Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We live near downtown SS and have not compromised on school quality. Our schools are great, not risky (as you put it).

If you insist on schools serving only high SES populations the you and only you are to blame for your money woes.

Blair high school? That is quite good, at least magnet portion. MoCo and fairfax do well even in lower SES schools but as ESOL demands grow and the counties cut their school budgets I think you are taking more risk than you realize. Unless you stay home and can navigate your child through the academic shoals.

Downtown SS is quite nice but largely a product of housing bubble; walk one block over (we went to mininut so toured the area around) and there is a wide divide there. It is not as likely to be a stable low crime neighborhood unlike more traditional close in suburbs. It can go either way, you are gambling; it could pay off if SS keeps developing, definitely, look at that awesome library. But essentially 200k allow you to be urban pioneers.

You don't know what you are talking about. I am a lawyer and my DH a college professor, and we are surrounded by people of similar backgrounds and educational levels. Our housing values have remained stable throughout the downturn and risen somewhat as well. Our kids (15 and 12yo) and our friends' kids are doing great, performing well and heading to excellent colleges and universities.
I guess if you are spending your money on more expensive neighborhoods to avoid what you believe is a "risk" (attending school with people of color), then you feel compelled to justify that choice by denigrating the road not taken.

Anonymous wrote:

Anonymous wrote:We live near downtown SS and have not compromised on school quality. Our schools are great, not risky (as you put it).

If you insist on schools serving only high SES populations the you and only you are to blame for your money woes.

Blair high school? That is quite good, at least magnet portion. MoCo and fairfax do well even in lower SES schools but as ESOL demands grow and the counties cut their school budgets I think you are taking more risk than you realize. Unless you stay home and can navigate your child through the academic shoals.

Downtown SS is quite nice but largely a product of housing bubble; walk one block over (we went to mininut so toured the area around) and there is a wide divide there. It is not as likely to be a stable low crime neighborhood unlike more traditional close in suburbs. It can go either way, you are gambling; it could pay off if SS keeps developing, definitely, look at that awesome library. But essentially 200k allow you to be urban pioneers.

Anonymous wrote:

Anonymous wrote:We live near downtown SS and have not compromised on school quality. Our schools are great, not risky (as you put it).

If you insist on schools serving only high SES populations the you and only you are to blame for your money woes.

Blair high school? That is quite good, at least magnet portion. MoCo and fairfax do well even in lower SES schools but as ESOL demands grow and the counties cut their school budgets I think you are taking more risk than you realize. Unless you stay home and can navigate your child through the academic shoals.

Downtown SS is quite nice but largely a product of housing bubble; walk one block over (we went to mininut so toured the area around) and there is a wide divide there. It is not as likely to be a stable low crime neighborhood unlike more traditional close in suburbs. It can go either way, you are gambling; it could pay off if SS keeps developing, definitely, look at that awesome library. But essentially 200k allow you to be urban pioneers.

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It depends on when you bought. We bought in the late 80's (top of the previous peak). It is hard to compare real estate prices because it isn't he same housing stock. WHen we bought our "shit shack" it was aboe the 50th percentile in house value for the area. Now, with all the fill ins and teardowns, it is at the top of the teardown heap around the 45th percentile. If you go and buy a house like ours, it will be similar to the income inreases. But, buyers don't want a house like ours, they want more square footage, granite (or fancier) countertops, top notch appliances............ Buyers want more expensive houses and then complain that their houses are more expensive.

Anonymous wrote:We live near downtown SS and have not compromised on school quality. Our schools are great, not risky (as you put it).

If you insist on schools serving only high SES populations the you and only you are to blame for your money woes.

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Anonymous wrote:There have been multiple people in very different phases of life (50+, 30s, single moms, sahm, renters) who have lived very comfortable lives in the area on 200k and far less. There has been an excuse thrown out for each how those don't apply - you bought before the real estate boom, you had a big down payment, you have one high wage earner.

The simple fact is that it can be done and in a variety of ways. YOU might not be able to do it, but it is not because it is not possible, but because you make different choices or have expectations/entitlements that are out of line with your income.

The simple truth is that if you are broke at 200k you would probably be broke at 300 or 400k. 100/150/200 are plenty to live comfortably, raise children, live close in, and save for a great retirement. What do they have in common? Live below their means in some ways, save aggressively, prioritize their wants and needs, and realize how fortunate they are to make so much money.

There will always be excuses.

I think people who make statements like these have no idea or experience with starting a family in this area today. That would've been me saying the same thing before I had kids. Once kids came along, childcare is a second mortgage, diapers, wipes, etc. I haven't gotten a haircut in over a year, manicure over 4 years ago, new clothes bought 2 years ago because of my growing belly... 200k is a lot less after taxes etc. its enough to cover childcare, mortgage, food, utilities, insurances, etc but its far from luxurious living. We still need to budget carefully.

I am 50yo. It was like this for us, too. It is not "today." It is what it is like to start out, given childcare costs and everything else you cite. For our generation too.

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Anonymous wrote:My husband makes $160k and I stay at home with two small kids. These threads always surprise me because at $160k we do pretty darn good! Rent a townhouse for $2300/month, aggressively paying off both cars so we spend $1000/month on that, $131/month insurance for both cars. $280/month for preschool, around $200/month for power and gas, $400 for cable/internet/cell phones. We have a house in another state but the mortgage is covered by a renter so we don't make money on that but we aren't in the red either (this year at least). In a normal 2 paycheck month we net around $8500 and very very rarely do we feel pinched unless a few major expenses come up at once (property taxes, new tires for cars, medical bills, things like that). I mean we aren't wealthy by any means but I feel we do much better than "survive."

You don't own, you don't save for college for the kids, and what are you doing for yourself as a SAHM for retirement? Households with income totalling less than $200K, with kids, are almost always way short on house equity, retirement and college savings.

We do own, in another state, hence why we rent here. My DH works in Tyson's. We save for college (I didn't list ALL expenses... Notice I didn't list anything for food, clothing, savings in my OP), and max out 401k. When youngest is 3 I will go back to work and my entire salary will go in savings/retirement since we can live just fine on DH's salary.

Does this sound okay to you?

Also I am only 29.

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Anonymous wrote:

Let me break down the math for you.
In real dollars 3.6x vs 4.4x is 160k more today. A 30 year mortgage would mean shelling out extra 1000 dollars a month. Maybe that's not a lot to you.

Not really. Interest rates were a lot higher when we first bought, in 1996. I think our first mortgage had a rate well over 6%, maybe 7%.

Well in rough terms, you took on a mortgage 2.5x your salary earlier. Today you would be taking on a mortgage 3.5x your salary. Real estate prices have outpaced income increases.

Yes, but you're missing is that in the mid-90s, the mortgage worth 2.5x your salary cost you not much less, on a monthly basis, than the mortgage worth 3.5x your salary, because interest rates were that much higher. If your HHI is $100,000, and you take out a mortgage at 2.5x your income ($250,000) at 6.5% for 30 years, your monthly payment is $1580. If you take out a mortgage at 3.5x your income ($350,000), but the interest rate is 3.5% for 30 years, your monthly payment is $1572.

Note, too, that historically as interest rates have risen, real estate prices have dropped and vice versa.

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Anonymous wrote:My husband makes $160k and I stay at home with two small kids. These threads always surprise me because at $160k we do pretty darn good! Rent a townhouse for $2300/month, aggressively paying off both cars so we spend $1000/month on that, $131/month insurance for both cars. $280/month for preschool, around $200/month for power and gas, $400 for cable/internet/cell phones. We have a house in another state but the mortgage is covered by a renter so we don't make money on that but we aren't in the red either (this year at least). In a normal 2 paycheck month we net around $8500 and very very rarely do we feel pinched unless a few major expenses come up at once (property taxes, new tires for cars, medical bills, things like that). I mean we aren't wealthy by any means but I feel we do much better than "survive."

You don't own, you don't save for college for the kids, and what are you doing for yourself as a SAHM for retirement? Households with income totalling less than $200K, with kids, are almost always way short on house equity, retirement and college savings.

Citation please.

Our HHI is $180K.

We have about $700K equity in our house and less than $100K to pay on the mortgage.

Retirement accounts total $1.5M. We are 50yo.

College savings total $250K for two kids ages 15 and 12.

We are not "way short." Not by a long shot.

Wow, very impressive! Good for you.

Thank you. We are aggressive savers and planners.

Anyone who uses "$200K" and "survive" in the same sentence is clueless. With a HHI of $180K, we consider ourselves rich.

But you're at a different stage in life. You bought your house when before the bubble, when gas was cheaper, when economy was better, and when families were able to live on one income. Try starting out with 2 kids in daycare and paying for a house now on 180k.

PP here. That will always be true. We didn't make $180K when we were starting out, not even close. We struggled just as you do. It's what life is like, starting out, for most people.

I still say $200Kish is a LOT of money.

What did the home cost compared to your income. No way in hell someone would make that equity and be in the same position if they bought now and fast forwarded 20 years.

IIRC, we were making about $90K or $100K together when we bought our house for $360K in 2000. (Families in this area were definitely not able to live on one income at that time. No way.) At the time we had two kids in daycare (later pulled them and did a nanny-share) and for a few years we were in the red, with more going out to childcare etc. than we had coming in.

I don't think you know what your house will be worth in 20 years. (We've owned for almost 14, not 20.)

It's very unlikely that housing will triple in next 15 yrs like yours did.

And a comparable housing cost would be 600k, which means you are living at out and paying more in gas and extended care or live closer in and pay for private.

Different world now. We should all move tonPitt or nC.

Huh? How do you figure our housing value tripled? $360K x 3 = $1M+. Our house is worth about $800K. So it doubled, plus a little more. Yours might too, in the next 15 years. Unless you have a crystal ball, we don't know.

I don't know what you mean by comparable housing cost. Do you mean that is what we would be buying now with our income? Perhaps so. We live in close-in Silver Spring and put gas in our cars 1x/month as we don't drive that much. Our kids go to public school. People buy houses in our area for $600K today and make these same choices.

Your situation is really not any different from what ours was 14 years ago. It just isn't.

Except, when you bought your house the value was 3.6x your salary. Now, making 180k would mean the house is 4.4x the salary.

Like I said, not vastly different.

And not living in the hinterlands, or paying for private schools.

Let me break down the math for you.
In real dollars 3.6x vs 4.4x is 160k more today. A 30 year mortgage would mean shelling out extra 1000 dollars a month. Maybe that's not a lot to you.

Not really. Interest rates were a lot higher when we first bought, in 1996. I think our first mortgage had a rate well over 6%, maybe 7%.

Well in rough terms, you took on a mortgage 2.5x your salary earlier. Today you would be taking on a mortgage 3.5x your salary. Real estate prices have outpaced income increases.

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Anonymous wrote:My husband makes $160k and I stay at home with two small kids. These threads always surprise me because at $160k we do pretty darn good! Rent a townhouse for $2300/month, aggressively paying off both cars so we spend $1000/month on that, $131/month insurance for both cars. $280/month for preschool, around $200/month for power and gas, $400 for cable/internet/cell phones. We have a house in another state but the mortgage is covered by a renter so we don't make money on that but we aren't in the red either (this year at least). In a normal 2 paycheck month we net around $8500 and very very rarely do we feel pinched unless a few major expenses come up at once (property taxes, new tires for cars, medical bills, things like that). I mean we aren't wealthy by any means but I feel we do much better than "survive."

You don't own, you don't save for college for the kids, and what are you doing for yourself as a SAHM for retirement? Households with income totalling less than $200K, with kids, are almost always way short on house equity, retirement and college savings.

We have earned between 140 - 160 for the last 10 years on one income. We have 2 kids but no student loans. Both kids went to good preschools and do after school activities (education is a priority for us). We live in the DC area. We have bought a house at the peak with 25% down and sold it 8 years later for a minor profit. We have 450K cash equity in the market, and maxed out 401K. This is with no family help. Of course we are not crazy rich, but will retire and still be able to maintain our standard of living unless the market wipes us out (except it will wipe everyone else out concurrently). We travel abroad once every 2 years to see family, eat out and even have someone come in a couple of times a month to clean house. We average about 40-60K per year savings (excluding 401K).


It's doable.

Are you in your 30s? How have your housing costs been? I suspect you live someplace on edge of DC metro like Loudoun? And one of you works out there too. That is an enviable situation big you can get it bc you avoid the ridiculous cost of housing most of us pay to maintain shorter commutes. And I mean shorter not short.

We live in DTSS about 1.2 miles from the metro. House is small and not extravagant. We are fairly minimalistic (partly nature, partly circumstance). DH commute is 20mins to college park. If one is willing to forgo some bells and whistles it is doable.

I would guess your house was 300k or so? How do you feel about schools? That is a great commute even to downtown, but we aren't sure about school quality is dtss. But the area is rapidly changing and schools should improve. We are more risk adverse regarding schools so sadly small homes in our preferred close in school district start at 700k. I suspect that maybe part of the 450k you have saved up! What do you consider bells ad whistles? We have $30 internet, low end Hondas (1 car is nice but two kids & two working parents make that harder). No cable. We just got our first smartphone (only 1) and that was cheapest version.

Our expense are dominated by housing, daycare (equals the mortgage), and to a much lesser degree annual travel to far away family. What are we forgetting? This is an issue seen in another warren book, the 60% solution. Cutting out Starbucks won't fund college; you have to make changes to these big recurring expenses, and that can mean moving, finding different jobs, etc. whistles and bells prob weren't funding your awesome nest egg, right?

NP. To me, the problem is that you are trying to do too much at the same time. Look what you just wrote: you have the equivalent of another mortgage payment due to daycare costs. When those daycare costs go away, so do a lot of your money troubles. Why not look to shorter-term housing solutions? Buy the smaller home in the more "risky" school district until you are done with daycare. Your oldest kid goes to school there for a few years. Then when your youngest is ready to start school, you can afford to make the move to a better school district, if you still feel that is necessary, or if you want to a larger home in same district if by that time you have become comfortable in that district.

At a HHI of $200,000, you may be able to have much of what you want. Just not all at the same time. Like some PPs noted, my very middle class parents (that is, HHI much less than $200k) eventually ended up in the lovely home they had always wanted....once their kids were out of college.

Daycare costs don't go away. Between extended day and summer care, my monthly nut is about 10% less. Maybe by the time they are 12 they can think about being independent , but college costs loom then.

As for houses, the only thing we care about is good schools and commute. We have no interest in a dream house and will probably move into tiny condo once kids graduate.

200k is manageable if you compromise on school quality, commute, or have a single earner which eliminates daycare costs. Additionally, if you have someone home, longer commutes are less of an issue (long commute means you never see your kids). And you can take a chance on riskier schools b/c you have a parent on the ground who can manage tutoring and homework help much more easily.

So if the 200k is single earner, much easier and I think that's why some people scoff at surviving. But if two incomes, the costs in money and time push you to the brink.

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Anonymous wrote:My husband makes $160k and I stay at home with two small kids. These threads always surprise me because at $160k we do pretty darn good! Rent a townhouse for $2300/month, aggressively paying off both cars so we spend $1000/month on that, $131/month insurance for both cars. $280/month for preschool, around $200/month for power and gas, $400 for cable/internet/cell phones. We have a house in another state but the mortgage is covered by a renter so we don't make money on that but we aren't in the red either (this year at least). In a normal 2 paycheck month we net around $8500 and very very rarely do we feel pinched unless a few major expenses come up at once (property taxes, new tires for cars, medical bills, things like that). I mean we aren't wealthy by any means but I feel we do much better than "survive."

You don't own, you don't save for college for the kids, and what are you doing for yourself as a SAHM for retirement? Households with income totalling less than $200K, with kids, are almost always way short on house equity, retirement and college savings.

Citation please.

Our HHI is $180K.

We have about $700K equity in our house and less than $100K to pay on the mortgage.

Retirement accounts total $1.5M. We are 50yo.

College savings total $250K for two kids ages 15 and 12.

We are not "way short." Not by a long shot.

Wow, very impressive! Good for you.

Thank you. We are aggressive savers and planners.

Anyone who uses "$200K" and "survive" in the same sentence is clueless. With a HHI of $180K, we consider ourselves rich.

But you're at a different stage in life. You bought your house when before the bubble, when gas was cheaper, when economy was better, and when families were able to live on one income. Try starting out with 2 kids in daycare and paying for a house now on 180k.

PP here. That will always be true. We didn't make $180K when we were starting out, not even close. We struggled just as you do. It's what life is like, starting out, for most people.

I still say $200Kish is a LOT of money.

What did the home cost compared to your income. No way in hell someone would make that equity and be in the same position if they bought now and fast forwarded 20 years.

IIRC, we were making about $90K or $100K together when we bought our house for $360K in 2000. (Families in this area were definitely not able to live on one income at that time. No way.) At the time we had two kids in daycare (later pulled them and did a nanny-share) and for a few years we were in the red, with more going out to childcare etc. than we had coming in.

I don't think you know what your house will be worth in 20 years. (We've owned for almost 14, not 20.)

It's very unlikely that housing will triple in next 15 yrs like yours did.

And a comparable housing cost would be 600k, which means you are living at out and paying more in gas and extended care or live closer in and pay for private.

Different world now. We should all move tonPitt or nC.

Huh? How do you figure our housing value tripled? $360K x 3 = $1M+. Our house is worth about $800K. So it doubled, plus a little more. Yours might too, in the next 15 years. Unless you have a crystal ball, we don't know.

I don't know what you mean by comparable housing cost. Do you mean that is what we would be buying now with our income? Perhaps so. We live in close-in Silver Spring and put gas in our cars 1x/month as we don't drive that much. Our kids go to public school. People buy houses in our area for $600K today and make these same choices.

Your situation is really not any different from what ours was 14 years ago. It just isn't.

Except, when you bought your house the value was 3.6x your salary. Now, making 180k would mean the house is 4.4x the salary.

Like I said, not vastly different.

And not living in the hinterlands, or paying for private schools.

Let me break down the math for you.
In real dollars 3.6x vs 4.4x is 160k more today. A 30 year mortgage would mean shelling out extra 1000 dollars a month. Maybe that's not a lot to you.

Anonymous wrote:

Anonymous wrote:There have been multiple people in very different phases of life (50+, 30s, single moms, sahm, renters) who have lived very comfortable lives in the area on 200k and far less. There has been an excuse thrown out for each how those don't apply - you bought before the real estate boom, you had a big down payment, you have one high wage earner.

The simple fact is that it can be done and in a variety of ways. YOU might not be able to do it, but it is not because it is not possible, but because you make different choices or have expectations/entitlements that are out of line with your income.

The simple truth is that if you are broke at 200k you would probably be broke at 300 or 400k. 100/150/200 are plenty to live comfortably, raise children, live close in, and save for a great retirement. What do they have in common? Live below their means in some ways, save aggressively, prioritize their wants and needs, and realize how fortunate they are to make so much money.

There will always be excuses.

I think people who make statements like these have no idea or experience with starting a family in this area today. That would've been me saying the same thing before I had kids. Once kids came along, childcare is a second mortgage, diapers, wipes, etc. I haven't gotten a haircut in over a year, manicure over 4 years ago, new clothes bought 2 years ago because of my growing belly... 200k is a lot less after taxes etc. its enough to cover childcare, mortgage, food, utilities, insurances, etc but its far from luxurious living. We still need to budget carefully.

Anonymous wrote:

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Anonymous wrote:My husband makes $160k and I stay at home with two small kids. These threads always surprise me because at $160k we do pretty darn good! Rent a townhouse for $2300/month, aggressively paying off both cars so we spend $1000/month on that, $131/month insurance for both cars. $280/month for preschool, around $200/month for power and gas, $400 for cable/internet/cell phones. We have a house in another state but the mortgage is covered by a renter so we don't make money on that but we aren't in the red either (this year at least). In a normal 2 paycheck month we net around $8500 and very very rarely do we feel pinched unless a few major expenses come up at once (property taxes, new tires for cars, medical bills, things like that). I mean we aren't wealthy by any means but I feel we do much better than "survive."

You don't own, you don't save for college for the kids, and what are you doing for yourself as a SAHM for retirement? Households with income totalling less than $200K, with kids, are almost always way short on house equity, retirement and college savings.

We do own, in another state, hence why we rent here. My DH works in Tyson's. We save for college (I didn't list ALL expenses... Notice I didn't list anything for food, clothing, savings in my OP), and max out 401k. When youngest is 3 I will go back to work and my entire salary will go in savings/retirement since we can live just fine on DH's salary.

Does this sound okay to you?

Anonymous wrote:

Anonymous wrote:My husband makes $160k and I stay at home with two small kids. These threads always surprise me because at $160k we do pretty darn good! Rent a townhouse for $2300/month, aggressively paying off both cars so we spend $1000/month on that, $131/month insurance for both cars. $280/month for preschool, around $200/month for power and gas, $400 for cable/internet/cell phones. We have a house in another state but the mortgage is covered by a renter so we don't make money on that but we aren't in the red either (this year at least). In a normal 2 paycheck month we net around $8500 and very very rarely do we feel pinched unless a few major expenses come up at once (property taxes, new tires for cars, medical bills, things like that). I mean we aren't wealthy by any means but I feel we do much better than "survive."

You don't own, you don't save for college for the kids, and what are you doing for yourself as a SAHM for retirement? Households with income totalling less than $200K, with kids, are almost always way short on house equity, retirement and college savings.