What $PITI should we aim for...

[Anonymous]

We had that income profile and did 3.75K. Luckily interest rates were lower then, so we could buy much more house.

Glad we did it (income did go up and kid left daycare)

[Anonymous]

Anonymous wrote:We had that income profile and did 3.75K. Luckily interest rates were lower then, so we could buy much more house.

Glad we did it (income did go up and kid left daycare)

Well OP is saying they don’t have much income
Mobility and will continue to keep their kids in private school. Bad choices.

[Anonymous]

Anonymous wrote:We had that income profile and did 3.75K. Luckily interest rates were lower then, so we could buy much more house.

Glad we did it (income did go up and kid left daycare)

OP's income isn't going to go up much, and daycare cost is going up next year because OP is going to have two kids in private school. $3.75k is way too much.

[Anonymous]

260,000 HHI
1600 for daycare

Our PITI is 2700 and we are comfortable.

[Anonymous]

Anonymous wrote:

Anonymous wrote:$3500

Yikes. So that's looking like a 750k house with current interest rates.
Slim pickings inside the beltway

What math are you using that you will have a 3500 mortgage with a 750k purchase price? Are you putting 35% down? I don’t think someone with your income profile is going to be Abel to afford a fixer upper.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wouldn't go higher than $3000.

For comparison, we are slightly higher HHI than you ($260k) and our PITI is $2200. We also have young kids (k, pk, and daycare) and save a decent amount (max 401ks, Roth's, $500/mo per kid to 529s) and after groceries, fixed expenses, activities, there's not a lot left!

Do you have a lot of room to grow in salaries? If so maybe go a little higher but you don't want to be house poor.

Can only increase maybe 30-50k in the next 10 years.
That is similar to what we currently pay.
We don't do 529s because we cash flow daycare/ tuition now so plan on continuing that.
Admittedly don't max out 401k, but do contribute to get the match.

Hard to swallow staying in the house we have outgrown in order to put money away for 30+ years from now, but aware it's probably the smarter move

I was with you until the last paragraph. Spending twice as much for GT OOS over VT is no less a terrible plan than budgeting 25k/year for college.

This is a terrible “plan” you say you have a baby? Tuition is going to be much higher than what you are paying for daycare.

Why would you set your kids up to start their adult lives with crippling debt? At a bare minimum those daycare payments shouldn’t stop. They should be redirected into 529. You also have no business with your kids in private school if you can’t afford college. You are doing them a gigantic disservice.

I have a senior in high school and a sophomore. It’s not as simple as cash flow. I have one who is an excellent student and got into Georgia tech which is an excellent engineering school. I’m so glad I wont be leaving him out to dry. Sure I could have insisted he attend VT, but he got into a top engineering school and this is well worth the extra savings we did just in case state schools weren’t enough. Plus with you having a baby and inflation , the expense will be very different in 17 years from now. Schools are opening even more slots for international students and it is making state flagships insanely competitive and are off the table for many residents.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wouldn't go higher than $3000.

For comparison, we are slightly higher HHI than you ($260k) and our PITI is $2200. We also have young kids (k, pk, and daycare) and save a decent amount (max 401ks, Roth's, $500/mo per kid to 529s) and after groceries, fixed expenses, activities, there's not a lot left!

Do you have a lot of room to grow in salaries? If so maybe go a little higher but you don't want to be house poor.

Can only increase maybe 30-50k in the next 10 years.
That is similar to what we currently pay.
We don't do 529s because we cash flow daycare/ tuition now so plan on continuing that.
Admittedly don't max out 401k, but do contribute to get the match.

Hard to swallow staying in the house we have outgrown in order to put money away for 30+ years from now, but aware it's probably the smarter move

I was with you until the last paragraph. Spending twice as much for GT OOS over VT is no less a terrible plan than budgeting 25k/year for college.

This is a terrible “plan” you say you have a baby? Tuition is going to be much higher than what you are paying for daycare.

Why would you set your kids up to start their adult lives with crippling debt? At a bare minimum those daycare payments shouldn’t stop. They should be redirected into 529. You also have no business with your kids in private school if you can’t afford college. You are doing them a gigantic disservice.

I have a senior in high school and a sophomore. It’s not as simple as cash flow. I have one who is an excellent student and got into Georgia tech which is an excellent engineering school. I’m so glad I wont be leaving him out to dry. Sure I could have insisted he attend VT, but he got into a top engineering school and this is well worth the extra savings we did just in case state schools weren’t enough. Plus with you having a baby and inflation , the expense will be very different in 17 years from now. Schools are opening even more slots for international students and it is making state flagships insanely competitive and are off the table for many residents.

NP, GT is a far superior school than VT for engineering students in all engineering disciplines. If my kid got into GT and VT I’d definitely pay for GT.

I work for a tech company and we heavily recruit out of GT and I’ve seen 200k offers to CS students coming out of T10 engineering schools. I can say I have not seen that with VT, Auburn, and the like tier 2 schools. GT stands out for it’s known rigor. You know exactly what you are getting with those new grads.

[Anonymous]

You cannot afford private school.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wouldn't go higher than $3000.

For comparison, we are slightly higher HHI than you ($260k) and our PITI is $2200. We also have young kids (k, pk, and daycare) and save a decent amount (max 401ks, Roth's, $500/mo per kid to 529s) and after groceries, fixed expenses, activities, there's not a lot left!

Do you have a lot of room to grow in salaries? If so maybe go a little higher but you don't want to be house poor.

Can only increase maybe 30-50k in the next 10 years.
That is similar to what we currently pay.
We don't do 529s because we cash flow daycare/ tuition now so plan on continuing that.
Admittedly don't max out 401k, but do contribute to get the match.

Hard to swallow staying in the house we have outgrown in order to put money away for 30+ years from now, but aware it's probably the smarter move

I was with you until the last paragraph. Spending twice as much for GT OOS over VT is no less a terrible plan than budgeting 25k/year for college.

This is a terrible “plan” you say you have a baby? Tuition is going to be much higher than what you are paying for daycare.

Why would you set your kids up to start their adult lives with crippling debt? At a bare minimum those daycare payments shouldn’t stop. They should be redirected into 529. You also have no business with your kids in private school if you can’t afford college. You are doing them a gigantic disservice.

I have a senior in high school and a sophomore. It’s not as simple as cash flow. I have one who is an excellent student and got into Georgia tech which is an excellent engineering school. I’m so glad I wont be leaving him out to dry. Sure I could have insisted he attend VT, but he got into a top engineering school and this is well worth the extra savings we did just in case state schools weren’t enough. Plus with you having a baby and inflation , the expense will be very different in 17 years from now. Schools are opening even more slots for international students and it is making state flagships insanely competitive and are off the table for many residents.

NP, GT is a far superior school than VT for engineering students in all engineering disciplines. If my kid got into GT and VT I’d definitely pay for GT.

I work for a tech company and we heavily recruit out of GT and I’ve seen 200k offers to CS students coming out of T10 engineering schools. I can say I have not seen that with VT, Auburn, and the like tier 2 schools. GT stands out for it’s known rigor. You know exactly what you are getting with those new grads.

Are you insane? You are wasting money on GT. It won't make your child more successful in life. Plenty of VT graduates will be more successful than your child.
What a stupid move. You should have saved than money for grad school.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wouldn't go higher than $3000.

For comparison, we are slightly higher HHI than you ($260k) and our PITI is $2200. We also have young kids (k, pk, and daycare) and save a decent amount (max 401ks, Roth's, $500/mo per kid to 529s) and after groceries, fixed expenses, activities, there's not a lot left!

Do you have a lot of room to grow in salaries? If so maybe go a little higher but you don't want to be house poor.

Can only increase maybe 30-50k in the next 10 years.
That is similar to what we currently pay.
We don't do 529s because we cash flow daycare/ tuition now so plan on continuing that.
Admittedly don't max out 401k, but do contribute to get the match.

Hard to swallow staying in the house we have outgrown in order to put money away for 30+ years from now, but aware it's probably the smarter move

Do you have other savings?

It sounds like your retirement savings are low, you don't have college savings. You can cash flow private school (Catholic? $24k/year seems fairly low) but college is much pricier and you're unlikely to get need-based aid at a $200k+ HHI. Do you have an emergency fund?

It really does seem like you should stay put and focus on saving.

Thank you for this input.
yes, plan to contribute 25K per year per kid through college. Additional costs must be through comb of grants/scholarship/loans, etc

Our retirement savings are low, but one of us is a Fed and will have ~40k pension (in today's $) at retirement.
Total retirement savings now are ~ 150k

We have 16k in an individual brokerage account.
Also an inherited IRA (240K) that we haven't done anything with thus far.

You are way behind and 25k/yr per kid for college isn’t jack shit , especially since you have young kids. You are very behind in retirement savings. Last thing you need is more debt and more expenses. Your focus should be college savings and more retirement contributions.

OP said what they plan to do about college. You can disagree with their plan, but there is no reason to insult them.

OP never gave their ages and yet you are able to declare that they are way behind with 400k in retirement savings and a Fed pension. Ignoring the pension, 400k in savings on a 230k HHI is right on target for a 37 years old and OP might be a lot younger than that.

Both DH and I are 35. 2 kids 8 and infant.
I’m quite humbled by the responses on this thread.
I thought we were doing ok financially.

230 HHI with no student loans, two paid off newer cars, no other debt.
We have 30 years left to work so I thought contributing (10% and 7% of gross income respectively was not great, but ok). Perhaps I’m placing too much worth on the fed pension.
Does everyone really max out 401ks every year?

Re: college savings, my parents (and parents of many friends growing up) paid for 4 years instate school. Anything else was understood to be my responsibility. Looking back I’m grateful for this. I went in-state and didn’t graduate with any loans. They paid a LOT less for my education than friends who went to OOS public’ and ended up with same degree. It was a good lesson for me.

A pp mentioned the down payment. We are being gifted down payment by a grandparent. .
My question is to get a sense of PITI for day to day budgeting based on our income.

Thanks for helpful insight, however I do feel much worse about myself than I did going in!

[Anonymous]

Yes, financially responsible professionals that are able absolutely max out their 401ks every year. Most of us have additional investments beyond that as well.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wouldn't go higher than $3000.

For comparison, we are slightly higher HHI than you ($260k) and our PITI is $2200. We also have young kids (k, pk, and daycare) and save a decent amount (max 401ks, Roth's, $500/mo per kid to 529s) and after groceries, fixed expenses, activities, there's not a lot left!

Do you have a lot of room to grow in salaries? If so maybe go a little higher but you don't want to be house poor.

Can only increase maybe 30-50k in the next 10 years.
That is similar to what we currently pay.
We don't do 529s because we cash flow daycare/ tuition now so plan on continuing that.
Admittedly don't max out 401k, but do contribute to get the match.

Hard to swallow staying in the house we have outgrown in order to put money away for 30+ years from now, but aware it's probably the smarter move

Do you have other savings?

It sounds like your retirement savings are low, you don't have college savings. You can cash flow private school (Catholic? $24k/year seems fairly low) but college is much pricier and you're unlikely to get need-based aid at a $200k+ HHI. Do you have an emergency fund?

It really does seem like you should stay put and focus on saving.

Thank you for this input.
yes, plan to contribute 25K per year per kid through college. Additional costs must be through comb of grants/scholarship/loans, etc

Our retirement savings are low, but one of us is a Fed and will have ~40k pension (in today's $) at retirement.
Total retirement savings now are ~ 150k

We have 16k in an individual brokerage account.
Also an inherited IRA (240K) that we haven't done anything with thus far.

You are way behind and 25k/yr per kid for college isn’t jack shit , especially since you have young kids. You are very behind in retirement savings. Last thing you need is more debt and more expenses. Your focus should be college savings and more retirement contributions.

OP said what they plan to do about college. You can disagree with their plan, but there is no reason to insult them.

OP never gave their ages and yet you are able to declare that they are way behind with 400k in retirement savings and a Fed pension. Ignoring the pension, 400k in savings on a 230k HHI is right on target for a 37 years old and OP might be a lot younger than that.

Both DH and I are 35. 2 kids 8 and infant.
I’m quite humbled by the responses on this thread.
I thought we were doing ok financially.

230 HHI with no student loans, two paid off newer cars, no other debt.
We have 30 years left to work so I thought contributing (10% and 7% of gross income respectively was not great, but ok). Perhaps I’m placing too much worth on the fed pension.
Does everyone really max out 401ks every year?

Re: college savings, my parents (and parents of many friends growing up) paid for 4 years instate school. Anything else was understood to be my responsibility. Looking back I’m grateful for this. I went in-state and didn’t graduate with any loans. They paid a LOT less for my education than friends who went to OOS public’ and ended up with same degree. It was a good lesson for me.

A pp mentioned the down payment. We are being gifted down payment by a grandparent. .
My question is to get a sense of PITI for day to day budgeting based on our income.

Thanks for helpful insight, however I do feel much worse about myself than I did going in!

I am the PP. Typical recommendations for retirement savings is 15% of gross a year. For higher earners, that tends to be a little low. With one Fed match and fed pension, you are close, but should be saving another couple of percent. That said, it sounds like there is some family money (inherited IRA and a down payment gift). That could mean you are way ahead, but if there are other gifts, you may be living beyond your means, but not your family means. The 5-10k to talk to a no-fee financial planner might be money well spent. You can lay out your goals and your full financial situation and you will get some reasonable advice and not the DCUM fantasy world.