[quote=Eugene]
If you contribute maximum to both of your 401k’s, your housing payment would be around 40% of your net income. Two kids … 2500/month for full-time care (…) And why do you have car loans if you make that kind of money?
Pay off your car loans first, save up for the down payment if you don’t have 150-200k in the bank already … those places may not go below 600’s, but they probably won’t shoot right up, either. [/quote]
Umm…hijack… I don’t think your numbers add up…But even if they did, housing being 40% of the income is WAY too risky/tight IMHO. For me, the housing shouldn’t be more that 28% of the gross income.
The take home salary is 11K. Maximizing 401K means 2000/mo. 2500/mo daycare, 1000/mo college funds, 1000/mo life insurances for everybody -that’s more than half the income. gas and car insurance $500 for 2 cars, car payments 500/mo – so another 1000 here. I am undersestimating a bit here. So here are 7000$ already accounted for. $500 utilities. In this case, we’d have left $5000 at MOST. $3500 for the PITI and then what? Food expenses alone (including eat-out) are more than $1500. One needs to buy clothes and other household items, plus maintenance of the place. Did you include the $400-700 HOA fee too? And one needs to put some money away for vacations and other big ticket items or emergencies…Even if we don’t maximize the 401K is still very tight for our comfort.
Regarding savings, we are far from $150K. We’ve been in grad programs and postdocs, then employed in academia, so only for very few years we had real income and we are about 40yrs old. By the time we save another 100K the kids will be in high school and we’d be looking at a house to retire in, not to have kids grow up in…
