What income is needed to live the american dream - close in DC area?

[Anonymous]

250-260k is the answer (if the 2 kids are early elementary. If they’re in daycare and at the same time,bump this up closer to 300k), Specifically, that gives an effective tax rate of between 15-18% with state and local taxes of 5-6%.

700k house assuming you put down 20%) means $2500 approx PITI + 500/month to save in a house repairs fund. - 3k

Retirement- if early in your careers, something in the range of 3k/month into 401ks will do it.

College savings for 2 young kids, for 100% funding at in state public- 2k/month

2 cars, insurance, fuel- used, 25-35k each car financed - $1,600/mo

Comfortable domestic vacation for 4 at 8k (650/mo)

Additional Rainy day savings, 1k/month

Household- groceries + some eating out), Utilities, phone, cable; life insurance, clothing misc, kids activities- 3,500

Charitable giving- 200/month

And then adjust according to your priorities and preferences.

[Anonymous]

Oh and I’ll add- this is still a generous budget because sometimes you just don’t do all of the above, all at once. Some years it’s staycations or day trips. Maybe you do a little less in the kids 529s sometimes. Maybe you drive a paid off beater for awhile. Lots of ways to flex on this. Housing and childcare are tough. Big line item that can be hard to compromise on. Contrary to DCUMs most prolific posters, it is possible to find a house for 700k within a 45 minute drive. Just not a 6k square foot new build in Arlington.

[Anonymous]

Part of this isn’t going to be relevant- housing bubble will have to break at some point. After the orange man, we will see the cost of housing and housing materials decrease. Yes, this means less equity, but it also means a better life for the younger people.

[Anonymous]

Anonymous wrote:Oh and I’ll add- this is still a generous budget because sometimes you just don’t do all of the above, all at once. Some years it’s staycations or day trips. Maybe you do a little less in the kids 529s sometimes. Maybe you drive a paid off beater for awhile. Lots of ways to flex on this. Housing and childcare are tough. Big line item that can be hard to compromise on. Contrary to DCUMs most prolific posters, it is possible to find a house for 700k within a 45 minute drive. Just not a 6k square foot new build in Arlington.

45 minute drive in rush hour with good schools?

[Anonymous]

Anonymous wrote:250-260k is the answer (if the 2 kids are early elementary. If they’re in daycare and at the same time,bump this up closer to 300k), Specifically, that gives an effective tax rate of between 15-18% with state and local taxes of 5-6%.

700k house assuming you put down 20%) means $2500 approx PITI + 500/month to save in a house repairs fund. - 3k

Retirement- if early in your careers, something in the range of 3k/month into 401ks will do it.

College savings for 2 young kids, for 100% funding at in state public- 2k/month

2 cars, insurance, fuel- used, 25-35k each car financed - $1,600/mo

Comfortable domestic vacation for 4 at 8k (650/mo)

Additional Rainy day savings, 1k/month

Household- groceries + some eating out), Utilities, phone, cable; life insurance, clothing misc, kids activities- 3,500

Charitable giving- 200/month

And then adjust according to your priorities and preferences.

How are you getting this mortgage payment? Interest alone at 6% will be almost the whole amount, plus taxes and insurance.

[Anonymous]

Correction- 700k house is closer to 4 k/month.

[Anonymous]

Anonymous wrote:Part of this isn’t going to be relevant- housing bubble will have to break at some point. After the orange man, we will see the cost of housing and housing materials decrease. Yes, this means less equity, but it also means a better life for the younger people.

Unfortunately the tariffs will drive up the cost of living substantially. American's have come to expect cheap goods and our economy depends on it. People want 10 pairs of pants at $40 not 2 pairs at $250 like 100 years ago. It's fiction to think people want to go back to a world where every day items are super expensive but "higher quality and made in the USA".

[Anonymous]

Anonymous wrote:

Anonymous wrote:Part of this isn’t going to be relevant- housing bubble will have to break at some point. After the orange man, we will see the cost of housing and housing materials decrease. Yes, this means less equity, but it also means a better life for the younger people.

Unfortunately the tariffs will drive up the cost of living substantially. American's have come to expect cheap goods and our economy depends on it. People want 10 pairs of pants at $40 not 2 pairs at $250 like 100 years ago. It's fiction to think people want to go back to a world where every day items are super expensive but "higher quality and made in the USA".

Clothing used to be good quality. Also washing machines used to be more gentle on clothes and they didn’t get worn out so quickly. Fashion used to emphasize more of a classic style so people didn’t feel out of style so quickly.
Those 10 pairs of pants are cheap because they have been sown together by children in a third world country and will also fall apart quickly because the thread that was used for sewing was super cheap.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Oh and I’ll add- this is still a generous budget because sometimes you just don’t do all of the above, all at once. Some years it’s staycations or day trips. Maybe you do a little less in the kids 529s sometimes. Maybe you drive a paid off beater for awhile. Lots of ways to flex on this. Housing and childcare are tough. Big line item that can be hard to compromise on. Contrary to DCUMs most prolific posters, it is possible to find a house for 700k within a 45 minute drive. Just not a 6k square foot new build in Arlington.

45 minute drive in rush hour with good schools?

Yep- try 20902 (close to Wheaton), or 20910 or parts of PG County, like another poster mentioned. Of course, you will be attending schools with Black and brown children. It will be ok though, I promise.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Part of this isn’t going to be relevant- housing bubble will have to break at some point. After the orange man, we will see the cost of housing and housing materials decrease. Yes, this means less equity, but it also means a better life for the younger people.

Unfortunately the tariffs will drive up the cost of living substantially. American's have come to expect cheap goods and our economy depends on it. People want 10 pairs of pants at $40 not 2 pairs at $250 like 100 years ago. It's fiction to think people want to go back to a world where every day items are super expensive but "higher quality and made in the USA".

Clothing used to be good quality. Also washing machines used to be more gentle on clothes and they didn’t get worn out so quickly. Fashion used to emphasize more of a classic style so people didn’t feel out of style so quickly.
Those 10 pairs of pants are cheap because they have been sown together by children in a third world country and will also fall apart quickly because the thread that was used for sewing was super cheap.

Sure, but that's not what the market wants. The middle class doesn't want to save up their paychecks to buy basic stuff like pants.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Oh and I’ll add- this is still a generous budget because sometimes you just don’t do all of the above, all at once. Some years it’s staycations or day trips. Maybe you do a little less in the kids 529s sometimes. Maybe you drive a paid off beater for awhile. Lots of ways to flex on this. Housing and childcare are tough. Big line item that can be hard to compromise on. Contrary to DCUMs most prolific posters, it is possible to find a house for 700k within a 45 minute drive. Just not a 6k square foot new build in Arlington.

45 minute drive in rush hour with good schools?

Yep- try 20902 (close to Wheaton), or 20910 or parts of PG County, like another poster mentioned. Of course, you will be attending schools with Black and brown children. It will be ok though, I promise.

0% chance those are 45 min or less in rush hour to downtown. You’re looking at 55 minutes each way.

I live <10 miles to downtown DC, and it usually takes me an hour if I leave at 8. Sometimes more, usually less on Fridays.

[Anonymous]

$500k at today’s prices and rates.

[Anonymous]

Anonymous wrote:$500k at today’s prices and rates.

+1 Not saying it can’t be done for less but the question was about “the American Dream” and not having to worry about $$$.

[Anonymous]

Monthly Budget:

House: $3600 ($600k house in Gaithersburg at current mortgage rates, including tax and insurance and assuming 20% down)
Cars: $1000 (assumes you buy for about $35k and keep for 7 years, including gas and maintenance)
College: $1500 (assumes MD in state for 2 kids fully funded)
Groceries and eating out:$1500
Utilities: $300
Clothing/miscellaneous: $750
Retirement: $500 (assume 40 years saving and a matching to 401k, and SS)
Vacation:$750 (assume one $9k vacation)

That’s a little over $100k. Plus that up for taxes by 20% and call is $120k.

[Anonymous]

Anonymous wrote:Part of this isn’t going to be relevant- housing bubble will have to break at some point. After the orange man, we will see the cost of housing and housing materials decrease. Yes, this means less equity, but it also means a better life for the younger people.

This makes no sense. I think T is crazy, but housing prices and inflation were worse under Biden. Interest rates are going down now, barely, but it's going in the right direction. (Though not guaranteed to be sustainable.)

Something bad has to happen for the housing bubble to pop, but then so much else will be breaking as well. Not sure what the answer is.