S/O Making it on $150k

amother

Thu, Mar 28 2024, 12:50 pm

I saw a lot of posters in recent threads saying they make $150k-$200k with kids and are doing fine. I assume that all of them must have bought houses pre Covid and have very low mortgage payments?? And live in places where they’re paying like $5k tuition?? Because otherwise I can’t comprehend this.

Our literal barebones set expenses before ANYTHING extra are $127k. This means we need to GROSS about $180k just to cover the literal bare minimum, NOT including anything like food, clothes, gas, cellphones, etc. And our kids are still young and we are only paying tuition for 2 kids right now, and our health insurance is partly paid my employer!

Barebones annual expenses:
$66k mortgage
$28k tuition
$15k health
$6k car/home insurance
$12 utilities

Total: $127k

Obviously we still need a lot more to live, for food, gas, phones, etc. And as our family grows tuition and other expenses will only grow.

So how in the world can families get by on salaries like $150k or even $200k?? I know our mortgage is high ($5,500/month) but anyone in the NY housing market these days knows that if you want to pay less than that you’re taking a small fixer upper. But let’s even assume that someone’s mortgage is a more modest $3,000. That still leaves them an enormous amount of barebones expenses.

If you are making it on a $150k-$200k gross salary can you please share a basic breakdown of your expenses?

amother

Petunia

Thu, Mar 28 2024, 12:54 pm

I feel like we are making it just fine on 150k.
But we are on healthshares to save on insurance costs, we have a tiny house we bought last year 2500 months mortgage. We would prefer small house to being house poor. We own our cars, they're old, and insurance isn't so much for them.
Our bare bones expenses only add up to about 80k including expensive childcare for 2 kids...

amother

Oxfordblue

Thu, Mar 28 2024, 12:57 pm

amother OP wrote:

$3000 is not a modest mortgage. And a $5500 mortgage is wayyyyy too high. We have always bought a smaller place to have a lower mortgage. That has always been our go to so that we aren't house poor. Imagine if you're mortgage was 3k a month that's an extra $2500 a month which an adds up to 30k a year!! Maybe you can move to a smaller place to ease the stress.

amother

Thu, Mar 28 2024, 1:08 pm

amother Oxfordblue wrote:

You’re incorrect, $3,000 is definitely a very modest mortgage in 2024. If you buy a house for $500k and put down 20%, and pay $10k annual property tax, your monthly 30 year mortgage payment with todays 6.5% interest rate will be $3,381. I believe these numbers of a $500k house and $10k property taxes are very very modest for most frum communities (and actually probably impossible to find in the tri state area).

amother

Thu, Mar 28 2024, 1:09 pm

amother Petunia wrote:

Wow can you share the costs of your house, what your down payment was and what your property taxes are?? $2,500 mortgage for a house bought last year is amazing! What sort of house is it and what condition? Is it in a large frum community?

amother

Oxfordblue

Thu, Mar 28 2024, 1:11 pm

amother OP wrote:

Fair. But you're still paying well over that and you asked why you are struggling. I'd try to find a smaller mortgage. A couple k a month will make a huge difference in your life.

amother

Thu, Mar 28 2024, 1:15 pm

amother Oxfordblue wrote:

$3000 is not a modest mortgage. And a $5500 mortgage is wayyyyy too high. We have always bought a smaller place to have a lower mortgage. That has always been our go to so that we aren't house poor. Imagine if your mortgage was 3k a month that's an extra $2500 a month which an adds up to 30k a year!! Maybe you can move to a smaller place to ease the stress.

Baruch Hashem we are not facing financial stress, though I admit our mortgage sounds crazy high it’s not really as high as you think once you get realistic about house prices in the tri state area. For context, we bought a 2,800sq foot home in a high property tax county (as most major Jewish communities are in). We did NOT buy a mansion, new construction, or super newly updated home, tho it was mostly move in condition.

Our mortgage is approx 1/5 of our monthly gross income, we were very very nervous to take on this debt because I agree it’s a crazy high monthly bill but spoke with many advisors and were told it was not financially irresponsible. Unfortunately in order to save even $1.5k on our monthly mortgage we would have basically had to buy a 2,000 sq foot 3 bedroom starter home, which I honestly would have no problem with, but for our financial situation it made more sense for us to spend the extra $150k and go with a “forever” home.

mig100

Thu, Mar 28 2024, 1:15 pm

amother OP wrote:

I agree. 500k doesn't buy you that much nowadays.

If rates go back and dow and everyone can refinance that would help. At today's rates 3k is a small mortgage

amother

Thu, Mar 28 2024, 1:16 pm

amother Oxfordblue wrote:

Fair. But you're still paying well over that and you asked why you are struggling. I'd try to find a smaller mortgage. A couple k a month will make a huge difference in your life.

Sorry if you got the impression we were struggling, Baruch Hashem right now we are able
To cover all our expenses and more. But I was wondering how it’s possible that so many people have much lower costs. It must be they bought homes pre Covid mostly. And have very low tuition?

amother

Pumpkin

Thu, Mar 28 2024, 1:21 pm

amother Oxfordblue wrote:

This exactly. Sounds like you bought too much house. And if Brooklyn is too expensive than you buy elsewhere. Your mortgage payments would keep me up at night. If gd forbid employment situation changed, that’s a lot of money. How would you pay then?

amother

Oxfordblue

Thu, Mar 28 2024, 1:24 pm

amother OP wrote:

We are moving to the tri state from oot (but not to a super in town community) we make about 200k and my fil helped us a ton with the house and we sold another property elsewhere so that was a huge help. Paying full tuition and camp for 3 kids! Taxes are about $850 a month. We bought something for high 6s. I'm not sure it's a forever forever home unless we add another floor but it will happily serve us while we raise our kids for years bzh! It is so silly to say but somehow whenever need it, the money just works out. I know I probably sound like a spoiled frummy but somehow whenever a huge expense pops out, we get an email from someone like oh here's 3k back from your taxes or the like. I try to just remember it's all from Hashem and do the best hishtadlus I can!

amother

Oxfordblue

Thu, Mar 28 2024, 1:40 pm

amother Powderblue wrote:

IMO $150-200 is absolutely impossible. We live OOT have 5kids bh - tuition is around $15 k each, we’ve paid off our house and cars , and we struggle on $275. Like really struggle. I don’t know what the answer is !!

Something doesn't add up here....no mortgage and no car payments and you're struggling?

amother

Thu, Mar 28 2024, 1:45 pm

amother Blushpink wrote:

Where do you live that you’re paying 28k tuition for two kids?

I live in Lakewood. Tuition around here is 7k a year I think. I’m paying about that much for babysitting now.

You wrote $12 utilities. Did you mean 1,200 or 12k?

we send to mainstream litvish monsey schools. Without breaks, tuition is $10k-$15k depending on the school.

I meant $12k utilities, $1k month. This is an small overestimate. Though our home was built in the 60s and isn’t super efficient with heat/cooling.

amother

Thu, Mar 28 2024, 1:51 pm

amother Pumpkin wrote:

BH in my situation I can afford my house. After our down payment all closing costs etc we still are left with a few hundred thousand in savings if chas veshalom we are out of work for a few months or longer.

But I want to challenge your assumption of too much house. In monsey the cheapest starter home you can get these days is basically a 3/4 bedroom high ranch for $700k and $12-$15k property tax. We bought a 4/5 bedroom house for $850k and $19k property tax. So yes we upgraded but the difference between what we bought and what the next cheapest option is is not as large as you think.

Of course there are always options like move out of town etc. BH we were not in a financial position to need to consider that. But I think some imas need to adjust their reality about housing costs/interest rates these days. Like I detailed upthread, it’s virtually impossible to buy a house these days without a minimum $3,500 mortgage.

Trust me I did NOT want such a high mortgage but the market is the market and this is what was bashert for us.

mig100

Thu, Mar 28 2024, 1:55 pm

amother OP wrote:

I agree. Those who are surprised by your mortgage, probably purchased pre-covid. Im glad for those who did.

Anyone who got married more recently, or did not buy before covid, will have much higher cost of housing.

amother

Brown

Thu, Mar 28 2024, 1:57 pm

We earn in that $150-200K range and are doing fine in the Baltimore area.
We did buy (way) before covid. Mortgage including property taxes and insurance is $1600/month. We pay about 2/3 tuition due to scholarship so we pay more like Lakewood prices per kid. I budget $900/week for all variable expenses (food, clothing, gas, household goods - not including mortgage, insurance, tuition, and other fixed expenses). Some weeks we are under even significantly and other weeks something comes up and we need more.