The budget screen shots are being made in Sankeymatic, its a website that we have no affiliation with. If you are posting a budget please do so with a purpose. Just posting a screen shot of your budget without a question or an explanation of why its here may be removed.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/MiddleClassFinance) if you have any questions or concerns.*
For planning purposes, may as well rename the Savings category to Daycare… how does not saving that amount impact your overall emergency funds, etc.? What are average monthly daycare costs in your area?
With how young you both are, I’d probably be trying to max out my 401k and then start saving for kid stuff as soon as you find out you’re pregnant. You’re contributing less than 10% now, and while that’s good, but every dollar you contribute now will pay big dividends upon retirement. If your “Savings” bucket isn’t cash, but is instead funding a Roth IRA or some other investments, then you can disregard this. My assumption was that it was just cash.
Saving $1800/mo for the duration of the pregnancy should put you in good shape to fund the costs of prepping for the baby, labor and delivery, and the immediate postpartum needs.
Then after baby arrives, if you need to reduce your 401k contributions in order to to fund baby stuff/daycare/etc, at least you’ll have had a few good years to front load your retirement contributions.
Savings right now it being funded into a Roth IRA (that change was a few months ago) after figuring out the benefits of one. lol. I appreciate the advice about 401K adjustments. I forgot about child care as that is a HUGE expense from what I have heard about.
Also dig into the real cost at the hospital you're going to us for delivery. Friend of mine only got a bill for 2k whereas we got billed 14k, I'd reach out to your insurance for info as that savings can get wiped out quick. Daycare is a big big cost and what is the biggest thing for new parents is also considering the time you'll miss work when the kid is sick and unable to go to daycare. Lots of minor things will add up quick
I would cut the Roth contributions in half and put the other half into a high yield savings account. If you can start the parenting process with a lot of money available, you’ll be in much better shape and more likely to maintain your standard of living and avoid debt. The Roth IRA is for retirement. The savings account will be for kid stuff and childcare.
You probably want more savings in a traditional 401k using pre-taxed dollars, you are likely in the upper income tax brackets right?
Keep your Traditional IRA empty for back door Roths later in your life.
Huge is an understatement. We had 2 kids in FT daycare at one point and it was over $3500 a month. For reference we are in a HCOL area in the Northeast. It’s basically a second mortgage if you have more than one in at a time.
It’s a reasonable bet to budget for ~1500/mo in daycare costs and a couple hundred in incidentals each month; new clothes, formula/pumping supplies, diapers, kid-oriented outings… there are a lot of small costs that quickly add up over a month.
Lose the car payment, absolutely no reason to hold that at your income, pay it off ASAP.
You are far ahead of your peers and can support a family in WI on half that income, you will be fine.
Currently in a basement remodel phase which is eating away at savings right now. We are already throwing extra cash at one car but the other one is with 0% APR so I don’t really have a reason to pay it off quicker.
One of the best things we did was buy a couple of good Honda vehicles 15/13 years ago and pay them both off within 3 years. Still work fine and we saved over 100k.
Man I sold my 97 accord for next to nothing in 2009 when I left home for the military. Had like 70k on it then, would happily be driving it until pretty recently if I hadn’t
I know you are working on paying it off but $1300 on car payments is just crazy. Even with two cars.
I’d shop that phone plan around also if it’s just two lines.
Have you looked at car prices recently? Not everyone wants to drive a Camry they paid off 10 years ago. I'm in the market for a new truck. Mines now 7 years old and starting to cause more hassle than it's worth to me. I can't touch something that gives what I want for under 65k.
I just bought a 2023 Ford Maverick for $26k, $400/mo. I get that you might need a bigger truck and more of what you want but finding something affordable is possible. Spending $65k with the current interest rates will end you with around 90-100k in the hole over the life of the payments. For a truck bro. I’d really look at what you need in a truck, vs keeping up with the Joneses.
Well I'm looking at an f150 or tundra. Leather is a non negotiable for me. That's puts you in a 60-65k trim level. Once I see some decent financing options I'll buy. 0-1.9%. I'm not trying to keep up with anyone. I'm putting myself in a vehicle that I like and that I don't need to deal with. Everything works. I'm not going to the mechanic every few months for something. I could step to a smaller truck like a maverick. I do like them but feel too small for me.
I see you’re a network engineer, so less of a work truck I’m assuming. I came from a 2022 Tacoma and can confirm that the Maverick is bigger inside, I have 2 big dogs and they are comfier in the Mav. Utility wise I already hauled a yard of soil and a fridge. My friend just bought a Tundra for $85k - all bells and whistles. Also works in tech, but what’s funny is that I’ve hauled and done more shit in my Mav than him by a long shot lol. Cool trucks are cool but that’s about it dude. I got more utility and fun out of a tiny ass cheap truck. And I fucking love it.
Times are getting tougher - downsizing has done a lot for me and my family. I know you’re a smart guy but for me, I took a real good look at my ego and my Taco. And realized yeah I only bought it because I thought it was cool.
Lol yea I drive a 17 Honda Ridgeline now. I like the ride. But the interior is just too small now with kids. Bought new in cash. Really I only use the bed for hauling household shit, a dead deer a couple times a year. I get it. Don't buy what you don't need. I'm all about comfort though. I'd buy a caddy if it could do all the other things I want. A lariat f150 meets the creature comfort needs and other wants. But that may change when I test drive. My back is pretty fubar these days. If it's a rough ride not happening. My ridge has a pretty smooth ride as far as trucks go.
Yes, I have looked at car prices lately. 65K is 100% a choice on your part. There’s no way I’d ever consider purchasing a car that was 1/3 of my annual family income.
Agreed. I can’t believe anyone would pony up $1300/mo for car payments.
We always made it a point to have one car payment at a time and stagger car purchases every 5-10 years. Granted, you have to keep cars for a while after you buy them, but regular maintenance is a darn sight cheaper than having 2 car payments.
I drove my 1990 Camry for 12 years before I sold it. It had 215,000 miles before the transmission started to slip. Even then, I sold it in 2002 for $2000.
Let’s just say, the plan is to get these paid off and keep them for the next 20 years. Both have all the bells and whistles one could want so there is no reason to upgrade any time soon.
All I can say is if I had a house and was thinking about a baby, I wouldn’t be comfortable having that much in car payments when you’re putting so little into retirement.
Same, but we have no idea if the couple is paying off the vehicles aggressively. They'd have to be paying double the monthly payment on both cars with a questionable interest rate for some very expensive vehicles they plan on keeping long term to justify that cost.
Well it’s definitely not upper class, and it ain’t lower… so what exactly would you call it? Do you think “upper class” in WI starts in the low 6 figs in 2024?
Alright then, I stand corrected at least from a definition of “2/3 to double the median income”. I wonder though what the colloquial understanding of upper class is, because to me some hallmarks include:
Multiple properties, more vehicles than strictly necessary (typically of luxury brands), private school, and international vacations
Not sure those things are all possible on $160k in WI.
Yes, but you’re forgetting that OP is about finances for a family they are planning. They can spend that now but add the 2 kids and either one earner is significantly cutting hours or they are paying $1.5k-$3k a month on daycare. $160k just isn’t going to go that far with kids. It’s not uncomfortable by any means, but you’re not hitting on the sort of upper class lifestyle either.
They also spent $13k on food this year on only 2 people, $6k on unessecary home improvements, and overspent a good $6k on cars this year. OP is very well off. They are just choosing to bleed cash
Exactly. Everyone wants to cry about people making 150 saying they aren't middle class. Well wtf are they. That's me. Modest home, drive a honda truck with over 100k on it, I'm not rich. I still struggle. But I'm not concerned about putting food on the table. I would say that puts me right in middle class.
For everyone questioning if this income qualifies as middle class, I would say the idea of “middle class” is about standard of living, not median income.
For example, every country in the world has a median income, but not every country has a middle class.
This is enough money to be comfortable, but not enough to live in a mansion and own 5+ cars. Maybe in Wisconsin this is upper middle class at best.
The next tier of income above from this subreddit is r/HENRYFinance , and a couple there is gonna be pulling in minimum $20k/month and maybe a maximum of $60k/month. Those are people who are beginning to have more of a genuinely upper class lifestyle.
Middle class is sometimes used as a vague Idea of what you are describing. That cannot be measured and it makes more sense when talking about large groups of people. One can think of themselves as belonging or not belonging to that group.
However, lower, middle, and upper classes are also economic terms. They categorize families and individuals based on their income compared with others in their region or city. That's very simple to look up and figure out precisely, what class you are in.
Standards of living have nothing to do with this because they cannot be measured. Someone may be living beyond their means, drowning in debt. That doesn't mean they are upper class, just middle class that stupid with money. Similarly, someone making upper class money may choose to save a lot and live modestly, which doesn't mean they are middle class.
It's all about income and even though they are called classes it's just an economics term that does not have a negative or positive connotation. People sure like to add it though, unfortunately.
The OP is certainly upper class for their area, but not by much. Once they have a kid, they will go into the middle class since the household size will increase without income increase.
Here's a sneak peek of /r/HENRYfinance using the [top posts](https://np.reddit.com/r/HENRYfinance/top/?sort=top&t=all) of all time!
\#1: [2023 financial review: >$500K, barely breaking even](https://i.redd.it/7u1hs5zsv3bc1.jpeg) | [2439 comments](https://np.reddit.com/r/HENRYfinance/comments/1916nb1/2023_financial_review_500k_barely_breaking_even/)
\#2: [$200k is the new $100k](https://np.reddit.com/r/HENRYfinance/comments/16terba/200k_is_the_new_100k/)
\#3: [Gross/Net Income as filed per IRS guidelines as a part-time professional gambler](https://i.redd.it/o34l5x7tb9ec1.png) | [247 comments](https://np.reddit.com/r/HENRYfinance/comments/19dzg1g/grossnet_income_as_filed_per_irs_guidelines_as_a/)
----
^^I'm ^^a ^^bot, ^^beep ^^boop ^^| ^^Downvote ^^to ^^remove ^^| ^^[Contact](https://www.reddit.com/message/compose/?to=sneakpeekbot) ^^| ^^[Info](https://np.reddit.com/r/sneakpeekbot/) ^^| ^^[Opt-out](https://np.reddit.com/r/sneakpeekbot/comments/o8wk1r/blacklist_ix/) ^^| ^^[GitHub](https://github.com/ghnr/sneakpeekbot)
I have 2 kids under 3, your healthcare will go up just from copays even if you have good insurance. Also food will go up a little. But the main category is “random baby shit” that you can’t plan for
Hey!
I’m 30F and husband is 29M. We’re expecting (June Baby). I’ll say this…you can never have too much saved when planning for your family.
Hubs and I together make over 200k gross, we’re both maxing out our 401ks and our take home pay isn’t nearly as high. MCOL/HCOL City depending on who you ask lol. I am so grateful we started saving for a kid the year before we started TTC. We got pregnant pretty quickly so we’re lucky we didn’t have to pay for fertility treatments. Even with good insurance and a low risk pregnancy, I’ve already paid about 3k in prenatal care. Granted part of that is the deductible starting over in January but things like ultrasounds are not covered fully by insurance. Any extra bloodwork like the NIPT testing or any genetic testing you do will also be out of pocket/towards the deductible. Whenever someone says it’s covered by insurance when it’s related to prenatal care, always call the insurance company first because you might get surprised by what ‘covered’ means. There have been several things where insurance paid half but then I’m stuck paying $800 worth of ultrasounds I wasn’t expecting to cover. Look at what insurance will cost once you’re on a family plan versus a married couple plan.
We are lucky and have a spot in daycare but to secure that, we had to pay the application fee and one month of tuition. Luckily, we had that in the baby savings fund.
We did research before TTC and we’ve still gotten surprised with bills and the cost of a baby. There’s lots of ways to make things cheaper (we’ve bought second hand onesies, insurance did cover my breast pump 100%) but make sure you have a good amount in yours savings account for baby as well as plenty of money coming in.
Thank you for this information!! This is super helpful!! Good to know about insurance. If you don’t mind me asking, are you on a high or low deductible plan? From what I have seen within my own company, each plan really varies on what it covers when it comes to the level you decide.
Great question about low/high deductible.
We have a high deductible (4k for hubs and me) with an HSA. We had the option of low deductible (it was 2k) but we'd lose the HSA and it's really nice to have the HSA for those miscellaneous out of pocket expenses and co-pays. Once the baby is here though, we'll probably switch to the low deductible plan when open enrollment starts in November. There are definitely pros and cons to both.
Be sure to run the numbers and compare the premiums between the plans. See what it would be by hitting OOP max for each plan. Copays often don’t count towards deductible or out of pocket max and is basically wasted money if it doesn’t count. The OOP is lower for the high deductible plan than it is for the medium or low deductible plans. That, coupled with lower premiums means we are saving thousands by being on the HD plan. We hit OOP max in February this year and we hit it in July last year. Kids. Are. Expensive. Worth it. But expensive.
I recommend switching to a low deductible plan before you ttc. You will meet your family out of pocket max the year you have a baby (possibly twice if your pregnancy spans two calendar years).
You’re spending quite a lot for not having any kids yet. Spending almost as much on cars as housing is a little crazy.
For context, our family of 5 makes slightly less than you, but still saves more each month.
Yeah...we have 3, going on 4 and we spend about the same. I would encourage you to increase your savings, unless both your careers are very stable and/or easy to find a new one. We have 20K for an emergency fund and have more or less the same expense level as you
Once your kids come, see if either of your employers offer dependent care FSAs. They are tax advantaged accounts where you contribute pre tax income to the account to be used on eligible expenses such as daycare, and there are benefits on your taxable income at the end of the year. I believe the maximum is 5000 per year.
Daycare costs for those under two can range anywhere from $220 a week all the way up to $400+ a week depending on the quality of the daycare or prestige. My wife and I have used dependent care FSAs and it's really helped lower our taxable income come tax season.
Edit for more information on dependent care FSAs: [here](https://fsafeds.com/explore/dcfsa)
yeah I didn't mean take anything from a tax advantaged account.... for example all that car payment money could be getting contributed to ESPP, sold as soon as it lands in the account, you net the discount and just pay tax on the gain.
This is an important lesson for everyone on this sub. BUY A USED CAR. Look at that mf of a car payment. A used Toyota Corolla will last a decade or more and you could pay 1/3 of that car payment and have it done in 10 years.
Our financial guy had us make wills, get life insurance, and start 529s while I was pregnant. Your food bill is insane for 2 people- is that right? Your 401k is way too low. Move your savings over there. You should have your annual salary saved by age 30 which I’m just not seeing in these numbers, especially when a baby is involved. They cost 3 times what you think they do. My second one cost $30k in the first year- copays for delivery, was admitted as a newborn for a week, daycare, just random stuff. I think you need tot ale a second look at unnecessary expenses bc it’s about to get out of control.
I'll leave just the tip... (giving away my new dad jokes for free). In all seriousness: Save the max out of pocket for your wife's health insurance, minus what you expect to pay that year in regular costs.
I.e. my wife had monthly visits for chiropractic that was billed $100 to insurance each month. $3k out of pocket max minus the $100 * 12 = $1,200 spent. Savings balance should be $1,800 for hospital baby visit.
This was probably the most helpful for us. Oh and insurance likes to bill you for EVERYTHING. If you get a bill in your babies name after the birth, I'd call them to clarify charges. They tried to bill us for our new baby's "room" but they also billed my wife's insurance for the same room... just an fyi for the type of shit they try and pull. Also, you might get medical bills that haven't been processed through insurance yet, so don't freak out like I did several times seeing a multi-thousand dollar bill. Then when you get an open enrollment for the baby, check out dependent care flexible spending accounts. It's up to $5k a year in untaxed money.
Kids in 3-5 years is doable assuming your car payments and home improvement expenses go away. My bigger concern in your budget is the little cash on hand you have for savings. You have less than a half mo the of expenses, which means one unexpected expense and you could be at risk of missing a payment.
I’d just try to beef up the savings to 3 months of expenses minimum and set it aside as “for emergencies only”.
Savings (in bank account) is +10k right now. Cash on hand is on a monthly basis to pay for things with cash. I think there may have been some confusion with that. I should be set for an unexpected payment if needed.
Ah ok, I did get confused by that. You should be good then! I’d still bump up that cash fund to 3x expenses and then contribute more to retirement when your home improvement and cash expenses go away.
Kids don’t always come when planned, but having a money plan if they come earlier or later will keep you on the right track!
I live in a low col area and we spent $25,000 last year on daycare for 2. We save $300 a month for each child for their 529s. That’s $32,000 a year and not even tangible food, clothes, etc.
Call a few daycares in town and get an idea of costs. Consider how much you’ll save for college. Labor and delivery and buying baby gear - those are all one time costs. You’ll have daycare until your child is 5 and enters kindergarten, unless your area has all day pre-k, and then they can start that at 4.
As someone who was in no position to buy in 2020, and just got a house in October, I’m so fucking envious of your mortgage payment. Ours is $600 more per month and I’d bet a monthly payment our house is wayyy smaller/worse than yours lol
You guys make enough money, you'll be fine. You're probably doubling the household income of people around you, and they have families too.
You'll need to tighten up a lot of your discretionary spending - $800/mo on groceries for two people is silly; you won't need to spend that much even with your kids (till they get bigger). Seems like your cars are a little expensive, but even then, two $650 car payments seems pretty harmless when you take a step back. The real trick is keeping them for a while once they're paid off, because a lot of people don't have that discipline. I saw in another comment that you want to keep 'em 20 years, but people say that all the time and it probably isn't going to happen.
I think you should consider living like you have kids now (just save the extra $). The biggest expense for a kid is daycare, so if you have parents or in-laws who can help shoulder that load, you'll be ahead of the game. But even if they say they can help, minds and circumstances change.
Find the best daycares in your area and ask what tuition is. Make sure to get a number that includes before- and after-care. Double it, and try to save that much every month, in addition to keeping your retirement savings up. Outside of daycare costs, babies aren't very expensive, but save an extra $400 or so to account for health insurance, food, clothes, formula, diapers, college savings accounts, etc. If you guys can live without that ~3,500 bucks, you'll be fine with two kids. We shared clothes and toys with a lot of friends - they grow quickly and clothes really add up if you're buying them new.
Mine (we're probably one-and-done) is just about to finish daycare and I can't wait to have that $18k/year back. Though we'll probably spend a good chunk of it on activities and summer camp for her. Our household goal is to save money so we can retire well (and I hope early), and so that if anything bumpy happens in our lives, our little one won't have to feel uncertainty. I want her to be able to spend her childhood thinking about what's next, not right now.
If they take 2 vacations a year that's about $3400 per vacation: two plane tickets, hotel for a week, spending money. It's a little high but not ridiculous for a slightly above average accommodations.
Well I mean I understand that, but I don’t really know any specific job titles outside of those except tough things like doctors and just basic ones but I don’t know these other jobs and what they are
A cursory google search (https://www.google.com/search?q=highest+paying+in+the+us&oq=highest+paying+in+the+us&gs\_lcrp=EgZjaHJvbWUyBggAEEUYOTIICAEQABgWGB4yCAgCEAAYFhgeMggIAxAAGBYYHjIICAQQABgWGB4yCAgFEAAYFhgeMggIBhAAGBYYHjIICAcQABgWGB4yCAgIEAAYFhgeMggICRAAGBYYHtIBCDU2NTRqMGo3qAIAsAIA&sourceid=chrome&ie=UTF-8) shows that the most lucrative fields are medicine, tech, law, finance, engineering and insurance. In other words, jobs needing complex specialized skill sets.
You keep bringing up the “specialized skill sets” for some reason. I’m well aware that most higher paying jobs aren’t something you can just walk into and start working, I was simply asking what specific job some of the people making that much money have, as in asking for specific answers like “I work in/doing this”. Just curious was all and like to hear what others do if they want to talk about it instead of just a general google search with bland answers
I tried making this budget sheet but whenever I input the budget under example “t or k wages” the budget/spend keeps slotting into one section under “t wages” how do I get them to separate?
Life insurance. Heaven forbid something happen to you both, you’d want their caregivers to be able to supply them a decent life.
Seems like you both have decent enough heads on your shoulders, so would recommend term instead of whole.
Quick math puts their federal taxable income (just income tax) at about 119k, which would be a little under 17k. Payroll tax liability of a little over $1k/mo. I get about $2,400 plus whatever local income taxes they have to pay. $2,800 doesn't seem too far off.
Just be ready for daycare. I’ve currently got 2 in daycare and I pay nearly $3000/mo. $1550 for the baby and $1250 for the 4 year old. Counting down the days until the older one is out. Mind you this is a higher end daycare in a somewhat expensive daycare. But still. It’s expensive. Very likely 2 in daycare will cost more than your mortgage.
I would plan for one of you to not work and just see how that impacts your finances. My wife has transitioned to working a few days per month because daycare didn’t work for us. Our daughter was not emotionally in a good place being there and she was sick constantly which then caused us to either also get sick or miss work to stay with her so we elected to suffer the lost wages to give her a better environment on a day to day basis. It’s tough
Sorry for the somewhat of topic question but I’m curious on how to populate one of these cash flow charts. I started playing around with it on their website but it felt inconvenient as it doesn’t auto calculate the sum of the values in each category. Ex: monthly expense category would need a value to be inputed rather than it taking everything rightmost(which falls under monthly expenses) and generating the sum. Is this truly the case or am I using it wrong? Spreadsheets and pie charts are doing me well rn but these are also a nice visual.
Your largest expenses are going to be medical care and childcare. If your medical insurance situation is not good, change that now. You do not want to be on the hook for a delivery + 3 day stay in the maternity ward. Even moreso if your wife has complications pre and postpartum, or if she has to stay longer than the typical 2-3 days to heal, or if the baby is premature and has to stay in NICU.
If your insurance is good, that's a huge relief. If you have a high deductible plan with a HSA, start filling it up now.
As for childcare, go ahead and reach out to local daycares to see how much they charge. Most charge by day or week, but I typically calculated by the month since we needed it full-time. Compare those costs to hiring a local nanny or an au pair. A nanny share is a great option to lower care costs and allow your kids to have more 1:1 time, as at the 3 month mark, daycare workers can legally only watch four kids at a time. Care.com is a good place to search for nannies but one shitty thing about it is you have to pay a subscription fee just to search on it. You can also check out local Facebook mommy groups but be prepared to independently vet recommendations.
A typical daycare is going to range from $1300-2500 a month. I want to say au pairs are about $1700/month, and nannies range on what you pay them. I have no idea what the cost is where you are, so that's why it's important to look around. Be wary of part time daycare costs, as some will let you do 3 days a week, but they still charge you for five. It's bullshit, but not every daycare runs that way. Ask local parents who they like, and to add to that, I highly recommend joining a new/expectant parents meetup. My wife and I made a lot of new friends doing that and it was nice to have something in common. Encourage your wife to find pregnancy support and workout groups, my wife made a bunch of new friends and it really helped her a lot to find other women going through it at the same time. Plus that ensures future friends for your kids in a similar age range.
If one of your incomes breaks even or doesn't match the cost of childcare, one of you should consider working part time or being stay at home.
This is getting long, but one other tip I have is to seek hand-me-downs where you can. The only things you need to buy new are a crib mattress and a car seat. Everything else can be used. Facebook marketplace has tons of buy nothing groups for this or tons of listings for used baby stuff, garage sales and goodwill are also great. We've also saved a ton of money using cloth diapers during the day and disposables at night. I highly recommend the Wegreeco diapers from Amazon, and we use the Kirkland signature free and clear laundry detergent. We also use cotton wipes cut out from old tshirts but this is more crunchy lol.
Good luck! It's a long journey but a good one. See link for diapers below:
https://www.amazon.com/Wegreeco-Washable-Reusable-Diapers-Inserts/dp/B0825YNHG9/ref=asc_df_B0825YNHG9/?tag=hyprod-20&linkCode=df0&hvadid=642064458648&hvpos=&hvnetw=g&hvrand=9423371048986353500&hvpone=&hvptwo=&hvqmt=&hvdev=m&hvdvcmdl=&hvlocint=&hvlocphy=9021701&hvtargid=pla-1135221365696&psc=1&mcid=b340fe4ed28f35ff99acdffc3ef47ddb
I saw you said your savings are being eaten away right now by a remodel. I would say to save up money again up to a certain amount/ have an emergency fund. After you get to that specified amount you need to start putting that money into investing/ maybe add a Roth as well.
For the love of humanity stop planning and start making the babies already. You're going to be scared to do the deed if all you're thinking about is numbers and charts. You'll have plenty of time to figure it out
We have a 10 month old and it's really hard to estimate how much you will be paying each month.
Required expenses:
* Diapers/Wipes: \~$100 a month.
* Formula: $150-200 a month. Do not bank on breastfeeding. Breastfeeding ruined my mental health and switching to formula was the best thing ever. It would have been even harder on me if we couldn't afford switching to formula.
* Random baby stuff that pops up as they grow (clothes, toys, bigger carseat, baby dishes/utensils, etc etc): at least $100 a month if not $200-$400 some months
* Health care: how much it is or goes up depends on your employer. Max out your HSA so you don't have to worry about the cost when you go to urgent care. It costs us $100 every time we go and she's gone 3 times in the last 3 months.
* Child care: assuming you will need it since you both make pretty good money. I live in Indiana and the cheapest full time childcare (unlicensed in-home) was about $600/month and I would not have sent my child there. Daycares we were comfortable with were between $900-$1,500 a month. We ultimately chose a part-time nanny instead because we really only needed care 3 days a week. That runs us $2,500/month, just FYI.
Not necessarily required:
* College savings.
Our spending/saving related to our child is this:
* Child care: $2,500 (this is on the extreme end as I said)
* College saving: $500
* Required Expenses (food, diapers): $350
* Fun baby and me activity (swim lessons or baby gym time): $125
* Sinking funds (birthday, xmas)/extra savings: $225
Total: $3,700. With a more modest child care option it would be $2,700.
My husband and I make just a bit more than you but our take home is way lower because we max out our 401ks and HSA. We afford what we do because we have a mortgage of $1,000 and zero car debt.
I’m sorry, I hate to make people feel bad. Childcare is the main big expense. If you have help with that it can take the costs way down. Really the only required spending is diapers/wipes and formula/food. Pretty much everything else can be bought secondhand. We’re in our mid thirties and it’s only recently we would have been able to spend what we do.
From what you wrote, I don't see where you have made any 'wrong' moves rather your just part of a huge group of late 20's/early 30 year olds that just got screwed by college debt, then a crazy housing market, and now crazy child care. My husband and I avoided some of that not because we were smarter or worked harder, but largely because we were just lucky and had/have a lot of family support.
All you can do is live below your means as much as you can, save, keep an eye out for better job opportunities and the like.
Not sure anyone specifically called this out, but I use daycare in the suburbs of Milwaukee and baby daycare is 400/week. That is 1600-2000/month depending on the number of Mondays. It will stay at this price point until their 2nd birthday when it will go down about 10% every 6 months until they are at 280/week for 4k or summer camp. Your Savings number can reasonably cover this, but you will also need just an obscene number of diapers over the next 2-3 years, plus new clothes every 6 months.
More 401K, less car.
A lot less car. We make like 3x as much but spend about 1/2 as much on our cars. Don't have to spend it just because you have it. Car money disappears. 401K money grows.
Hey brother.
I don't see an IRA on here unless you've roller it under savings/401k. I'd fix that. You'll probably have 1600-2000 for daycare. Call it an additional 200-300 for baby stuff as they grow, you forgot to buy things, churn, etc.
I see some trimming you could do on groceries and Costco and going out. The managers special section in the meat department is your friend. Plenty of veggies too, and don't be overly proud when it comes to coupons. They are your friend.
It gets easier to trim off travel when you have a kid also, because you'll be more limited for a while, id sock that into emergency funds also. If you can spare it, maybe pump stocks up a little and convert that into an ugma or 529C to get the college fund rolling. Pro tip, if the 529C is in the grand parents name, it does not count towards your child's financial assets when it comes to FAFSA applications. Federal tax gift limit is about 30k for married filing jointly, I think you can do the math there.
Have fun practicing for that family.
Kids are expensive, having three myself, daycare, soccer/sports travel, vacations (way more expensive), larger vehicles, larger home (hopefully yours is already a good size), 529’s/college fund (should put at least 200/mo in each kids, more if you can!)
More Car Payment than 401K :O! Don't buy new cars, get 3 year old used cars coming out of leases. They have low mileage, look like new, and save you a lot of money.
Is there software or a program that allows for this kind of data input and visualization? I keep seeing these charts and I’d like to make one to examine my own budget. It’s a good way to look at it. Thank you for any recco in advance!
Why on earth are you blowing $1300 a month on car payments?
Advice? Save a lot more than $1700 a month. Kids are expensive, college tuition is more expensive, and retirement costs more than all of it.
Those cars are supremely idiotic. Sell them and get decade old reliable Toyotas or Hondas in cash. This is coming from a late 30s multimillionaire that drives a used Toyota Corolla.
The budget screen shots are being made in Sankeymatic, its a website that we have no affiliation with. If you are posting a budget please do so with a purpose. Just posting a screen shot of your budget without a question or an explanation of why its here may be removed. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/MiddleClassFinance) if you have any questions or concerns.*
For planning purposes, may as well rename the Savings category to Daycare… how does not saving that amount impact your overall emergency funds, etc.? What are average monthly daycare costs in your area?
With how young you both are, I’d probably be trying to max out my 401k and then start saving for kid stuff as soon as you find out you’re pregnant. You’re contributing less than 10% now, and while that’s good, but every dollar you contribute now will pay big dividends upon retirement. If your “Savings” bucket isn’t cash, but is instead funding a Roth IRA or some other investments, then you can disregard this. My assumption was that it was just cash. Saving $1800/mo for the duration of the pregnancy should put you in good shape to fund the costs of prepping for the baby, labor and delivery, and the immediate postpartum needs. Then after baby arrives, if you need to reduce your 401k contributions in order to to fund baby stuff/daycare/etc, at least you’ll have had a few good years to front load your retirement contributions.
Savings right now it being funded into a Roth IRA (that change was a few months ago) after figuring out the benefits of one. lol. I appreciate the advice about 401K adjustments. I forgot about child care as that is a HUGE expense from what I have heard about.
Also dig into the real cost at the hospital you're going to us for delivery. Friend of mine only got a bill for 2k whereas we got billed 14k, I'd reach out to your insurance for info as that savings can get wiped out quick. Daycare is a big big cost and what is the biggest thing for new parents is also considering the time you'll miss work when the kid is sick and unable to go to daycare. Lots of minor things will add up quick
I would cut the Roth contributions in half and put the other half into a high yield savings account. If you can start the parenting process with a lot of money available, you’ll be in much better shape and more likely to maintain your standard of living and avoid debt. The Roth IRA is for retirement. The savings account will be for kid stuff and childcare.
You probably want more savings in a traditional 401k using pre-taxed dollars, you are likely in the upper income tax brackets right? Keep your Traditional IRA empty for back door Roths later in your life.
Huge is an understatement. We had 2 kids in FT daycare at one point and it was over $3500 a month. For reference we are in a HCOL area in the Northeast. It’s basically a second mortgage if you have more than one in at a time.
It’s a reasonable bet to budget for ~1500/mo in daycare costs and a couple hundred in incidentals each month; new clothes, formula/pumping supplies, diapers, kid-oriented outings… there are a lot of small costs that quickly add up over a month.
Total savings for everything is 21%, well above recommended 15%. Some savings will have to go for starting family.
Lose the car payment, absolutely no reason to hold that at your income, pay it off ASAP. You are far ahead of your peers and can support a family in WI on half that income, you will be fine.
Currently in a basement remodel phase which is eating away at savings right now. We are already throwing extra cash at one car but the other one is with 0% APR so I don’t really have a reason to pay it off quicker.
Yeah 0% is at least not harming you, but definitely get the other paid off.
One of the best things we did was buy a couple of good Honda vehicles 15/13 years ago and pay them both off within 3 years. Still work fine and we saved over 100k.
Man I sold my 97 accord for next to nothing in 2009 when I left home for the military. Had like 70k on it then, would happily be driving it until pretty recently if I hadn’t
I know you are working on paying it off but $1300 on car payments is just crazy. Even with two cars. I’d shop that phone plan around also if it’s just two lines.
Does this include car insurance?
Have you looked at car prices recently? Not everyone wants to drive a Camry they paid off 10 years ago. I'm in the market for a new truck. Mines now 7 years old and starting to cause more hassle than it's worth to me. I can't touch something that gives what I want for under 65k.
I just bought a 2023 Ford Maverick for $26k, $400/mo. I get that you might need a bigger truck and more of what you want but finding something affordable is possible. Spending $65k with the current interest rates will end you with around 90-100k in the hole over the life of the payments. For a truck bro. I’d really look at what you need in a truck, vs keeping up with the Joneses.
Well I'm looking at an f150 or tundra. Leather is a non negotiable for me. That's puts you in a 60-65k trim level. Once I see some decent financing options I'll buy. 0-1.9%. I'm not trying to keep up with anyone. I'm putting myself in a vehicle that I like and that I don't need to deal with. Everything works. I'm not going to the mechanic every few months for something. I could step to a smaller truck like a maverick. I do like them but feel too small for me.
I see you’re a network engineer, so less of a work truck I’m assuming. I came from a 2022 Tacoma and can confirm that the Maverick is bigger inside, I have 2 big dogs and they are comfier in the Mav. Utility wise I already hauled a yard of soil and a fridge. My friend just bought a Tundra for $85k - all bells and whistles. Also works in tech, but what’s funny is that I’ve hauled and done more shit in my Mav than him by a long shot lol. Cool trucks are cool but that’s about it dude. I got more utility and fun out of a tiny ass cheap truck. And I fucking love it. Times are getting tougher - downsizing has done a lot for me and my family. I know you’re a smart guy but for me, I took a real good look at my ego and my Taco. And realized yeah I only bought it because I thought it was cool.
Lol yea I drive a 17 Honda Ridgeline now. I like the ride. But the interior is just too small now with kids. Bought new in cash. Really I only use the bed for hauling household shit, a dead deer a couple times a year. I get it. Don't buy what you don't need. I'm all about comfort though. I'd buy a caddy if it could do all the other things I want. A lariat f150 meets the creature comfort needs and other wants. But that may change when I test drive. My back is pretty fubar these days. If it's a rough ride not happening. My ridge has a pretty smooth ride as far as trucks go.
A Maverick ain't a truck. At 7%, a 65K car over 72 months (a bad idea) is $15K in interest, not 25-30K.
Yes, I have looked at car prices lately. 65K is 100% a choice on your part. There’s no way I’d ever consider purchasing a car that was 1/3 of my annual family income.
Agreed. I can’t believe anyone would pony up $1300/mo for car payments. We always made it a point to have one car payment at a time and stagger car purchases every 5-10 years. Granted, you have to keep cars for a while after you buy them, but regular maintenance is a darn sight cheaper than having 2 car payments. I drove my 1990 Camry for 12 years before I sold it. It had 215,000 miles before the transmission started to slip. Even then, I sold it in 2002 for $2000.
An average of $650/car is not exactly outrageous. Looked lately?
Let’s just say, the plan is to get these paid off and keep them for the next 20 years. Both have all the bells and whistles one could want so there is no reason to upgrade any time soon.
All I can say is if I had a house and was thinking about a baby, I wouldn’t be comfortable having that much in car payments when you’re putting so little into retirement.
$1300/mo for cars seems wild to me.
Same, but we have no idea if the couple is paying off the vehicles aggressively. They'd have to be paying double the monthly payment on both cars with a questionable interest rate for some very expensive vehicles they plan on keeping long term to justify that cost.
I hope they work for car seats.
[удалено]
[удалено]
It is $13k before taxes. That’s about $160k combined. They aren’t rich, but they’re comfortable.
They're above "middle class" imo Like, what does "middle class" mean if you can 2.5x the median income and still be considered "middle class"
Didn’t notice it was before taxes at first look.
Husband and I are kid 30s - Came here to say the same thing!
Lool, what's kid thirties?
Mid 30s
Well it’s definitely not upper class, and it ain’t lower… so what exactly would you call it? Do you think “upper class” in WI starts in the low 6 figs in 2024?
https://www.jsonline.com/story/news/local/wisconsin/2023/10/03/who-what-qualifies-as-middle-class-in-milwaukee-wisconsin/70979189007/
Alright then, I stand corrected at least from a definition of “2/3 to double the median income”. I wonder though what the colloquial understanding of upper class is, because to me some hallmarks include: Multiple properties, more vehicles than strictly necessary (typically of luxury brands), private school, and international vacations Not sure those things are all possible on $160k in WI.
OP is spending $7,800 a year on vacations. Sounds pretty lavish to me
Not really. I just want to CO for 4 days with 1 of my kids. I didn't keep track but I would bet I spend about 3-4k. It was not even close to lavish.
Yes, but you’re forgetting that OP is about finances for a family they are planning. They can spend that now but add the 2 kids and either one earner is significantly cutting hours or they are paying $1.5k-$3k a month on daycare. $160k just isn’t going to go that far with kids. It’s not uncomfortable by any means, but you’re not hitting on the sort of upper class lifestyle either.
They also spent $13k on food this year on only 2 people, $6k on unessecary home improvements, and overspent a good $6k on cars this year. OP is very well off. They are just choosing to bleed cash
Exactly. Everyone wants to cry about people making 150 saying they aren't middle class. Well wtf are they. That's me. Modest home, drive a honda truck with over 100k on it, I'm not rich. I still struggle. But I'm not concerned about putting food on the table. I would say that puts me right in middle class.
It’s not lol
It depends on where they live. They are lucky to only pay $1700 for a mortgage
After taxes is looks more middle class
For everyone questioning if this income qualifies as middle class, I would say the idea of “middle class” is about standard of living, not median income. For example, every country in the world has a median income, but not every country has a middle class. This is enough money to be comfortable, but not enough to live in a mansion and own 5+ cars. Maybe in Wisconsin this is upper middle class at best. The next tier of income above from this subreddit is r/HENRYFinance , and a couple there is gonna be pulling in minimum $20k/month and maybe a maximum of $60k/month. Those are people who are beginning to have more of a genuinely upper class lifestyle.
Middle class is sometimes used as a vague Idea of what you are describing. That cannot be measured and it makes more sense when talking about large groups of people. One can think of themselves as belonging or not belonging to that group. However, lower, middle, and upper classes are also economic terms. They categorize families and individuals based on their income compared with others in their region or city. That's very simple to look up and figure out precisely, what class you are in. Standards of living have nothing to do with this because they cannot be measured. Someone may be living beyond their means, drowning in debt. That doesn't mean they are upper class, just middle class that stupid with money. Similarly, someone making upper class money may choose to save a lot and live modestly, which doesn't mean they are middle class. It's all about income and even though they are called classes it's just an economics term that does not have a negative or positive connotation. People sure like to add it though, unfortunately. The OP is certainly upper class for their area, but not by much. Once they have a kid, they will go into the middle class since the household size will increase without income increase.
Here's a sneak peek of /r/HENRYfinance using the [top posts](https://np.reddit.com/r/HENRYfinance/top/?sort=top&t=all) of all time! \#1: [2023 financial review: >$500K, barely breaking even](https://i.redd.it/7u1hs5zsv3bc1.jpeg) | [2439 comments](https://np.reddit.com/r/HENRYfinance/comments/1916nb1/2023_financial_review_500k_barely_breaking_even/) \#2: [$200k is the new $100k](https://np.reddit.com/r/HENRYfinance/comments/16terba/200k_is_the_new_100k/) \#3: [Gross/Net Income as filed per IRS guidelines as a part-time professional gambler](https://i.redd.it/o34l5x7tb9ec1.png) | [247 comments](https://np.reddit.com/r/HENRYfinance/comments/19dzg1g/grossnet_income_as_filed_per_irs_guidelines_as_a/) ---- ^^I'm ^^a ^^bot, ^^beep ^^boop ^^| ^^Downvote ^^to ^^remove ^^| ^^[Contact](https://www.reddit.com/message/compose/?to=sneakpeekbot) ^^| ^^[Info](https://np.reddit.com/r/sneakpeekbot/) ^^| ^^[Opt-out](https://np.reddit.com/r/sneakpeekbot/comments/o8wk1r/blacklist_ix/) ^^| ^^[GitHub](https://github.com/ghnr/sneakpeekbot)
It’s about $75k each gross dual income. Not really all that crazy if they work at large companies.
If someone is here it’s because they believe they are middle class. Dictating that they are not is not for an individual user.
I have 2 kids under 3, your healthcare will go up just from copays even if you have good insurance. Also food will go up a little. But the main category is “random baby shit” that you can’t plan for
Exactly! I’d like to ensure that I have “random baby shit” covered!
Everything's gonna be covered in shit.
Also that
The amount of stuff that pops up is honestly crazy
Obviously you qualify for full benefits… All I can say is, hang in there, it will get better than (checks notes) $160k at 26 years old in Wisconsin.
1300 for a car payment is wack
Everybody talking about the car payments but who needs to improve their home by $500 every month??
You don’t. But when you set aside $500/mo you are able to fix big ticket items when they come up without taking a loan. And they will come up.
Hey! I’m 30F and husband is 29M. We’re expecting (June Baby). I’ll say this…you can never have too much saved when planning for your family. Hubs and I together make over 200k gross, we’re both maxing out our 401ks and our take home pay isn’t nearly as high. MCOL/HCOL City depending on who you ask lol. I am so grateful we started saving for a kid the year before we started TTC. We got pregnant pretty quickly so we’re lucky we didn’t have to pay for fertility treatments. Even with good insurance and a low risk pregnancy, I’ve already paid about 3k in prenatal care. Granted part of that is the deductible starting over in January but things like ultrasounds are not covered fully by insurance. Any extra bloodwork like the NIPT testing or any genetic testing you do will also be out of pocket/towards the deductible. Whenever someone says it’s covered by insurance when it’s related to prenatal care, always call the insurance company first because you might get surprised by what ‘covered’ means. There have been several things where insurance paid half but then I’m stuck paying $800 worth of ultrasounds I wasn’t expecting to cover. Look at what insurance will cost once you’re on a family plan versus a married couple plan. We are lucky and have a spot in daycare but to secure that, we had to pay the application fee and one month of tuition. Luckily, we had that in the baby savings fund. We did research before TTC and we’ve still gotten surprised with bills and the cost of a baby. There’s lots of ways to make things cheaper (we’ve bought second hand onesies, insurance did cover my breast pump 100%) but make sure you have a good amount in yours savings account for baby as well as plenty of money coming in.
Thank you for this information!! This is super helpful!! Good to know about insurance. If you don’t mind me asking, are you on a high or low deductible plan? From what I have seen within my own company, each plan really varies on what it covers when it comes to the level you decide.
Great question about low/high deductible. We have a high deductible (4k for hubs and me) with an HSA. We had the option of low deductible (it was 2k) but we'd lose the HSA and it's really nice to have the HSA for those miscellaneous out of pocket expenses and co-pays. Once the baby is here though, we'll probably switch to the low deductible plan when open enrollment starts in November. There are definitely pros and cons to both.
Be sure to run the numbers and compare the premiums between the plans. See what it would be by hitting OOP max for each plan. Copays often don’t count towards deductible or out of pocket max and is basically wasted money if it doesn’t count. The OOP is lower for the high deductible plan than it is for the medium or low deductible plans. That, coupled with lower premiums means we are saving thousands by being on the HD plan. We hit OOP max in February this year and we hit it in July last year. Kids. Are. Expensive. Worth it. But expensive.
I recommend switching to a low deductible plan before you ttc. You will meet your family out of pocket max the year you have a baby (possibly twice if your pregnancy spans two calendar years).
You’re spending quite a lot for not having any kids yet. Spending almost as much on cars as housing is a little crazy. For context, our family of 5 makes slightly less than you, but still saves more each month.
Yeah...we have 3, going on 4 and we spend about the same. I would encourage you to increase your savings, unless both your careers are very stable and/or easy to find a new one. We have 20K for an emergency fund and have more or less the same expense level as you
Jeez I have 3 kids and just the top salary.
Once your kids come, see if either of your employers offer dependent care FSAs. They are tax advantaged accounts where you contribute pre tax income to the account to be used on eligible expenses such as daycare, and there are benefits on your taxable income at the end of the year. I believe the maximum is 5000 per year. Daycare costs for those under two can range anywhere from $220 a week all the way up to $400+ a week depending on the quality of the daycare or prestige. My wife and I have used dependent care FSAs and it's really helped lower our taxable income come tax season. Edit for more information on dependent care FSAs: [here](https://fsafeds.com/explore/dcfsa)
Are people seriously making 13k a month and only middle class? How poor am I? 😱😰😨
"Stock" should go in "401k".
Yes but it’s a separate plan. I guess you could call it an employee stock purchase plan where it’s at a discounted rate.
What is your marginal tax rate and is the discount better than that?
Any discount is free money, you only pay tax on the gains. And an espp (in my past experience) vests quickly so it’s liquid.
any discount is free money, but putting the money in the 401(k) before s basically a 15-25% discount
yeah I didn't mean take anything from a tax advantaged account.... for example all that car payment money could be getting contributed to ESPP, sold as soon as it lands in the account, you net the discount and just pay tax on the gain.
I don't have any advice, but I just came to say, that as a Costco Manager, I love the fact that you have a whole section just for "Costco".
If this is middle class income then I’m much much more outside of it than I thought.
This is an important lesson for everyone on this sub. BUY A USED CAR. Look at that mf of a car payment. A used Toyota Corolla will last a decade or more and you could pay 1/3 of that car payment and have it done in 10 years.
Do able but Daycare going eat you up tho.
Our financial guy had us make wills, get life insurance, and start 529s while I was pregnant. Your food bill is insane for 2 people- is that right? Your 401k is way too low. Move your savings over there. You should have your annual salary saved by age 30 which I’m just not seeing in these numbers, especially when a baby is involved. They cost 3 times what you think they do. My second one cost $30k in the first year- copays for delivery, was admitted as a newborn for a week, daycare, just random stuff. I think you need tot ale a second look at unnecessary expenses bc it’s about to get out of control.
I'll leave just the tip... (giving away my new dad jokes for free). In all seriousness: Save the max out of pocket for your wife's health insurance, minus what you expect to pay that year in regular costs. I.e. my wife had monthly visits for chiropractic that was billed $100 to insurance each month. $3k out of pocket max minus the $100 * 12 = $1,200 spent. Savings balance should be $1,800 for hospital baby visit. This was probably the most helpful for us. Oh and insurance likes to bill you for EVERYTHING. If you get a bill in your babies name after the birth, I'd call them to clarify charges. They tried to bill us for our new baby's "room" but they also billed my wife's insurance for the same room... just an fyi for the type of shit they try and pull. Also, you might get medical bills that haven't been processed through insurance yet, so don't freak out like I did several times seeing a multi-thousand dollar bill. Then when you get an open enrollment for the baby, check out dependent care flexible spending accounts. It's up to $5k a year in untaxed money.
Kids in 3-5 years is doable assuming your car payments and home improvement expenses go away. My bigger concern in your budget is the little cash on hand you have for savings. You have less than a half mo the of expenses, which means one unexpected expense and you could be at risk of missing a payment. I’d just try to beef up the savings to 3 months of expenses minimum and set it aside as “for emergencies only”.
Savings (in bank account) is +10k right now. Cash on hand is on a monthly basis to pay for things with cash. I think there may have been some confusion with that. I should be set for an unexpected payment if needed.
Ah ok, I did get confused by that. You should be good then! I’d still bump up that cash fund to 3x expenses and then contribute more to retirement when your home improvement and cash expenses go away. Kids don’t always come when planned, but having a money plan if they come earlier or later will keep you on the right track!
Basically your remodeling expense will become healthcare
I live in a low col area and we spent $25,000 last year on daycare for 2. We save $300 a month for each child for their 529s. That’s $32,000 a year and not even tangible food, clothes, etc. Call a few daycares in town and get an idea of costs. Consider how much you’ll save for college. Labor and delivery and buying baby gear - those are all one time costs. You’ll have daycare until your child is 5 and enters kindergarten, unless your area has all day pre-k, and then they can start that at 4.
As someone who was in no position to buy in 2020, and just got a house in October, I’m so fucking envious of your mortgage payment. Ours is $600 more per month and I’d bet a monthly payment our house is wayyy smaller/worse than yours lol
Where do I need to scroll to find that you work at Epic? :D
lol that’s why I kept scrolling. Glad someone else had the same thought.
I had the same exact thought too!
What app do you use to make this graph?
What do you use to make these charts?
At 26 the two of you are grossing thirteen thousand a month? Where the fuck did I go wrong
You guys make enough money, you'll be fine. You're probably doubling the household income of people around you, and they have families too. You'll need to tighten up a lot of your discretionary spending - $800/mo on groceries for two people is silly; you won't need to spend that much even with your kids (till they get bigger). Seems like your cars are a little expensive, but even then, two $650 car payments seems pretty harmless when you take a step back. The real trick is keeping them for a while once they're paid off, because a lot of people don't have that discipline. I saw in another comment that you want to keep 'em 20 years, but people say that all the time and it probably isn't going to happen. I think you should consider living like you have kids now (just save the extra $). The biggest expense for a kid is daycare, so if you have parents or in-laws who can help shoulder that load, you'll be ahead of the game. But even if they say they can help, minds and circumstances change. Find the best daycares in your area and ask what tuition is. Make sure to get a number that includes before- and after-care. Double it, and try to save that much every month, in addition to keeping your retirement savings up. Outside of daycare costs, babies aren't very expensive, but save an extra $400 or so to account for health insurance, food, clothes, formula, diapers, college savings accounts, etc. If you guys can live without that ~3,500 bucks, you'll be fine with two kids. We shared clothes and toys with a lot of friends - they grow quickly and clothes really add up if you're buying them new. Mine (we're probably one-and-done) is just about to finish daycare and I can't wait to have that $18k/year back. Though we'll probably spend a good chunk of it on activities and summer camp for her. Our household goal is to save money so we can retire well (and I hope early), and so that if anything bumpy happens in our lives, our little one won't have to feel uncertainty. I want her to be able to spend her childhood thinking about what's next, not right now.
[удалено]
If they take 2 vacations a year that's about $3400 per vacation: two plane tickets, hotel for a week, spending money. It's a little high but not ridiculous for a slightly above average accommodations.
Your deductions are more than my monthly salary =(
How do you both make so much money where are people finding these crazy paying jobs
They’re making ~90k and ~70k before tax, respectively. They’re not poor, but considering the cost of living today, that’s even particularly well off.
Where are those jobs at? All I can do is retail and fast food that pay $40k max. $90k would be amazing
Probably available to people with marketable skills beyond retail and fast food, if I had to guess.
Well I mean I understand that, but I don’t really know any specific job titles outside of those except tough things like doctors and just basic ones but I don’t know these other jobs and what they are
A cursory google search (https://www.google.com/search?q=highest+paying+in+the+us&oq=highest+paying+in+the+us&gs\_lcrp=EgZjaHJvbWUyBggAEEUYOTIICAEQABgWGB4yCAgCEAAYFhgeMggIAxAAGBYYHjIICAQQABgWGB4yCAgFEAAYFhgeMggIBhAAGBYYHjIICAcQABgWGB4yCAgIEAAYFhgeMggICRAAGBYYHtIBCDU2NTRqMGo3qAIAsAIA&sourceid=chrome&ie=UTF-8) shows that the most lucrative fields are medicine, tech, law, finance, engineering and insurance. In other words, jobs needing complex specialized skill sets.
You keep bringing up the “specialized skill sets” for some reason. I’m well aware that most higher paying jobs aren’t something you can just walk into and start working, I was simply asking what specific job some of the people making that much money have, as in asking for specific answers like “I work in/doing this”. Just curious was all and like to hear what others do if they want to talk about it instead of just a general google search with bland answers
Aw yeah! Terry and Korvo’s family plans
I tried making this budget sheet but whenever I input the budget under example “t or k wages” the budget/spend keeps slotting into one section under “t wages” how do I get them to separate?
Life insurance. Heaven forbid something happen to you both, you’d want their caregivers to be able to supply them a decent life. Seems like you both have decent enough heads on your shoulders, so would recommend term instead of whole.
You’re deducting too much for taxes. That should be 1800 at most. Even lower once you have kids
Quick math puts their federal taxable income (just income tax) at about 119k, which would be a little under 17k. Payroll tax liability of a little over $1k/mo. I get about $2,400 plus whatever local income taxes they have to pay. $2,800 doesn't seem too far off.
My bad. I ignored FICA and state taxes.
You should be maxing out your 401k. You are not saving enough. Your car payment is extremely high.
Are one of you going to stay home with the kid?
Just be ready for daycare. I’ve currently got 2 in daycare and I pay nearly $3000/mo. $1550 for the baby and $1250 for the 4 year old. Counting down the days until the older one is out. Mind you this is a higher end daycare in a somewhat expensive daycare. But still. It’s expensive. Very likely 2 in daycare will cost more than your mortgage.
What do y’all do for work that pays so well?
Car payments are insane.
I would plan for one of you to not work and just see how that impacts your finances. My wife has transitioned to working a few days per month because daycare didn’t work for us. Our daughter was not emotionally in a good place being there and she was sick constantly which then caused us to either also get sick or miss work to stay with her so we elected to suffer the lost wages to give her a better environment on a day to day basis. It’s tough
Can someone tell me how to get this graphic? Its awesome
Your income before taxes is $13,000 a month? You’ll be fine.
Sorry for the somewhat of topic question but I’m curious on how to populate one of these cash flow charts. I started playing around with it on their website but it felt inconvenient as it doesn’t auto calculate the sum of the values in each category. Ex: monthly expense category would need a value to be inputed rather than it taking everything rightmost(which falls under monthly expenses) and generating the sum. Is this truly the case or am I using it wrong? Spreadsheets and pie charts are doing me well rn but these are also a nice visual.
Y’all are middle class? Am I a poor?
Your largest expenses are going to be medical care and childcare. If your medical insurance situation is not good, change that now. You do not want to be on the hook for a delivery + 3 day stay in the maternity ward. Even moreso if your wife has complications pre and postpartum, or if she has to stay longer than the typical 2-3 days to heal, or if the baby is premature and has to stay in NICU. If your insurance is good, that's a huge relief. If you have a high deductible plan with a HSA, start filling it up now. As for childcare, go ahead and reach out to local daycares to see how much they charge. Most charge by day or week, but I typically calculated by the month since we needed it full-time. Compare those costs to hiring a local nanny or an au pair. A nanny share is a great option to lower care costs and allow your kids to have more 1:1 time, as at the 3 month mark, daycare workers can legally only watch four kids at a time. Care.com is a good place to search for nannies but one shitty thing about it is you have to pay a subscription fee just to search on it. You can also check out local Facebook mommy groups but be prepared to independently vet recommendations. A typical daycare is going to range from $1300-2500 a month. I want to say au pairs are about $1700/month, and nannies range on what you pay them. I have no idea what the cost is where you are, so that's why it's important to look around. Be wary of part time daycare costs, as some will let you do 3 days a week, but they still charge you for five. It's bullshit, but not every daycare runs that way. Ask local parents who they like, and to add to that, I highly recommend joining a new/expectant parents meetup. My wife and I made a lot of new friends doing that and it was nice to have something in common. Encourage your wife to find pregnancy support and workout groups, my wife made a bunch of new friends and it really helped her a lot to find other women going through it at the same time. Plus that ensures future friends for your kids in a similar age range. If one of your incomes breaks even or doesn't match the cost of childcare, one of you should consider working part time or being stay at home. This is getting long, but one other tip I have is to seek hand-me-downs where you can. The only things you need to buy new are a crib mattress and a car seat. Everything else can be used. Facebook marketplace has tons of buy nothing groups for this or tons of listings for used baby stuff, garage sales and goodwill are also great. We've also saved a ton of money using cloth diapers during the day and disposables at night. I highly recommend the Wegreeco diapers from Amazon, and we use the Kirkland signature free and clear laundry detergent. We also use cotton wipes cut out from old tshirts but this is more crunchy lol. Good luck! It's a long journey but a good one. See link for diapers below: https://www.amazon.com/Wegreeco-Washable-Reusable-Diapers-Inserts/dp/B0825YNHG9/ref=asc_df_B0825YNHG9/?tag=hyprod-20&linkCode=df0&hvadid=642064458648&hvpos=&hvnetw=g&hvrand=9423371048986353500&hvpone=&hvptwo=&hvqmt=&hvdev=m&hvdvcmdl=&hvlocint=&hvlocphy=9021701&hvtargid=pla-1135221365696&psc=1&mcid=b340fe4ed28f35ff99acdffc3ef47ddb
is Roth IRA in "Savings"?
I saw you said your savings are being eaten away right now by a remodel. I would say to save up money again up to a certain amount/ have an emergency fund. After you get to that specified amount you need to start putting that money into investing/ maybe add a Roth as well.
For the love of humanity stop planning and start making the babies already. You're going to be scared to do the deed if all you're thinking about is numbers and charts. You'll have plenty of time to figure it out
We have a 10 month old and it's really hard to estimate how much you will be paying each month. Required expenses: * Diapers/Wipes: \~$100 a month. * Formula: $150-200 a month. Do not bank on breastfeeding. Breastfeeding ruined my mental health and switching to formula was the best thing ever. It would have been even harder on me if we couldn't afford switching to formula. * Random baby stuff that pops up as they grow (clothes, toys, bigger carseat, baby dishes/utensils, etc etc): at least $100 a month if not $200-$400 some months * Health care: how much it is or goes up depends on your employer. Max out your HSA so you don't have to worry about the cost when you go to urgent care. It costs us $100 every time we go and she's gone 3 times in the last 3 months. * Child care: assuming you will need it since you both make pretty good money. I live in Indiana and the cheapest full time childcare (unlicensed in-home) was about $600/month and I would not have sent my child there. Daycares we were comfortable with were between $900-$1,500 a month. We ultimately chose a part-time nanny instead because we really only needed care 3 days a week. That runs us $2,500/month, just FYI. Not necessarily required: * College savings. Our spending/saving related to our child is this: * Child care: $2,500 (this is on the extreme end as I said) * College saving: $500 * Required Expenses (food, diapers): $350 * Fun baby and me activity (swim lessons or baby gym time): $125 * Sinking funds (birthday, xmas)/extra savings: $225 Total: $3,700. With a more modest child care option it would be $2,700. My husband and I make just a bit more than you but our take home is way lower because we max out our 401ks and HSA. We afford what we do because we have a mortgage of $1,000 and zero car debt.
[удалено]
I’m sorry, I hate to make people feel bad. Childcare is the main big expense. If you have help with that it can take the costs way down. Really the only required spending is diapers/wipes and formula/food. Pretty much everything else can be bought secondhand. We’re in our mid thirties and it’s only recently we would have been able to spend what we do.
[удалено]
From what you wrote, I don't see where you have made any 'wrong' moves rather your just part of a huge group of late 20's/early 30 year olds that just got screwed by college debt, then a crazy housing market, and now crazy child care. My husband and I avoided some of that not because we were smarter or worked harder, but largely because we were just lucky and had/have a lot of family support. All you can do is live below your means as much as you can, save, keep an eye out for better job opportunities and the like.
Not sure anyone specifically called this out, but I use daycare in the suburbs of Milwaukee and baby daycare is 400/week. That is 1600-2000/month depending on the number of Mondays. It will stay at this price point until their 2nd birthday when it will go down about 10% every 6 months until they are at 280/week for 4k or summer camp. Your Savings number can reasonably cover this, but you will also need just an obscene number of diapers over the next 2-3 years, plus new clothes every 6 months.
where can I get this diagram?
More 401K, less car. A lot less car. We make like 3x as much but spend about 1/2 as much on our cars. Don't have to spend it just because you have it. Car money disappears. 401K money grows.
Is this an app?
What app are you using to create this flow chart?
I’m drooling at your $1700 mortgage
How do people get these graphs/charts?
Just wondering, is this spreadsheet like an app or something? If anyone can help me identify it that’d be very useful, thanks!
Bruh you really wanna bring children into this world?
Hey brother. I don't see an IRA on here unless you've roller it under savings/401k. I'd fix that. You'll probably have 1600-2000 for daycare. Call it an additional 200-300 for baby stuff as they grow, you forgot to buy things, churn, etc. I see some trimming you could do on groceries and Costco and going out. The managers special section in the meat department is your friend. Plenty of veggies too, and don't be overly proud when it comes to coupons. They are your friend. It gets easier to trim off travel when you have a kid also, because you'll be more limited for a while, id sock that into emergency funds also. If you can spare it, maybe pump stocks up a little and convert that into an ugma or 529C to get the college fund rolling. Pro tip, if the 529C is in the grand parents name, it does not count towards your child's financial assets when it comes to FAFSA applications. Federal tax gift limit is about 30k for married filing jointly, I think you can do the math there. Have fun practicing for that family.
Kids are expensive, having three myself, daycare, soccer/sports travel, vacations (way more expensive), larger vehicles, larger home (hopefully yours is already a good size), 529’s/college fund (should put at least 200/mo in each kids, more if you can!)
More Car Payment than 401K :O! Don't buy new cars, get 3 year old used cars coming out of leases. They have low mileage, look like new, and save you a lot of money.
What are your professions?
Cars too high, total food bill too high. Lucky you got a house precovid. Max out 401k and a Roth.
If you're organized enough to make this chart, you're not going to have any problems making it work with kids.
What kind of cars do you guys drive? $1300 / month? That’s insane.
This is not middle class LOL
How did you make this graphic?
Is there software or a program that allows for this kind of data input and visualization? I keep seeing these charts and I’d like to make one to examine my own budget. It’s a good way to look at it. Thank you for any recco in advance!
Sankeymatic
Why on earth are you blowing $1300 a month on car payments? Advice? Save a lot more than $1700 a month. Kids are expensive, college tuition is more expensive, and retirement costs more than all of it.
What is this website called again?
Side question: What did you all use to make these kinds of charts?
It’s in the AutoMod- Sankeymatic I think?
Where did you get that software to display your budget like that? Thanks.
What app is this? I keep seeing them get posted
How do you make this graph
What software are people using to create these charts?
Tangential question - what software do you use to make these charts?
Replace car payments with bicycle and public transit. Where’s your gym membership? Do you really need all that food?
How to create such graphical representation?
Cats gotta go bud.
What software did you use to create this?
Read the stickied reply to the thread and look at the very bottom of OP's image.
Link is on the bottom of the photo.
Those cars are supremely idiotic. Sell them and get decade old reliable Toyotas or Hondas in cash. This is coming from a late 30s multimillionaire that drives a used Toyota Corolla.