our monthly bills. What do we do?

Picture this: A young couple has just closed on their dream home. They’re debt-free and have $80,000 in savings. The wife is on maternity leave, and after crunching the numbers, they realize they’ll have just $200 left over each month after paying their bills.

It’s a classic case of being house poor — a financial situation where mortgage payments leave little room for anything else.

This hypothetical family isn’t really that hypothetical. According to the Bureau of Labor Statistics, U.S. households spent an average of 32.9% of their income on housing in 2023. That’s a significant chunk, but still manageable.

But, if that number creeps closer to 40% — especially with tight cash flow and limited income — it’s time to reassess.

Here are four ways this couple could stay on track financially.

When your financial margin is razor-thin, every dollar counts. The first step? Create a strict budget where every dollar has a job and no money goes to waste.

The couple should:

• Break down fixed expenses like mortgage payments, insurance and utilities.

• Track variable costs including groceries, gas, baby supplies and subscriptions.

• Eliminate non-essentials like takeout, streaming services or unused memberships.

Budgeting apps can help visualize spending and find areas to trim. Even cutting $50 here or $100 there can stretch that $200 into something more sustainable.

Their $80,000 in savings is a huge asset — but it needs to be used wisely.

Here’s a potential breakdown:

• $10,000 Emergency Fund: Set this aside and don’t touch it unless it’s a true emergency, like job loss or a major medical expense.

• $20,000–$30,000 Maternity Leave Cushion: Use this as a buffer for the next six months. That’s roughly $3,300–$5,000 per month to help fill in gaps while they’re living on one income.

• $40,000+ Long-Term Savings: Keep this intact for future goals like investing, education or improvements. Don’t dip into it unless absolutely necessary.

Assigning a purpose to each dollar can help the couple spend confidently without jeopardizing their long-term financial stability.