“Rich” but Broke - What can we cut?

[Anonymous]

Is it possible PP meant to say “NOT living paycheck to paycheck.” Agree with other posters it doesn’t make sense otherwise.

[Anonymous]

Anonymous wrote:When I worked in a warehouse some of my colleagues would walk a couple of miles a day for the last couple of days before payday because they didn’t have enough money for the bus. That is living paycheck to paycheck.

Please don’t say you are paycheck to paycheck when you are saving $8k/month, it is insulting. Words do have some meaning.

+1 I do pro bono work with lower income working families. Paycheck to paycheck often means deciding which obligatory bill to pay late each month based on their collection policies--knowing exactly the length of grace period before your power, water, internet will be shut off (and have large fees) if you pay late and sequencing accordingly every single month. If you or your kids get sick and you lose pay, it can throw off the entire sequence. It means walking/taking the bus for most family members and only being able to repair your car if you take on a 2nd or 3rd job.

You are not "broke" or "living paycheck to paycheck" if you have savings, contribute to retirement and college plans. I find it offensive to appropriate those terms--and it explains some of the cluelessness. I think because people don't really know others who are in this situation, they don't really count to them. They say oh even though I'm UMC, I'm really just MC because I see these other people who have more and I feel the pinch. They never compare themselves to the very many people who are living in the DMV who are getting by on so, so much less.

[Anonymous]

Anonymous wrote:Is it possible PP meant to say “NOT living paycheck to paycheck.” Agree with other posters it doesn’t make sense otherwise.

The title of the thread also says "Broke" so it kind of feels like a theme.

[Anonymous]

Anonymous wrote:You can absolutely reduce childcare expenses. LOOK.

This. $5000 for two kids is steep. Find a smaller center or an in-home and you could cut that down to 3500, at least. I have a 14mo and 3 yo and pay $2950 for them both at the same small neighborhood daycare.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You can absolutely reduce childcare expenses. LOOK.

This. $5000 for two kids is steep. Find a smaller center or an in-home and you could cut that down to 3500, at least. I have a 14mo and 3 yo and pay $2950 for them both at the same small neighborhood daycare.

Tough part is getting a slot at one of those places. Getting into a large center is easier by sheer number of spots.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You can absolutely reduce childcare expenses. LOOK.

This. $5000 for two kids is steep. Find a smaller center or an in-home and you could cut that down to 3500, at least. I have a 14mo and 3 yo and pay $2950 for them both at the same small neighborhood daycare.

In Chevy Chase, MD? What center?

[Anonymous]

If you have an extra bedroom (or could have your kids double up), you can get an au pair and cut your childcare costs in half.

I think you might be living above your means. I say this as someone who lives below my means, but my HHI is about 3x yours, and your expenses give me anxiety just looking at them. You might feel a lot more comfortable if you don't think of yourself as rich, and think of yourself as middle class for the DC area (which is more accurate). If you feel really confident in your financial position, you tend to overestimate what you "should" be able to afford.

[Anonymous]

Anonymous wrote:If you have an extra bedroom (or could have your kids double up), you can get an au pair and cut your childcare costs in half.

I think you might be living above your means. I say this as someone who lives below my means, but my HHI is about 3x yours, and your expenses give me anxiety just looking at them. You might feel a lot more comfortable if you don't think of yourself as rich, and think of yourself as middle class for the DC area (which is more accurate). If you feel really confident in your financial position, you tend to overestimate what you "should" be able to afford.

+1

[Anonymous]

Anonymous wrote:You aren't doing anything wrong. Childcare is expensive. Once you don't have that expense you will be in great shape.

Kids get more expensive as they get older. Because of their large mortgage they will be house poor for awhile.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You aren't doing anything wrong. Childcare is expensive. Once you don't have that expense you will be in great shape.

Kids get more expensive as they get older. Because of their large mortgage they will be house poor for awhile.

Not for someone spending 60k a year on childcare.

Even if OP signs her kids up for tons of activities, pricey summer camp and expensive clothing it’s 20k each max. And all of this stuff is optional. OP has to spend 60k to go to work.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You aren't doing anything wrong. Childcare is expensive. Once you don't have that expense you will be in great shape.

Kids get more expensive as they get older. Because of their large mortgage they will be house poor for awhile.

Not for someone spending 60k a year on childcare.

Even if OP signs her kids up for tons of activities, pricey summer camp and expensive clothing it’s 20k each max. And all of this stuff is optional. OP has to spend 60k to go to work.

+1. The DC area has the most expensive child care in the nation; its more expensive than the average cost of college. Most DC area families will never have a more expensive time period than when the kids are under 5.

But this won't go away that easily. Even after-care tends to be around a grand per kid.

[Anonymous]

Here is the budget I have for you:

Total income: $350k

Fixed expenses:
Taxes: 80k
Housing: 64k
Childcare: 60k
Utilities: 10k
Insurance: 8k
Auto payments: 12k
___
Total: 234k

Variable expenses:
Food: 18k
Gas: 6k
Retirement savings: 45k
Vacation: 12k
Entertainment: 5k
Everything else (clothes, diapers, activities, home repairs): $30k (or 2500/month)
___

Total: 116k

I don’t think you need to save 20% for retirement right now. You have a lot of really high fixed expenses now that you won’t have at that time.
I do think you should hire a babysitter and go out a couple of times a month and take a yearly vacation! Those are great memories that will only appreciate in value as your kids get older.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You aren't doing anything wrong. Childcare is expensive. Once you don't have that expense you will be in great shape.

Kids get more expensive as they get older. Because of their large mortgage they will be house poor for awhile.

Not for someone spending 60k a year on childcare.

Even if OP signs her kids up for tons of activities, pricey summer camp and expensive clothing it’s 20k each max. And all of this stuff is optional. OP has to spend 60k to go to work.

But for the OP, it wont be "optional". They want to keep up with everyone in their expensive neighborhood. Camps alone will run them $15K-20K for the 2 kids. Add in all the other expenses and sports/music/karate/ and they will likely still spend $40K+ easily.

[Anonymous]

It’s not the cars. You can’t nickel and dime your way out of these kinds of problems. It’s the mortgage and the childcare, period. You overspent on the house by far (our HHI is a little higher than yours at 400k and our mortgage is less than half of what you pay). Serious question on childcare, how is it possible you have a 900k house and not enough space for an au pair when you only have 2 babies? Make space for the au pair and you’ll be much better off.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You aren't doing anything wrong. Childcare is expensive. Once you don't have that expense you will be in great shape.

Kids get more expensive as they get older. Because of their large mortgage they will be house poor for awhile.

Not for someone spending 60k a year on childcare.

Even if OP signs her kids up for tons of activities, pricey summer camp and expensive clothing it’s 20k each max. And all of this stuff is optional. OP has to spend 60k to go to work.

But for the OP, it wont be "optional". They want to keep up with everyone in their expensive neighborhood. [url]Camps alone will run them $15K-20K for the 2 kids. Add in all the other expenses and sports/music/karate/ and they will likely still spend $40K+ easily.

What kind of camps? Even expensive sleepaway camps for wealthy kids from places like Manhattan are 15k for an 8 week session.

I don’t see someone in NoVa earning 350k even getting their children into camps like those.