Submitted by nic_is_diz t3_127mrv5 in personalfinance
Looking to understand if my expenses are similar to others or if I have missed something, because I'm shocked at how little we will have left over. Feel like my wife and I have done everything right/gotten pretty lucky and we can afford 1 child but definitely not 2 and wondering how other people do it.
Gross Salary: $152,100 ($100,100 me, $52,000 wife) in the midwest
After tax/insurance/retirement/Roth contributions take-home: $82,067 or $6,838/mo.
We have no student debt, own both of our cars, have no credit card debt, and our mortgage on our home we paid a 20% downpayment on is $1,577/mo with $320/mo escrow which is about 27% of our takehome.
Our other monthly bills total $1,715 with a bit of overestimating on my part for safety. So $3,615 total all bills with mortgage/escrow included or 52% of our takehome.
We have 6 months of emergency fund saved up that includes the childcare costs I'm about to mention with about another $20k on top of that in various other savings accounts.
We have about $90k in retirement between us both at age 27 with me maxing both my company retirement plan and roth and her saving less than max for both.
Our newborn childcare at a facility we trust <5 minutes from our home is ~$400/we or $1,733/mo. Obviously, some weeks this won't apply but for budgeting I'm trying to be conservative.
All said and done this leaves us with total monthly bills/living expenses of $5,348/mo or 78% of our takehome without the increase in general grocery/weekly shopping trips for children.
I guess I'm just shocked that doing what I thought was everything right (total bills ~50% of takehome, mortgage <30% of income, saving religiously for retirement) that we are supposed to live with only 20% of our takehome leftover for the next ~5 years? And if we want a second child I don't think we can even afford it? I wanted to try and save for my children's college fund but I don't see how we can even fit that in. Am I way off base here? I feel like I'm missing something or I made some grevious error relating to our expenses. We had family literally telling us we were insane for purchasnig less home than we could technically afford and I just don't see how that is actually true. Should we just be gutting our retirement contributions for the next 5 years?