Feeling Paralyzed with Financial Decisions

[Anonymous]

OP, do you have a chunk of money saved that you could dump into your mortgage to increase you equity. If so, you can put the money in, "recast" and drop your mortgage payment while keeping your interest rate. I did this to leave Biglaw and go in house.

[Anonymous]

You could afford your mortgage on the reduced income if you cut way back on other areas. With a less stressful job, you and DH can do the housework, lawn care, cook food at home, pack lunches etc.

[Anonymous]

Anonymous wrote:OP, do you have a chunk of money saved that you could dump into your mortgage to increase you equity. If so, you can put the money in, "recast" and drop your mortgage payment while keeping your interest rate. I did this to leave Biglaw and go in house.

I have $100k saved. But it does me no good with my mortgage because I'm prohibited from recasting my mortgage -- we have a VA loan. With VA Loans they allow you to do a streamline refinance, but only if you are getting a lower interest rate. Since our interest rate is 3.5% I obviously can't do better.

[Anonymous]

Anonymous wrote:OP, you can take the lower paying job and keep your mortgage. You will need to cut back on some spending and maybe some saving, especially in the short term, but it will be fine. It is really important not to kill yourself with work. Would the new job lower your expenses in any way (health care premiums, transportation benefit, other benefits, etc.)? Can you negotiate extra vacation to save money on summer camp when your kids are school aged? Or flex your schedule to start early and skip aftercare?

For reference, our HHI is $275k. We do not spend lavishly, but aren't super frugal either. While our mortgage is lower than yours ($3200), we also put $2500/month in 529s. This is important, but discretionary, and we'd cut it if needed. We spend $1000 per month on aftercare/camp. Could lower that by shifting our schedule if we absolutely needed to. We also have $1500-$2000 that we don't spend/month that ends up in discretionary investing, home projects, etc.

Look carefully at your spending, there may be a lot you can cut.

Thank you! Do both of you contribute to 401ks?

[Anonymous]

Perhaps this new job will allow you to telework? If so, you could move a little further out but still kinda close to your DH's job. It's not so bad having a longer commute if you only do it a few days a week.

[Anonymous]

So you're currently making $320 and your DH $80. Has he given any consideration to trying to find a better paying job so the burden isn't all on you? Let him stay at home and cut out cleaning and lawn services and child care. Or is it simply that the pressures of your job are overwhelming and you want out? Taking a 50% pay cut is brutal, have you pursued any other options?

[Anonymous]

Anonymous wrote:I know this board is ultraconservative, but I need some financial feedback. DH and I currently have an HHI of $400 a year. We have a high mortgage for which we have a $4500/month PITI. We live close in to DC, where we both work and the commute is good. We have two kids who will start school in two years. We are doing fine on this income and contribute fully to retirement, 529s, etc., and spend a lot on extras (cleaning service, lawn service, etc.). We have two kids and childcare is $1600/month.

But I just can't do this anymore. I'm the primary earner and literally every day I feel like I'm going to have a heart attack I'm so stressed out at work. An opportunity has come up for me to take a government position, but I would earn no more than $160k, which would cut our HHI to $240k - almost in half. I tell DH every day that I can't do this job anymore, and he just shrugs and says that I should go ahead and quit and take the lower paying job and that we would be fine and would just "cut back" spending, or else move. When I run the numbers I don't know how we could pay that mortgage. But when I look at real estate and interest rates, there is nothing that seems workable with a reasonable commute and good public schools where we could spend less. We would be going to a 3.5% mortgage to a 4.6% mortgage, and would have far less buying power, and would probably have to live over an hour away, and then would lose our current low-cost childcare (nearby family members).

Has anyone ever been in a similar situation and have any words of advice?

1. What does your DH do? 80k seems low for this area. He should be looking at ways to increase his income if you are so stressed at work you feel like you're going to have a heart attack.
2. The previous PP's idea of setting a date seems like a good one. The ideal date for you seems to be when the kids start school. In the mean time, your DH is the new cleaning service, lawn service, etc. Front load your kids' 529's with the savings -- you can put more in now to benefit from compound interest and you won't have to put as much in when your income goes down. And agree with PP that you're only options are not "kill yourself for $320k or go to goverment for $160k." You have 2 years to network and plan a path toward a job in the $200-250k range that won't kill you by 50.
3. $4500/month is really steep, but if you wait to move to another job until the kids are in school, you lose $1600/month in childcare costs. If you have a huge cash buffer saved up and have frontloaded the 529's you can direct that money toward the mortgage. It might be doable (I would hate it, but your current situation is not sustainable). And you can always move. Your health is more important than any particular house/neighborhood/school system.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, you can take the lower paying job and keep your mortgage. You will need to cut back on some spending and maybe some saving, especially in the short term, but it will be fine. It is really important not to kill yourself with work. Would the new job lower your expenses in any way (health care premiums, transportation benefit, other benefits, etc.)? Can you negotiate extra vacation to save money on summer camp when your kids are school aged? Or flex your schedule to start early and skip aftercare?

For reference, our HHI is $275k. We do not spend lavishly, but aren't super frugal either. While our mortgage is lower than yours ($3200), we also put $2500/month in 529s. This is important, but discretionary, and we'd cut it if needed. We spend $1000 per month on aftercare/camp. Could lower that by shifting our schedule if we absolutely needed to. We also have $1500-$2000 that we don't spend/month that ends up in discretionary investing, home projects, etc.

Look carefully at your spending, there may be a lot you can cut.

Thank you! Do both of you contribute to 401ks?

Yep - we both max 401ks. We take mostly driving vacations, which makes a big difference, and our (elementary-aged) kids do not do expensive activities. We'll do some bigger trips as they get older. We don't save a ton outside of 401ks and 529s, but I am satisfied that we'll be able to live well in retirement and largely fund college for 2 kids. We are happy to enjoy our lives, have flexible jobs, and spend time with our kids while they are young.

[Anonymous]

Anonymous wrote:I know this board is ultraconservative, but I need some financial feedback. DH and I currently have an HHI of $400 a year. We have a high mortgage for which we have a $4500/month PITI. We live close in to DC, where we both work and the commute is good. We have two kids who will start school in two years. We are doing fine on this income and contribute fully to retirement, 529s, etc., and spend a lot on extras (cleaning service, lawn service, etc.). We have two kids and childcare is $1600/month.

But I just can't do this anymore. I'm the primary earner and literally every day I feel like I'm going to have a heart attack I'm so stressed out at work. An opportunity has come up for me to take a government position, but I would earn no more than $160k, which would cut our HHI to $240k - almost in half. I tell DH every day that I can't do this job anymore, and he just shrugs and says that I should go ahead and quit and take the lower paying job and that we would be fine and would just "cut back" spending, or else move. When I run the numbers I don't know how we could pay that mortgage. But when I look at real estate and interest rates, there is nothing that seems workable with a reasonable commute and good public schools where we could spend less. We would be going to a 3.5% mortgage to a 4.6% mortgage, and would have far less buying power, and would probably have to live over an hour away, and then would lose our current low-cost childcare (nearby family members).

Has anyone ever been in a similar situation and have any words of advice?

We will all be able to help if you post a budget or a listing of monthly expenses.

Without that.. $240K is more than enough. You are young and have a long way to go in Government. At the end of if you will get a small pension and good healthcare. With that in mind:
- Do not move. You will never get the 3.5% rate during your lifetime. $4500 seems like a lot now but it is set for the next 25+ years for you.
- Cut back on 529 and 401K/IRA contributions for at least two years when your kids go to school.
- Buy a lawmmower and have a neighbor teach your DH how to mow the lawn

We are at $160K HHI. About $96K take home. No childcare. PITI of $2500. Don't splurge but don't hold back either when it comes to kids' activities, travel sports, summer camps, tutoring, etc. Of course we have a large nest egg based on DH's past work so our savings now are limited to 401K (for 1 person) and IRA (for the non-working spouse). We manage fine.

[Anonymous]

I would take a lower paying job, but never a government job. It was a slow death: very special environment turned out to be even higher stress for me. Are you a fit for it?

[Anonymous]

Anonymous wrote:I had a similar situation when my kids were 3 and 5. I had an opportunity to go in house and go from 325k to 150k. I wanted to do it SO bad but also had a montage that was too high (3800) and similar living expenses. DH is a professor and makes 110k BUT does all the drop offs, pick ups, days off, and gets reduced summer hours and a sabatical every 7 years. In other words he wasn't moving. So I turned down that job but we made a 3 year plan. We lived SUPER lean, sent kids to our OK public and put everything we could on our mortgage. While we weren't able to pay it off we were able to pay it was down (to about 285k) and refinance and have a payment of 1650.00. Then I took a similar in house position (making a bit more, 182k) and we all lived happily ever after. My advice is to pick a date in the future and work towards it. We not only attacked our montage but paid off the last of our loans, our car note, and really let go of dry cleaning, lawn car, cleaning people, pea pod, etc etc. We felt way more flush when I actually switched to my low paying job and "the trial period" was over!

+1

This is great advice.

[Anonymous]

Anonymous wrote:I know this board is ultraconservative, but I need some financial feedback. DH and I currently have an HHI of $400 a year. We have a high mortgage for which we have a $4500/month PITI. We live close in to DC, where we both work and the commute is good. We have two kids who will start school in two years. We are doing fine on this income and contribute fully to retirement, 529s, etc., and spend a lot on extras (cleaning service, lawn service, etc.). We have two kids and childcare is $1600/month.

But I just can't do this anymore. I'm the primary earner and literally every day I feel like I'm going to have a heart attack I'm so stressed out at work. An opportunity has come up for me to take a government position, but I would earn no more than $160k, which would cut our HHI to $240k - almost in half. I tell DH every day that I can't do this job anymore, and he just shrugs and says that I should go ahead and quit and take the lower paying job and that we would be fine and would just "cut back" spending, or else move. When I run the numbers I don't know how we could pay that mortgage. But when I look at real estate and interest rates, there is nothing that seems workable with a reasonable commute and good public schools where we could spend less. We would be going to a 3.5% mortgage to a 4.6% mortgage, and would have far less buying power, and would probably have to live over an hour away, and then would lose our current low-cost childcare (nearby family members).

Has anyone ever been in a similar situation and have any words of advice?

you are way over analyzing this situation OP.

You have one life, so live it the way YOU want to live it - within reasonable boundaries. By this I mean don't do anything that will negatively effect your kids. Other than that - what do you have to lose, except for the tremendous stress you're currently experiencing which sounds like it won't be decreasing any time soon unless you do something about it. Your DH is on board, so do it!

and you don't have to move an hour away either, that is really being overly dramatic. $240K isn't chump change, the issue is that you've become accustomed to living at the $400K level.

Why not do a "dry run" - rent out your current house, move into a rental at about $3k per month and see how that feels. At the same time, start living as if you're only making $240K, and do this for at least 6 months. see how that feels. I think you'll be surprised at how quickly your "new normal" feels normal.

[Anonymous]

You might have to cut back in other areas, but you can do your PITI on that income, particularly with your lower childcare costs.

We make slightly more, $250k, but have higher childcare, $2300 for 2 kids and a slightly lower PITI- $4000. It's fine. We don't travel much, mostly driving trips to family, but I can't stand traveling with little kids anyway. We kept the house-cleaner, but do our own lawn work. Our kids don't do expensive activities, but even if they pick up something more expensive, we'll be trading the $2300 for a total of $600 in about a year, so we can cover any additional activities and camp from the excess $1700. Our oldest is in public school and the youngest will start in about a year. We do fully fund two IRAs and contribute enough to two 529s to cover what we estimate will be about 1/2 the cost of college.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I know this board is ultraconservative, but I need some financial feedback. DH and I currently have an HHI of $400 a year. We have a high mortgage for which we have a $4500/month PITI. We live close in to DC, where we both work and the commute is good. We have two kids who will start school in two years. We are doing fine on this income and contribute fully to retirement, 529s, etc., and spend a lot on extras (cleaning service, lawn service, etc.). We have two kids and childcare is $1600/month.

But I just can't do this anymore. I'm the primary earner and literally every day I feel like I'm going to have a heart attack I'm so stressed out at work. An opportunity has come up for me to take a government position, but I would earn no more than $160k, which would cut our HHI to $240k - almost in half. I tell DH every day that I can't do this job anymore, and he just shrugs and says that I should go ahead and quit and take the lower paying job and that we would be fine and would just "cut back" spending, or else move. When I run the numbers I don't know how we could pay that mortgage. But when I look at real estate and interest rates, there is nothing that seems workable with a reasonable commute and good public schools where we could spend less. We would be going to a 3.5% mortgage to a 4.6% mortgage, and would have far less buying power, and would probably have to live over an hour away, and then would lose our current low-cost childcare (nearby family members).

Has anyone ever been in a similar situation and have any words of advice?

1. What does your DH do? 80k seems low for this area. He should be looking at ways to increase his income if you are so stressed at work you feel like you're going to have a heart attack.
2. The previous PP's idea of setting a date seems like a good one. The ideal date for you seems to be when the kids start school. In the mean time, your DH is the new cleaning service, lawn service, etc. Front load your kids' 529's with the savings -- you can put more in now to benefit from compound interest and you won't have to put as much in when your income goes down. And agree with PP that you're only options are not "kill yourself for $320k or go to goverment for $160k." You have 2 years to network and plan a path toward a job in the $200-250k range that won't kill you by 50.
3. $4500/month is really steep, but if you wait to move to another job until the kids are in school, you lose $1600/month in childcare costs. If you have a huge cash buffer saved up and have frontloaded the 529's you can direct that money toward the mortgage. It might be doable (I would hate it, but your current situation is not sustainable). And you can always move. Your health is more important than any particular house/neighborhood/school system.

Good god this is privileged! They have two small kids, so assume DH is under 40. What could his profession be for the low low salary of $80K? Oh, I don't know: teacher, professor, basically anything at a non-profit, state government employee, architect, social worker, technical writer, scientist, basically anything?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I know this board is ultraconservative, but I need some financial feedback. DH and I currently have an HHI of $400 a year. We have a high mortgage for which we have a $4500/month PITI. We live close in to DC, where we both work and the commute is good. We have two kids who will start school in two years. We are doing fine on this income and contribute fully to retirement, 529s, etc., and spend a lot on extras (cleaning service, lawn service, etc.). We have two kids and childcare is $1600/month.

But I just can't do this anymore. I'm the primary earner and literally every day I feel like I'm going to have a heart attack I'm so stressed out at work. An opportunity has come up for me to take a government position, but I would earn no more than $160k, which would cut our HHI to $240k - almost in half. I tell DH every day that I can't do this job anymore, and he just shrugs and says that I should go ahead and quit and take the lower paying job and that we would be fine and would just "cut back" spending, or else move. When I run the numbers I don't know how we could pay that mortgage. But when I look at real estate and interest rates, there is nothing that seems workable with a reasonable commute and good public schools where we could spend less. We would be going to a 3.5% mortgage to a 4.6% mortgage, and would have far less buying power, and would probably have to live over an hour away, and then would lose our current low-cost childcare (nearby family members).

Has anyone ever been in a similar situation and have any words of advice?

1. What does your DH do? 80k seems low for this area. He should be looking at ways to increase his income if you are so stressed at work you feel like you're going to have a heart attack.
2. The previous PP's idea of setting a date seems like a good one. The ideal date for you seems to be when the kids start school. In the mean time, your DH is the new cleaning service, lawn service, etc. Front load your kids' 529's with the savings -- you can put more in now to benefit from compound interest and you won't have to put as much in when your income goes down. And agree with PP that you're only options are not "kill yourself for $320k or go to goverment for $160k." You have 2 years to network and plan a path toward a job in the $200-250k range that won't kill you by 50.
3. $4500/month is really steep, but if you wait to move to another job until the kids are in school, you lose $1600/month in childcare costs. If you have a huge cash buffer saved up and have frontloaded the 529's you can direct that money toward the mortgage. It might be doable (I would hate it, but your current situation is not sustainable). And you can always move. Your health is more important than any particular house/neighborhood/school system.

Good god this is privileged! They have two small kids, so assume DH is under 40. What could his profession be for the low low salary of $80K? Oh, I don't know: teacher, professor, basically anything at a non-profit, state government employee, architect, social worker, technical writer, scientist, basically anything?

Bit dramatic of a reaction, tbh. She's making 4x his salary. It's not insane to expect him to try to step it up if it's taking a toll on her health and well-being to keep their family in their house.