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“Rich” but Broke - What can we cut?
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Anonymous
Not OP, but I don’t understand this. What student has $60-70K each year to pay private school tuition? Who graduates with 20-30K of student debt after 7-8 years of college and grad school? I’m a lawyer myself and have many, many, friends who went fed just to get their crippling loans forgiven after 10 years. And please don’t start with “should’ve gone to public school.” Anyone who works in Law knows Big Law firms only hire from top private law schools. Who knows what the circumstances were around that debt, but it doesn’t surprise me at all that 2 people had $500K student debt. |
Anonymous
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They’ll be much better off in a couple of years when at least one child is in school and both cars are paid off. They just need to suck it up until then.
And look at their take-home pay, because something does sound off there. They should bring home more than $15k/m on a $350k annual income. |
Anonymous
+1 We make $350k on two earners, max out two separate retirement accounts, put aside a bunch for pretax childcare, and one earner contributes to FERS, and we still bring home more about $17k/month. OP says neither of them are maxing and even if they're paying a lot in insurance (as a fed???) there's money missing here. Based on the financial vagueness and incompetence on display, though, I wouldn't be surprised if they bring home more than that, like maybe she's accidentally leaving out 2 paychecks/year for each of them because of biweekly takehome. |
Anonymous
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The $5300 mortgage seems high at 2.6%
OP said it appreciated '$400k so the loan amount should only be around 400K right?is it a 15 yr mortgage? |
Anonymous
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In my opinion, both sets of comments are right. Things will get easier financially as your kids hit school age. AND your mortgage amount is high for your income.
It may be worth you and your spouse having a conversation about what you want your life to look like. If you love your house, your community and your commute, maybe you stay out and accept that you won’t be taking many vacations/eating out, etc. Maybe you want more savings and vacations, so you move someplace a LOT less expensive. (900K mortgage + 500k appreciation means a value of at least 1.4 Million. In an 800K house, you could have a smaller mortgage + some savings.) or maybe you want your current house + vacations and savings in which case one person needs a higher paying job. It’s really all about your Family priorities. |
Anonymous
No, OP said that the mortgage was $900k, not that the house cost $900k. Assuming they put 20% down the house cost around $1.1 million. |
Anonymous
| Honestly I don’t see the problem here. The mortgage is slightly steeper than I would have chosen but it’s not terrible at that income, especially for a forever home. Daycare costs are what they are—you can’t really avoid that. The cars were a poor financial decision but if I’m understandingly correctly they’ll be paid off soon? So once that’s done and daycare ends, OP will be fine. They do need to save more but should have plenty to catch up if they don’t spend outrageously. |
Anonymous
https://www.toyota.com/corolla/2023/ Starting price 21,700 |
Anonymous
| A nanny for 2 kids would be cheaper than your current Day Care costs. I had a nanny for 2 kids for 8 years. She worked 50 hours a week and earned $50,000 until the kids were in school full time. Then she was part time. Depending on how many hours you need, if you pay hourly at $25 an hour, you could find some savings. I have an Au pair now and it works out great and saves a ton of money. Your kids are too young for an au pair. |
Anonymous
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7 years ago when OP bought these cars, a nicely equipped brand new Odyssey was $34k.
This is about image and having champagne tastes on a beer budget. |
Anonymous
I’m currently looking for a new car and am considering a Corrolla. After talking with multiple dealers this week I am comfortable saying that $21,700 is very, very optimistic. |
Anonymous
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Anonymous
If one is "smart enough to be a lawyer" and go to a private law school in order to go into Big Law, then one should be smart enough to stay in big law until they pay off the loans. Me personally, I wouldn't have kids until I had paid off most of the loans and found a job that I could do while managing a family---not that difficult to realize that big law and being a very involved parent do not easily mix (I suspect the big law is the woman and she decided she wanted a more relaxed lifestyle with kids). If you choose to take on that debt then you need a good plan to pay it off, and that means working in big law until you do ideally. It may mean putting off having kids for another 2-3 years. Whatever it means, you should have a plan, and their plan was not very good on many levels/choices financially |
Anonymous
+1000. And they could likely easily manage with one vehicle. Saving so much money |
Anonymous
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You keep the cars until they run into the ground, after they are paid off.
If you have taste that is this expensive OP, I would wonder if a lot of things you are buying are also fairly expensive. Iphones instead of cheaper Androids? Premium streaming services? An expensive phone plan? Brand new clothes for the kids instead of used? You can't do much about the house or the cars at this point, except sell them, which may not be a great idea. The other plan would be to cut back on all other expenses until the children are out of daycare and in public school. |