What do you consider doing ok Financially? Gross income

amother

Mustard

Mon, Jun 26 2017, 12:44 pm

amother wrote:

We are doing ok on $105k combined income. 2 kids in school. Our monthly expenses are about 6-7k and this includes putting away $500-1000/month for savings most months. We can't afford to go on vacations but we can afford most of our needs and wants, including small extra expenses like cleaning help and eating out now and then. Do we feel tight sometimes, when everyone else has the latest iPhone/car/vacation/clothes and we don't? Yes but it's small potatoes and we swallow the small sting of envy and watch our bank account grow. I want money for my kids college and wedding funds more than I want the latest designer shoes or the newest gadget.

A lot of people who can't make ends meet on $200k are mismanaging their money. But the more kids you have, the more income gets sucked away for tuition and other expenses. So some people are doing everything right but just can't comfortably afford all their kids expenses.

But after taxes, you should only be taking home about $6400 a month. If your expenses are up to $7000, you're in debt.

Tuition for two kids is about $2000 a month -- we pay a lot more, but we'll go low here. That leaves you $4400 a month. I live in NYC, so I'll say 2 Metrocards for the adults, at $120 each. Cellphone another $100. Add in savings that you mention, we'll call that $1000 total. So $3400 left.

The USDA uses national food intake data and grocery price information to calculate different costs for a healthy diet at home. The 2013 numbers for a four-member family: a thrifty food plan, $146 a week; a low-cost food plan, $191 a week; a moderate-cost plan, $239; a liberal plan, $289 a week. Now, that's not kosher, so you're likely higher. But I'll give it low-cost, then add in some toiletries and call at $1200. $2200 a month.

So you're paying $2200 a month for rent or mortgage, private health insurance, utilities, clothing and shoes, maaser, chagim, shul dues, and whatever else comes up.

Not sure how you do that, but I'm impressed.

Still, not everyone can do that. So I wouldn't accuse them of misspending.

Shoshana37

Mon, Jun 26 2017, 12:50 pm

I agree that's very impressive. my husband and I work full time and have 4 kids in yeshiva we live in NY and make about 120K together. it's not enough at all my credit cards are full to the max and we always use our income tax refund to get rid off our debts with credit cards. we pay Tuition for 4 more than for our mortgage and we just bought our house with help of my parents. I don't know how we are making it but we live pay check to pay check. Unfortunately its very stressful and schools don't care how we come up with their tuitions as long as we pay. Sad

amother

Seashell

Mon, Jun 26 2017, 1:03 pm

saw50st8 wrote:

I live in an area where a lot of people have a combined income of 250-300k (wish I did!). It's a lot of money, but it's generally 2 professionals later on in their careers. No one expects 2 22 year olds with their bachelors to earn that kind of money. Most professionals 10 years into their careers can reach close to $100,000. People with careers that tend to make more money can earn even more, especially doctors and lawyers, but those come with a lot of additional hidden costs (years of schooling, student loans etc).

The real question is what are your expenses because $250,000 sounds like a lot of money until you have 4 kids in a yeshiva that's $18,000/kid. So $72,000 in after tax money (and if your kid needs a program like Sinai, it's $80,000/year/kid)! People who earn less have a lot smaller tuition payment and that's really the great equalizer. It almost doesn't matter if you make $100,000 or $300,000 until you reach the point where tuition is truly affordable for you.

I wasn't referring to people in their early 20s. I am in my late 30s, as are many of my friends. I guess I am in the wrong field. But, then again, I did not choose my field for financial reasons.

I was responding to a poster who said that people who are familiar with people earning higher incomes are probably living in areas where people are more educated. My point was just that it is not only about education/degrees. A lot depends on what field you choose.

And, FWIW, it seems to me that most of the people who earn really high salaries are business/financial people who have a knack for that type of thing.

amother

Burgundy

Mon, Jun 26 2017, 1:56 pm

cnc wrote:

Someone at her income level can be in the same position as someone with an income level of $100k. If her expenses are five time the amount of someone with much less income, at the end of the day they're in the same boat.

Many times these salaries in certain communities come along with hefty mortgages, insane tuition bills and lots of other expenses.

Unless I'm misunderstanding something about life in the US, I honestly don't understand this.
Coming from the UK, $400,000 is considered a high wage even in London where houses cost over a million dollars. Of course someone might have some unexpected high expenses (though that could happen to someone on a low wage as well!), but as a general rule, it should cover a very nice comfortable lifestyle.

amother

Navy

Mon, Jun 26 2017, 2:49 pm

amother wrote:

Don't forget that with that income, almost 1/2 goes to taxes and another about $35,000 a year goes for health insurance.

This is a slight exaggeration. We make $200k and taxes and insurance combined are about 35% of our gross income and we pay less than half that number for health insurance and medical expenses. If you have a mortgage (interest and property taxes) and give tzedakah you reduce your taxes.

OP to answer your question we consider ourselves to be doing ok, we can pay our bills and put something into savings after. We're proud to be independent. We were never supported and we bought our house on our own, the down payment was all from our savings. If you're wondering where our money goes Smile

We pay $60k a year in child care and tuition because we both work and need early/after care, another $30k for our house and the rest for food clothing etc.

cnc

Mon, Jun 26 2017, 3:24 pm

amother wrote:

How much is insurance/ healthcare and tuition for a family of 7 for example? And a house over a million dollars in Brooklyn is a very basic house. Houses in Riverdale or more expensive areas (which goes along with increased income )are most likely a lot more than a million.

There are people that can get along very very nicely on 400k, but if you have a tuition bill of over 100k a year (I know people that do), pay for medical insurance, have a mortgage on a multi million dollar home, live in a neighborhood with a high standard of living or items are generally more expensive and are in a very high tax bracket, you're not all that rich at the end of the day. Not at all.

There are people making 150k doing way better because their tuition is under $20k a year, insurance is covered by their employee and there are discount supermarkets in their area.

Obviously details will vary but I'm just trying to point out that a number for yearly income is not enough to provide a complete picture.

amother

Aqua

Mon, Jun 26 2017, 3:30 pm

amother wrote:

We pay $60k a year in child care and tuition because we both work and need early/after care, another $30k for our house and the rest for food clothing etc.

Similar, my dh makes around 300k and it goes up every year. We pay around 30% in taxes and pay nothing for health insurance, it's covered by his work. When I go back to work we'll make closer to 400k. We feel very comfortable right now but our bills will increase as our children move into middle and high school.

The way we earn comfortably bh is through strategic advanced degrees and hard work.

amother

Violet

Mon, Jun 26 2017, 3:42 pm

cnc wrote:

I don't understand this. So why don't they move???

cnc

Mon, Jun 26 2017, 4:00 pm

amother wrote:

I don't understand this. So why don't they move???

Why should they? MO couples living in a house in Riverdale and sending their kids to SAR and private colleges have no interest in moving to a cheap apartment building in Boro Park because the tuition in Pupa is cheaper and they can shop at Kollel grocery. Generally, higher incomes come along with more expensive lifestyles.

amother

Ruby

Mon, Jun 26 2017, 4:23 pm

cnc wrote:

I think healthcare is free in the UK, and the tuition at Jewish schools is either free or very cheap. (cnc's post was in response to a poster from the UK)

amother

Sapphire

Mon, Jun 26 2017, 4:35 pm

amother wrote:

We pay $60k a year in child care and tuition because we both work and need early/after care, another $30k for our house and the rest for food clothing etc.

I live in New York and yes almost 50% of my income goes to taxes.

amother

Slateblue

Tue, Jun 27 2017, 1:34 am

[quote="amother"]But after taxes, you should only be taking home about $6400 a month. If your expenses are up to $7000, you're in debt.

Tuition for two kids is about $2000 a month -- we pay a lot more, but we'll go low here. That leaves you $4400 a month. I live in NYC, so I'll say 2 Metrocards for the adults, at $120 each. Cellphone another $100. Add in savings that you mention, we'll call that $1000 total. So $3400 left.

The USDA uses national food intake data and grocery price information to calculate different costs for a healthy diet at home. The 2013 numbers for a four-member family: a thrifty food plan, $146 a week; a low-cost food plan, $191 a week; a moderate-cost plan, $239; a liberal plan, $289 a week. Now, that's not kosher, so you're likely higher. But I'll give it low-cost, then add in some toiletries and call at $1200. $2200 a month.

So you're paying $2200 a month for rent or mortgage, private health insurance, utilities, clothing and shoes, maaser, chagim, shul dues, and whatever else comes up.

Not sure how you do that, but I'm impressed.

Still, not everyone can do that. So I wouldn't accuse them of misspending.[/quote]

How is this possible? We make about 95k combined and bring home more than that a month after taxes...Even with a higher tax bracket, someone making more than double what we are, shouldn't be coming home with less money...

Also, don't forget that many communities have significantly lower tuition fees. I pay less than half that amount for my kids...

amother

Burgundy

Wed, Jun 28 2017, 10:40 am

amother wrote:

I think healthcare is free in the UK, and the tuition at Jewish schools is either free or very cheap. (cnc's post was in response to a poster from the UK)

There is a national health service (NHS) though it doesn't cover everything. School fees are not free at all, I don't know exact figures since I'm not up to that yet.

When I mentioned over a million for a house, that was also for a very small house so most are more (in London).

I think the difference is the standard of living. I think that most people aren't living in as large fancy houses that seem to almost be basic in the US.