Feeling Paralyzed with Financial Decisions

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I know this board is ultraconservative, but I need some financial feedback. DH and I currently have an HHI of $400 a year. We have a high mortgage for which we have a $4500/month PITI. We live close in to DC, where we both work and the commute is good. We have two kids who will start school in two years. We are doing fine on this income and contribute fully to retirement, 529s, etc., and spend a lot on extras (cleaning service, lawn service, etc.). We have two kids and childcare is $1600/month.

But I just can't do this anymore. I'm the primary earner and literally every day I feel like I'm going to have a heart attack I'm so stressed out at work. An opportunity has come up for me to take a government position, but I would earn no more than $160k, which would cut our HHI to $240k - almost in half. I tell DH every day that I can't do this job anymore, and he just shrugs and says that I should go ahead and quit and take the lower paying job and that we would be fine and would just "cut back" spending, or else move. When I run the numbers I don't know how we could pay that mortgage. But when I look at real estate and interest rates, there is nothing that seems workable with a reasonable commute and good public schools where we could spend less. We would be going to a 3.5% mortgage to a 4.6% mortgage, and would have far less buying power, and would probably have to live over an hour away, and then would lose our current low-cost childcare (nearby family members).

Has anyone ever been in a similar situation and have any words of advice?

1. What does your DH do? 80k seems low for this area. He should be looking at ways to increase his income if you are so stressed at work you feel like you're going to have a heart attack.
2. The previous PP's idea of setting a date seems like a good one. The ideal date for you seems to be when the kids start school. In the mean time, your DH is the new cleaning service, lawn service, etc. Front load your kids' 529's with the savings -- you can put more in now to benefit from compound interest and you won't have to put as much in when your income goes down. And agree with PP that you're only options are not "kill yourself for $320k or go to goverment for $160k." You have 2 years to network and plan a path toward a job in the $200-250k range that won't kill you by 50.
3. $4500/month is really steep, but if you wait to move to another job until the kids are in school, you lose $1600/month in childcare costs. If you have a huge cash buffer saved up and have frontloaded the 529's you can direct that money toward the mortgage. It might be doable (I would hate it, but your current situation is not sustainable). And you can always move. Your health is more important than any particular house/neighborhood/school system.

Good god this is privileged! They have two small kids, so assume DH is under 40. What could his profession be for the low low salary of $80K? Oh, I don't know: teacher, professor, basically anything at a non-profit, state government employee, architect, social worker, technical writer, scientist, basically anything?

Bit dramatic of a reaction, tbh. She's making 4x his salary. It's not insane to expect him to try to step it up if it's taking a toll on her health and well-being to keep their family in their house.

+1, and privileged has my vote for the most annoying epithet of 2018.

[Anonymous]

OP, our monthly take home is $280k, and PITI is the same as yours. If all we had was our monthly income, I would think it's a little too tight. You can do it, but there would have to be significant sacrifices. I don't hate my job, though.

[Anonymous]

I can’t believe your day care is only $1600 for two kids! Unless that is each.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I know this board is ultraconservative, but I need some financial feedback. DH and I currently have an HHI of $400 a year. We have a high mortgage for which we have a $4500/month PITI. We live close in to DC, where we both work and the commute is good. We have two kids who will start school in two years. We are doing fine on this income and contribute fully to retirement, 529s, etc., and spend a lot on extras (cleaning service, lawn service, etc.). We have two kids and childcare is $1600/month.

But I just can't do this anymore. I'm the primary earner and literally every day I feel like I'm going to have a heart attack I'm so stressed out at work. An opportunity has come up for me to take a government position, but I would earn no more than $160k, which would cut our HHI to $240k - almost in half. I tell DH every day that I can't do this job anymore, and he just shrugs and says that I should go ahead and quit and take the lower paying job and that we would be fine and would just "cut back" spending, or else move. When I run the numbers I don't know how we could pay that mortgage. But when I look at real estate and interest rates, there is nothing that seems workable with a reasonable commute and good public schools where we could spend less. We would be going to a 3.5% mortgage to a 4.6% mortgage, and would have far less buying power, and would probably have to live over an hour away, and then would lose our current low-cost childcare (nearby family members).

Has anyone ever been in a similar situation and have any words of advice?

I

1. What does your DH do? 80k seems low for this area. He should be looking at ways to increase his income if you are so stressed at work you feel like you're going to have a heart attack.
2. The previous PP's idea of setting a date seems like a good one. The ideal date for you seems to be when the kids start school. In the mean time, your DH is the new cleaning service, lawn service, etc. Front load your kids' 529's with the savings -- you can put more in now to benefit from compound interest and you won't have to put as much in when your income goes down. And agree with PP that you're only options are not "kill yourself for $320k or go to goverment for $160k." You have 2 years to network and plan a path toward a job in the $200-250k range that won't kill you by 50.
3. $4500/month is really steep, but if you wait to move to another job until the kids are in school, you lose $1600/month in childcare costs. If you have a huge cash buffer saved up and have frontloaded the 529's you can direct that money toward the mortgage. It might be doable (I would hate it, but your current situation is not sustainable). And you can always move. Your health is more important than any particular house/neighborhood/school system.

Good god this is privileged! They have two small kids, so assume DH is under 40. What could his profession be for the low low salary of $80K? Oh, I don't know: teacher, professor, basically anything at a non-profit, state government employee, architect, social worker, technical writer, scientist, basically anything?

Bit dramatic of a reaction, tbh. She's making 4x his salary. It's not insane to expect him to try to step it up if it's taking a toll on her health and well-being to keep their family in their house.

+1, and privileged has my vote for the most annoying epithet of 2018.

I think some PPs seem to be missing the point, which is what if DH can't make more? Say he's a teacher. What exactly do you want him to do?? Thinking anyone can just go out and make 6 figures because their spouse makes more or lots of people you know make more is naive as best, dumb at worst, and definitely privileged. Sorry you dislike the "'most annoying epithet of 2018."

[Anonymous]

Anonymous wrote:I had a similar situation when my kids were 3 and 5. I had an opportunity to go in house and go from 325k to 150k. I wanted to do it SO bad but also had a montage that was too high (3800) and similar living expenses. DH is a professor and makes 110k BUT does all the drop offs, pick ups, days off, and gets reduced summer hours and a sabatical every 7 years. In other words he wasn't moving. So I turned down that job but we made a 3 year plan. We lived SUPER lean, sent kids to our OK public and put everything we could on our mortgage. While we weren't able to pay it off we were able to pay it was down (to about 285k) and refinance and have a payment of 1650.00. Then I took a similar in house position (making a bit more, 182k) and we all lived happily ever after. My advice is to pick a date in the future and work towards it. We not only attacked our montage but paid off the last of our loans, our car note, and really let go of dry cleaning, lawn car, cleaning people, pea pod, etc etc. We felt way more flush when I actually switched to my low paying job and "the trial period" was over!

I’m in a somewhat similar position to you PP. I’ll have to leave my biglaw job in about another year (but sigh my husband lost his job earlier this year). Did you stay in your house and continue to send your kids to the OK public schools or did you move?

[Anonymous]

It’s great DH is supportive but does he have a clue? If he makes $80K and you make $320K - are you also handling all the bills and investments and such? If so, his “whatever honey I love you” may not be grounded in the reality of what it means to say that.

[Anonymous]

Anonymous wrote:It’s great DH is supportive but does he have a clue? If he makes $80K and you make $320K - are you also handling all the bills and investments and such? If so, his “whatever honey I love you” may not be grounded in the reality of what it means to say that.

Please, every SAHM thread ever lists ‘handling the finances’ as a core competency. I’m sure the DH who works and make a$80k can figure it out.

He is probably willing to downsize or move to cheaper locale.

[Anonymous]

Cut spending now, not after you take less pay.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I had a similar situation when my kids were 3 and 5. I had an opportunity to go in house and go from 325k to 150k. I wanted to do it SO bad but also had a montage that was too high (3800) and similar living expenses. DH is a professor and makes 110k BUT does all the drop offs, pick ups, days off, and gets reduced summer hours and a sabatical every 7 years. In other words he wasn't moving. So I turned down that job but we made a 3 year plan. We lived SUPER lean, sent kids to our OK public and put everything we could on our mortgage. While we weren't able to pay it off we were able to pay it was down (to about 285k) and refinance and have a payment of 1650.00. Then I took a similar in house position (making a bit more, 182k) and we all lived happily ever after. My advice is to pick a date in the future and work towards it. We not only attacked our montage but paid off the last of our loans, our car note, and really let go of dry cleaning, lawn car, cleaning people, pea pod, etc etc. We felt way more flush when I actually switched to my low paying job and "the trial period" was over!

I’m in a somewhat similar position to you PP. I’ll have to leave my biglaw job in about another year (but sigh my husband lost his job earlier this year). Did you stay in your house and continue to send your kids to the OK public schools or did you move?

This is my post above. Yes we stayed in our house (it’s kind of our back up savings, if we sold now we would take away about 800k cash) and will use our schools until we have a bad experience. My kids are middle of the road achievers and the school is fine for them. They like it and I’m not looking to make issues where there aren’t any. I will see how middle school goes and am willing to make a change but not expecting ultimate doom like some of my neighbors seem to be!

[Anonymous]

OP, you have two years of daycare left, and savings of $100K. That $100K will more than cover the remaining daycare payments, so take that off the board. In the meanwhile, look at other spending. With the new tax law, it's possible you will get more $$$ back, esp. since you will likely still be itemizing deductions. As government, you will fund a pension, so cut back on 401(k) contributions.

[Anonymous]

I think it's doable. We have the same HHI and slightly lower PITI and child care, and we are fine. No lavish international vacations but we don't feel deprived.

Look closely at your health care costs -- they probably will go down significantly with a govt job.

[Anonymous]

They don't call it golden handcuffs for no reason. . .

[Anonymous]

Anonymous wrote:OP, our monthly take home is $280k, and PITI is the same as yours. If all we had was our monthly income, I would think it's a little too tight. You can do it, but there would have to be significant sacrifices. I don't hate my job, though.

DCUM, you gotta love it

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, our monthly take home is $280k, and PITI is the same as yours. If all we had was our monthly income, I would think it's a little too tight. You can do it, but there would have to be significant sacrifices. I don't hate my job, though.

DCUM, you gotta love it

I assumed that was meant to be yearly. . .

[Anonymous]

I don't understand how you can't make $4500 mortgage work on 250k income. I mean unless you are burning money, that sounds totally doable, we managed $3500.00 mortgage on 160k for 4 years, now we are at 350k and are looking at $6000.00 15yr mortgage, we do have early elementary kids and pay for afternoon babysitter which is around $800.00. Our only car payment is $240/month, we contribute $37500.00 to 401ks and fund $1000/month in 529. We also save on top of this to send to our brokerage account.

Change jobs and make it work, $240k is a LOT of money.