How much do you save/invest every year?

[tartesos]

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This.

I daily drive my car, and each time I park I look back and stare at it until it's out of view. Not to mention rarely a day goes by a couple people don't turn their heads or tell me they like my car.
If it provides you with a daily dose of dopamine, it's worth it.

I feel the same way about my Subaru.

As long as you are happy and saving for retirement you will be fine

 

[tartesos]

I'm guessing all you fancy car guys don't live in Massachusetts where people drive like dogsh-te. 😉

After years in Boston my dream car is now a battle bunker with train horns, reinforced bumpers, 4-way dashcams, and previous scars to show that I mean business.

A marauder. 😁

 

[Chemist0157]

Waiting to see what the tax man final tally is, but I am saving some 6 figure number. My wife recently did some budgeting numbers, and we are probably spending 8-10k a month.

 

[abolt18]

2024:

Earned $753K
Taxes $229K (~10K return coming because I haven't dialed in my withholdings for this income yet)
Saved $256K
Spent $253K including the mortgage and a $40K car we bought with cash (not planning similar expenses this year)
Giving ~$55K (mostly tax deductible, but ~$5-7K was just random stuff for people in need)

These numbers don't quite add up because we did take a big chunk of cash out of savings in January last year to replace our dying minivan. Never imagined I'd have this big of a shovel. The net worth exceeded $500K right before the new year. Pretty exciting!

 

[Monocles]

Giving ~$55K (mostly tax deductible, but ~$5-7K was just random stuff for people in need)

Tithing?

 

[Splenda88]

2024:

Earned $753K
Taxes $229K (~10K return coming because I haven't dialed in my withholdings for this income yet)
Saved $256K
Spent $253K including the mortgage and a $40K car we bought with cash (not planning similar expenses this year)
Giving ~$55K (mostly tax deductible, but ~$5-7K was just random stuff for people in need)

These numbers don't quite add up because we did take a big chunk of cash out of savings in January last year to replace our dying minivan. Never imagined I'd have this big of a shovel. The net worth exceeded $500K right before the new year. Pretty exciting!

Your taxes (Federal, SS tax, Medicare etc...) seem low for that kind of income. Any tax strategies besides maximizing your tax deductible retirement vehicles?

 

[Nocturnist]

Your taxes (Federal, SS tax, Medicare etc...) seem low for that kind of income. Any tax strategies besides maximizing your tax deductible retirement vehicles?

2024 tax on married filing jointly is 197k+ 37% on income over 731k so they should be paying roughly 205k in federal income taxes.
OASDI maxed at 10.5k
Medicare another 11k.

Sounds like the tax strategy they're going to recommend is living in an income tax free state..

 

[dpmd]

Your taxes (Federal, SS tax, Medicare etc...) seem low for that kind of income. Any tax strategies besides maximizing your tax deductible retirement vehicles?

Most people only mean federal income tax when they talk about taxes.

 

[abolt18]

Your taxes (Federal, SS tax, Medicare etc...) seem low for that kind of income. Any tax strategies besides maximizing your tax deductible retirement vehicles?

State income tax here is 3.05% flat. Maxed out 403b and 457b so that's $46k not getting taxed. Then the ~$50K charitable giving I deducted. Then mortgage interest, etc. ended up with total deductions of almost 100K so my "taxable income" was closer to $600K after all that.

 

[eyeeye_captain]

State income tax here is 3.05% flat. Maxed out 403b and 457b so that's $46k not getting taxed. Then the ~$50K charitable giving I deducted. Then mortgage interest, etc. ended up with total deductions of almost 100K so my "taxable income" was closer to $600K after all that.

That’s a pretty good rate. The national median percentage is like 5.7%.

I wouldn’t have guessed Minnesota is almost 10% if you’re over $260k filing jointly.

 

[mmmcdowe]

My general brush strokes plan that I've been following for the last couple years is to max out all employer investment accounts and to invest 1/3 of the net pay and live off the other 2/3. I use invest fairly loosely and that may mean individual stocks/start ups, debt reduction, mortgage payoff payments, index funds, new education expenses, etc. Full disclosure I only started this once I was an attending, before then I was pretty much investing 15% pre-tax and living on the rest. It has worked fairly well for me. Recently paid off all debt except the mortgage and I am playing around with serial recasting of my mortgage once a year using about 1/3 of that 1/3. Not sure the math fully maths vs just faster payoff vs investing in other assets, but the emotional motivation to it gives me is substantial and that helps me maintain adherence to the system similar to the idea behind the snowball method of debt payment. At some point I will switch over to just paying it off faster, probably when I am around 25% of the original mortgage amount where I can just dump all difference between my original mortgage payment and my recasted payment into the residual principle and just knock it out in a year or two.

 

[abolt18]

My general brush strokes plan that I've been following for the last couple years is to max out all employer investment accounts and to invest 1/3 of the net pay and live off the other 2/3. I use invest fairly loosely and that may mean individual stocks/start ups, debt reduction, mortgage payoff payments, index funds, new education expenses, etc. Full disclosure I only started this once I was an attending, before then I was pretty much investing 15% pre-tax and living on the rest. It has worked fairly well for me. Recently paid off all debt except the mortgage and I am playing around with serial recasting of my mortgage once a year using about 1/3 of that 1/3. Not sure the math fully maths vs just faster payoff vs investing in other assets, but the emotional motivation to it gives me is substantial and that helps me maintain adherence to the system similar to the idea behind the snowball method of debt payment. At some point I will switch over to just paying it off faster, probably when I am around 25% of the original mortgage amount where I can just dump all difference between my original mortgage payment and my recasted payment into the residual principle and just knock it out in a year or two.

What does it cost you to recast the loan each time? Seems like a strange approach.

 

[mmmcdowe]

What does it cost you to recast the loan each time? Seems like a strange approach.

A hundred dollars. Minimum 50k payment towards your principle but it also rolls any other principle payments into the new amortization schedule. So for example if you paid 30k in principal payments from just your standard mortgage payments and then another 50k at the time of your recasting your calculations are based on the 80k reduction not the 50k. I put the money that I am building up to 50K in either CDs or money market.

 

[abolt18]

A hundred dollars. Minimum 50k payment towards your principle but it also rolls any other principle payments into the new amortization schedule. So for example if you paid 30k in principal payments from just your standard mortgage payments and then another 50k at the time of your recasting your calculations are based on the 80k reduction not the 50k. I put the money that I am building up to 50K in either CDs or money market.

Interesting. At least it costs nearly nothing. What's your goal when recasting? Just to lower your monthly payment? Cause otherwise every time you recast the loan doesn't it lower your monthly payment and reset the amortization schedule? Seems like it would slow your overall progress to payoff.

 

[mmmcdowe]

Interesting. At least it costs nearly nothing. What's your goal when recasting? Just to lower your monthly payment? Cause otherwise every time you recast the loan doesn't it lower your monthly payment and reset the amortization schedule? Seems like it would slow your overall progress to payoff.

The amortization schedule gets recalculated but not reset. So if you are 5 years in and you recast you are still five years in, but all the payments get recalculated as if you had always been paying that amount. My idea behind it is every time I recast I take the difference and put it towards investments or building up faster for the next recast. I am still early on in my 15 year fixed mortgage, so this pretty significantly reduces the total interest, which is still more monthly than my principle payment, I pay over the next, say, 5 years. At that point I will likely transition to just paying the mortgage off but I will have dodged a significant chunk of interest that I would otherwise be paying if I just tried to pay it off directly over then next 6 or 7 years.

The decreasing fixed costs of my life after each recast provides a sense of security even if I am still actually living on the same amount by investing the savings. The reality is the overall savings for this approach, especially if you factor in mortgage interest tax refunds, isn't all that different than just paying it off, but it feels better and behavior from my perspective is 90 percent of winning with money.

 

[Nocturnist]

The amortization schedule gets recalculated but not reset. So if you are 5 years in and you recast you are still five years in, but all the payments get recalculated as if you had always been paying that amount. My idea behind it is every time I recast I take the difference and put it towards investments or building up faster for the next recast. I am still early on in my 15 year fixed mortgage, so this pretty significantly reduces the total interest, which is still more monthly than my principle payment, I pay over the next, say, 5 years. At that point I will likely transition to just paying the mortgage off but I will have dodged a significant chunk of interest that I would otherwise be paying if I just tried to pay it off directly over then next 6 or 7 years.

The decreasing fixed costs of my life after each recast provides a sense of security even if I am still actually living on the same amount by investing the savings. The reality is the overall savings for this approach, especially if you factor in mortgage interest tax refunds, isn't all that different than just paying it off, but it feels better and behavior from my perspective is 90 percent of winning with money.

So I read that about a dozen times and you'll have to forgive me but I'm still not sure i quite understood what you meant. Only asking because I've been super interested in recasting but haven't gotten around to calling my bank about it.

I'm 5 years into my million dollar 15 year loan on my primary home at 2.75%. During covid, I dumped in an extra 200k (because in 2020,
with HYSA giving 0% and stocks crashing- 2.75% actually felt like expensive money) which shaved 4 years off so I currently have 6 years/a little under 500k left. Fast forward to now, I regret putting extra money towards the mortgage because a)2.75% is better than free money in hind sight and b) now with toddlers, daycare costs, 529 savings- I'm having to work a fair bit of overtime to cover my monthly expenses so I don't have to dip into my brokerage account.

So in my understanding, re-casting would lower my monthly payment by something like 3k/month by extending the loan repayment from 6 years to the original 10 years I'd otherwiss have left, which would increase my cash flow.
I have friends who took a large mortgage out last year for their 1.75M forever home and then a month later sold their 750k starter home. In that scenario it makes sense to me to dump the lump sum proceeds from the sale into their new mortgage and roughly halve their monthly payment into something more manageable.

But those are kind of the only two plausible scenarios that make sense for recasting in my mind. I guess I'm not sure i understand the thought process and math behind recasting every year?

 

[mmmcdowe]

So I read that about a dozen times and you'll have to forgive me but I'm still not sure i quite understood what you meant. Only asking because I've been super interested in recasting but haven't gotten around to calling my bank about it.

I'm 5 years into my million dollar 15 year loan on my primary home at 2.75%. During covid, I dumped in an extra 200k (because in 2020,
with HYSA giving 0% and stocks crashing- 2.75% actually felt like expensive money) which shaved 4 years off so I currently have 6 years/a little under 500k left. Fast forward to now, I regret putting extra money towards the mortgage because a)2.75% is better than free money in hind sight and b) now with toddlers, daycare costs, 529 savings- I'm having to work a fair bit of overtime to cover my monthly expenses so I don't have to dip into my brokerage account.

So in my understanding, re-casting would lower my monthly payment by something like 3k/month by extending the loan repayment from 6 years to the original 10 years I'd otherwiss have left, which would increase my cash flow.
I have friends who took a large mortgage out last year for their 1.75M forever home and then a month later sold their 750k starter home. In that scenario it makes sense to me to dump the lump sum proceeds from the sale into their new mortgage and roughly halve their monthly payment into something more manageable.

But those are kind of the only two plausible scenarios that make sense for recasting in my mind. I guess I'm not sure i understand the thought process and math behind recasting every year?

The difference between refinancing and recasting is a bit challenging to wrap your head around because of the fact that refinancing is such a dominant method. Recasting does not mean new loan. Refinancing is a new loan with a reset time length (new end of mortgage date) in exchange for a lower rate. Recasting is the same loan, meaning same interest rate and same end of mortgage date. The easiest way to conceptualize what happens is go to a online mortgage calculator and put in the details of your current loan. Find your current place in the amortization table 5 years in. After you recast it will still be at that same point 5 years in. To figure out what the difference will be, take your current remaining principal minus anything you plan to put towards it at the time of recasting and put that in the mortgage calculator as if that was your initial mortgage amount. Whatever the amortizations schedule now says 5 years in is where you are. It's like going back in time and just changing what you initially borrowed to a lower amount. The ratio of interest to principal will be the same because it is the same loan at the same time point.

So for example, let's say you currently have $750,000 left on the principal and that your initial principal was a million and you recast right now with $50,000. Your new calculated mortgage will be based on the 700,000 not the million. So whatever the table says you owe in combined principal and interest is your new monthly payment excluding taxes, etc. I don't know your specifics, obviously in terms of down payment etc. But I did the math and it looks like at least $2,000 to $2,500 lower payment based on my fake numbers, so with only 500k left you can expect even more. With a interest rate as low as yours, it probably doesn't really matter, but to be clear, recasting makes the most sense if you're planning on investing the savings and not spending it. Otherwise, you're better off putting that $50,000 elsewhere potentially.

In your situation, if your fixed expenses are higher then it makes sense as well to do this because it will make your life easier for several years. You are correct. Since you have put money towards the principal it will reset you to only being 5 years in and you will be making 10 years worth of payments, but the reality is you are still paying the interest to principal ratio of someone who never put any money towards their principal. As far as the bank is concerned you are only 5 years in and your monthly payments are paying mostly interest until at least the 10-year mark (maybe not true for a 2.75 percent rate I didn't check). It just so happens that by the time you are paying at the 10-year mark ratio you will also be paid off. As we all know the payments with the most money earmarked for the principal are the last ones so you have effectively only removed the best years loan wise and still have to pay all of the interest up front essentially. I think the time that it makes the most financial sense is if you serial recast as early as possible within the loan. This way you are locking consecutive savings and as long as you put that additional money towards the next recast or investments you get compounding benefits because all reductions in principal are factored into the recast, including standard monthly payments. A single recast unless you need the cash flow is not substantially better or worse than just paying off the principal faster. You eventually reach a point of diminishing returns with serial recasting where it just makes sense to take all of your saved monthly payment money and just pay it off. Recasting $100,000 loan that was initially a million for example, probably doesn't make a lot of sense because you have already unlocked most of the monthly payment except taxes and insurance. At that point I would just pay it off.

 

[mmmcdowe]

The difference between refinancing and recasting is a bit challenging to wrap your head around because of the fact that refinancing is such a dominant method. Recasting does not mean new loan. Refinancing is a new loan with a reset time length (new end of mortgage date) in exchange for a lower rate. Recasting is the same loan, meaning same interest rate and same end of mortgage date. The easiest way to conceptualize what happens is go to a online mortgage calculator and put in the details of your current loan. Find your current place in the amortization table 5 years in. After you recast it will still be at that same point 5 years in. To figure out what the difference will be, take your current remaining principal minus anything you plan to put towards it at the time of recasting and put that in the mortgage calculator as if that was your initial mortgage amount. Whatever the amortizations schedule now says 5 years in is where you are. It's like going back in time and just changing what you initially borrowed to a lower amount. The ratio of interest to principal will be the same because it is the same loan at the same time point.

So for example, let's say you currently have $750,000 left on the principal and that your initial principal was a million and you recast right now with $50,000. Your new calculated mortgage will be based on the 700,000 not the million. So whatever the table says you owe in combined principal and interest is your new monthly payment excluding taxes, etc. I don't know your specifics, obviously in terms of down payment etc. But I did the math and it looks like at least $2,000 to $2,500 lower payment based on my fake numbers, so with only 500k left you can expect even more. With a interest rate as low as yours, it probably doesn't really matter, but to be clear, recasting makes the most sense. If you're planning on investing the savings and not spending it. Otherwise, you're better off putting that $50,000 elsewhere. In your situation, if your fixed expenses are higher then it makes sense as well to do this because it will make your life easier for several years. You are correct. Since you have put money towards the principal it will reset you to only being 5 years in, but the reality is you are still paying the interest to principal ratio of someone who never put any money towards their principal. It just so happens that by the time you are paying at the 10-year mark ratio you will also be paid off. I think the time that it makes the most financial sense is if you serial recast. This way you are locking consecutive savings and as long as you put that additional money towards the next recast or investments you get compounding benefits because all reductions in principal are factored into the recast, including standard monthly payments. A single recast unless you need the cash flow is not substantially better or worse than just paying off the principal faster. You eventually reach a point of diminishing returns with serial recasting where it just makes sense to take all of your saved monthly payment money and just pay it off. Recasting $100,000 loan that was initially a million for example, probably doesn't make a lot of sense because you have already unlocked most of the monthly payment except taxes and insurance. At that point I would just pay it off.

One additional thought that I would have is in your case, if you are regretting the big payment towards your loan recasting at least will allow you to unlock some of that revenue monthly which you could then invest. So yes, if you don't put anything more towards your principal, you will have to pay your loan for 10 years but you will also get $360,000 that you could otherwise invest elsewhere. Plus you are still getting a tax benefit under $750,000 owed so you're 2.75% loan is probably closer to 2% with the tax refund, so paying a few extra years in order to unlock that money might make sense for you.

 

[thumbz]

Love this thread, glad it's still alive. Thanks all for the transparency.

2024

Gross: $465k (hospitalist)
Taxes: $161k
401k/401a: $57k
After Tax Savings: $116k

Which means I spent $131,000 on an absolute pile of nothing last year - that "other" category in the budget gets away from you so quickly!

2025 is going to be grim for my savings as I decided to buy another toy (a lambo).

 

[702]

Love this thread, glad it's still alive. Thanks all for the transparency.

2024

Gross: $465k (hospitalist)
Taxes: $161k
401k/401a: $57k
After Tax Savings: $116k

Which means I spent $131,000 on an absolute pile of nothing last year - that "other" category in the budget gets away from you so quickly!

2025 is going to be grim for my savings as I decided to buy another toy (a lambo).

Which one

 

[finalpsychyear]

So I read that about a dozen times and you'll have to forgive me but I'm still not sure i quite understood what you meant. Only asking because I've been super interested in recasting but haven't gotten around to calling my bank about it.

I'm 5 years into my million dollar 15 year loan on my primary home at 2.75%. During covid, I dumped in an extra 200k (because in 2020,
with HYSA giving 0% and stocks crashing- 2.75% actually felt like expensive money) which shaved 4 years off so I currently have 6 years/a little under 500k left. Fast forward to now, I regret putting extra money towards the mortgage because a)2.75% is better than free money in hind sight and b) now with toddlers, daycare costs, 529 savings- I'm having to work a fair bit of overtime to cover my monthly expenses so I don't have to dip into my brokerage account.

So in my understanding, re-casting would lower my monthly payment by something like 3k/month by extending the loan repayment from 6 years to the original 10 years I'd otherwiss have left, which would increase my cash flow.
I have friends who took a large mortgage out last year for their 1.75M forever home and then a month later sold their 750k starter home. In that scenario it makes sense to me to dump the lump sum proceeds from the sale into their new mortgage and roughly halve their monthly payment into something more manageable.

But those are kind of the only two plausible scenarios that make sense for recasting in my mind. I guess I'm not sure i understand the thought process and math behind recasting every year?

You were saving like a bandit a few years ago and maybe still now but obviously you have kids now. Im always curious did expenses go up like 50%? This is what my friends tell me to anticipate my pre kids to post kids life to be and now everything in 2025 is more expensive than ever.

 

[mmmcdowe]

I think it has to do less with expenses in general and more to do with child care costs vs loss of income Hard to track cash purchases but my credit card spending was fairly flat pre and post kids. Yes they cost more in terms of clothes and diapers but you also balance that with going out less and less trips (vacations become childcare in less convenient locations).

I think the bigger factor is lost income vs childcare cost if you were a two income family. My wife was already part time and the lower earner before our first kid and she had family for childcare so we didn't have reduced income or sustain childcare costs when she went back. She's now totally out of the work place after our second but I also took a promotional position that matched her income so again functionally no income loss or childcare costs. As they get older the expenses will go up but my wife theoretically could go back to work part time to cover after school activities, vehicles, etc. plus saving for college and weddings could also be considered expenses.

Anyone else dragging their feet regarding putting away for educational expenses? The savings accounts I qualify for haven't really impressed me and part of me isn't sure about paying at all. I went to public college on a full academic scholarship and took loans/worked during med school and recently qualified for PSLF forgiveness. My family helped to cover the remainders from lifestyle for sure but I was at least 75 percent self powered through college and med school and 95 percent in residency. I think the experience was formative in a lot of ways even though it would have been nice to have it all covered. The safety net was there but I worked hard to avoid using it.

 

[Nocturnist]

You were saving like a bandit a few years ago and maybe still now but obviously you have kids now. Im always curious did expenses go up like 50%? This is what my friends tell me to anticipate my pre kids to post kids life to be and now everything in 2025 is more expensive than ever.

Kids habe been double whammy. Spending goes way up, while time to moonlight goes way down.

Full time day care is 3k a month, we'll be paying for two of those in a year for the next 2-3 yrs. We're putting away $1500/month combined towards their 529. We also joined lifetime at $600/month primarily for the complimentary childcare whereas prior I was just working out at home.

I haven't even attempted to calculate the other costs like food, babysitting, toys, clothes, and weekend activities. So conservatively kids are costing 5-6k a month and will be upto 8-9k with double day care. For reference our mortgage payments are almost 13k and credit card bills average 6-10k a month, so not 50% increase but definitely pretty much all the extra money I was otherwise dumping in the market or towards the mortgage before.

At the same time I cut down on my FTE and trying to make up the difference by picking up half admitting shifts after the kids go to bed.
Pre-kids I was making 550-600k, now my goal is to crack 500k. That's about what I gotta make to clear 25k a month.

That said, our NW is sitting on 4.1M.
2.3M evenly split between retirement and brokerage, and the rest in our homes' equity.
So my goal for the next 5 years is to "defend" the savings and just break even after maxing my retirement so we don't have to sell stocks. I suppose if it came to that I'd probably stop contributing to the 529 first, but I'd like to not have to do either. In 5 years my primary home is paid off and no more day care payments, the investments should grow to 3-4M and I'll have 10k/month freed up to dump in the market or cut down on work significantly. If I dont invest another penny, the 2.3M should grow to 10-15M in 20 yrs or 25-40M in 30 yrs. I suppose that's a long winded way to say my goal is to coast-fire for now.

Kids: a huge money and time suck, but man it's all worth it every time they tell your significant other they're their favorite 😅

 

[sloh]

Kids habe been double whammy. Spending goes way up, while time to moonlight goes way down.

Full time day care is 3k a month, we'll be paying for two of those in a year for the next 2-3 yrs. We're putting away $1500/month combined towards their 529. We also joined lifetime at $600/month primarily for the complimentary childcare whereas prior I was just working out at home.

I haven't even attempted to calculate the other costs like food, babysitting, toys, clothes, and weekend activities. So conservatively kids are costing 5-6k a month and will be upto 8-9k with double day care. For reference our mortgage payments are almost 13k and credit card bills average 6-10k a month, so not 50% increase but definitely pretty much all the extra money I was otherwise dumping in the market or towards the mortgage before.

At the same time I cut down on my FTE and trying to make up the difference by picking up half admitting shifts after the kids go to bed.
Pre-kids I was making 550-600k, now my goal is to crack 500k. That's about what I gotta make to clear 25k a month.

That said, our NW is sitting on 4.1M.
2.3M evenly split between retirement and brokerage, and the rest in our homes' equity.
So my goal for the next 5 years is to "defend" the savings and just break even after maxing my retirement so we don't have to sell stocks. I suppose if it came to that I'd probably stop contributing to the 529 first, but I'd like to not have to do either. In 5 years my primary home is paid off and no more day care payments, the investments should grow to 3-4M and I'll have 10k/month freed up to dump in the market or cut down on work significantly. If I dont invest another penny, the 2.3M should grow to 10-15M in 20 yrs or 25-40M in 30 yrs. I suppose that's a long winded way to say my goal is to coast-fire for now.

Kids: a huge money and time suck, but man it's all worth it every time they tell your significant other they're their favorite [emoji28]

I’m a member of Lifetime as well! Totally worth it.

 

[Nocturnist]

As they get older the expenses will go up

I feel like I keep hearing this but I still can't imagine why? If you live in a high child care cost area, unless you're planning to send your kids to private school until college...I can never figure out what activities and sports equipment will ever come close to 35k a year in child care per kid. Maybe folks with older kids who've been through it can chime in...

 

[Nocturnist]

I’m a member of Lifetime as well! Totally worth it.

It's honestly the best! I got too used to home workouts during covid but wish I'd done it sooner.

 

[mmmcdowe]

I feel like I keep hearing this but I still can't imagine why? If you live in a high child care cost area, unless you're planning to send your kids to private school until college...I can never figure out what activities and sports equipment will ever come close to 35k a year in child care per kid. Maybe folks with older kids who've been through it can chime in...

I think private school is part of it for many, fortunately for me we are in a good public school district. Other than that my feeling is it is subtle. Costs more to go out because they eat more, they need their own seats on the plane, maybe a second or more expensive hotel room. Costco clothes aren't cool so then you are dropping an extra hundred on Gap jeans and saphora makeup. Gas to after school sports and activities which have a registration fee and a few hundred in equipment each season. Oh, and don't you want to go on the team trip at the end of the year for 500 each for your kid and you to chaperone? Squeeze in a tutor or piano lessons and don't forget about summer camp! Wouldn't it be a great lesson on accountability if you got them a dog? Better go purebred and hypoallergenic for safety. Allowance, spending money for the fair, birthday presents for their friends, etc etc. Death by a thousand cuts. I feel the same way when I come home to a doorway full Amazon boxes with 20 dollar purchases in each.

 

[finalpsychyear]

Kids habe been double whammy. Spending goes way up, while time to moonlight goes way down.

Full time day care is 3k a month, we'll be paying for two of those in a year for the next 2-3 yrs. We're putting away $1500/month combined towards their 529. We also joined lifetime at $600/month primarily for the complimentary childcare whereas prior I was just working out at home.

I haven't even attempted to calculate the other costs like food, babysitting, toys, clothes, and weekend activities. So conservatively kids are costing 5-6k a month and will be upto 8-9k with double day care. For reference our mortgage payments are almost 13k and credit card bills average 6-10k a month, so not 50% increase but definitely pretty much all the extra money I was otherwise dumping in the market or towards the mortgage before.

At the same time I cut down on my FTE and trying to make up the difference by picking up half admitting shifts after the kids go to bed.
Pre-kids I was making 550-600k, now my goal is to crack 500k. That's about what I gotta make to clear 25k a month.

That said, our NW is sitting on 4.1M.
2.3M evenly split between retirement and brokerage, and the rest in our homes' equity.
So my goal for the next 5 years is to "defend" the savings and just break even after maxing my retirement so we don't have to sell stocks. I suppose if it came to that I'd probably stop contributing to the 529 first, but I'd like to not have to do either. In 5 years my primary home is paid off and no more day care payments, the investments should grow to 3-4M and I'll have 10k/month freed up to dump in the market or cut down on work significantly. If I dont invest another penny, the 2.3M should grow to 10-15M in 20 yrs or 25-40M in 30 yrs. I suppose that's a long winded way to say my goal is to coast-fire for now.

Kids: a huge money and time suck, but man it's all worth it every time they tell your significant other they're their favorite 😅

Thats great. Your in peak expense mode for the next 5 years but then house paid off and kids in school = massive savings and or part time work if you wanted.

I would consider a nanny. I do have several friends who are paying them 20/hr for 40 hr weeks and have multiple kids. Some even cook. When they go on vaca or call off sick yeah thats the tricky part.

 

[mmmcdowe]

Thats great. Your in peak expense mode for the next 5 years but then house paid off and kids in school = massive savings and or part time work if you wanted.

I would consider a nanny. I do have several friends who are paying them 20/hr for 40 hr weeks and have multiple kids. Some even cook. When they go on vaca or call off sick yeah thats the tricky part.

I floated the idea of au pair to my wife before. We didn't end up going that direction, but if you have extra space in the house I think it can be a great social experience for children, especially if you want them to learn additional languages.

 

[finalpsychyear]

It's honestly the best! I got too used to home workouts during covid but wish I'd done it sooner.

its a 150-180/mo for 1 person near me. do they do month to month or is this a contract type of gym nonsense?

 

[thumbz]

Which one

An aventador - all thanks to not having the daycare and child expenses like my colleagues above 😆

 

[sloh]

its a 150-180/mo for 1 person near me. do they do month to month or is this a contract type of gym nonsense?

It's month to month for my LifeTime. 300 per person, 100 extra to add on spouse.

 

[Nocturnist]

its a 150-180/mo for 1 person near me. do they do month to month or is this a contract type of gym nonsense?

Ours is like 280 for me, another 140 for spouse, 70 for each kid and you can add a "nanny" for $100 so we added my mother in law. $600-650 total...not including their $6 coffee after each workout

 

[Nocturnist]

Thats great. Your in peak expense mode for the next 5 years but then house paid off and kids in school = massive savings and or part time work if you wanted.

I would consider a nanny. I do have several friends who are paying them 20/hr for 40 hr weeks and have multiple kids. Some even cook. When they go on vaca or call off sick yeah thats the tricky part.

It's a great thought, we did consider it. You probably live in a much lower COL area, the rate in our neck of the woods is 30-40/hr. A full time nanny comes out about even to sending 2 kids to daycare. We happen to live a 5 minute walk from one of the best daycares and also wanted the socialization for our kids they wouldnt get home with a nanny. Ultimately though it's the inconsistency you mentioned that swayed us. Nanny calls out sick for a week? Your problem. Friends' nanny even gave them a one week notice and moved to another state with her boyfriend. Staffing is the daycare's headache and I'm guaranteed 40 hours. In the chaotic world of babies and toddlers, it's kind of the one certainty I can always count on.

 

[Nocturnist]

I think private school is part of it for many, fortunately for me we are in a good public school district. Other than that my feeling is it is subtle. Costs more to go out because they eat more, they need their own seats on the plane, maybe a second or more expensive hotel room. Costco clothes aren't cool so then you are dropping an extra hundred on Gap jeans and saphora makeup. Gas to after school sports and activities which have a registration fee and a few hundred in equipment each season. Oh, and don't you want to go on the team trip at the end of the year for 500 each for your kid and you to chaperone? Squeeze in a tutor or piano lessons and don't forget about summer camp! Wouldn't it be a great lesson on accountability if you got them a dog? Better go purebred and hypoallergenic for safety. Allowance, spending money for the fair, birthday presents for their friends, etc etc. Death by a thousand cuts. I feel the same way when I come home to a doorway full Amazon boxes with 20 dollar purchases in each.

Ditto on the good public school district, that's why we chose our high cost town so there's no way my kids are going to private school.

Other than that, kids already buy their own airplane seat by age 2, pay full price ticket for Disney by age 3 (pro tip: theyre not exactly checking IDs 😉), and we're already needing a 2-3 bedroom apartment for traveling because we're usually bringing a grandparent along for babysitting. My toddler is already in dance and gym class, kids meals (and they always need the pasta AND the pizza, never just one) are 75% the price of the adult meal. The indoor play ground is $20 because its raining and what else are we going to do on a Sunday...Did we even mention the berry budget rivals small African nations?

I guess we'll have to wait and see in 10 years and I'm probably going to come back to this thread and be shocked at how affordable I thought teenagers are but until then I'm going to remain blissfully ignorant.

 

[Splenda88]

An aventador - all thanks to not having the daycare and child expenses like my colleagues above 😆

Will it be new or used? How much will you be spending?

Will you have a second car or will it be used for your day-to-day driving?

 

[Splenda88]

Love this thread, glad it's still alive. Thanks all for the transparency.

2024

Gross: $465k (hospitalist)
Taxes: $161k
401k/401a: $57k
After Tax Savings: $116k

Which means I spent $131,000 on an absolute pile of nothing last year - that "other" category in the budget gets away from you so quickly!

2025 is going to be grim for my savings as I decided to buy another toy (a lambo).

170k+ in savings/investing is great.

 

[thumbz]

Will it be new or used? How much will you be spending?

Will you have a second car or will it be used for your day-to-day driving?

It's actually my third car - I have an R8 I daily drive, a Nissan Xterra I use for moving around the doggos and now the lambo.

It's used, all of my cars are. Paid a little over 300 for the lambo

If any of my residents happen to stumble on this I doxxed myself hard haha

 

[Splenda88]

It's actually my third car - I have an R8 I daily drive, a Nissan Xterra I use for moving around the doggos and now the lambo.

It's used, all of my cars are. Paid a little over 300 for the lambo

If any of my residents happen to stumble on this I doxxed myself hard haha

Did not know you already bought it.

That is an expensive car.

 

[Nocturnist]

It's actually my third car - I have an R8 I daily drive, a Nissan Xterra I use for moving around the doggos and now the lambo.

It's used, all of my cars are. Paid a little over 300 for the lambo

If any of my residents happen to stumble on this I doxxed myself hard haha

Congrats, that's quite a car!
Did you finance or buy it outright? I heard past 150k car loans get tricky. How's the insurance and maintenance on it? (I guess if I gotta ask I clearly can't afford it).

Also this is exactly why I don't say what I drive because I'll be immediately doxxed lol

 

[thumbz]

Congrats, that's quite a car!
Did you finance or buy it outright? I heard past 150k car loans get tricky. How's the insurance and maintenance on it? (I guess if I gotta ask I clearly can't afford it).

Also this is exactly why I don't say what I drive because I'll be immediately doxxed lol

Thanks!

Ok so good news is I come with tidings of affordability! So I got a $200k loan at 5% - my thought process was my HYSA alone is making 4.5%, so why drain my brokerage account and rainy day fund if I don't need to. I paid cash for the remainder. I did wait until I could buy it outright to pull the trigger, this has been a couple years in the making.

So maintenance actually isn't as horrifying as long as you find a good indy shop and don't take it to lambo. Oil change will be $600, other services will be similar. I intentionally got one with a new clutch ($12k otherwise) and new brake pads ($1000 per corner).

The $3000 oil changes you see are 100% lambo stealership markup.

I do however pray I don't have something like a catastrophic transmission failure, as that would run me $50k (I priced all this out before I purchased to make sure the worst case scenario wouldn't leave me penniless on the streets).

This is my "you only live once and have loved cars since you were 6 years old" purchase - I'm very hopeful this will get cars like this out of my system. The aventador has always been my "you'll never be able to afford it" dream car so it's so cool to actually have one

 

[Splenda88]

Thanks!

Ok so good news is I come with tidings of affordability! So I got a $200k loan at 5% - my thought process was my HYSA alone is making 4.5%, so why drain my brokerage account and rainy day fund if I don't need to. I paid cash for the remainder. I did wait until I could buy it outright to pull the trigger, this has been a couple years in the making.

So maintenance actually isn't as horrifying as long as you find a good indy shop and don't take it to lambo. Oil change will be $600, other services will be similar. I intentionally got one with a new clutch ($12k otherwise) and new brake pads ($1000 per corner).

The $3000 oil changes you see are 100% lambo stealership markup.

I do however pray I don't have something like a catastrophic transmission failure, as that would run me $50k (I priced all this out before I purchased to make sure the worst case scenario wouldn't leave me penniless on the streets).

This is my "you only live once and have loved cars since you were 6 years old" purchase - I'm very hopeful this will get cars like this out of my system. The aventador has always been my "you'll never be able to afford it" dream car so it's so cool to actually have one

Impressive! Haven't you been only an attending for only 4 yrs?

 

[thumbz]

I'm 6 years in now, but it's just me - no kids or other responsibilities to try to work less for or spend money on. That really helps

 

[Splenda88]

I'm 6 years in now, but it's just me - no kids or other responsibilities to try to work less for or spend money on. That really helps

Oh ok. That should put you in a good financial footing and it seems you've been making > 400k/yr.

 

[abolt18]

Ours is like 280 for me, another 140 for spouse, 70 for each kid and you can add a "nanny" for $100 so we added my mother in law. $600-650 total...not including their $6 coffee after each workout

This is straight up crazy... I never knew anyone paid this much to go to the gym... I hope the toilet paper feels like clouds on your butt.

 

[Nocturnist]

This is straight up crazy... I never knew anyone paid this much to go to the gym... I hope the toilet paper feels like clouds on your butt.

Lol. Honestly, me neither. Give me a $19.99 a month planet fitness membership or a set of bowflex dumbells and I'm a happy camper..but as it turns out seems like half the people on this forum go there as well! In my defense there happen to be literally no other gyms in our town, and we use their babysitting 1-2 hours at least 5 times a week so that's like 20-40 hours a month of complimentary childcare. We pay our 15 year old neighbor $15/hr on date nights so in my mind that's at least a $300-600 value and it kind of pays for itself. We take the kids to the indoor pool every weekend so that's also saved money on activities we'd otherwise be having to come up with. Haven't tried their toilet paper yet, will report back...

 

[mmmcdowe]

I'm a fan of a lot of Ramit Sethi's content because of his emphasis on feelings often being inconsistent with financial realities. The reality is no one with a net worth in the millions should bat an eye at a 600 dollar monthly cost for something that gives them joy and improves their health. Easier said than done, however. I still grimace at delivery fees for groceries even though I recognize the time savings are immense, allowing me to more consistently eat home cooked meals, and the price is ultimately negligible.

We don't have a gym with child car but I would absolutely eat a 600 fee if we did. My 5 month old daughter decided 100 days of hell wasn't enough and still wakes up multiple times a night. Haven't been able to do an early AM workout in months because that's my shift with her and I'm constantly scrounging for time later in the day.

Also, what are you doing between sets if not enjoying free toilets????

 

[Mad Jack]

Congrats, that's quite a car!
Did you finance or buy it outright? I heard past 150k car loans get tricky. How's the insurance and maintenance on it? (I guess if I gotta ask I clearly can't afford it).

Also this is exactly why I don't say what I drive because I'll be immediately doxxed lol

I only put mine in the private forum, but not out in the open. I'm pretty identifiable though, thankfully I'm boring enough these days that I don't think any doxxing would be worth anyone's time

 

[sloh]

This is straight up crazy... I never knew anyone paid this much to go to the gym... I hope the toilet paper feels like clouds on your butt.

Commercial gyms are a zoo these days. Weird crowd, bad manners, filthy, broken equipment, dirty toilets, dirty showers, not enough showers and toilets, not enough equipment, not enough benches, not enough dumbbells, tik tok teens acting like hooligans, dangerous parking lots.

My lifetime has 2-3 employees restocking and cleaning the locker rooms constantly. Commercial gyms only have an employee cleaning the bathrooms and locker rooms maybe twice per day.

My lifetime also stocks Gloss Moderne shampoo, bodywash, lotion; shaving cream, shaving blades, free towels, many blowdryers. 20 spacious showers. It’s perfect for people who want to do an AM workout, shower, then get ready and head right to work after. Gated and covered parking.

When machines break, it is fixed within 1-2 days. When machines break at commercial gyms, it usually takes at least 1-2 weeks for them to fix it.

Lots and lots of classes for the ladies such as Pilates. Even private Pilates classes. A pool area that would rival most luxury hotel pools.

Gyms like lifetime are also just a great way to meet like minded people. I’ve made many friends here who are very successful. It’s hard to meet and make new friends once we are out of training.

They also have “parents night out” every Saturday from 5-8 pm. Parents can drop their kids off and they will provide meals for the kids while the parents can have a date night.

Worth 300/month for families? I guess YMMV but it is for me

 

[Mad Jack]

So about two years in, I've got 225k invested, with 110k contributed last year on a base salary of 318k gross. Paid down a lot of debt, got my wife a new car (hers was on its last legs, 20 years old), went on several overseas vacations in that time, so I don't feel like I'm missing out on anything. I may pick up a higher paying job in the future to accelerate my savings, but I'm enjoying academics and I feel like I'm doing relatively well this early on