Why can't I save enough to have decent vacation or restaurant meal

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Ron Ronnerson
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by Ron Ronnerson » Wed Mar 01, 2017 8:58 pm

These things are a matter of priorities. We (family of 3) live in the Bay Area. I’m a public school teacher and my wife works part-time for a small company. Our combined gross income is $145k. We save 25% of that amount in retirement accounts and I also contribute 10% of my salary toward a pension (which alone should largely cover retirement expenses). The median home price in our zip code is $1.1M. The neighborhood and schools are fantastic here. We live what I consider to be an extravagant lifestyle where we have pretty much everything we want: 4 bedroom townhouse, iPhones, cable package with all the channels, nice vacations, a daily latte for my wife, and much more - all while living in a place where the weather couldn’t be any better and having half the days of the year off.

Here’s the tradeoff: we don’t go out to fancy restaurants. It’s Chinese food or Subway on the weekends. We drive our cars (both currently have Corollas) until they die. We could, of course, eat out at nicer places or replace our cars more frequently if my wife worked more hours or I taught summer school or if we lived in a lower cost of living area. It’s just not worth it to us increase the amount of time we work or feel extreme temperatures for fancier meals and bigger cars. It’s simply priorities.

As for vacations, we went to Hawaii this past summer and will be going to Las Vegas next month. Credit Card companies paid for these trips thanks to lucrative bonuses. You could look at strategies to take advantage of the opportunities out there. We earned the equivalent of $9k last year in points, miles, and cash (mostly tax free) due to credit card/checking account/brokerage bonuses, as well as by earning 2% on our savings at a credit union and earning a little money by selling old household stuff on craigslist. In our marginal tax bracket, that's like 18k of extra income.

Also, go carefully through your budget and look for places to save. A small trim in a lot of different areas can add up to a decent amount. Perhaps, if eating out is important to you, you can make room for it. If it's really important, maybe you should move somewhere that will allow you to do it more often. Or make peace with what you do have and feel fulfilled by it. The choice is up to you.

beattherush
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Because your expenses are out of whack

Post by beattherush » Wed Mar 01, 2017 10:35 pm

Your savings is not the problem; you look to me like you are saving what you need to be.

Your problem is the mortgage but that's a symptom, not a cause all by itself. The problem is, $3k mortgages are generally for housing in the $600k realm or higher, and you don't have the income to sustain the lifestyle typical of those locales. It's the environment you are in that is driving your ideas around family activities, educational costs, and "decent" vacations and going-out budgets.

Difficult though it is, I suggest you need to consider moving to a lower cost area. The rest will fall into place.

Read "The Millionaire Next Door" if you have not done so. It will help quite a bit in your mindset.

Incendiary
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by Incendiary » Thu Mar 02, 2017 8:36 am

Ron Ronnerson wrote:These things are a matter of priorities. We (family of 3) live in the Bay Area. I’m a public school teacher and my wife works part-time for a small company. Our combined gross income is $145k. We save 25% of that amount in retirement accounts and I also contribute 10% of my salary toward a pension (which alone should largely cover retirement expenses). The median home price in our zip code is $1.1M. The neighborhood and schools are fantastic here. We live what I consider to be an extravagant lifestyle where we have pretty much everything we want: 4 bedroom townhouse, iPhones, cable package with all the channels, nice vacations, a daily latte for my wife, and much more - all while living in a place where the weather couldn’t be any better and having half the days of the year off.

Here’s the tradeoff: we don’t go out to fancy restaurants. It’s Chinese food or Subway on the weekends. We drive our cars (both currently have Corollas) until they die. We could, of course, eat out at nicer places or replace our cars more frequently if my wife worked more hours or I taught summer school or if we lived in a lower cost of living area. It’s just not worth it to us increase the amount of time we work or feel extreme temperatures for fancier meals and bigger cars. It’s simply priorities.

As for vacations, we went to Hawaii this past summer and will be going to Las Vegas next month. Credit Card companies paid for these trips thanks to lucrative bonuses. You could look at strategies to take advantage of the opportunities out there. We earned the equivalent of $9k last year in points, miles, and cash (mostly tax free) due to credit card/checking account/brokerage bonuses, as well as by earning 2% on our savings at a credit union and earning a little money by selling old household stuff on craigslist. In our marginal tax bracket, that's like 18k of extra income.

Also, go carefully through your budget and look for places to save. A small trim in a lot of different areas can add up to a decent amount. Perhaps, if eating out is important to you, you can make room for it. If it's really important, maybe you should move somewhere that will allow you to do it more often. Or make peace with what you do have and feel fulfilled by it. The choice is up to you.
I'm curious as to how your marginal tax rate is 50%.

Maverick3320
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by Maverick3320 » Thu Mar 02, 2017 8:56 am

sawhorse wrote:
HomerJ wrote:
sawhorse wrote:There is definitely more than one place where all the houses are well over $600k. I'm not in the Bay Area, and I typed my zip code into Zillow. The cheapest house for sale is $1.85 million, and it's a semi-detached. The cheapest single family house is $2.40 million.
So look at the zip-code next to you. There's no place on Earth where the cheapest single family house in a 30 mile radius is $2.4 million.

How do you afford to live in that zip-code?
Okay, I checked Zillow. The zip code next to mine on the west is 2.00 million. On the east is 2.35 million. On the south (super rich area) is 3.8 million. There's also a listing for an apartment there that says, I kid you not, "Wonderful opportunity to own your own place for less than $1.5 million." On the north (sort of bad area with very limited public transportation access) is 1.25 million. If you go to the less desirable areas, you can find cheaper houses. They're mostly bought by investors and rented out to groups of young roommates, often students.

People "afford" to live here by renting instead of buying because they can't save for a down payment. This drives up the rent prices, so people put more and more of their money toward rent. Another effect of not being able to save for a down payment is that moving to an outer suburb is difficult without financial assistance from, say, a family member. In the suburbs it's hard to find houses for rent, and the ones available cost as much as the apartments in the city because they're bigger; the price per square foot is much cheaper but the total price is similar. The only real option is to buy, and that requires a down payment. In addition, when you take into account property taxes, which can easily be 1-2k a month from what I've heard from people who own houses, and the additional commute cost, you wouldn't save so much in absolute terms.

I'm annoyed of posters, when they hear of a large mortgage or rent from someone living in the area, jumping to the conclusion that these people must be living in lavish houses they can easily downsize. People in these areas are just as likely living in small non-house homes and using public transportation. Most single people live with roommates.

Maybe the OP is living in a lavish home that he can easily downsize. Maybe not. It's impossible to know.

And the "why don't you move" suggestion is easier said than done. Believe me, I would love it if my husband could find a steady job in the low cost area we used to live. But there's a reason it's low cost. The jobs aren't there. We reluctantly left after he couldn't find steady work for two years.

I absolute hate living here for many reasons, but we're kind of stuck for the foreseeable future since I'm unable to work due to a serious medical problem, and my husband's job is really good with flexible hours so he can take me to appointments.
You're living in a 2+ million dollar home neighborhood (on one income, and with a husband that couldn't find steady work for several years(?)), but you can't move because you can't work and his job is "flexible"? If your spouse is talented enough to be bringing in that kind of income, I'm pretty sure he/she could find work elsewhere. And if you truly are in this situation, realize that you are having to do a lot of explaining for the simple fact that your situation is an outlier, and definitely not the norm.

fishmonger
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by fishmonger » Thu Mar 02, 2017 9:15 am

I think way too many people are talking about housing, and not enough about $2500 a month on kids activities ($30,000 a year)! My two kids are 6 and 7 and are involved in all sorts of things. I don't budget for it, but it is probably less than $2500 a year, that includes both of them going to day camp for a week each summer, sports, new gear, etc.

OP, you also lump in "credit cards" with that $2500/month. Do you have significant CC debt that you are chipping away at in that amount?

Ron Ronnerson
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by Ron Ronnerson » Thu Mar 02, 2017 9:43 am

Incendiary wrote:
Ron Ronnerson wrote:These things are a matter of priorities. We (family of 3) live in the Bay Area. I’m a public school teacher and my wife works part-time for a small company. Our combined gross income is $145k. We save 25% of that amount in retirement accounts and I also contribute 10% of my salary toward a pension (which alone should largely cover retirement expenses). The median home price in our zip code is $1.1M. The neighborhood and schools are fantastic here. We live what I consider to be an extravagant lifestyle where we have pretty much everything we want: 4 bedroom townhouse, iPhones, cable package with all the channels, nice vacations, a daily latte for my wife, and much more - all while living in a place where the weather couldn’t be any better and having half the days of the year off.

Here’s the tradeoff: we don’t go out to fancy restaurants. It’s Chinese food or Subway on the weekends. We drive our cars (both currently have Corollas) until they die. We could, of course, eat out at nicer places or replace our cars more frequently if my wife worked more hours or I taught summer school or if we lived in a lower cost of living area. It’s just not worth it to us increase the amount of time we work or feel extreme temperatures for fancier meals and bigger cars. It’s simply priorities.

As for vacations, we went to Hawaii this past summer and will be going to Las Vegas next month. Credit Card companies paid for these trips thanks to lucrative bonuses. You could look at strategies to take advantage of the opportunities out there. We earned the equivalent of $9k last year in points, miles, and cash (mostly tax free) due to credit card/checking account/brokerage bonuses, as well as by earning 2% on our savings at a credit union and earning a little money by selling old household stuff on craigslist. In our marginal tax bracket, that's like 18k of extra income.

Also, go carefully through your budget and look for places to save. A small trim in a lot of different areas can add up to a decent amount. Perhaps, if eating out is important to you, you can make room for it. If it's really important, maybe you should move somewhere that will allow you to do it more often. Or make peace with what you do have and feel fulfilled by it. The choice is up to you.
I'm curious as to how your marginal tax rate is 50%.
I'm at the very top of the 15% tax bracket. Any additional money would be taxed at 25%. State tax rate is 8%. I contribute 10.25% toward a pension. Our AGI is at $110,000. Any additional income would mean we'd be in the phaseout for the child tax credit (so effectively a 5% tax increase). I pay 1.45% for medicare as well. This up to 49.7%.

Incendiary
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by Incendiary » Thu Mar 02, 2017 9:55 am

Interesting. And the pension contribution is required?

Ron Ronnerson
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by Ron Ronnerson » Thu Mar 02, 2017 10:00 am

Incendiary wrote:Interesting. And the pension contribution is required?
Yes

Da5id
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by Da5id » Thu Mar 02, 2017 10:16 am

OP you are saving about 23% of gross earnings (2700/month, 143000 gross including bonus). That is better than most of the country, though not all that high by bogleheads inflated standards. If you consider your job situation to be secure, you might consider dropping some of the 529 and spending a bit more. Unclear the 529 is a great idea anyway (vs, say Roth). That assumes that your other spending can't be trimmed, which I'd guess it always could be...

It is all a question of priorities. While more savings is better to a point, you also should enjoy your life within what is fiscally prudent. Expansion of your luxury costs (vacation/restaurants) can always be cut back if income drops or life throws you a curve ball. You can also upgrade your vacations with credit card bonuses, you likely have enough expenses that meeting the minimum spend is easy (that assumes you have good credit, no problem paying off your credit cards, etc).

Incendiary
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by Incendiary » Thu Mar 02, 2017 11:37 am

Ron Ronnerson wrote:
Incendiary wrote:Interesting. And the pension contribution is required?
Yes
Understand now. Thanks for explaining.

WhiteMaxima
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by WhiteMaxima » Thu Mar 02, 2017 11:39 am

Cooking is fun and cost effective. Learn to cook. Get a National Park Pass and visit often. Camping instead staying in hotel. Have fun doesn't mean spending a lot of money.

delamer
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by delamer » Thu Mar 02, 2017 12:28 pm

sawhorse wrote:
KlangFool wrote:OP,

1) You are "House Poor". After spending $3K per month on the house, it does not matter what else you do. You choose to have the house versus decent vacation and nice restaurant meal.

2) I spend less for my house. Hence, I could save a lot of money plus vacation and nice restaurant meal. This is very common among my peers. They buy a 500K to 600K house. Then, they have to pack their lunches and stop dining at restaurants.

KlangFool
I don't know if this is the OP's situation, but in some places, you literally cannot buy a $500k to $600k home because they're all more expensive.

Like I said, $400k for a 350 sq ft studio apartment in a recent sold listing on Zillow. Over $3k rent for a 1 bedroom apartment.

I don't even have the option of a $3k mortgage because I spend so much on rent that it's impossible to save for a down payment. It took years for my husband to find this job as his work is specialized, and we've looked into moving to a lower cost area but couldn't find a job.

If you have children like the OP does and want them to be in a safe neighborhood with good schools, what are you supposed to do?

I think a lot of people here are out of touch with the housing burden in high cost areas.
I want to second this. Unless you are willing to put up with a very long commute, which can be really detrimental if you have kids, it would be hard to find a single-family house in my area for less than $550K. And that is not for a mini-mansion, but 1,800 square feet, 3/4 bedrooms, two full baths.

But I also agree with the earlier poster who mentioned that life is about trade-offs. If the nice house with a decent commute is important to you, then maybe you don't get to eat out or take nicer vacations.

I have a friend who eats out a lot and probably spends $50 to $75 for her and her SO each time. She drives a Honda. We don't each out much and spend less when we do, but drive luxury cars. We're both financially stable. To each her own.

sawhorse
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by sawhorse » Thu Mar 02, 2017 12:31 pm

Maverick3320 wrote:You're living in a 2+ million dollar home neighborhood (on one income, and with a husband that couldn't find steady work for several years(?)), but you can't move because you can't work and his job is "flexible"? If your spouse is talented enough to be bringing in that kind of income, I'm pretty sure he/she could find work elsewhere. And if you truly are in this situation, realize that you are having to do a lot of explaining for the simple fact that your situation is an outlier, and definitely not the norm.
He makes $130k a year. We rent a 1 bedroom apartment. Owning is out of the question. We can't afford to take a risk on a job that may not work out because I'm unable to work due to a grave disease, and it's rare to find well paying jobs that give so much flexibility in terms of hours. His field of work is very specialized and location specific. He would have to change fields.

Believe me, both of us would rather not live here.

You said I have a lot of explaining to do and am insinuating that I'm lying. What else would you like me to explain? I wish I was lying.

My situation is an outlier in this area as almost all households are dual income. We were dual income too until I became sick. Now our cash flow is negative because of the medical costs. It would make sense to downsize to a studio apartment, but I'm already bedridden most of the time, and to be bedridden in a small studio would be pretty miserable. Most of the rentals here are old walkups, and that wouldn't work for us due to my mobility problems, so we earn less and pay more rent than a healthy couple.
Last edited by sawhorse on Thu Mar 02, 2017 2:42 pm, edited 3 times in total.

sawhorse
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by sawhorse » Thu Mar 02, 2017 12:42 pm

In New York City on average 2/3 of income goes toward rent. These are anything but lavish places. We're talking shared apartments in walkups.

Some places are really really expensive. This thread is fascinating.

viewtopic.php?f=11&t=196038

Grt2bOutdoors
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by Grt2bOutdoors » Thu Mar 02, 2017 12:55 pm

sawhorse wrote:
Maverick3320 wrote:You're living in a 2+ million dollar home neighborhood (on one income, and with a husband that couldn't find steady work for several years(?)), but you can't move because you can't work and his job is "flexible"? If your spouse is talented enough to be bringing in that kind of income, I'm pretty sure he/she could find work elsewhere. And if you truly are in this situation, realize that you are having to do a lot of explaining for the simple fact that your situation is an outlier, and definitely not the norm.
He makes $130k a year. We rent a 1 bedroom apartment. Owning is out of the question. We can't afford to take a risk on a job that may not work out because I'm unable to work due to a grave disease, and it's rare to find well paying jobs that give so much flexibility in terms of hours. His field of work is very specialized and location specific. He would have to change fields.

Believe me, both of us would rather not live here.

You said I have a lot of explaining to do and am insinuating that I'm lying. What else would you like me to explain? I wish I was lying.
Don't feel compelled to respond to those who have zero concept about costs/employment and zero empathy for those where unfortunate circumstances require real sacrifice. You're doing fine and making the best of the hand of cards you are holding. Wish you the best and please don't feed the trolls.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

Grt2bOutdoors
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by Grt2bOutdoors » Thu Mar 02, 2017 12:58 pm

sawhorse wrote:In New York City on average 2/3 of income goes toward rent. These are anything but lavish places. We're talking shared apartments in walkups.

Some places are really really expensive. This thread is fascinating.

viewtopic.php?f=11&t=196038
^^ It could be higher than that, too! Nothing is cheap in NYC or even the surrounding suburbs, if it is it's because you will need to accept one or several undesirable characteristics that most would balk at - poor schools, high crime, bad elements living in the neighborhood, longer than long commute to workplace from home - ride the A train to the end of the line, tell us how long a ride like that is and that is without the incessant train traffic delays.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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knpstr
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by knpstr » Thu Mar 02, 2017 1:13 pm

Your savings is definitely NOT too much.
The most reasonable savings to cut, if you were to do so, would be the 529.
Your retirement is a priority, because shorting yourself here will put the burden on your kids anyway.
Other potential "easy" savings would be to limit the paid activities for kids or perhaps groceries expense.
You need to make a detailed budget at the beginning each month. This is where you'll "find" money being wasted, or allow you to see where you can cut expenses you that are in a lower priority than a vacation.

The fact simply is $130,000 for a family of four isn't a ton of money. You have comfortable life but seek more luxury. So you either have to trade some comforts for luxuries or you need to make more money.

I certainly wouldn't trade retirement savings for luxury. That is a bad trade.

:beer
Very little is needed to make a happy life; it is all within yourself, in your way of thinking. -Marcus Aurelius

sandramjet
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by sandramjet » Thu Mar 02, 2017 1:22 pm

Grt2bOutdoors wrote:
sawhorse wrote:
Maverick3320 wrote:You're living in a 2+ million dollar home neighborhood (on one income, and with a husband that couldn't find steady work for several years(?)), but you can't move because you can't work and his job is "flexible"? If your spouse is talented enough to be bringing in that kind of income, I'm pretty sure he/she could find work elsewhere. And if you truly are in this situation, realize that you are having to do a lot of explaining for the simple fact that your situation is an outlier, and definitely not the norm.
He makes $130k a year. We rent a 1 bedroom apartment. Owning is out of the question. We can't afford to take a risk on a job that may not work out because I'm unable to work due to a grave disease, and it's rare to find well paying jobs that give so much flexibility in terms of hours. His field of work is very specialized and location specific. He would have to change fields.

Believe me, both of us would rather not live here.

You said I have a lot of explaining to do and am insinuating that I'm lying. What else would you like me to explain? I wish I was lying.
Don't feel compelled to respond to those who have zero concept about costs/employment and zero empathy for those where unfortunate circumstances require real sacrifice. You're doing fine and making the best of the hand of cards you are holding. Wish you the best and please don't feed the trolls.
+1

Dottie57
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by Dottie57 » Thu Mar 02, 2017 1:23 pm

saddle_up wrote:Hello all, I am 40 yr old male and I along with my wife part time job (38 yr) earn 130K p.a + 10% Bonus. The issue we have is we hardly save anything for family to earn a decent vacation or a restaurant meals

We term our expense as pretty ordinary with -
401 K (nearing to 18K since we started to save in late 30s) - i.e 1.5k /month with 5 % ESPP to make up for retirement i.e 0.5K/month
529 for 2 kids @ .35k/month/child equalling 0.7k per month
Mortgage and Escrow for 30 yrs @ 3K/month
Credit Card , Utilities, Oil, Gas @ 2.5k/month ( I know this seems high but we have enrolled kids for activities all around the year + after school program + Summer clinics so have put the average per month)
rest goes to federal /state Tax/ssn and medicaid taxes.

Question is am i being too aggressive in my saving, should I curtail down to enjoy life now or should i be worried that the average salary for our household is too low to make any savings. We don't have any inherited monetary support from our ancestors. Please advise.
What area do you live in?

pascal
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by pascal » Thu Mar 02, 2017 1:27 pm

To each his own.

I am surprised people are complaining about 25% of income going towards mortgage - Really?!
About 3 years ago when I was renting 40% of my income was going towards renting a 1 bedroom. Are we all sufficiently outraged?

If I moved to a LCOL I dont know if I would have a job in the same area I worked in and if I did get laid off how many companies in that LCOL would likely hire me?

To the OP: Spending 3k on mortgage seems OK to me. $2500 a month on kids activities might need some tweaking. Also I agree with everyone on the 529 - those are comparatively secondary to you needing vacations or taking the wife out(at least to me!)
"Never underestimate the ability of a bad situation to get worse...rapidly." Ninegrams

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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by Dottie57 » Thu Mar 02, 2017 1:32 pm

sawhorse wrote:
yellowgirl wrote:You make 10k more than us but our house payment is less than $600. We also have 2 kids. We don't take a lot of vacation but we do dining out.
A parking space in New York City, not a luxury lot or anything, is $749 a month. The one across the street is $812.

You can't just look at income.
I guess I think of living in New York city as a luxury. It comes with a lot of upsides, but cost.... I would hate it. So I live in the Midwest.

sawhorse
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by sawhorse » Thu Mar 02, 2017 1:44 pm

sawhorse wrote:
Maverick3320 wrote:You're living in a 2+ million dollar home neighborhood (on one income, and with a husband that couldn't find steady work for several years(?)), but you can't move because you can't work and his job is "flexible"? If your spouse is talented enough to be bringing in that kind of income, I'm pretty sure he/she could find work elsewhere. And if you truly are in this situation, realize that you are having to do a lot of explaining for the simple fact that your situation is an outlier, and definitely not the norm.
He makes $130k a year. We rent a 1 bedroom apartment. Owning is out of the question. We can't afford to take a risk on a job that may not work out because I'm unable to work due to a grave disease, and it's rare to find well paying jobs that give so much flexibility in terms of hours. His field of work is very specialized and location specific. He would have to change fields.

Believe me, both of us would rather not live here.

You are insinuating that I'm lying. What else would you like me to explain? I wish I was lying.

My situation is an outlier in this area as almost all households are dual income. We were dual income too until I became sick. Now our cash flow is negative because of the medical costs. It would make sense to downsize to a studio apartment, but I'm already bedridden most of the time, and to be bedridden in a small studio would be pretty miserable. Most of the rentals here are old walkups, and that wouldn't work for us due to my mobility problems, so we earn less and pay more rent than a healthy couple.
Perhaps I've been too negative on this thread. One positive is access to some medical research centers so we don't have to travel for hours for medical treatment. My husband can go to work early, leave to take me to the hospital or doctor, and go back to work. He does this at least once a week. Those days are exhausting for him, but he doesn't have to take the whole day off because both his job and the medical centers are close enough. This is why we live in a more expensive zip code; his commute is half an hour each way at the very most. The treatment center we most often visit is 35 minutes away. We have to travel every few months for treatment that requires overnight stays of up to 1 week, so it's important for him to be able to use his vacation days for that.

Although I haven't been accepted for a clinical trial yet, the fact that I live locally improves my chances of one.

randomguy
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by randomguy » Thu Mar 02, 2017 1:48 pm

pascal wrote:To each his own.

I am surprised people are complaining about 25% of income going towards mortgage - Really?!
About 3 years ago when I was renting 40% of my income was going towards renting a 1 bedroom. Are we all sufficiently outraged?

If I moved to a LCOL I dont know if I would have a job in the same area I worked in and if I did get laid off how many companies in that LCOL would likely hire me?

To the OP: Spending 3k on mortgage seems OK to me. $2500 a month on kids activities might need some tweaking. Also I agree with everyone on the 529 - those are comparatively secondary to you needing vacations or taking the wife out(at least to me!)
The percentages are just BS. Compare 2 renters. Who would you rather be
Make 10k, pay 4k in tend, 2k in taxes, and have 4k to spend else
Make 2k, pay 500 in rent, 0k in taxes, and have 1.5k to spend on everything else

As your income goes up you end stop spending on neccessities ( i.e. 500 dollars on food) and more on luxuries (you spend a 1000 on food).

In this case the OP is saving a lot
18k in a 401(k)
6k in a ESPP
9k in 529

That is a 25% savings rate not including money being saved in the house (probably another 12k+/year at todays rates). Cut the savings back to 15% and you have another 10+ to spend. Or split the difference and sell the ESPP shares when they vest,

Or if you want a high savings rate, get a cheaper house.

pascal
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by pascal » Thu Mar 02, 2017 2:02 pm

randomguy wrote: The percentages are just BS. Compare 2 renters. Who would you rather be
Make 10k, pay 4k in tend, 2k in taxes, and have 4k to spend else
Make 2k, pay 500 in rent, 0k in taxes, and have 1.5k to spend on everything else

As your income goes up you end stop spending on neccessities ( i.e. 500 dollars on food) and more on luxuries (you spend a 1000 on food).

In this case the OP is saving a lot
18k in a 401(k)
6k in a ESPP
9k in 529

That is a 25% savings rate not including money being saved in the house (probably another 12k+/year at todays rates). Cut the savings back to 15% and you have another 10+ to spend. Or split the difference and sell the ESPP shares when they vest,

Or if you want a high savings rate, get a cheaper house.
Agree completely.
"Never underestimate the ability of a bad situation to get worse...rapidly." Ninegrams

alfaspider
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by alfaspider » Thu Mar 02, 2017 2:03 pm

Ron Ronnerson wrote:
I'm at the very top of the 15% tax bracket. Any additional money would be taxed at 25%. State tax rate is 8%. I contribute 10.25% toward a pension. Our AGI is at $110,000. Any additional income would mean we'd be in the phaseout for the child tax credit (so effectively a 5% tax increase). I pay 1.45% for medicare as well. This up to 49.7%.
Your state taxes are deductible against your federal taxes (I assume you itemize if you own the townhouse). Pension contributions aren't taxes. Your real marginal rate is in the 30s.

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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by Grt2bOutdoors » Thu Mar 02, 2017 2:13 pm

Dottie57 wrote:
sawhorse wrote:
yellowgirl wrote:You make 10k more than us but our house payment is less than $600. We also have 2 kids. We don't take a lot of vacation but we do dining out.
A parking space in New York City, not a luxury lot or anything, is $749 a month. The one across the street is $812.

You can't just look at income.
I guess I think of living in New York city as a luxury. It comes with a lot of upsides, but cost.... I would hate it. So I live in the Midwest.
Grew up in NYC - look past the facade, the vast majority of the population is hanging on by a thread - there are 9 million people living in Manhattan and the surrounding 4 boroughs. There are homes and I mean homes built in the 1940's right after the War, less than 1800 sq ft, in need of a major face-lift selling for 750K+. Average income in NYC is like $60K - a one bedroom apartment in the outer boroughs goes for $1500+. There is nothing luxurious about the Bronx, Queens, Brooklyn (unless you are living in DUMBO where a loft will run you $4K a month) even some of the newer upcoming neighborhoods like Ft. Greene (20 years ago you'd risk your life if you went into that neighborhood during the light of day) that now are being gentrified and will run you thousands to rent per month (can't vouch for safety at night, adjacent neighborhoods are still quite rough). Staten Island? - the natives there call it Stinkin Island or Sit in the Island (because when you get in your car or on the bus, you just sit and sit in traffic and it is not a big place, and there is a drug epidemic on that island). It takes two incomes to live in NYC and then some. It's no joke. To move to a lower cost area means risking your safety or jacking up your monthly commuting times and costs - public transportation is expensive, driving a car into and out of the city, even more so.
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by stoptothink » Thu Mar 02, 2017 2:18 pm

Grt2bOutdoors wrote:
Dottie57 wrote:
sawhorse wrote:
yellowgirl wrote:You make 10k more than us but our house payment is less than $600. We also have 2 kids. We don't take a lot of vacation but we do dining out.
A parking space in New York City, not a luxury lot or anything, is $749 a month. The one across the street is $812.

You can't just look at income.
I guess I think of living in New York city as a luxury. It comes with a lot of upsides, but cost.... I would hate it. So I live in the Midwest.
Grew up in NYC - look past the facade, the vast majority of the population is hanging on by a thread - there are 9 million people living in Manhattan and the surrounding 4 boroughs. There are homes and I mean homes built in the 1940's right after the War, less than 1800 sq ft, in need of a major face-lift selling for 750K+. Average income in NYC is like $60K - a one bedroom apartment in the outer boroughs goes for $1500+. There is nothing luxurious about the Bronx, Queens, Brooklyn (unless you are living in DUMBO where a loft will run you $4K a month) even some of the newer upcoming neighborhoods like Ft. Greene (20 years ago you'd risk your life if you went into that neighborhood during the light of day) that now are being gentrified and will run you thousands to rent per month (can't vouch for safety at night, adjacent neighborhoods are still quite rough). It takes two incomes to live in NYC and then some. It's no joke. To move to a lower cost area means risking your safety or jacking up your monthly commuting times and costs - public transportation is expensive, driving a car into and out of the city, even more so.
My sister moved here (Utah) about 6-months ago after spending the last 7yrs in NYC. These words could have come from her mouth. She was making decent money as an archivist at NYU (~$70k/yr), but to afford her 2bdr apartment that she shared with 3 other single people, she also took on a 2nd job working at a bakery. And she says that is just what people do there. Moderately successful professional young adults, looking for 2nd jobs just to help with rent. And she has recently been talking about moving back. No thank you.

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Pajamas
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by Pajamas » Thu Mar 02, 2017 2:37 pm

saddle_up wrote: Credit Card , Utilities, Oil, Gas @ 2.5k/month ( I know this seems high but we have enrolled kids for activities all around the year + after school program + Summer clinics so have put the average per month)
From the little information you have provided, you could probably cut back on a lot of things and spend more carefully while improving your lifestyle. Most people don't really know where their money goes and your summation of $2.5k a month for a broad category of everything except for major expenses makes me think that is probably true for you, too.

If you are like most families, you have closets full of clothes you don't ever wear, the kids have tons of toys they never play with, and when you go to the grocery store you are short on time and energy and just grab things and put them in your basket and a lot of the food ends up in the garbage.

Best thing you could do is carefully look at where your money is going in an organized and detailed manner for a few months to really understand what you are spending and how you are spending it.

The easiest way to cut back on your spending is to not buy anything. Your family could probably go three months without buying any clothes at all, for instance.

You can also look at spending less on fixed expenses, such as refinancing your mortgage, changing to less expensive cable and telephone plans, decreasing utilities through switching to LED bulbs, keeping the house a couple of degrees cooler in the winter and warmer in the summer, etc. If you are carrying any debt other than your mortgage you should look at eliminating that, switch to a credit card with a higher bonus, plan menus around what's on sale at the grocery store, etc.

If you trim just 3% off the $2.5k you spend on credit cards, that would be $75, which would be a basic meal for your family in a casual restaurant.

But the first thing you need to do is look at your spending in detail and see where your money is actually going.

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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by Ron Ronnerson » Thu Mar 02, 2017 2:57 pm

alfaspider wrote:
Ron Ronnerson wrote:
I'm at the very top of the 15% tax bracket. Any additional money would be taxed at 25%. State tax rate is 8%. I contribute 10.25% toward a pension. Our AGI is at $110,000. Any additional income would mean we'd be in the phaseout for the child tax credit (so effectively a 5% tax increase). I pay 1.45% for medicare as well. This up to 49.7%.
Your state taxes are deductible against your federal taxes (I assume you itemize if you own the townhouse). Pension contributions aren't taxes. Your real marginal rate is in the 30s.
It was perhaps a crude way to say that if I earned an additional $18k gross from my job, I'd end up with about $9k in my pocket to spend on next year's vacation and meals at my favorite restaurants in the year ahead.
Last edited by Ron Ronnerson on Thu Mar 02, 2017 2:59 pm, edited 1 time in total.

AZAttorney11
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by AZAttorney11 » Thu Mar 02, 2017 2:59 pm

It's the mortgage. Your mortgage is 25.2% of your gross annual income (including the bonus). For some perspective, our mortgage payment (including taxes and insurance) is only 6.4% of gross income.

I understand if you want the nice house in a nice neighborhood with good schools for the kids, but $143,000 for a family four, especially depending on where you live, isn't that much money. Don't get me wrong, it's nothing to sneeze at and you'll enjoy an upper middle class lifestyle, but like another poster said you can't have everything you want at your income level without substantial assets that can fund the shortfall.

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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by Onion » Thu Mar 02, 2017 3:41 pm

Some areas to cut costs:

1.) Keep your childrens' activities simple. Allow them to pick one thing a season as an extracurricular activity.
2.) Cell Phone: Look into Cricket Wireless (AT&T) for cell phone service. We have plans that are $35/month with unlimited everything (high speed capped, though).
3.) Cable/Internet: Contact your current cable/internet provider to see if they have any cheaper options. Or, if after calling, there aren't, go online and see what is available on their website. If you can change providers, try doing so at a cheaper rate. Hassle? Yes. Worth it? YES! We only have ONE provider in our area. We tried for 6-8 months to change our cable/internet plan and could not get cheaper service. We went online a few weeks ago and found they changed their platform and now we pay $30 less because we could do the changes online. So, my point is, if you can't change right now, keep trying.
4.) Changing Car and/or Home Insurance: This has saved us a lot of money over the years. Again, a small hassle, but we've saved $200-300/year in changing our insurance company yearly or every-other-year.
5.) Depending on where you want to eat, check online for discount gift cards. Yes, these will be for chain restaurants (including Ruth's Chris or others in this range), but there may be a place you like that has a discounted gift card. Or, if you want a family friendly place, check Groupon.

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HomerJ
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by HomerJ » Thu Mar 02, 2017 4:15 pm

pascal wrote:If I moved to a LCOL I dont know if I would have a job in the same area I worked in and if I did get laid off how many companies in that LCOL would likely hire me?
FYI, when we say LCOL, we're taking Midwest cities like St. Louis or Kansas City with 2 or 3 million residents. There's plenty of jobs.

We're not talking about one stop-light towns. (Those are the VLCOL areas).

I'm in IT, and I make about 30% less than I could on the coasts. But my housing costs are 75% less, so it's a pretty good trade-off.

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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by fishmonger » Thu Mar 02, 2017 5:03 pm

Maybe a post for a different thread, but I don't understand why anyone would live and work in NYC unless you are in finance and have to be there. I went to school at Syracuse and a number of my classmates moved there. A decade later, most have soul crushing commutes or live in small, cramped apartments or townhouses. Many can't have kids or are just "stuck" there. Staying because of the "culture and nightlife" gets old real fast.

There are plenty of major cities where you can make a stellar living and buy a great house with plenty to spare

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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by Trev H » Thu Mar 02, 2017 5:30 pm

The things you really want to accomplish.. you really just have to make them a priority.

You have heard the old saying ... pay yourself first. If you don't - no one else will.

Or in other words you have to save it and have to make it a priority to do so. If you don't no one will. Also if you don't save it, it will get spent. What you do not purposely set aside and save always seems to get consumed by all of the other activities that you do.

If you can send money from your check to a savings account thru payroll... have it deducted and sent direct to savings.
If you can't do that then you could setup a automatic transfer from your bank account to savings for the amount you want to dedicate to vacation or eating out.

Let it be just like any other bill that you pay on a regular basis, but make it automatic, a draft or transfer that just happens.

Budgeting is good... but you still have to have the discipline to stick to the budget.

A payroll check deduction, or auto transfer to savings... (once you get used to it)... is something you will adjust to spending wise and not have to worry about making the decision, or remaining dedicated enough to do it - as is with budget items.

When you do get Raises - that is a excellent time to up the savings - dedicate part or all of the raise to this new thing you are saving for.

Good Luck !

Trev H

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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by fareastwarriors » Thu Mar 02, 2017 6:42 pm

fishmonger wrote:Maybe a post for a different thread, but I don't understand why anyone would live and work in NYC unless you are in finance and have to be there. I went to school at Syracuse and a number of my classmates moved there. A decade later, most have soul crushing commutes or live in small, cramped apartments or townhouses. Many can't have kids or are just "stuck" there. Staying because of the "culture and nightlife" gets old real fast.

There are plenty of major cities where you can make a stellar living and buy a great house with plenty to spare
NYC, SF/California...
"Nobody goes there anymore. It’s too crowded."

blinx77
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by blinx77 » Thu Mar 02, 2017 9:03 pm

In my neighborhood a split level from the 1950s that is less than 2,000 sf will run you more than 800k.

I live in the 36th wealthiest zip in the MSA. So nice, but definitely not where the rich and famous are hanging out.

Taxes are high too.

If you work downtown and want to pay less, you need to up your commute to the 1hr mark or gamble on low performing schools.

If you want to pay less than $500k and need more than a two bedroom apartment, you might have to do both.

fishmonger
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by fishmonger » Fri Mar 03, 2017 10:03 am

fareastwarriors wrote:
fishmonger wrote:Maybe a post for a different thread, but I don't understand why anyone would live and work in NYC unless you are in finance and have to be there. I went to school at Syracuse and a number of my classmates moved there. A decade later, most have soul crushing commutes or live in small, cramped apartments or townhouses. Many can't have kids or are just "stuck" there. Staying because of the "culture and nightlife" gets old real fast.

There are plenty of major cities where you can make a stellar living and buy a great house with plenty to spare
NYC, SF/California...
"Nobody goes there anymore. It’s too crowded."
At least in San Fran/California the weather is great!

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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by Grt2bOutdoors » Fri Mar 03, 2017 10:23 am

fishmonger wrote:
fareastwarriors wrote:
fishmonger wrote:Maybe a post for a different thread, but I don't understand why anyone would live and work in NYC unless you are in finance and have to be there. I went to school at Syracuse and a number of my classmates moved there. A decade later, most have soul crushing commutes or live in small, cramped apartments or townhouses. Many can't have kids or are just "stuck" there. Staying because of the "culture and nightlife" gets old real fast.

There are plenty of major cities where you can make a stellar living and buy a great house with plenty to spare
NYC, SF/California...
"Nobody goes there anymore. It’s too crowded."
At least in San Fran/California the weather is great!
Last week it was 71 degrees and sunny in NYC. Today's it's 28 degrees and they are talking snow.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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ERMD
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by ERMD » Fri Mar 03, 2017 1:38 pm

i'll echo two things:

1) we live in a HCOL area, where our 1000 sqft, 100 year old house cost 500k. "just move" is not particularly helpful advice for people in this scenario.

2) vacations? credit card sign-up bonuses. look at blogs like million mile secrets, or the points guy. build your credit slowly. track your expenses, pay off your bills in full each month. the reward is round-trip tickets to virtually anywhere you'd want to visit, free hotel rooms, lounge access, etc. you can travel relatively extravagantly on Chase's dime.
between scotch and nothing, i'll take scotch. -- faulkner

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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by livesoft » Fri Mar 03, 2017 1:40 pm

We may never know why the OP can't save enough.
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rralex1
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by rralex1 » Fri Mar 03, 2017 1:54 pm

Grt2bOutdoors wrote:
SamB wrote:I am 70 years old, and I am sure glad that when I was 40 we went camping for vacation, and the restaurant meals fell into the category of almost never. In fact, since both my wife and I cook, restaurants are one perpetual disappointment.

Looked at from a financial perspective, life is one big trade off between present and future consumption. Be very careful about what you consider "decent" present consumption, especially if it is discretionary.

Here is an example for you. My wife's parents were immigrants from eastern Europe after WWII. It was leave or die. They settled in Chicago, about three miles from a steel mill. Her father got a job as a laborer at the mill. It was unionized, and the mill was at full capacity his whole career.

Her parents managed to pay for a modest house, and I mean completely pay off the mortgage, send both their children to college, one to the U of Chicago, and there were no scholarships. They did not own a car, and her father took the bus to work. When they both passed away their assets consisted of the house, $30K in US savings bonds, and $80K in a time savings account.

They were losers, right? Never went out to eat, and they did not comprehend what a vacation was. And they cerntainly never ventured into the equity markets or knew the least thing about finance or economics. Or did they? You decide.
That's a rare and winning combination. Kudos to your in-laws.
+1 :thumbsup

Wellfleet
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by Wellfleet » Fri Mar 03, 2017 2:12 pm

It's definitely about priorities and some good luck like avoiding major illness, job loss, etc.

I have three family/friends who I admire financially. None ate ramen for the last 40 years or avoided going out but did choose to avoid some of the trappings related to their upper middle class/upper class position. One has owned a boat with a financial partner for a long time. One travels extensively and one has a -gasp- pool! and drives Lexuses.

All passed on vacation homes while many peers own them. All stayed married to same spouse. All owned only one or two homes. All drove/drive non-luxury cars until they could pay cash or didn't care about a lease.

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HomerJ
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by HomerJ » Fri Mar 03, 2017 2:17 pm

ERMD wrote:we live in a HCOL area, where our 1000 sqft, 100 year old house cost 500k. "just move" is not particularly helpful advice for people in this scenario.
If you have family and long-term friends in an area, I understand why you want to stay.

If you don't, "just move" is excellent advice. I don't mean tomorrow, but you can certainly start looking for other jobs in other areas.

Americans used to be a lot more mobile. Nowadays, not as much, and it's hurting the economy. There are jobs available in some states, and in other states, people just sit there and complain they can't find jobs.

People in the past moved to get good jobs. There were huge migrations from the South to the northern cities to find good manufacturing jobs. Now people just want to sit in their hometown, and complain that the jobs aren't coming to them.

If housing is stupid expensive, moving IS an option... Wouldn't it be nice to have a 10-year home with 3000 square feet that only costs $300k?

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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by jharkin » Fri Mar 03, 2017 3:47 pm

sawhorse wrote:[
I don't know if this is the OP's situation, but in some places, you literally cannot buy a $500k to $600k home because they're all more expensive.

Like I said, $400k for a 350 sq ft studio apartment in a recent sold listing on Zillow. Over $3k rent for a 1 bedroom apartment.

I don't even have the option of a $3k mortgage because I spend so much on rent that it's impossible to save for a down payment. It took years for my husband to find this job as his work is specialized, and we've looked into moving to a lower cost area but couldn't find a job.

If you have children like the OP does and want them to be in a safe neighborhood with good schools, what are you supposed to do?

I think a lot of people here are out of touch with the housing burden in high cost areas.

But on the flip side - a lot of people in the UHCOL areas (And someplace where a studio is 500k is Ultra, not just high) are often out of touch to how different they are form everywhere else. I live in a HCOL (Boston) and I can get a 4 bedroom house in a reasonable drive to the city under $500k. You can get under $400k if you are willing to put up with a 1hr commute.


The other thing is that areas where housing is so expensive also tend to have ridiculous salaries. Like the posters on this board who are computer programmers in silicon valley and report making salaries that only senior executives and CEO's make everywhere else.

My point is... The OP is 40-ish and making 130k? Then he is not likely in an UHCOL area.

majiaknight
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by majiaknight » Fri Mar 03, 2017 4:17 pm

IMO your saving rate and spending both look good. I'm still learning how to enjoy restaurant meals w/ my little kid, so this is not a must-have in my case. :oops:

For decent vacation, I think all you need is to spend a couple of weekends each year to sign up great credit card bonus and start earning points w/ your everyday spending. My family had several long weekend travels every year and we used all points to pay for hotel stays and flights. FYI as of today just my CHASE Ultimate Rewards alone has ~350K points which are worth ~$5,200 towards travel when booking through Ultimate Rewards w/ my new CHASE RESERVE credit card. :beer

Check these two blogs and you will find out how to do it w/ little effort:
http://thepointsguy.com/
http://millionmilesecrets.com/

finite_difference
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by finite_difference » Fri Mar 03, 2017 5:59 pm

majiaknight wrote:IMO your saving rate and spending both look good. I'm still learning how to enjoy restaurant meals w/ my little kid, so this is not a must-have in my case. :oops:

For decent vacation, I think all you need is to spend a couple of weekends each year to sign up great credit card bonus and start earning points w/ your everyday spending. My family had several long weekend travels every year and we used all points to pay for hotel stays and flights. FYI as of today just my CHASE Ultimate Rewards alone has ~350K points which are worth ~$5,200 towards travel when booking through Ultimate Rewards w/ my new CHASE RESERVE credit card. :beer

Check these two blogs and you will find out how to do it w/ little effort:
http://thepointsguy.com/
http://millionmilesecrets.com/
I agree. I think bogleheads tend to have high salaries and live in LCOL areas.

$2.5k monthly n CC spending is not a lot considering you have 2 kids and need to eat. Just food can be like half of that.

My parents property tax was $20k/year alone. Sometimes you can't move because it will mean a longer commute, an unsafe area, or bad schools. Or maybe you like where you live. My parents eventually sold their house and I think they at least broke even on thanks to appreciation, even with mortgage interest taken into account. Maybe not after taking maintenance expenses into account but you gotta live somewhere. (And there's a small mortgage interest tax break.)

I think you could consider to cut back a little bit on 529 saving and budget that toward vacation. That with the CC awards should get you a nice trip. Your kids can take out student loans which you can pay or you can cash flow their school. You don't want to overfund their 529. Also shop around for hotel deals, search eBay to rent someone's unused timeshare or check AirBnB.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh

sawhorse
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by sawhorse » Fri Mar 03, 2017 6:34 pm

jharkin wrote:The other thing is that areas where housing is so expensive also tend to have ridiculous salaries. Like the posters on this board who are computer programmers in silicon valley and report making salaries that only senior executives and CEO's make everywhere else.

My point is... The OP is 40-ish and making 130k? Then he is not likely in an UHCOL area.
No. Just no.

Look at this article.

New York City, which is the second highest city behind San Francisco, has an average rent for a 2 bedroom apartment of $3692. The median household income as of five years ago was $50,711.

I can count on my fingers the number of families I know with a 2 bedroom apartment. I know plenty of people who live in one with roommates.

Admittedly, those numbers for NYC don't really paint a good picture because there is immense variation in both income and rent. The second link has some information about that. In Manhattan, where a little less than 20% live, the average per capita income is over $144k a year. In all the other boroughs, the average is less than $50k. Details here.

sawhorse
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by sawhorse » Fri Mar 03, 2017 6:49 pm

blinx77 wrote:If you work downtown and want to pay less, you need to up your commute to the 1hr mark or gamble on low performing schools.
A lot of the higher income employees in New York City live in suburbs in New Jersey with good schools. 90-120 minutes is a very standard commute. You have to drive to the train station, wait for the train, ride the train sometimes changing trains once (the trains are scheduled so that people changing usually only wait a few minutes), wait for the subway when you arrive in the city, ride the subway, get off the subway, and walk to the office. Those working downtown may take the train to Hoboken and then the PATH to downtown instead of the train to Penn Station and the subway.

The nice thing is that the commute actually is quite tolerable because the bulk of the time is spent on the train where everyone sleeps. The last stop is Penn Station or Hoboken, so you can't oversleep on your way to work. On the other hand, a lot of people have overslept going back at least once :D

It's completely incomparable to driving; you often arrive at work more refreshed than when you left your house.

As a result, the highest price suburbs are the ones with direct trains into New York. There are neighboring suburbs with equally good schools but lower real estate because there is no train station.

RoadHouseFan
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by RoadHouseFan » Fri Mar 03, 2017 7:46 pm

We save up and only go to fancy restaurants like Olive Garden once a month.

cherijoh
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Re: Why can't I save enough to have decent vacation or restaurant meal

Post by cherijoh » Fri Mar 03, 2017 9:17 pm

saddle_up wrote:Hello all, I am 40 yr old male and I along with my wife part time job (38 yr) earn 130K p.a + 10% Bonus. The issue we have is we hardly save anything for family to earn a decent vacation or a restaurant meals

We term our expense as pretty ordinary with -
401 K (nearing to 18K since we started to save in late 30s) - i.e 1.5k /month with 5 % ESPP to make up for retirement i.e 0.5K/month
529 for 2 kids @ .35k/month/child equalling 0.7k per month
Mortgage and Escrow for 30 yrs @ 3K/month
Credit Card , Utilities, Oil, Gas @ 2.5k/month ( I know this seems high but we have enrolled kids for activities all around the year + after school program + Summer clinics so have put the average per month)
rest goes to federal /state Tax/ssn and medicaid taxes.

Question is am i being too aggressive in my saving, should I curtail down to enjoy life now or should i be worried that the average salary for our household is too low to make any savings. We don't have any inherited monetary support from our ancestors. Please advise.
That is the oddest budget accounting that I have ever seen. How did credit card get lumped in with utilities, oil, and gas?

IMO, you aren't being too aggressive on saving for retirement - especially for someone who only started gearing up to save for retirement in the last few years. According to one rule of thumb, saving of around 15% of gross salary starting at 25, will give you a comfortable retirement at 65 for someone with your family's income. (Lower income families can expect to get a higher % of their retirement budget from SS and thus don 't need to save as much). But the later you start saving, the higher your savings rate needs to be to catch up. You might find this article of interest for benchmarking purposes.

IMO you are simply spending too much money elsewhere to have money left over for a vacation or an evening out. All those kids activities plus your high mortgage expenses are eating up whatever discretionary income you would have for vacations, etc. Remember, every lifestyle choice you make - including how much you spend on your house - has consequences.

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