I truly cannot wrap my head around our HHI jump from $150k to $260k

[Anonymous]

OP I’m trying to remember when we went from getting a small refund at tax time to owing and it may have been around that amount. We had to have one of us change our w2 to single, no deductions (we’re married with 2 kids) which I think removed an extra $800 or so a month for taxes. That’s right around what we needed to be mostly square at tax time. Just fyi that a bigger tax bill could be coming, so look into it now so you’re not surprised.

Also: no boat.

[Anonymous]

Anonymous wrote:You guys are acting like OP posted she got a raise from 80k to 100k and what should she splurge on. She is going from 150k (a good income!!!) to 260k when she was already living well within her means (a 325k house??? a car with 350k miles on it??) and now has an extra, let's say, 70k a year after taxes. Yes, she can take a one time vacation for 10k and she can buy a car and start making car payments that are like 300 a month. And she can still save an extra 50k this year alone.

You guys are absolutely insane.

Except for the boat opinions. Don't buy a boat.

What car can you get for $300 a month?

[Anonymous]

Anonymous wrote:OP I’m trying to remember when we went from getting a small refund at tax time to owing and it may have been around that amount. We had to have one of us change our w2 to single, no deductions (we’re married with 2 kids) which I think removed an extra $800 or so a month for taxes. That’s right around what we needed to be mostly square at tax time. Just fyi that a bigger tax bill could be coming, so look into it now so you’re not surprised.

Also: no boat.

OP here. Thank you for sharing this, I had no idea and have been doing our taxes on turbo tax til now and getting a ~$2k refund each year.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We made 300k and never went on vacation for 10k or bought anything expensive like a boat. You don't make enough for a boat and ongoing expenses. Take a modest vacation. There is no need to upgrade your car.

Airfare alone for a family of 4 is going to be 4k. Then let's say you spend 10 days somewhere accessible and easy in Europe. On 6k as a family of 4 for hotels, food, etc. That's not exactly living in the lap of luxury or being overly extravagant!!

I think 10 days in Europe is extravagant! Or 10 days anywhere. I have never taken a 10-day vacation in my life.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Under no circumstances should you buy a boat. That would be really unwise due to the ongoing expenses.

What kind of shape is the car in? If it’s unsafe or likely to die soon, I’d prioritize getting a few or good used one. If you expect it to last a couple more years, I’d definitely start planning a vacation. Doesn’t have to be anything fancy, but your older child is at that age where there is a lot of wonder and excitement about exploring new places, and it’s past time for you all to start making good family vacation memories.

This a ridiculous comment. Not every family goes on vacation. It is a luxury. And no such thing as "past time"--vacation is not any better than spending regular time together. No one needs a 10k vacation. Maybe once in a lifetime but regularly? No way.

Maybe I do not necessarily need them, but I value nice vacations highly. We spend about 30k a year on travel (Europe in the summer, skiing in the winter, Caribbean during spring break plus a few long weekends) and I do not regret a penny. However,. I do not own any designer clothes, our furniture is from IKEA and we have one mid-range car. We simply value experiences and that is where a good chunk of our money goes. This is on a 500k HHI so not really a stretch for us. I would not spend as much on OP's HHI, but she should definitely treat herself to a nice vacation if that is what she desires.

Good for you. That is not the norm. Most people don't have that luxury.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You guys are acting like OP posted she got a raise from 80k to 100k and what should she splurge on. She is going from 150k (a good income!!!) to 260k when she was already living well within her means (a 325k house??? a car with 350k miles on it??) and now has an extra, let's say, 70k a year after taxes. Yes, she can take a one time vacation for 10k and she can buy a car and start making car payments that are like 300 a month. And she can still save an extra 50k this year alone.

You guys are absolutely insane.

Except for the boat opinions. Don't buy a boat.

What car can you get for $300 a month?

I have a Volkswagen Passat. I put a little down. My payments are $350 a month. You can get a Jetta or a Nissan Altima for around $300.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We made 300k and never went on vacation for 10k or bought anything expensive like a boat. You don't make enough for a boat and ongoing expenses. Take a modest vacation. There is no need to upgrade your car.

Airfare alone for a family of 4 is going to be 4k. Then let's say you spend 10 days somewhere accessible and easy in Europe. On 6k as a family of 4 for hotels, food, etc. That's not exactly living in the lap of luxury or being overly extravagant!!

I think 10 days in Europe is extravagant! Or 10 days anywhere. I have never taken a 10-day vacation in my life.

Seriously? Why not? Honest question. Do you have no PTO or vacation time? A week is never long enough anywhere besides the beach. By the time you've settled in to wherever you're visiting, it's time to pack up.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We have similar numbers to you. I would do $500 per kid in the 529 not $500 total. You can definitely take a vacation but I eould cap it at $5K max. If car prices weren't sky high I'd say replace the old car too but if you can I'd try to hold off until the chip situation evens out hopefully in a year or so and prices come down a bit.

Where can a family of 4 go for 5k? Honest question!!! Can't get a beach house in the OBX easily for under 5k (leaving money for food, beach chairs, etc). Certainly can't fly anywhere and still have money leftover for lodging.

easy. drive to Hilton head and rent a 2BR Marriott timeshare for $3000 https://www.redweek.com/resort/P1023-marriotts-grande-ocean/timeshare-rentals
or fly to Marco Island FL (or other places in FL) and rent a villa for $3000 plus $1000 for airfare, $700 for rental car https://www.redweek.com/resort/P5701-marriotts-crystal-shores/timeshare-rentals
https://www.redweek.com/resort/P1177-hyatt-beach-house-resort/timeshare-rentals

And no food, no mini golf, no going out to dinner?

This is what I'm saying. A 10k vacation isn't some massive luxury trip. It's just a non east coast beach trip. Which someone making 260k a year is certainly allowed to do once or twice.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We made 300k and never went on vacation for 10k or bought anything expensive like a boat. You don't make enough for a boat and ongoing expenses. Take a modest vacation. There is no need to upgrade your car.

Airfare alone for a family of 4 is going to be 4k. Then let's say you spend 10 days somewhere accessible and easy in Europe. On 6k as a family of 4 for hotels, food, etc. That's not exactly living in the lap of luxury or being overly extravagant!!

I think 10 days in Europe is extravagant! Or 10 days anywhere. I have never taken a 10-day vacation in my life.

Seriously? Why not? Honest question. Do you have no PTO or vacation time? A week is never long enough anywhere besides the beach. By the time you've settled in to wherever you're visiting, it's time to pack up.

I have vacation. I never use all of it. I do not even do 7 days anywhere. I use my vacation to visit family. Occasionally 3 nights at the beach with kids. 10 days is extravagant. Many many people do not even take annual weeklong vacations. You live in a DC bubble.

[Anonymous]

Anonymous wrote:I feel stupid, but my brain does not make sense of the math. We will absolutely NOT fall victim to lifestyle creep. We are already in our forever home. We both grew up LMC and understand how fortunate we are to have already started 529s, Roth IRAs on top of 401k etc. That is where our money will go- into the future.

That being said, we would like to make one purchase to celebrate- a vacation, boat (used), or (used) car for DH as his has 356,000 miles. I truly cannot comprehend what we can afford.

We have a 5yo and a 1yo. We are 31/32yo. Here's an overview of our finances:

HHI 260K
Bought our house 5 years ago (tomorrow!) for $325,000 by putting down $45k with a 30 year mortgage. We just got out of PMI.
$2400/mon mortgage, taxes, insurance
$1400/mon daycare (older DC will be in public next year)
$4000 left on my car (will pay off eventually we have 0% interest)
No student loans or other debt

We have been putting $500/mon into 529s, maxing 401Ks, I have a Roth IRA on top of that, and we have $40,000 emergency fund.

Can we make a $10k vacation, $15k boat, or $25k vehicle purchase without worrying? Not planning on changing anything else except adding more monthly to 529s.

The car is the practical choice, you will need one soon either way so the cost of pushing it up a little is very minimal. The vacation is the fun one, if you have a plan you are super excited about then may as well go for it. The boat, no way, it is a money pit with ongoing costs….you are not there yet so hold off on that one for at least a few years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I would just save/invest the extra income. I wouldn’t get a boat because it’s expensive to maintain. Also don’t see why you would need to spend 10k on a vacation. If anything, it would make sense to replace the old car, it must be unreliable at this point.

^^ you can travel to Europe for about half the amount and have a great time there.

Not right now. Europe is crowded, airline unreliable, no AC and terrible heatwave. Your kids are small too. I would book a new car stat, as your current car is near death and supply change issues are still there. May Be get an EV so you can charge it.

[Anonymous]

And your shoes I would get a new car and I would take a family vacation. You can decide to do an inexpensive vacation, but you should go somewhere. Even if it’s a four-day weekend in the nearby city or an AirBnB off-season near the beach or mountains. Take a little getaway.

[Anonymous]

don't buy a boat. Make friends who own a boat.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We made 300k and never went on vacation for 10k or bought anything expensive like a boat. You don't make enough for a boat and ongoing expenses. Take a modest vacation. There is no need to upgrade your car.

Airfare alone for a family of 4 is going to be 4k. Then let's say you spend 10 days somewhere accessible and easy in Europe. On 6k as a family of 4 for hotels, food, etc. That's not exactly living in the lap of luxury or being overly extravagant!!

I think 10 days in Europe is extravagant! Or 10 days anywhere. I have never taken a 10-day vacation in my life.

Seriously? Why not? Honest question. Do you have no PTO or vacation time? A week is never long enough anywhere besides the beach. By the time you've settled in to wherever you're visiting, it's time to pack up.

I have vacation. I never use all of it. I do not even do 7 days anywhere. I use my vacation to visit family. Occasionally 3 nights at the beach with kids. 10 days is extravagant. Many many people do not even take annual weeklong vacations. You live in a DC bubble.

this is so so sad- maybe lots of people live this way but it isn't a happy or satisfied way to live. I know people who cant take vacations- they do domestic or retail labor but they don't want to live that way-its part of their hard lot in life and they think that they have a hard lot in life and these people live in developing countries or have moved here from developing countries and are struggling to establish themselves. I don't think anyone willingly never takes a week long vacation in a year. I mean, ppl cant afford fancy vacations and take camping trip or something..

Anyhow- Op, stash the extra cash away for a whole year and then reevaluate.

[Anonymous]

I would hold off on the car if possible, just because the car market is the one thing that seems likely to improve within the next year or so, but of course get a new one now if it's totally falling apart.

Sounds like you have a sudden influx of something like at least $5k/ month extra after taxes? I'd set aside $3k/mo of that towards savings for a new car purchase, $750/month towards a vacation, the rest to retirement and college savings. By next summer or fall you will have a nice chunk of money for a vacation and nice down payment for a new-to-you car.