I just can’t understand it-and I can’t take it either!

amother

↑ DarkRed ↓

Sun, Sep 15 2024, 3:09 am

tulip3 wrote:

Dip ingredients are dirt cheap and the same $4-7 for 3 oz you pay for each dip, you can make by yourself and have 4x the amount. With fruit, your paying triple the price bec they cut it up for you. It adds up fast.

Ok, I'm the ima who says she buys cut fruit and dips, it wasn't the OP, and I totally didn't mean to hijack this thread!

But since every poster is bringing it up - when I buy fruit it costs between 5 and 10 dollars, maybe more, depending on what I buy. If I buy a whole honeydew, for example, not all of it gets eaten and some of it goes to waste. I started buying cut fruit some weeks, I think its around $15. So I'm spending a little bit more but all of the fruit gets eaten. It's all of 5 dollars more a week, so no, it's really not adding up.

Second, regarding dips - my kids like a certain type and brand of dip. I don't buy all every week - depending on which of my kids are home - but I can't easily make them at home and of course my kids eat them (I definitely wouldn't buy it otherwise). Whatever dips are left over are finished off during the week. I make one dip myself and it does make a lot, but that one does end up sometimes in the garbage.

Hope that clarifies.

ora_43 ↓

Sun, Sep 15 2024, 3:50 am

With apologies if I come across as harsh:

You're not struggling.

You have an expensive home which you partially renovated. You have a lot of cleaning help. You have 8 ka"h kids and you're able to feed and clothe and school all of them, to pay for their weddings, and even to help them out a bit after marriage. Your kids all go to summer camp.

That's what well-off looks like. That's "making it." If someone who can pay for a wedding in cash savings isn't 'making it' who is?

Don't get me wrong. Food prices are crazy high everywhere right now and it's hard and frustrating. Tuition is a huge expense. I'm not saying it's all in your head. But at the same time your expectations seem to be a bit off. If you're spending more money in each existing category (housing, food, etc) you're not also going to have money to invest in new categories (jewelry, second homes, whatever). You're upper middle class, not extremely wealthy.

If you know people in the same income bracket who are traveling to Europe every year or who have a second home, I'm guessing they also have 1-3 kids, not 8.

How is everyone else managing? Living in a cheaper area, or in a smaller house. Having fewer children. Having significantly less cleaning help and either having kids do chores or living in a messy house. Living with an old ugly kitchen. Tuition breaks. Less-good health insurance. Going into debt for weddings. No secrets just spending less (and for the most part, getting less).

↑ imaima

Sun, Sep 15 2024, 5:13 am

amother Ebony wrote:

Of the top 2 things that are standing out one is OPs 80k-100k job. Because her husband is already making over 500k, her Federal Tax rate is 35% on all of that income. Add FICA 7.5% tax plus state and or city tax and that 80k is only a bit over 40k of take home pay. 24k of that goes to the cleaning help, leaving OP with 16k of actual take home pay for all of her efforts!

If OP wants to work she would be far better off taking a much lower paying job that offers either full health insurance (tax free) or is an educational institution that can give tuition benefit instead of salary straight to her kids schools tuition. She could take a 30k to 40k pay cut and still come out ahead.

The other option is to quit working entirely and take care of her home and household budget on the cheap, also probably coming out ahead financially.

As others have mentioned, consulting a tax expert about ways to lower her DH tax burden is a must. There are often creative solutions that can leagally save a bundle in taxes.

Most people pulling in OPs income would NOT be in OPs predicament. They would proactively strategize to maximize their after tax take home pay.

How can she do it without losing out in her career path?

amother

Denim

Sun, Sep 15 2024, 6:06 am

amother OP wrote:

Here is my story:
My husband makes 575k a year but the last couple of years it’s been somewhat less than that because he’s gotten paid in equity under par (don’t ask) so more like 525. Still a lot of money

I make 80-100k.

We have 8 children kh.

We are not making it.

No vacations no second home our house has new kitchen and bathrooms but is otherwise old.

We made a wedding-middle of the road- and paid mostly in cash savings. But that was followed by a huge tax bill that came out of nowhere

Our heloc is maxed out. Our equity stocks is way down so we can’t touch it. We borrowed from our heloc bec we thought the stocks could only go up. Guess again.

All our money goes to tuition. Mortgage. Cc payments. Helix payment. Groceries and household items. Bills. Clothing (not $$ but frequently for our growing kids ). Support for our marries is 2k. our overall expenses monthly are around 30k.

I bought one new sheitel in the past 5 years. I got one piece of jewelry as well.

Bh no therapies for our kids. One child takes music lessons otherwise no extracurricular.

Our credit card bills are insurmountable. When I look through it it’s Groceries. Groceries. Groceries. We don’t eat lavishly. Chicken on shabbos. But 300-400 just for shabbos shopping.
If I’m struggling how is everyone else managing??
How does this make sense??

These are things you need to analyze with a professional. If you don't want to pay someone look at dave ramsey, and diy - but it sounds like you have no clue where your money is going.

At this income level its not the 3$ coffee or even the high food bill that is doing this.

The problem is that you are not fiscally planned out and budgeted and you get hit by things and then make stupid moves like the Helloc to cover for that, and now you have even less cash flow.

You need to look at your expenses for real.
How much is being put into retirement/investment accounts? It should not be more then 15% of your income. If to much is going into investing, you are not building wealth, because then you end up taking debt to cover living expenses.

Same with equity on par - it may be nice and on paper it is better, but you need to pay of the helloc and mortgage more then you need the equity, if you want to actually build wealth, because that frees more money up month to month and means you don't actually dip into savings.

What is the actual take home income? Do you have a good accountant making sure that your taxes are calculated properly and you are deducting monthly to pay them? Why is there a big tax bill out of nowhere?

amother

Winterberry ↓

Sun, Sep 15 2024, 7:04 am

amother OP wrote:

I’m not sure it may be 38% by now.

I am in Israel, I assumed the number you gave was neto, not bruto. Neto - meaning net what you have after taxes. Bruto - whatever your gross payment is before anyone else takes a bite out of it.
For us we see the bruto on our payslips but only the neto goes into our bank account. After taxes.

Sit down and look at what you are earning neto. If your taxes and health payments don't come off your income before it hits your bank account, automatically direct them to a separate account the day after your paychecks come in. That way all you'll have left in your account is the neto, what you have after taxes and health insurance.

Then come back and tell us what your neto is, and compare it to your expenses, and see how those two figures line up.

amother

↑ OP ↓

Sun, Sep 15 2024, 7:12 am

Op here.
Thanks for all the advice.
Maaser is accounted for by half our tuition as per our Rav.
If I buy cut fruit once in a while it’s for melon which in our store costs a dollar or two more than a melon would and gets fully eaten-although that is besides the point.

I live in a low key neighborhood. Out of town ish. Very little material pressure. Our house cost much less than a house in town.

As for not working. I’ve thought this through. But my husbands salary alone is 10.5k each paycheck for 21k a month. We would be short for much more than just help.

I work privately as a consultant which for sure eats up more taxes for self employment. The hours are flexible but I still need coverage by my housekeeper for my kids when I am working.

I’ve thought of taking a teaching job instead of this. The pay cut would be half. But I could funnel the money to tuition and perhaps get on insurance and also get perks before yt. On the other hand I would have to teach and I just don’t have those skills.

I feel like my husband and I are both at the peak of our careers and this is where we are. My original question is does it make sense to feel this way on this salary. It seems that the answer is yes. In which case, just wow.

amother

↑ Lime ↓

Sun, Sep 15 2024, 7:19 am

amother OP wrote:

1. 21k a month means he earns 252k a year which is 273k less than 525k.
It doesn't make sense to pay 273k in taxes.

Are you putting away something? Like an IRA etc? I assume so.

2. Why would self employment eat up more of your taxes? It should be just the opposite.

You might need a better accountant for both of you.

amother

↑ Winterberry

Sun, Sep 15 2024, 7:21 am

amother OP wrote:

You need to understand that those earning significantly less than you are also paying significantly less in taxes. For instance, we are earning 17k NIS a month, 7 people, in Jerusalem. We pay zero income tax. We do pay health insurance (not sure how it works honestly but it comes off everyone's income as a percentage of their income, with a set minimum) but that's not so much, though it increases as our incomes increase.

But the bottom line is that you are paying a lot in taxes. And you need to be thinking about your income in neto, not bruto.

amother

Red

Sun, Sep 15 2024, 7:30 am

As Ora said, you are paying for a lot of things poor people don't have.

Take me for example. Our total annual household income is $45k. We have 7 kids. Obviously, we can't be paying $60,000 a year for tuition. We pay more like $2000 a year and we struggle to pay that.

We get medicaid, so no insurance expenses. No cleaning help at all. We rent a little apartment and somehow squeeze our family in here. We could never afford to pay $5500 a month for a mortgage. And we don't spend much on food either. We have food stamps, we get money from tomchei Shabbos at a grocery store every week, and we still have to spend around $300 a month for food.

We buy the little kids clothing from temu for $5-10 an outfit.

Forget vacations. We sometimes can't afford groceries.

So your income is buying you the ability to pay tuitions. It's buying you your nice, partly renovated house. I'm guessing you also have furniture that works and looks nice, and linen without holes in it. You have expensive health insurance. You made nice weddings. And you support married kids, which we will never be able to do at this rate.

Yes, I would have thought someone with your income would be able to afford vacations. But your money is going other places.

amother

↑ Charcoal ↓

Sun, Sep 15 2024, 7:31 am

ora_43 wrote:

This is the best post yet . No ones ever going to “make it “ because our expectations will just keep going higher . This actailly makes me feel better . I’m feeding my 5 kids Kh, clothing them and paying mostly full tuition . I have a decent house . No we can’t afford nice vacations , new wigs all the time , I shop in cheaper stores , I can’t afford to fix my falling apart kitchen , I can only afford 5 hrs cleaning help a week …
But that doesn’t mean I’m not making it . Thanks for making me see this !

amother

↑ OP ↓

Sun, Sep 15 2024, 7:33 am

Sorry correction he is making 23k on both paychecks which brings us 7k short. His base is 425.

Self employment has its own tax which cuts into my income.

We do have a very good and of course expensive accountant.

I have a tax bill at the end of the year because it’s just not possible for me to cover my expenses and set aside for taxes. My husbands bonus covers our taxes and there have been times that the bonus wasn’t great and we had to take from the heloc.

One more point. My husband and I are both extremely responsible people, it’s not that we’re careless. It’s just that somehow we have always been in over our heads and now that we are finally getting this good income we are paying for our past mistakes.

amother

Olive

Sun, Sep 15 2024, 7:37 am

Our income is a few times as much as yours.

We have less kids, but our tuition is significantly more.

We do not spend a lot. I do not buy without thinking or in expensive stores. We wouldn’t be able to afford it.

We are able to save a lot.

But we do not go on expensive vacations, and I do not get jewellery that is very expensive, and not very frequently.

I think that people who seem to be able to get those things actually just spend without being able to afford it.

We have a comfortable lifestyle and I am extremely grateful.

amother

Tangerine ↓

Sun, Sep 15 2024, 7:41 am

amother OP wrote:

I agree that is the best response yet and actually makes me feel better. I am making it. But this is what making it looks like.

I think I need to realign expectations with reality but it’s shocking still that this income equals a reality where any true extras are still out of reach.

To those of you who ask why bother? I say, agreed. Don’t.

But if people don’t bother they may not be able to afford having a large family like you do ka”h, or to offer to support kids after marriage, cleaning help, renovations, camp for kids etc

amother

↑ Ebony ↓

Sun, Sep 15 2024, 7:49 am

amother OP wrote:

If you are a consultant it’s likely you are able to deduct some of the car expenses and there may be ways to have health insurance come off your pretax income depending on how you structure your business.

You are also looking at your budget backwards. Your husbands take home pay is 23k and you have to get to 30k a month so you need your consultant job to bring in 7k a month pre tax. Your husbands year end bonus (100-150k) then pays your tax bill.

If you took a different job with better hours and much smaller pay that just covered your health insurance tax free you would only have the 23k a month from your husband- but you wouldn’t actually be short 7k each month because your 3700 health insurance line item in your monthly bill would be zero, your 2000 household help bill would likely be reduced with shorter working hours, and your husbands (100-150k) year end bonus would not have to cover the tax bill from your self employed consulting. Instead it would cover the 3k-4k shortfall each month with money left over, so you would actually come out ahead and be able to cover your monthly budget plus throw in a new sheitel or that 5k family vacation.

Better yet, use it to pay down your credit card and Heloc and watch your money work to make you more money.

watergirl

Sun, Sep 15 2024, 8:00 am

amother OP wrote:

You are more than making it.

8 kids that you can feed, house, and clothe is a luxury. Paying tuition and camp for 8 kids? Ashreichem!! Many people can’t afford so many kids.

A house with a 5k/month mortgage and 2k/ month on heloc is a massive luxury. Many people with 8 kids are squeezing into a tiny home or a tiny cramped rental.

Paying 2k/month to support married child is a huge luxury.

Cleaning lady??? I hope you know how luxurious that is! People delude themselves into thinking that it’s a necessity, but it is absolutely not. $500/week on help? That is a choice.

Your car payments are very high. It’s a huge luxury to have cars that require a monthly payment. So many people (like me!) drive beaters. My car is a 2006. My husband’s new car is a 2012.

The thing that worries me is how you are allocating your money and none of it is going to retirement. It’s amazing that you are supporting your children, but that money should be going to your retirement savings.

Last edited by watergirl on Sun, Sep 15 2024, 8:46 am; edited 1 time in total

amother

Holly

Sun, Sep 15 2024, 8:11 am

We aren’t making quite as much as you but we are putting away quite a bit.
My husband makes $420k and I make $30k very part time.

Mortgage $3k
Health insurance $2k
Tuition $4k
Food $2k
Cleaning help $600
Cars $0 - we buy them straight out. I have a 10 year old minivan and my husband bought a Tesla 2 years ago
We sent 3 kids to sleep away and 2 to daycamp ($13k)

We own 6 investment houses (about $200-$300k each) rent covers mortgage
We put away the most allowed tax free in IRA each year- I think $12k?
The rest gets reinvested in my husbands business.

I think you need to quit your job. It costs more money then it’s worth sometimes to have two working parents