S/O Our income of 300k is barely enough AMA

amother

Heather

Wed, Aug 21 2024, 12:06 pm

amother Eggshell wrote:

Wow that's a lot of taxes & insurance.
Do you get a tax refund at the end of the year?
How much is insurance?

I say this because our pre-tax income is about 70k, post Is abt 52k per month. We don't take off insurance, but yours still seems a lot.

The taxes make sense. Higher income pays a much larger percentage of taxes that those who only earn 70k.

amother

↑ OP ↓

Wed, Aug 21 2024, 12:10 pm

amother Eggshell wrote:

We usually get back between $1k-3k when we file our taxes. Our taxes are a lot more than yours because the higher your income the higher your tax bracket (%) is.
Insurance is about $1400/month on a high deductible plan + about $650/month is withheld for our HSA (which is used for copays/deductibles, etc)

amother

↑ Eggshell ↓

Wed, Aug 21 2024, 12:12 pm

amother OP wrote:

Again, I said we make $70,000 per month, not per year.

My income is three times yours. Every penny is reported. But we are paying less taxes.

amother

↑ OP ↓

Wed, Aug 21 2024, 12:16 pm

amother Eggshell wrote:

Again, I said we make $70,000 per month, not per year.

My income is three times yours. Every penny is reported.

I guess there are a lot of variables that account for tax rate. We earn as salaried employees so we don't have business expense deductions. Depends on family size. If you own real estate depreciation saves a lot of taxes... I can't comment for you Smile

amother

Lightgray

Wed, Aug 21 2024, 12:18 pm

amother Eggshell wrote:

Again, I said we make $70,000 per month, not per year.

My income is three times yours. Every penny is reported. But we are paying less taxes.

Do you have a business? Or are employed? That makes a huge difference. As business have way more expenses and can reduce their taxes that way.

amother

Honeydew

Wed, Aug 21 2024, 12:19 pm

We make a bit under 300 gross, 5 kids, just barely covering everything. I am a careful shopper and my DH even more so, but we do spend on certain things that I’m sure some would consider luxuries, for example sleep away camp and I have cleaning help a few times a week. OP sounds quite reasonable to me.

Edited to add: yes, taxes reduce our income by nearly half.

amother

↑ Sage ↓

Wed, Aug 21 2024, 12:27 pm

amother OP wrote:

Our employers don't offer matching, so it's a matter of the taxes we save on the money we contribute. After speaking it over with our accountant it would be a good idea if we had extra money, but since we don't, it doesn't make sense.

I don’t know. I put away a few hundred every paycheck (after taxes it’s like half of that) and I’m on track to have a very nice amount of money for retirement with Hashem’s help. Not only that, you can borrow against it to make weddings.

I have (non jewish) coworkers who think like you and then after they’ve worked for 20 years they leave with nothing to show, while others (with Yiddishe kops) leave with a million dollars.

Many years ago I got so frustrated that I went over to my Korean coworker (who gave me the whole shpiel that he has no money and he’s paying back loans) and just went into the intranet on his desk and signed him up for $200 a paycheck to go into retirement. He has hundreds of thousands of dollars saved up by now and has since left our company. For years, whenever he would see me he would say - wow, I owe you big time, I should really buy you a drink …

ETA that we invest in S&P 500/large cap mutual funds which have historically over the past 25 years that I have been investing had a 6-7 percent annual growth, compounded.

When is the best time to plant a tree? 70 years ago. When is the next best time? Today.

amother

↑ OP ↓

Wed, Aug 21 2024, 12:28 pm

amother Honeydew wrote:

I don't think sleep away camp and basic cleaning help are luxuries. I think these are normal expenses and are not meant to be cut out so that you can save.

amother

↑ OP ↓

Wed, Aug 21 2024, 12:34 pm

amother Sage wrote:

I hear you. And I'm all for it if you don't need that money. But Hashem has always provided exactly how much we need, so I have no reason to believe that I need to save money I don't have because in 25 years He will not. Besides, in the frum world our expenses decrease with time.

amother

↑ Eggshell ↓

Wed, Aug 21 2024, 12:35 pm

amother OP wrote:

No these are paid on payroll. Not business.

I know you said you don't want any advice but can I suggest kindly to maybe try a different accountant?

When we made 300k, our take home pay was about 60-65% plus we got a $4000 or so refund.

amother

↑ Sage

Wed, Aug 21 2024, 12:49 pm

amother OP wrote:

That’s okay. But you complained that you don’t have savings. And I have a similar total income and similar expenses and I do have savings B”H. I disagree about expenses getting lower. I’m in my late 40s and all of my friends are making weddings and supporting married children. I was just telling my husband that this time of life is actually what people don’t see is coming up ahead and then have nervous breakdowns when they get there. (Similar to the Catcher in the Rye metaphor or the top of the log flume ride).

amother

Grape ↓

Wed, Aug 21 2024, 12:50 pm

We live frugal by choice. 6 kids. Oldest is 19. We are young 40s. Prob make around 250k. Pay full tuition. Only recently started making this amount. For years made much less Everything in the books. Taxes and health insurance take a large part of it.

We manage to save monthly - it’s done automatically do we can’t choose not to.

$150/kid/month. Since each kid was born. Will hopefully pay for wedding and support.
401k maxed and matched for me.
Some sort of Roth for dh.
We also try to invest regularly in a mix of areas. And don’t touch that money or when we cash out automatically reinvest.

I’m not sure what we do different.

We live in a very, very small house when most ppl I know have double or tripe the square footage. It keeps out Mortgage, property tax and utilities lower.
We buy used cars with cash and then drive until not worth it anymore or fix it costs are high. Typically about 7-8 years.
I shop around for kids clothing.
Vacations are Sunday road trips.
Shop food sales.
Cook from scratch. Never eat out.
Not sure what else.

We do send to camp. Have cleaning help. I couldn’t work otherwise.

I don’t feel rich. Bec I save before I get my money I don’t feel like I have for extras so we live tight and think before we spend. But in reality we are going ok.

I don’t think my expenses will go down. My youngest is 6. I hope to help my kids in future. Weddings are crazy expensive even if careful. And life is expensive.

amother

↑ Cantaloupe

Wed, Aug 21 2024, 1:15 pm

amother Slategray wrote:

My question is why stay in the area you live in?
For people who can't make it on 300 You've got to realise where you live is crippling (and yes I get there may be perks or non negotiable reasons, but not for everyone)

I’ve looked into moving but anywhere we would move would have higher housing costs since we bought cheaper a while ago, even higher because transferring a mortgage would mean higher interest rates, and most significantly is lower salaries. Maybe we’d save on tuition if it’s a voucher state but that only saves if you’re able to keep everyone local. If you have to send your mesivta boys out of town to dorm that’s a huge expense.

amother

↑ Grape ↓

Wed, Aug 21 2024, 1:37 pm

amother Cantaloupe wrote:

And you are unlikely to make the same salary. Or even close in many other cities