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Family income vs how you feel you are doing financially

  1. babypugs

    persimmon / 1101 posts

    I'm still learning a lot from all of your responses. Thanks to everyone who has replied!

  2. crazydoglady

    nectarine / 2431 posts

    Such an interesting discussion! DH and I are both teachers and make 2.5× the average for our town. That should show that we are paid fairly well as teachers and live in a relatively LCL area. For example, we paid 550 a month for daycare (switched to a better daycare that is around 775) per month. Average home value is 315k. Living comfortably is absolutely about perception. We don't take extravagant/international vacations, aren't saving for college, and our investments are limited (but our retirement is pretty much taken care of.) We did recently have to buy a second car and currently have 2 car payments which makes things tighter. We could definitely do better and save more, but YNAB helps to keep us on track. Someone else might look at our finances and feel severely limited, but we feel comfortable enough and rarely go without.

  3. Miss Ariel

    nectarine / 2210 posts

    Based on the link posted, for our neighborhood we are at the median income, but it’s one of the wealthiest areas. For the entire city, we’re far above. We live comfortably, but don’t spend extravagantly. We are at a point now where we don’t really have to budget, but if we wanted something out of the ordinary we likely would need to.

  4. Mrs D

    grapefruit / 4545 posts

    @hellobeeboston: I'm counting the days until DD1 starts kindy and our daycare bill is cut in half. Then DD2's daycare runs out the same time as DHs student loans...we're going to feel like kings all of the sudden with that double swing!

  5. psw27

    pomelo / 5220 posts

    We make almost 5 times the median income with 2 incomes and 2 kids in full time daycare. Our area is very high COL with extremely expensive housing. Lucky we have made good home investments that allowed us to buy our first place at the pit of the market and sell it for a big profit to get our current home. We are comfortable but don't feel like we are living large by any means. We spend almost $50,000 a year on child care and have a huge mortgage. We are super blessed and lucky (and my husband works incredibly hard) and we know that but we certainly don't feel like we are living a lavish lifestyle by any means. I sincerely wonder how anyone actually making the median income (or below) could afford to live where we live - rent for a very average 2 bedroom apartment is upwards of $2500 per month and child care for an infant is at minimum $450 per week.

  6. PurplePumps

    pomegranate / 3809 posts

    Lots of interesting perspectives here on what is "comfortable" and what is considered "needs" vs "luxuries".

    I guess for us, I think we are very "comfortable" because we don't want for (or are willing to pay for) many luxuries others are willing to pay for. Or don't feel the need to have them to be comfortable. I don't define comfortable as extravagant or luxurious, but a simple, still budget conscious, while not needing to actually budget lifestyle.

  7. gingerbebe

    cantaloupe / 6131 posts

    This is off topic somewhat, but its something I want to raise because people don't talk about it a lot: the mental health benefits of our spending priorities. The TLDR version is I don't think people should feel bad if they need what they need.

    I think we've seen on the boards that some people NEED a very organized house in order to feel sane. Some people NEED sleep. Some people NEED a vacation twice a year. Some people NEED exercise. Some people NEED to eat a very healthy diet. I think if you need those things, you're going to prioritize your spending on those areas. So while a housecleaner, a gym membership, a fancy bed, or eating all organic Paleo Whole30 IS a luxury and a privilege, it could also be seen as preventative medicine. Put another way, if a mom had a mental breakdown, no one would tell her that her antidepressants and therapy were a splurge. But the things that keep her sane might look like luxuries.

    I grew up with no money and my mom worked full time, made us breakfast in the morning, packed our lunches every single day, cooked dinner every single night from scratch, took her lunch break when school was out at 3pm so she could pick us up and drop us off, and was OCD about keeping the house clean. My brother was an IUGR baby, he was dangerously underweight for most of his childhood, and was the definition of a high needs child in every way - feeding, sleeping, pooping, personality, discipline, everything.

    But my parents had an awful marriage and my mom was so incredibly mean. She screamed constantly, never played with us, verbally and physically abused us, nagged incessantly, and constantly had a frown on her phase. She had undiagnosed and untreated anxiety and depression, probably some actual OCD, and while I am 100% certain my mom loved us and was devoted to us, I don't recall my childhood as being a very happy one.

    As a mom now who struggles with the same anxiety and depression issues, I look back and I have a lot of forgiveness towards my mother because she was just completely frayed. I can't imagine she got much sleep, she was culturally expected to handle EVERYTHING in the house, plus we financially needed the money she made doing menial jobs. She did the best she could. My dad? Present, but riddled with his own problems and equally abusive, so no help there.

    Because I grew up with no money, I fully admit I used to judge "those rich people" all the time about housecleaners or needing a Mommy's Helper or whatever other things that looked like luxuries on the surface. (I grant you I was single and young and childless at the time). But now I see a lot of those things as investments in sanity and I just refuse to feel bad about them. Why? Because my brother and I spent (and continue to spend) a lot of time and money as adults dealing with the EFFECTS of growing up in a home with parents who had untreated mental illness, no resources/money to help ease their struggles, and the resulting abuse. Essentially, those costs got passed to us.

    So right now, in my stage of life, I may drive a used car and wear clearance clothing, but a housecleaner helps my sanity, reduces stress in my marriage, and helps me be a kinder mother. Its an investment. Some people may not have problems keeping their house clean or enjoy doing it or their sanity spending is done elsewhere. But for me personally and my own mental capacity, the housecleaner is pretty much a utility expense. Spending money on healthier foods and a home gym - very lucky to afford it, but also preventative medicine (literally) to keep me from getting sick and not being a horrible burden on my kids (like my folks) later in life because they never took care of their health.

  8. psw27

    pomelo / 5220 posts

    @gingerbebe: Totally agree. We have friends who think we get babysitters "a lot" (maybe 2-3 times a month) but my marriage is better if I take the time to go out of the house with my spouse and have fun. Sunday we got a babysitter for 4 hours and went to an arcade and got some dinner - it sort of helped to erase some of the stress of this season of life. So that is a "luxury" that we prioritize over other things to help us stay on the same page. I'd say most of our luxuries are things that help our marriage not become a series of nagging and griping at each other - cleaning, driving as our commute occasionally (in lieu of me walking to two schools), babysitters, etc.

  9. Mrs D

    grapefruit / 4545 posts

    @gingerbebe: Such a good point to make. We've been subject to many comments about how we spend our money...and in some cases - I've dealt with DH questioning some of the outsourcing we're doing. But it helps my sanity - and as the person who runs 80% of the household I feel I'm entitled to make those calls.

    My MIL constantly ridicules my choices to hire things out. She questioned my need for a cleaning lady. Constantly made comments to DH that she didnt understand why I was stressed - why I needed my mommy breaks (for which she occasionally helped DH with the girls). Just last week she acted appalled when I told her I hired someone to install our mulch - yes it cost me $300....but it would have taken me and DH and entire weekend - which are stressful enough these days.

    I'm toying with the idea now of having dinner delivered two nights a week. Not because I NEED to, but because I think our family might NEED it. It may cost 50% more, but it might mean DH and I arent stressed about the mad dash from the minute we walk in to the minute DD2 goes to bed. We might actually enjoy ourselves. It might give us a few moments of sanity...totally worth it.

    @psw27: DH and I need to do this...we keep saying we need to set a standing date night and keep to it...then something always comes up. Goals for 2018.

  10. gingerbebe

    cantaloupe / 6131 posts

    @Mrs D: Yeah, I mean, I think its very stage of life related too. Like, my ILs are all middle class families from Michigan, my MIL was a stay at home mom for most of DH's childhood, and FIL was a notoriously frugal man. They lived in a tiny house that they never really did much to because they had 3 kids that were going to destroy it all anyway and my FIL would never have hired anyone out for stuff. They fully admit those childrearing years were a huge grind for them and when you ask my MIL how she had 3 kids under 4 by herself, even now at almost 70, she gets misty-eyed because it was SO HARD. But now that they are empty nesters and retired, MIL and FIL eat out several times a week, moved to a maintenance free condo, golf all the time, and that's all fine because "they're old."

    I'm sure they don't understand why we do half the things we do. But I'm like dude, DH and I are both attorneys, we have zero family around to help us, and I don't want to spend an entire weekend day cleaning my house WITH my children underfoot (meaning the house will never get or stay clean). Why wait until retirement to take some of the pressure off when I can try to enjoy my life a little today?

  11. psw27

    pomelo / 5220 posts

    @Mrs D: It's so worth it. I can't really describe it except to say it can undo some of the resentment (not sure if that's even the right word?) and grind of being two working parents with no family around.

  12. Mrs D

    grapefruit / 4545 posts

    @gingerbebe: Ugh...I wish my MIL for one minute would realize her dear son and I are equal financial contributors to our family. I get that FIL (who is amazing) didnt ever change any diapers...but sorry - your son has to. Yes, he is an attorney supporting his family - but that does expunge him from normal fatherly responsibilities. She is so tone deaf in regards to how she discusses his/my roles in our family - maybe she truly has no clue. Whereas FIL is the complete opposite - he shuts MIL up all the time when she gets judgey about our choices...he comes to my defense specifically often...such an interesting dynamic.

    Maybe the next time they come for dinner I'll have it out sourced and see how her head explodes. hahaha

  13. MrsBucky

    kiwi / 656 posts

    This thread continues to be so interesting to me! I really appreciate all the thoughtful insights people have raised. I agree that lifestyle inflation is a real things, and that so much of what many of spend our money on are luxuries / desires, not needs. Which doesn't make them bad at all! I loved @gingerbebe 's points, which are important to think about and so true! I think it becomes tricky when we start to see them as needs and not prioritizing our wants. I know someone else upthread mentioned retirement and childcare being luxuries to an extent to, and I see that point also. I am making the choice to pay for those things now because I think it's prudent, but if I had less available, I'd obviously do what I had to do based on what my realistic options were at the time. I also pay for life insurance, which isn't a fun luxury at ALL, and I make other sacrifices to do so, but it would also get cut if I couldn't afford it, so I guess technically it is? Also it's important to send my kids to good schools, but if I didn't have money to afford to live in those areas, I'd choose from whatever options I could. I think part of the challenge of talking about this stuff is that the connotation of luxury is that it's fun or makes you happy, and the truth is when it feels like something is expected of you, or just makes like bearable, it doesn't feel luxurious, it feels different, even if it is something we should be grateful for. Anyway, I'm not sure my thoughts are super clear here, but I've been thinking about this thread a lot, so I wanted to brain dump some of my thoughts!

    ETA: I will also say that this makes me think of the "Smart Couples Finish Rich" book we read while engaged and have gifted to numerous couples. It starts with defining your values and aligning your financial goals/ choices with your values. This has been such a helpful tool for DH and I. Some of my values are family/relationships and security. A lot of our financial choices align with those values which we share- money towards insurance, for example, or retirement savings both help us feel more secure. We spend a lot of money on travel to nurture relationships with friends and family, but since it aligns with our values. When we go through our budget each month it helps us identify areas where we are bleeding money that don't align with our values. Super helpful.

  14. petitenoisette

    pear / 1521 posts

    We make the median income for our town but our housing costs are a less than average so I think we’re doing pretty well (or will be when I’m no longer on unpaid maternity leave!). With just one LO in daycare 3 days a week we had a lot of disposable income that we have been putting straight into improvements on the fixer-upper we bought. This fall we will have two in DC so basically we will be just making even at the end of the month however still contributing to our retirements, college savings and a little towards savings hopefully. I think the number one reason in this thread that makes people feel financially tight is childcare and we will def be feeling that more with two in (not even full time) care!

    That said, lifestyle inflation definitely is in effect at our house - I find it so much harder to cut back on things that I used to consider luxuries. The biggest thing for us is on convenience foods that I never would have purchased before kids but now seems necessary.

  15. avivoca

    watermelon / 14467 posts

    @Mrs D: We just hired our lawn people for the summer and I'm pumped. I feel extremely blessed that we can afford to do this and "throw money at the problem."

  16. Anagram

    eggplant / 11716 posts

    @petitenoisette: just curious about your last line, re: convenience foods. Is it possible you just literally have less time now that you have kids? I have 1/10 of the time I used to have as a single, childless person. Like what kinds of convenience foods are you buying, and in reality, do you have the time in your day to make those things from scratch without affecting other parts of your life? I'm not picking at your answer, I just think this is a common mom-guilt thing working women do to themselves. You have kids now, you are likely trying to make dinner while someone clings to your leg or while one siblings is trying to cut another sibling's hair--is it really "lifestyle inflation" if now you have less time to rice your own cauliflower or to spiralize your own zucchini?

    This is my own struggle, because in this day and age, we'd also be judged if we were giving our kids a bologna sandwich on white bread with a can of Tab and a bag of doritos for dinner. Because then it would be processed and not nutritious. You just can't win! haha

  17. hellobeeboston

    honeydew / 7235 posts

    @gingerbebe: Well said! SO TRUE.

  18. skinnycow

    pear / 1728 posts

    Our combined income is about 4x our state's median income. We certainly don't feel rich but we don't struggle. We have a mortgage, two car payments, daycare, etc. so I do worry about not saving enough for college and retirement. However, I know we're really lucky to live comfortably.

  19. hellobeeboston

    honeydew / 7235 posts

    @Mrs D: AWESOME. i know, I can't even imagine how nice it will be not spending SO MUCH...

    A friend of ours made a great suggestion. Before that money starts coming in and we get used to it - we should set up another savings account and just immediately send a quarter, a half, whatever, of that money into that account.

    I think it's a fantastic idea, and as soon as the nanny is gone i'm going to redirect a portion of my paycheck into that savings account so I don't get too used to having the extra money!

  20. petitenoisette

    pear / 1521 posts

    @Anagram: Oh yea, I definitely have less time and I also NEED the time we have at the end of the night kid free to relax and not to be still doing stuff for the next day. However, if I really didn't have the money then I wouldn't be buying the convenience foods, right? I don't feel guilty about it and def don't judge myself or others for doing it. But I guess I acknowledge that it is a luxury that I can make that choice to preserve my free time by spending the money elsewhere.

    Feel you on how we gotta feed our kids healthy foods all the time. You know my mom kept a constant supply of doritos in the house when we were kids and to this day will claim they are "healthy" because they have corn! Corn! She is a nut. I will say I grew up eating a lot of junk food (though we were served pretty healthy dinners) and I turned out just fine/eat what I would say is very healthy nowadays. So we have to cut ourselves some slack there too I think.

  21. petitenoisette

    pear / 1521 posts

    @hellobeeboston: This is our plan too and the only way we will actually meet our savings goals for college. The majority of the daycare money is just going to go to their 529s or other savings accounts and I'm sure the rest will go straight to kids activities. So trying to not assume our disposable income will go up by much anytime in like the next decade and a half Ok, I just made that sound really depressing.

  22. gingerbebe

    cantaloupe / 6131 posts

    @hellobeeboston: Whenever DH and I have done longterm financial planning and budgeting (including before we had children), we never considered cutting daycare out as a line item out of our monthly expenses. Like, we assumed that money would immediately go towards some other need a child would have. We considered longterm unpaid maternity leaves, summer camps, extracurriculars, bulked up college savings, homeschooling (i.e. the loss of my income), private schooling, and even therapies if our children ended up having special needs. We actually did end up deciding to send our kids to private school (its a local Christian school, nothing super expensive or fancy) and our costs won't really change that much from paying for daycare.

    We've actually told engaged couples and young married couples who ask us for advice to create a savings pool BEFORE you have kids for childcare expenses if you can (assuming you have a handle on your debts). Like even single childless people are cognizant of having to save for college or a down payment on a home, but somehow daycare costs are a shock when its a much more immediate thing!

  23. Anagram

    eggplant / 11716 posts

    @petitenoisette: ha, yes...doritos for corn and pizza for tomatos! My work in low income schools showed me that even people who are really struggling financially don't really have the time for home cooked meals--it's just that their "convenience foods" might be Totino's pizza, ramen, the so-called "government cheese" on white bread.

    As I said upthread, my food budget is high. And that's one thing I'm okay with not cutting. I do buy convenience foods and they are expensive--because I'm buying the grass-fed beef patties to avoid making my own hamburger patties (but because they don't have weird added ingredients like the cheaper frozen patties), I'm buying "fresh" sweet potatoes that have already been peeled and cut into fry shapes, so I can make my own "home made" sweet potato fries without all the preservatives and fillers and added sodium and sugars the frozen ones have. I do get that it's a privilege, but it's also just kind of necessary at this point in my life as a working mom. If my options are to quit work so I have more time to make healthy, cheaper homemade meals, then it's a net loss financially so that doesn't make sense (for my family). We have to give ourselves a little grace.

    I guess as others have said, defining what's "enough" or a want vs a need will depend on the family and their particular situation.

  24. hellobeeboston

    honeydew / 7235 posts

    @petitenoisette: that's a good plan. We started 529's for both of them right after they were born, but at the rate we're saving, we'll probably only be able to pay for half of their education. Ideally we would increase that contribution and our 401k contributions after the childcare payments end, plus save a little extra.

  25. Mrs D

    grapefruit / 4545 posts

    @hellobeeboston: Yup - I just did this when I changed jobs. It was a heft raise (25%)...so I immediately started an auto savings draft from my bank account on paydays...then as soon as I was eligible to contribute to my 401K I maxed that back out. Like you said, if you never know it its SO much easier.

    I think when Daycare is done and DH's student loans are done we will move that money to 529s for a few years til we have those at a good point.

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