Anonymous wrote:

Anonymous wrote:OP again. We take home about 19k (after paying into healthcare costs which are high for our firm, 401k, etc). Nanny is 3500/month. Family help is about 2k/month now but that will go up in time. We've also had to bail out the parents from a foreclosure and pick up emergency health expenses so all of those things took a toll early on and ate up money we could have saved. Also, we weren't as disciplined about savings until the last few years (paid for our own modest wedding etc). Student loans from college are 1k/month. Hoping we find a house eventually that has room for an au pair so we can cut way down on childcare costs. For those who have incomes similar to ours, thanks so much for posting your budgets. We know we can cut down in some areas but there aren't huge areas of excess (lavish vacations, jewelry, fancy clothes, cars, etc).
I'd like to put together a larger downpayment (wait until we can save enough) rather than raising our monthly cost if possible. It just seems excessive to spend more than 4500/month. We realize our HHI income is high now so it worries me to take on even more monthly expense.

I think your situation demonstrates very nicely the hedonic treadmill and why people who earn lots of money still feel poor. Just think about how "rich" you would be if you discarded your attachment to the $1 mil house and bought a $500k house. You'd be rich! But since you've developed this concept that you have to have a $1 mil house, you're essentially going to be financially exactly the same as my family in terms of disposible income (we earn almost half what you do and are looking for a 500k house). I guess you could argue that you get 2x the pleasure out of your $1 mil house as I do out of my $500 k house. But I truly believe that we adjust to our circumstances in terms of happiness -- as long as your home is safe, clean, and comfortable, you won't really notice the difference.

Anonymous wrote:OP again. We take home about 19k (after paying into healthcare costs which are high for our firm, 401k, etc). Nanny is 3500/month. Family help is about 2k/month now but that will go up in time. We've also had to bail out the parents from a foreclosure and pick up emergency health expenses so all of those things took a toll early on and ate up money we could have saved. Also, we weren't as disciplined about savings until the last few years (paid for our own modest wedding etc). Student loans from college are 1k/month. Hoping we find a house eventually that has room for an au pair so we can cut way down on childcare costs. For those who have incomes similar to ours, thanks so much for posting your budgets. We know we can cut down in some areas but there aren't huge areas of excess (lavish vacations, jewelry, fancy clothes, cars, etc).
I'd like to put together a larger downpayment (wait until we can save enough) rather than raising our monthly cost if possible. It just seems excessive to spend more than 4500/month. We realize our HHI income is high now so it worries me to take on even more monthly expense.

Anonymous wrote: We are going to try to scrape together another $100k in downpayment over the next few years but not sure it will happen. How do you afford your $1M home? Our HHI is just over 400k but once you calculate family we need to help, nanny (we both have very long hours), etc, we're not able to sock away enough to really put together a large downplayment

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, why is it important for you to have that $1 Mil home?
I know some families that live in an ordinary house in an ordinary neighborhood, have a holiday house, own some forest etc. Their net worth is easily $1Mil and above, but have no desire to take that and put it into a fancy house

$1 million isn't a "fancy" house in these parts.

Usually a desire for a $1 million home is strongly correlated with school quality. It's not a vanity thing.

true but just because you don't buy the $1mil home with the highest ranking school it doesn'tmean your kid is going to end up at the worste school possible. There are lots of great school that aren't in the richest neighborhood. If you can afford the expensive home in the best school district then fine, but going into debt, borrowing agains a 401k and so forth to get that is not the wisest decission.

My in-laws owned a gorgeous home in a top school district, put all theri money into their kids (private tennis lessons, expensive camps and so forth), know where it got them....living with and being supported by their daughter, because they lived above their means for many years and didn't save enough for emergencies like my FIL losing his job late in life. Obviously extreme and I nkow people wil say "that won't happen to me." but I am sure they never thought it would happen to them either.

on the flip side their commitment to their kids was well appreciated and their children are gladly helping them out later in life...

Anonymous wrote:

Anonymous wrote:OP, try not to get caught up in this notion of having to live close in. The fact is that people who live as far out as Rockville are happy with their commutes. Instead of committing financial suicide, look at more reasonably priced houses further out. BTW, we have a HHI of 445 K and we are NOT looking at anything over 950,000.

I totally DISAGREE. There are exceptions, of course, but study after study shows that a longer commute decreases quality of life. People also underestimate how much time they spend commuting in an effort to convince themselves that it really isn't so bad. However, if you add up a "mere" extra 20 minutes of commuting per day (10 minutes one way, and 10 back), 5 days/week, that's over 80 HOURS of commuting annually. Can you imagine what you would do with basically two entire work weeks? I'd rather spend that time with my family than in a car.

Anonymous wrote:OP, try not to get caught up in this notion of having to live close in. The fact is that people who live as far out as Rockville are happy with their commutes. Instead of committing financial suicide, look at more reasonably priced houses further out. BTW, we have a HHI of 445 K and we are NOT looking at anything over 950,000.

Anonymous wrote:OP, we are in a similar situation to you. We are under contract to buy a $900K home. We are currently in a sh*tty school district, area w/ higher crime than we feel comfortable with, etc. It feels ridiculous to us, too, given our HHI, but it is a stretch for us to buy the $900K home. HHI is $340K. That will go up to $400K next month when the one of us who is not currently employed starts working. Nanny is $50K/yr. Pre-school $15K. We are paying off law and grad school debt, have 1 car note at $350/mo, pay for life insurance, disability insurance, college savings, retirement savings, emergency savings, etc. We take a modest 1 wk. vacation (maybe $2-3K) every 2-3 yrs. We are putting down $180K, and with closing costs added, that's $210K. We saved 3/4 of this, but I am taking a loan from my 401K to fund the balance. A loan means no tax penalty--it has a 4% rate and I'll pay it off from paycheck deducts over 2 years. To us, it was the right thing to do, b/c our children are almost school age so the school issue is looming, the interest rate we are getting on our new mortgage (3.875% on first trust, 4.25% on 2nd) is historically unprecedented and makes our monthly payment $3,600ish, with insurance and taxes added, $4600ish. That's definitely doable on our take home, but after paying for life and disability insurace, college savings, retirement savings that are not as great as I'd like them to be, etc., there is very little left. This is a very expensive area to live in, espec. if you want to be in the better school districts.

Anonymous wrote:OP again. We take home about 19k (after paying into healthcare costs which are high for our firm, 401k, etc). Nanny is 3500/month. Family help is about 2k/month now but that will go up in time. We've also had to bail out the parents from a foreclosure and pick up emergency health expenses so all of those things took a toll early on and ate up money we could have saved. Also, we weren't as disciplined about savings until the last few years (paid for our own modest wedding etc). Student loans from college are 1k/month. Hoping we find a house eventually that has room for an au pair so we can cut way down on childcare costs. For those who have incomes similar to ours, thanks so much for posting your budgets. We know we can cut down in some areas but there aren't huge areas of excess (lavish vacations, jewelry, fancy clothes, cars, etc).
I'd like to put together a larger downpayment (wait until we can save enough) rather than raising our monthly cost if possible. It just seems excessive to spend more than 4500/month. We realize our HHI income is high now so it worries me to take on even more monthly expense.

Anonymous wrote:OP, try not to get caught up in this notion of having to live close in. The fact is that people who live as far out as Rockville are happy with their commutes. Instead of committing financial suicide, look at more reasonably priced houses further out. BTW, we have a HHI of 445 K and we are NOT looking at anything over 950,000.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Not if they're paying her on the books, which is what it sounds like to me. We paid $14/hr for 55 hours a week and with taxes we were paying over $50k a year.

who would pay a nanny off the books? only a tax cheat and a leech on society.

Totally off topic, but...
Are you serious? Almost everyone in NYC pays off the books. Ditto other big cities. Most nannies in other makets won't take an on the books job. I'm new here and learning that DC is a different market, but something like 95% of NYC families with a nanny don't pay on the books. We were the only people we knew paying on the books.