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Parents! What % of your income do you save after tax?
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Parents! What % of your income do you save after tax? - July 15, 2013, 06:53 AM

I'm not talking 401k or anything pre tax. I'm talking, IRA, after tax kids college fund, house projects, vacations, rainy days, whatever else.

I'm at the edge of buying a house, but I'm seriously concerned about the amount of money left over for savings every month and year.

I was always raised to live within my means, no debt, be smart w/ money. I'm staring at a house that my wife and we really like. We've got a little girl on the way. And w/ the new daycare, baby stuff, has really eaten into the amount we usually save.

Our budget doesn't take into account any bonus's or anything but right now the budget says we'd be saving about 8% of our after tax income a year/month. Which is a lot less than usual. So I'm thinking in my head, how the hell do I save for college, vacations all that jazz when that 8% just isn't that much money? Is this what people do? If bonuses came as they have in the past, it could be as high as 15-20%, but thats not a sure thing.

This is a tough decision...

How much is enough. And the bottom line is its probably different for everyone. fml.
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July 15, 2013, 07:16 AM

Not nearly enough.

If it wasn't for the Hazelwood act, I'm not sure I'd be able to afford to send my kid to school. we put a few hundred a month into her college fund. I put 8 percent or so into retirement accounts.

That's about it. It's woefully inadequate. And, kid = more expenses, making it even harder to save


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July 15, 2013, 07:39 AM

depends how much you put down, how much you are paying a month - maybe the house you want isn't affordable to maintain your lifestyle.

i can tell you that when kids come along your priorities in spending change, and you somehow find more money than you usually would. that being said. take a sheet of paper out or open up excel and make a list of your monthyl expenses house/tax etc. everything that is fixed. (gas/electricity/water - guestimate but you should know your avg)

then make a row for groceries and eating out and other bs you do that you spend. try to take an avg over 3 months.


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July 15, 2013, 07:44 AM

see all those links and such in your signature - kiss em good bye if you are concerned with saving enough etc. etc.

I can tell you - i had a kid 4 mos ago - i immediately started him with a 10K deposit into a 529 plan, with a 100 bucks a month going to it, then 10% to 401K.

everyone saves a diff. amount - but you need to get your priorities straight. if you are spending 10K+ a year on moto racing, and it's a hobby, you may need to cut it out to get the house for your family - in retrosepct its worth it, and you'll eventually get back to racing. some things need to be put on hold.


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July 15, 2013, 10:29 AM

Quote:
Originally Posted by pauliodotnet View Post
see all those links and such in your signature - kiss em good bye if you are concerned with saving enough etc. etc.

I can tell you - i had a kid 4 mos ago - i immediately started him with a 10K deposit into a 529 plan, with a 100 bucks a month going to it, then 10% to 401K.

everyone saves a diff. amount - but you need to get your priorities straight. if you are spending 10K+ a year on moto racing, and it's a hobby, you may need to cut it out to get the house for your family - in retrosepct its worth it, and you'll eventually get back to racing. some things need to be put on hold.
I haven't been on a motorcycle of the racing sort in 3 years. Those links are old. Good memories though.

Good input in the thread so far.

Thank you for the replies.
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July 15, 2013, 10:50 AM

Like Paul said it depends on your priorities. Some people want a fancy house, cars, and hobbies so they're willing to cut costs on vacations, eating out, entertainment, child costs (birthdays, theme parks, Christmas, etc). Other people are willing to live in a mobile home and drive a Bronco, but in their no HOA backyard they have an RV, a boat, 2 dirt bikes, and take a month long family vacation every year. Where are your priorities and is there a balance?

My wife and I (+ our 9yr old son) bought a perfect house for an amazing deal that we could definitely afford. After taking all fixed bills into account (including health insurance, taxes, 401k) we realized we should be able to save around $2k per month give or take. Now a year later and taking into account gas, groceries, child care costs, child camps, birthdays, camping, Christmas, traveling to grandparents, car repairs, house upgrades...heck the list goes on, it turns out that left over money can be very tight. And we haven't even been able to buy any new furniture for new house yet.

We realized that we love our house and we're happy but we're giving up a lot. No vacations, no random expensive outings/hobbies, not much left for specific savings, and apparently furloughs do happen. So although we will never outgrow this house and will never be unable to afford it, we are thinking about making some changes where after all bills and regular expenses are spoken for, including child care, we could have 50% of our income left over in the bank. The truth is though, that the only way to do that would be to change our house. We're seriously considering it and might take that route.

Conclusion: If you're eyeballing your perfect new house ask yourself this... Is it perfect because it fulfills everything you WANTED in a HOUSE? Or because its everything you NEED while allowing you the flexibility to LIVE?

- Disclaimer - We live with zero debt including no credit cards, one car paid the other a couple of months left, bike paid, no financed furniture, etc; and we do prioritize on keeping it that way.

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July 15, 2013, 11:45 AM

Your stressing too much..... LOL, I did the same thing!

You will be fine, you live well within your means. Your just in that point in your life where there are lots of changes, all coming quickly.

With that said...children do cost a fair amount of money for sure, more than I "calculated" on paper. Having a daughter doesn't help when "Mom" wants to make her look pretty and dress her up.

Back to your question, not including bonuses, etc.... I'm at 18.5% after tax. If things come up....I'm ok with pulling money from one account or another to fund it. You will be fine...your bonuses turn into your "fun money".
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July 15, 2013, 12:26 PM

Be glad your kid is going to be living with you... they are MUCH easier to support that way.
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July 15, 2013, 01:30 PM

Quote:
Originally Posted by Fitz View Post
Not nearly enough.

If it wasn't for the Hazelwood act, I'm not sure I'd be able to afford to send my kid to school. we put a few hundred a month into her college fund. I put 8 percent or so into retirement accounts.

That's about it. It's woefully inadequate. And, kid = more expenses, making it even harder to save
This dude speaks the truth!


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July 15, 2013, 01:38 PM

Four-Person Family in Northern Virginia Needs More Than $88,000 to Get By, Study Says - Business - Kingstowne-Rose Hill, VA Patch


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July 15, 2013, 01:50 PM

I believe that


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Parents! What % of your income do you save after tax?
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Parents! What % of your income do you save after tax? - July 15, 2013, 02:37 PM

We did not save and are paying out the wazoo for college. Glad my kids have been good students so scholarships are coming in.
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July 15, 2013, 08:08 PM

i have two motorcycles and in the last 3 years less than 1000 miles on them. i sold my race bike. So toys/hobbies for the first 3 years or so are gone, so do not worry about vacations with a kid in the short term. Trust me, it is not a vacation.

There are calculators out there for college funds but fwiw two kids in daycare full time runs us $3500 per month. Lucky to save 1k a month, $500 a month into 529s.

So 5k a month gone before you get to daily expenses. But, good side is if you are able to save anything for actual savings you will be amazed at how little time you have to spend it...unless it is on the home or a car or something...bikes and video games and cool clothes are things you think of after getting the new "cool" thing like a home generator or security system.
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July 15, 2013, 09:26 PM

Man that's it? I thought it would be more than that to feed four mouths in NOVA. It's a ridiculous expensive area.


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July 15, 2013, 09:40 PM

I did it with one kid in ashburn on 65k... And the additional kids don't add a ton to the overall.

It was fucking tough

Very glad that I make drastically more now, and no longer live in ashburn ...


-Fitz

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2012 Harley Ultra Limited in Ultra Annoying Orange Sold!
2012 V-Strom 1000 Sold!
2009 Buell 1125R Sold!
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