Share your budget

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Topic Author
novemberrain
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Share your budget

Post by novemberrain »

Inspired by the super popular "Share your net worth progression" thread
viewtopic.php?f=2&t=139157
, here is a another topic I am curious about - annual budget. I think I am spending too much. So curious to compare. Thanks

Household situation - double income 2 kids
Residence Area : HCOL
Residence : paid off home
Ages - 40

820,000 - Annual household income (approximately). Was ~ 1M pre-covid
330,000 - Annual total taxes (approximately)
490,000 - annual take home pay (approximately)

Outflows
----------
39,000 - two 401ks
12,000 - two IRAs
28,000 - two 529 plans
7,000 - one HSA
170,000 - annual taxable brokerage account contributions
70,000 - annual cash savings
170,000 - Annual expenses

Breakdown of annual expenses (170,000 total from line just above)
---------------------------------------
15,000 - childcare / tuition
25,000 - housekeeper / babysitter
20,000 - vacations
18,000 - food (grocery + eating out)
10,000 - home repairs / remodeling
20,000 - car payments (was a one time purchase. So should go down in subsequent years)
9,000 - prop taxes
1,000 - prop insurance
3,000 - car insurance
7,000 - utilities
6,000 - gas (we drive a lot)
3,000 - car maintenance & repairs (got rid of my clunker this year. So should be better going forward; but at the cost of high depreciation for new car)
3,000 - kids educational accessories etc (legos, books, experiment sets etc)
30,000 - other
Last edited by novemberrain on Thu Jul 09, 2020 7:55 pm, edited 15 times in total.
L82GAME
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Re: Share your budget

Post by L82GAME »

Sorry if I missed it, but is there a mortgage payment?
Topic Author
novemberrain
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Re: Share your budget

Post by novemberrain »

L82GAME wrote: Thu Jul 02, 2020 3:48 pm Sorry if I missed it, but is there a mortgage payment?
Thanks. Updated. No mortgage since home is paid off
L82GAME
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Re: Share your budget

Post by L82GAME »

OP, why do you ask the question? What are your goals?
jjface
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Re: Share your budget

Post by jjface »

L82GAME wrote: Thu Jul 02, 2020 3:58 pm OP, why do you ask the question? What are your goals?
Yes seems like you want to show off or something. So you have more money coming in than my house is worth. And you spend a lot. Your other category is close to my entire spending budget. Congrats. Feel good? See ya.
Topic Author
novemberrain
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Re: Share your budget

Post by novemberrain »

L82GAME wrote: Thu Jul 02, 2020 3:58 pm OP, why do you ask the question? What are your goals?
I think I might be spending more than I should. So was curious to compare with people who are more frugal and force myself to downsize
L82GAME
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Re: Share your budget

Post by L82GAME »

  • Do you want to retire in your 60s or be FIRE?
  • Why are there so few relative assets in your tax-deferred accounts vs. your taxable accounts?
  • What is your and your spouse's respective contribution rates to your tax-deferred retirement accounts?
User avatar
MrBobcat
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Re: Share your budget

Post by MrBobcat »

Op, given your income I don't think you're spending too much it's only about 40% of your after tax income and you still have kid expense. To me it's more of a quality of life issue. What would make you happier, spending less now to retire earlier and have more free time on the back end or enjoy more of the fruits of your labor as you go along?
musicmom
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Re: Share your budget

Post by musicmom »

I have no answers for OP.
Before retiring last year, our highest income was about 120k and i kinda felt wealthy, even in a HCOL area. Youre in a whole other universe.

Congrats on your amazing income; hope you find info you are looking for.
Topic Author
novemberrain
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Re: Share your budget

Post by novemberrain »

L82GAME wrote: Thu Jul 02, 2020 4:08 pm
  • Do you want to retire in your 60s or be FIRE?
- retire in my 60s; but take very good vacations quarterly till I reach 60
L82GAME wrote: Thu Jul 02, 2020 4:08 pm
  • Why are there so few relative assets in your tax-deferred accounts vs. your taxable accounts?
- Sorry, didn't understand. The numbers I posted are annual contributions, not total assets.
L82GAME wrote: Thu Jul 02, 2020 4:08 pm
  • What is your and your spouse's respective contribution rates to your tax-deferred retirement accounts?
The contributions are identical
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ohboy!
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Re: Share your budget

Post by ohboy! »

L82GAME wrote: Thu Jul 02, 2020 3:58 pm OP, why do you ask the question? What are your goals?
Yeah wow big money winnner. 99% of the population has the goal of being you.
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MrBobcat
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Re: Share your budget

Post by MrBobcat »

novemberrain wrote: Thu Jul 02, 2020 4:05 pm
L82GAME wrote: Thu Jul 02, 2020 3:58 pm OP, why do you ask the question? What are your goals?
I think I might be spending more than I should. So was curious to compare with people who are more frugal and force myself to downsize
You're not going to find too many comparables. If you want to live on my budget you can, about $21K in fixed expenses and $46K in "play" money, rest goes to taxes and savings.
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Artful Dodger
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Re: Share your budget

Post by Artful Dodger »

Looks like you're saving around 60% of your after tax income, which is great!

The spending categories you mention don't seem out of line, though I can't comment on the $43K "other". I'd look at better defining the "other" category.

$400K in taxes! Thanks for helping out. 8-)
L82GAME
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Re: Share your budget

Post by L82GAME »

novemberrain wrote: Thu Jul 02, 2020 4:18 pm
L82GAME wrote: Thu Jul 02, 2020 4:08 pm
  • Do you want to retire in your 60s or be FIRE?
- retire in my 60s; but take very good vacations quarterly till I reach 60
L82GAME wrote: Thu Jul 02, 2020 4:08 pm
  • Why are there so few relative assets in your tax-deferred accounts vs. your taxable accounts?
- Sorry, didn't understand. The numbers I posted are annual contributions, not total assets.
L82GAME wrote: Thu Jul 02, 2020 4:08 pm
  • What is your and your spouse's respective contribution rates to your tax-deferred retirement accounts?
The contributions are identical
OP, this is really a personal question that you and your spouse need to answer for yourselves. Per Mr. Bobcat's response above, if you want to retire early before your 60s, then yes, you're spending too much. If you want to retire later in life and enjoy the fruits of your labor now (i.e., current consumption at the cost of deferred consumption now for an earlier retirement), then you're living the life you want to.

I just gotta ask though why you're socking so much money away into a taxable account. Do you have the option to make mega-back door Roth IRA contributions? You may want to consider the option if your employer plans are structured to allow you to do this.

However, if you're asking me to apply my values to your situation, then I'd say you have the ability to pull way back on your discretionary consumption, save like mad, possibly downsize to a smaller house (if applicable in your HCOL) and FIRE.

I don't have anything else to add.
Topic Author
novemberrain
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Re: Share your budget

Post by novemberrain »

Artful Dodger wrote: Thu Jul 02, 2020 4:34 pm I'd look at better defining the "other" category.
Thanks. Yes, I am also trying to chase it down and reduce that.
Topic Author
novemberrain
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Re: Share your budget

Post by novemberrain »

L82GAME wrote: Thu Jul 02, 2020 4:38 pm I just gotta ask though why you're socking so much money away into a taxable account. Do you have the option to make mega-back door Roth IRA contributions? You may want to consider the option if your employer plans are structured to allow you to do this.
Not an option in my (or spouses) retirement plans'.
L82GAME wrote: Thu Jul 02, 2020 4:38 pm However, if you're asking me to apply my values to your situation, then I'd say you have the ability to pull way back on your discretionary consumption, save like mad, possibly downsize to a smaller house (if applicable in your HCOL) and FIRE.

I don't have anything else to add.
Thank you !
L82GAME
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Re: Share your budget

Post by L82GAME »

novemberrain wrote: Thu Jul 02, 2020 4:53 pm
L82GAME wrote: Thu Jul 02, 2020 4:38 pm I just gotta ask though why you're socking so much money away into a taxable account. Do you have the option to make mega-back door Roth IRA contributions? You may want to consider the option if your employer plans are structured to allow you to do this.
Not an option in my (or spouses) retirement plans'.
L82GAME wrote: Thu Jul 02, 2020 4:38 pm However, if you're asking me to apply my values to your situation, then I'd say you have the ability to pull way back on your discretionary consumption, save like mad, possibly downsize to a smaller house (if applicable in your HCOL) and FIRE.

I don't have anything else to add.
Thank you !
You're welcome, but I guess I have one more thing to add; then why not "straight forward" backdoor Roth contributions?
mortfree
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Re: Share your budget

Post by mortfree »

The true barometer of a good budget is the cell phone bill?

I pay $30 per month.

You?
Topic Author
novemberrain
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Joined: Wed May 09, 2018 12:26 pm

Re: Share your budget

Post by novemberrain »

mortfree wrote: Thu Jul 02, 2020 5:13 pm The true barometer of a good budget is the cell phone bill?

I pay $30 per month.

You?
hmm, $30 is impossible for me. I have 3 phone lines in household and a watch & iPad (so 5 devices in total). I pay 190 for these 5 devices.
https://www.att.com/plans/unlimited-data-plans/
smitcat
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Re: Share your budget

Post by smitcat »

novemberrain wrote: Thu Jul 02, 2020 3:43 pm Inspired by the super popular "Share your net worth progression" thread
viewtopic.php?f=2&t=139157
, here is a another topic I am curious about - annual budget. I think I am spending too much. So curious to compare. Thanks

Household situation - double income 2 kids
Residence Area : HCOL
Residence : paid off home
Ages - 40

820,000 - Annual household income (approximately)

400,000 - Annual total taxes (approximately)
39,000 - two 401ks
12,000 - two IRAs
28,000 - two 529 plan
7,000 - one HSA
170,000 - annual taxable brokerage account contributions
170,000 - Annual expenses

Breakdown of annual expenses (170,000 total from line just above)
15,000 - childcare / tuition
25,000 - housekeeper / babysitter
20,000 - vacations
18,000 - food (grocery + eating out)
10,000 - home repairs / remodeling
20,000 - car payments (was a one time purchase. So should go down in subsequent years)
9,000 - prop taxes
3,000 - car insurance
7,000 - utilities
43,000 - other
I do not see how you can get to $400K in taxes with that income and deductions, even in Calif. with the marginal rate at 11.3% the effective rate falls far short of those numbers.
runner3081
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Re: Share your budget

Post by runner3081 »

You spend on a babysitter and Housekeeper that nearly matches what we spend on everything for the year.
runner3081
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Re: Share your budget

Post by runner3081 »

mortfree wrote: Thu Jul 02, 2020 5:13 pm The true barometer of a good budget is the cell phone bill?

I pay $30 per month.

You?
3 phones here and $9.00 per month.
Topic Author
novemberrain
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Re: Share your budget

Post by novemberrain »

smitcat wrote: Thu Jul 02, 2020 7:47 pm
I do not see how you can get to $400K in taxes with that income and deductions, even in Calif. with the marginal rate at 11.3% the effective rate falls far short of those numbers.
Hmm, you are right. www.smartasset.com shows the effective take home pay should be $490,000 & not $420,000 as I posted. Thanks. I think I should change my W4 to get more money deposited per paycheck. The reason I set my withholdings so high was because last year I got hit with a huge tax bill on Apr 15 because of under-payment. But last year was also special since I had a windfall.
Topic Author
novemberrain
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Re: Share your budget

Post by novemberrain »

runner3081 wrote: Thu Jul 02, 2020 8:10 pm You spend on a babysitter and Housekeeper that nearly matches what we spend on everything for the year.
I see. You have kids ? Is it possible for you to elaborate on your situation ? I would love to learn from you. Thanks
Robdac
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Re: Share your budget

Post by Robdac »

At $820K a year you're gonna have a tough time finding a large group set to compare budgets with.

With that kind of income I'd live comfortably and invest a ton in VTSAX without worrying about it too much.
Triple digit golfer
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Re: Share your budget

Post by Triple digit golfer »

I think you need to work on reducing your tax expense. Either your number is incorrect or you're doing a really bad job of managing that expense. What is the breakdown and source of the $400k?
Topic Author
novemberrain
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Re: Share your budget

Post by novemberrain »

Triple digit golfer wrote: Thu Jul 02, 2020 8:26 pm I think you need to work on reducing your tax expense. Either your number is incorrect or you're doing a really bad job of managing that expense. What is the breakdown and source of the $400k?
Thanks. Another poster also brought that to my attention. I replied a bit above. Reproduced below for reference
novemberrain wrote: Thu Jul 02, 2020 8:18 pm Hmm, you are right. www.smartasset.com shows the effective take home pay should be $490,000 & not $420,000 as I posted. Thanks. I think I should change my W4 to get more money deposited per paycheck. The reason I set my withholdings so high was because last year I got hit with a huge tax bill on Apr 15 because of under-payment. But last year was also special since I had a windfall.
All our income is either W2 salary or RSU vesting.
Last edited by novemberrain on Thu Jul 02, 2020 8:54 pm, edited 2 times in total.
Triple digit golfer
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Re: Share your budget

Post by Triple digit golfer »

novemberrain wrote: Thu Jul 02, 2020 8:32 pm
Triple digit golfer wrote: Thu Jul 02, 2020 8:26 pm I think you need to work on reducing your tax expense. Either your number is incorrect or you're doing a really bad job of managing that expense. What is the breakdown and source of the $400k?
Thanks another poster also brought that to my attention. I replied a bit above. Reproduced below for reference
novemberrain wrote: Thu Jul 02, 2020 8:18 pm Hmm, you are right. www.smartasset.com shows the effective take home pay should be $490,000 & not $420,000 as I posted. Thanks. I think I should change my W4 to get more money deposited per paycheck. The reason I set my withholdings so high was because last year I got hit with a huge tax bill on Apr 15 because of under-payment. But last year was also special since I had a windfall.
All our income is either W2 salary or RSU vesting.
So the actual expense is $330k? Much better.
JBTX
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Re: Share your budget

Post by JBTX »

novemberrain wrote: Thu Jul 02, 2020 3:43 pm Inspired by the super popular "Share your net worth progression" thread
viewtopic.php?f=2&t=139157
, here is a another topic I am curious about - annual budget. I think I am spending too much. So curious to compare. Thanks

Household situation - double income 2 kids
Residence Area : HCOL
Residence : paid off home
Ages - 40

820,000 - Annual household income (approximately)

400,000 - Annual total taxes (approximately)
39,000 - two 401ks
12,000 - two IRAs
28,000 - two 529 plan
7,000 - one HSA
170,000 - annual taxable brokerage account contributions
170,000 - Annual expenses

Breakdown of annual expenses (170,000 total from line just above)
15,000 - childcare / tuition
25,000 - housekeeper / babysitter
20,000 - vacations
18,000 - food (grocery + eating out)
10,000 - home repairs / remodeling
20,000 - car payments (was a one time purchase. So should go down in subsequent years)
9,000 - prop taxes
3,000 - car insurance
7,000 - utilities
43,000 - other
It depends on your goals, but on the surface that spending for that income isn't unreasonable. We make far less than you, and spend $120k-$140k excluding taxes, although in some ways our situation is unusual. In your case what is the $40k other?

The $40k for house keeper and child care is a lot, but, it may be what it takes for both of you to earn and maintain a high quality of life for your children. If so, I'd almost consider those work expenses.

$20k in vacations is a lot, but again, it may be a quality of life offset/ investment related to both of you working.
runner3081
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Re: Share your budget

Post by runner3081 »

novemberrain wrote: Thu Jul 02, 2020 8:21 pm
runner3081 wrote: Thu Jul 02, 2020 8:10 pm You spend on a babysitter and Housekeeper that nearly matches what we spend on everything for the year.
I see. You have kids ? Is it possible for you to elaborate on your situation ? I would love to learn from you. Thanks
We spend just over $24k per year. Me, my wife and a elementary aged child.

Paid off our house about 1.5 years ago, we are both frugal and absolutely do not feel we are missing out on anything.

Shop grocery ads heavily (have 3 stores within 1.5 miles of our house)

Really don't buy any new clothes, all pre-owned (garage sales etc).

Cars are 8 and 14 years old. Cheap licensing, insurance, still reliable.
stoptothink
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Re: Share your budget

Post by stoptothink »

novemberrain wrote: Thu Jul 02, 2020 8:21 pm
runner3081 wrote: Thu Jul 02, 2020 8:10 pm You spend on a babysitter and Housekeeper that nearly matches what we spend on everything for the year.
I see. You have kids ? Is it possible for you to elaborate on your situation ? I would love to learn from you. Thanks
We're in the same boat; 2 kids and your spend on "other" is quite a bit more than we spend total as a household for all expenditures. You can certainly afford it, but if you're looking for tips to cut back, isn't it kind of obvious?
Last edited by stoptothink on Thu Jul 02, 2020 9:13 pm, edited 1 time in total.
sailaway
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Re: Share your budget

Post by sailaway »

Does your current financial state of affairs meet your goals?
Topic Author
novemberrain
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Re: Share your budget

Post by novemberrain »

runner3081 wrote: Thu Jul 02, 2020 8:56 pm We spend just over $24k per year. Me, my wife and a elementary aged child.
Paid off our house about 1.5 years ago, we are both frugal and absolutely do not feel we are missing out on anything.

Shop grocery ads heavily (have 3 stores within 1.5 miles of our house)

Really don't buy any new clothes, all pre-owned (garage sales etc).

Cars are 8 and 14 years old. Cheap licensing, insurance, still reliable.
Thank you.
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luminous
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Re: Share your budget

Post by luminous »

We are a family of four and live in a VHCOL city. We have one working spouse (me) and one who stays at home full time to care for the kids (who are in elementary school).

These annual budget numbers don’t include our donations, taxes, or investment contributions. We do max out our retirement contributions every year.

Rent: $35,000 (rent control makes this far less than market rate)
Groceries: $10,533
Restaurants: $5,067
Travel: $7,280 (three vacations)
Utilities: $3,405 (cell phones, internet, electric, etc)
Insurance: $1,868 (car, life)
Entertainment: $985 (Netflix, movies, board games, etc)
Medical: $2,475
Shopping: $12,398 (clothes, electronics, books, household goods)
Transportation: $1,971 (gas, transit fares)
Other: $5,162 (gym, haircuts, kid classes, cash spent and not tracked, etc)

TOTAL: $86,144
50/20/30 US stock/international stock/bonds. Hope to semi-retire in 2022.
Topic Author
novemberrain
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Joined: Wed May 09, 2018 12:26 pm

Re: Share your budget

Post by novemberrain »

luminous wrote: Thu Jul 02, 2020 10:01 pm We are a family of four and live in a VHCOL city. We have one working spouse (me) and one who stays at home full time to care for the kids (who are in elementary school).

These annual budget numbers don’t include our donations, taxes, or investment contributions. We do max out our retirement contributions every year.

Rent: $35,000 (rent control makes this far less than market rate)
Groceries: $10,533
Restaurants: $5,067
Travel: $7,280 (three vacations)
Utilities: $3,405 (cell phones, internet, electric, etc)
Insurance: $1,868 (car, life)
Entertainment: $985 (Netflix, movies, board games, etc)
Medical: $2,475
Shopping: $12,398 (clothes, electronics, books, household goods)
Transportation: $1,971 (gas, transit fares)
Other: $5,162 (gym, haircuts, kid classes, cash spent and not tracked, etc)

TOTAL: $86,144
Thank you.
You and me are not that far off. If you add 40k for childcare to your budget and reduce 20k from mine for a 1 time car purchase I did.

But curious to know more about the 7k travel budget for 3 vacations. Is that air travel or road trips
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luminous
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Re: Share your budget

Post by luminous »

novemberrain wrote: Thu Jul 02, 2020 10:23 pm Thank you.
You and me are not that far off. If you add 40k for childcare to your budget and reduce 20k from mine for a 1 time car purchase I did.

But curious to know more about the 7k travel budget for 3 vacations. Is that air travel or road trips
It was a mix:
- Two week trip to Europe (flights, airbnbs, rental car)
- One week trip to a national park (car, airbnb)
- Two week trip to visit family and ski (flights, hotel, rental car)
50/20/30 US stock/international stock/bonds. Hope to semi-retire in 2022.
IMO
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Re: Share your budget

Post by IMO »

novemberrain wrote: Thu Jul 02, 2020 3:43 pm Inspired by the super popular "Share your net worth progression" thread
viewtopic.php?f=2&t=139157
, here is a another topic I am curious about - annual budget. I think I am spending too much. So curious to compare. Thanks

Household situation - double income 2 kids
Residence Area : HCOL
Residence : paid off home
Ages - 40

820,000 - Annual household income (approximately)

400,000 - Annual total taxes (approximately)
39,000 - two 401ks
12,000 - two IRAs
28,000 - two 529 plan
7,000 - one HSA
170,000 - annual taxable brokerage account contributions
170,000 - Annual expenses

Breakdown of annual expenses (170,000 total from line just above)
15,000 - childcare / tuition
25,000 - housekeeper / babysitter
20,000 - vacations
18,000 - food (grocery + eating out)
10,000 - home repairs / remodeling
20,000 - car payments (was a one time purchase. So should go down in subsequent years)
9,000 - prop taxes
3,000 - car insurance
7,000 - utilities
43,000 - other

LOL $43,000 "other"
Yeah, it's hard to track all those little miscellaneous expenses like getting Starbucks or a brick of cocaine.

OP, you say, "I think I'm spending too much, so curious to compare." I must ask, is this a serious budget post concern with an annual income of $820K? Many would say this is a humble brag. I mean honestly, you've got $43,000 in the other category and your asking about comparisons to other people????? But good job nonetheless, you are the jones'.
Topic Author
novemberrain
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Re: Share your budget

Post by novemberrain »

IMO wrote: Fri Jul 03, 2020 12:21 am Yeah, it's hard to track all those little miscellaneous expenses like getting Starbucks or a brick of cocaine.
I probably spent a grand total of $50 at Starbucks last year. And $40 of that would be my kids cake pops.
My source of coffee is this $10 machine.
https://www.walmart.com/ip/Mainstays-5- ... t/53056868
IMO wrote: Fri Jul 03, 2020 12:21 am I must ask, is this a serious budget post concern with an annual income of $820K?
Yes.
I came to this country as an immigrant with $1000 with me. My first living arrangement after getting a job was sharing a 2 bedroom with 4-5 people. So clearly I can be extremely frugal if I want to. But as my income increased, so did my expenses. And now I have this nagging feeling that I shouldn't be spending like this. Hence I posted this to get a reality check.
IMO wrote: Fri Jul 03, 2020 12:21 am you've got $43,000 in the other category and your asking about comparisons to other people?
This includes things like - $3000 for cord blood banking - https://www.viacord.com/services-pricing/
I sincerely don't believe I spend money on frivolous things. My annual clothing budget is probably $300.
But I posted this question to get feedback and now you can be the judge on whether $3000 for cord blood is frivolous.
IMO
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Re: Share your budget

Post by IMO »

novemberrain wrote: Fri Jul 03, 2020 12:43 am
IMO wrote: Fri Jul 03, 2020 12:21 am Yeah, it's hard to track all those little miscellaneous expenses like getting Starbucks or a brick of cocaine.
I probably spent a grand total of $50 at Starbucks last year. And $40 of that would be my kids cake pops.
My source of coffee is this $10 machine.
https://www.walmart.com/ip/Mainstays-5- ... t/53056868
IMO wrote: Fri Jul 03, 2020 12:21 am I must ask, is this a serious budget post concern with an annual income of $820K?
Yes.
I came to this country as an immigrant with $1000 with me. My first living arrangement after getting a job was sharing a 2 bedroom with 4-5 people. So clearly I can be extremely frugal if I want to. But as my income increased, so did my expenses. And now I have this nagging feeling that I shouldn't be spending like this. Hence I posted this to get a reality check.
IMO wrote: Fri Jul 03, 2020 12:21 am you've got $43,000 in the other category and your asking about comparisons to other people?
This includes things like - $3000 for cord blood banking - https://www.viacord.com/services-pricing/
I sincerely don't believe I spend money on frivolous things. My annual clothing budget is probably $300.
But I posted this question to get feedback and now you can be the judge on whether $3000 for cord blood is frivolous.
Yes, but $3000 is some ways away from $43,000.

My point on your $43,000 "other" category is that how can a typical person judge your budget and make suggestions on it you are or are not spending too much? My answer to you is yes, you are spending too much. No typical person I've known has an category of miscellaneous expenses that amount to $43,000 yr in relationship to annual expenses of $170,000. If you were my best friend and presented your numbers, 1st thing I'd say is "WTF are you spending $43,000 yr on?" How can anyone rationally criticize a budget with that number in it? Your other expenses seem to make reasonable sense, especially given your income level. Sure there are criticisms, such as $18,000 seems like a lot for food, but then again your talking about an income level of $820K and not something like $200K yr. For most people with a paid off mortgage, $170K yr is high, but for someone making $820 yr, it's probably not unreasonable. But really, if your meeting your savings goals, you probably don't really need to track expenses. Lifestyle creep is real, not saying it's bad, but it's just more common as one makes more money.
smitcat
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Re: Share your budget

Post by smitcat »

novemberrain wrote: Thu Jul 02, 2020 8:18 pm
smitcat wrote: Thu Jul 02, 2020 7:47 pm
I do not see how you can get to $400K in taxes with that income and deductions, even in Calif. with the marginal rate at 11.3% the effective rate falls far short of those numbers.
Hmm, you are right. www.smartasset.com shows the effective take home pay should be $490,000 & not $420,000 as I posted. Thanks. I think I should change my W4 to get more money deposited per paycheck. The reason I set my withholdings so high was because last year I got hit with a huge tax bill on Apr 15 because of under-payment. But last year was also special since I had a windfall.
That is close to what I got if you were in Calif. and had no other deductions other than what is in the post. That would leave at least another $70,000 to go to savings or to spend in the current year each year.
smitcat
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Re: Share your budget

Post by smitcat »

runner3081 wrote: Thu Jul 02, 2020 8:56 pm
novemberrain wrote: Thu Jul 02, 2020 8:21 pm
runner3081 wrote: Thu Jul 02, 2020 8:10 pm You spend on a babysitter and Housekeeper that nearly matches what we spend on everything for the year.
I see. You have kids ? Is it possible for you to elaborate on your situation ? I would love to learn from you. Thanks
We spend just over $24k per year. Me, my wife and a elementary aged child.

Paid off our house about 1.5 years ago, we are both frugal and absolutely do not feel we are missing out on anything.

Shop grocery ads heavily (have 3 stores within 1.5 miles of our house)

Really don't buy any new clothes, all pre-owned (garage sales etc).

Cars are 8 and 14 years old. Cheap licensing, insurance, still reliable.
"we are both frugal and absolutely do not feel we are missing out on anything."
How do you know you may not be missing something if you do not try some of these things?
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whodidntante
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Re: Share your budget

Post by whodidntante »

I don't see a whole lot of budget sharing in the responses. :twisted:

My post will also not have a budget included.

I'm afraid that I don't have a budget, although I do track spending to keep it less than scandalous.

Your own spending is fine given your income. Yes, you can spend less. And based on other comments, you know how. Do you want to, though?

Make sure your partner is on board with spending cuts. Otherwise the money saved will be rehomed to another budget category and y'all will fight.
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LadyGeek
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Re: Share your budget

Post by LadyGeek »

This thread has run its course and is locked (not discussing a budget, no added value to continue). See: Locked Topics
Moderators or site admins may lock a topic (set it so no more replies may be added) when a violation of posting policy has occurred. Occasionally, even if there are no overt violations of posting policy, a topic (or thread) will reach a point where the information content of the discussion has been essentially exhausted and further replies are much more likely to cause distress to the community than add anything of value.
Update: See below.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
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LadyGeek
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Re: Share your budget

Post by LadyGeek »

After receiving a request, this thread is helpful for discussing budgets. The intent here is to show Household budgeting for your own situation.

If anyone needs further assistance, please start a new thread so we can deep-dive into the details. Feel free to link to your new thread here.

This thread is now unlocked to continue the discussion.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
smitcat
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Re: Share your budget

Post by smitcat »

smitcat wrote: Fri Jul 03, 2020 6:17 am
novemberrain wrote: Thu Jul 02, 2020 8:18 pm
smitcat wrote: Thu Jul 02, 2020 7:47 pm
I do not see how you can get to $400K in taxes with that income and deductions, even in Calif. with the marginal rate at 11.3% the effective rate falls far short of those numbers.
Hmm, you are right. www.smartasset.com shows the effective take home pay should be $490,000 & not $420,000 as I posted. Thanks. I think I should change my W4 to get more money deposited per paycheck. The reason I set my withholdings so high was because last year I got hit with a huge tax bill on Apr 15 because of under-payment. But last year was also special since I had a windfall.
That is close to what I got if you were in Calif. and had no other deductions other than what is in the post. That would leave at least another $70,000 to go to savings or to spend in the current year each year.
I believe your budget and spending with the taxes corrected is very good - maybe too much going to savings dependent upon what your longer range goals happen to be.
When you 'correct' for the taxes these are the general ratios:
20% for current spending
40% for taxes
40% to savings
Result - you are saving 2 years of current expenses in each year

And when your kids no longer require the childcare costs and adjusting for your one time car payment a bit I get this in your near future:
15% for current spending
40% for taxes
45% for savings
Result - you will be saving 3 years of current expenses in each year
With a paid off home and living in a HCOL area your choices will be many in just a few years - retiring and/or finding a use for all of those funds will be your next challenge.
toocold
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Re: Share your budget

Post by toocold »

About 3 years ago, I had a similar income as you. Living in a MCOL, our budget was $60k. This year, our budget is $72k (60k + 12k health insurance) plus $25k for travel. We don't breakdown our budget anymore than that. We're obviously not going to hit our travel budget this year. This does not include taxes.
runner540
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Re: Share your budget

Post by runner540 »

congrats on your and your spouse’s accomplishments. You’re earning a lot and saving a lot too.

Based on the round numbers, the $43k “other” and $70k “missing” from overestimating taxes, it sounds like you may need better data if you want to change your spending. YNAB is a great flexible tool for this.

Here are some common categories your budget doesn’t have that might all be in the $43 + 70k:
Health insurance
Life insurance
Home and umbrella insurance
Medical copays
Charity
Birthday/holiday Gifts
Gas for cars
Auto maintenance
Diapers/kid stuff
Household supplies
Decor
Lawn care
Fitness
Personal care (haircuts, spa, etc)
Cousin Eddie
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Re: Share your budget

Post by Cousin Eddie »

OP, your savings rate looks good. I don't know how much you have saved, but at your age I would make sure to build up an emergency fund and examine my expenses in more detail with an emphasis on how to reduce expenses in the event of health issues or a job loss. How long will your finances last if something unexpected happened and what would you do to extend that length of time?

Also, if you don't have term life insurance, I would get a policy that will meet the needs of your family should something happen to you.
Dottie57
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Re: Share your budget

Post by Dottie57 »

No budget here. I take a “paycheck” from my accounts each month. Spending is dictated by my paycheck. My withdrawal rate is 3.5% of portfolio. Lfe is good.
huskerfan1414
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Re: Share your budget

Post by huskerfan1414 »

Almost 50% in taxes, $400k? My goodness sakes, that's absolutely ludicrous.
The more I learn, the dumber I feel.
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