OT-How much money does the average family have left over each month?

[buckeye]

I'll just say, "Thank goodness I'm here in Ohio."

 

[marcyinPA]

Wow, I don't consider "only" six figures "modest" -- it's almost double what we make every year! We must really be poor!

I was just thinking the same thing!!! We are a family of 4 living on an income of $36,500!! We are making it...it's tight, but you learn to appreciate the small stuff!!

 

[EsmeraldaX]

I was just thinking the same thing!!! We are a family of 4 living on an income of $36,500!! We are making it...it's tight, but you learn to appreciate the small stuff!!

Wow. That's pretty impressive. I don't think that would even be possible in this area without gov assistance.

My brother and his wife just had a baby and they only have his income of about a $36K and honestly, I have no idea how they are going to get by.

 

[marcyinPA]

Wow. That's pretty impressive. I don't think that would even be possible in this area without gov assistance.

My brother and his wife just had a baby and they only have his income of about a $36K and honestly, I have no idea how they are going to get by.

What makes it a little tougher for us is that we were making twice that much a few years ago. My dh had a string of job lay-offs and we've been through the wringer. I have my B.S. in Elementary Ed, but until my kids are a bit older, I am going to budget my behind off to be a SAHM!!

You never know what you can do until you are actually faced with the situation. We've btdt with gov. assistance (medical)....you do what you have to do. We own our own home, we have two cars, we are well fed and clothed, we give to our church. Faith gets you a long way too.

I'm sure your brother and SIL will be fine. You really do learn to make do! Money really isn't everything!!

 

[d-man's mom]

For me the answer to the question is zero because I allocate every dime to something (even if it's savings, vacation funds, car repair fund, etc).

As for the original post, I personally would cut out some of the home upgrades or even consider purchasing a lower priced home so that you could have more money in the bank.

 

[mamalle]

we bought our home back in 1998. we have a great lot on the water and a 3/2/2.we paid $115,000. our mortgage is low along with a low property tax. you cannot touch a house for under $350,00 now in palm beach county. dh and I could not afford to sell even though we could make a large profit because a larger home with zero lot lines would cost us $500,000 and our property taxes would be through the roof. I count my blessings that we bought it when we did. we decided to add on a playroom and a 4th bedroom since it was much cheeper than moving. Its tough this day and age for the middle class families. we are lucky to be in a profession ( dh is a medic/firefighter and Im a RN) that the pay is always increasing and flexible. we dont have to pay childcare and we have great retirements. we started the kids prepaid college program right after they were born and their tution is now paid off. You just have to figure out a budget and really put everything on paper and go from there. I highly recommend doing it for each year. I break everything down each Dec for the following year. Allocating for vacations, bonuses, etc. Good Luck.

 

[joestein]

For all the people who think that a six figure income is not modest, you need to look at all major metro areas (Boston, NY, LA, SF, etc)

We live in the surburbs of NYC. When my wife and I were married 10 years ago, we made about 60K together, but we barely made it. We lived paycheck to paycheck, sometimes we only had $40 or $50 left by the time we got paid again. We had a modest rent and didn't spend much. We didn't eat out often or go partying.

Today we make about 3X that amount, but that isn't much for our area. Just as an example:

Monthly Costs:

$600 commuting (2 NJ bus passes + 2 Metro Cards per month)
$1100 daycare for our 2 children (That is CHEAP, we pay my MIL, otherwise they would cost about $1800 - $2700 per month depending on where we send them, we looked into it when we found out we were having twins.)
$10 - $15/day per person food at work. It cost $9.00 to get a miserable salad around here. I could eat a McDonald/BK, but that is crap and still not that cheap $7 - $8 value meals.

That is just $1700 a month for us to be able to go to work, that is more than $20,000 after taxes (gotta earn 30K to spend 20K) a year(not including food at work).

So while are incomes seem large, the expenses in our area are even larger.

In addition, we don't qualify for many middle class tax breaks because of our income. The middle class breaks are based upon more national average salaries.

Just to put this all in perspective: Our income is below our township's median income, but a bit above our "area" (Western Monmouth) median.

One last number.... Some friends and I were talking last summer about how much money you need to earn to be middle class/upper middle class. We agreed on 100K for middle and 250K for upper middle.

 

[Aidensmom]

The highest median income for a family of 4 in any state is $87,412 according to the US Census Bureau
(http://www.census.gov/hhes/income/4person.html ). For all of those people who make six figures or more, maybe you just don't realize how many people there are that struggle and budget and still want to buy a home. A home is a wise investment. Yes, you may struggle for a little while paying more than you would in rent, but in 30 years, that home is yours. Our income is close to our state's median, and we do have to do without some things like buying lunch at work, eating out and we don't have as much money as some people for clothing or furniture or other such things, but when I am 65, I am not going to be paying rent, just my relatively low property taxes! We have the about the same amount of money left per month as the OP believes they would have, and we are happy. And that leftover money is now our 'spending' money for clothes, entertainment, books, etc., so in the end, besides what we have budgeted each month to put into savings, there is not a lot of money left in the bank account.

 

[joestein]

You can't look at entire state any more than you look at the entire country.

In NYS, there are very high median incomes around NYC, but they are considerably less for the rest of the state (probably 85% of the state, property wise) and that evens out the median for the state.

Depending on where you live in comparison to the major metro makes a huge difference in housing prices. Where I live, it is a 2 hour commute each way to my office in NYC. You can buy the smallest level of house in my area for about $500K, but if you want to move more south or west, farther from NYC, you can buy a new contruction 5000 sq mansion 200-300K.

 

[EsmeraldaX]

You can't look at entire state any more than you look at the entire country.

In NYS, there are very high median incomes around NYC, but they are considerably less for the rest of the state (probably 85% of the state, property wise) and that evens out the median for the state.

Depending on where you live in comparison to the major metro makes a huge difference in housing prices. Where I live, it is a 2 hour commute each way to my office in NYC. You can buy the smallest level of house in my area for about $500K, but if you want to move more south or west, farther from NYC, you can buy a new contruction 5000 sq mansion 200-300K.

In MA, I found that rents go down as you get further away from the city, but housing costs stay in the same range, less, but still, you aren't going to find a decent house for less than 400K

 

[Aidensmom]

The point is that the OP is trying to buy a home, and figures they will have $400-$500 left over. Apparantly they are purchasing somewhere where they can afford a home. The question was how much does the average family have left over after paying all of their bills - the OP basically wants to know if they are making the right decision. The average person in the country does not make a six figure income but still can get a home, though there are sacrifices that may come with it if they choose to do so. Yes, there are some areas where income and home prices are higher than normal, and no one can afford a home, but that is out of the ordinary. If the OP was in a place where they could not afford a home, I don't think that they would have asked the question they did in the first place. If you live in a place with a much higher than average median income, there are benefits to that also, though by choosing to live there you may not have the benefit of affording a home. There are a lot of costs that are the same across the board no matter where you live, and so if you live in a place with a high income, some things that are "expensive" to people with median incomes are a good value to you. And one of those things that is easier for you to afford is a Disney vacation..... The rooms, tickets, food, and merchandise all cost the same no matter where you are from. I was not meaning to argue with anyone, was just kind of trying to point out that someone with a six figure income is really not the "average" person in the country, or even in their own state, though they may be within the metropolitan area where they live.

 

[joestein]

I know we are starting to beat a dead horse, but......

In certain parts of the country (Major metro areas) a six figure income (100K) for a family of four is average or maybe even a little below.

 

[disneysteve]

$10 - $15/day per person food at work. It cost $9.00 to get a miserable salad around here. I could eat a McDonald/BK, but that is crap and still not that cheap $7 - $8 value meals.

Sorry, but this one just jumped out at me. Have you considered packing your lunch. I bring my lunch every day and it costs me $2 or less. If you dropped from $30/day to $4/day, you'd save about $6,500/year. That's not small change when you add it up. It would nearly cover your commuting costs.

 

[joestein]

I could probably pack my lunch, but I leave my home at 6:30 am and get home no earlier than 7pm, sometimes like last night, 9:30pm and even midnight is not unheard of, and I guess I just don't have the time, energy or inclination. My wife follows a similar schedule, except she leaves at 5:30am.

I guess I could buy cold cuts or something, but I don't really want to.

 

[mill4023]

nevermind

 

[Kathy C]

I say go for it! I got divorced when my son was 18 months and didn't remarry until he was17 (he'll be 24 this Oct). I was 23 when I got divorced, moved in with my parents for almost 2 yrs, then to an apartment that was $330 a month. I knew where I wanted my son to go to school so I kept riding up and down the street until one of the "row homes" (for lack of a better word) became available - my rent was going up to $500 a month. My parents told me I couldn't afford it. I did it anyway. We lived there until he finished elmentary school and then I wanted a house so I rode around until I found one I could afford. It was small, 1200 sq ft, 2 bdrms, double car garage, cul de sac lot. My mortgage was $650. My parents didn't think I could do that either. Two months after I made settlement, I was laid off and stayed off for three months using my severance and unemployment pay. Mind you my salary at that point was $27.000 per year. I learned to budget my money well. I live in Houston, Texas and our taxes and homeowners insurance are high here. I've since married, sold my cute little house and made a nice profit as down payment on the house we own now (my husband did the same thing).

I struggled a little, but never regretted that I did it. I say go for it!

 

[CrzyforPiglet]

I think the bigger question is what type of lifestyle do you want to have. My husband and I do pretty well for ourselves but I remember being in debt and I remember having to live off my pantry because I had no money in the bank and another time wondering if i had the money to put gas in my car to get to work so when we bought a home last year we purposely bought way less than we "could afford" based on the mortgage calculators because we wanted to be able to afford the home and still travel, have nice cars, buy furniture, etc. We also knew that we would be starting a family and wanted to be able to have me not work for a year and our housing choice is going to allow me to do that. So we have a bit of money left over every month but half is going into general savings and half is earmarked for the baby fund so that we'll be all set when I'm out of work.

So presuming you have taken into account all expenses, ask yourselves what type of lifestyle do you want? If you are fine with cutting back and watching what you spend then I say go for it. Do what is best for your family.

 

[shelly3girls]

I have not read all of the posts but I just have a couple things to add.
First, have you consider the rising rate of property taxes in your area relative to the expected increase rate of income? In our area a new home around 3,000 squ. ft. starts around low $400's with property taxes around $12k/year. The problem is that there are so many new houses going up that property taxes are increasing at a rate of around 7 - 11% PER YEAR! The rate has been over 10% for the past 3 years because there is so much new construction that they continually have to add on to the schools. Will you be able to keep up with the rising tax rate? Bankruptcy rates in our area are rising partly because of the rising taxes.

It also appears that your children are pretty young and probably not involved in too many activities. Is it your desire that your children will participate in sports or other activities as they get older? I understand if that is not a priority but just something to think about. All I can think about is the constant unexpected expenses we have due to the house or the children. These expenses add up and it only takes one big one to put you in trouble.

With our new construction we had some problems. I know people have already mentioned landscaping and window treatments, but also think of things you cannot control. The basement in our previous house leaked after owning it for a couple of months. The builder came back and fixed the problem but we were required to pay for the sump pump. In our experience, the unexpected always happens.

Lastly, do you have enough set aside in case one of you loses your job? Can you get by for a couple of months? Will you risk losing your house if it takes a couple weeks to find another job? Even if you think your jobs are secure you never know what can happen. My cousin was in a car accident and could not work. They ended up selling their house b/c it took her over a year before she could start a new job. She received disability but that does not pay the bills. While she was injured her husband then lost his job = no health insurance ($1000/month for cobra). He was able to find another quickly but it took a while to get benefits.

I don't mean to sound like a downer but you have to think of all of these things. We have built two new homes and there are always expenses you do not plan on no matter how much planning you do ahead of time. If you have extra savings to fall back on then it is ok. Is it possible to find a newer home where maybe the property taxes would be less b/c it has not been appraised for 5 years? There are many opportunities around us for homes even 3-5 years old that are cheaper for the same model the builder is building and taxes are cheaper. Plus then the owners have often landscaped and added blinds, etc. Just an option that many people do not even consider.

 

[shelly3girls]

Not to add to the debate but $100k does not go very far around here either. One thing is that as soon as you make over a certain level you lose many of the deductions others get (not that I am complaining, it is just that many people don't realize that not everyone gets the child tax credit or the NJ tax rebate). With property taxes so high ($7k on a 1500 squ. ft. townhouse) and car insurance that is absolutely outrageous money just doesn't go that far. We spend over $500/month in commuting expenses alone. Add in daycare that costs $18000/year for two children (and we do not even use a more expensive center) and a large part of the income is already spent. Although not as high as outside of NYC, housing in our area is still pretty high. An older 2,000 squ. ft. home sells for around 300-350k while a new 3,000 squ. ft. (they don't even build smaller homes) starts in the low 400's, really 500's by the time you add upgrades (lot premiums, ac, etc.). My MIL is thinking of retiring and wants to relocate to our area to be near the kids. She cannot even buy a small house or condo in our area because prices/taxes are so high. I don't know how families with lower incomes make it unless they have owned a house for a while.

 

[Julia M]

this has been very interesting for me, as I realized I really don't know how much I spend on anything!

Dh and I would like to send our oldest son to Catholic high school (that's 10K around here). I realized I need to really know what I spend on everything, so I can figure out how I can economize (I know I blow lots of money!)

Right now, I am just writing down EVERYTHING I spend.....including a soda for a snack from a machine....everything.

The places I think I'll be able to reduce my budget are:
1. trips to Target/Costco/etc. Although I'm alot better, I can do better
2. Eating Out Again, we do this less, but probably need to reduce it more
3. Groceries I'm curious how this will be........I have absolutely no idea of how much we spend.

We also like to vacation.....I'm afraid our trip to WDW in December will be the last one for the next 10 years! That's one area that will be easy to cut.

And to chime in on the salary issues......I'm sympathetic.....we live in Silicon Valley.....a very average 1800 square foot home..........it would probably sell for about 725K.......we couldn't afford it now! I just paid $2.63 for gas (unleaded, not supreme).

If we didn't have kids, our salaries would give us a very comfortable living. It's a good thing I love them!

I'd like to find a nice frugal living website. But at the same time, I work part time, I'm busy with kids activities.......I need to do things that are easy, that will maximize my savings (like carrying lunches to work)

Julia