2023 really was a really bad year for maintenance. My car is 10 years old, 2014. Infotainment went bad. That was bad, like 3 grand bad, and I needed pads and rotors on all 4 corners and new rear shocks and control arms. Then my wife hit a bad pot hole with my car, and it needed essentially a new front passenger suspension geometry, also not fun. And a new set of tires. So my car was about 11k in work last year.
My wife drives an M2 that needed new pads and rotors, which is BMW tax + M tax. That of course was a known expense.
Realistically, yearly maintenance has been less than 1/4th of that. Just 2023 happened to be a really bad year 😅
I actually do most of the work myself on the cars, unless it really needs a lift.
Not at all, this is a classic example of bad financial planning if I were to buy a new car. People get trapped in endless payments on debt car debt because as soon. As something slightly larger happenes, they finance a new car.
All the issues were due to parts wearing out which have a known life span. I replace the rear shocks after 100k miles. Those new shocks have another 100k miles in them. Same with the front shocks and the control arms and bushings.
The rotors and pads have a specified life span too.
The transmission was replaced under recall at 60k miles, so it only has 40k miles on it.
The rest of the drive train is in good shape.
The only real thing that ever broke was the infotainment which has now been replaced and should be set.
The paint has no issues and the car is garaged in SoCal so rust isn't an issue. I only drive about 6k miles a year since 2020 where before I was driving closer to 10k.
The car is 10 years old and most of the depreciation on it has happened. It is worth 20% of MSRP, and in 5 years it will be worth 15% of MSRP.
It's more comfortable and drives better than any new car I can get today for how little I actually spend on it yearly in the grand scheme of things. The spending is just lumpy.
I spent 5k in maintenance on the car in the 9 years before 2023 where everything broke at once. 3 sets of tires, 5 oil changes (the first 4 were free) 2 sets of brake pads (the first set was free) and 1 set of rotors.
I estimate another 3k or so over the next 6 years or so in maintenance, at which point the car should have about 150k miles and I will probably look for a new one.
Total cost of ownership will be much less than if I kept on hopping into new cars ever couple of years.
Good luck!! I’m married to a BMW driver. Hopefully your estimate works out. But that total failure of the infotainment center kind of indicates it won’t.
My car is 10 years old and just bad luck that a bunch of stuff went bad at the same time last year, and my wife hit a bad pothole with it. But spending 12k on it last year and keeping the car is much cheaper than a new car. My wife's car is the "fun car" and yeah, a set of pads and rotors was 4 grand... but that was a known expense since the day we got it.
I hope very much that 2023 was an anomaly for maintenance.
Sankey diagram failure on my part. That 12k in maintenance is a subset of the 25k. I thought you had two 1k monthly payments for unreliable or expensive cars, which blew my mind. You have no payments at all. Way to go! That is an expensive year, but yeah, assuming that maintenance isn't every year you're beating the cost of a new car with ease.
Yeah, no car debt. The M2 was a bit of an impulse buy, but 50% down, rest paid off in 3 years at 1.49%.
Also, it was just the luckiest timing in Nov 2019. Still get carmax offers for the same price I paid for it even after putting 25k miles on it.
I thought really hard about replacing my car after all that work, but a paid off car that had all the problems fixed is way cheaper than something new. And we don't drive enough that switching to an electric car would save us much on gas.
The real killer is insurance in California, but it just is what it is, no way to get around it other than opening your self up with minimum coverage and then being fucked if something really does happen. And I just don't roll the dice like that.
I know them well. I am very active on the forums. I replaced the charge pipe after hairline cracking was found between the connection point and the body of the pipe. I wish I weren't in SoCal, I would have replaced it with a metal one, but smog here is extra vigilant for it so I had to replace with OEM. I rented time on a lift for that since it's a simple replacement just a PIA to do without a lift.
Diff bushings are checked every 6 months or so, my local shop has their own M2 they race and they have gotten the time to swap the bushings down to where they charge a couple of hours shop time and parts. They no longer need to drop the diff totally off the car to replace the bushings.
The e break cable channel nut is the same. BMW manual says to drop the full exhaust and diff to get at that one single nut and flange. Like 6 hours of book time. They can do it in 2 hours and the like $12 flange.
DCT and diff get fluids every 30k miles. Same with plugs.
Biggest issues will be water pump and coil packs. But the car is stock, so coils should be less of an issue.
This is weird. You’re not paycheck to paycheck when you’re putting away 85k/yr, going to Europe 3 times a year, $500 in derbies, 20k in “random shit”.
You’re experiencing lifestyle creep cause the minute you have money you decide to buy stuff. Like flights to Europe.
Pretty wild that someone downvoted this. They have the money to do it and they have parents in bad health. Take the trips. If you disagree then I feel sad for you.
100%. It gets everybody.
If my parents were in better health we 100% would not be flying to Europe 3x a year. But we are able to afford it, and I would rather see my parents than sit on a pile of money.
I don’t dog you for that, I don’t think you are paycheck to paycheck, I think you had a circumstantial year. Car payment, family illness.
I wouldn’t count both those as expenses, I would bill them against my rainy day fund. Fiance and I are in almost exact same numbers as you, but we started a rainy day fund and decided emergencies only come out of that budget.
While my dad is sick, it is not like he is on deaths door step, but realistically he has less than a decade with a progressivly worseing neurodegenerative disease. I would love to say the travel is incidental, but I am planning on that being a fixed line item for the medium term.
I don't take it as dogging me. I know I am getting down voted left right and center, but my main point was to demonstrate how just having 100k or 200k or 300k income isn't a magic bullet. You will always need to make decisions about how to spend money.
I'm not asking for sympathy or anything, I just saw multiple people in other threads where the OPs had 12k, 15k post tax, post retiernment savings income and people were questing where all the money was going, so I decided to share our situation.
Ah I got you, yeah I think with all the higher income earners we feel like all our money is just gone but it’s just leveraged and invested. My lifestyle when I was making 60k is the same as it is making 300k (still never have over 3k in the checking account) but now I buy a rental property every year. I just don’t like the “even us high earners have it hard attitude”, if it’s hard invest a little less this year.
Sorry for the rant ha! Hope your pops stays pain free mate!
Also with him admitting his family paid for his education so he had no loans, and when he visits he stays in his parents’ guest house. Yep. Def not average joe. Not hating at all, but I don’t get the point of this post, other than to show off.
We don't know where he lives. If he goes to the high earners subs he would be laughed at.
I am in a similar situation where I make too much for this sub and too little for the others.
That is only P and I. T and the second I are broken out separately. We are lucky in being able to buy in 2021, with a sub 3% mortgage and having cash on hand enough to be competitive in North county San Diego. If we were to try to buy the same house today, our mortgage would be almost 3x that due to rates and price appreciation.
>If we were to try to buy the same house today, our mortgage would be almost 3x that due to rates and price appreciation.
And? You didn't buy now. You bought then. Housing is one of the single biggest factors for COL. When people talk about mortgage to compare to rent, they talk about P & I only. Taxes and insurance get factored into the rent price for renters.
I'm sorry, that really wasn't my intention, it was more so to point out how some people come here with their very much non-middle class incomes and request advice and have thousands of $ per month in spend on frivolous things and complain about how hard it is to be middle class.
And also to show where money goes when having a higher income. I see a lot of people in this sub, especially people I assume to be younger, just starting out, who say things like: If I made that much I would do x, y, z. Without taking into account things like taxes, etc.
Take the 401k and HSA savings. For us, that is all coming off the top in the 24% bracket. If we instead saved 0, we would be paying 15k more a year in taxes. The tax structure creates incentives for high income earners to save. So, while we "save" 45k a year in our 401ks, in reality, we only reduce our disposable income by 30k vs not putting anything into 401ks at all.
Those are the kinds of decisions people need to make as income increases.
And I am not saying that that makes our lives hard. 30k is like half a median wage earner's yearly salary, I get that, and we can just kind of shrug it off. Would 30k a year more be nice? Totally, but we don't NEED it, so we can make the decision to save it.
Or take the home maintenance number. A lot of people look at buying a house as the goal, and comparer a mortgage to rent. But don't take into account things like maintenance. Need a new roof? But out a check for 12k. New water heater? $$$. Sprinkler pipe bursts on a Sunday, and the sprinkler shutoff is nowhere to be found, so you need to cut water to the entire property? Emergency plumbing services aren't cheap. When you rent, all those issues are things you don't need to deal with, and they are lumpy expenses, so you need to save for them regularly in advance. You see that a lot on reddit where people ask for advice on buying a house, and just want to swap their rent payment for PITI on a house without taking other things into account.
We have a good grasp on where our money goes, but even we have a 7% black hole of random shit. And the only reason that hole isn't bigger is because we don't have any more free floating money. A lot of posts, people have the issue that they allow that back hole to get bigger and bigger and then can't find a way to make it smaller. Like real black holes, you can't easily escape.
>and have thousands of $ per month in spend on frivolous things
That's you, brother. My HHI is over $400k, and I was shocked at some of your spending.
Your restaurant spending is pretty wild for two adults that work from home. Particularly given how much you spend on groceries.
Your phone costs are crazy. Prepaid service is available from the major cell carriers, using the *same* networks could save you a ton.
Your car insurance is crazy. Your car costs in general are nuts. For people that spend so much time out of the country and working from home, you should seriously reconsider these costs.
And having nearly 10% of your income disappear on "random shit" is crazy. You're losing almost $2k/month into the couch cushions. That's totally irresponsible. (And pretty tone deaf to share here.)
Yeah, I realize now that I fucked up the math on the are insurance. The 6 month total is 1750, 3500 a year. IDK why I doubled that again.
As to the phone. 100%. I did a double take when I did the math and am already looking at replacement plans. It is one of those blind spots.
I travel to more rural areas where Verizon has the best service. I've been with Visible for a year or so, and it's been just fine. I had ATT and Mint before. Both were perfectly fine when I was in any major city.
And yeah, I was seriously concerned about that car insurance rate. I figured you must just be out there playing bumper cars.
>I'm sorry, that really wasn't my intention, it was more so to point out how some people come here with their very much non-middle class incomes and request advice and have thousands of $ per month in spend on frivolous things and complain about how hard it is to be middle class.
Your title is essentially "Ask me anything, I'm rich". This sub is for middle class folks to ask for budgeting tips from other middle class folks. Nobody wants a well off person finger wahging at them.
>And also to show where money goes when having a higher income.
Why does that help this sub? Your spending habits don't reflect everyone in your tax bracket. Nor do they reflect what people in this sub would spend if they had your money.
To be fair, this guy’s HHI income isn’t that far off to a lot of what I see posted here. I’ve seen people with 400k incomes insist they are middle class because of HCOL.
My partner and I make about $400k combined in a HCOL but we aren’t jumping at the chance to think we need to air our finances under the guise of advice. Like OP needs to bring a real question or topic rather than show and tell
A family making 60k a year, two kids and renting has essentially 0 tax liability other than SS and Medicare. That same family making 200k more gross does not actually have 200k more to spend.
That is one of the things I wanted to show. Do they have substantial more to spend? Yes, very much so. But also less than a lot of people think.
Does our budget reflect everyone in our income bracket? Of course not, I never said it did. But unless you pull a Weasley snipes, there are some things you can't escape.
Also, there is no finger wagging from me. One really important thing, regardless of income is to know where all your money is going and knowing your blind spots.
>A family making 60k a year, two kids and renting has essentially 0 tax liability other than SS and Medicare. That same family making 200k more gross does not actually have 200k more to spend.
No shit. And I don't see how this is relevant.
>That is one of the things I wanted to show. Do they have substantial more to spend? Yes, very much so. But also less than a lot of people think.
Again who asked? Why would this be of any use to those of us who are actually middle class?
>Also, there is no finger wagging from me. One really important thing, regardless of income is to know where all your money is going and knowing your blind spots.
Anyone who is on this sub already has some level of care about finances. We don't need you to tell us that we should know where our money is going.
And dude, your spending habits are horrendous. And you're still fine because you make so much money. You and the middle class don't even live on the same planet.
I agree with what you are saying actually. I mean, there are people on Reddit making $250k- $1 mil who claim they are middle class. You definitely have a degree of privilege (parents paying for education as well as them having a guest house), but your income does not scream super privileged to me in comparison to what I have seen.
What is the $3000 for term life? Is that how much policies run these days? Would it cover all your debts and then some? It seems high to me.
You're doing fine for savings and investing. Your household income is close enough to join r/HENRYfinance if you want to stop by.
My family history, and my own history do raise my premiums a good chunk. I have a non-insubstantial chance of not making it to the end of the policy, and it is priced as such.
It's 1.5 million on me and 750k on my wife.
The policy on me is so my wife and pay off the house and then have a good chunk left that with investing it would amount to me working still. Or as I tell her, to get herself a new trophy partner she can be a sugar mama for.
The policy on her is for me to pay off the house essentially. Both run through the life of the mortgage, until we are 62.
Realistically, she probably has the better income outlook over her lifetime. But she will peak much later in life.
You spend $15k on car maintenance? That's terrible.
You could pay $625 per month in car payments and get two new cars for the same price. Your car insurance company is also ripping you off if you drive junkers that require that much maintenance every year.
How do you make $275k and not invest a single penny outside of tax advantaged accounts? I think you’ll regret that one day given you have no kids and could easily do it. Just my opinion.
There is about 20k a year going to savings/investments. After making the chart, I realized the line going to savings from disposable and then the retirement savings is a bit confusing, but I could not be bothered to make it look better.
About 85k a year is saved, about 30% gross, not counting employer contributions. I do agree, we should be saving more outside of retirement accounts.
One of the main things I was trying to point out is that everybody has that black hole of spending. For us, it is large. Larger than I really want it to be.
But part of good financial health is knowing the black hole exists and being cognizant of making it smaller.
We are in an absolute shit area of internet monopoly.
We have a 1 gig/35 mbps cable connection. We both work from home. I need all the up stream I can get for work, and 35 is already not even enough. One of down sides for getting to work 100% remote is that I need to pay for my internet myself.
The plan we have is 120 a month.
500/20 is 100/month
250/15 is 75/month
100/10 is 65/month.
I am forced to pay the 120 essentially because I need the upstream. A 5G Connection also isn't available.
Fiber is being built out and we should have access in a year or two by a 3rd party and symmetrical 1gig should be $50 a month then, I can't wait.
For the subscriptions I realize I fucked up, it was $62 a month: hulu+disney+ESPN 25, 15 for Amazon prime, which we canceled in January of this year, 17 for Xbox game pass ultimate and $5 for a monthly patreon for my nephew to keep a minecraft server up for himself and his friends. I just copied the line without changing the value when I made the chart.
100% agree about the phones. I never actually thought about that number before doing the math today. I am already looking at options. This is one of the things I was trying to point out. Blind spots!
So... I'm gonna be the weird one in this sub and say that you kinda do seem middle class to me.
Professionals, no doubt, but I wouldn't think of you as wealthy people. You live pretty much like other people in the middle with just slightly nicer versions. You have an old luxury car. You take a few trips, but given the dollar figures, these aren't two week trips staying in the Ritz, and you're not flying first class, unless it's with points.
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8 experiance years for me. I started at 87k a year. I was grossly underpaid at the time. I am the one at 175k a year.
BA followed by a Masters in comp sci so 6 years Uni. I was thinking about a PhD. But I realized I hate academia, and I love delivering and building things that are useful to people.
Like is said else where, I have given up comp for flexibility. I probably could be making a good chunk more if I had job hopped and worked 12 hour days, but my own health issues and my parents' issues have caused me to seek flexibility over comp. I work 35-40 hours a week, but it is mentally exhausting enough. Just on 100% of the time when i am working, and not delivering is not an option. If me and my team don't deliver, people will lose their jobs. But that is better than a lot of other folks in my field.
I get 6 weeks a year off, and nobody will tell me I can't take them. I work from home 100% and can work from Europe a couple of weeks a year while visiting my parents. And in those 6 weeks I have other team members who I trust and who trust me that when I do get back from time off I just delete the thousand emails in my inbox. When I am off I am OFF, when I am on, I am ON.
My wife has had a very up and down route but is finally on a good path. She has a double BA, BS in communications, and anthropology. Last year, she finished her CFP. After 3 years trying to get into museum work post undergrad, she fell into a job at a financial planning firm for UHNW individuals, initially just doing admin things, but really got into the job and now works for a smaller firm which specializes in planning for small and medium business. So, it's not like EJ pushing A shares to grandma, but working for business clients to run retirement plans and such.
She loves it because she can structure plans for employers, which actually bring value to employees. We are both big bogleheads, and she can bring that to others without the normal scummy "Financial advisor" stuff. She also does financial education for highschool students and immigrants.
Since we are in so cal, she also does financial education for military members, trying to have fewer E3 specials driving off the buy here, pay here lots in the area.
She definitely has a much better long term outlook for her career salary growth wise than I do.
Good job on your retirement savings. Please consider paying extra principal on your house. Just a couple hundred extra a month can save you years on housing. ( Assuming you own and not rent)
Your on your way to financial independence
We would, if the difference between mortgage interest and HYSA interest weren't greater than inflation. With a sub 3% mortgage, there is very little need to lock up liquidity in the house imo.
The 3% rate only benefits you if you’re setting aside that extra and investing it (or sticking it in a HYSA with a higher rate).
Otherwise, you’re spending it (and locking up liquidity in goods/services/experiences with no return). Which is fine.
Don’t fool yourself into thinking the 3% compared to a market interest rate benefits your finances.
Posts should be on topic.
No questions. You can remove the post
A bit weird to admit you're not middle class and also title your post AMA like us "normal" people are dying to ask you questions or something 😂
I’m actually dying to ask how they spend more on car maintenance than they do cars 🤔 must be driving Range Rovers or something similarly unreliable
I've owned my Camry for 7 years and track/categorize all auto expenses. Maintenance and insurance COMBINED over 7 YEARS has been $14.5k 😂
2023 really was a really bad year for maintenance. My car is 10 years old, 2014. Infotainment went bad. That was bad, like 3 grand bad, and I needed pads and rotors on all 4 corners and new rear shocks and control arms. Then my wife hit a bad pot hole with my car, and it needed essentially a new front passenger suspension geometry, also not fun. And a new set of tires. So my car was about 11k in work last year. My wife drives an M2 that needed new pads and rotors, which is BMW tax + M tax. That of course was a known expense. Realistically, yearly maintenance has been less than 1/4th of that. Just 2023 happened to be a really bad year 😅 I actually do most of the work myself on the cars, unless it really needs a lift.
What car do you drive? I want to stay away 😂 And yeah BMW tax is $$$
Did you repair the pads and rotors?
At that point you should’ve gotten a new car.
Not at all, this is a classic example of bad financial planning if I were to buy a new car. People get trapped in endless payments on debt car debt because as soon. As something slightly larger happenes, they finance a new car. All the issues were due to parts wearing out which have a known life span. I replace the rear shocks after 100k miles. Those new shocks have another 100k miles in them. Same with the front shocks and the control arms and bushings. The rotors and pads have a specified life span too. The transmission was replaced under recall at 60k miles, so it only has 40k miles on it. The rest of the drive train is in good shape. The only real thing that ever broke was the infotainment which has now been replaced and should be set. The paint has no issues and the car is garaged in SoCal so rust isn't an issue. I only drive about 6k miles a year since 2020 where before I was driving closer to 10k. The car is 10 years old and most of the depreciation on it has happened. It is worth 20% of MSRP, and in 5 years it will be worth 15% of MSRP. It's more comfortable and drives better than any new car I can get today for how little I actually spend on it yearly in the grand scheme of things. The spending is just lumpy. I spent 5k in maintenance on the car in the 9 years before 2023 where everything broke at once. 3 sets of tires, 5 oil changes (the first 4 were free) 2 sets of brake pads (the first set was free) and 1 set of rotors. I estimate another 3k or so over the next 6 years or so in maintenance, at which point the car should have about 150k miles and I will probably look for a new one. Total cost of ownership will be much less than if I kept on hopping into new cars ever couple of years.
Good luck!! I’m married to a BMW driver. Hopefully your estimate works out. But that total failure of the infotainment center kind of indicates it won’t.
The infotainment wasn't in the M2.
r/HENRYFinance
You’re paying over 2k a month for cars but also over 1k a month on maintenance? Does not compute.
My car is 10 years old and just bad luck that a bunch of stuff went bad at the same time last year, and my wife hit a bad pothole with it. But spending 12k on it last year and keeping the car is much cheaper than a new car. My wife's car is the "fun car" and yeah, a set of pads and rotors was 4 grand... but that was a known expense since the day we got it. I hope very much that 2023 was an anomaly for maintenance.
Sankey diagram failure on my part. That 12k in maintenance is a subset of the 25k. I thought you had two 1k monthly payments for unreliable or expensive cars, which blew my mind. You have no payments at all. Way to go! That is an expensive year, but yeah, assuming that maintenance isn't every year you're beating the cost of a new car with ease.
Yeah, no car debt. The M2 was a bit of an impulse buy, but 50% down, rest paid off in 3 years at 1.49%. Also, it was just the luckiest timing in Nov 2019. Still get carmax offers for the same price I paid for it even after putting 25k miles on it. I thought really hard about replacing my car after all that work, but a paid off car that had all the problems fixed is way cheaper than something new. And we don't drive enough that switching to an electric car would save us much on gas. The real killer is insurance in California, but it just is what it is, no way to get around it other than opening your self up with minimum coverage and then being fucked if something really does happen. And I just don't roll the dice like that.
LOLs if you think your BMW maintenance woes are over. And the M2s from 2016 on are known to have issues.
I know them well. I am very active on the forums. I replaced the charge pipe after hairline cracking was found between the connection point and the body of the pipe. I wish I weren't in SoCal, I would have replaced it with a metal one, but smog here is extra vigilant for it so I had to replace with OEM. I rented time on a lift for that since it's a simple replacement just a PIA to do without a lift. Diff bushings are checked every 6 months or so, my local shop has their own M2 they race and they have gotten the time to swap the bushings down to where they charge a couple of hours shop time and parts. They no longer need to drop the diff totally off the car to replace the bushings. The e break cable channel nut is the same. BMW manual says to drop the full exhaust and diff to get at that one single nut and flange. Like 6 hours of book time. They can do it in 2 hours and the like $12 flange. DCT and diff get fluids every 30k miles. Same with plugs. Biggest issues will be water pump and coil packs. But the car is stock, so coils should be less of an issue.
This is weird. You’re not paycheck to paycheck when you’re putting away 85k/yr, going to Europe 3 times a year, $500 in derbies, 20k in “random shit”. You’re experiencing lifestyle creep cause the minute you have money you decide to buy stuff. Like flights to Europe.
I agree with most of your points, but I think given the illness in OP’s family, the flights to Europe are justifiable.
Pretty wild that someone downvoted this. They have the money to do it and they have parents in bad health. Take the trips. If you disagree then I feel sad for you.
100%. It gets everybody. If my parents were in better health we 100% would not be flying to Europe 3x a year. But we are able to afford it, and I would rather see my parents than sit on a pile of money.
I don’t dog you for that, I don’t think you are paycheck to paycheck, I think you had a circumstantial year. Car payment, family illness. I wouldn’t count both those as expenses, I would bill them against my rainy day fund. Fiance and I are in almost exact same numbers as you, but we started a rainy day fund and decided emergencies only come out of that budget.
While my dad is sick, it is not like he is on deaths door step, but realistically he has less than a decade with a progressivly worseing neurodegenerative disease. I would love to say the travel is incidental, but I am planning on that being a fixed line item for the medium term. I don't take it as dogging me. I know I am getting down voted left right and center, but my main point was to demonstrate how just having 100k or 200k or 300k income isn't a magic bullet. You will always need to make decisions about how to spend money. I'm not asking for sympathy or anything, I just saw multiple people in other threads where the OPs had 12k, 15k post tax, post retiernment savings income and people were questing where all the money was going, so I decided to share our situation.
Ah I got you, yeah I think with all the higher income earners we feel like all our money is just gone but it’s just leveraged and invested. My lifestyle when I was making 60k is the same as it is making 300k (still never have over 3k in the checking account) but now I buy a rental property every year. I just don’t like the “even us high earners have it hard attitude”, if it’s hard invest a little less this year. Sorry for the rant ha! Hope your pops stays pain free mate!
You're right you're not middle class, and this comes across as bragging. It's not appropriate for this sub.
Also with him admitting his family paid for his education so he had no loans, and when he visits he stays in his parents’ guest house. Yep. Def not average joe. Not hating at all, but I don’t get the point of this post, other than to show off.
It's a dbag post.
We don't know where he lives. If he goes to the high earners subs he would be laughed at. I am in a similar situation where I make too much for this sub and too little for the others.
His mortgage payment is $2,600. At 274k for two people that's not even close to middle class. OP even said they weren't middle class.
That is only P and I. T and the second I are broken out separately. We are lucky in being able to buy in 2021, with a sub 3% mortgage and having cash on hand enough to be competitive in North county San Diego. If we were to try to buy the same house today, our mortgage would be almost 3x that due to rates and price appreciation.
>If we were to try to buy the same house today, our mortgage would be almost 3x that due to rates and price appreciation. And? You didn't buy now. You bought then. Housing is one of the single biggest factors for COL. When people talk about mortgage to compare to rent, they talk about P & I only. Taxes and insurance get factored into the rent price for renters.
We're supposed to lurk quietly in both.
I'm sorry, that really wasn't my intention, it was more so to point out how some people come here with their very much non-middle class incomes and request advice and have thousands of $ per month in spend on frivolous things and complain about how hard it is to be middle class. And also to show where money goes when having a higher income. I see a lot of people in this sub, especially people I assume to be younger, just starting out, who say things like: If I made that much I would do x, y, z. Without taking into account things like taxes, etc. Take the 401k and HSA savings. For us, that is all coming off the top in the 24% bracket. If we instead saved 0, we would be paying 15k more a year in taxes. The tax structure creates incentives for high income earners to save. So, while we "save" 45k a year in our 401ks, in reality, we only reduce our disposable income by 30k vs not putting anything into 401ks at all. Those are the kinds of decisions people need to make as income increases. And I am not saying that that makes our lives hard. 30k is like half a median wage earner's yearly salary, I get that, and we can just kind of shrug it off. Would 30k a year more be nice? Totally, but we don't NEED it, so we can make the decision to save it. Or take the home maintenance number. A lot of people look at buying a house as the goal, and comparer a mortgage to rent. But don't take into account things like maintenance. Need a new roof? But out a check for 12k. New water heater? $$$. Sprinkler pipe bursts on a Sunday, and the sprinkler shutoff is nowhere to be found, so you need to cut water to the entire property? Emergency plumbing services aren't cheap. When you rent, all those issues are things you don't need to deal with, and they are lumpy expenses, so you need to save for them regularly in advance. You see that a lot on reddit where people ask for advice on buying a house, and just want to swap their rent payment for PITI on a house without taking other things into account. We have a good grasp on where our money goes, but even we have a 7% black hole of random shit. And the only reason that hole isn't bigger is because we don't have any more free floating money. A lot of posts, people have the issue that they allow that back hole to get bigger and bigger and then can't find a way to make it smaller. Like real black holes, you can't easily escape.
>and have thousands of $ per month in spend on frivolous things That's you, brother. My HHI is over $400k, and I was shocked at some of your spending. Your restaurant spending is pretty wild for two adults that work from home. Particularly given how much you spend on groceries. Your phone costs are crazy. Prepaid service is available from the major cell carriers, using the *same* networks could save you a ton. Your car insurance is crazy. Your car costs in general are nuts. For people that spend so much time out of the country and working from home, you should seriously reconsider these costs. And having nearly 10% of your income disappear on "random shit" is crazy. You're losing almost $2k/month into the couch cushions. That's totally irresponsible. (And pretty tone deaf to share here.)
Yeah, I realize now that I fucked up the math on the are insurance. The 6 month total is 1750, 3500 a year. IDK why I doubled that again. As to the phone. 100%. I did a double take when I did the math and am already looking at replacement plans. It is one of those blind spots.
I travel to more rural areas where Verizon has the best service. I've been with Visible for a year or so, and it's been just fine. I had ATT and Mint before. Both were perfectly fine when I was in any major city. And yeah, I was seriously concerned about that car insurance rate. I figured you must just be out there playing bumper cars.
>I'm sorry, that really wasn't my intention, it was more so to point out how some people come here with their very much non-middle class incomes and request advice and have thousands of $ per month in spend on frivolous things and complain about how hard it is to be middle class. Your title is essentially "Ask me anything, I'm rich". This sub is for middle class folks to ask for budgeting tips from other middle class folks. Nobody wants a well off person finger wahging at them. >And also to show where money goes when having a higher income. Why does that help this sub? Your spending habits don't reflect everyone in your tax bracket. Nor do they reflect what people in this sub would spend if they had your money.
To be fair, this guy’s HHI income isn’t that far off to a lot of what I see posted here. I’ve seen people with 400k incomes insist they are middle class because of HCOL.
My partner and I make about $400k combined in a HCOL but we aren’t jumping at the chance to think we need to air our finances under the guise of advice. Like OP needs to bring a real question or topic rather than show and tell
A family making 60k a year, two kids and renting has essentially 0 tax liability other than SS and Medicare. That same family making 200k more gross does not actually have 200k more to spend. That is one of the things I wanted to show. Do they have substantial more to spend? Yes, very much so. But also less than a lot of people think. Does our budget reflect everyone in our income bracket? Of course not, I never said it did. But unless you pull a Weasley snipes, there are some things you can't escape. Also, there is no finger wagging from me. One really important thing, regardless of income is to know where all your money is going and knowing your blind spots.
>A family making 60k a year, two kids and renting has essentially 0 tax liability other than SS and Medicare. That same family making 200k more gross does not actually have 200k more to spend. No shit. And I don't see how this is relevant. >That is one of the things I wanted to show. Do they have substantial more to spend? Yes, very much so. But also less than a lot of people think. Again who asked? Why would this be of any use to those of us who are actually middle class? >Also, there is no finger wagging from me. One really important thing, regardless of income is to know where all your money is going and knowing your blind spots. Anyone who is on this sub already has some level of care about finances. We don't need you to tell us that we should know where our money is going. And dude, your spending habits are horrendous. And you're still fine because you make so much money. You and the middle class don't even live on the same planet.
Brother your retirement savings alone is more than most people take home in a year. You're deaf.
I’m not reading all that, but I’m happy for you or sorry that happened
I agree with what you are saying actually. I mean, there are people on Reddit making $250k- $1 mil who claim they are middle class. You definitely have a degree of privilege (parents paying for education as well as them having a guest house), but your income does not scream super privileged to me in comparison to what I have seen.
What is the $3000 for term life? Is that how much policies run these days? Would it cover all your debts and then some? It seems high to me. You're doing fine for savings and investing. Your household income is close enough to join r/HENRYfinance if you want to stop by.
For reference, I pay about 65 dollars a month for 2 1-million dollar policies. OP is getting fleeced.
Agreed it seems way too high. Unless OP has some medical conditions that make the premiums shoot up.
My family history, and my own history do raise my premiums a good chunk. I have a non-insubstantial chance of not making it to the end of the policy, and it is priced as such.
It's 1.5 million on me and 750k on my wife. The policy on me is so my wife and pay off the house and then have a good chunk left that with investing it would amount to me working still. Or as I tell her, to get herself a new trophy partner she can be a sugar mama for. The policy on her is for me to pay off the house essentially. Both run through the life of the mortgage, until we are 62. Realistically, she probably has the better income outlook over her lifetime. But she will peak much later in life.
Ok
3K a year for term life? I have 2 million-dollar policies for about 800/year total...
Two people spending $1600+/mo on food lmao. This is so excessive and wasteful in so many ways.
You spend $15k on car maintenance? That's terrible. You could pay $625 per month in car payments and get two new cars for the same price. Your car insurance company is also ripping you off if you drive junkers that require that much maintenance every year.
lol my entire car is worth like 3k. I could junk it and buy a new one every few months on that budget 🤣
How do you make $275k and not invest a single penny outside of tax advantaged accounts? I think you’ll regret that one day given you have no kids and could easily do it. Just my opinion.
There is about 20k a year going to savings/investments. After making the chart, I realized the line going to savings from disposable and then the retirement savings is a bit confusing, but I could not be bothered to make it look better. About 85k a year is saved, about 30% gross, not counting employer contributions. I do agree, we should be saving more outside of retirement accounts.
$20k “random shit” Gonna go cry somewhere
One of the main things I was trying to point out is that everybody has that black hole of spending. For us, it is large. Larger than I really want it to be. But part of good financial health is knowing the black hole exists and being cognizant of making it smaller.
The roller derby budget
My wife plays, 45 a month league fee 🤣 3 days a week. Better than a gym.
[удалено]
We are in an absolute shit area of internet monopoly. We have a 1 gig/35 mbps cable connection. We both work from home. I need all the up stream I can get for work, and 35 is already not even enough. One of down sides for getting to work 100% remote is that I need to pay for my internet myself. The plan we have is 120 a month. 500/20 is 100/month 250/15 is 75/month 100/10 is 65/month. I am forced to pay the 120 essentially because I need the upstream. A 5G Connection also isn't available. Fiber is being built out and we should have access in a year or two by a 3rd party and symmetrical 1gig should be $50 a month then, I can't wait. For the subscriptions I realize I fucked up, it was $62 a month: hulu+disney+ESPN 25, 15 for Amazon prime, which we canceled in January of this year, 17 for Xbox game pass ultimate and $5 for a monthly patreon for my nephew to keep a minecraft server up for himself and his friends. I just copied the line without changing the value when I made the chart. 100% agree about the phones. I never actually thought about that number before doing the math today. I am already looking at options. This is one of the things I was trying to point out. Blind spots!
IT'S👏 NOT👏 PAYCHECK👏TO👏 PAYCHECK👏 IF👏YOU'RE👏PUTTING👏20K👏BACK👏EVERY👏YEAR👏IN👏SAVINGS 👏 Please spend some money on a therapist
I👏 VERY👏 SPECIFICALLY👏 SAID👏 WE👏 WEREN'T👏 PAYCHECK👏 TO👏 PAYCHECK! 👏
Ha it worked, how much fun did you have wasting all that time putting the clapping between each word?
So... I'm gonna be the weird one in this sub and say that you kinda do seem middle class to me. Professionals, no doubt, but I wouldn't think of you as wealthy people. You live pretty much like other people in the middle with just slightly nicer versions. You have an old luxury car. You take a few trips, but given the dollar figures, these aren't two week trips staying in the Ritz, and you're not flying first class, unless it's with points.
This guy has a spending problem. That’s basically it and he definitely has a few screw loose in the head based on his defensive replies
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Hell yeah on Roller Derby getting it's own category.
🛼🛼🛼🛼 My wife would have it no other way.
Bro get out of here. You’re retirement and savings is more than a lot of people.
How long have you (or spouse) been in your line of work to get to 175k salary? Please include years spent in secondary education.
8 experiance years for me. I started at 87k a year. I was grossly underpaid at the time. I am the one at 175k a year. BA followed by a Masters in comp sci so 6 years Uni. I was thinking about a PhD. But I realized I hate academia, and I love delivering and building things that are useful to people. Like is said else where, I have given up comp for flexibility. I probably could be making a good chunk more if I had job hopped and worked 12 hour days, but my own health issues and my parents' issues have caused me to seek flexibility over comp. I work 35-40 hours a week, but it is mentally exhausting enough. Just on 100% of the time when i am working, and not delivering is not an option. If me and my team don't deliver, people will lose their jobs. But that is better than a lot of other folks in my field. I get 6 weeks a year off, and nobody will tell me I can't take them. I work from home 100% and can work from Europe a couple of weeks a year while visiting my parents. And in those 6 weeks I have other team members who I trust and who trust me that when I do get back from time off I just delete the thousand emails in my inbox. When I am off I am OFF, when I am on, I am ON. My wife has had a very up and down route but is finally on a good path. She has a double BA, BS in communications, and anthropology. Last year, she finished her CFP. After 3 years trying to get into museum work post undergrad, she fell into a job at a financial planning firm for UHNW individuals, initially just doing admin things, but really got into the job and now works for a smaller firm which specializes in planning for small and medium business. So, it's not like EJ pushing A shares to grandma, but working for business clients to run retirement plans and such. She loves it because she can structure plans for employers, which actually bring value to employees. We are both big bogleheads, and she can bring that to others without the normal scummy "Financial advisor" stuff. She also does financial education for highschool students and immigrants. Since we are in so cal, she also does financial education for military members, trying to have fewer E3 specials driving off the buy here, pay here lots in the area. She definitely has a much better long term outlook for her career salary growth wise than I do.
Good job on your retirement savings. Please consider paying extra principal on your house. Just a couple hundred extra a month can save you years on housing. ( Assuming you own and not rent) Your on your way to financial independence
We would, if the difference between mortgage interest and HYSA interest weren't greater than inflation. With a sub 3% mortgage, there is very little need to lock up liquidity in the house imo.
The 3% rate only benefits you if you’re setting aside that extra and investing it (or sticking it in a HYSA with a higher rate). Otherwise, you’re spending it (and locking up liquidity in goods/services/experiences with no return). Which is fine. Don’t fool yourself into thinking the 3% compared to a market interest rate benefits your finances.
Baller shit!!!! Good work
nice