Families of five, making under 150k, share your budget
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Anonymous
Nice budget. You can afford a nice quality of life (healthy travel and leisure budget) while still saving $36000 for retirement. Curious about whether you are allowed to save that much in retirement accounts. I thought the max was $18500 for 401k and $6000 for an IRA |
Anonymous
You have a very poor understanding of basic economics. |
Anonymous
I understand basic price discrimination, which this is. And I, as a full pay parent, am making it possible for people to pay less than I do, for the same product. I’m mad about it, because there is no incentive to make or save more money, because the school (k-12 or college) will just take it. |
Anonymous
If that’s so easy, just work part-time so you’ll get all these great breaks in life! |
Anonymous
You are allowed to save as much as you want into a 401k. But you only get a tax benefit on $18500. |
Anonymous
My husband is 50 so he can put in an extra $6,000 per year for a total of $24K (I guess it's $24.5K now). Even though I don't work, I can do a spousal IRA. The limits were $6500 last year for a 50+ aged person and $5500 for those under 50, so we can put in $12K total. Not sure if the limits have been updated this year. I'll have to check. |
Anonymous
Actually that’s not how it works. At all. |
Anonymous
Thanks for the explanation. Again, great job on saving so much and still living so comfortably. |
Anonymous
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We are a family of 5 and make 130K. Our children are 18, 15 and 13. I have basically been a SAHM since oldest DS was 2 (I worked full time until shortly before #2 was born.) I went back to work very part time (9 hours a week) when DS #3 started kindergarten. I work at a preschool during the school year so we only needed child care when I was working full time. My income is used for kids activities and very modest vacation (cheap beach house for a week, drive vacations to visit family, etc.)
We bought our home in Fairfax County in 1997 so our mortgage is very low - $1600 PITI. We own modest vehicles and keep them for 10 plus years - we stagger when we buy new so we've typically had one car payment for 4 years, then 2 years with no payment (save that payment for future car downpayment.) Kids go to Fairfax County schools. I rarely buy new clothes for myself. I don't need a professional wardrobe. DS is in the IT field and wears more casual clothes (khaki pants, polos) so he doesn't have an expensive clothing budget. I rarely have to go to the dry cleaners - once or twice a year when we get invited to a wedding and have to pull out the "fancy clothes." DS works 4 miles from home so we have minimal commuting costs. I often only gas up my car every two weeks. The only thing we have gotten help with is college education. My parents paid for my college education and DS did the 12 year plan (worked full time from age 18 and went to school part time - his work paid for his degree via tuition reimbursement.) I have a childless aunt who has set up 529s for the kids which will cover in-state tuition. DS #1 is starting at college this week. We save a modest amount for the kids - our savings will cover books and expenses. DS and I were older when we got married. We both had bought first homes on our own - I bought a condo at 27 with no help from parents and DS had bought a townhouse at 26, again with no help. When we got married, we sold both and were able to put 20% down on a single family home in Fairfax County. We've refinanced a couple of times to get the interest rate really low. We made the decision to afford the house on his income alone, thinking we were going to have kids and I would become a SAHM. The other really smart thing we did - DS started maxing out his 401K at 18 when he went to work full time. I maxed out the Thrift while I was working and rolled it over to an IRA when I resigned. We are way ahead on retirement savings. We don't eat out very often. There have been several years when we haven't taken a real vacation - we save up to take a nice vacation every few years. Its not easy living in this area on such a modest budget, but if your housing costs are low, it can be done. I will admit there are times when I wish I could afford the fun activities, beautiful clothes, and fancy cars that some of my friends have. But at the end of the day, I wouldn't trade the family time that I have for more things. Rough budget: 7000 take home pay Fixed Monthly Costs: 1600 PITI 450 Car Loan 300 Car Insurance 450 Cable/Internet/Cell 400 Utilities 1000 Food 350 Auto Gas |
Anonymous
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Current median HHI in DC area is $100k. Now that includes singles, divorcees, etc. but still. $150k for a family of five is not shockingly low. It's pretty standard.
Our HHI is $178 for four and we are going to have a fifth soon. We aren't rolling in dough but do just fine. $18k in the 401(k), $5k in each 529 and pay down mortgage principal. Every year grow just a bit richer. |
Anonymous
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We are a family of 5 with a HHI of $150K and we are doing just fine. My partner has been SAH with the kids but will be looking for something part time in the fall since all three will be in school full time.
The biggest thing is that we live in PG county and can afford at big house. We only have one car loan at a time and buy used cars not new. We look at consignments sales or get hand me downs for most of my kids clothing. We go to Payless for shoes for them and Target if we need any new clothing. My commute is only 5 miles each way so we don't need a lot money in the budget for gas. Fixed Monthly Costs: $1950 PITI $250 Car Loan $200 Car Insurance $200 Cable/Internet/Cell $400 Utilities $1000 Food $100 Auto Gas $300 529 (yes I know this isn't much but it's what we can do right now) It isn't fancy but it is doable for sure. |
Anonymous
You sound pretty thrifty, but the "smartest" thing you did is have relatives who can pay for kids' education. |
Anonymous
The aversion to student loans on DCUM is ridiculous. The smartest kind of loan to get is an education loan - data has shown over and over that wages for college graduates are hundreds of thousands of dollars more over a lifetime than high schools graduates or even some-college graduates. They also have lower rates of unemployment, even during recessions. The population which gets into trouble is individuals who take out loans and don't finish, so they get minimal benefit from their additional education while getting all of the loans. There are exceptions here and there, but generally speaking, investing in college pays for itself many times over. I myself took out about $60K in student loans in the 90s, and am still paying them, 18 years out from graduation. My siblings are all still paying theirs, as well. My kids are fortunate in that our HHI is high, so we will likely pay for most/all their college, but we have 4 kids and if they have to take out loans to contribute toward their education, I think that is fine. |
Anonymous
Exactly. Who do you think lives in all the apartments, condos, townhomes, etc.? |
Anonymous
Some student loans are fine but too often they are a burden well into adulthood. If you really do have a high HHI how have you not paid yours off yet? Pay that thing down. |