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

amother

↑ Pear ↓

Thu, Aug 22 2024, 8:54 am

amother OP wrote:

As requested, I will post our general budget soon. I have to go through QB to compile it. But I want to clarify our financial situation first:
We are not frugal. We are also definitely not lavish.
When my kids were young we were very frugal. All large purchases (furniture, baby equipment, etc) were second hand. I welcomed good condition hand-me-downs and shopped at children's place and old navy on sale with coupons. I went out to eat (to a takeout place) twice a year - my birthday and anniversary.
As my kids got older, their requests for more made me anxious. We discussed our situation with our Rav, and this is how we were advised:
We should provide family and kids with whatever is considered "normal" in our community (obviously within reason. I still don't understand how 4k Sq ft homes became normal.) Hashem wants us to live normally, not to penny pinch, and He will provide.
Our kids are not spoiled. They do not have anything name brand. No Lululemon, alo, Michelle, pandora, Tiffany or similar. But they do want 2 new shabbos dresses (not hand-me-downs) every season. And yes, every kid on the block gets that, so that is normal. Every single girl starts school with a band new pair of loafers. Mine need too as well, even if they are expensive. Girls go to sleep away camp - that is normal.
My original post that triggered this S/O was when I said that the organizations that give steep discounts (or even free) to low income/klei kodesh families does a huge disservice to us as it raises the bar of "normal". E.g. well to do families go on vacation. Now there is the iggud that offers very cheap resort vacation for yungerleit. What about my kids? We are not going for 4 days to a resort. We can't afford it. But rich and poor can afford it, so now that is normal.

I wish more Rabbanim were advising people to live below their means rather than emulate those around them who either making more money or are drowning in debt.

My Rav also said we should try to give our kids what normal but I really don't think that includes a 4,000 square foot house even if "everyone else is buying them".

I heard a really great shiur once that spoke about the importance of choosing our "extras" wisely because our "extras" will become our kids' necessities. The consumerism in our communities is nauseating to me. It's time we look at our own choices if we want to stop raising the bar.

It is crazy to think that you can be earning $300k annually and not be wealthy. So much is lost to taxes. I also think there's no comparison to when we were earning $75k and getting government benefits or earning $125k and getting tuition breaks. We could never have afforded a resort with those incomes. We could maybe now but it would be at the expense of something else. Earning $300k means still making choices about how we spend our money.

amother

↑ OP ↓

Thu, Aug 22 2024, 9:22 am

Ok, it took me a while to find time to go through QB and put together the numbers. Here is a basic idea of our budget. I did it annually rather than monthly because the expenses are so varied based on the time of year.
As I said upthread, after payroll deductions of taxes, health insurance and HSA contributions our take home pay is appx $7600/pay period ($15200/month). We also usually get a $15,000 end of year bonus (after taxes is about $10,000) - Total yearly (rounded) $208,000
Maaser - $20,800
Mortgage - $33,000 (1900sq ft, 48 year old house. Needs work...)
Tuition - $42,000 (1 HS, 1 mesivta, 4 elementary, 1 post HS)
Camp - $8,000 - 1 paid staff, 2 sleepaway, 3 daycamp (one half only).
Cars - no payments, they are both 10 years old. Gas, tolls, auto repairs, etc - $5000
Insurances (auto, accident, life) - $4000/yr
Medical expenses (copays, deductibles, orthodontics, dental, vision (2 kids see vision specialist), medication, speech therapy) - $10000 + HSA
Utilities - $7,500
Cleaning help - $6,500 (7 hours/week)
Family Vacation - $1,500 (4 nights in airbnb in poconos + activities and food)
Yomtov expenses - $2,500 - arba minim, mishloach manos/costumes, matzah, wine, pesach supplies, chanukah gelt, afikoman gifts, chol hamoed outings
Hobbies - $4,500 - swimming lessons, music lessons, gymnastics classes, sewing classes, gym membership
Membership fees - $500 (Costco, instacart, 24six, CCHF discount card, adobe)
Shul Membership - $600
Clothing - $14,500 - includes all shabbos clothes, weekday clothes, uniforms, pajamas, coats, jackets, shoes, boots, shells, tights, undergarments, swimwear, socks, socks and more socks!!!, ... did I miss anything?
Groceries - $31,000 - this includes household supplies as well. It is all my grocery store, walmart and costco shopping.
Takeout - $3,000 - this is important to our kids. We try very hard to minimize. Includes pizza every other week and occasionally on m"sh, takeout for siyumim and some birthdays, bagels that we buy and freeze, occasional ice cream store visits, occasional "mommy and me" breakfasts following an appointment, 8-10x/yr DH and I go out (nothing fancy, takeout style.)
School fees - $7,000 - registration, GO/trips, mandatory elementary school lunches, courtesy and sunday bussing, mandatory yeshiva camp
Gifts - $3,000 - sounds like a lot, but rebbeim $100/chanukah and purim, all teachers $36/ chanukah and purim, $10-50 for baby/bar mitzvah/vort/wedding gifts (ka"h large family and many friends/neighbors) counselor tips, etc.
Dry cleaners - $900 - DH's shirts and pants (he wears them more than once before cleaning) and occasionally his and DS's suits, and an occasional simcha outfit
There are other regular small purchases that add up such as makeup, postage, propane, dollar store, amazon purchases, etc.
And there are expenses that are random, one time only, or just for a specific period of time. E.g. home/appliance repairs, periodic tutoring, extermination, driving lessons, simcha expenses (biggie is a bar mitzvah/wedding, smaller is a sheva brachos or bas mitzva), seminary, vocational courses/college...

[b]

amother

↑ OP ↓

Thu, Aug 22 2024, 9:36 am

amother Pear wrote:

Insurance through an employer in the US. And that's on the higher end from what we've had. Most plans that my husband or I have had from an employer have cost between $100-350 per month for family plan.

Ok, maybe I should work for your employer Smile

I still don't know where you live, as the insurance rates vary tremendously by state. I live in NJ and insurance is high here. I know the public school system offers fabulous benefits, and maybe some corporate companies offer better benfits. But we get through DH's employer. He works for a frum company and I think our rates are pretty standard.

amother

↑ OP ↓

Thu, Aug 22 2024, 9:48 am

amother Chestnut wrote:

Are you able to look back in you Quickbooks and try to see where you had extra income/lowered regular expenses from that allowed you to pay the extra $30k?

I tried to do this, but it is super confusing, because how do I sort it out? My income and expenses are rolling, I.e. I can run a year by year report but my income doesn't actually start in January and end in December. Some months are more, some are less. Some seasons kids need more clothing, some less. I can't isolate exactly where the extra thousands came from, but two biggies are:
8K tuition that we had paid for DD for HS
The prior year we paid a Rebbe to learn with DS in the evenings, that was about 8K (but again, we weren't sure how we could afford that, either. And we did. So I have to roll over to the previous year to figure that out?)

ETA we paid for seminary over 12 months, so that's also why it's hard to pinpoint- the expense kind of rolled out over 24 months - a few thousand had accrued in our account before, and we were pretty tight for a few months after.

amother

Snowflake ↓

Thu, Aug 22 2024, 10:06 am

amother Pear wrote:

Can I ask how many children you have and approximate ages? Bc this was my thinking until I got older and had more. So I’m curious what stage you’re in

amother

↑ OP ↓

Thu, Aug 22 2024, 10:09 am

amother Periwinkle wrote:

If hashem can do anything why can't he give you enough money to save a bit?

If he can give you 30k for seminary why can't he give you 30k to save?

I don't think saving a reasonable amount of money is a lack of bitachon. I think it's being realistic.

Yes, absolutely, Hashem can do anything. But apparently Hashem doesn't want us to have savings Smile

and He did want DD to go to sem Smile

Every time I tried to save, I get hit with a large unexpected expense. I put $1000 in savings - car needs big repair. Put $2000 in savings - child landed in ER- $2500 bill.

Interestingly, many years ago we were in a very tight spot, short a few thousand dollars. We got a phone call that we won 2 tickets to EY, and they sent us a check for $2000.

DH felt this was "extra" money - not regular income, so this has to go directly to savings. Our Rav advised us that we shouldn't classify money in our heads - Hashem provides what you need, and He just sent us the money we needed for our bills

For many years we tried saving, we stressed about saving, until we finally let go and realized that we consistently have enough for what we need, so why should we worry that we won't have enough at a later date? We worried plenty that we wouldn't have enough when we reached the stage we're at now, and bH we do!

amother

↑ OP ↓

Thu, Aug 22 2024, 10:30 am

amother Bottlebrush wrote:

Op - thanks for this thread. If your other thread was the one I am thinking of last summer- thanks for that one also. I found it extremely eye-opening.

Here are my questions

1) at what stage ( how many kids/ ages ) did finances start to get tight.

I am asking since I find this thread fascinating how much people are struggling, even with really good incomes. so far I feel I am able to make ends meet. my kids are still young. I want to prepare myself for the future

2) if you can go back to your 19 year old self- what financial advise would you give yourself. what could you have done differently, to improve your situation now.

1) We were tight from day one because DH was learning and did not get kollel checks and I earned $13/hr at a desk job. We also received $1000/month from my parents. We were extremely frugal, but chose to live a kollel lifestyle (as existed 20 years ago. Not the Doona/Tesla lifestyle of today.) We lived in a 2 bedroom basement apartment for 7 years.

When my parents were no longer able to support us, DH went to work. He started out with a low, starter salary and pushed very hard to prove himself so that he could move up. Over the years he did and now earns quite a nice salary. I still work part time (for more than $13/hr lol) but the bulk of our income is his.

Our income gradually increased together with our family and expenses. We kept waiting for the moment when, aha! now we have plenty and can put away, but just never happened. What did happen is that we stopped living frugally (as per our Rav, as I explained upthread.)

2) One thing I wish we had done differently was learn to let go to Hashem earlier, especially in reference to having the confidence to buy a house earlier. We were too nervous to buy, figured it would be better to rent a house first, see how that goes... eventually we took the leap, but it was sooo scary - will this really work out financially? BH it did. And I regret not having done that sooner for many reasons. Primarily because it really needs work and if we had bought it earlier we would be able to afford to fix it up now. (Note that we bought an old, small house - basic needs. I am not suggesting taking a leap of faith to buy something luxurious.)

I also think that if it's possible to live frugally and save money in the early years (before your kids have bigger needs) that's so important. Such a waste to live the high life as newlyweds, wait for retirement!

amother

↑ Gray

Thu, Aug 22 2024, 10:42 am

amother OP wrote:

Yessss was just having such a conversation with a friend. She wanted to know why I am so careful about my spending, is the extra few hours of cleaning help or jewish-brand clothing or extra meat during the week really going to hurt. And I'm like, right now I'm focused on putting away as much as I possibly can because our expenses are only going to go up, and who knows what the future holds, and I view this as my basic hishtadlus. If I get nice hand-me-downs for my kids, I'll accept them happily and be glad that that's most of a wardrobe I don't need to spend on right now. If we get guests I'll buy a bit extra for Shabbos but otherwise if it's just us, we're fine with the basics. Things like that. I just don't have an urge to live it up, at the possible expense of future me. We're not depriving ourselves, we're just being careful about expenses that aren't totally necessary. We do tiny splurges here and there but thought-out ones. We're enjoying life! We just don't need expensive stuff in order to enjoy life!

amother

↑ Pear ↓

Thu, Aug 22 2024, 10:55 am

amother OP wrote:

Ok, maybe I should work for your employer Smile

The rates for insurance at my company (and others my husband or I previously worked for) are the same across most of the the US. I think only one or two locations have different pricing.

amother

Butterscotch

Thu, Aug 22 2024, 11:35 am

OP, you are literally me with some variations.
When we were newly married DH was in kollel and then went to college. We lived on my very low salary and had next to nothing.
Over time bh both DH and I moved up tremendously. Today we earn in the 400K range. People who know what we do truly think we’re rich. In reality we live comfortably, with a constant eye on our bank accounts. Bh we do have savings but far less than we should on this income!
Taxes are a killer. We pay over $2K a month in health insurance. We pay full tuition because who should do it if not us? At the end of the day we’re not taking our kids away to fancy resorts…
Like you, I completely blame a system that makes poor people’s lifestyles the ones that we need to keep up with!