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Making it on $250,000 a year (WaPo business section, front page, Sunday)
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Anonymous
15:33 here. We max our our 401Ks (which is a lot less than 43K, not sure where that number came from), and save a modest amount in 529s for both kids. It's not going to be nearly enough to put them both through the Ivies, but it will be enough to help pay for tuition at a good public, in-state school. Anything beyond that they'll have to fend for themselves. We only donate a small $ amount to charity, but we both volunteer our time, which we feel counts towards charitable contributions. |
Anonymous
Hhmm. You must not have to spend several thousand a year on house maintenance. I keep thinking we should be saving way more but every year some major system fails and needs to be replaced. We live in a 1950's rambler out in outer Potomac. Something is always breaking down. Would love to be able to spend on a new kitchen or something fun but it is expensive trying to keep the roof from falling in. Also, do your kids not have activities? Woe to families who's kids excel at some activity. It will cost you an arm and a leg. |
Anonymous
Now I understand why some p[eople complain that they are just barely scraping by on $250K. Your idea of "comfortable" is indeed quite well-off by average American standards and luxurious by the rest of the world's. Just be aware of that! |
Anonymous
12:53 here, and you are right that the $43K number is wrong. The right number is $38,000, which we arrive at as follows: $16,500K/year is the max 401(k) contribution allowed by law and we each reach that max. DH, who is 55yo, can contribute an additional $5K under the "catch up" IRS provisions, so the total for our joint retirement savings is $38K. |
Anonymous
12:53 here, and we live in a rambler in a close-in suburb too (the point being, our house is old too). No, we don't spend several thousand a year on house maintenance, although I am sure that like you, at some point we will as that's just part of homeownership. DH is fairly handy and I've learned some things, too, so for minor handyman-type things we are sometimes able to do it ourselves. We do routine maintenance from time to time (had a tree removed after the August storm to the tune of $3K), but like you we leave the fun stuff mostly alone because of money - our main bath and master bath each date to 1953, when our house was built. The master one in particular is fugly as all get-out, but it is functional, so like my 15 year old car, we will keep using it until we no longer can. Our kids do have activities. Our middle schooler plays tennis, swims, and participates in a ski club. Our tween plays soccer, tennis, swims, and takes a pottery class. They both go to overnight camp (2 weeks) in the summer, and DC#1 is going abroad this summer - we hosted a same-age child last summer, and now it is our child's turn to be hosted by the other family. DH and I will pay for the plane ticket out of savings; there is no room & board or other expense (since it's a private exchange); and child is doing pet-care and yardwork to pay for incidentals/pocket money. DC has saved about $300 so far, which is great. Our kids are by no means deprived. It is astonishing to me that PP would tell me that we are not "comfortable." |
Anonymous
Good thing we had extra money each month, because we had $15,000 last year in unanticipated home repairs and medical bills. If you don't generate free cash each month, how do you pay for a new furnace or a new roof, or an unexpected surgery? |
Anonymous
I've been curious about this aspect throughout this whole thread. (And I've skipped many pages in the middle, so perhaps it was discussed. If so, forgive this extra post.) We attempt to tithe 10% of our after-tax dollars, though many people we know tithe at least that amount on before-tax income. For those who feel frugal and are more than "making it" on under $250k/year, how much does charitable giving factor in to your household expense equation? I'm honestly just curious about this. We put this "expense" at the top of our fixed budget and try to treat it as we do our mortgage -- that is, non-negotiable -- but I know there are a wide array of philosophies about this. Some friends give a little here and there, others don't give at all until they are completely shored up for retirement/college/etc., viewing giving as a later-in-life kind of thing to do. We make more than $250,000 and include charitable giving as a regular item in our budget. |
Anonymous
But why give so much to charity when you don't have your own savings on track for college?
We make about $225 single income and tithe 10%. As this point we're not saving for college because we don't have the $$ while paying for preschool for 2 children. However, it's very important to us to give a percentage of our income away to others (especially given the size of our income which we consider to be quite large in comparison to how we both grew up). |
Anonymous
Frugal, comfortable PP here. We do generate extra cash - each month we put about $500 in savings. Our emergency reserves are currently at about $60K, and since we have huge equity in our house, we could if needed borrow against that - or against retirement if things got dire. We currently have about $250K saved towards our kids' college expenses, and the kids are now 12 and 10. We may need to kick in some money when they get to the requisite age, but we will be most of the way there (and will have fully-funded retirements by then). We are prepared for an emergency. |
Anonymous
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$43K - maxing two 401(k)s or Thrift Savings Plans plus $10,000 max in traditional IRAs quote=Anonymous]
15:33 here. We max our our 401Ks (which is a lot less than 43K, not sure where that number came from), and save a modest amount in 529s for both kids. It's not going to be nearly enough to put them both through the Ivies, but it will be enough to help pay for tuition at a good public, in-state school. Anything beyond that they'll have to fend for themselves. We only donate a small $ amount to charity, but we both volunteer our time, which we feel counts towards charitable contributions. |
Anonymous
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"We make about $225 single income and tithe 10%."
How does that work out tax wise? |
Anonymous
I'm assuming that you guys either came into the marriage with no investment portfolio or that you had jobs in your 20's that paid well/had retirement plans. |
Anonymous
Do you mean to say, *an investment portfolio* rather than "no investment portfolio"? In any case, no, and no. DH was a musician in his 20's, earning little money, and went to grad school at 30. He didn't start saving for retirement until his mid-30's, when he landed his first real job. I lived abroad in my 20's, earning a pittance as an English teacher and saving nothing (in local money, and the dollar was so strong then that even if I'd saved it would have been worth little here) then went to grad school later, finishing at 30. I worked for a low-budget operation for several years, saving only $2K/year in an IRA. At 35, I began saving in earnest for retirement when I landed a better job that year. We had our kids on the late side (first child when I was 36). We got started late, but once we got started, we were very disciplined about things and we have always maxed out our retirement savings. |