Gah, where is our money going?

[Anonymous]

Anonymous wrote:Here's some advice:

Don't save what you can after spending. Spend what you can after saving.

Exactly.

The phrase, "not much left over" says it all.

OP, pay yourself first. Then spend.

[Anonymous]

We make about $280 and save, in addition to maxed out 401k, about $3.5k post tax, but we also have $4,000 a month nanny. Once we are past that I imagine we'd save $6 or $7 a month.

Good goal is $100k a year in networth improvement.

[Anonymous]

Anonymous wrote:Gah?

Sort of like "Argh."

[Anonymous]

Take out, restaurants, lunches out, coffee at work - even at modest places, this can really add up. If you have two working full time parents, you can easily end up spending 1k+ a month on non-grocery food. It doesn't take fancy date nights to make that happen either.

That's the easiest money pit to not notice, IME, so if you find yourself wondering where your money is going, I'd look there first.

[Anonymous]

I recently sat down and did quick books for our family. By the time it was all said and done, we were spending a mint in food. I couldn't believe how many times in a week I stopped by the grocery store and how much I was spending each time. We only eat out a few times a month. In the end I decided I need to actually meal plan. Already, I've saved a bunch. A small change made a big difference. It's easy to get caught up paying stuff and not paying yourself first. We take savings off the top and then go from there. Once it's automatic you don't think about it.

[Anonymous]

The Washington metropolitan area is becoming more like the New York City or San Francisco metropolitan areas. Would you purposely choose to live in those cities? Probably not, because we recognize that the ordinary cost of living in those cities is prohibitively expensive, and that our income of $350-400 K would not go very far in supporting an upper-middle class lifestyle.

If you believe that NYC or SF or DC are the only places that you can live because they are so cosmopolitan, and intellectual, and international, and cultural, then so be it. You are purposely making the tradeoff to live more modestly, and constantly worrying about money, precisely so that you can live in an area that is more cosmopolitan, and intellectual, and international, and culturally significant.

But what if, like the original settlers, or our founding fathers, or the pioneers, you believed that you can bring "civilization", and "intellectualism", and "culture" with you and raise your children with those interests and values wherever you may settle. Then an affordable world of options all over this country (or the world) open up to you -- outside of the very most desirable metropolitan areas.

Choose any place in the country -- Billings, MT, or Oak Park, IL, or Bloomington, IN, or Santa Fe, NM. I will choose the random (for me) area of Vestavia Hills, AL. As you can see $539K will buy you a perfectly nice, if not dream home. More importantly the public schools all have 10 ratings, so your children will be well-educated in an area where all your neighbors and friends also send their children to the public schools.

http://www.zillow.com/homedetails/5105-Club-Ridge-...Vestavia-AL-35242/974256_zpid/

Tuition in-state at the University of Alabama is $4,800/semester for a full-time undergraduate student. And since your kids plan to go there they can somewhat enjoy their high school years, without constantly worrying about the grades and extracurriculars needed for the Ivy League -- like everyone's children around here stress over.

Yes, there are federal jobs to be had in that part of Alabama, and private sector ones also. If you continue to earn between $350-400K there, you will not only feel rich -- you will be rich as well. But as the cost of living is so much lower in every respect (including state income taxes), you can afford to have a stay-at-home parent, or to take new jobs that only pay you between $250-300K.

That is one option for everyone feeling bad about their income in this area. The other, is to realize that you live here because you love all that the region has to offer, and that you are willing to pay for the high-quality of cultural, intellectual, international, and cosmopolitan life. It is a trade off for sure.

[Anonymous]

Well, we have family in the area (think both sets of grandparents, siblings, etc.), so DC is not interchangeable with other locations for us.

Our situation is similar to OPs, except that our mortgage is lower-- it's about $1500 PITI/month, which we overpay on.

We have a comparable income, but I am also finding it tough to save. We max out retirement, hubby contributes to kids' college fund, etc., but we can never seem to put away any much extra cash most months.

It seems like we do okay, but could do better. I'm also not sure where to start though.

[Anonymous]

Try You Need a Budget (YNAB) software. Track what you are spending for a month or two, and re-evaluate.

[Anonymous]

Anonymous wrote:Take out, restaurants, lunches out, coffee at work - even at modest places, this can really add up. If you have two working full time parents, you can easily end up spending 1k+ a month on non-grocery food. It doesn't take fancy date nights to make that happen either.

That's the easiest money pit to not notice, IME, so if you find yourself wondering where your money is going, I'd look there first.

We just noticed this a few months ago too. With a change to our habits, we've been able to really save.
Meal planning for dinners at home has also really helped. Shop sales and use coupons.

[Anonymous]

I work 65 hours a week how am I supposed to do a meal plan

[Anonymous]

I don't get this. Our mortgage, HHI, and student loans are similar to OP's. We are totally comfortable. Drive two newish (not luxury though) cars, that are paid for, 1/2 of the VA prepaid tuition is paid for so far for each kid, retirement accounts are maxed out annually and we have a nice 6 -9 month emergency fund. Two annual trips, one to the beach, the other somewhere more expensive like Disney.