“Rich” but Broke - What can we cut?

[Anonymous]

Anonymous wrote:Why are people claiming a $900k house on $350k HHI is too much house? It's perfectly reasonable, particularly with the low interest rate environment when OP purchased it. The house is fine.

Agree. The problem is they have two earners instead of just one and $5k a month in childcare.

[Anonymous]

Why not think of the other side of the equation? Bring in more money instead of cut. Consider going back to big law or looking for an in-house job that pays more.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why are people claiming a $900k house on $350k HHI is too much house? It's perfectly reasonable, particularly with the low interest rate environment when OP purchased it. The house is fine.

Housing should ideally be only 2x your income not 3x.

How's life back there in the 1980s?

If you keep your mortgage at only 2x your income, life is grand. You can afford to take vacations and save for college and retirement. Able to pay for my kid's $80k/year college now without anyone taking loans. And by the time my oldest kid was in HS, the house was paid off.

[Anonymous]

Hi OP, just wanted to comment on here that I could have written your post, down to numbers and the former big law who had kids and realized it wasn’t the work balance lifestyle me or my spouse wanted. We pay roughly the same PITI and same income, and I too feel like we live paycheck to paycheck, although in reality we are saving for retirement and some towards a 529, so really, if we are saving something we aren’t doing it all wrong. And we have things we value, like a house in a good school district with quality (although expensive) childcare. I try to remind myself that when I get down about not saving cash for the fun things. You aren’t alone! And childcare prices just suck. It’s brutal.

[Anonymous]

Anonymous wrote:I don’t understand what we are doing wrong. What can we change/cut out?

Family of 4: 2 kids under 3
Gross income: 350K (net after taxes is approx $15K/month)
House Mortgage, Home Insurance, and Property Taxes: $5300/month (900K at 2.6% interest, Chevy Chase, MD). House has appreciated 500K since we bought it. Really good public schools so not inclined to move.
Childcare: $5000/month
Car payments and insurance: $1000/month for 2 cars

Between these fixed expenses, mobile phone bills, utilities, kids’ activities, diapers and other necessities for kids, groceries, healthcare expenses, house maintenance, etc. we are living paycheck to paycheck. We don’t buy anything we don’t immediately need. Dining out consists of fast food eaten at home, at most 1/week. Free activities on weekends with kids. What are we doing wrong?

Cool troll post bro.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why are people claiming a $900k house on $350k HHI is too much house? It's perfectly reasonable, particularly with the low interest rate environment when OP purchased it. The house is fine.

Housing should ideally be only 2x your income not 3x.

Ideally I'd have a trust fund, low cost and high quality child care would be available for all children, paid maternity leave would be available for all, there would be world peace.....Shall I keep going about what is ideal?

[Anonymous]

Move to Hagerstown. Savings = 62%

[Anonymous]

Mildly off topic, but child care is expensive because it is an important job and good caretakers need to be attracted to the jobs by decent salaries.

Lots of us act all upset by the cost of childcare, but let’s face it, that is in good part because we undervalue work that has traditionally been done by women. I hope that the rising cost of childcare is an indication that our society is becoming more aware of and respectful of the traditional work contributions of women.

[Anonymous]

OP, don't move. You'll end up paying the same amount for a crappier house once you factor in higher interest rates and transaction costs. Don't rent it out for a few years. This is your home, your community where you're raising your kids.

The cars were a mistake, but at this point just ride it out until the loans are paid off. Light at the end of the tunnel in 11-13 months.

Cut paid kids activities. Just do play dates and trips to the playground, library, etc.

Find cheaper childcare if possible, especially for the older one. Look for a full-day preschool. Try to find one that starts at 18 months or 2 years so you can put them at the same place soon.

No cable, just internet and one streaming service. Lots of kids shows on either prime or netflix. I assume you're already not buying clothing and other stuff unless absolutely necessary.

Hang in there. You'll get some relief in 11 months, then more in 13 months, then again once your oldest starts K.

[Anonymous]

Anonymous wrote:First problem is that you think you are rich, you are middle class and living pay check to paycheck. You need to drop the nanny and cars and live like the middle class with daycare and 15 year old shit cars

NP if you're going to be rude at least be correct. OP has stated MANY times her kids are in daycare.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why are people claiming a $900k house on $350k HHI is too much house? It's perfectly reasonable, particularly with the low interest rate environment when OP purchased it. The house is fine.

Housing should ideally be only 2x your income not 3x.

Ideally I'd have a trust fund, low cost and high quality child care would be available for all children, paid maternity leave would be available for all, there would be world peace.....Shall I keep going about what is ideal?

But you have control over what housing you choose. There are so many good choices between a large home in Chevy Chase and the housing projects in DC proper. You can't have it all---so you need to learn to budget and make choices. Or make choices about what job/pay you need if you choose the luxury home choice.

[Anonymous]

I'm 35 and so sick of the delusion of some of the older posters on here. "Spend 10k on a car! Drop the 5k nanny! Your house costs way too much!"

It is 2023. Housing and childcare costs are out of control. The average cost of a new car in America is over $48,000. My generation has been crippled by out of control student loans and multiple financial crises, not to mention being forced to parent young children during a global pandemic. Yes, OP has made expensive choices but guess what? This is WHAT THINGS COST in an expensive metro area in 2023.

[Anonymous]

Anonymous wrote:I'm 35 and so sick of the delusion of some of the older posters on here. "Spend 10k on a car! Drop the 5k nanny! Your house costs way too much!"

It is 2023. Housing and childcare costs are out of control. The average cost of a new car in America is over $48,000. My generation has been crippled by out of control student loans and multiple financial crises, not to mention being forced to parent young children during a global pandemic. Yes, OP has made expensive choices but guess what? This is WHAT THINGS COST in an expensive metro area in 2023.

100% in agreement! Op, get through those few years of childcare costs and it'll be better...or will it?! We have similar stats as you, slightly higher income, and one 1 kid left with childcare costs but everything has been getting more expensive and it's like cutting out one of those costs have done nothing. Taxes are up. Insurance up up up. HOA cost-- went from $575 to $900 a month since moving into our neighborhood. It's hard to get ahead when you budget for one thing and that thing goes up without anything changing "due to rising costs and the economy."

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why are people claiming a $900k house on $350k HHI is too much house? It's perfectly reasonable, particularly with the low interest rate environment when OP purchased it. The house is fine.

Agree. The problem is they have two earners instead of just one and $5k a month in childcare.

Yup. Having one big earner makes the numbers so much easier to deal with - since you wipe out much of the childcare costs. Plus with a spouse at home, you need to outsource so much less. Food, cleaning, maintenance, etc go down substantially. Plus the at-home spouse is essentially a full time job, but it isn't taxed.

But yeah, OP is living a big law life on dual GS-15 salaries. They need to realize us GS-15 may have that mortgage, but we have other compromises. Live in DC for PK-3, have one non-luxury car, use metro/bikes.

[Anonymous]

Anonymous wrote:I'm 35 and so sick of the delusion of some of the older posters on here. "Spend 10k on a car! Drop the 5k nanny! Your house costs way too much!"

It is 2023. Housing and childcare costs are out of control. The average cost of a new car in America is over $48,000. My generation has been crippled by out of control student loans and multiple financial crises, not to mention being forced to parent young children during a global pandemic. Yes, OP has made expensive choices but guess what? This is WHAT THINGS COST in an expensive metro area in 2023.

Eh, I'm the same age as you, but OP is spending a bit much overall. They are living a CCMD lifestyle on a Brookland or Takoma budget. We have the same salary and mortgage, but we don't pay for PK3/4 and have just one car since we live near public transit. CCMD would be fine for OP if one was big law. And no, half a mil of student debt is super atypical. Most of us has more like 20-30k in student debt. Super easy to manage. We just weren't going out buying 48k+ luxury SUVs in school. Hell a brand new toyota corolla is 21k.