2 incomes and still not making it

Dolly Welsh

Sun, Aug 02 2015, 8:10 pm

I worked for years and had a lot of fun doing it.

But I want to remark that when you are out and about, among business people, you get a certain notion of what life ought to be like. You are in nice surroundings, with mirrored walls, marble lobbies, palm trees, thick upholstery. And going and coming to work, you see lots and lots of advertising that you wouldn't see if you stayed home.

These things make you spend money. You get a notion that you ought to buy better clothes, and hair, and appliances, and accessories, and travel, and all that jazz. I like those things too, but the fact is these stimulations are part of the cost of working, just like torn stockings that have to be replaced, and nicer purses and all.

I have no objection to people having fun, but part of what they pay us in, is fun. It's an expensive kind of fun. I enjoyed it too, but maybe sometimes we can't afford it. Our children are our fun.

There is also a certain serenity that is the reward of not feeling these needs. Serenity has its charm.

nylon

Sun, Aug 02 2015, 8:33 pm

Dolly, your tax information is completely, completely wrong.

Almost no one in the US even has a marginal tax take of 50% even with high state taxes. Much less an average tax take. Especially with 2 kids, she is deducting both and claiming child credit. The marriage penalty has been whittled away so that now very few people pay one at all. Her husband's effective tax rate would go down if she quit work but that's because their HHI would go down and the amount would likely not justify it. In addition the long term consequences of quitting the work force are substantial (it's not never worth it, but it has to be considered).

$1K/mo for an infant or young toddler is normal.

sneakermom

Sun, Aug 02 2015, 9:11 pm

To me one thousand dollars a month for tuition is crazy!!

It sounds like you have to be rich to be mo. What exactly are you getting for that fancy price tag?

I recommend sending to a school that's a little more to the right. And cheaper. True it won't be a perfect fit but at least it's affordable.

Can you sublet this apartment? Is it legal?

In the end it might be worth letting go of one income. Maybe you will qualify for govt assistance and a tuition break and minus the daycare.

Middle class is so hard. No breaks. Hug

Amarante

Sun, Aug 02 2015, 9:53 pm

Dolly Welsh wrote:

Nylon, it's not exactly 50%, that was approximate, but it can be vaguely around there. Say, 40% ish. You pay: Fed, SS, Medicare, State, City, and health insurance. Health insurance is also a tax.

Every case is different, yes.

Yes, the child deductions are in her favor.

Health insurance isn't a tax - It's an expense.

Most Americans don't pay 40% of their salary in total taxes - especially with deductions for children and child care.

Yes, there are certain expenses when one works but in my experience they are controllable. I brought lunch unless it was a special occasion; a nice black skirt or two and a few tops mixed around and that's all you need.

Based on the OP's salary, it's unlikely that she can afford to stop working. And there is a REAL cost for a woman (or man) to quit working as it's hard to get a job after being out of the workforce and statistically the income never catches up with someone who has worked consistently.

You have very old fashioned ideas of what male and female roles are. IMO, if possible, it is important for a woman to be able to earn a living for a variety of reasons - because most families can't make it on one income and also because things happen in life which are outside of one's control - death, disease, divorce - and it is good that a woman has the ability to know she can earn an income and support herself and the children.

Besides which the OP didn't ask people's opinions on how she could impoverish herself and stay home. She isn't complaining that her life is out of control because she is working and she isn't seeking to justify luxuries based on her working - I.e. she does NOT have a cleaning woman and she doesn't rely on take out food.

To the OP, it is hard and it's not a lot of money - it's just middle class and as others have pointed out, you make enough to not qualify for subsidies but not enough for luxuries. Very Happy

amother

Crimson

Sun, Aug 02 2015, 10:16 pm

We earn about $90,000 gross and know exactly how you feel. Both of us work 40 hours a week.

My husband would never even consider public school so we shell out 10K a year for a preschooler to go to an overcrowded bais yaakov with a lousy education. (We live in an amazing public school district by the way)

We also pay about 12K a year for full time babysitting for our second child.

Add to that, another 2K for camp plus before/after care for camp and school and a babysitter for all the days the kids have vacation from school.

All this together and we pay close to 30 grand a year on daycare.

Then we also pay our taxes and living expenses.

Ya we are not making it either.

nylon

Sun, Aug 02 2015, 10:32 pm

$1K is not tuition. It's daycare, even though they like to call their fees tuition. that's got nothing to do with MO or not; just local costs. If OP were in Boston, she could pay twice that if she were lucky enough to get a center based space. Yes, there are sitters who will charge less if you're lucky, but that's not always an option. Other kid is in PS so she has minimized education as far as she can go.

Dolly, you're still misunderstanding tax rates.

Social Security of 6.2% stops being paid at 110K. Relevant for OP but not anyone in top tax brackets.

The top marginal federal tax rate has gone back to 39% but for married filers that is on income over $450K. (Wage income. Not investments which have favorable tax rates.) OP's income places her in a 25% bracket. Again, taxes are progressive, so this is the MARGINAL rate. NO ONE pays 39% federal on all income even before deductions or tax planning or any of that. When you jump a bracket it only increases your taxes on income above the threshold.

In NYS, you can pay a fairly decent chunk in state and city tax, nearly 15%, if you earn enough. This would give some filers a marginal rate over 50%, but their average tax rate would be lower.

In any case, Illinois has a simple 3.75% income tax.

My back of the envelope non-CPA calculations from our own taxes is that they are paying approximately 25% of income in taxes. Could be a bit less, even, depending.

amother

Saddlebrown

Sun, Aug 02 2015, 10:41 pm

amother wrote:

Op here: yea this is exactly right.

I am not sure what people are not understanding w my income vs expenses outputs. After paying health insurance, FSA dependent care (pays for after care costs) and tuition (goes directly from my paycheck to the school) I earn exactly $450 a paycheck.

My DH brings home, after tax, 3100 a month. That needs to cover rent, food, car insurance, car payment and utilities. This without any additional luxuries or outings.

I can't not work. It will take me forever to find a similar position and that extra $900/ month is very necessary.

Amarante

Sun, Aug 02 2015, 10:48 pm

amother wrote:

I think most posters understand that you are not wasting money or leading an over the top lifestyle and I think most people understand that your paycheck is necessary.

nylon

Sun, Aug 02 2015, 10:48 pm

OP, I am sorry. it is tight. The only chizuk I can give is, it will improve for you. Your incomes should rise from now on, and if you keep the kids in public school for a few years, your expenses will decline. Even preschool gets a bit cheaper for the older groups as there are bigger classes. That will give you breathing room. There really doesn't seem to be much to cut for you until your lease is done and you can move. Sad

amother

Saddlebrown

Sun, Aug 02 2015, 10:51 pm

Amarante wrote:

I think most posters understand that you are not wasting money or leading an over the top lifestyle and I think most people understand that your paycheck is necessary.

Thanks so much - I was not talking about your post- sorry for confusion .. Was referring to a poster above who said there must be a piece of my finances missing :/

Just venting more than advice- there's really not much else I can do Sad

Amarante

Sun, Aug 02 2015, 10:55 pm

amother wrote:

Thanks to you.. Was referring to a poster above who said there must be a piece of my finances missing :/

Just venting more than advice- there's really not much else I can do Sad

I understand. It seems like it is a lot of money but it really isn't for a decent not fancy middle class existence. Not a lot of room for extras at all in the budget.

It's okay to whine Very Happy

Dolly Welsh

Sun, Aug 02 2015, 10:56 pm

So OP is getting $900 in her hand for a month's work? Isn't that 40 /hrs a week x 4? Isn't that 160 hours a month? Is that sixty cents an hour? I must have something wrong.

I remark that jobs come and go but children remain. Children care about you in old age. Jobs used to. There used to be pensions. There aren't many defined pensions any more.

As for strengthening OP's hand in the case of divorce or widowhood, that's got a little truth to it but not as much as twenty years ago. The jobs just aren't there. Especially for older women, no matter how experienced, unless they are lawyers or doctors, and perhaps not even then. The moderately young get the jobs. Not the very young, that's not easy, and not the middle aged.

This doesn't sound nice of me, but I am for the maximum exploitation of men.

Splitting things is less efficient.

Division of labor seems to pay better now. Yes, the old roles.

That of course assumes everyone is honest, gives their best, and stays with the program. Without that, one has little anyway, so I don't think there is a lot of choosing left to do, that there used to be, twenty years ago.

Women find a way to work from home, while keeping an eye on their children. But it's even better if they don't have to do too much of that.

Last edited by Dolly Welsh on Sun, Aug 02 2015, 11:14 pm; edited 2 times in total

amother

Saddlebrown

Sun, Aug 02 2015, 11:01 pm

Amarante wrote:

I understand. It seems like it is a lot of money but it really isn't for a decent not fancy middle class existence. Not a lot of room for extras at all in the budget.

It's okay to whine Very Happy

Thanks! To amother above I have no idea how you are paying tuition. This is the cheapest but best value (and sweetest little school) daycare there is as well. If I could send to public school at 2.5 I would...

We also need t be near a big metro Jewish area. My DH business involves selling kosher products to restaurants/ nursing homes etc and if we move far away we have nothing. Plus moving is expensive!

naturalmom5

Sun, Aug 02 2015, 11:10 pm

TwinsMommy wrote:

we have our kids in public school in Cleveland (VERY happy with their schools, 2 diff ones) -- they have special needs so the Jewish schools aren't a good fit for them--- and our rent is half that. we pay $1200 plus water and sewer so usually between $1300 and $1400 a month for rent. $2500 is a lot, in my opinion. We have a decent sized 3 bedroom house with attic and basement and detached garage and huge backyard. So I don't think you have to have a huge rent in an area with a decent public school.

There are lots of ways to make money at home without babysitting. I've been self employed at home since before I had kids. My husband only makes $20 K a year-- I'm not kidding-- but he likes his job and so I've got to hustle..... even so, we make less than you. But no babysitting cost or before/after care or huge amount of rent, etc. But we are in debt of over $100,000 (we used to make more money and had a whole different lifestyle) and debt payments are huge.

20k... He might as well be in kolel

Dolly Welsh

Sun, Aug 02 2015, 11:59 pm

If OP could house two people, two boarders, for $450 each / month, or, one person for $900, and that is probable, she could quit work.

If she could house two people for $900/month, she would be $900 a month ahead of where she is now. That is nine thousand dollars a year more in her hand, to go out, to go away, and all.

In time her kids won't need quite as much pre and post school care, but they will probably need some paid care, as school at an earlier hour than work does. If she is working.

A non-working woman is very valuable: she does a thousand things for free that cost the earth to pay American wages to someone else to do, and she can Torah Home School, too, in some cases, saving even more.

OP the woman you are paying $1k to is getting a hundred dollars more in her hand a month than you are, unless I misunderstand.

I hope I don't sound critical of OP as I completely support her in her struggle and sympathize completely. No criticism is intended.

SRS

Mon, Aug 03 2015, 12:24 am

OP, if you send to public school in the future, the babysitting costs are temporary. Unfortunately, that second income is diminished and will basically go towards childcare with something leftover for you. But, with it isn't an income you can let go of lightly. I think you do need to look again at your housing costs. But just know that others with the 2 incomes for under 100K are struggling alongside of you. Just save where you can and stay out of debt and you will start be on a good path.