Struggling to get by on a $300k household income

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Well most people don't have a 5,500 mortgage per month.

But I would break it down to what do you actually need. Daycare costs can probably be trimmed down. Entertainment and groceries as well.

Oh boy really wrote:

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+1. This is the epitome of a faux humblebrag troll post if there ever was one.

Dude I'm not a class warrior and don't begrudge you a nice home, but $5,500/month for a house is maybe too much at your gross income. It can work but you're pushing the boundaries. Implies you're in a $1MM+ home.

East_Coaster wrote:

Quick stats: wife and I, both grad school educated, working professionals, living in the NY metropolitan area. Around $300k in annual income (fluctuates a bit with bonus, sometimes more, sometimes less), two kids.

People think I am insane when I tell them that it's difficult to live off that kind of salary on the east coast, but we're struggling.

Here's how the math works out:

$25,000 monthly combined gross salary

15% each in our 401ks, leaves $17,500 adjusted gross income

Are we crazy? How to people survive on household incomes of $100k or even less?

15% of $25,000 = $3,750 into 401k. You claim it removes $7,500 from your monthly adjusted income. Right there is almost $4,000 you should have. Troll.

I highlighted what's killing you compared to my budget. You have 2 kids yet own a $500k-ish home? Is that necessary where you live?

Here's my breakdown, if you're interested. Me, wifey, 1 kid, 1 on the way

Salary: $87k (+$5-8k bonus)

Mortgage: $2k (4 bedroom, 2700 sq ft home)

401k, HSA, 529: $800

Car pmt + ins: $250 (will eliminate auto loans in August)

Groceries: $550

Date nights: $100

Charitable contributions: $750

Utilities: $300

Student loans: $170

I may have missed a few, but I am comfortable! That leaves me is $500 to pay down debt (I have a few 6+% student loans left) and $500 for various expenses, including clothes and home repair. I have $8k as an emergency fund that I'm working on getting to $25k (primarily through tax returns and bonuses). We also take a couple vacations a year, also funded through the bonus.

My 401k is slightly underfunded (7% company match brings me to 14% total savings), and every raise I get is funneled towards retirement savings.

If I were you, I'd recalculate my tax withholding and cut back on entertainment and 529 savings until you can knock down some of that other debt.

Is there anything you can do about childcare? That is an outrageous sum to pay.

What about the house? How much equity do you have? Would it make sense to look for a less expensive home?

You can sell your children to gypsies to reduce expenses.

Unless kids = 2x teen boys, y'all be snarfers. Oink! Oink!

You are house poor - downgrade.

If the daycare number includes private k-12 education send them to public school. If it is simply daycare you are overpaying.

hoo-ahh wrote:

Unless kids = 2x teen boys

And if they are, please provide pics. If it would help you to save money, I might be willing to take over rearing your children.

Biggest things that jump out are home and food. We make it on $500 with four people, and we are all running and eating a lot. Find an Aldi's, it will save your life. Whole Foods is quite expensive. The home is probably a lot as well but if you love it I don't see a problem with paying a ton for it. Oh, and we don't have car payments, we buy our cars used and with cash (no payments, buy it outright).

Typical Letsrunner in my mom's basement:

Here's how the math works out:

$2,200 monthly gross salary

10% in my 401k, leaves $2,000 adjusted gross income

Fed, local and state taxes are about 20% for me , leaves: $1600

Mortgage: $300

Insurance, misc expenses (upkeep): $0

Childcare (two kids, both in daycare): $0

Car payment incl insurance (paid off typical soccer mom SUV): $100

Leaves: $1200

Groceries: $300 (again, nothing fancy, Costco)

Entertainment: $500

Kids necessities: $0

Medical expenses: $150 (we have good insurance through employer)

529 college plan $0 per month

Result: +$250

I feel for you OP.

Have you thought about looking into government assistance to help you and your family financially? It might not be a lot but an EBT card (or whatever they are called nowadays) could help relieve some of the stress of living on a shoestring budget.

$5,500 house note? Wow!!!! I thought my $1500 was high off of our $150K per year.

House and childcare are crazy high. How much does your wife make? How old are the kids. I know childcare is really expensive in some areas but that is high.

It is also hard to believe that taxes and retirement take you from $300,000 to $125,000.

15% on 300k gross income for a 401k is 45k a year. Max per year from 2015-2017 is 18,000 per year per person (traditional and Roth), so right off this post sounds at least partially made up.

With a 5500/mo mortgage, you either live in a very nice area, have a really nice home, or both. Pretty easy way to solve that issue.

$25,000 back on your tax return? Sounds like you should adjust your W-4 and get more back during the year to live on.

You are overpaying and under earning

Here is my assessment:

- You didn't buy your car outright?? Were you in financial strife at the time? This seems silly.

- 1400 for groceries?? You are wayyy overspending for your income here. This really sticks out.

- I'm sure it is more expensive where you live but seems like you are getting a bit ripped off on childcare. Our daycare is half that per kid.

- Your child expenses, entertainment etc. actually seem on the low end.

oh please wrote:

15% on 300k gross income for a 401k is 45k a year. Max per year from 2015-2017 is 18,000 per year per person (traditional and Roth), so right off this post sounds at least partially made up.

This is indeed true, and nice catch.

Another nail in the troll coffin. Move on, people... nothing to see here.