Middle class life has me completely baffled

[Anonymous]

Anonymous wrote:No one in this area making $180,000 is living like a king without getting help or living on the edge. You're not doing that and good for you.

We live on that really comfortably. We have a house that we paid $400K (but needed a lot of work), drive older cars, etc. We don't travel much but do spend a lot on activities monthly.

[Anonymous]

+1 to everyone who said you’re savings too aggressively to meet your goal of saving for a house. Great goal to have, but saving is like spending - you can’t have everything at once.

We focused on student loan pay down. When that was done, we funneled all that money to down payment and retirement.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Honestly, I'm wondering where your money goes. Our mortgage is lower than your rent, but we save about 40k a year after maxing retirement.

Bills (quoted below all in per mo.)

Car insurance: $150
Phone bill: 100
internet: 90
gas+electric: 80
rent: 1700
groceries: 300
parking: 70

About $2900 per month in left over cash after subtracting out all taxes and required payments for healthcare and pension contributions. We are also also putting away $300 per mo. right now into a 'new car pot' for the eventual day that we will need to buy a new car (ours is 4 years old right now), $1000 per month into free cash flow for emergency savings and rainy day funds that I really wouldn't want to tap in case of job loss or health care disaster. That only leaves about $1600 per month to save for a new house. Mind you, I also assumed $0 for leisurely activities, expenses if a wedding comes up, buying new clothes, car maintenance/repair, and other miscellaneous expenses. In reality, the amount we are able to save is more close to $1000-1200 per month for a house after all is said and done. Even 10% down on a modestly priced house of $500-600k will take several years, assuming absolutely zero goes wrong financially.

I don’t understand how this is all you have in take home pay even with maxing out retirement. My husband maxes his retirement and makes 160k and his take home pay after everything else taken out is 8600 per month. Yours is adding up to about 2k less.

I don’t really understand where all your money is going but 3.5 years ago we were making a HHI the same as you and not only paid for our own modest wedding but then was able to save for a small down payment on a house in one year (like 25k) and bought a starter home for 450k at the time. We had no help from parents other than setting us up without students loans. Our hhi has increased to 300k since then and we have one kid in preschool and another on the way plus 200k in equity in the starter home.

It wasn’t that difficult honestly and it’s not like we were eating rice and beans when we were in your position either.

See the other post, I broke it down better.

[Anonymous]

Trust. Funds.

[Anonymous]

Family money + bought real estate and stocks before the boom (2008-2012).

Sucks for the rest of us but that's just how it is.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Honestly, I'm wondering where your money goes. Our mortgage is lower than your rent, but we save about 40k a year after maxing retirement.

Bills (quoted below all in per mo.)

Car insurance: $150
Phone bill: 100
internet: 90
gas+electric: 80
rent: 1700
groceries: 300
parking: 70

About $2900 per month in left over cash after subtracting out all taxes and required payments for healthcare and pension contributions. We are also also putting away $300 per mo. right now into a 'new car pot' for the eventual day that we will need to buy a new car (ours is 4 years old right now), $1000 per month into free cash flow for emergency savings and rainy day funds that I really wouldn't want to tap in case of job loss or health care disaster. That only leaves about $1600 per month to save for a new house. Mind you, I also assumed $0 for leisurely activities, expenses if a wedding comes up, buying new clothes, car maintenance/repair, and other miscellaneous expenses. In reality, the amount we are able to save is more close to $1000-1200 per month for a house after all is said and done. Even 10% down on a modestly priced house of $500-600k will take several years, assuming absolutely zero goes wrong financially.

I don’t understand how this is all you have in take home pay even with maxing out retirement. My husband maxes his retirement and makes 160k and his take home pay after everything else taken out is 8600 per month. Yours is adding up to about 2k less.

I don’t really understand where all your money is going but 3.5 years ago we were making a HHI the same as you and not only paid for our own modest wedding but then was able to save for a small down payment on a house in one year (like 25k) and bought a starter home for 450k at the time. We had no help from parents other than setting us up without students loans. Our hhi has increased to 300k since then and we have one kid in preschool and another on the way plus 200k in equity in the starter home.

It wasn’t that difficult honestly and it’s not like we were eating rice and beans when we were in your position either.

No wonder why it wasn’t. You didn’t have student loans!

[Anonymous]

Damn, the fact that so many people point to the fact that people in this region get ahead because of family money and intergenerational wealth really hits home to what a lot of BLM protesters are rallying about. It is hella hard to bootstrap your way up. I don't have parental support either for anything.

[Anonymous]

You should be able to do it, Op. our HHI is $151K, two kids in private preschool, two old cars, and one mortgage. We live in Gaithersburg though. Before ppl jump on the location, our preschool cost is close to $3600 a month. We live frugally, with no student loans or cc debts.

[Anonymous]

This is a very expensive area. It’s sad to say, but 180 hhi, is not sufficient to feel like you’re living a comfortable “middle class” existence in a close-in area. You need to make more like 300k to start feeling ok, especially with kids in the mix.

People may flame, but it’s true.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Honestly, I'm wondering where your money goes. Our mortgage is lower than your rent, but we save about 40k a year after maxing retirement.

Bills (quoted below all in per mo.)

Car insurance: $150
Phone bill: 100
internet: 90
gas+electric: 80
rent: 1700
groceries: 300
parking: 70

About $2900 per month in left over cash after subtracting out all taxes and required payments for healthcare and pension contributions. We are also also putting away $300 per mo. right now into a 'new car pot' for the eventual day that we will need to buy a new car (ours is 4 years old right now), $1000 per month into free cash flow for emergency savings and rainy day funds that I really wouldn't want to tap in case of job loss or health care disaster. That only leaves about $1600 per month to save for a new house. Mind you, I also assumed $0 for leisurely activities, expenses if a wedding comes up, buying new clothes, car maintenance/repair, and other miscellaneous expenses. In reality, the amount we are able to save is more close to $1000-1200 per month for a house after all is said and done. Even 10% down on a modestly priced house of $500-600k will take several years, assuming absolutely zero goes wrong financially.

I don’t understand how this is all you have in take home pay even with maxing out retirement. My husband maxes his retirement and makes 160k and his take home pay after everything else taken out is 8600 per month. Yours is adding up to about 2k less.

I don’t really understand where all your money is going but 3.5 years ago we were making a HHI the same as you and not only paid for our own modest wedding but then was able to save for a small down payment on a house in one year (like 25k) and bought a starter home for 450k at the time. We had no help from parents other than setting us up without students loans. Our hhi has increased to 300k since then and we have one kid in preschool and another on the way plus 200k in equity in the starter home.

It wasn’t that difficult honestly and it’s not like we were eating rice and beans when we were in your position either.

No wonder why it wasn’t. You didn’t have student loans!

It doesn’t sound like OP does either though. I obviously recognize the advantage of not having student loans which is why we are prioritizing saving for our own childrens’ colleges. It’s a huge advantage.

But even still, OP has the ability to save for a downpayment. You don’t need a massive amount to break into the market. If they reduced their retirement contributions for a year or two they’d be good. And hopefully their salaries increase so that when they begin having kids they can afford daycare.

[Anonymous]

Anonymous wrote:Generational wealth. So no student loans, help with down payment, etc.

And not the point of this thread but it struck me that this is why there’s a call for reparations. Black households on average have only $9 of wealth for every $100 in wealth the average white household has.

[Anonymous]

Anonymous wrote:This is a very expensive area. It’s sad to say, but 180 hhi, is not sufficient to feel like you’re living a comfortable “middle class” existence in a close-in area. You need to make more like 300k to start feeling ok, especially with kids in the mix.

People may flame, but it’s true.

Hmm, we just got up to a 200k HHI in January and we feel comfortably middle class. We save for retirement (not maxing but 18%/13% of our respective salaries), own a small house in DC, have two kids in public school who do music lessons and rec sports, and are saving a little for college. No debt other than mortgage and a small remaining student loan. I grew up middle class and my parents didn’t pay for my college or for expensive extras. It’s our perception here in DC of what constitutes middle class that’s off. It certainly doesn’t mean having or doing anything you want.

[Anonymous]

What you describe as a middle class life is NOT "middle class."

[Anonymous]

OP, you guys should buy as soon as you can, looking for a bargain. Then, you sell in a few years when you have built up equity. That’s the best way to get a big chunk for a down payment. Renting is a waste.

[Anonymous]

OP, our HHI was like this for a couple of years and we live in a low cost area. We paid off our modest 275K house, drove very modest cars and only were able to save 30K for college.

It’s a lot of money in the area where we live so it’s still surprising how little we were able to save. We don’t live an extravagant life style.