“Rich” but Broke - What can we cut?

[Anonymous]

Anonymous wrote:How old are you? How in demand and/or stable are your jobs? How much do you expect your comp to rise?

You bought too much house too quickly. Should have stuck it out somewhere cheap until 1st kid in public K. The nanny is also an indulgence, get your kids into a daycare.

Other than that, you have to grind it out for just a few more years.

33, lawyer working for fed so pretty stable. Worked the big law life many years to pay off school debt, it wasn’t working for me with 2 young kids. Comp will raise however President decides / congress agrees to every year.

I’m gathering that we overspent on house and cars. House ended up being a worthwhile “investment”, but cars are of course just depreciating assets. Will consider selling a car, and/or renting out our house and moving to dc for a bit to help with childcare costs. Kids are currently in FT daycare, but it’s really expensive… we are not Christian and don’t prefer a catholic preschool.

Thanks for all the helpful advice. Lots to think about.

[Anonymous]

Anonymous wrote:A little less than $400 per car plus insurance on both. Probably right though, we overspent on cars…

I didn't even know they gave auto loans over 72 months. How much time could you possible have left? DO NOT TRADE THESE CARS IN. Just keep driving them for free until at least one child is in public school.

[Anonymous]

Wait, do you actually have a car payment on 6+ year old cars?

[Anonymous]

84 month lease at the time, we were both students with lots of student debt. That’s the one thing we’ve prioritized paying off. Keeping the cars until they die is the plan! 11 months left on one, 13 months on the other.

[Anonymous]

Anonymous wrote:

Anonymous wrote:How old are you? How in demand and/or stable are your jobs? How much do you expect your comp to rise?

You bought too much house too quickly. Should have stuck it out somewhere cheap until 1st kid in public K. The nanny is also an indulgence, get your kids into a daycare.

Other than that, you have to grind it out for just a few more years.

33, lawyer working for fed so pretty stable. Worked the big law life many years to pay off school debt, it wasn’t working for me with 2 young kids. Comp will raise however President decides / congress agrees to every year.

I’m gathering that we overspent on house and cars. House ended up being a worthwhile “investment”, but cars are of course just depreciating assets. Will consider selling a car, and/or renting out our house and moving to dc for a bit to help with childcare costs. Kids are currently in FT daycare, but it’s really expensive… we are not Christian and don’t prefer a catholic preschool.

Thanks for all the helpful advice. Lots to think about.

Just sit tight for a couple more years. Once the kids start school things will get easier. Do look at the cars though. That situation doesn’t make much sense.

[Anonymous]

Anonymous wrote:84 month lease at the time, we were both students with lots of student debt. That’s the one thing we’ve prioritized paying off. Keeping the cars until they die is the plan! 11 months left on one, 13 months on the other.

Is there a payoff amount after an 84 month lease?

[Anonymous]

OP our HHI and expenses are nearly identical to yours except our cars are paid off - it’s a season of life and will go quickly.

Funny that everyone assumes you have a nanny — we also pay $5K/month for two in daycare in Alexandria.

[Anonymous]

Anonymous wrote:

Anonymous wrote:84 month lease at the time, we were both students with lots of student debt. That’s the one thing we’ve prioritized paying off. Keeping the cars until they die is the plan! 11 months left on one, 13 months on the other.

Is there a payoff amount after an 84 month lease?

She means loan. They definitely don't give leases that long, and with payments that high. At least they will own the cars, but since they seem to have champagne taste they will have to fight the urge to trade up.

[Anonymous]

Anonymous wrote:A little less than $400 per car plus insurance on both. Probably right though, we overspent on cars…

$800 for 2 car payments isn’t actually that bad, IMO. That’s Honda budget, not BMW.

[Anonymous]

Anonymous wrote:

Anonymous wrote:A little less than $400 per car plus insurance on both. Probably right though, we overspent on cars…

$800 for 2 car payments isn’t actually that bad, IMO. That’s Honda budget, not BMW.

It's that amount 6 years later.

[Anonymous]

Part of this is a failure to plan in advance. I wouldn’t have taken on big car loans knowing I was going to have kids. Do you really need two cars now? We both cycle from Chevy Chase to downtown, getting free exercise along the way. Might be an option to consider.

[Anonymous]

Anonymous wrote:

Anonymous wrote:How old are you? How in demand and/or stable are your jobs? How much do you expect your comp to rise?
Kids are currently in FT daycare, but it’s really expensive… we are not Christian and don’t prefer a catholic preschool.

Thanks for all the helpful advice. Lots to think about.

Don't move or sell your car, etc. There are non secular preschool options throughout the area. What are the ages of your kids? Overall, agree this is a season of life. Daycare is expensive. You may be able to find a less expensive preschool option for your older child if they are 3 but will lose some convenience of having both at the same place until the younger one can go too.

[Anonymous]

Anonymous wrote:OP our HHI and expenses are nearly identical to yours except our cars are paid off - it’s a season of life and will go quickly.

Funny that everyone assumes you have a nanny — we also pay $5K/month for two in daycare in Alexandria.

+1 to this, we are in FFX and have the same daycare costs. I think the easiest way to get cheaper is an in home daycare but most near us seem to age out around 2.5/3, I believe.

[Anonymous]

Anonymous wrote:Since your take-home is half your gross, you're apparently maxing retirement for two people (which is close to $50K per year in savings). On top of that, you choose to live in an expensive house on a good but not great salary. So living paycheck to paycheck sounds about right?

+ childcare and $1K/month for cars. It will be lean years until childcare disappears, since selling a home and buying another is not prudent at this time.

[Anonymous]

Anonymous wrote:OP here: retirement savings are just what employer matches (8% me, 4% husband). Health insurance is a huge cut, plus I work for fed and have 4.4% of my pay cut for govt pension. Both kids are in FT daycare; we don’t have space for an au pair. Cars were purchased before we got married 6 years ago / had kids + insurance is very expensive.

Helpful to know it’s just a season in life…

How do cars cost you 1000/month if they are over 6 years old (hint: they should be paid off)? No way you are paying $12K/year for auto insurance