Are you financially comfortable yet worried about finances?

amother

Orange

Thu, Jul 02 2015, 12:16 am

How would you lead a lifestyle if your financial situation was such that:
You are young, have a very low income that will not rise dramatically in the next few decades due to conscious career choices, have a significant amount of savings (close to 500,000) due to yerusha.

Husband uses yerusha as a means to justify spending money on moderate "extras." I am always worried about this.... I feel like we have to lead a lifestyle like our income allows, not rely on savings. However, I am always worried about our future financial situation due to our low income. (Im a anxious person).... would you worry if you were in such a situation? How can I realize that I am blessed, not worrying about money all the time?

amother

Saddlebrown

Thu, Jul 02 2015, 12:25 am

amother wrote:

I would use the $500,000 to invest in growth plus income. I would then only live off part of the income.

Do you have any further expectations? If this is it, I would be very careful.

amother

Saddlebrown

Thu, Jul 02 2015, 1:22 am

amother wrote:

Thanks for your reply. It is invested. I dont think we can assume we will get more of the yerusha in the future. When you say be careful, you mean live as if its not there, right? Thx

Let's say you invested in real estate. The property will increase in value which is growth. Only use a portion of the rental income and save the the other part. $500,000 sounds like a lot of money, but it is not enough for your husband's purposes. How much does he want to use a year?

Also if the money is tied up, it is not available.

amother

Floralwhite

Thu, Jul 02 2015, 8:01 am

Learn from my mistakes. I lived "comfortably" because I had a nice income that was just cut to less than half. By comfortable I mean able to pay the bills and not worry about routine spending. I got used to spending that and don't have the income to back it anymore.

amother

Tan

Thu, Jul 02 2015, 8:45 am

We have a smaller sum of money that we got as a yerusha and are using it as a down payment for a house. (Close to 300k)

The past two years we have paid all our bills and put away about thirty thousand a year.

Now with the new house will come some big expenses. (Tax, utilities, higher tuition in new area).

And I am having trouble sleeping at night. I am so risk averse. And it feels risky.

The move is important for a bunch of reasons. But I am scared.

zigi

Thu, Jul 02 2015, 10:11 am

save it for bigger expenses, bar mitzvas weddings, down payment etc. then you will notice the impact of the money otherwise it will be used and then one day gone. or take a bit out and use that for extras. orthodontics etc when needed.

Amarante

Thu, Jul 02 2015, 10:25 am

As others have posted, YOU are not financially comfortable since you have low earning potential for your life - I.e. not temporary while in school.

You should leave invest this money and not use it to subsidize your life style - except for extreme emergencies. However, IMHO, you should really live as if you don't have this money at all and live on your actual income - which would include saving money for "emergencies".

With this amount of money to invest, you should get a recommendation of a good financial advisor. Since you are young, you would be best investing the majority in a stock index fund with low fees such as ones from Fidelity.

amother

Honeydew

Thu, Jul 02 2015, 10:45 am

We're in the same position. Low income right now, nice amount of inheritance money. We invested in a few real estate money with some of the money. We are using most of that income to supplement our right now, and saving a little. This is not ideal, but at least we are not eating through savings. HOWEVER, my husband will IY"H be able to make much more in the near future.
The rentals bring in enough income that we would get back what we put in after several years. After that it would be pure profit, and we could use the money to put into a new investment (once we stop using those earning for our regular income. Sigh.) Until my husband is earning more we are scrimping a lot and very nervous. We really want to live within our earned income.
Talk to a frum financial planner to figure out what your budget and investment goals should be like. Someone fun understands tuition and the frum expenses much better. Also see if you can invest in something that can produce regular income to supplement yours. Try not to touch your nest egg for regular expenses or it will be gone before you know it.

amother

White

Thu, Jul 02 2015, 1:41 pm

I am in a similar situation and think I made a mistake. I too had a large yerusha (500,000) and used it on a house down payment and put around 300,000 in savings. Great. But then I realized we cant afford this house. Taxes, mortgage, repairs, utilities. The expenses are way more than our incomes! So it is either continue to use the savings to pay off the mortgage or move to a cheaper house. Likely out of state and far from family.

So yes, I am technically financially comfortable. If I wanted to I could pay off my mortgage with the rest of the savings and be left with no debt... But that doesn't make be financially safe. Without changing incomes it is impossible to live counting on the yerusha. If so it will be gone in 10 years or less... Where will we be then?

amother

Wheat

Fri, Jul 03 2015, 3:09 am

Yes. My husband B"H makes about $350,000 per year. Our expenses are about $170,000 per year.

We have a nice house, cars, full time help, and I spend $500 to $800 monthly on clothes, shoes for me and kids, occasionally DH when he needs. Even with this and taxes we save $2,000-$8,000 per month (our income is not the same every month).

And yet. I still worry about money all the time. I am trying to curb this and getting better as I grow older, but my parents made plenty of money and worried and complained about money all the time, so I feel that it is ingrained in me. I don't talk about it to my children because I don't want them to be as obsessed as me.

I started a side business to keep busy and it's B"H doing very well-- about $2,000 per week. I am saving every penny. Most people in my position would not work. But I do it because I enjoy it. I enjoy other things too that don't make money, but I feel better when there is more money in savings and my business is run while my children are in school so it is not taking away from them.

No yerusha for us, but we own a few rental properties B"H. If you have $200,000 in the bank, use the rest to buy property. I like to have a minimum of $100,000 in the bank, but $200,000 liquid is best in my opinion. The rest use for investing.

tigerwife

Fri, Jul 03 2015, 7:16 am

Right now we are financially comfortable because we really do not have major expenses as a young couple with a baby not yet in school. I am slightly anxious about the future and hope that our incomes will grow at the same rate or faster than our expenses.

amother

Brown

Fri, Jul 03 2015, 7:21 am

amother wrote:

Would you be comfortable sharing what your side business is?

amother

Powderblue

Fri, Jul 03 2015, 10:39 am

amother wrote:

Would you be comfortable sharing what your side business is?

I had the same thought as well. Obviously it's not something common or everybody would be making that kind of money. But 2,000 a week sounds really grand for a side business. Would love to know what it is if you care to share.