200k is not much money

[Anonymous]

Anonymous wrote:

Anonymous wrote:$200K HHI would put you at the 79th percentile in the District. I think you’d be closer to 85th percentile in the DC metro area.

$200K is middle class inside the Beltway.

I don't understand how in the same statement you say "85th percentile" and then "middle class"

Pew Research defines "middle income" as two-thirds to twice the median HHI in a given locality. The median HHI in the District is $93K, so the "middle income" range is $61K to $186K HHI. This translates roughly to the 36th percentile to the 77th percentile. I imagine incomes & costs are similar inside the Beltway in VA and MD.

So $200K HHI inside the Beltway is basically just barely above the middle class. Culturally and practically, I would assume a $200K HHI inside the Beltway would have a lot more in common with the middle class than the upper class. They are still doing public schools, driving non-luxury vehicles, paying students loans, diligently saving, sticking to a budget, etc.

Source: https://dqydj.com/income-percentile-by-state-calculator/

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:200K is the top 20% of HHI in the DC metropolitan area. If you feel you need to "compromise", you are an entitled spoiled brat whose completely out-of-touch with reality.

I'd love for you to link us a 4br+ 4000sf+ single family home in a top school district and low crime with a big yard, garage, and a 15 minute commute to downtown DC that you could afford on a $200K income while maxing out 2 401Ks, Roth IRAs, and 529s for 3 kids.

Because if you can't find all of that, you're going to have to give some of it up to be able to find something you can afford. And what's another word for giving things up to be able to get some of what you want? It starts with a "C..."

Agree. A comfortable, middle class to upper middle class lifestyle to me means:

- max out 401k(s) or IRA(s)
- adequately save in a 529 plan
- mortgage on a ~3000 SF house with a 2-car garage and a yard in a safe neighborhood in a good school district
- 2 vacations a year
- kids' activities (and child care if both parents work)
- family car(s)

$200,000 / year isn't enough for the above-described lifestyle. No chauffeurs or other extravagant expenses mentioned above.

That's not a middle class lifestyle, not in the US right now. Maybe it was for boomers but not today.

DCUM is so out of touch with reality.

[Anonymous]

Anonymous wrote:200k is basically our family income goal. Right now we are at around 130k, but I'm working part time (though that comes with a big savings in childcare at the moment, so it's worth it). Hoping to get there in the next 5 years though, as I transition to full time work and DH likely moves up a level at work.

The trick is that we already own our home and only have one child. Moving to 200k without moving from a house where we already have a ton of equity, and then not shifting our lifestyle at all, means that money will be a massive boost in terms of college and retirement savings. We are already very frugal.

It's totally possible to do this. But not if you are determined to have multiple kids, live in a 3k square foot home in the best neighborhood, send kids to private schools, always have new clothes and nice furnishings, eat out a lot, always have a car or cars that are less than 5 years old, and take multiple nice vacations every year. But not one of those things is a necessity. You can have fewer kids and be very happy, no one needs as much space as they think, there are plenty of good publics out there if you are smart about it, clothes and furniture and cars still work and can even look nice when they are 5, 10, even 15 years old. And you can still travel plenty, and to interesting locations, on a budget -- we do a foreign trip only every other year, one of our vacations each year is a big road trip, and we have learned that with a very young child, this is a good time to take low-key and less expensive vacations to accessible destinations.

People often aren't very good at discerning between "needs" and "wants". You can have everything you need on 200k a year in this area (heck, I'm proof you can do that on 130k a year, though I'd like to be saving more). You will never, ever have everything you want. There are too many things to want! You just have to learn to live with that, no matter your income.

So, you are basically agreeing with OP's friend. You have to make choices at that income. You're comfortable with the choices you make, but they are still choices.

We make $225k in NYC. We have to make choices (townhouse, one car, two kids in public school) and can't have everything we might like (multiple flying vacations each year, enough in savings for private college). But we have enough for a MC/UMC life, which includes saving for retirement and in-state university.

BTW, the choice in number kids isn't as easy as you think. What if you aim for one and get twins? It happened to TWO sets of friends that we know. I also know of others who only wanted one but that came with the cost of IVF.

[Anonymous]

Sure. $200k is not good enough for a $250k+ lifestyle. For anything else, it's more than decent.

[Anonymous]

Anonymous wrote:I was talking to a friend the other day who is adamant that 200k is not enough money to raise a kid on and to have savings and a nice life.

I thought she was SO out of touch!

As someone whose family once made half that (with kids) she's definitely out of touch. Even now we're not to 200K a year. And while we can't do unlimited spending, we certainly don't feel impoverished.

The only way a family would have an extremely tight budget on that salary is because of poor planning: huge student loans, enormous mortgage (Not necessary. In this region, it's a luxury.). Maybe all of the above plus private schools.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I was talking to a friend the other day who is adamant that 200k is not enough money to raise a kid on and to have savings and a nice life.

I thought she was SO out of touch!

As someone whose family once made half that (with kids) she's definitely out of touch. Even now we're not to 200K a year. And while we can't do unlimited spending, we certainly don't feel impoverished.

The only way a family would have an extremely tight budget on that salary is because of poor planning: huge student loans, enormous mortgage (Not necessary. In this region, it's a luxury.). Maybe all of the above plus private schools.

What do you consider an "enormous" mortgage vs. just plain reality in this area? It's not like rents are cheap either if home ownership is too much of a luxury item.

[Anonymous]

A friend once told me that $200k was minimum wage to live inside DC with a family. I have to say, I think he was right.