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Looking at a big mortgage payment, and a radically changed budget. Advice sought.

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  • #16
    hmm, not sure If i'm missing what is not adding up? The fixed expenses are on the R, is that column not adding up to you?

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    • #17
      I think I was just confused with the $6800 , what that actually includes?

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      • #18
        I would probably go with #1 given the low rates. Hard to mess up with that income...

        But here's the obligatory "make sure there's proper insurance in place (life/disability)" suggestion!

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        • #19
          Originally posted by Random1 View Post
          I think I was just confused with the $6800 , what that actually includes?
          no worries you guys DID actually get me to catch an error in math. I was calculating my monthly income (paid bi weekly) as if i were recieving 24 paychecks not 26, which is the reality... So actually now budget has excess of 3800/ month. feeling better and better.

          to answer your question 6800, is everything, groceries, diapers, house hold products, cleaning lady... cash flowed small trips. Basically its all our discretionary spending.

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          • #20
            Originally posted by Ozarka View Post
            I would probably go with #1 given the low rates. Hard to mess up with that income...

            But here's the obligatory "make sure there's proper insurance in place (life/disability)" suggestion!
            if you look at my budget you'll see we are paying sadly about 600 a month in insurance, umbrella, car, disability, term life.... gah. it burns.

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            • #21
              Originally posted by drgenericusername View Post

              to answer your question 6800, is everything, groceries, diapers, house hold products, cleaning lady... cash flowed small trips. Basically its all our discretionary spending.
              Yikes. That still feels high if you aren't double counting child care.

              Maybe break that out a bit to see what discretionary could be reduced?
              Last edited by HanBZ; 04-26-2021, 01:49 PM.

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              • #22
                Originally posted by drgenericusername View Post

                if you look at my budget you'll see we are paying sadly about 600 a month in insurance, umbrella, car, disability, term life.... gah. it burns.
                $600 per month for ALL of your insurance?

                Do you have an appropriate amount of disability insurance for yourself and your spouse?

                My disability insurance costs $618.07 for a benefit of $17,755 after 90 day waiting period.

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                • #23
                  Originally posted by endo4jc View Post

                  $600 per month for ALL of your insurance?

                  Do you have an appropriate amount of disability insurance for yourself and your spouse?

                  My disability insurance costs $618.07 for a benefit of $17,755 after 90 day waiting period.
                  I have an excellent plan discounted for resident purchase now upgraded to cover most after tax income of mine. It's about 300 a month through guardian. Wife has none (i'm hers). I went with a variable rate assuming I wont need it as I get closer to FI, (and have wife to cover me)

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                  • #24
                    Originally posted by HanBZ View Post

                    Yikes. That still feels high if you aren't double counting child care.

                    Maybe break that out a bit to see what discretionary could be reduced?
                    We are definitely going to look closer at it in the coming months, but I don't think 80k discretionary for a family of 4 is crazy town. It's only 20% of our after tax income, 12% of our gross (before bonus). I'm sure there is some fat that can be trimmed. It's a big bucket I include in there. For instance our last vacation rental was cashflowed from that money pool, so are some out of pocket medical expenses. It's a big bucket, a better budget would break some of the things out i'm sure.

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                    • #25
                      I would take a step back and think about needs and wants. You make 3/4 of a million dollars every year and are having trouble making your budget balance. You don’t give a penny to charity, you don’t have anything allotted to vacations. No money to replace cars. Nothing for college savings. Also, you don’t have a good grip of your finances as demonstrated by not knowing how many paychecks you get equating to a 4K/mo swing. Also, I’d be surprised if you had enough insurance.

                      Sorry if this sounds harsh, but you are very, very sloppy and spend an insane amount of money. If you were the average American with a 50k/y salary, you’d be in credit card debt. Thankfully, you have a tremendous household income.

                      Think about your life choices. You have what could equate to generational wealth if you were willing to make minor changes. A change in home choice, change in location, change in childcare expenses. Even having a budget will probably be a 25-50k/y swing.

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                      • #26
                        Originally posted by VentAlarm View Post
                        I would take a step back and think about needs and wants. You make 3/4 of a million dollars every year and are having trouble making your budget balance. You don’t give a penny to charity, you don’t have anything allotted to vacations. No money to replace cars. Nothing for college savings. Also, you don’t have a good grip of your finances as demonstrated by not knowing how many paychecks you get equating to a 4K/mo swing. Also, I’d be surprised if you had enough insurance.

                        Sorry if this sounds harsh, but you are very, very sloppy and spend an insane amount of money. If you were the average American with a 50k/y salary, you’d be in credit card debt. Thankfully, you have a tremendous household income.

                        Think about your life choices. You have what could equate to generational wealth if you were willing to make minor changes. A change in home choice, change in location, change in childcare expenses. Even having a budget will probably be a 25-50k/y swing.
                        It is really really hard to screw up on an income of $730k. It takes a major earthquake to blow it up beyond repair.
                        The part that I don't care for is they don't seem to have a plan to go back upon. In three years, a new priority or whatever. Taking the life journey without priorities.
                        It is like a "can I afford it" question. Whatever is missing, they can probably recover without too much pain.
                        As long as the $730k continues, things will be fine.

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                        • #27
                          Originally posted by VentAlarm View Post
                          I would take a step back and think about needs and wants. You make 3/4 of a million dollars every year and are having trouble making your budget balance. You don’t give a penny to charity, you don’t have anything allotted to vacations. No money to replace cars. Nothing for college savings. Also, you don’t have a good grip of your finances as demonstrated by not knowing how many paychecks you get equating to a 4K/mo swing. Also, I’d be surprised if you had enough insurance.

                          Sorry if this sounds harsh, but you are very, very sloppy and spend an insane amount of money. If you were the average American with a 50k/y salary, you’d be in credit card debt. Thankfully, you have a tremendous household income.

                          Think about your life choices. You have what could equate to generational wealth if you were willing to make minor changes. A change in home choice, change in location, change in childcare expenses. Even having a budget will probably be a 25-50k/y swing.
                          I promise I'm not offended by the tone, it's the internet afterall! I would say:

                          We are not average americans, and so we pay a nanny 15 dollars a week (plus overtime) for 50+ hours to take care of our infant, and toddler after day care. We are paying her an average american's wage so we can do our high intensity jobs. A huge chunk of our overhead comes from paying child care so we can earn.

                          I don't think our record is particularly bad We've gone from -168k to + 550 networth in about 3.5 years as an attending (other spouse is newly an attending, avg earning over the 3.5 closer to 500k, until this year), so we've use about 30-40% of every earned dollar to increase networth. we went sequentially through student loans, downpayment accumulation, maxing out retirement accounts without doing any taxable retirement savings.

                          The 80k of discretionary spending is insane? Whelp I guess we're insane.

                          your point about budgeting is well taken regardless
                          Last edited by drgenericusername; 04-26-2021, 01:37 PM.

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                          • #28
                            Originally posted by drgenericusername View Post

                            I promise I'm not offended by the tone, it's the internet afterall! I would say:

                            We are not average americans, and so we pay a nanny 15 dollars a week (plus overtime) for 50+ hours to take care of our infant, and toddler after day care. We are paying her an average american's wage so we can do our high intensity jobs. A huge chunk of our overhead comes from paying child care so we can earn.

                            I don't think our record is particularly bad We've gone from -168k to 500k networth in about 3.5 years as an attending (other spouse is newly an attending, avg earning over the 3.5 closer to 500k, until this year), so we've use about 30-40% of every earned dollar to increase networth. we went sequentially through student loans, downpayment accumulation, maxing out retirement accounts without doing any taxable retirement savings.

                            The 80k of discretionary spending is insane? Whelp I guess we're insane.

                            your point about budgeting is well taken regardless
                            I don’t think your discretionary spending is insane. It’s substantially more than we spend, but we’re in a MCOL area.

                            You will be able to retire and pay off your house. What I’m saying is you are be in the position to leave each of your grandkids a million bucks, pay for all your kids college, fund a charity that is important to you for decades upon your death, give generously now and anything else you want to do. But your choices now may preclude that.

                            You make 750k and don’t give a penny to charity - is that how you want to live? I’m not saying that to be nasty or saying you should, I just know that’s not how I want to live and suspect not how most want to live. I am trying to clarify that you need to verbalize your priorities then build your budget from there, not the other way around.

                            FWIW, I’m an academic who just hit a 500k NW 2.5y out of training. I came on here 2ish y ago asking for advice on my savings plan. I felt very crestfallen with reading the responses. Although my pride took a hit, I’m very glad I listened. There is some wisdom on this forum.

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                            • #29
                              This forum is heavily populated by compulsive savers (or super savers if you prefer). We tend to judge by that lens. I think the OP's budget is fine. Saving 20% and spending the rest is reasonable. Their lifestyle appears to be commensurate with a dual attending household (not residents). If their goal was retire in 5 years I would say there was an issue. At the current budget keep an eye out for lifestyle inflation (unless income increases to accommodate).

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                              • #30
                                Originally posted by VentAlarm View Post

                                I don’t think your discretionary spending is insane. It’s substantially more than we spend, but we’re in a MCOL area.

                                You will be able to retire and pay off your house. What I’m saying is you are be in the position to leave each of your grandkids a million bucks, pay for all your kids college, fund a charity that is important to you for decades upon your death, give generously now and anything else you want to do. But your choices now may preclude that.

                                You make 750k and don’t give a penny to charity - is that how you want to live? I’m not saying that to be nasty or saying you should, I just know that’s not how I want to live and suspect not how most want to live. I am trying to clarify that you need to verbalize your priorities then build your budget from there, not the other way around.

                                FWIW, I’m an academic who just hit a 500k NW 2.5y out of training. I came on here 2ish y ago asking for advice on my savings plan. I felt very crestfallen with reading the responses. Although my pride took a hit, I’m very glad I listened. There is some wisdom on this forum.
                                As usual real feedback stings a bit and unlike your trainees I won’t write you up for it thanks for the comments

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