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

amother

Whitesmoke

Sun, Sep 15 2024, 10:22 am

Putting dil on payroll is a great idea. My father was an accountant and recommended all of his small business owners to put all kids allowances on payroll. I was his official office shredder from when I was 12yo for a grand total of $20/wk. Went up a bit when I could actually help with some date entry.

For tuition, ask if what you pay is the amount to educate your child or to cover other scholarships as well. They may let you make the difference as a donation. Also building fund, annual dinner, etc. Certain states (I know PA for sure) let you allocate a portion of your property taxes to a private school and the school will apply it towards your tuition

amother

↑ DarkRed ↓

Sun, Sep 15 2024, 10:24 am

amother Ultramarine wrote:

I am dealing with this now- decent salary but lots of taxes and cost of life (BH) and we just made a simcha (BH) which cost more than I was expecting (doesn't it always?) and I'm wondering how to change things going forward so we have more of a cushion and less paycheck-to-paycheck living. Also with the crazy inflation and even with some raises my paycheck is going less far than it used to (thanks Joe and Kamala).

Some things I am thinking about-
1. Cutting down on cleaning help (I hate this idea since I am a slob and it's the only way I live in any sort of a functional home, and I work so hard and long hours it's almost a necessity, but I need to)
2. I have never really needed to aggressively price compare with grocery prices but I think I need to do some careful looking at our food budget and yes, buy cheaper meat/ poultry for shabbos and fewer disposables and I probably need to start shopping at Aldi's for produce and eggs and things like that even though it's less convenient than doing a one-stop-shopping at frum stores. Also we use tons of disposables (plates/ cups etc) but that's probably a huge waste and I think we need to learn how to wash cups and cutlery when we eat.
3. Right now we have leased cars, I think we will need to buy outright next time (with financing) and drive them for many years.
4. FSA- I haven't used this although I am eligible but it seemed too complicated. Now I realize it's a necessity.

Basically little things that I hope will add up.

FSA is not complicated at all, you should set it up. The only part that's complicated is that you need to use up all the money you designated for FSA otherwise you lose it, but if you're like me and you have dental copays/glasses expenses/orthodontist you'll use it up pretty quickly.

HSA is even better if you're eligible.

amother

↑ Ebony

Sun, Sep 15 2024, 10:36 am

amother DarkGreen wrote:

I’m confused why people keep saying that at a higher income the tax percent is higher on all the income. It’s only higher on the amount above the limit.

This is incorrect. If her husbands income is already putting them in the 35% tax bracket and they are filing jointly then every single dollar she makes is taxed at 35%. She pays an additional 15% FICA and SECA minus a small deduction on taxable income plus state taxes. So yes, she is likes paying 40% to 50% of her consulting income in taxes after all is said and done.

She can probably take additional business expenses on her consulting income if she can structure it properly.

amother

Cinnamon

Sun, Sep 15 2024, 10:44 am

My initial thought is perhaps to reevaluate the accountant you are using and make sure you are getting appropriate advice especially since you work as a consultant. Sometimes meeting with a new person with fresh eyes can help zero in on the best way of restructuring your financials. To me, it sounds less about cutting an individual expenditure and more about your overall financial makeup. That your high priced accountant hasn't helped you and that you did not indicate retirement savings is concerning to me.

amother

↑ Blonde

Sun, Sep 15 2024, 10:46 am

amother Oldlace wrote:

Btw, for all those freaking about her housing expense, $5-7k a month is what regular Joe schmoes like me are looking at right now. I don’t know when OP bought but between housing prices and interest rates right now, that’s what it will cost to buy an average home in 2024.

No it’s not. I’m buying a house now and will pay arnd 3k an month including property taxes. U need to buy something in ur budget

amother

Outerspace

Sun, Sep 15 2024, 11:04 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.

Except you do have a lot of extras that others can't do.
Right now my DH is unemployed so even though I work full time, we are very tight.

You have more kids than average.
You have a home you own- not an apartment with a broken couch and 1 set of sheets per bed from Target.
You don't have to collect tzeddakah which is huge.
You buy melon! And probably have more than a minimal shabbos (1 course with 1 main, 1 side).
You pay for camp, weddings, full tuition, and support married.
You don't have to embarrass yourself asking for handouts, tuition discounts. I had to cry on the phone several times to the administrator asking for help and also just to get a call back from the tuition committee.
You sound like you can buy some of what you want- just not carefree spending like you thought at this stage.

Notice what you do have.
And get a better understanding of the small leaks so you can pay back debt and save for what you want.

amother

↑ Blush ↓

Sun, Sep 15 2024, 12:59 pm

amother Oldlace wrote:

This, of course, depends where you are buying. Once you leave the tri-state bubble, you can halve your mortgage in many places.

I find OP's situation a bit perplexing since she keeps saying she lives out of town in a low-key community. Which community like that has such high mortgages??

amother

↑ DarkRed ↓

Sun, Sep 15 2024, 1:01 pm

amother Blush wrote:

Once you leave the tri state bubble, salaries are lower as well, so it's a catch-22...

amother

Burlywood ↓

Sun, Sep 15 2024, 1:19 pm

OP - we make about half of what you make ($350k), with half the amount of kids but similar expenses and we are making it - with room for extras. Your HELOC/support/household help and health insurance are killing you. For reference, we make $23k pre-tax a month from our regular jobs, and then about an additional $60k a year pre-tax from two side businesses. Our expenses are:
$4600 mortgage
$5000 childcare (this includes camp)
$4500-5500 spending (includes everything we put on a cc, groceries, clothes, coffee, nails, diapers etc)
$500 utilities
$500 car
$400 cleaning help
$300 student loans
Our health insurance is about $400/month taken pretax as well as $400-600 each into a 401k and our car insurance/gas is paid for pre-tax by one of my husband's side hustles. Month-to-month we pretty much use everything we bring in ($16k) but we use my husbands side hustle checks (which he gets 3x a year) for extras. This goes to one vacation a year, extra savings, and anything we want to do for the house.

How long has your income been this high? There's a big difference between making $700k a year for the past 10 years (in which case you should have accumulated some emergency funds) and going from $150k for the past 10 years to $700k just this year -- because then there is probably some debt you are paying off. But your income should be covering it with some breathing room if you make smart financial decisions.

amother

↑ Tangerine ↓

Sun, Sep 15 2024, 1:23 pm

amother Burlywood wrote:

$400/month health insurance is a steal! Very unusual. We have excellent health insurance BH as one of us is a gov’t employee and we pay approx $1200 a month, $600 per paycheck, for health insurance for the entire family (the best plan- with access to out of state doctors, which was a must for us.)

amother

↑ Burlywood ↓

Sun, Sep 15 2024, 1:30 pm

amother Tangerine wrote:

Bh we don't need anything fancy -- I picked the cheapest monthly plan. Something that made a big difference for us was having the kids and me on my insurance and my husband on his. For a family plan with either mine or my husbands company, we'd be paying about $8-900, but for an employee w/dependents plan at my company it's about $350 and for just my husband on his plan is about $100. I don't think people typically consider splitting it like this, but for us it's a huge cost saver. In addition, we do put $100 a month into a HSA, which my company matches with $150 a month and that accumulates pretty quickly if you don't use it. Small bills l pay out of pocket for and try to save my HSA for a birth, which is expensive on my plan since the actual health insurance isn't great.

amother

↑ DarkRed ↓

Sun, Sep 15 2024, 1:30 pm

amother Burlywood wrote:

What about tuition? Or is that included in child care?