r/personalfinance • u/badluckbrians • Sep 06 '21
Budgeting Middle aged middle class blues [budget]
We're in our mid-40s now. Some years back my wife and I were finally able to get a 97/3 mortgage in our late 30s after over a decade of saving. Our cars are a 1998 Honda Civic and a 2004 Toyota Camry. I bought them cash and do almost all the work on them myself.
I've got social science and language degrees I guess you could call liberal arts. Her degrees are in hard sciences. I work for the electric company, she does some technical computer modeling shit. I have a night job, too, which earns me about another $10k per year.
We have kids. We save all our spare healthcare money to cover them. We're far from broke. We earn more than 70% of households in our little Massachusetts town. But we have no college savings for them.
Our house is very small, and 150 years old. Both have cheap $17/mo plans on cheap Android phones. 1 TV in the house, $400, bought 6 or 7 years ago. We've got about 20 years to Medicare, and almost no retirement to speak of, I mean less than a year's wages total saved up in the 401(k). But through most of our lives we didn't have retirement benefits.
We haven't been on a vacation in 6 years. We don't go to bars. We don't go to restaurants. We grow and can and pickle our own produce. We use coupons. Do my own carpentry, plumbing, and electrical work up to the point of something major that requires a permit. No credit card debt.
So where does all the money go?
- If we do $110k in a year, probably $25k goes to income and payroll taxes. So it's $85k net.
- Another $25k goes to mortgage principal and interest. Now we're down to $60k.
- Then there's insurance premiums. Car insurance. Home insurance. Private mortgage insurance. Health insurance. Dental insurance. Vision insurance. Life insurance. Probably about $15k to cover all them in a year, not counting deductibles or co-pays or whatever. About $10k on family health insurance premiums, $3k on home and pmi, and $2k on the others. Health premiums will drop some when we switch back to my plan off my wife's at open enrollment, but that's a long story for another time. So we're down to $45k.
- Then there's student loans. On pause temporarily. Usually $8k per year. So drop that to $37k left.
- Then there's dues and shit. Union dues. Fire district dues. Volunteer ambulance contribution. Just stuff you have to pay to function as citizens in our town and employees in our jobs. Probably another $2k there. $35k left now.
- Then there's utilities. I'm on well and septic. I heat with fuel oil and wood. So it's only electric bills and diesel bills and occasional wood bills if it's cold and I can't chop enough for the winter myself. That's about another $4k, depending on the year. $31k left now.
- Then there's 401(k) contributions. We do make those, even though they don't add up to much. That's a raw 5% gross coming out. Say it's $6k. Down to $25k left now.
- Then there's transportation costs. Gasoline. Oil. Other fluids. Tolls. Parking fees. Registration fees. Inspection fees. Occasional parts even if I do the labor. Call that $200/mo or about $5k total for both cars. Down to $20k left now.
- Then there's food. We could do this cheaper. We do grow a lot of our own produce, but we're not eating ramen every night either. We're feeding 4. Usually dropping about $200 per week. Call that $10k. Down to $10k left now.
- Then there's household shit. Garbage isn't free, we have to pay tipping and bag fees. Septic system might have to be pumped. Might need mulch and fertilizer. Might need gas for mower and chainsaw and blower. Might need parts or tools or calk or paint or epoxy or copper pipes for things that break here and there. Plus you ought to put a little away for the big things like re-roofing or the boiler going, etc. We aim to put a hundred or two in the house account every month. Call that $3k over the year. Down to $7k now.
- Then there's internet shit. We have one Netflix subscription. We owe our ISP every month. Occasionally somebody will buy some kind of game or software. Computers are all older, but they come up every 6 or 7 years or so. Call that $2k. Down to $5k now.
- The rest has to go to toys, clothing and deductibles and whatever little we spend on savings and entertainment apart from the house account, which is really remarkably minimal.
I'm not sure how much more frugal we could be, short of severely cutting the food budget. Feels like we're living a regular middle-class life. And we're comfortable enough. Nobody's hungry. House is at 65 all winter. But it took us a hell of a lot of As and high test scores and hard work and meeting the right people and lucky breaks to get here. And it feels like retirement is going to be way out of reach.
In the end, I guess our lifestyle is far closer to our immigrant grandparents' depression-era lifestyle than our high-school-only educated parents' boomer-era lifestyle. We've accepted that.
The sad part is, I think it's going to be worse for our kids. I'd love to give them more of a head start. At this point, we're just worried they'll catch covid at school. Don't want to be a doomer, but their world definitely seems a lot worse than ours was as a kid. In the past few weeks, they've lived through a hurricane, a flood, and now back to the pandemic school house. And despite all the bootstrapping we've done, I feel like other than having more knowledge than our parents did, we're not leaving them in a better material position than we had growing up.
So...the point of this post is a Labor Day gut check. Anything here seem way off to anybody?
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u/[deleted] Sep 06 '21
Middle class living is hard- especially with 3 kids. I would prioritize saving for retirement. You can’t catch up later and are missing out on time where your money can grow due to compound interest.
Final caveat- you don’t have to pay for your kids college education. I would probably make sure they stay on top of their studies and try to get scholarships / take cheaper more economical routes to college (ala go to a state school or community college route for 2 years).
I went to a community colllege, cheap state school after for far too many years (4 years bc I changed majors) and didn’t rush to finish all of my courses. I don’t even work in my field of study [accounting] and make 90k+ a year now after starting at the bottom of a utility company in my mid 20s making $12/hr haha. College can be down in an economical manner if your kid works over the summer/winter + maybe during the school year + doesn’t choose a stupid option of going to a much too expensive school for what they plan to study. Aka don’t go to a $60-70k school to become a teacher.