Being lower middle class and living well

[Anonymous]

Anonymous wrote:I'm the OP! I haven't had a chance to read this whole thread but let me just apologize if my post was misconstrued. It was not directed at the conscientious savers who live reasonably and have to account for many expenses, but I luk in various DCUM forums a lot and it seems to me that many people here are indeed out of touch with reality. There are people here who earn $170k got a family of four and say they struggle but the only place where I'd see a legitimate struggle there is saving for college (college is too expensive now) and having to cover health costs if your insurance doesn't extend to the kids, which would suck.

Also I do max out my 401 and Roth ira from the amount I save each month and the rest goes into the savings account.

I could invest in stocks I know but up be honest I'm not good at evaluating stocks and wouldn't know how to do it, so I don't want to risk losing my money. And I don't want to pay a broker.

OP, take your time and learn methodically. My advice is to head over to bogleheads.org. They are your kindred frugal spirits with an eye always on the bottom line.

[Anonymous]

OP I get what you're saying. We went from saving only for retirement to saving 50-60 percent of our take home pay. It can be done. Living paycheck to paycheck is a choice.

[Anonymous]

Anonymous wrote:

Anonymous wrote:^^^ get a cape, your husband will love it. Your welcome

It is you're not your.

Yes I am aware, typing on an iPhone and I only have 3 fingers on my right hand from a birth defect so it makes it difficult to accurately type, especially with auto correct "helping" me

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:$600/month is exactly what I paid when my son was a baby/toddler (so that was 2005-2008). He is 9 yrs old now. This was a licensed in home daycare. I rent a basement apartment is a nice area in Montgomery County. Don't say it can't be done when people are doing it.

I live next door to a licensed in-home daycare in an outside the beltway neighborhood that charges $1,400/month. The next cheapest daycare for infants I have found is church run and costs $1,300/month. Childcare costs have gone up a ton since 2008. And a lot of us would like to have more than one child, so we could not make having a family work on your salary.

It's great that you've managed to make things work for you with that salary, but the average family that wants to own a home and have more than one child could not.

Right. She isn't planning on having a child on her salary! She said she isn't having children yet. I assume she will have a husband and not be a single mom at her age!! Do you not get they will have two salaries which will be combined when and if they marry? And that they should make more money over time?

Yes but presumably housing costs would go up once married. Surely they won't live together in a group home. And suppose they have jobs far apart and in order to have a manageable commute for both they have to live in an expensive location and so it goes ... for most people.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'm the OP! I haven't had a chance to read this whole thread but let me just apologize if my post was misconstrued. It was not directed at the conscientious savers who live reasonably and have to account for many expenses, but I luk in various DCUM forums a lot and it seems to me that many people here are indeed out of touch with reality. There are people here who earn $170k got a family of four and say they struggle but the only place where I'd see a legitimate struggle there is saving for college (college is too expensive now) and having to cover health costs if your insurance doesn't extend to the kids, which would suck.

Also I do max out my 401 and Roth ira from the amount I save each month and the rest goes into the savings account.

I could invest in stocks I know but up be honest I'm not good at evaluating stocks and wouldn't know how to do it, so I don't want to risk losing my money. And I don't want to pay a broker.

OP again. Sorry for typos, on phone.

And I do understand how my lifestyle is a little extreme with never eating out, etc. my ultimate goal is yes, to transfer to a higher paying job (economy sucked when I graduated law school - I took the job I could get and I have gained valuable experience from it) through social connections I have made with other lawyers in DC. My boyfriend works in a govt position and while his salary will increase with time it's never going to be the 200k that people on this forum earn. My philosophy is that when we are earning more comfortably (which I hope will be by 2016) then we can go out to cheap, high quality Korran restaurants every once in a while. But until then I want to save like the apocalypse is coming. I don't know if I'll end up marrying my boyfriend in the end - I think we will but then anything can happen. I think my job security is solid and my chances at transferring to a higher paying job are looking really good right now, but again, anything can happen. No matter what I already have so much saved up that I feel i will be fine no matter what goes wrong.

We aren't sure we want kids because of the costs but will probably have just one. We want to be living in VA by the time we have a family so that we can pay in-state at a great school like William & Mary or VA Tech or, if the kid's smart, UVA. Though I'd still want my kid to gun for scholarship money like I did.

I thought I needed all these "things" when I was younger too (dad was a lawyer as well and earned enough to provide a barely-upper-middle-class lifestyle) but then in college I changed. I had to manage my own budget for he first time and when you're surrounded by other broke college kids you learn how happy you can be just drinking cheap beer that upperclassmen guys bought you and hanging out in your apartment. I know I cannot sustain this lifestyle as a mother but the point is with my inexpensive needs and planning, I'll manage even with more expenses and everyone else can too. People here who get loans on nice cars are ridiculous, I'm sorry. So you have a loan on your house, loan on your car AND you did that knowing you have student loans to pay off? The mortgage I understand but in that case buy two used cars. I

Unless of your course something happens like your child has special needs and getting through high school is a challenge.

Weddings cost money.

That solid job today - could easily be gone tomorrow.

Living a theoretical life in the future is always very simple and easy.

Don't worry about how perfect and frugal you are going to be in some distant future. There are so many things that you can not even imagine or envision right now that will occur in your life between now and when you turn 40.

[Anonymous]

Anonymous wrote:I'm the OP! I haven't had a chance to read this whole thread but let me just apologize if my post was misconstrued. It was not directed at the conscientious savers who live reasonably and have to account for many expenses, but I luk in various DCUM forums a lot and it seems to me that many people here are indeed out of touch with reality. There are people here who earn $170k got a family of four and say they struggle but the only place where I'd see a legitimate struggle there is saving for college (college is too expensive now) and having to cover health costs if your insurance doesn't extend to the kids, which would suck.

Also I do max out my 401 and Roth ira from the amount I save each month and the rest goes into the savings account.

I could invest in stocks I know but up be honest I'm not good at evaluating stocks and wouldn't know how to do it, so I don't want to risk losing my money. And I don't want to pay a broker.

OP, you are aware that "maxing" means the highest allowed by tax law, meaning $17,500 in a 401k and $5500 in a Roth, or close to $2k per month, right? Listen, I hope you are saving that much but it doesn't sound like it. Not if you're saving out of the $1400 you set aside. I'm just saying that I don't think you're doing what you say you're doing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'm the OP! I haven't had a chance to read this whole thread but let me just apologize if my post was misconstrued. It was not directed at the conscientious savers who live reasonably and have to account for many expenses, but I luk in various DCUM forums a lot and it seems to me that many people here are indeed out of touch with reality. There are people here who earn $170k got a family of four and say they struggle but the only place where I'd see a legitimate struggle there is saving for college (college is too expensive now) and having to cover health costs if your insurance doesn't extend to the kids, which would suck.

Also I do max out my 401 and Roth ira from the amount I save each month and the rest goes into the savings account.

I could invest in stocks I know but up be honest I'm not good at evaluating stocks and wouldn't know how to do it, so I don't want to risk losing my money. And I don't want to pay a broker.

OP, take your time and learn methodically. My advice is to head over to bogleheads.org. They are your kindred frugal spirits with an eye always on the bottom line.

What kind of 401k plan doesn't have an index option or lifecycle fund these days? I hate to say it but smells troll like.

[Anonymous]

I think this young woman was just posting and sharing on how one can make sensible financial decisions in how one lives when single which can very well carryover into marriage.
I would add that she and her boy friend could well be saving up to be able to make a combined down payment on a first condo or home in the future. It seems to me that many could take some things she does as suggestions on how to set aside a little more money a month, too. Also the values that she has instilled in herself now will carryover well to marriage even if one or both move onto more lucrative jobs in the law or with the government because you are all right marriage does bring its own sense of basic expenses.

We have two daughters in the DC area with a combine income with a spouse in the range of $200,000 and two young children each. There is the usual combined day care and mortgage of about $5,000 per month as a base point with one living in MD and the other in NOVA. However, the younger couple was like this girl and her BF in terms of watching expenses and being very good savers. For example both DD and DH drove very old 10-12 year old cars until his finally needed a repair more than they were willing to pay. Well they were able to go out and purchase a new van in cash - after DH nicely contacted via email 15 dealerships in the area after DW test drove a couple of models at a dealership. He ended up getting a higher end model at a cost below first quoted.

A lot of comment was made about this young couple's saving power and some commenting negatively on her not eating out etc much. Well similarly the ability to save enabled this daughter and husband to go into the Arlington market with a high cash outlay to be able to get in as one must do - first person in and offering way above asking. Now they are back to saving to start home improvement. The other couple fortunately had help from SIL's parents because they just always seem to have the same amount in the bank.
Even though, they just got the biggest raise of their working life with twins now in kindergarten and $25,000 in child care down to about $10,000 per year.

What some of you ought to be doing who may have teenagers or early college students is to print out this girl's email to show a son or daughter a way to live to get those student loans paid back or to set aside money for a first car or home. Money management skills are really key in today's world. This young couple is doing very well on this in my opinion.

[Anonymous]

I agree with the PP.

[Anonymous]

Anonymous wrote:

Anonymous wrote:$600/month is exactly what I paid when my son was a baby/toddler (so that was 2005-2008). He is 9 yrs old now. This was a licensed in home daycare. I rent a basement apartment is a nice area in Montgomery County. Don't say it can't be done when people are doing it.

Also the basement apartment was likely illegal and it is possible to lose custody for not providing a livable space for a child. So, sure, it's possible and it's possible for a child to be taken away.

No, my basement apartment is not illegal. I may not make a lot of money but I am not an idiot. We live quite well in a very large basement apartment of a very large home. Owning a home and having multiple children are also lifestyle choices but don't say it can't happen when it does happen all of the time. Maybe you think it is unbelievable that people life a lifestyle that you choose not to follow but it doesn't make it impossible.

[Anonymous]

Op you have no health problems. That helps a lot.

Also, at this rate, you are not saving enough for retirement.

If you develop a serious health issue or disability, u r screwed.

Are u planning on an inheritance from grandma to fund yr retirement?

[Anonymous]

Very inspiring and refreshing, OP!

[Anonymous]

Anonymous wrote:Op you have no health problems. That helps a lot.

Also, at this rate, you are not saving enough for retirement.

If you develop a serious health issue or disability, u r screwed.

Are u planning on an inheritance from grandma to fund yr retirement?

She is also in her 20's. At 30, my only asset was my degree and brain.

Assuming she is saving 10% for retirement, and she can live on her salary, she will be fine. The big numbers for retirement are based on the idea 80% of the current salary: 150K would required 3 million. 30K would require 600K. She will have that.

[Anonymous]

I paid $186/week at a nice church daycare in 2012 for my 2 year old. The most I paid for infant care was $300/week and at NAEYC center. Ex and I split daycare. DD went into free PreK3 thereafter. Her school provided free aftercare. I took home $3000 when she was born. Mortgage and condo fees plus utilities were $1400. I breastfed exclusively and opted to use cloth diapers (until we switched to a cheaper center that only used disposable). I saved 10-15% for retirement the entire time.

We still ate out, travelled, and I went out with friends and dates. I am not as extreme as OP, but I agree that living on well under 100k can be done. I am probably not much older than OP.

[Anonymous]

Everyone can save money. There's nothing particularly inspiring or praiseworthy about about it. It's like congratulating someone for not being overweight. Being strong and healthy is another matter - you actually have to put in long term hard work and exercise.

The OP grossly mis-characterized the complaints voiced in this forum by people with higher HHI. These people are not complaining about lack of money for food, rent, gas, or other essentials. They are saying that even with the higher income, they live a very middle class lifestyle, and certainly not luxurious as one may imagine without first hand experience. Close your eyes and imagine if you had $170k a year, $300k a year, how would you live, where would you vacation, the home you would live in, and etc. The people making these salaries have found out that the answer in all cases is "slightly better than average". When you were young, you might think that a 170k or 300k HHI means "you've made it". I know I did, and so did my wife. The reality is that people making $300k in the DC area have NOT "made it". These people have exerted great effort to improve their financial condition. They are the over-achievers in life, with purpose driven personality, and willing to put in the hard work necessary to achieve their goals. The fact that this level of income doesn't bring absolute financial security is what worries these people.

This worrying is natural and expected. This same personality is what brought them to their current level of income in the first place. There are those who are satisfied with their existing condition, content to stay the same and live modestly for decades - there is nothing wrong with that. It is certainly yet another goal to achieve personal financial security. However, it is important to recognize that we are talking about two different types of people here. Someone making $300k a year and hungry for more may go insane with the idea of staying the same for decades.