budget for those making 400ishK?

[Anonymous]

WHAT is the obsession about 400k on this board?

[Anonymous]

I'm the poster who makes $380K. My DH and I absolutely feel terrible about the small amount we give to charity. (However, we do volunteer and when we were at a law firm, we did a lot of pro bono work).

Part of the problem is I think people look at the high income number and think we don't have any money issues. But we have a house with a sizeable mortgage, one young child and another on the way and both of us have somewhat precarious jobs in the current market. So while it may look like we are on easy street - one person losing their job could change things in a hurry. (Not to mention I will be going on unpaid maternity leave later this year and a significant chunk of our income is based on discretionary bonuses of which I am pretty sure I will not be getting next year because of the economic environment.)

We are in our early 30's so we are still in the beginning stages of building our nest egg. It's taken a while to get into the black even though we've both been making a significant amount for the past 6 years just because we had to pay off very large student loans. Also, it's not like we've been making $380K for the past 6 years, we started out at $250K and have been working our way up. I think there is a big difference between someone making $400K with $2 MM in savings and someone in our position with a high income but not much beyond retirement accounts (which have been cut in half due to the market) and an emergency fund. If we had a significant amount stashed away, I would feel much more comfortable giving away 5% or more of my income but in this economic environment and with not much of a safety net below us, I would feel like I was taking risks with my family's welfare. Our top priority right now is building up our emergency fund.

Anyway, please feel free to continue to judge us. I mean I'm sure we could give up vacations and give that money to charity instead but I would miss seeing our family and having those breaks from a stressful job!

[Anonymous]

Anonymous wrote:I'm the poster who makes $380K. My DH and I absolutely feel terrible about the small amount we give to charity. (However, we do volunteer and when we were at a law firm, we did a lot of pro bono work).

Part of the problem is I think people look at the high income number and think we don't have any money issues. But we have a house with a sizeable mortgage, one young child and another on the way and both of us have somewhat precarious jobs in the current market. So while it may look like we are on easy street - one person losing their job could change things in a hurry. (Not to mention I will be going on unpaid maternity leave later this year and a significant chunk of our income is based on discretionary bonuses of which I am pretty sure I will not be getting next year because of the economic environment.)

We are in our early 30's so we are still in the beginning stages of building our nest egg. It's taken a while to get into the black even though we've both been making a significant amount for the past 6 years just because we had to pay off very large student loans. Also, it's not like we've been making $380K for the past 6 years, we started out at $250K and have been working our way up. I think there is a big difference between someone making $400K with $2 MM in savings and someone in our position with a high income but not much beyond retirement accounts (which have been cut in half due to the market) and an emergency fund. If we had a significant amount stashed away, I would feel much more comfortable giving away 5% or more of my income but in this economic environment and with not much of a safety net below us, I would feel like I was taking risks with my family's welfare. Our top priority right now is building up our emergency fund.

Anyway, please feel free to continue to judge us. I mean I'm sure we could give up vacations and give that money to charity instead but I would miss seeing our family and having those breaks from a stressful job!

Would you still be friends with us, even though we have a very small household income and just making ends meat, but jobs that are NOT stressful ?

[Anonymous]

By the way, those who keep calling high income earners - rich or wealthy - do a google search for high earner, not rich yet (HENRY). There was an interesting article on CNN about this income group. By no means am I saying you need to feel sorry for us because we make a high income. But for those who can't believe people in this income group can have legitimate worries about finance, the article describes in detail why many of us do. People lump everyone making $250,000 and up in the same category but as stated in a previous post - income is only a part of the picture. Net worth is a MUCH better indicator of wealth (in particular net worth excluding a personal residence).

Again, I am not saying - oh us poor high income earners - we have it so hard. My husband and I realize that we are very fortunate (although we also worked very hard to get here as the children of immigrants). I'm just saying that to lump us into the same category as the "wealthy" is a bit absurd. I would say we have a nice life but we don't take extravagant trips, we don't buy Gucci and other expensive brands and we don't drive luxury cars (we drive Hondas). We also keep a budget and try to cook at home a lot instead of going out to eat, comparison shop for bigger ticket items, and worry about saving enough for our children's education.

[Anonymous]

Anonymous wrote:

Anonymous wrote:400K

100K for taxes
50K for childcare (nanny and preschool)
40,000 mortgage
30,000 retirement
40,000 student loans
24,000 cash savings for house down-payment in better school district
6,800 health care premiums
4,000 prescription co-pays
5,000 weekly house cleaning
6,000 car payments (1 chevy wagon, 1 Prius)
10,000 vacations (bethany rental in summer, domestic hotel trip in winter, long weekend away at a local resort, long camping weekend in fall)
15,000 charities (social services)
15,000 political contributions (Emily's List and assorted feminist advocacy orgs)
3,000 phone
1,500 cable/internet (when we strike it rich, we'll spring for HBO =))
1,200 lawn mowing and weeding
10,000 groceries- we go crazy here, never use coupons, buy lots of brand named packaged food and fruits and veggies and meat that go bad because we're never home to cook them
5,000 restaurants (see above, mostly fast food or delivery)
2,000 gym, which we never go to
3,500 suits for DH (one new suit, 3 shirts, 2 ties, dress shoes, welcome to brooks brothers)
3,000 business and casual clothes for me as I get fatter (see lack of time for gym and fast food above)
3,000 clothes for 2 kids (yes, this is a big splurge, for sure)

that's all, folks!

No synagogue membership fees ?

WTF???!!

[Anonymous]

" I'm just saying that to lump us into the same category as the "wealthy" is a bit absurd."

Thank you. I'm in the 250K crowd and I have to say that the assumptions that have been made recently about what type of lifestyle I lead come off as just plain ignorant. No nanny, cleaning lady, expensive cars or private schools for us, for example.

[Anonymous]

If your income=outgo it doesn't matter how much your W-2 says.

As pp said, it's one's net worth that is the true indicator of wealth. If all your $$ comes on a W-2, then you pay a lot in taxes especially vis a vis those who receive more of their $$ on 1099s.

[Anonymous]

Anonymous wrote:I'm the poster who makes $380K. My DH and I absolutely feel terrible about the small amount we give to charity. (However, we do volunteer and when we were at a law firm, we did a lot of pro bono work).

Part of the problem is I think people look at the high income number and think we don't have any money issues. But we have a house with a sizeable mortgage, one young child and another on the way and both of us have somewhat precarious jobs in the current market. So while it may look like we are on easy street - one person losing their job could change things in a hurry. (Not to mention I will be going on unpaid maternity leave later this year and a significant chunk of our income is based on discretionary bonuses of which I am pretty sure I will not be getting next year because of the economic environment.)

We are in our early 30's so we are still in the beginning stages of building our nest egg. It's taken a while to get into the black even though we've both been making a significant amount for the past 6 years just because we had to pay off very large student loans. Also, it's not like we've been making $380K for the past 6 years, we started out at $250K and have been working our way up. I think there is a big difference between someone making $400K with $2 MM in savings and someone in our position with a high income but not much beyond retirement accounts (which have been cut in half due to the market) and an emergency fund. If we had a significant amount stashed away, I would feel much more comfortable giving away 5% or more of my income but in this economic environment and with not much of a safety net below us, I would feel like I was taking risks with my family's welfare. Our top priority right now is building up our emergency fund.

Anyway, please feel free to continue to judge us. I mean I'm sure we could give up vacations and give that money to charity instead but I would miss seeing our family and having those breaks from a stressful job!

I really don't think you need to justify to these ninnies on this board why you don't give money to charity. It's your perogative to do with your money what you want. In this area, 400K is by no means rich (where Obama came up with 250K as "rich" is beyond me), so don't feel guilty about how you spend your money.