How much money do we need to live comfortably?

[Anonymous]

We have a HHI over just over $200K and two kids in preschool. Yes, kids are expensive and preschool for two adds up and it's an expensive area, but still. We do modest vacations, have a nice (not huge) home just outside the beltway, two mid-range cars. We're not quite pay-check-to-paycheck but we're not far from that, and we're certainly not putting away a huge amount for college and retirement. (To be fair, we did save for retirement at a good rate before the kids came into the picture.)

I know that $200,000 isn't by any means wealthy for this area, but shouldn't we be able to to have a bunch of cushion if we are not throwing money away?

[Anonymous]

Do you have an emergency fund/savings and health insurance? If yes, sounds comfortable to me.

[Anonymous]

This is a classic question from economics class:

How much money do people need to be comfortable (or happy or secure)?

The answer: "A little bit more"

[Anonymous]

Anonymous wrote:Do you have an emergency fund/savings and health insurance? If yes, sounds comfortable to me.

Health insurance - yes

Emergency fund - just a few thousand but we have access to funds we could borrow if truly desprite, heaven forbid!

[Anonymous]

My husband makes about 85k and I make 50k, so we do about 135k a year. We rent and don't have kids though - which means its a lot easier for us. I feel extremely comfortable though!

[Anonymous]

Perhaps a bit of a tangent -- but do you and your DH each have life and disability insurance policies in place? I could be wrong but I feel like that's one area people often overlook in their budget/planning--and it's not cheap. I was astounded by how costly they are, but they are necessary to provide a real financial safety net for the family. That sucks up about $1000 a month in our budget. If we had that cash to save or spend, we'd feel things were a lot more "comfortable," but so it goes.

[Anonymous]

Jesus your life insurance is $1000/month? Is that normal?

[Anonymous]

Anonymous wrote:Jesus your life insurance is $1000/month? Is that normal?

NO WAY. Life insurance for $750K each for my spouse and myself runs us about $75/month, including small riders for our children. You should be getting term, not whole life insurance.

[Anonymous]

Our HHI is about what yours is, we have 1 in daycare, and we have almost $2k/month in law school loans. We live in the District, though we rent. We are certainly not living paycheck-to-paycheck. We save just about $3k/month.

[Anonymous]

Anonymous wrote:Our HHI is about what yours is, we have 1 in daycare, and we have almost $2k/month in law school loans. We live in the District, though we rent. We are certainly not living paycheck-to-paycheck. We save just about $3k/month.

Our HHI is similar to yours as well. We have 1 toddler in daycare, mortgage on a small house we bought in 2008 in a nice neighborhood in N. Arlington, but no other debt. On an annual basis, we put about 60% of our after tax income into savings and college funds.

We track our expenses every month. It's helpful to see where the money is going and it motivates us to be better about brown bagging lunch and reducing takeout dinners, etc.

[Anonymous]

Did you change your 401K contributions after kids?

[Anonymous]

Anonymous wrote:We have a HHI over just over $200K and two kids in preschool. Yes, kids are expensive and preschool for two adds up and it's an expensive area, but still. We do modest vacations, have a nice (not huge) home just outside the beltway, two mid-range cars. We're not quite pay-check-to-paycheck but we're not far from that, and we're certainly not putting away a huge amount for college and retirement. (To be fair, we did save for retirement at a good rate before the kids came into the picture.)

I know that $200,000 isn't by any means wealthy for this area, but shouldn't we be able to to have a bunch of cushion if we are not throwing money away?

Our HHI is around $225-250K depends on the bonus. Are you carrying a lot of debt or did you overpay for your house? with what you described, you should be living more comfortably than you are. Not trying to be insensitive, but perhaps you need to look at where your money is going. While $200K is not wealthy in the DC area, it's still a respectable amount of money. I feel blessed to have the income we have, and feel we are better off than many of our friends.

[Anonymous]

PP, my husband makes $210K and only nets $8,000 a month. How can you have a mortgage, daycare and still save $3,000 a month on $200K gross?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Our HHI is about what yours is, we have 1 in daycare, and we have almost $2k/month in law school loans. We live in the District, though we rent. We are certainly not living paycheck-to-paycheck. We save just about $3k/month.

Our HHI is similar to yours as well. We have 1 toddler in daycare, mortgage on a small house we bought in 2008 in a nice neighborhood in N. Arlington, but no other debt. On an annual basis, we put about 60% of our after tax income into savings and college funds.

We track our expenses every month. It's helpful to see where the money is going and it motivates us to be better about brown bagging lunch and reducing takeout dinners, etc.

PP do you use a software package to track expenses or are you just really diligent? I would like to do the same, but am so lazy about it...

[Anonymous]

OP, what are your big ticket items?

Mortgage
Childcare
Food
Loans
Etc.