How does preschool for two kids only come to $1200? Do uou mean per kid, so $2,400?

OP, we are in a similar situation, though our HHI is a bit less, but we are still paying off school loans which eats up a ton of money. Once our loans and car are paid off, and we're no longer paying for daycare (god help us) we'll be able to eat at debt and sock more away in savings. We have a plan and know we'll get there in about 3-5 years. It's frustrating in the meantime, but such is life.

And yes, we have life, ST and LT disability insurance, socking away as much as possible in 401K, and a smaller amount in the 529. I don't think you're alone in this WTF feeling that I'm making pretty good money but still feel like I'm struggling. It's a phase that we'll all muddle through.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:PP, my husband makes $210K and only nets $8,000 a month. How can you have a mortgage, daycare and still save $3,000 a month on $200K gross?

Net after what? How is your effective tax rate 54%? This doesn't make any sense.

After 401(k) contributions and health, life and other types of insurance.

He's still taking home way too little. I don't contribute to my 401K and my base is 210. My take home is over 12K/month, and that's after I've paid health and life insurance. Something's off.

Does the pp with 210 of income not itemize deductions? Or perhaps employer doesn't pay for any part of premiums and life and health premiums get deducted as well as health? Obviously, pp doesn't need to report the details here but she should look at the pay stub to find out where the $$ is going.

I can't believe all the pps paying they contribute zero to their 401k. Come on.

Anonymous wrote:My husband makes about 85k and I make 50k, so we do about 135k a year. We rent and don't have kids though - which means its a lot easier for us. I feel extremely comfortable though!

We're the same and feel pretty comfortable.

Anonymous wrote:OP, what are your big ticket items?

Mortgage
Childcare
Food
Loans
Etc.

Mortgage - $2500/mo
Preschool - $1200/mo
Au pair - averaged to $1400/mo
Housekeeper - just reduced use/cost - was $400/mo; now $240/mo
Loans (cars, school) - $800/mo
Food - I don't know but a LOT. Now that we're budgeting I expect to get a handle on that

Anonymous wrote:

Anonymous wrote:Our HHI is about what yours is, we have 1 in daycare, and we have almost $2k/month in law school loans. We live in the District, though we rent. We are certainly not living paycheck-to-paycheck. We save just about $3k/month.

Our HHI is similar to yours as well. We have 1 toddler in daycare, mortgage on a small house we bought in 2008 in a nice neighborhood in N. Arlington, but no other debt. On an annual basis, we put about 60% of our after tax income into savings and college funds.

We track our expenses every month. It's helpful to see where the money is going and it motivates us to be better about brown bagging lunch and reducing takeout dinners, etc.

We didn't overpay our house and we put over 30 percent down, so our mortgage is small. (about 2,500/month including insurance and taxes.) We have a small amount of debt. School loans and car laon payments total $800/month. We also have an au pair, but for two kids the combination of an au pair + (reasonably priced) half-day preschool vs. full time daycare for two kids isn't a big difference.

You are totally right about tracking our expenses. We always knew we should but we sort of hit a low in our slush fund a few weeks ago that became a wake-up call as to the necessity. We are being sooo much more careful now that we are writing everything down. This is new so we'll see how much of an impact it will have in reality.

By the way, thank you to everyone who is telling me about their savings on a similar HHI. It's giving me some faith that now that we are acting like adults we may be able to build up the emergency savings, college fund and retirement next egg that we should.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:PP, my husband makes $210K and only nets $8,000 a month. How can you have a mortgage, daycare and still save $3,000 a month on $200K gross?

Net after what? How is your effective tax rate 54%? This doesn't make any sense.

After 401(k) contributions and health, life and other types of insurance.

He's still taking home way too little. I don't contribute to my 401K and my base is 210. My take home is over 12K/month, and that's after I've paid health and life insurance. Something's off.

Anonymous wrote:Did you change your 401K contributions after kids?

Yes. We went from maxing out my 401k to putting nothing in mine and a very small amount in DH's (just the amount his firm will match.)

Anonymous wrote:Perhaps a bit of a tangent -- but do you and your DH each have life and disability insurance policies in place? I could be wrong but I feel like that's one area people often overlook in their budget/planning--and it's not cheap. I was astounded by how costly they are, but they are necessary to provide a real financial safety net for the family. That sucks up about $1000 a month in our budget. If we had that cash to save or spend, we'd feel things were a lot more "comfortable," but so it goes.

We have life insurance but not disability insurance.

Make a "reverse budget". Take all the categories and enter how much you'd like to ideally have to spend if you were to be living "comfortably". Include things like a monthly travel budget, fund for big purchases, regular savings, colleges savings, retirement, etc. Get your ideal net amount, do a couple tax calculations, and you should be able to figure out what gross about you need to make. Define "comfortably". To me, it means you can easily do and have most things you like most of the time (i.e. eat out a reasonable amount of time, good childcare, family vacations, daily trips to Starbucks and occasional big furniture or other purchases are not budget busters). IMO, $200K in this city with young kids, a mortgage and student loan debt is very often not enough to live "comfortably".

Anonymous wrote:Jesus your life insurance is $1000/month? Is that normal?

I read it as life insurance and disability insurance cost that much per month. Disability coverage is really expensive.

Anonymous wrote:

Anonymous wrote:PP, my husband makes $210K and only nets $8,000 a month. How can you have a mortgage, daycare and still save $3,000 a month on $200K gross?

Net after what? How is your effective tax rate 54%? This doesn't make any sense.

After 401(k) contributions and health, life and other types of insurance.

Anonymous wrote:

Anonymous wrote:PP, my husband makes $210K and only nets $8,000 a month. How can you have a mortgage, daycare and still save $3,000 a month on $200K gross?

Net after what? How is your effective tax rate 54%? This doesn't make any sense.

Sounds like a lot of pre-tax savings to me...(Or DH is socking away a private fund...)

Anonymous wrote:PP, my husband makes $210K and only nets $8,000 a month. How can you have a mortgage, daycare and still save $3,000 a month on $200K gross?

Net after what? How is your effective tax rate 54%? This doesn't make any sense.