Life is Easy in NW DC on $300k, AMA

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't think $5K per year to charity on an income of $300K is the least bit generous.

We have a similar income and two kids but we give around $15K which I also don't consider enough or particularly generous.

We are so privileged and fortunate. $5K? Good grief.

I do. I donate $500 on the same income.

You make $300,000 and donate $500?! No comment.

It's his money. Donating even $1 above taxes is completely voluntary.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't think $5K per year to charity on an income of $300K is the least bit generous.

We have a similar income and two kids but we give around $15K which I also don't consider enough or particularly generous.

We are so privileged and fortunate. $5K? Good grief.

I do. I donate $500 on the same income.

You make $300,000 and donate $500?! No comment.

It is very hard to find a worthwhile cause. I would rather give money to people I know, like relatives with health care expenses.

[Anonymous]

You charity critics are nuts. There are a million factors to judge somebody by. Does this family volunteer? What charities do they give to? I'd venture that giving $5k to Red Cross does far less than giving $1k to Marthas Table or even donating goods and services to local orgs. Do they shop responsibly? I'd rather spend an extra $5k per year on groceries and paper products, etc that are made by responsible companies and arguably that makes a bigger difference. I mean, doesn't it make you a more moral person to not drive a car than to give $5k to charity? Doesn't it make you "better" to "live small" than it does to throw your money around at some obnoxious $10k/table event? I personally think so.

[Anonymous]

Anonymous wrote:OP-thanks for doing this thread. My spouse and I also make about $300K combined and feel like we want for nothing (and yes, we had student loans and bought a home recently with a downpayment we saved on our own with no family help). We don't have luxury cars or send our kids to private school, but we're able to eat out and travel regularly and give money to charity. I read these posters talking about how 300K is middle class and barely getting by and I just can't understand it. My kids have so many more luxuries than I did while growing up in a household with a total income of 45K, which was also considered middle class (and I never felt poor growing up!)

I could have written this post. All of it. Except we have an income of about $100k.

[Anonymous]

Anonymous wrote:I see so much confusion on here, and I thought I'd try to clear some stuff up. My central point is that life is easy, downright cushy even, on $300k per year gross income in the DC area. My wife (38) and I (40) raise our two kids (6 and 3) in upper NW DC and our gross income in 2016 was $300k. People who suggest they are scraping by at this income are either deluding you or deluding themselves.

I am happy to answer any questions and dispel any other related myths you may see on DCUM.

Some of our details:
- ~$300k gross income
- $about 70k in total income and payroll taxes
- PITI is about $3500 (we bought a 4 BR house near AU park in 2012 for low $800s. Before that we owned a small condo in Logan Circle)
- Public school (but we did daycare for both kids from 4 months - 3 years)
- I graduated from law school in 2004 with about $150k in student loans. Those are all paid off now.
- We don't do fancy luxury cars, but it's not bargain basement either. The last car we bought was in 2012 and it cost about $30k.
- We eat at nice restaurants weekly, travel several times a year, and buy more consumer goods (clothes for her, gadgets for him) than we probably should
- We save amply $36k per year in the 401k/TSP, $10k per year in the 529s, and $30-40k in the taxable brokerage account. Our savings balances include $750k in retirement accounts, $60k in 529s (kids are still young), and $250k in taxable brokerage accounts.
- We give to charity an amount that I think is generous, about $5k per year usually.

300k is peanuts for a dual income couple. 300k is a decent income for a husband with a stay at home wife and no child care costs etc. I say you are upper middle class. I remember when I made 300k a year, buying junkyard parts used car, keeping heat at 60, dollar menu McDonald's, selling scrap at metal place, mowing my own lawn was not fun.

[Anonymous]

Anonymous wrote:You charity critics are nuts. There are a million factors to judge somebody by. Does this family volunteer? What charities do they give to? I'd venture that giving $5k to Red Cross does far less than giving $1k to Marthas Table or even donating goods and services to local orgs. Do they shop responsibly? I'd rather spend an extra $5k per year on groceries and paper products, etc that are made by responsible companies and arguably that makes a bigger difference. I mean, doesn't it make you a more moral person to not drive a car than to give $5k to charity? Doesn't it make you "better" to "live small" than it does to throw your money around at some obnoxious $10k/table event? I personally think so.

I don't give to private charity. I grew up dirt dirt poor and no charity helped us. They pocket the money. My federal tax dollars is charity.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I see so much confusion on here, and I thought I'd try to clear some stuff up. My central point is that life is easy, downright cushy even, on $300k per year gross income in the DC area. My wife (38) and I (40) raise our two kids (6 and 3) in upper NW DC and our gross income in 2016 was $300k. People who suggest they are scraping by at this income are either deluding you or deluding themselves.

I am happy to answer any questions and dispel any other related myths you may see on DCUM.

Some of our details:
- ~$300k gross income
- $about 70k in total income and payroll taxes
- PITI is about $3500 (we bought a 4 BR house near AU park in 2012 for low $800s. Before that we owned a small condo in Logan Circle)
- Public school (but we did daycare for both kids from 4 months - 3 years)
- I graduated from law school in 2004 with about $150k in student loans. Those are all paid off now.
- We don't do fancy luxury cars, but it's not bargain basement either. The last car we bought was in 2012 and it cost about $30k.
- We eat at nice restaurants weekly, travel several times a year, and buy more consumer goods (clothes for her, gadgets for him) than we probably should
- We save amply $36k per year in the 401k/TSP, $10k per year in the 529s, and $30-40k in the taxable brokerage account. Our savings balances include $750k in retirement accounts, $60k in 529s (kids are still young), and $250k in taxable brokerage accounts.
- We give to charity an amount that I think is generous, about $5k per year usually.

300k is peanuts for a dual income couple. 300k is a decent income for a husband with a stay at home wife and no child care costs etc. I say you are upper middle class. I remember when I made 300k a year, buying junkyard parts used car, keeping heat at 60, dollar menu McDonald's, selling scrap at metal place, mowing my own lawn was not fun.

Lol what are you talking about? OP listed a $11k restaurant budget and $9k on groceries. That's not eating on the McDonald's dollar menu. I doubt he's keeping the heat at 60 or selling scrap metal. As I'm typing this, I'm realizing it was probably sarcasm on your part, but I'll just hit enter anyway, lol.

[Anonymous]

Lol @ people minding what OP thinks what "generous" means. If OP came from a family without much means, 5k might in fact be a lot just because of his upbringing and not his current salary. But whatever, OP, you do you and people will always be salty.

Or you coasting in terms of career or are there plans on coming back out in the private sector?

[Anonymous]

OP, I hope you are my future self, coming back to tell me everything is going to work out.

I think we're 5 years behind you, on a very similar seeming track. My wife (33) and I (35) live in a small-ish condo in the city. We just had our first kid, and we're looking at (but also kind of dreading) moving to the burbs or maybe (if we can afford it) upper NW DC. We currently make about $260k, and we're doing fine for now, but increasing the housing costs and/or adding private school tuition seems like it will kill our margins! You are giving me some hope!

[Anonymous]

Anonymous wrote:

Anonymous wrote:I see so much confusion on here, and I thought I'd try to clear some stuff up. My central point is that life is easy, downright cushy even, on $300k per year gross income in the DC area. My wife (38) and I (40) raise our two kids (6 and 3) in upper NW DC and our gross income in 2016 was $300k. People who suggest they are scraping by at this income are either deluding you or deluding themselves.

I am happy to answer any questions and dispel any other related myths you may see on DCUM.

Some of our details:
- ~$300k gross income
- $about 70k in total income and payroll taxes
- PITI is about $3500 (we bought a 4 BR house near AU park in 2012 for low $800s. Before that we owned a small condo in Logan Circle)
- Public school (but we did daycare for both kids from 4 months - 3 years)
- I graduated from law school in 2004 with about $150k in student loans. Those are all paid off now.
- We don't do fancy luxury cars, but it's not bargain basement either. The last car we bought was in 2012 and it cost about $30k.
- We eat at nice restaurants weekly, travel several times a year, and buy more consumer goods (clothes for her, gadgets for him) than we probably should
- We save amply $36k per year in the 401k/TSP, $10k per year in the 529s, and $30-40k in the taxable brokerage account. Our savings balances include $750k in retirement accounts, $60k in 529s (kids are still young), and $250k in taxable brokerage accounts.
- We give to charity an amount that I think is generous, about $5k per year usually.

300k is peanuts for a dual income couple. 300k is a decent income for a husband with a stay at home wife and no child care costs etc. I say you are upper middle class. I remember when I made 300k a year, buying junkyard parts used car, keeping heat at 60, dollar menu McDonald's, selling scrap at metal place, mowing my own lawn was not fun.

I certainly hope you're joking.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, still really curious about how you can save so much without scrimping at all. What is your monthly take home (after taxes, tsp/401k, health insurance, etc.). And for the TSP/401K, are you doing regular or roth?

I've posted my budget upthread. Take a look. We do traditional 401k/TSP, not Roth.

From what you posted, it looks like you are taking about $15K home a month. That seems pretty high for an annual salary of $300K.

My last paycheck was 3342.08 after all the deductions. I get paid biweekly. My wife's paychecks are like 3100 something but she only gets paid twice a month. So, I think that works out to more less than 14k "take home" per month. Is this easier way to break things down for you? I don't usually think about things this way. "Take home" is a weird concept to me, because it seems to treat 401k (savings) the same as health insurance (spending) and taxes (a different kind of spending). Not to mention all the complications about putting things in FSAs, or how many exemptions you claim, or whether you get a tax refund, etc. But, does that help your question?

That works out to be approx. $13.5 take home every month.

Yes, it's a little more than $13.5k "take home" per month. That's right. Is everything clear now?

Not really. That's a total of about $160k take home, but the after tax expenses you listed are $20k over. That's not including the $5k annual donation (which I agree is generous):

74k taxes
---
36k 401k contribs
36k brokerage savings
10k 529
---
48k housing (includes PITI, utilities, and various home improvement/maintenance items)
21k daycare
11k groceries
9k insurance and medical
2k verizon
---
11k restaurants
11k clothes and other merchandise
9k travel
14k misc/uncategorized

I think I addressed your comment as well in my last post. You think it's off by about $20k, but I think you're not accounting for tax refund (which went straight to the brokerage), plus the pre-tax components of daycare and medical (which don't come out of "take home"). I think that makes up for most of the difference. I also think it's highly possible my expenses included some reimbursable expenses from work. I didn't include as "income" the reimbursements we got from work travel, but they'd still likely show up in the expenses I listed. Lastly, I rounded all of these categories and rely on Mint to spit everything out for me. I'm not shocked if that's not 100% lined up.

$25K after tax difference is not a negligible amount.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I see so much confusion on here, and I thought I'd try to clear some stuff up. My central point is that life is easy, downright cushy even, on $300k per year gross income in the DC area. My wife (38) and I (40) raise our two kids (6 and 3) in upper NW DC and our gross income in 2016 was $300k. People who suggest they are scraping by at this income are either deluding you or deluding themselves.

I am happy to answer any questions and dispel any other related myths you may see on DCUM.

Some of our details:
- ~$300k gross income
- $about 70k in total income and payroll taxes
- PITI is about $3500 (we bought a 4 BR house near AU park in 2012 for low $800s. Before that we owned a small condo in Logan Circle)
- Public school (but we did daycare for both kids from 4 months - 3 years)
- I graduated from law school in 2004 with about $150k in student loans. Those are all paid off now.
- We don't do fancy luxury cars, but it's not bargain basement either. The last car we bought was in 2012 and it cost about $30k.
- We eat at nice restaurants weekly, travel several times a year, and buy more consumer goods (clothes for her, gadgets for him) than we probably should
- We save amply $36k per year in the 401k/TSP, $10k per year in the 529s, and $30-40k in the taxable brokerage account. Our savings balances include $750k in retirement accounts, $60k in 529s (kids are still young), and $250k in taxable brokerage accounts.
- We give to charity an amount that I think is generous, about $5k per year usually.

300k is peanuts for a dual income couple. 300k is a decent income for a husband with a stay at home wife and no child care costs etc. I say you are upper middle class. I remember when I made 300k a year, buying junkyard parts used car, keeping heat at 60, dollar menu McDonald's, selling scrap at metal place, mowing my own lawn was not fun.

I certainly hope you're joking.

Of course it's a joke, internet. We actually looked into taking scrap metal to a place that gives you money and found out that, unless you have tons and tons, it doesn't make sense at all, it wouldn't cover the gas costs.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, still really curious about how you can save so much without scrimping at all. What is your monthly take home (after taxes, tsp/401k, health insurance, etc.). And for the TSP/401K, are you doing regular or roth?

I've posted my budget upthread. Take a look. We do traditional 401k/TSP, not Roth.

From what you posted, it looks like you are taking about $15K home a month. That seems pretty high for an annual salary of $300K.

My last paycheck was 3342.08 after all the deductions. I get paid biweekly. My wife's paychecks are like 3100 something but she only gets paid twice a month. So, I think that works out to more less than 14k "take home" per month. Is this easier way to break things down for you? I don't usually think about things this way. "Take home" is a weird concept to me, because it seems to treat 401k (savings) the same as health insurance (spending) and taxes (a different kind of spending). Not to mention all the complications about putting things in FSAs, or how many exemptions you claim, or whether you get a tax refund, etc. But, does that help your question?

That works out to be approx. $13.5 take home every month.

Yes, it's a little more than $13.5k "take home" per month. That's right. Is everything clear now?

Not really. That's a total of about $160k take home, but the after tax expenses you listed are $20k over. That's not including the $5k annual donation (which I agree is generous):

74k taxes
---
36k 401k contribs
36k brokerage savings
10k 529
---
48k housing (includes PITI, utilities, and various home improvement/maintenance items)
21k daycare
11k groceries
9k insurance and medical
2k verizon
---
11k restaurants
11k clothes and other merchandise
9k travel
14k misc/uncategorized

I think I addressed your comment as well in my last post. You think it's off by about $20k, but I think you're not accounting for tax refund (which went straight to the brokerage), plus the pre-tax components of daycare and medical (which don't come out of "take home"). I think that makes up for most of the difference. I also think it's highly possible my expenses included some reimbursable expenses from work. I didn't include as "income" the reimbursements we got from work travel, but they'd still likely show up in the expenses I listed. Lastly, I rounded all of these categories and rely on Mint to spit everything out for me. I'm not shocked if that's not 100% lined up.

$25K after tax difference is not a negligible amount.

I don't know, it seems like you're really stretching it.

I've mentioned the tax refund, and the pretax contributions to daycare and medical insurance, which you're ignoring. That covers about $17k of the difference so there's only $8k discrepancy. If you're going to discount my entire post because I can't line up $8k expenses with my "take home" pay, I guess that's your decision, but I think you should consider a couple things that would easily explain the $8k.

First, I mentioned work travel -- which would cause some incidentals to show up in my expenses that didn't come out of my take home pay (bc they were reimbursed). Those reimbursements add up and I'd very conservatively say that's about $3k per year. It's probably more. We also get other reimbursements from work that I haven't mentioned (bc they seem de minimis to me and don't affect the point of the thread) -- like for metro and and cell phone data, and even my wife's gym membership. My metro reimbursement alone is about $1k for me per year. My wife gets one too but I don't know how much hers is. The data reimbursement is another 70/mo (840 a year). Those things wouldn't be reflected in our monthly "take home" and yet they'd still show up on our expenses.

After all of that, you're really left with a $2k rounding error. It's pretty trivial.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, still really curious about how you can save so much without scrimping at all. What is your monthly take home (after taxes, tsp/401k, health insurance, etc.). And for the TSP/401K, are you doing regular or roth?

I've posted my budget upthread. Take a look. We do traditional 401k/TSP, not Roth.

From what you posted, it looks like you are taking about $15K home a month. That seems pretty high for an annual salary of $300K.

My last paycheck was 3342.08 after all the deductions. I get paid biweekly. My wife's paychecks are like 3100 something but she only gets paid twice a month. So, I think that works out to more less than 14k "take home" per month. Is this easier way to break things down for you? I don't usually think about things this way. "Take home" is a weird concept to me, because it seems to treat 401k (savings) the same as health insurance (spending) and taxes (a different kind of spending). Not to mention all the complications about putting things in FSAs, or how many exemptions you claim, or whether you get a tax refund, etc. But, does that help your question?

That works out to be approx. $13.5 take home every month.

Yes, it's a little more than $13.5k "take home" per month. That's right. Is everything clear now?

Not really. That's a total of about $160k take home, but the after tax expenses you listed are $20k over. That's not including the $5k annual donation (which I agree is generous):

74k taxes
---
36k 401k contribs
36k brokerage savings
10k 529
---
48k housing (includes PITI, utilities, and various home improvement/maintenance items)
21k daycare
11k groceries
9k insurance and medical
2k verizon
---
11k restaurants
11k clothes and other merchandise
9k travel
14k misc/uncategorized

I think I addressed your comment as well in my last post. You think it's off by about $20k, but I think you're not accounting for tax refund (which went straight to the brokerage), plus the pre-tax components of daycare and medical (which don't come out of "take home"). I think that makes up for most of the difference. I also think it's highly possible my expenses included some reimbursable expenses from work. I didn't include as "income" the reimbursements we got from work travel, but they'd still likely show up in the expenses I listed. Lastly, I rounded all of these categories and rely on Mint to spit everything out for me. I'm not shocked if that's not 100% lined up.

$25K after tax difference is not a negligible amount.

I don't know, it seems like you're really stretching it.

I've mentioned the tax refund, and the pretax contributions to daycare and medical insurance, which you're ignoring. That covers about $17k of the difference so there's only $8k discrepancy. If you're going to discount my entire post because I can't line up $8k expenses with my "take home" pay, I guess that's your decision, but I think you should consider a couple things that would easily explain the $8k.

First, I mentioned work travel -- which would cause some incidentals to show up in my expenses that didn't come out of my take home pay (bc they were reimbursed). Those reimbursements add up and I'd very conservatively say that's about $3k per year. It's probably more. We also get other reimbursements from work that I haven't mentioned (bc they seem de minimis to me and don't affect the point of the thread) -- like for metro and and cell phone data, and even my wife's gym membership. My metro reimbursement alone is about $1k for me per year. My wife gets one too but I don't know how much hers is. The data reimbursement is another 70/mo (840 a year). Those things wouldn't be reflected in our monthly "take home" and yet they'd still show up on our expenses.

After all of that, you're really left with a $2k rounding error. It's pretty trivial.

But this is the point. You're saying "look at all the things I pay for - $11k/year for dinners, etc." but then you're not actually paying for it out of your take home. Cell phones, gym memberships, metro reimbursements, dinners - those are the expenses that add up.

[Anonymous]

We have no mortgage, no loans, no credit card debt, no vehicle payments and the big one, NO KIDS. We live on half of your $300k and save half or more.