Reply to How to budget when your income is all bonus?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Our numbers are very similar to OP.

We maintain a fairly middle class lifestyle by living off salaries for day to day expenses. We don’t scrimp or budget, but we are mindful to spend less each month than our take home pay. Our housing costs are low due to good timing in a recent refinance, but we also live in an extremely middle class neighborhood. We are happy here.

However, we don’t save (other than 401k withdrawals) from the salary funds. As bonuses and stock vests come in each quarter, we use those funds for the things that move our life from middle class to wealthy. That includes tax prepayments, large charitable donations, a healthy vacation fund, and private school tuition. Every few years we might buy a car or do a big house project. We invest the remaining funds, which is ultimately way more than we spend.[/quote]

Do you find paying for private school, rather than moving to a place with a good public school system, to be better?[/quote]

Totally fair question. From a financial standpoint, moving probably would have been smarter if we were only doing it to be at a “better” school. However, we didn’t hit this income until the kids were already in school and we had an established community. Switching to private wasn’t driven by the higher income. Instead, our kids needed something specific they could not get at any public school.

If I was a DINK making this income, I’d still focus on living well below my means so that even when kids/a mortgage/maybe tuition are in the picture, you can live off the salary. Things change and you will appreciate the flexibility. DH (who brings in about 80% of our income) has grown to really dislike his work, but the tuition means he is locked in until the kids finish high school. He plans to retire the moment both kids are launched, around age 50. Our low cost of living means that’s a real option.
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