How does your family survive making under 200k hhi

[Anonymous]

Anonymous wrote:I find these posts so hilarious. We are a family of four "surviving" in DC quite happily on less than $100,000. I should point out that I stay home so we don't pay for daycare, which I know is very expensive.

Another family of four here "surviving" on less than $90k, and I feel rich/count ourselves lucky!

[Anonymous]

Anonymous wrote:

Anonymous wrote:I really don't get why people think two income earners in a household with kids is not really worth it. I have one child in a licensed in-home daycare for a total of $13,800/year. [For those who think in-home care is "substandard," there's a reputable center even closer to my house that I could send my daughter to (yes, they have openings) for $13k a year, so I'd actually save a bit.]

Since we both work, we're each "paying" $7.5k a year to keep our full time jobs. It's a no brainer that this is financially worthwhile. Even if you wanted to attribute all of the childcare costs to the mother, you could say I "pay" $13k/year to keep my full time job, health insurance for my family, life insurance for us, retirement and a modest pension. Do you know how little I'd have to make for this to not be financially worthwhile? Even if I made that little, I would be eligible for childcare subsidies through my city, my work, and my state + low-income housing + food stamps. All of that would probably still make it worthwhile for me to stay in the work force, contribute to social security, etc.

The vast majority of people staying home with their children and out of the workforce are not doing it to save money. They are doing it because they feel it is the right thing to do, it's what they want to do, or they feel their children need them available and present all day, everyday. But I don't see the point of pretending there's a "two income trap." The numbers just don't add up.

Not to mention the lost income potential--often when you stay home for several years, you lose ground that you never get back.

Definitely true, but 'surviving' on $200k or $160k is much easier when it is a single high income earner rather than two folks making $80k and paying for childcare and working parent scrambling.

Being a SAHP can have long term consequences to ultimate household income in the long term, but most folks who go that route already have a relatively high income spouse and most likely in a stable job (otherwise unlikely you would have left the workforce).

[Anonymous]

Anonymous wrote:

Anonymous wrote:I really don't get why people think two income earners in a household with kids is not really worth it. I have one child in a licensed in-home daycare for a total of $13,800/year. [For those who think in-home care is "substandard," there's a reputable center even closer to my house that I could send my daughter to (yes, they have openings) for $13k a year, so I'd actually save a bit.]

Since we both work, we're each "paying" $7.5k a year to keep our full time jobs. It's a no brainer that this is financially worthwhile. Even if you wanted to attribute all of the childcare costs to the mother, you could say I "pay" $13k/year to keep my full time job, health insurance for my family, life insurance for us, retirement and a modest pension. Do you know how little I'd have to make for this to not be financially worthwhile? Even if I made that little, I would be eligible for childcare subsidies through my city, my work, and my state + low-income housing + food stamps. All of that would probably still make it worthwhile for me to stay in the work force, contribute to social security, etc.

The vast majority of people staying home with their children and out of the workforce are not doing it to save money. They are doing it because they feel it is the right thing to do, it's what they want to do, or they feel their children need them available and present all day, everyday. But I don't see the point of pretending there's a "two income trap." The numbers just don't add up.

It gets a little more complicated if you have two kids, so let's say $26K per year in your situation (5K of which is pretax). You also need to factor in the wage differential between the higher paid earner and the lower paid earner. For example, if one makes $100K and the other makes $35K, you're actually losing money by working. I think the value comes from (1) ability to have continuous insurance if higher earning spouse loses job and (2) ability to stay in the workforce and gain experience/skills which will hopefully translate to higher earnings relative to what you would make had you stayed at home and re-entered the workforce once kids are in school.

You're totally right and we're actually expecting our second and our childcare costs will be about $26k/year at that point. It still absolutely makes financial sense for us but I understand for some, it would be cutting it close and so they may think it's all awash, especially if they heavily discount the value of point #2 you raise.

The thing is though, that families in such lower income brackets use different kinds of childcare than those in higher income brackets. I have friends with the husband making 50k, the wife making 5k a year with her part time gigs. They have two kids and they just pay a neighbor $20/day when they need childcare and otherwise stagger their schedules so they don't need it often. It's not licensed childcare, I'm sure plenty of DCUMers would call this "subpar" but it's what a lot of people do, maybe even most people do. That, or they live near family. Honestly, it's a luxury that we're able to afford to live out here on our own and make enough to support ourselves, pay for back up care when our regular is out, etc. Many don't have that luxury and stay closer to home. Assuming that a family making less than half of what we make would consider the same childcare options we do is just not realistic, so we shouldn't really be taking about a family making $60k deciding whether they can afford $26k in childcare expenses every year - they wouldn't even be in the market for that kind of care.

[Anonymous]

That, or they live near family. Honestly, it's a luxury that we're able to afford to live out here on our own and make enough to support ourselves, pay for back up care when our regular is out, etc. Many don't have that luxury and stay closer to home. Assuming that a family making less than half of what we make would consider the same childcare options we do is just not realistic, so we shouldn't really be taking about a family making $60k deciding whether they can afford $26k in childcare expenses every year - they wouldn't even be in the market for that kind of care.

That's what my SIL does...she lives near enough my in-laws that my MIL comes every day and watches her kids while she's at work. They need two incomes to get by and pay the bills, but they would never be able to afford a nanny or in center childcare, even though the cost of childcare is much lower where she lives. When I was in graduate school, my friend had a baby near her dissertation and her mother came and lived with her for 3 months (she was Nigerian and there was more of a cultural norm of doing this for your kids). A lot of people who make lower salaries have two working parents but they either stagger work schedules or rely on extended family.

[Anonymous]

Anonymous wrote:The thing is though, that families in such lower income brackets use different kinds of childcare than those in higher income brackets. I have friends with the husband making 50k, the wife making 5k a year with her part time gigs. They have two kids and they just pay a neighbor $20/day when they need childcare and otherwise stagger their schedules so they don't need it often. It's not licensed childcare, I'm sure plenty of DCUMers would call this "subpar" but it's what a lot of people do, maybe even most people do. That, or they live near family. Honestly, it's a luxury that we're able to afford to live out here on our own and make enough to support ourselves, pay for back up care when our regular is out, etc. Many don't have that luxury and stay closer to home. Assuming that a family making less than half of what we make would consider the same childcare options we do is just not realistic, so we shouldn't really be taking about a family making $60k deciding whether they can afford $26k in childcare expenses every year - they wouldn't even be in the market for that kind of care.

Right, but the changing childcare cost also continues up the income scale from where you are, not just down, which partially answers your original question. We pay about as much in childcare for one child as it sounds like you'll be paying for two. So if we have another, our childcare costs will be similar to my spouse's after tax income. It still makes economic sense sense for my spouse to work, both for the reasons other posters said and because we'd still send the kids to at least a part day pre-school if one of us didn't work, so our childcare costs would not be zero. But its true that 100% of my spouse's income will go to childcare costs.

[Anonymous]

Yes there are costs to staying at home. There is also tremendous value add and not just to the children but the family as a whole. To the working spouse and his or her ability to earn more. If we get hung up on just $$ of staying at home then we fail to understand some of the more fundamental motivators. It is a risky move, agreed. But could pay dividends of a nature that you can't put a $ value to. For some families having a SAHP is the best decision.

[Anonymous]

A SAH parent can also save the household a lot of money in forgoing expenses like takeout/delivery meals, cleaning service, and all the other that often end up getting outsourced when you have 2 parents working full-time.

[Anonymous]

Anonymous wrote:A SAH parent can also save the household a lot of money in forgoing expenses like takeout/delivery meals, cleaning service, and all the other that often end up getting outsourced when you have 2 parents working full-time.

really? we still ate out when I SAH.
I was also still getting dh's closed dry cleaned.

[Anonymous]

plus I shopped alot more since I had the time.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The thing is though, that families in such lower income brackets use different kinds of childcare than those in higher income brackets. I have friends with the husband making 50k, the wife making 5k a year with her part time gigs. They have two kids and they just pay a neighbor $20/day when they need childcare and otherwise stagger their schedules so they don't need it often. It's not licensed childcare, I'm sure plenty of DCUMers would call this "subpar" but it's what a lot of people do, maybe even most people do. That, or they live near family. Honestly, it's a luxury that we're able to afford to live out here on our own and make enough to support ourselves, pay for back up care when our regular is out, etc. Many don't have that luxury and stay closer to home. Assuming that a family making less than half of what we make would consider the same childcare options we do is just not realistic, so we shouldn't really be taking about a family making $60k deciding whether they can afford $26k in childcare expenses every year - they wouldn't even be in the market for that kind of care.

Right, but the changing childcare cost also continues up the income scale from where you are, not just down, which partially answers your original question. We pay about as much in childcare for one child as it sounds like you'll be paying for two. So if we have another, our childcare costs will be similar to my spouse's after tax income. It still makes economic sense sense for my spouse to work, both for the reasons other posters said and because we'd still send the kids to at least a part day pre-school if one of us didn't work, so our childcare costs would not be zero. But its true that 100% of my spouse's income will go to childcare costs.

Right, I see that with families of two doctors or lawyers. The parents work such long hours that they can't make the center pick ups by 6pm so they need a dedicated nanny and are not in a position to share that nanny either. Aside from that though, I think sometimes a center is just a center and the one in my work building that costs 80% more than the one down the block from my place isn't any more well regarded. It's just more expensive because it's downtown. When it comes to that kind of choice, I'm less sympathetic to the coworkers saying it's barely worth it for them to work. We make approx the same, live in the same burbs - I just chose a childcare situation closer to home and you chose one at work. Those are the kinds of choices that land people in OP's situations - making 200k and having half of the take home income go towards mortgage and childcare. That's due to choices and it's not as if there were no good alternatives.

[Anonymous]

Anonymous wrote:

Anonymous wrote:A SAH parent can also save the household a lot of money in forgoing expenses like takeout/delivery meals, cleaning service, and all the other that often end up getting outsourced when you have 2 parents working full-time.

really? we still ate out when I SAH.
I was also still getting dh's closed dry cleaned.

So it depends a lot on the SAHP. If they are focused on cost reduction when they are not generating income - they can significantly reduce cost. I know a lot of WOHM couples that eat in all the time and wash iron and care/mend their clothes. If you are a SAHM and can justify profligacy then you are well off and this discussion is a non issue. Many realize the burden of their choice and are responsible.

It comes down to the individuals. I know a dozen or so educated middle class moms who treat staying at home as a job. Just as their are more efficient productive office workers the same is true for SAHP. Those who get a lot done, stay focused - they could generate savings by being( in addition to reliable childcare) a tutor, reading coach, work with their SN child reducing specialists appointments, prepare healthful meals from scratch, give other spouse the flexibility to work longer hours and generate more income - the list is endless.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I find these posts so hilarious. We are a family of four "surviving" in DC quite happily on less than $100,000. I should point out that I stay home so we don't pay for daycare, which I know is very expensive.

Another family of four here "surviving" on less than $90k, and I feel rich/count ourselves lucky!

On $90K, do you rent? Do you plan to save any money for your kids' college education?

[Anonymous]

Anonymous wrote:My husband makes $160k and I stay at home with two small kids. These threads always surprise me because at $160k we do pretty darn good! Rent a townhouse for $2300/month, aggressively paying off both cars so we spend $1000/month on that, $131/month insurance for both cars. $280/month for preschool, around $200/month for power and gas, $400 for cable/internet/cell phones. We have a house in another state but the mortgage is covered by a renter so we don't make money on that but we aren't in the red either (this year at least). In a normal 2 paycheck month we net around $8500 and very very rarely do we feel pinched unless a few major expenses come up at once (property taxes, new tires for cars, medical bills, things like that). I mean we aren't wealthy by any means but I feel we do much better than "survive."

You don't own, you don't save for college for the kids, and what are you doing for yourself as a SAHM for retirement? Households with income totalling less than $200K, with kids, are almost always way short on house equity, retirement and college savings.

[Anonymous]

Anonymous wrote:

Anonymous wrote:My husband makes $160k and I stay at home with two small kids. These threads always surprise me because at $160k we do pretty darn good! Rent a townhouse for $2300/month, aggressively paying off both cars so we spend $1000/month on that, $131/month insurance for both cars. $280/month for preschool, around $200/month for power and gas, $400 for cable/internet/cell phones. We have a house in another state but the mortgage is covered by a renter so we don't make money on that but we aren't in the red either (this year at least). In a normal 2 paycheck month we net around $8500 and very very rarely do we feel pinched unless a few major expenses come up at once (property taxes, new tires for cars, medical bills, things like that). I mean we aren't wealthy by any means but I feel we do much better than "survive."

You don't own, you don't save for college for the kids, and what are you doing for yourself as a SAHM for retirement? Households with income totalling less than $200K, with kids, are almost always way short on house equity, retirement and college savings.

They do own, just not here.

[Anonymous]

Anonymous wrote:

Anonymous wrote:My husband makes $160k and I stay at home with two small kids. These threads always surprise me because at $160k we do pretty darn good! Rent a townhouse for $2300/month, aggressively paying off both cars so we spend $1000/month on that, $131/month insurance for both cars. $280/month for preschool, around $200/month for power and gas, $400 for cable/internet/cell phones. We have a house in another state but the mortgage is covered by a renter so we don't make money on that but we aren't in the red either (this year at least). In a normal 2 paycheck month we net around $8500 and very very rarely do we feel pinched unless a few major expenses come up at once (property taxes, new tires for cars, medical bills, things like that). I mean we aren't wealthy by any means but I feel we do much better than "survive."

You don't own, you don't save for college for the kids, and what are you doing for yourself as a SAHM for retirement? Households with income totalling less than $200K, with kids, are almost always way short on house equity, retirement and college savings.

Short by what standard? Putting away enough for a public university, putting away 10% of HHI for retirement - is that short? I think you're imagining a family of 200k income living like they make 300 or 400k, which sure plenty of families do, and they make up the difference by not putting away for retirement or college, but the point I've been trying to make on this thread is you don't have to live like that and your standard of living doesn't necessarily have to take a big hit to live more modestly. Living just outside the district and sending your kid to childcare there can easily save you 2k a month that you then can put towards the savings you claim people are short on.