Am I a financial disaster?

[Anonymous]

Anonymous wrote:OP here. I agree that we should not have that damn car. And, it is actually a LEASE. Does that make it worse or better? Worse in some sense as we pay over 700/month and we don't actually own anything, but better in that it is temporary -- when that lease is up (1 more year) I want to talk DH into a less expensive car. I'll send him this thread -- that will do the trick!
(In his defense......he leased this car after a big promotion. I know, I know........stupid.....but he works very hard to give everything to our kids and enjoys this car immensely, and other than the damn car he doesn't ask for much and his still wearing his khakis from 1999, so I try not to make a big deal out of it.......even though I refuse to drive it out of principle )

ugh! leases are the WORST. At least it is over in a year. Given your income, you probably want to really re-evaluate. With that kind of cash coming in, you should be able to really set yourself up to be financially free. Us working class schmucks really have to get creative and pinch realy tight to be financially free. You have all the opportunity in the world, you just have to look at really scaling back your big ticket items.

In all honesty the childcare expenses are about as much as MANY people bring home for their entire income and then some.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here. I agree that we should not have that damn car. And, it is actually a LEASE. Does that make it worse or better? Worse in some sense as we pay over 700/month and we don't actually own anything, but better in that it is temporary -- when that lease is up (1 more year) I want to talk DH into a less expensive car. I'll send him this thread -- that will do the trick!
(In his defense......he leased this car after a big promotion. I know, I know........stupid.....but he works very hard to give everything to our kids and enjoys this car immensely, and other than the damn car he doesn't ask for much and his still wearing his khakis from 1999, so I try not to make a big deal out of it.......even though I refuse to drive it out of principle )

ugh! leases are the WORST. At least it is over in a year. Given your income, you probably want to really re-evaluate. With that kind of cash coming in, you should be able to really set yourself up to be financially free. Us working class schmucks really have to get creative and pinch realy tight to be financially free. You have all the opportunity in the world, you just have to look at really scaling back your big ticket items.

In all honesty the childcare expenses are about as much as MANY people bring home for their entire income and then some.

Actually it truly is. When my son was born 3 years ago, I stayed home the first 18mos. His take home income was only $400 more than what you spend on nanny and school. We managed to incur no debt and save a measley $500/mo.

[Anonymous]

Anonymous wrote:OK, now I am freaking out. Do people really have 9 months worth of salary in savings? We used to, before we bought a house. Then we still kept a good cushion...and then we had a kid. Now we're just trying to survive and get a little ahead.

For those who say they save 20 percent of their income, does that mean in savings in ADDITION to retirement? Just wondering how horrible we are doing.

Geez, I thought we were doing well, given we have friends who are in debt up to their eyeballs. I need some more financially savy friends : )

I count retirement savings as part of our general savings. So that 20% is NOT in addition to retirement (that would be pretty nice though!)

I think we are doing well compared to our friends as well. None of them are in debt to their eyeballs but many of them are not saving as aggressively as we are. We definitely like nice things but we try to space out big purchases. For example, we'd love to get a plasma TV, a new computer, etc. and we have a friend who makes these types of purchases without a lot of thought because they are already maxing out their retirement plans and putting money in a 529 plan. But we are not only saving for retirement, we are saving for financial freedom. So if at the age of 50 or 55, we get sick of the grind of our work, my DH or I have the option to leave our high paying job for a lower paying job that is more personally rewarding. We think working towards that goal is worth forgoing some material possessions now. Another example - my DH likes cars a lot. Once we were at a gas station and one of our work colleagues (this is back when we worked at a law firm) drove up in his Infinity. My DH was practically drooling over the car. But he drives a Honda Accord that we paid cash for and has no plans to upgrade. (I keep telling him as a gift to himself, he should get a Mercedes in 10 years but he goes back and forth between the enjoyment he'd get from driving a really nice car and feeling that another Honda would be good enough).

I do think it's a fine line to draw between being too frugal (when you have the income) and spending too much. We actually had our LO in daycare to save on childcare costs but it was causing fights between my DH and I because I felt like I was doing much of the work (packing up his things, getting him ready every morning, etc.) Having a nanny is a much bigger expense but we can afford it and it has relieved a lot of our stress (she helps with dishes, tidying up the place, etc.) So we try to save as much as we can but still spend so we can enjoy our lives now.

[Anonymous]

12:46, you make a really good point about defining your goals. Under OP's scenario, she is doing fine financially if the goal is to stay afloat and save something towards retirement and college. But if her goal were "financial freedom" as you put it, then she is not doing well.