Bought house six months ago - now feeling like we're treading water and can't save money

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stoptothink
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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by stoptothink » Tue Mar 20, 2018 8:16 am

mouses wrote:
Tue Mar 20, 2018 6:40 am
dm200 wrote:
Sat Mar 17, 2018 4:18 pm
Happy wife, happy life.
:happy
My least favorite expression on these boards. Rewrite it as keep the self centered, not too smart little woman happy, or she'll make your life miserable. How does that sound?
+10000000000...although I'd definitely reword the 2nd sentence.

LiterallyIronic
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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by LiterallyIronic » Tue Mar 20, 2018 9:11 am

mouses wrote:
Tue Mar 20, 2018 6:40 am
dm200 wrote:
Sat Mar 17, 2018 4:18 pm
Happy wife, happy life.
:happy
My least favorite expression on these boards. Rewrite it as keep the self centered, not too smart little woman happy, or she'll make your life miserable. How does that sound?
You're weird. :shock:

I would expect my wife to say, "Happy husband, happy life." But since I'm the husband, my focus is on her. I would expect both of us to make the other one a priority in life. I would expect both of us to know that making each other happy will also make ourselves happy through an improved quality of family life.

But if you want to infer something sexist, be my guest.

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buccimane
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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by buccimane » Tue Mar 20, 2018 9:19 am

BuckyBadger wrote:
Mon Mar 19, 2018 11:13 am
And secondly, I'm curious as to which $1,000 beater with no working windows that you're driving your baby around in? I would recommend that you replace at least one car with something that has at least a modicum of modern safety. It doesn't matter how good a driver you are - it only matters how mad everyone else is. You need a car with airbags (more than just front) and things like ABS and crumple zones. It doesn't have to be expensive or new, but driving around something dangerous and unreliable is false economy.
This was the main concern I noticed when reading through the thread.. You can be the most defensive driver in the world, but that doesn't stop others from drinking/texting and driving.
A man convinced against his will is of the same opinion still

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teen persuasion
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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by teen persuasion » Tue Mar 20, 2018 9:37 am

986racer wrote:
Sun Mar 18, 2018 9:07 am
LiterallyIronic wrote:
Sat Mar 17, 2018 4:40 pm
Breaking down my semi-monthly paycheck:
Gross: $2,645.83
Federal Income Tax: $142.51 (5.4%)
Social Security: $163.86 (6.2%)
Medicare: $38.33 (1.4%)
Utah State Income Tax: $110.84 (4.2%)
Definitely check out your expected tax liability with the 2018 tax law changes.

The basic math looks like this
  • Annual gross salary : 63500
  • Annual 401k contributions : $3600
  • Standard deduction: 24000
  • AGI ((63500 - 3600) - 24000): 35900
  • Tax on 35900 (1905 + 12% of amount over 19050): 3927
  • Child tax credit: 2000
  • Saver's credit: 400
  • Total due: 1527
  • Amount that should be withheld each paycheck: 63.63
I think you could be seeing an extra 78.88 each paycheck, for a total of 1893 for the year. To be fair though, you would see this money anyhow when you file taxes next year.
There's also $300/month to his 401k. That should drop his AGI low enough to qualify for the Retirement Saver's credit at 10% * 2 (assuming they are funding 2 Roth IRAs at the stated level of savings). Changes as above, although OP has already paid in probably $700 in federal taxes to date.

mak1277
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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by mak1277 » Tue Mar 20, 2018 9:47 am

I haven't read all of this, but my thoughts:

1) stop the extra mortgage payment
2) stop/reduce retirement contributions

Being "401k poor" is no different than being "house poor". Being forced to sacrifice or stress because of retirement savings just doesn't seem like a move that's worth making.

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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by Darth Xanadu » Tue Mar 20, 2018 9:51 am

I won't comment on the specifics, since there are already dozens of good ideas folks have shared. I'll just say that the fact that you track your expenses to this level of detail puts you in a great position to make the necessary adjustments. I wish I had your commitment to budgeting, well done!
My friends said stick to your guns, but instead I just got stuck.

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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by 3CT_Paddler » Tue Mar 20, 2018 9:54 am

It's amazing to me all of the negative reactions on here to a religious tithe. For someone who feels called to tithe, there are things more important than the accumulation of personal wealth. You won't take any of it with you.

OP, you are doing a great job of tracking your expenses. You are putting a lot of money away in your Roth, and that will act as a pseudo emergency fund. Look for ways to supplement income and grow that piece of the pie. Keep growing your skillset.

This board is sometimes blind to the fact that for a lot of people where the second income in the family does not make north of $30-40k, childcare expenses make both parents working a break even affair. That can make things tight and high savings goal nearly impossible.

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teen persuasion
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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by teen persuasion » Tue Mar 20, 2018 9:56 am

mak1277 wrote:
Tue Mar 20, 2018 9:47 am
I haven't read all of this, but my thoughts:

1) stop the extra mortgage payment
2) stop/reduce retirement contributions

Being "401k poor" is no different than being "house poor". Being forced to sacrifice or stress because of retirement savings just doesn't seem like a move that's worth making.
I disagree with your #2 - OP is only contributing $3600/year to his 401k. The bulk of his retirement contributions are going to Roth IRAs. In a tight spot, they can withdraw contributions from the Roth IRAs, so those savings are not as inaccessible.

mak1277
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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by mak1277 » Tue Mar 20, 2018 10:06 am

teen persuasion wrote:
Tue Mar 20, 2018 9:56 am
mak1277 wrote:
Tue Mar 20, 2018 9:47 am
I haven't read all of this, but my thoughts:

1) stop the extra mortgage payment
2) stop/reduce retirement contributions

Being "401k poor" is no different than being "house poor". Being forced to sacrifice or stress because of retirement savings just doesn't seem like a move that's worth making.
I disagree with your #2 - OP is only contributing $3600/year to his 401k. The bulk of his retirement contributions are going to Roth IRAs. In a tight spot, they can withdraw contributions from the Roth IRAs, so those savings are not as inaccessible.
I guess my point is that I wouldn't contribute anything to either until I had an emergency fund I was comfortable with and until I was feeling non-stressed about my monthly expenses.

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buccimane
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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by buccimane » Tue Mar 20, 2018 10:30 am

3CT_Paddler wrote:
Tue Mar 20, 2018 9:54 am
This board is sometimes blind to the fact that for a lot of people where the second income in the family does not make north of $30-40k, childcare expenses make both parents working a break even affair. That can make things tight and high savings goal nearly impossible.
This is true, but that equation doesn't take into account career advancement. While they may be making 20/30/40k when the child is born, that number can change significantly in ~5 years.

That is just some food for thought, because I know people also value raising their own children 100% of the time during this stage.
A man convinced against his will is of the same opinion still

mortfree
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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by mortfree » Tue Mar 20, 2018 10:54 am

buccimane wrote:
Tue Mar 20, 2018 10:30 am
3CT_Paddler wrote:
Tue Mar 20, 2018 9:54 am
This board is sometimes blind to the fact that for a lot of people where the second income in the family does not make north of $30-40k, childcare expenses make both parents working a break even affair. That can make things tight and high savings goal nearly impossible.
This is true, but that equation doesn't take into account career advancement. While they may be making 20/30/40k when the child is born, that number can change significantly in ~5 years.

That is just some food for thought, because I know people also value raising their own children 100% of the time during this stage.
Additional thought, some people have occupations where the salary ceiling is 30-40k

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buccimane
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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by buccimane » Tue Mar 20, 2018 11:21 am

mortfree wrote:
Tue Mar 20, 2018 10:54 am
buccimane wrote:
Tue Mar 20, 2018 10:30 am
3CT_Paddler wrote:
Tue Mar 20, 2018 9:54 am
This board is sometimes blind to the fact that for a lot of people where the second income in the family does not make north of $30-40k, childcare expenses make both parents working a break even affair. That can make things tight and high savings goal nearly impossible.
This is true, but that equation doesn't take into account career advancement. While they may be making 20/30/40k when the child is born, that number can change significantly in ~5 years.

That is just some food for thought, because I know people also value raising their own children 100% of the time during this stage.
Additional thought, some people have occupations where the salary ceiling is 30-40k
Agreed, in the big picture.

While nothing is certain, it is a fair assumption that the OP's wife has not hit the salary ceiling working 37.5 hours a week at $12.50/hr.

In the event that those numbers are indeed the ceiling, it is obvious that SAHM is the best option.
A man convinced against his will is of the same opinion still

LiterallyIronic
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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by LiterallyIronic » Tue Mar 20, 2018 11:40 am

buccimane wrote:
Tue Mar 20, 2018 9:19 am
BuckyBadger wrote:
Mon Mar 19, 2018 11:13 am
And secondly, I'm curious as to which $1,000 beater with no working windows that you're driving your baby around in? I would recommend that you replace at least one car with something that has at least a modicum of modern safety. It doesn't matter how good a driver you are - it only matters how mad everyone else is. You need a car with airbags (more than just front) and things like ABS and crumple zones. It doesn't have to be expensive or new, but driving around something dangerous and unreliable is false economy.
This was the main concern I noticed when reading through the thread.. You can be the most defensive driver in the world, but that doesn't stop others from drinking/texting and driving.
Since you're the second one to ask, the baby rides around in the 2001 Toyota Corolla. The seatbelts in the backseat of the 2001 Dodge Stratus don't lock into place, so it doesn't really work with a carseat. I thought ABS and crumple zones were a thing for a long time now. Airbags somewhere other than the front? Like where? In the back of the frontseats?
Darth Xanadu wrote:
Tue Mar 20, 2018 9:51 am
I'll just say that the fact that you track your expenses to this level of detail puts you in a great position to make the necessary adjustments. I wish I had your commitment to budgeting, well done!
Thank you!
buccimane wrote:
Tue Mar 20, 2018 11:21 am
While nothing is certain, it is a fair assumption that the OP's wife has not hit the salary ceiling working 37.5 hours a week at $12.50/hr.
At her (former) place of employment, unless she got into management - which I would imagine she'd hate doing - that's bumping up against the limit, I would think. She essentially worked on an assembly line. She started at about $9/hour, if I recall correctly. I don't know how much higher they could go beyond $12.50/hour while still turning a profit.

I think Costco and Hobby Lobby start at a higher rate than that, and I believe they actually provide benefits, so maybe she could go that route when the kid starts school. She has a BS in Public Health, but frankly I'd be beyond stunned if she got a job in that field. :(
John Doe 123 wrote:
Mon Mar 19, 2018 1:54 pm
You should both acquire life insurance and, as the breadwinner, you should consider a disability policy for yourself.

The insurance company itself does not physically have possession of your blood if that is what you are concerned about.

When I had blood drawn for my life insurance policy, the blood was not drawn by the insurance company. The insurance company hired a third party who specializes in lab work to come out to my home and draw blood. The lab results were then reported to the insurance company.

If it makes you more comfortable, you may be able to have a blood draw by your physician and have the physician submit that blood work to the insurance company. This of course would be at your own expense. If you use the insurance company's contracted provider then the insurance company covers the lab expense.
I do have disability insurance. 60% of my income until I'm 65. And I technically have life insurance through my place of employment, but it's only $60,000. Would be nice to have more like $500,000 on both of us. It's not the possession of the blood that's the concern, it's the drawing of the blood - and not for any religious reason. It's the needle. It's both scary and gross. But one of these days I need to suck it up and let someone stick me with a needle for life insurance purposes. That being said, getting life insurance on my wife right now would probably be way more expensive, given that with the weight she put on with the baby, her BMI is literally obese level. She needs to lose the weight and I need to overcome a fear of needles. Then we can get life insurance.

ThriftyPhD
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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by ThriftyPhD » Tue Mar 20, 2018 11:48 am

3CT_Paddler wrote:
Tue Mar 20, 2018 9:54 am
It's amazing to me all of the negative reactions on here to a religious tithe. For someone who feels called to tithe, there are things more important than the accumulation of personal wealth. You won't take any of it with you.
Remember that this is a finance forum, not a religion forum. People are responding with all sorts of options for the OP, ranging from "you're doing fine as is" to a list of expenses that can be cut.

The largest expense is the tithe, so it's getting mentioned. The OP can ignore the advice. I'm sure if he felt called to do business only with the local financial guy from his church who was charging him 5% AUM, people would point out that he needs to fire the financial adviser, even if doing so is 'off limits'.

And just like 'of course you need a local financial adviser', plenty of people donate to their church without thinking about why they are, or why they chose that amount. Getting the OP to think about it isn't a bad thing, even if in the end he decides to keep the tithe. At least he does so knowing it's a stretch and a choice, not an obligation that everyone does. I have plenty of family members who donated to their church, and when asked why they didn't really know other than 'that's what you're supposed to do' or 'that's what my parents did'. Some stopped or cut back after thinking about it, others continued to do so but were at least more aware of why they were doing so. Others became more engaged in their church, volunteering time and learning what the donations were being spent on.

I've seen threads where people have stated that cable, cigarettes, and unlimited smart phone plans are non negotiable expenses. Everyone mentioned them even though they're 'non negotiable'. I understand that to someone who is religious, having a tithe lumped in with buying a carton of cigarettes may be a offensive, but for someone who is not religious they're all just unnecessary expenses.

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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by ThriftyPhD » Tue Mar 20, 2018 11:51 am

LiterallyIronic wrote:
Tue Mar 20, 2018 11:40 am
It's not the possession of the blood that's the concern, it's the drawing of the blood - and not for any religious reason. It's the needle. It's both scary and gross. But one of these days I need to suck it up and let someone stick me with a needle for life insurance purposes.
At some point it will be good to have a comprehensive screen by your doctor as well for your own preventative medicine and health maintenance. In that case, it may be worth exploring having the doc do a draw at the same time for the insurance company. That way you're only getting a single draw rather than multiple times. Plus if you have a doctor you're more comfortable with, it may reduce your anxiety level.

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buccimane
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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by buccimane » Tue Mar 20, 2018 12:20 pm

LiterallyIronic wrote:
Tue Mar 20, 2018 11:40 am
Airbags somewhere other than the front? Like where? In the back of the frontseats?

Curtain and torso airbags
A man convinced against his will is of the same opinion still

TareNeko
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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by TareNeko » Tue Mar 20, 2018 12:37 pm

Old vs New car crash test. You should see this:

https://youtu.be/JZdjH8-0J6A?t=110

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hand
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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by hand » Tue Mar 20, 2018 2:09 pm

LiterallyIronic wrote:
Tue Mar 20, 2018 11:40 am

And I technically have life insurance through my place of employment, but it's only $60,000. Would be nice to have more like $500,000 on both of us. It's not the possession of the blood that's the concern, it's the drawing of the blood - and not for any religious reason. It's the needle. It's both scary and gross. But one of these days I need to suck it up and let someone stick me with a needle for life insurance purposes. That being said, getting life insurance on my wife right now would probably be way more expensive, given that with the weight she put on with the baby, her BMI is literally obese level. She needs to lose the weight and I need to overcome a fear of needles. Then we can get life insurance.
A needle typically isn't required for life insurance - it is required for the best priced life insurance.
If fear of needles is the limiting factor, consider increasing the employer group life until you are able to give blood. (Employer group life may not be a bad deal if you're young and unhealthy, though you typically can't take it with you if you change jobs).

Be aware that life insurance cost tends to jump up at 5(?) year break points - cost at 34 is likely less than cost at 35, so best bet is to buy before your birthday.

bayview
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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by bayview » Tue Mar 20, 2018 10:29 pm

1. If you feel that it's important to tithe, then tithe. Values are important to how you live your lives. Kudos to you for making this choice, even though it's not mine.

2. Term life for both of you, no excuses; no ifs, ands, or buts. When you talked to the insurance agent, were you talking term? Even if term required blood work, suck it up and do it. I would think that your wife had already had blood pulls during this pregnancy, even if she didn't go the traditional medical route. I had my last child at home with a lay midwife, and I still had blood work. (This was back in 1987.) I don't love needles either, but you should both think whether "eeeww, I don't like needles; they're scary" is a good reason to leave the other in financial straits due to no insurance and loss of income/ childcare. If you can take on a hideous diaper after your baby's first encounter with apple juice, you can both most certainly endure a needle stick. :happy

3. Stop the mortgage pre-payment. Why on earth are you doing this? Is this some sort of Dave Ramsey thing? You can probably take this on one day, if you feel it's beneficial, but right now, it's way too early in your lives, it's killing your cash flow, and it's not reducing your monthly payment, even though it saves interest in the long run. This is not what you should be doing now. Boost your EM, and then find your happy spot/ SWAN (sleep well at night) cash flow.

4. If you can save enough from skipping the extra mortgage payments, keep funding your Roths. Partially fund them, at least. One day, you'll be happy that you did so.

5. The personal trainer is great as long as your wife gives her all during this time. Losing weight after pregnancy can be tough, and I'll happily take on anyone who thinks it isn't. I like the six months and then out part (for the trainer), and then pop the baby in the stroller and start walking. And walking, and walking, and walking.

I think you're on a great path. Just make sure that the decisions you make are truly, truly for the benefit of your family, and not as the result of outside "you ought to's". Like this one. :D
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

quantAndHold
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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by quantAndHold » Tue Mar 20, 2018 11:28 pm

You are doing more than fine on saving. Your expenses are appropriate. The first couple of years of home ownership and parenting are always hard. Once you get a couple of raises, you’ll be fine. In the meantime...

Drop the mortgage prepayment. You can pick this up again when you’re making more.

If the tithe is based on a percentage of take home pay, reduce your take home pay. Get rid of the Roth and put the money into the 401k. It will reduce your tithe enough to overcome the drag of the 401k expense ratio. If you’re planning on jumping ship in the next couple of years, you won’t have this 401k for that long anyway.

Get insurance. Life, disability, umbrella policy. In your current situation, future earnings are your largest asset, and you need insurance to protect your family from loss of future earnings. Bonus points if you can do this by payroll deduction and reduce the tithe at the same time.

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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by Easy Rhino » Wed Mar 21, 2018 12:28 am

wait where's the budget for diapers? those are expensive!

BanquetBeer
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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by BanquetBeer » Wed Mar 21, 2018 5:55 am

camillus wrote:
Sat Mar 17, 2018 6:51 pm
6) I am also 34, house currently worth $200k or so, make a 10% tithe from gross to church and other charities, and will start paying for religious private school shortly. Most people on this board think I'm nuts, but these are my priorities. For those that give a lot, charity planning should be a factor in retirement planning.
Wait, so you give 10% gross and then from the savings in retirement you plan to give again from the growth of your after donation savings?

Sure, after seeing the income of several small town preachers I personally don’t believe in donating to the church, but I guess I don’t understand the whole double donation part as well.

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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by LiterallyIronic » Wed Mar 21, 2018 9:05 am

bayview wrote:
Tue Mar 20, 2018 10:29 pm
3. Stop the mortgage pre-payment. Why on earth are you doing this? Is this some sort of Dave Ramsey thing?
No, it's a "pay off the mortgage before I retire" thing. :P
Easy Rhino wrote:
Wed Mar 21, 2018 12:28 am
wait where's the budget for diapers? those are expensive!
We have boxes and boxes of diapers. I have no idea where they came from. :?
quantAndHold wrote:
Tue Mar 20, 2018 11:28 pm
If the tithe is based on a percentage of take home pay, reduce your take home pay. Get rid of the Roth and put the money into the 401k. It will reduce your tithe enough to overcome the drag of the 401k expense ratio. If you’re planning on jumping ship in the next couple of years, you won’t have this 401k for that long anyway.
It is based on take-home pay. You make a very interesting proposition that I hadn't considered before.

mortfree
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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by mortfree » Wed Mar 21, 2018 9:55 am

LiterallyIronic wrote:
Wed Mar 21, 2018 9:05 am

quantAndHold wrote:
Tue Mar 20, 2018 11:28 pm
If the tithe is based on a percentage of take home pay, reduce your take home pay. Get rid of the Roth and put the money into the 401k. It will reduce your tithe enough to overcome the drag of the 401k expense ratio. If you’re planning on jumping ship in the next couple of years, you won’t have this 401k for that long anyway.
It is based on take-home pay. You make a very interesting proposition that I hadn't considered before.
Perhaps you need to rearrange your budget and calculate your “true” take home pay differently for determining charitable contributions.

For instance net take home minus mortgage payment minus Roth contribution minus whatever else equals your “true” take home. Then do charity off of that.

Creative accounting.

Glockenspiel
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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by Glockenspiel » Wed Mar 21, 2018 10:04 am

buccimane wrote:
Tue Mar 20, 2018 11:21 am
mortfree wrote:
Tue Mar 20, 2018 10:54 am
buccimane wrote:
Tue Mar 20, 2018 10:30 am
3CT_Paddler wrote:
Tue Mar 20, 2018 9:54 am
This board is sometimes blind to the fact that for a lot of people where the second income in the family does not make north of $30-40k, childcare expenses make both parents working a break even affair. That can make things tight and high savings goal nearly impossible.
This is true, but that equation doesn't take into account career advancement. While they may be making 20/30/40k when the child is born, that number can change significantly in ~5 years.

That is just some food for thought, because I know people also value raising their own children 100% of the time during this stage.
Additional thought, some people have occupations where the salary ceiling is 30-40k
Agreed, in the big picture.

While nothing is certain, it is a fair assumption that the OP's wife has not hit the salary ceiling working 37.5 hours a week at $12.50/hr.

In the event that those numbers are indeed the ceiling, it is obvious that SAHM is the best option.
I think a lot of people are jaded thinking that lower income people are only making that for a short period of time and then they move up. Most retail jobs, you may get a 25 cent raise per year, with virtually no opportunity to move up, unless you get into management. Even retail managers hardly make $40k/year. One of the bigger issues with income inequality is that lower income people don't get the same % wage increases that higher paid people get. For example, an engineer making $80k per year may get a 4% wage increase, but a retail worker making $12/hour may get a 0%, 1%, or 2% wage increase per year. My parents were both lower paid workers, and neither of them ever made more than $15/hour, ever, even though they were both good at what they did.

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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by michaeljc70 » Thu Mar 22, 2018 10:32 am

denovo wrote:
Sat Mar 17, 2018 7:37 pm
OP, just to summarize what people have suggested.

1. Stop prepaying mortgage.
2. Drop the personal trainer.
3. Eliminate the charitable donations.

This would be my advice. But just reduce the charitable donations if possible. You don't have to eliminate it.

delamer
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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by delamer » Thu Mar 22, 2018 10:49 am

LiterallyIronic wrote:
Wed Mar 21, 2018 9:05 am
bayview wrote:
Tue Mar 20, 2018 10:29 pm
3. Stop the mortgage pre-payment. Why on earth are you doing this? Is this some sort of Dave Ramsey thing?
No, it's a "pay off the mortgage before I retire" thing. :P
Easy Rhino wrote:
Wed Mar 21, 2018 12:28 am
wait where's the budget for diapers? those are expensive!
We have boxes and boxes of diapers. I have no idea where they came from. :?
quantAndHold wrote:
Tue Mar 20, 2018 11:28 pm
If the tithe is based on a percentage of take home pay, reduce your take home pay. Get rid of the Roth and put the money into the 401k. It will reduce your tithe enough to overcome the drag of the 401k expense ratio. If you’re planning on jumping ship in the next couple of years, you won’t have this 401k for that long anyway.
It is based on take-home pay. You make a very interesting proposition that I hadn't considered before.
So it is OK to manipulate your take home pay to reduce your tithing, but it is not OK to make a decision based on your family’s current situation to reduce your tithe by a specific dollar amount? Even if in the end, your church gets the same tithe in dollars?

LiterallyIronic
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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by LiterallyIronic » Thu Mar 22, 2018 1:48 pm

delamer wrote:
Thu Mar 22, 2018 10:49 am
So it is OK to manipulate your take home pay to reduce your tithing, but it is not OK to make a decision based on your family’s current situation to reduce your tithe by a specific dollar amount? Even if in the end, your church gets the same tithe in dollars?
Not sure what you're asking. Some people tithe based on their gross income. Some people tithe based on their net income. There's no legal (or even religious) requirement for either, so both are "okay." We do it on whatever amount lands in our bank account. That's what we've decided on. So if more lands in our bank account, we pay more. If less lands in our bank account, we pay less. Not sure what kind of "moral high ground" angle you're trying to take here, or why.

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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by delamer » Thu Mar 22, 2018 1:59 pm

LiterallyIronic wrote:
Thu Mar 22, 2018 1:48 pm
delamer wrote:
Thu Mar 22, 2018 10:49 am
So it is OK to manipulate your take home pay to reduce your tithing, but it is not OK to make a decision based on your family’s current situation to reduce your tithe by a specific dollar amount? Even if in the end, your church gets the same tithe in dollars?
Not sure what you're asking. Some people tithe based on their gross income. Some people tithe based on their net income. There's no legal (or even religious) requirement for either, so both are "okay." We do it on whatever amount lands in our bank account. That's what we've decided on. So if more lands in our bank account, we pay more. If less lands in our bank account, we pay less. Not sure what kind of "moral high ground" angle you're trying to take here, or why.
I meant “OK” in the sense of your personal comfort level. If you see any distinction between the two options, then you should lower your take home pay to save money on your tithing.
Last edited by delamer on Thu Mar 22, 2018 2:14 pm, edited 1 time in total.

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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by DaftInvestor » Thu Mar 22, 2018 2:09 pm

I agree with others that have told you that >12% on Charitable Donations is high for someone one starting out with a young family. Charity starts at home - not sure what your charities are, sure they are important, but isn't your family and child's future also important?
I would drop down the charitable donations from $400 to $100 (or eliminate altogether until you are better established) and also stop the extra mortgage payments.
I think you are doing fine - as a young software engineer your salary will go up for at least the first 3-5 years (while your mortgage payment will stay the same) and then you will start feeling and doing better.

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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by stoptothink » Thu Mar 22, 2018 2:55 pm

LiterallyIronic wrote:
Thu Mar 22, 2018 1:48 pm
delamer wrote:
Thu Mar 22, 2018 10:49 am
So it is OK to manipulate your take home pay to reduce your tithing, but it is not OK to make a decision based on your family’s current situation to reduce your tithe by a specific dollar amount? Even if in the end, your church gets the same tithe in dollars?
Not sure what you're asking. Some people tithe based on their gross income. Some people tithe based on their net income. There's no legal (or even religious) requirement for either, so both are "okay." We do it on whatever amount lands in our bank account. That's what we've decided on. So if more lands in our bank account, we pay more. If less lands in our bank account, we pay less. Not sure what kind of "moral high ground" angle you're trying to take here, or why.
Based upon some of the comments earlier in this thread, sounds like there are some pretty large misconceptions about tithing and our faith that exist within the general public. More than anything, you need to realize that you may perceive that you are treading water, but you are actually doing quite well (well ahead of most of your peers) when it comes to saving and and have all kinds of options. Just starting in your career, going down to a single income, being a first-time home-owner, and first time parent simultaneously; most in that position are not even treading water, they are drowning and don't have options. Stay the course and the numbers will become more comfortable in time. It's all a matter of reframing your mindset.

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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by frugalmama » Thu Mar 22, 2018 2:56 pm

I think you are doing really well and should be proud of where you are. I just have 2 comments as you've received some great advice. I second the idea of YNAB (You Need a Budget). It has given me a lot of piece of mind. I have been using it since shortly after its inception and I feel I have a much better handle on my finances now...and I'm a numbers person so I love spreadsheets.

One area that I think you could probably cut IF you really wanted to is groceries. I have been to Utah several times and I think your prices are pretty comparable to my area. I spend $138.48 per week for my family of 12. That works out to be $11.54 per week - I realize that is abnormally low for most people but it works for us...and we aren't eating junk (although we do have the extra yummy stuff on occasion). If the baby is breastfeeding, you are really spending $225 on only 2 people (even if the baby isn't, making your own baby food is super easy and much cheaper and better for the environment than all those little jars). So that means $28.13 per week per person for your family. If you switch to more meatless meals, only buy what is on sale and plan your menus around that, stockpile at the lowest prices (which I'm guessing you utilize the church provision stores so you may do that already), shop around etc. I could see you cutting some out of your current budget, especially if you garden (I noticed you commented about soil for that...we have a pretty large one). However, as a mom of 10, make sure you don't overwhelm your wife with the idea if she isn't ready for it as newborns are a lot of work as I'm sure you know...it could be something that you work to do gradually. I had a much higher grocery budget years ago..I see grocery budgets as always a work in progress and I'm always raiding it to balance my budget, LOL! Congratulations on your new addition!

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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by LiterallyIronic » Thu Mar 22, 2018 3:03 pm

delamer wrote:
Thu Mar 22, 2018 1:59 pm
LiterallyIronic wrote:
Thu Mar 22, 2018 1:48 pm
delamer wrote:
Thu Mar 22, 2018 10:49 am
So it is OK to manipulate your take home pay to reduce your tithing, but it is not OK to make a decision based on your family’s current situation to reduce your tithe by a specific dollar amount? Even if in the end, your church gets the same tithe in dollars?
Not sure what you're asking. Some people tithe based on their gross income. Some people tithe based on their net income. There's no legal (or even religious) requirement for either, so both are "okay." We do it on whatever amount lands in our bank account. That's what we've decided on. So if more lands in our bank account, we pay more. If less lands in our bank account, we pay less. Not sure what kind of "moral high ground" angle you're trying to take here, or why.
I meant “OK” in the sense of your personal comfort level. If you see any distinction between the two options, then you should lower your take home pay to save money on your tithing.
Ah, I see. I misinterpreted your meaning.
DaftInvestor wrote:
Thu Mar 22, 2018 2:09 pm
I agree with others that have told you that >12% on Charitable Donations is high for someone one starting out with a young family. Charity starts at home - not sure what your charities are, sure they are important, but isn't your family and child's future also important?
I would drop down the charitable donations from $400 to $100 (or eliminate altogether until you are better established) and also stop the extra mortgage payments.
I think you are doing fine - as a young software engineer your salary will go up for at least the first 3-5 years (while your mortgage payment will stay the same) and then you will start feeling and doing better.
Point of clarity, it's actually just shy of 10% of net (7.5% of gross).

That's the question, though. Just how important is the charitable contributions? Where is it at on the totem pole? I'm going to prioritize food on the table and keeping the lights on over charitable donations, sure. But if I lower charitable contributions instead of lowering the eating out expenses, then am I saying that restaurants are more important than charitable donations?

The more pertinent comparison, though, is charitable donations vs liquidity. I am not quite putting enough away for retirement (I'm putting away $1,216 when I need to be doing at least $1,250), but that's pretty close. I can bump up my 401k contributions to make up the difference. And I'm paying off the mortgage at a faster pace. So, you ask, "but isn't your family and child's future also important?," but I don't think I'm neglecting either of those things. I don't think I'm disregarding the important things in favor of donating money. But what am I disregarding? Seems like liquidity and I think that's what's causing me to be anxious. 401k, IRAs, home equity all going up, but checking/savings are flat-lining.
frugalmama wrote:
Thu Mar 22, 2018 2:56 pm
One area that I think you could probably cut IF you really wanted to is groceries.
I think you're right. Baby breastfeeds a little, but eats dinner with us ("eats" is a strong word - half of it ends up on the floor :oops: ). The goal is to keep groceries to $1/person/meal, which would be $180/month for two people. My wife does the grocery shopping - but we should talk about the strategies for lowering our grocery bill. That being said, in that arena, I'm primarily focused on trying to get her to cut the snacks budget to zero. Just because candy bars are on sale, doesn't mean we should buy them!

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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by kelvan80 » Thu Mar 22, 2018 3:11 pm

Groceries should be for three people if your wife is still breastfeeding. I can't imagine eating at home for $180/month and I'm super frugal. believe you should keep the tithe. We've never regretted it.

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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by LiterallyIronic » Thu Mar 22, 2018 3:13 pm

stoptothink wrote:
Thu Mar 22, 2018 2:55 pm
LiterallyIronic wrote:
Thu Mar 22, 2018 1:48 pm
delamer wrote:
Thu Mar 22, 2018 10:49 am
So it is OK to manipulate your take home pay to reduce your tithing, but it is not OK to make a decision based on your family’s current situation to reduce your tithe by a specific dollar amount? Even if in the end, your church gets the same tithe in dollars?
Not sure what you're asking. Some people tithe based on their gross income. Some people tithe based on their net income. There's no legal (or even religious) requirement for either, so both are "okay." We do it on whatever amount lands in our bank account. That's what we've decided on. So if more lands in our bank account, we pay more. If less lands in our bank account, we pay less. Not sure what kind of "moral high ground" angle you're trying to take here, or why.
Based upon some of the comments earlier in this thread, sounds like there are some pretty large misconceptions about tithing and our faith that exist within the general public. More than anything, you need to realize that you may perceive that you are treading water, but you are actually doing quite well (well ahead of most of your peers) when it comes to saving and and have all kinds of options. Just starting in your career, going down to a single income, being a first-time home-owner, and first time parent simultaneously; most in that position are not even treading water, they are drowning and don't have options. Stay the course and the numbers will become more comfortable in time. It's all a matter of reframing your mindset.
Thanks! And I think you're right. It's a tight pinch at the moment, but I look around and see people in a much tougher bind than us. We just had our semi-annual 401k meeting at work and my boss mentioned that he's barely able to save 2% of his income and that he "can't get another credit card until he pays off his current credit card debt" :oops: . I said something empathetic because there was no way in the world I was going to tell him that I'm saving 24% of my income for retirement while pre-paying my mortgage.

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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by DaftInvestor » Thu Mar 22, 2018 3:19 pm

LiterallyIronic wrote:
Thu Mar 22, 2018 3:03 pm
DaftInvestor wrote:
Thu Mar 22, 2018 2:09 pm
I agree with others that have told you that >12% on Charitable Donations is high for someone one starting out with a young family. Charity starts at home - not sure what your charities are, sure they are important, but isn't your family and child's future also important?
I would drop down the charitable donations from $400 to $100 (or eliminate altogether until you are better established) and also stop the extra mortgage payments.
I think you are doing fine - as a young software engineer your salary will go up for at least the first 3-5 years (while your mortgage payment will stay the same) and then you will start feeling and doing better.
Point of clarity, it's actually just shy of 10% of net (7.5% of gross).

That's the question, though. Just how important is the charitable contributions? Where is it at on the totem pole? I'm going to prioritize food on the table and keeping the lights on over charitable donations, sure. But if I lower charitable contributions instead of lowering the eating out expenses, then am I saying that restaurants are more important than charitable donations?

The more pertinent comparison, though, is charitable donations vs liquidity. I am not quite putting enough away for retirement (I'm putting away $1,216 when I need to be doing at least $1,250), but that's pretty close. I can bump up my 401k contributions to make up the difference. And I'm paying off the mortgage at a faster pace. So, you ask, "but isn't your family and child's future also important?," but I don't think I'm neglecting either of those things. I don't think I'm disregarding the important things in favor of donating money. But what am I disregarding? Seems like liquidity and I think that's what's causing me to be anxious. 401k, IRAs, home equity all going up, but checking/savings are flat-lining.
True - but its >12% of your defined discretionary income (this is where I got the 12%: 400/31xx).
Obviously this decision is very personal but to your point about whether or not to put family first and whether or not you are doing so - personally I'd be putting some of this $400 monthly into a 529 plan to fund college rather than all of it to charities.
Regarding "Checking/Savings" flat-lining - in my opinion your checking account should be a flat-line - its your cash-flow balance. And your "savings", if it is an emergency fund - should also be a flat-line when properly funded. What should be growing is your retirement investments and college savings investments. If you checking account is growing you are doing something wrong (at least in my opinion) - you aren't investing in your goals.
What do you need to save money for outside these items? Maybe that's your struggle - after saving up for a house downpayment you got used to short-term savings. But now that you own a house; provided you have a funded EF; you might not need further short term savings (maybe a car fund or something). You stated after all the items you listed your savings was $200/monthly. When I had a young child mine was $0 - but this was by design.

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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by dknightd » Thu Mar 22, 2018 3:30 pm

I didn't see your savings balance. If you have a comfortable balance, and are still saving $200/month you are doing fine.
If you do not have adequate emergency savings then I'd hold off on Roth and extra mortgage principle until you did.
Nothing will sink you faster than having to put an emergency expense on a credit card.
You are not treading water. You are swimming. You are saving for retirement, and paying of your mortgage faster than required.
Smile and be happy.

Happy Spouse, Happy House
Last edited by dknightd on Thu Mar 22, 2018 4:25 pm, edited 1 time in total.

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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by Meg77 » Thu Mar 22, 2018 4:10 pm

LiterallyIronic wrote:
Sat Mar 17, 2018 2:02 pm
We bought our first house last year. And we had a baby last year. Before that, I felt like I was rolling in the dough. Now I fee like we're struggling to stay even.
...

We're only saving less than $200/month. It's making me feel like we're treading water and can't get anywhere. I just feel poor when before we bought the house, I felt rich. Utilities, for example, are way higher than I anticipated.

* We've already turned the heater down from 66F to 64F.
* We also only have Netflix temporarily - for my wife to have something easy to watch while she's feeding the baby in the middle of the night. We'll cancel when the baby starts sleeping through the night.
* My wife is using a personal trainer for six months in order to lose the baby weight, so that expense will go away soon.
* I've agreed to buy no video games this year. And no clothes unless necessary.
* I feel like we're spending way too much on "gifts", "holiday expenses" and "snacks."

Any other ideas or suggestions?
You're not only saving $200 a month. You're saving $200 a month in cash plus $1216 a month for retirement plus putting an extra $200 or so toward your mortgage. That's over 30% of your gross income! And you're doing this in the year after buying a home and having a baby - one of the biggest cash crunch times of anyone's lives!

My advice: relax.

My other advice: Quit paying extra on your mortgage until your cash reserves get where you want them and all your other short and mid term goals are met. There's no need to force yourself to do that right now if you feel crunched. You sure as heck don't need to suspend normal/basic purchases such as clothing and Netflix.

My additional unsolicited advice - Quit talking about this with your wife, apologize if you've been nagging her about the budget, and take her out to a nice dinner or buy her a small gift as a show of good faith. You are probably driving her nuts if she is less than half the budget Nazi you are!
"An investment in knowledge pays the best interest." - Benjamin Franklin

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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by White Coat Investor » Thu Mar 22, 2018 6:00 pm

LiterallyIronic wrote:
Sat Mar 17, 2018 2:02 pm
We bought our first house last year. And we had a baby last year. Before that, I felt like I was rolling in the dough. Now I fee like we're struggling to stay even. We track all our expenses, and here's where things stand since the house purchase (averages used when applicable):

Gross Income: $5,291.66

We're only saving less than $200/month. It's making me feel like we're treading water and can't get anywhere. I just feel poor when before we bought the house, I felt rich. Utilities, for example, are way higher than I anticipated.

* We've already turned the heater down from 66F to 64F.
* We also only have Netflix temporarily - for my wife to have something easy to watch while she's feeding the baby in the middle of the night. We'll cancel when the baby starts sleeping through the night.
* My wife is using a personal trainer for six months in order to lose the baby weight, so that expense will go away soon.
* I've agreed to buy no video games this year. And no clothes unless necessary.
* I feel like we're spending way too much on "gifts", "holiday expenses" and "snacks."
Stop playing defense. You're already a winner there. Play offense. Earn more. Your household income is barely more than the median household income and you're obviously intelligent and hard-working. You can earn more by working smarter and working harder. It might be a raise, changing jobs, a side gig, overtime or something else. But I'll tell you this- it's way easier to save money when your income is rising!
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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Re: Bought house six months ago - now feeling like we're treading water and can't save money

Post by DaftInvestor » Thu Mar 22, 2018 6:39 pm

One other thought that helps some people - if what you are looking for is satisfaction that you are getting ahead financially over time you could start tracking your total networth including your home equity.

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