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Old 05-16-2018, 09:56 AM
 
629 posts, read 492,088 times
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This is a fascinating thread and I both very much relate to the original poster and also wish I had his household income. We live in Larchmont and absolutely love it here, but struggle every day with feeling like we're among the "poorest" people in the village. (Our combined income varies but is in the neighborhood of the low $200k range.)


We live in a small but beautiful home that we very much enjoy, and we live a modest but comfortable lifestyle. We drive Subarus, we do not really buy designer clothing (I'm a lawyer and wear basically Calvin Klein and Ralph Lauren suits that are on sale at Lord & Taylor), we don't order delivery or eat in restaurants more than 2-3 times per month, and we hardly ever buy material items other than necessities. We take 2 nice vacations a year as travel is our greatest passion, but we do so frugally and let price dictate our destinations. We have only 1 child, and she attends town camp in the summer. We have a 15 year mortgage that will be paid off by the time we're about 50, and we've been putting 10k/year into our child's 529 plan.


So we don't live lavishly and we certainly cannot afford to take a family of 5 to Sicily or drive a Mercedes as many of our neighbors can, but we feel pretty fortunate overall. I think the key is to make peace with the fact that Westchester is just a very, very expensive place, and unless you make a seven figure salary, you're not going to really feel "rich" here. That said, we make a fraction of that income, and do not expect anyone to feel bad for us.
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Old 05-16-2018, 11:03 AM
 
Location: New York
743 posts, read 457,938 times
Reputation: 1945
Quote:
Originally Posted by ashowofhands View Post
Even those who managed to buy at a time when prices were somewhat reasonable are now struggling to keep up with the constantly rising taxes.
I don't know about the rest of you, but I live in Dobbs and every single year the school budget increase is approved. Since that accounts for the lion's share of property taxes, our tax rate increases have remained steady year-to-year. I guess we can file a grievance at some point, but from what I've read, it's just a temporary respite.

We moved to Westchester because we're both originally from the Midwest and appreciate the natural beauty of the place, the small-town atmosphere and being out of the 'fray' of NYC/NJ so to speak. However, it's getting really hard to justify staying here given that we don't have any kids and aren't using the school system and yet paying tons of money into it. I love the house, the area and the nature/outdoor beauty which just wasn't there in NJ, but the tax increases are unsustainable at this rate and 25k/yr is a lot to pay for access to nice trails and the waterfront area. Also, socially, it's hard to meet people here if you don't participate in the school-related activities/sports/etc. I guess it's not hard to imagine that most folks in our position have already moved out and/or never really considered Westchester in the first place.
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Old 05-16-2018, 12:09 PM
 
27 posts, read 17,149 times
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Who the hell saves like that? Im a millennial and im the only one of my friends(im 27, husband 33) who can afford to buy a house. Let alone in southern westchester. Of my husband’s friends who bought a house. They bought in Stamford becauae they couldnt afford Westchester. For my generation, it is the norm to put most of your money into buying a small house.

You have a 401k + savings+ Other retirment savings. That is abnormal. Most people have 401k thats it.

Your savings could pay for another mortgage that many would love to have.

You have to realize that these are different times. To be able to save is a rare thing...
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Old 05-16-2018, 12:43 PM
 
10 posts, read 9,629 times
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Earlier in the thread, I believe someone noted that your family is saving ~$7.5K/month, whether in the form of savings, investments, etc. after you and your partner are maxing out your 401Ks. I think you are not appreciating the magnitude of the amount you are saving per month.


I find it hard to believe that a family with $650K HHI is able to just live comfortably, even in Westchester. With that amount of income, if the family is just living comfortably, it likely is on account of either overspending or oversaving. In your case, it appears to be the latter. Now, I do not say "oversaving" negatively; if it is your desire to save at this rate, by all means, it is your decision. But, it appears you could certainly afford to save less per month and enjoy more luxuries in life (whether in the form of a more expensive home or otherwise).


Also, your $3K monthly child care expense will not go on forever. Assuming you will be sending your children to public school, this expense will fall sharply once your children begin kindergarten. The amount by which your child car expense falls at that time could account for the step-up in mortgage/taxes associated with a more expensive home.
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Old 05-16-2018, 01:28 PM
 
5 posts, read 6,288 times
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I agree. In our case, at current rate we are thankfully saving more that $7.5K a month but we decided to live like we are making less than half what we do and never updated as income grew.

The problem IMHO is when someone wants to buy the "typical" upper middle class Westchester house which can be north of 1.5M+ with taxes at 30-35K. Assuming 1.2M mortgage with 20% down, the monthly payment including insurance is 9K a month. So the first $9K go out of the window before you turn your lights on.

Anywhere in reasonable commuting distance from the city, this would be a nice house but not a mansion (See what that buys in Larchmont, Scarsdale, Bronxville, etc.).

This may be a "definitional" issue after all, but $500K in Weschester is not rich. Either you go my family route (modest house with substantial monthly savings) or you go the big house, little saving route.

In any event, OP can cut in various areas and should still be able to "afford" a big-ticket house, but will not become a multi-millionaire any time soon like a $650K yearly salary would suggest. So yes, no rich.

Stated otherwise, take 10577, AGI in 2013 was $897,457 http://www.city-data.com/zips/10577.html

So when you wonder around at 500K/y feeling poor compared to the big mansion owners, chances are that the feeling is supported by data.

Quote:
Originally Posted by CardiffGiant View Post
Earlier in the thread, I believe someone noted that your family is saving ~$7.5K/month, whether in the form of savings, investments, etc. after you and your partner are maxing out your 401Ks. I think you are not appreciating the magnitude of the amount you are saving per month.


I find it hard to believe that a family with $650K HHI is able to just live comfortably, even in Westchester. With that amount of income, if the family is just living comfortably, it likely is on account of either overspending or oversaving. In your case, it appears to be the latter. Now, I do not say "oversaving" negatively; if it is your desire to save at this rate, by all means, it is your decision. But, it appears you could certainly afford to save less per month and enjoy more luxuries in life (whether in the form of a more expensive home or otherwise).


Also, your $3K monthly child care expense will not go on forever. Assuming you will be sending your children to public school, this expense will fall sharply once your children begin kindergarten. The amount by which your child car expense falls at that time could account for the step-up in mortgage/taxes associated with a more expensive home.
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Old 05-16-2018, 01:38 PM
 
1,569 posts, read 2,747,460 times
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Quote:
Originally Posted by BD1978 View Post

So we don't live lavishly and we certainly cannot afford to take a family of 5 to Sicily or drive a Mercedes as many of our neighbors can, but we feel pretty fortunate overall.
I don't know how anyone pays for vacations. One guy I worked with said that at some point he spent $65k a year on family vacations.

Me it's either on points, coupled with a work trip (to get the write off) or visiting the in-laws.
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Old 05-16-2018, 01:47 PM
 
277 posts, read 560,006 times
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Also, another thing to distinguish in this conversation...the difference between saving, and building wealth. Fine, if you have enough money to live comfortably, and even better if you can pocket some away while doing it..but is it possible to build wealth, while still living comfortably here? Between house renovations, kids activities, vacations, taxes, college savings, and a bit for retirement and savings, there's not much left. My main goal in life is not really to own a ton of material things, or live lavishly , but I would like to have the feeling that I don't need to worry about money. At our household income, I think I should be able to have that mindset, but I can't.

The link someone posted on page 1 I think, to the financial samurai blog, had some good conversation about this topic. He is recommending that you save 50% of your net income. After several years of this, along with some good investments, I guess you could become wealthy, but I don't know how realistic this goal actually is.
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Old 05-16-2018, 02:18 PM
 
629 posts, read 492,088 times
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Quote:
Originally Posted by ponytrekker View Post
I don't know how anyone pays for vacations. One guy I worked with said that at some point he spent $65k a year on family vacations.

Me it's either on points, coupled with a work trip (to get the write off) or visiting the in-laws.

Travel is very important to us, and that is the one category of leisure spending in which we deem it worth it to spend a solid amount of money. We greatly look forward to our travels and enjoy planning our trips, and love reflecting on the travels by making photo books, etc. It's a passion of ours.


However, we could not in a million years spend $65k per year on vacations. We generally do two vacations of about one week long each, and we choose our destinations by cost of airfare and hotel, and we book trips 6 months in advance to snag great deals. For our family of three, we usually spend absolute soup to nuts about $4,000 to $5,000 for a flying vacation (in recent years to Norway, Sedona, California Coast, Texas, etc.) and maybe $2,500 for a driving vacation (places like Quebec City, Maine Coast, etc.). And we'll maybe do 1 weekend away in the summer, which just costs 2 nights' hotel. So I think there is a happy medium between only travelling if you have points/miles to do so, and spending $65k per year on super luxury vacations.
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Old 05-16-2018, 02:24 PM
 
Location: Saint Louis, MO
138 posts, read 98,666 times
Reputation: 246
I don’t even know how I ended up here (not a New Yorker), but I’m always interested in cost of living threads. I’m just stunned at these figures. Is New York really that bad? I live in the Midwest (yes, I know, cheaper but still in a major city). We have a HHI of roughly $100K before any potential bonus. And our house is $250K with property taxes of $3,000 or so. We have two kids also. And we are doing great. Thriving honestly. So your income is over 6x what ours is yet your house is only 3x what ours cost.

We take a nice vacation each year, I save 10% for retirement with a 6% company match (16% total) plus an extra few grand in a Roth IRA each year. We can’t do everything we want, but we do a lot of fun things. I do know everything costs more in New York; just can’t fathom not feeling comfortable on $650K. Is this just a New York thing? Not satisfied if someone down the street has more than you? I don’t mean to sound facetious, but it just blows my mind a bit. What more are you seeking? If you’re saving almost $100,000 a year, you aren’t “uncomfortable” or “having to worry about money.” You literally save twice as much as the average American makes in a year.
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Old 05-16-2018, 03:01 PM
 
40 posts, read 37,135 times
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Quote:
Originally Posted by ryanfze55 View Post
I donít even know how I ended up here (not a New Yorker), but Iím always interested in cost of living threads. Iím just stunned at these figures. Is New York really that bad? I live in the Midwest (yes, I know, cheaper but still in a major city). We have a HHI of roughly $100K before any potential bonus. And our house is $250K with property taxes of $3,000 or so. We have two kids also. And we are doing great. Thriving honestly. So your income is over 6x what ours is yet your house is only 3x what ours cost.

We take a nice vacation each year, I save 10% for retirement with a 6% company match (16% total) plus an extra few grand in a Roth IRA each year. We canít do everything we want, but we do a lot of fun things. I do know everything costs more in New York; just canít fathom not feeling comfortable on $650K. Is this just a New York thing? Not satisfied if someone down the street has more than you? I donít mean to sound facetious, but it just blows my mind a bit. What more are you seeking? If youíre saving almost $100,000 a year, you arenít ďuncomfortableĒ or ďhaving to worry about money.Ē You literally save twice as much as the average American makes in a year.
I'm the OP. I'm also originally from the Midwest. This is why I am constantly struggling with the question of whether staying here is worth it. I know *exactly* what our income would buy in Cleveland, or Chicago, or Indianapolis. I think a lot of people who are born-and-bred NYers don't really have that perspective--or they believe the schools somehow justify it. That's an argument I absolutely don't buy. In my (admittedly boring) Midwestern hometown, many many people graduated from top-ranked public schools (or private schools that cost half what they cost here) and jetted off to Ivies. So the schools simply aren't a reason--they're an excuse.

You don't sound facetious. At all. You sound like a completely reasonable person asking completely reasonable questions. Yes, we save a lot. But as I mentioned in my original post, if we upgrade to one of the top-ranked school districts, we will liquidate that extra savings on a home in probably the $1.2-$1.4 million range--a home with taxes around $35k. Ou monthly costs will skyrocket, and we'll probably be unable to save much outside of retirement and 401(k)s. On a 1% income. Now that is some staggering math. I know we could buy something smaller, and shabbier. But am I totally superficial if I'd like a two-car garage, a kitchen that's newer than 1960, and more than two bathrooms?
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