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A friend told me a family of four can't live on $200k. I laughed and said of course they can. I said I do it right now. She's like no way, no how. I even save. And her answer was it's only people in LCOLA. I said no way. I said I could do it in SF if I needed too. What we live on is totally translateable to the Bay where they are.
I pointed out that part of it is the decisions we've made.
1. No debt but the mortgage - no car loans, no student loans, no credit cards. It makes the monthly spending just what you spend. And our mortgage is more than rent because we down a pretty expensive house. Comparatively for what we get it's cheaper but DH and I and 2 kids could live in a 2-3 bedroom apartment for less than our mortgage if we really wanted too.
2. 1 income - no childcare, people she knows all pay for childcare
3. did i mention the cars we drive?
It's been a really weird week with two people telling me strange things that we happen to do. 1 friend said you can't raise a family on $200k. I said yes you can. Second person told me they are leaving the area because it's too affluent and you get caught up in Keeping up with the Jones/Kardashians - their example - they have to buy a new car since they are giving their old car to their high school senior going to college. Her first thought was BMW X5 or 5 series, but then she realized they could easily make do with a subaru and average/normal. I laughed at her and said I drive a subaru and minivan and why the hell would I think of upgrading? Would i? sure if I was rolling in dough. But I need to be comfortably saving a lot to spend a lot I think.
The same friend/old coworker who said you can't live on $200k said her son and DIL that she does their taxes made over $500k combined in SF and they do roth 401k because neither of them max out their contributions to the 401k. I said huh? At that income level you should be maxing it out pretax and aftertax backdoor Roth IRA. I mean 15% for retirement is $75k. That's more than 2 maxed out 401k. but okay. Guess you can get there with contributions and matches. I
I pointed out that part of it is the decisions we've made.
1. No debt but the mortgage - no car loans, no student loans, no credit cards. It makes the monthly spending just what you spend. And our mortgage is more than rent because we down a pretty expensive house. Comparatively for what we get it's cheaper but DH and I and 2 kids could live in a 2-3 bedroom apartment for less than our mortgage if we really wanted too.
2. 1 income - no childcare, people she knows all pay for childcare
3. did i mention the cars we drive?
It's been a really weird week with two people telling me strange things that we happen to do. 1 friend said you can't raise a family on $200k. I said yes you can. Second person told me they are leaving the area because it's too affluent and you get caught up in Keeping up with the Jones/Kardashians - their example - they have to buy a new car since they are giving their old car to their high school senior going to college. Her first thought was BMW X5 or 5 series, but then she realized they could easily make do with a subaru and average/normal. I laughed at her and said I drive a subaru and minivan and why the hell would I think of upgrading? Would i? sure if I was rolling in dough. But I need to be comfortably saving a lot to spend a lot I think.
The same friend/old coworker who said you can't live on $200k said her son and DIL that she does their taxes made over $500k combined in SF and they do roth 401k because neither of them max out their contributions to the 401k. I said huh? At that income level you should be maxing it out pretax and aftertax backdoor Roth IRA. I mean 15% for retirement is $75k. That's more than 2 maxed out 401k. but okay. Guess you can get there with contributions and matches. I
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