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Posted September 13, 2007(191 replies)
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We have no savings - live paycheck to paycheck. I am extremely worried. We make $350K and spend nothing. Between the nanny, pre-school, IT ALL GOES. Before you attack me and say we are obviously living a lavish life style, realize my question is simply: do you have savings, or is anyone living paycheck to paycheck, and does that worry anyone?
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we make less than 100K, dh blew all savings on art investments (which I must sheepishly admit held its value in this market), no nanny ever, no babysitting, paid off school loans 5 years out of graduate programs, bought a co-op unit before the boom, ergo, no debt period, pay for preschool and toddler classes for both kids. we are living a little lean now because of the market, but we have stuff to sell if we need to.
[ Reply | More ]we're spending more than our income right now and it's very worrisome. and stressful. that being said, if you have 350k to play with, you have to be able to find something in your budget to cut back on.
[ Reply | More ]I totally hear you. It's just that the nanny, preschool, classes, mortgage, food, utilities, camp, life insurance premiums, doormen bonuses, everything adds up. The catch I did not mention is that we have a real estate investment property that we cannot rent or sell, which hemmorages $4,000 per month. If we didn't have it, then we'd save $4K a month, and maybe I would buy a new pair of shoes (I do not buy ANYTHING). We are stuck with it for a few years. No renters, no buyers. Still, I just can't find anywhere to cut. PS 6 asks for $1,000 a child, which I would like to do. Winter coats for the kids, some charitable contributions are our luxury spending items. NEVER go out to dinner or order in. $250 a week on groceries, feeding the two of us, 2 kids, and the nanny. We're 37 and 39, I can't even say we are young and will eventually make money. I am totally depressed and petrified. How do people amass so much wealth?
[ Reply | More ]if you are paying the nanny and you are paying the preschool, cut back on classes. you can easily by new toys or get a museum membership for significantly less than you are paying for classes. i guarantee you can cut back on your utilities by at least 10% a month while hardly feelign the difference. same with groceries.
[ Reply | More ]^^^i'm just doing the math in my head. you're spending 1k a month on groceries. and let's say 150/month on utilities. cut back 10% and you just paid your 1k school fee for "free". (also curious why you have a nanny, preschool and public school. do you have three dc?)
[ Reply | More ]I have a 6 year old and 2 year old, dh and I both work. A lot. preschool is three days a week for 2 1/2 hours. She also picks up the six year old from school. Utilities are $500 per month! Con Ed is $200, Cable is $150, and phones are $150!!!
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Your expenses are ridiculous. I don't pay ConEd $200 a month (unless we're talking about HOT summer days). I pay $80 for cable. I pay $110 for landline AND cell phone plan. There is no way I pay $250 in groceries. Spare me the sob story about how you're living paycheck to paycheck. You obviously do have more than one thing you can cut back on - and that's just what you 'fessed up to!
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i don't. we had a heat wave and I need to sleep with a/c. I get night sweats and still nude with the a/c on. I never have all my units on. During the heatwave dd needed hers on at night too she was shvitzing - oh and before that in the winter it's $90. BTW if you have a/c units from the 80's they burn tons of electric and there is nothing you can do about if you rent
[ Reply | More ]Are you in NYC? Because OP is and we haven't had a heat wave. My AC hasn't been on in a month. So I puzzle as to her high bill.
[ Reply | More ]same for us--i can't deal with the kvetching of "i'm hot, i can't sleep" and it's not fair to them so we just keep them on overnight when it's super hot.
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$250/week on groceries? what are you eating caviar and foie gras every day? for a family of four, even in manhattan, you should be able to make it with 150 and still eat quality food. not prime steak, but organic chicken. we are a family of 4 and we may spend about what you make to support our lifestyle, but if we had to cut there would be plenty of places we could start. we live quite comfortably on that budget. maybe you bought a house you cannot afford?
[ Reply | More ]i bet she's buying organic everything and will say "but it's not worth cutting back on. my family's health is too important to me".
[ Reply | More ]I buy organic everything and a lot of prime meats and imported food and still don't get even close to 250. A family of 4 that makes 350K and lives paycheck to paycheck must be doing something financially unwise.
[ Reply | More ]Tell me what you buy, I pack my breakfast and lunch. It adds up. We also feed our nanny, that's another adult.
[ Reply | More ]lol. your nanny has a very cushy job. she not even watching anyone for half the day more times than not.
[ Reply | More ]you are right, the nanny has it pretty good. but I have had her for six years, and am not letting her go.
[ Reply | More ]and you also pay for preschool AND camp. right there you can cut back, and if you aren't saving, you should not be making a big contribution to your school. why do you need a car? i've lived in manhattan for 20 years without one.
[ Reply | More ]We just got the car. It was too much to have two kids and install two car seats. My inlaws live in LI, and taking the train just sucks, and takes too long. We also don't take vacations, and take day trips. I also use the car to drive out and see clients, for which I am paid $0.55 per mile, pays the gas for the week.
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The mortgage is $4K and very affordable, we live in 900 square feet of space, please. The groceries include paper towels, toilet paper, shampoo, soap, etc. I can never get it less than $250, no matter how little I buy. Just the cereals are $20, yogurts are $20. It's not lavish, and the whole buying in bulk does not work, as we have no storage, and can't shell out $500 for a bulk shopping spree. The $250 keeps it in smaller spending increments.
[ Reply | More ]there's a lot of waste going on in your house. $20 worth of cereal. how are you going through four or five boxes of cereal in one week? And who is eating $20 worht of yogurt each week? i think you are throwing out numbers and don't really have an idea of what you are spending.
[ Reply | More ]Yeah thanks sweetie pie, was just waiting for the rude ones to chime in. Not looking to be attacked, and do have a VERY good idea on what we are spending. Cereal is over $5.00 a box, that's 4 boxes a week. DD and DS eat a yogurt a day, and I eat 2. That's 4 yogurts at $1.00 each or $20 for five days. They don't come in bulk. And if you consider eating yogurt and cereal as "a lot of waste in my house", as opposed to eating out and ordering in I think you are the one with no idea what is going on.
[ Reply | More ]not sure how to respond to that. you can buy yogurt in large containers. i find it surprising that everyone in your house is eating an entire box of cereal each week. i find it even more surprising that you aren't willing to cut back on any of your big expenditure areas.
[ Reply | More ]^^^also want to add that i didn't mean it to be rude. i just find it very frustrating when people say things like "i'm not spending any money but i never have anything left over" and then when you point out where they *are* spending money (at least overspending money) they say "oh, but i wnat to spend for that" or "oh, but that doesn't count b/c i don't want to give it up".
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Do you have a car and can you shop in the suburbs every other week? We shop out by my parents in Rockland and I have become a whiz with the coupons. I know it sounds annoying buy there are always cereal coupons online and most stores will double the coupons. I have gotten sale cereals with coupons for less than $1.00/box. Same deal with soups, pastas, etc. The fruit/veggies tend to be priced the same outside of the city but we get better deals with the meat/chicken.
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yeah--I'm trying to get my head around that one. For three people...that is a LOT of cereal.
[ Reply | More ]It's for 3 adults, and 2 kids. And since we have no money, we eat cereal for dinner at least one a week!
[ Reply | More ]I'm sorry--I just find this bizarre. I've never heard of anyone with high a combined HHI complaining about $$$. I'm a divorced mom with a mortgage and I make about a sixth of that--not in NYC but in another fairly expensive city. And I'm struggling but comfortably. This just sounds nuts to me, that you're eating cereal for dinner? The short form? Break it all down. Do a spreadsheet and see where the hell it's all going and then start slashing. if you only use the cell phones, then get rid of the landline. Do CostCo or whatever cheaper shopping options you can find, make a plan re the nanny/preschool/etc. This sounds cuckoo. And are you really feeding the nanny 3x a day?
[ Reply | More ]That's such BS. You spent $250 a week on groceries - a huge sum - and you're eating cereal for dinner?????
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Get a BIG container of yogurt and a few jars of jam or honey and you'll save money AND cut down on all the plastic you're using each week. Figure out what's cheap. If you're spending that much on cereal and yogurt, you might be better off making a big pot of chicken soup or chili or rice and beans or lentils for dinner.
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250 a week on groceries- ridiculous. Classes? Ridiculous. Camp when you have a nanny? ridiculous- (caveat- all ridiculous because you have no savings)
[ Reply | More ]I can't expect my nanny to entertain them all summer. They should go to camp. I will cut back on classes, they are ultimately a rip off - very expensive for 45 minutes. They start late, end early, and are annoying.
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We have no savings, either, live paycheck to paycheck. I am extremely worried. We make $300K and spend nothing. Between the nanny, preschool, cars, box seats to the Yankees, spa days, manicures, pedicures, lunches at Barney's, furs, shopping sprees at Tiffany and Cartier, IT ALL GOES.
[ Reply | More ]now this is funny - maybe we should start a support group for the UB paycheck to paycheck (P2P) poor.. Can I join? we make 600k HHI, and between the nanny, private hockey instruction, piano lessons, 15k vacations 3x a year, and the mortgages on our 2 investment properties we only save 10k a month!
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we send dc to a PUBLIC SCHOOL (gasp!) - (although I'll fess up and say that we may consider private for middle school!)
[ Reply | More ]and I would add: no car, no summer house, no TV, we eat out 1 to 2x per month, no manicures/pedicures, no w/d in our apt (we do laundry in the basement of our apt bldg). there are ways to save money even in Manhattan
[ Reply | More ]No TV? I haven't gotten a manicure since dd was born - she is 6. We do laundry in the basement too - it's $20 per week, which I didn't even list out. We just got the car - renting and installing car seats each time was too much. Maybe we should not have, but how can people in the midwest making $24K a year have a car and we not??
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so not funny. are you mocking or do you consider that spending nothing? furs? barneys? tiffanys? cartier? I don't even walk near those stores. I am at Walmart, Costco and BJ's.
[ Reply | More ]Yes of course I consider that "spending nothing". Those are all basic living expenses. It's not like I'm spending on extras like private jets and helicopters!
[ Reply | More ]Oh I love this. So you have membership to Costco and BJs. Pick a brand of yogurt that does come in bulk and stop spending $1 a container. God, it's like talking to a small child.
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let me tell you what most of you with 300k paychecks are doing wrong...move the heck out of nyc!..you shouldnt be living p2p..and if you are you shouldnt be living in nyc
[ Reply | More ]that's just stupid. Why do you think people need to move otu of nyc? Honestly the suburbs aren't that much cheaper and you need cars and commuting costs. It sucks and it isn't for everyone. They can downsize in the city without moving if housing costs are too high.
[ Reply | More ]ITA. We did the math on a house in the burbs, we would save maybe $1-2K a month, and not see our kids. I have a ten minute commute, and I want to see my kids. In the burbs, I would not. It's not worth it. The taxes, gardener, cleaning the gutter bs, second car, commuter passes, add up.
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HHI of about $240k. SAHM. Don't pay for a nanny or school yet). Don't own real estate. Have rented since we moved here. Have $125k+ in savings and save heavily in retirement accounts. We try to make saving each month a priority in our budget (averaging $1500/month now; it used to be way more).
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rent is $6000/month...about 1300 sq/ft (3 bedrooms) for us and 2 kids people. This is why we don't save nearly as much anymore.
[ Reply | More ]sorry...it's just the basics each week. we rarely buy new clothes. maybe a couple of times a year. we order in more often than we should. we did cut back our cell phone bills about $100 each month. but other than that, we aren't big budgeters. we do pay for pre preschool classes/membership (kidville), some museum memberships, and dh's gym membership. Honestly, we talked about getting pt help for me but when we added it up, it wasn't worth it. childcare is VERY expensive. that could be more much of your money is going.
[ Reply | More ]After tax you may take home just about 13,000. So you pay almost half of your take home for rent? That's insane. You should pay no more than 25%.
[ Reply | More ]np: where'd you get the 25% number? i think the guideline is something like 35% of gross.
[ Reply | More ]you're correct and i agree, it is insane, but that's the price you pay for a family sized unit in prime UWS. we are fine with this quality of life decision and we feel that we save very aggressively the last 5 years to make this decision. If we stay in manhattan beyond 3 more years, money will not be a concern. These are the trade-offs we are making.
[ Reply | More ]and if we don't stay we have a nice little egg to spring from...I think we're doing just fine even if our rent is 50% of take-home
[ Reply | More ]Interesting. We didn't move to Manhattan until our hhi was close to 400k and NEVER would have considered paying 6k a month on rent. Our budget was 3k. 2 beds, east or 3rd, but it was fine. We eventually bought a 2bed west of Lex, but it's still a 2 bed. And our income is 4x yours. Kids CAN share a room, you know.
[ Reply | More ]again, it was a quality of life decision for us. we spent 5 years in a small one bedroom, the last year with dd. it was time to move. we aren't hurting for money, have good savings, good retirement, and don't live beyond our means. what difference does it make?? what's the point in spending 1/2 that then blowing the other half on nannies, schools, real estate, lux vacations, cars, clothes, etc. we don't.
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Obviously the real estate property is bleeding you royally. Can you explore the option of renting it for considerably less than you'd like in an effort to lessen that huge expenditure? I don't know how expensive the classes are, but that also might be an area to consider cutting, esp. since you have a nanny that you seem to love and are already doing pre-school.
[ Reply | More ]To answer your question simply - yes, we have savings (retirement and college fund for one DC). DH effectively lost his job last year (he's 100% sales commission) and I took a pay cut so we're at about $160K-ish, but still doing the automatic deduction for retirement and college. In terms of expense cutting I would say that like you my expenses are pretty much fixed with the exception of food and travel. We've never been big consumers of processed food so that wasn't difficult but we've gone from eating fish 4+ times/week to maybe twice - we're eating vegetarian 3-4 nights a week which saves a ton of money. We've chosen to keep our once a year one-week vacation and have cut the weekend getaways to less than half of what they used to be.
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it shouldn't be. Many live here on a lot less. You change what's important to you to live here and what you spend your money on. City life is the only life for many of us. I don't drive and will never move
[ Reply | More ]So? Stop complaining about how pooor you are. You're not poor. Living in Manhattan is important to you, I get it. I wouldn't move out of NYC either, but I realize that I am paying a premium for my choice and do not whine about living P2P because of it.
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LOL--give the woman some tips! I'm still shaking my head...$350K and they're eating cereal for dinner...albeit $5 cereal.
[ Reply | More ]Don't forget the $1/yogurt and she is aghast that people get yogurt for less than that.
[ Reply | More ]cereal from rite aid -they have sales almost every other week $2 a box, I buy everything on sale and stock up. I read the flyers from rite aid and food emporium. I save at 35% on frozen stuff I buy and drug store things. I use fresh direct for the rest. I buy from their president's picks. I buy things on sale and freeze things - like pork tenderloin, steaks, chicken breasts. I buy all my clothes on sale or at sample sales
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I'll first answer your question and if you don't want to read the rest, the fine. I have the same HHI. Yes, we have $100k in savings after putting down a downpayment two years ago. No, I am not worried. So on to the stuff you don't want to hear: Manhattan, Nanny, and Private School are all luxuries. You can live in the outerboroughs, daycare, and public school, or just one of the three. I live in a house in Queens, and my commute to midtown is half an hour - shorter if I take the LIRR. It has nothing to do with "not making it in NYC." I have a child, I rather live in a house in a tree-lined street where my DC can play AND I can get to the city in half an hour if I wanted to. It's your choice to drive a Lexus for Honda. But don't cry poor after you spend more money on the Lexus.
[ Reply | More ]While there are probably ways to cut the fat, it's Manhattan. One big money sink. While we are doing ok and have a bit of a cushion, it's amazing that what my husband brings home only provides the level of savings we manage to pull in. And we really are looking homeless these days. I really need to get some clothes. On that note, does anyone have a remedy for moths? I hate to say it, but you probably need to either figure out a way to put away some savings or move out of the city.
[ Reply | More ]You don't have to live paycheck to paycheck on $350K even paying market rent in NYC but you can't live like you are in the suburbs in a 3BR with a car. What is your rent and can you do daycare and aftercare and ditch the nanny? If you get a place for $4K per month, do afterschool for $5K and daycare for $20K would that help?
[ Reply | More ]OK, I'll be the first to say it. WHY DOES YOUR 2-YR-OLD HAVE TO BE IN PRESCHOOL????? Cut out that expense and you're looking at a lot more cash in your pocket.
[ Reply | More ]I guess what everyone is driving at is that in order to change your situation, you really do have to look at everything and question yourself and your choices. You cannot assume there is anything that isn't negotiable, and then work from there. You're not going to save millions by buying larger yogourt containers and it's not about how many cereal boxes you all eat, it's about what your basic assumptions are and turning them on their heads. If DH doesn't want to cut the cable, then he has to come up with some other personal cut, etc. No one gets away with keeping a budget item without any other change. It's certainly not easy, but it is feasible.
[ Reply | More ]Exactly. I hate the attitude of "I'm so poor but oh wait don't tell me to cut that... or that... or that... or that." Those things are luxuries. So long as you have them and choose to pay for them, you are not poor. If a family with the same income live in a different location and spends $150 on groceries and $100 on cable, are they richer than you because they spend less in discretionary spending?
[ Reply | More ]I really can't believe how many of you are outraged by my spending on yogurt and cereal. You really need to think bigger picture. And don't say it adds up, because it doesn't.
[ Reply | More ]But it clearly DOES add up!! Why are you resisting some basic good advice when you're the one who posted? If you're spending that much on groceries weekly and need to eat cereal for dinner, then there's something wrong with how you're shopping, cooking, planning etc. If you're spending that much on winter coats for the kids, buy them on sale in the spring, or look on eBay or something. Either you find one big thing to cut or you take a look across the board and make some overall changes. It's your budget, not ours.
[ Reply | More ]Big picture (and this has been suggested to you): cut out camp, car, cable, overpriced food, nanny, preschool. Are you saying all this doesn't add up? And yogurt and cereal are your examples, I shudder to think what else you are buying for $250. $6 eggs?
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Agree with all the sage advice re: cost-cutting and re-examining your priorities. To answer one of your first questions "Do you have savings?". Yes we do and it's the only thing that keeps us sane in these harsh economic times. Granted, our HHI is a lot higher than yours and we are a 3 years older than you, but we didn't always make sick money. However, we always made our 401ks, retirement savings and the kids 529s priorities. Now we have all 3 kids college education completely financed (allowing for conservative growth and high inflation assumptions) and have several millions in retirement savings. We don't own a car, we just negotiated a big reduction in our rent, and otherwise try to be as fiscally responsible as possible. And before I get flamed for sounding like I'm bragging, I'm really not. I completely accept that this level of security merely makes us middle/UMC in NY and certainly does not inure us from making tough financial choices at times. Good luck.
[ Reply | More ]OP, I'm going to support you here. We are you. I know exactly how you feel. But in a couple of years you won't be paying $55k for nanny and preschool, you will be paying $15k for an after school baby sitter. Your camp and afterschool classes expenses may go up, but you will still be saving $30k, so just hold on for a few more years and you will be fine. Also, how did you get the money for the investment property you own? How much did you put into it and how much could get for it if you sold it now? it may not be worth holding on to it.
[ Reply | More ]Some people are so nasty on these boards, seriously ladies, can you calm down and stop attacking me? To this poster, THANK YOU. I love your thinking. We do know that in two years, there will be no pre-school expense, and the nanny needs will be from 3pm - 6pm, much different. We earned the downpayment for the investment property - from salaries. We can't seem to even find a buyer, but again in 2 years, maybe we will. It's a question of do we give up now, or try to keep up this way for two years, and hope things get better. Thank you SO much again.
[ Reply | More ]It seems to me that you are shooting down every single suggestion that has been offered to you. So I think the attacks are fair game. Another poster suggested some simple ways to save $ on groceries, and quoted FD as a baseline, and you said you don't like FD. Hello? Not the point! The point is that you don't have to pay $5 for cereal or $1 for yogurt!
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i honestly don't know how that's possible, esp. after you listed all the limitation to your lifestyle. we live on $150K, and i am a sahm. so no nanny. true, we live paycheck to paycheck, but have good savings from pre-kids life. we rent an 800 sq feet apt for $3000 a month. daughter started K at anderson, a 2-year-old is with me. we have memberships at all museums, pay for private piano lessons, gym, go out once a week, eat organic. i spend very little on clothes, and kids get dressed at the incredible sales at landsend, gap, hannaanderson, but husband likes and needs nice business clothes for work. we have no cable and no landline, so phone bill is only $60 a month. no car, no garage. we still donate at the end of each year and get nice gifts for the family kids for holidays and birthdays. we traveled to europe over the summer and daughter did a month of a great summer camp. so it's all possible on $150K, though it seems we are always the poorest people in the whole of manhattan. but i don't have any complexes; if anything, i'm proud we do so well, considering how little, relatively, we make. and i still get a tiffany's piece for some occasion once in a while! should i start some support group for the other "poor" in nyc with income twice as big as ours to show them they are actually super wealthy and can afford much, much more? here is a business idea :). god, having read some of the $300K+ hhi whiners i almost feel like organizing food stamps for them... ;)
[ Reply | More ]how about a cheaper preschool? there are schools like st. stephens on the ues that cost 1/4 of other private schools and people seem to be happy with them. if you are doing public school don't waste big bucks on ps. you could also postpone for a yr. 2 year olds don't need it.
[ Reply | More ]Here's a suggestion I didn't see: keep track of every cent you spend for at least a month. You sound as if you feel as if you really don't spend anything "extra," but I bet you'll be shocked at what you really spend.
[ Reply | More ]First time UB visitor, new mom looking for something I can relate to and gain advice. About to return to work and start paying for daycare and am super-stressed about savings. Wow. Guess this is the wrong forum for me - I'll take my 75K/year no-frills lifestyle elsewhere.
[ Reply | More ]I've quoted him before here but I'll do it again....my grandfather always said that your expenses will rise to meet your income. A nanny and preschool are not necessary. Most people in the rest of the US do day care. And the reason why the rest of the country doesn't live in NYC or a place like it is that it is too expensive.
[ Reply | More ]Our HHI is over $1 million and we can barely get by with our lifestyle. The more you make, the more you spend.
[ Reply | More ]Well exactly--I "barely get by" on $70K, but I know for damn sure that if I needed to cut back--live in an uglier apartment farther from downtown, eat ramen or beans and rice instead of fresh mozzarella from Whole Foods--I could, whereas my complaining (and your, and OP's) sounds ridiculous to someone is is really, truly "barely getting by."
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Our HHI is $1mm+ as well and we live feel like we live extremely well BUT have also have several millions in savings as well. Agreed that our expenses have increased with our income but it has certainly not been a parallel relationship. We make more... we spend more... but we save the most. Will always love having fancy vacays and dinners at Per Se but we would never do these things without first putting a lot of savings away first.
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It depends. Our HHI has more than tripled since college but we still have the same basic cable plan for less than $100.
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As someone remarked above. You need to get rid of the "investment property." Unless it's on a toxic waste dump, you can usually sell any property if you price it correctly. I imagine you are hanging on to this property in hopes of a market turnaround. It's a costly mistake in of itself, but it is also one that is opening you up to much greater risk. Unload it. Now.
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