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Our mortgage & taxes are $4,000 per month. Our youngest just graduated college last week with no student loan debt. Yeah! No more tuition bills - first time in decades as our kids attended parochial schools.
We did this on less than half your total income. I am a stay at home mom so no childcare expenses, home cooking so no takeout food expenses. I live in very nice jeans so I don't have same expense as work clothing. However, we love art so we had memberships to museums, ballet and opera tickets.
You probably have a lot more "stuff" than us. We drive our cars until 200,000 miles. Our lawn service is $300 per month for six months. Misc. home expenses/maintenance: $1000 per month seems high. Our utilities are high during the winter depending on the cost of heating oil but are a fraction during summer - even with central air - $1000 per month for 12 months also seems high.
We have an old fashioned marble notebook for expenses. We record every check we write so we can track our expenses.
My wife (part-timer) and I are in the $480Ks combined. We are blessed with great health care almost entirely paid by wife's employer. We share OP general feeling that things in Westchester are stupidly expensive. I find myself often wishing we were making more, until I realize that it is status-driven not need-driven.
Your issue is that you are spending too much in some areas, and are probably craving for that better house.
You look at us, from the outside we are living as we were making half what we pull in. We bought a house about a little less than a decade ago for $680K (today probably would be 900K) and low taxes. It is a nice residence but way less than what many of our friends/neighbors have. Day care, heating and electricity, house maintenance are the biggest expenses. I have nice cars but all paid out. We save an average of $9K a month.
Do we long sometimes for that nice 1.5M house with taxes at 30K. You bet we do. Is that house worth cutting down our savings by 5-6K a month. No way.
The Small price to pay is that we are viewed as the "least" affluent couple at the neighbors parties. But we attend few parties and try to spend time with friends who are not in the rat race.
Last edited by italdream; 05-15-2018 at 10:00 AM..
OP, our household income is less than yours, but I think it sort of evens out once you factor in the childcare costs and college savings. We don't have kids, so I can't relate to that, but I think a sizeable portion of your income (like many in Westchester) is going towards expenses in those areas.
In other respects, our budget looks similar to yours, with less healthcare premiums and + $700/mo in dog daycare expenses. Are you on a 15 year or 30 year mortgage? We switched to a 15 year so our payments are about $5500 but the nice part is most of that is going towards principal. The not-so-nice part is that we have less disposable income to work with every month since such a large portion is going towards the house. Have you made any large home upgrades/repairs/renovations/etc that are eating into your budget further?
Finally re: college savings, I know many parents today consider it a given that they will be paying for college tuition; however I just wanted to offer some reassurance that my own parents didn't give or lend me a red cent towards tuition (I'm a millennial) and I was still able to go to a good school, graduate and pay for college and here I am today. So I guess my point is that don't let the anxiety over affording college tuition (which continues to inflate) be a source of undue stress down the road! You can also partially contribute or supplement with scholarships, etc. Best of luck.
thank you for this -- I actually forgot to include the $800/month that we pay toward student loans. Ugh. And that's just for my spouse. We both have advanced degrees and I can't imagine if we both had school debt. It's something I'd really rather not saddle my kids with.
Our mortgage is 30 year but we do pay a few hundred extra each month toward the principal. Our 30-year rate (from 2013) is so low that a refi into 15-year at current rates makes no sense for us.
A lot of Westchester residents who aren't making literal millions simply got in when houses were cheaper. You see this a lot in the more rural reaches of northern Westchester, working/blue-collar/middle-class families who bought their house in South Salem or Somers 30 years ago for $150,000. So, keep that in mind- when did they first come here? Plenty of people bought in Westchester decades ago who would NOT be able to afford it today with the same (inflation-adjusted) income and savings they had back then.
With a small number of exceptions (Peekskill/Cortlandt area, maybe Mohegan Lake and Shenorock, and apartment/condos), young first-time buyers who are buying in Westchester now are either making 7+ figures or have family helping to foot the bill.
Yup, I can certainly understand why you'd say that. So:
Monthly take-home, after maxing out 401ks, is about $25,000-$26,000.
Mortgage/taxes: $4500
Health insurance: $2000 (no workplace contribution)
529s for two kids: $1200
Car-related expenses + train/parking: $1500
Utilities: $1000
Misc. home expenses/maintenance: $1000
Childcare: $3000
Extra-curriculars: $500
Food/leisure -- I don't add this up usually... maybe $1500-$2000, depending on how much entertaining we're doing and how much we're working too much and ordering in?
Extra retirement saving: $1200
General saving: $3000
Then there's a vacation or two each year, and camp.
After that, there's a couple thousand left, which we easily blow on clothes, etc. for all four of us. Nothing out of line for our income level. Today I ordered some Old Navy pajamas for my kids, some diapers, a new water bottle for my son because he keeps losing the damn thing, and a new carseat.
So where's the crazy spending?
Ok I see two issues right away. The health insurance on your own and the child care. After a while the child care goes away. Once it did for me, it went right into savings/529 and led to a paid for 4 year degree.
The health insurance you got to figure out a way to pay that pretax or on someone else's dime Those two categories are massive money sucks. If I had to pay those I'd be living in Newark.
This is a "sad" reality and there are not enough NYT articles that can convince me otherwise. in Manhattan, Westchester (but also San Francisco and the likes), $500K with kids is middle class. Now for people who spend it all and have no savings, it is a different story. I have acquaintances who are living paycheck to paycheck on that income, which is equally sad.
This is a "sad" reality and there are not enough NYT articles that can convince me otherwise. in Manhattan, Westchester (but also San Francisco and the likes), $500K with kids is middle class. Now for people who spend it all and have no savings, it is a different story. I have acquaintances who are living paycheck to paycheck on that income, which is equally sad.
Yep. Why do you think so many people commute from Putnam, Dutchess, Orange, and beyond, to their Westchester and NYC jobs? You need to be making money hand-over-fist just to afford the bare minimum in Westchester, and aside from well-rated schools (which, granted, are a big deal if you're raising kids), you get so little for what you pay in Westchester. Notice how many people move out of the county as soon as all the kids are out of school? 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 understand that location is everything and you have to pay to play and all of that...but I don't think it's fair at all that an actively working family making "only" $100k-200k should have to make a commute of 1hr+ each way because they've been priced out of anything closer.
I understand that location is everything and you have to pay to play and all of that...but I don't think it's fair at all that an actively working family making "only" $100k-200k should have to make a commute of 1hr+ each way because they've been priced out of anything closer.
This is how we ended up in Croton. The schools might not be Scarsdale or Edgemont but they are still good schools by most reasonable standards. You're far enough out from the city you can get a little more space without making millions. And the express train is 45-50 minutes to Grand Central. So yes your commute is going to be an hour plus once you add in getting to the train and getting from GC to wherever you work but it's not as bad as getting out of Westchester entirely.
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