Anonymous
Post 03/04/2023 00:03     Subject: Re:400k salary and creep factor we never really have much left
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:You are clearly doing something wrong if you can’t save with this income. Are you buying designer clothes? Eating out non stop? Even then I can’t see how you can go through this much money.


I was OP without doing those things.

OP, one thing I found that really helped was a monthlong "spending fast." Almost no spending for a month. Eat from the pantry/freezer except for some fresh vegetables and fruits, shop your closet, make your coffee. It really helps you reset and also see where you're mindlessly spending.



Eating out is probably a big one for us. I think a lot of it is also just gifts/meal trains/ those kids if obligations. We have about 50 birthday parties a year and then I get invited to do a meal train or baby shower usually 2x a month and these add up. I usually spend $75 on the meal train because I hate cooking and the shower gifts and invited to social events where you often pay like someone’s birthday dinner add up.


50 birthday parties??? One a week??
Anonymous
Post 03/04/2023 00:03     Subject: Re:400k salary and creep factor we never really have much left
Anonymous wrote:Here is some simple advice. You do NOT know what you are spending your money on. That much is clear from your post. Start with tracking everything that you are spending. Categorize the spend. Then you will see, really easily, where you can cut. From there, you can determine which buckets you want to increase using the savings from the wasted spend.





+1

Our big expenses are similar to yours, and our HHI is $210k. You’ve got money slipping through your fingers somehow. Put your stuff in mint.com and figure out what categories are eating your money.
Anonymous
Post 03/04/2023 00:00     Subject: Re:400k salary and creep factor we never really have much left
Anonymous wrote:It’s not uncommon. Coastal living with kids is expensive. We’re in a similar boat.

https://www.financialsamurai.com/400k-income/


Hahahahaah this breakdown is HILARIOUS.

150 for phones.
A Toyota Highlander?
Daycare AND preschool?.
Utility costs and insurance plus maintenance are hella low.
A TWO million dollar house!!!! 2k per month on food. 1500 per month in a 529.
Multiple vacations. life insurance AND umbrella.
Baby and toddler items 200 per month- wtf? Buy a used crib. A hand me down stroller. Costco diapers and wipes.
Personal car and clothes 350/mo
Both parents work but previously he said mc was a parent SAH.
And they donate to charity.

Gtfoh. They have every single thing covered. Thats how a budget works. There is nothing left over because they have a retirement, 529, daycare for 2 kids, food, utilities, both a life insurance and umbrella policy. THREE weeks of vacation PLUS random getaways in their entertainment budget.

After daycare years they will have 5200 a MONTH surplus.

I could not roll my eyes any harder.
Anonymous
Post 03/03/2023 23:12     Subject: Re:400k salary and creep factor we never really have much left
Anonymous wrote:It’s not uncommon. Coastal living with kids is expensive. We’re in a similar boat.

https://www.financialsamurai.com/400k-income/

Well if you have a boat, that's very expensive
Anonymous
Post 03/02/2023 23:14     Subject: Re:400k salary and creep factor we never really have much left
It’s not uncommon. Coastal living with kids is expensive. We’re in a similar boat.

https://www.financialsamurai.com/400k-income/
Anonymous
Post 03/02/2023 21:18     Subject: 400k salary and creep factor we never really have much left
Your post made it to Reddit OP. You should be proud!
Anonymous
Post 03/02/2023 11:15     Subject: 400k salary and creep factor we never really have much left
Anonymous wrote:
Anonymous wrote:No one should pay more than 20% in tax. OP if this is your big expense, invest in a good CPA to help you save.


How do you get to a 20% tax rate? We pay 30%.


Look at your actual effective rate (the amount of taxes you actually pay considering all deductions) not your tax bracket rate. Turbo tax provides a 5 yr comparison of the effective rate.
Anonymous
Post 03/02/2023 10:57     Subject: 400k salary and creep factor we never really have much left
Anonymous wrote:
Anonymous wrote:We live a fairly modest lifestyle but with $400k salary and we do reasonable travel (not international or anything, like 4 star domestic trips, half drive half fly, public schools, just paid off cars but before payment was $600 a month, 567k mortgage balance (house worth 1.4 from appreciation), childcare is about $7k a year total, camps/activities for kids add up to several thousand but run of the mill team stuff… What’s the thing that had the biggest impact for everyone on just cutting down on spending? We spend on everything! A lot is charity, at least $15k a year for that and then it seems like endless other expenses and emergency expenses related to kids, pets and home. Advice needed. I would love to be more meaningful with our money and at least have something more to show for it like doing an amazing trip every year.


$400k household income is now middle class (unless you're single with no kids). Been this way for a while.

That's a misunderstanding of what, in the past, middle class families were like. Middle class families budgeted their monthly spending. They had to eat all their leftovers to make the grocery budget stretch for the week. They sometimes had to delay paying bills. They had to save for years before going on vacation. Clothes needed to be mended because there was no money to buy new replacements. OP doesn’t experience any of that, neither do I, but I would never call myself midfle class.
Anonymous
Post 03/02/2023 10:34     Subject: 400k salary and creep factor we never really have much left
Anonymous wrote:We live a fairly modest lifestyle but with $400k salary and we do reasonable travel (not international or anything, like 4 star domestic trips, half drive half fly, public schools, just paid off cars but before payment was $600 a month, 567k mortgage balance (house worth 1.4 from appreciation), childcare is about $7k a year total, camps/activities for kids add up to several thousand but run of the mill team stuff… What’s the thing that had the biggest impact for everyone on just cutting down on spending? We spend on everything! A lot is charity, at least $15k a year for that and then it seems like endless other expenses and emergency expenses related to kids, pets and home. Advice needed. I would love to be more meaningful with our money and at least have something more to show for it like doing an amazing trip every year.


$400k household income is now middle class (unless you're single with no kids). Been this way for a while.
Anonymous
Post 03/02/2023 10:28     Subject: 400k salary and creep factor we never really have much left
I see a lot of suggestions on the spending side, but are you sure your income is what you say? Try adding up all the direct deposits, dividends, etc and see if they really add up to 400k. Your numbers are so off that I'm suspecting there is a flow of income to some location you aren't tracking.
Anonymous
Post 03/02/2023 09:53     Subject: Re:400k salary and creep factor we never really have much left
Ugh I feel similar except we probably make closer to $350.

1 - I know travel is my vice. I should budget it better. Food is also a big expenditure for us. I've been a bit better since 2023 but I could still stand to get better. Again no set budget.

Other things we are spending money on: retirement, college savings, car payments, mortgage. Our kids also attend a fairly expensive summer camp.

We cut cable last summer.

I did recently negotiate a raise for myself. My husband has previously said the biggest difference would be us trying to make more money rather than cutting back - but IDK. We kind of work a comfortable amount for us having 3 kids. I *could* actually make more if I didn't mommy track myself but I'm not really interested in that right now.

I should budget though. I barely buy clothes etc.
Anonymous
Post 03/01/2023 15:53     Subject: Re:400k salary and creep factor we never really have much left
I use 3 month, 6 month and 1 year CDs for the purposes of restraining myself.
Anonymous
Post 03/01/2023 08:50     Subject: 400k salary and creep factor we never really have much left
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Why are you donating $15k a year to charity? That’s excessive.


No, it's not. It is not even close to near enough on that income. We make about $300,000 (give or take $15k), and we donate over $35k every year. It's called being a good human being, and helping those who are in greater need than yourself.

I agree with everyone else, track your spending for a month. You'll be surprised at where it goes and it'll be easy to cut back


You’re a fool. We are at least 500k hhi and pay at least 100k out in taxes. Not our fault our tax dollars aren’t better spent. I have little interest in donating even more money to organizations where the CEOs are one percenters.


+1. I spent years working with the less fortunate and while many actually were less fortunate, there were just as many scamming the system. The big tell was in how many had the lastest and greatest phone, while supposedly being in need. Didn't add up! I will never donate money to charity because of the amount of people taking advantage. I consider my time spent at that program my debt to society.


This is a stupid conclusion. There are many people who work in hourly positions who need their phone for communication with employers/clients, listing services (if they are contractual), researching, sourcing materials, and so on. For many without a computer, a phone is an integral part of doing business. For those who are Instacart drivers, Uber drivers, Lyft drivers, Task Rabbit taskers, and so on, they need their phone to make money. There are plenty who use their phone to take photos or videos that they use in their work. Plus, many of these people have kids and need to contact or be reachable by childcare. I know people whose kids use their parents phone for schoolwork and research and Internet access because they don't have a school-issued device.

For many investing in a higher end phone and using it until it falls apart, it's a worthwhile investment. I tried a less expensive phone for a while. We bought my wife the latest iPhone and I got a lower end model Android. I had to replace my phone 3 times in the same time she kept her phone. And she had better storage, better performance (more memory) and had fewer issues using it heavy-duty than I had. After that experiment a few years ago, we now get new latest and greatest phones and use them as long as possible.

So while there are many ways to flag people who make bad life choices or scam the system, but this isn't one of them.


They don’t need the latest iPhone. Ridiculous.


How do you know all of these people you’re observing have the “latest” version? Even if you could tell just by looking at the phone in a brief moment, WTH does this?
Anonymous
Post 03/01/2023 07:30     Subject: Re:400k salary and creep factor we never really have much left
Anonymous wrote:
Anonymous wrote:You Need A Budget (the program). You’ll end up saving thousands the first year - we did.


Thank you, this sounds great


Second the recommendation of YNAB. You need to figure out where your money is going and plan where you want to spend it. YNAB forces you to look at your choices (our eating out money is done for the month, do I want to take some money from the vacation fund to eat out tonight?). At your income you can do anything you want to do...you just can't do absolutely everything you want to do. YNAB will help you make sure you are spending money on your priorities.
Anonymous
Post 03/01/2023 07:09     Subject: 400k salary and creep factor we never really have much left
Anonymous wrote:
Anonymous wrote:I’ve always followed the rule to “pay myself first”. We both max out our 401ks and I max out my mega Roth (25k) by May of each year. We also do direct deposit of X$ into our brokerage each month and $x into savings which cover future cars, home repairs and trips.

We then yolo all of our savings each month without regard.

We do not give to charity, but we do donate to our kids schools. However that only adds up to about 10k/yr

I find paying ourselves first via direct deposit is nice because I never see that money and know I can spend everything that hits our savings.


what is a mega Roth?


It’s typically called mega backdoor Roth. It is an option some employers offer to contribute more after tax money to your 401k after the standard limit is met. If available you can then convert that money to a Roth 401k (or Roth IRA) making future earnings tax free. It’s how some people can save beyond the 22,500 limit, and lets you potentially save up to 66,000 (including any employer match). It is a great benefit for high earners but not all companies offer it.