I truly cannot wrap my head around our HHI jump from $150k to $260k

[Anonymous]

Oh gosh of course you should take a vacation. You've worked hard, you are young, you are earning a lot and doing well!

Re: the car - do you need it now? If not then hold off. If so then get it.

I'd wait on the boat personally - go rent one from time to time and enjoy that, but wait to buy one until you have more money stashed away. Then you probably still don't actually want to buy one unless you actually live by the water and will actually use it all the time.

[Anonymous]

Bank the extra money for six months. See how much accumulates. What is your reserve fund? Make sure your have six months expenses in it. Then, with what’s left over, factor in a car purchase. If the old car still runs, then keep waiting until you have the cash to pay for it. At your new income with your current expenses, you shouldn’t need to take a car note.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I feel stupid, but my brain does not make sense of the math. We will absolutely NOT fall victim to lifestyle creep. We are already in our forever home. We both grew up LMC and understand how fortunate we are to have already started 529s, Roth IRAs on top of 401k etc. That is where our money will go- into the future.

That being said, we would like to make one purchase to celebrate- a vacation, boat (used), or (used) car for DH as his has 356,000 miles. I truly cannot comprehend what we can afford.

We have a 5yo and a 1yo. We are 31/32yo. Here's an overview of our finances:

HHI 260K
Bought our house 5 years ago (tomorrow!) for $325,000 by putting down $45k with a 30 year mortgage. We just got out of PMI.
$2400/mon mortgage, taxes, insurance
$1400/mon daycare (older DC will be in public next year)
$4000 left on my car (will pay off eventually we have 0% interest)
No student loans or other debt

We have been putting $500/mon into 529s, maxing 401Ks, I have a Roth IRA on top of that, and we have $40,000 emergency fund.

Can we make a $10k vacation, $15k boat, or $25k vehicle purchase without worrying? Not planning on changing anything else except adding more monthly to 529s.

Oh bless your heart. You’re already in that slippery slope.

Because you grew up LMC is going to be even harder for you especially since you think you are now filthy rich.

You are a nasty person with nothing to add. Go away.

[Anonymous]

Under no circumstances should you buy a boat. That would be really unwise due to the ongoing expenses.

What kind of shape is the car in? If it’s unsafe or likely to die soon, I’d prioritize getting a few or good used one. If you expect it to last a couple more years, I’d definitely start planning a vacation. Doesn’t have to be anything fancy, but your older child is at that age where there is a lot of wonder and excitement about exploring new places, and it’s past time for you all to start making good family vacation memories.

[Anonymous]

Anonymous wrote:Under no circumstances should you buy a boat. That would be really unwise due to the ongoing expenses.

What kind of shape is the car in? If it’s unsafe or likely to die soon, I’d prioritize getting a few or good used one. If you expect it to last a couple more years, I’d definitely start planning a vacation. Doesn’t have to be anything fancy, but your older child is at that age where there is a lot of wonder and excitement about exploring new places, and it’s past time for you all to start making good family vacation memories.

Even if they do buy a car they can take a vacation! My parents didn't earn anywhere near $260k when I was growing up and we took vacations. Get in the car and rent a house somewhere. Buy cheap flights on Southwest and go somewhere you've never been. It doesn't have to be a first class trip to Paris!

[Anonymous]

Anonymous wrote:Set up a separate savings account and move the extra cash into it. Once you have $25k in the account, then make a decision about what you want to do with it.

This is great advice. And DO NOT BUY A BOAT.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Under no circumstances should you buy a boat. That would be really unwise due to the ongoing expenses.

What kind of shape is the car in? If it’s unsafe or likely to die soon, I’d prioritize getting a few or good used one. If you expect it to last a couple more years, I’d definitely start planning a vacation. Doesn’t have to be anything fancy, but your older child is at that age where there is a lot of wonder and excitement about exploring new places, and it’s past time for you all to start making good family vacation memories.

Even if they do buy a car they can take a vacation! My parents didn't earn anywhere near $260k when I was growing up and we took vacations. Get in the car and rent a house somewhere. Buy cheap flights on Southwest and go somewhere you've never been. It doesn't have to be a first class trip to Paris!

Yeah, you’re right. Same was true for us as a military family, and my parents were afraid to fly. Still had a lot of great trips. My advice should have instead been to plan the vacation expenses in a way that will make it painless to buy a new car at the time of its anticipated demise.

[Anonymous]

Our HHI is over a million and I would NEVER buy a boat. We also drive American cars (Chevy sedan and Jeep) for 8+ years. Like that dumb expression "nothing tastes as good as skinny feels"...nothing material feels as good as money in the bank for a rainy day.

[Anonymous]

Anonymous wrote:Set up a separate savings account and move the extra cash into it. Once you have $25k in the account, then make a decision about what you want to do with it.

^^This

[Anonymous]

Anonymous wrote:If you truly don't want to fall victim to lifestyle creep, take that extra 100000 and bank it. Nothing makes money faster than money. Invest it wisely and you can be a lot more wealthier.

+1 This is the key. If you are comfortable with your lifestyle, save the gain and you will sleep better.

[Anonymous]

Why are so few people saying to get a new car? I didn’t even know a car could last for 350,000 miles. The repair bills have to be high and of course it will need to be replaced soon, right? OP what kind of car is it?

[Anonymous]

We went from $150 to $260 and I feel like we have less money now. Our mortgage is lower than yours and we don’t have daycare costs.

[Anonymous]

Anonymous wrote:Yes, Op. Not sure what the point of making more is if you decide to never spend any of it. Buy the new car or boat or vacation, continue saving, and enjoy the flexibility a bit.

Um...we saved it so we could buy a nice house. Saving came in very handy when we divorced.

[Anonymous]

We made 300k and never went on vacation for 10k or bought anything expensive like a boat. You don't make enough for a boat and ongoing expenses. Take a modest vacation. There is no need to upgrade your car.

[Anonymous]

Anonymous wrote:Under no circumstances should you buy a boat. That would be really unwise due to the ongoing expenses.

What kind of shape is the car in? If it’s unsafe or likely to die soon, I’d prioritize getting a few or good used one. If you expect it to last a couple more years, I’d definitely start planning a vacation. Doesn’t have to be anything fancy, but your older child is at that age where there is a lot of wonder and excitement about exploring new places, and it’s past time for you all to start making good family vacation memories.

This a ridiculous comment. Not every family goes on vacation. It is a luxury. And no such thing as "past time"--vacation is not any better than spending regular time together. No one needs a 10k vacation. Maybe once in a lifetime but regularly? No way.