Our financial situation

[moneymom]

I feel the need to share, because in my previous threads, I think I may have made some comments that led some of you to believe we are somewhat wealthy.  The truth?  We are not wealthy by any means.  In fact at certain times we struggle a bit.  But we have all the things we really wanted and needed and this makes us feel wealthy.  We have a gigantic mortgage (HCOL) but that is our only debt.  Here's the thing.  We don't have a true savings acct.  Our retirement accounts are fairly on target so we plan to use my Roth as an emergency fund, if needed.  Thankfully we have had no emergencies in 9 years that we couldn't just save up for in a couple of months (but cutting out eating out, fun money, etc).  

I am a SAHM but have a small part time job from home that pays a little (enough to fund our fun money).  We would love to start taking family vacations but don't have the money for it, so this is our financial struggle.  I am considering looking for a job that pays more so that we can increase our income for annual vacations.  With DD in school, it's really hard because before & after school care costs so much that it would eat my paycheck.  I am hoping to find something for just the few hours she is in school.  I currently volunteer every day but would drop that.

Soooo, all in all, we feel extremely wealthy because we can pay the bills, live in our dream home (somewhat modest) and buy everything we want (which is fairly minimal).  But in reality, we could be doing a LOT better by having more savings, funding vacations and increasing our retirement savings.

I plan to spend more time here now so I just wanted to share.  You guys have been wonderful in dealing with my previous threads and telling me like it is, and I thank you all for that.  I'm a work in progress

[swasat]

If you live so modestly how come your stepkids constantly hit you up for money??  And all your threads start and end up with "money".


I think you are projecting a wrong image to the world.

[justme]

If you don't have enough money to go on vacation why are you contemplating throwing thousands of dollars at your step kids?

I value experiences more than things so I would have cut back what sounds like extravagant Christmas celebration and large gifts to people for birthdays etc in favor of going on vacation.

[NomoreDramaQ1015]

If you don't have enough for vacations and your retirement is your EF, then where is the theoretical money to set up IRAs for the step kids coming from?

[swasat]

Soooo, all in all, we feel extremely wealthy because we can pay the bills, live in our dream home (somewhat modest) and buy everything we want (which is fairly minimal). But in reality, we could be doing a LOT better by having more savings, funding vacations and increasing our retirement savings.

Your past threads are in stark contrast to this. You are constantly planning thousands of $$ of spending on the stepkids and other things, while in reality you are not even content with you retirement savings?

Blows my mind.

[TheHaitian]

Dec 15, 2014 14:48:34 GMT -5 swasat said:

If you live so modestly how come your stepkids constantly hit you up for money??

I believe it is a matter of perception.

To someone in poverty or slightly above poverty, someone living a fairly "middle class" life to them might seem rich.

I know I had friends growing up that I thought were RICH but looking back their families were just barely middle class... But compared to "my" reality at the time, their life seems fairy tale like aka rich.

[Plain Old Petunia]

I suggest you cut back on eating out and "fun" money, and get some cash into a savings account.    You don't need huge amount sitting there, but you should have something.   Open an online savings account, set up an automatic transfer, and get an emergency fund started.

[Deleted]

Ok, now I REALLY don't get why you feel like you need to toss money at the stepkids.  I was thinking you guys were just doling out a large inheritance early or something. 

My kids are the most appreciative little souls ever (of course they're young ), but even I won't put saving for their retirement above mine.  It makes no sense.

[swasat]

Dec 15, 2014 14:58:02 GMT -5 TheHaitian said:

Dec 15, 2014 14:48:34 GMT -5 swasat said:

If you live so modestly how come your stepkids constantly hit you up for money??

I believe it is a matter of perception.

To someone in poverty or slightly above poverty, someone living a fairly "middle class" life to them might seem rich.

I know I had friends growing up that I thought were RICH but looking back their families were just barely middle class... But compared to "my" reality at the time, their life seems fairy tale like aka rich.

Or it could be $$ as gifts,  $$ as dangling carrot, $$ as control.....Which i strongly suspect is the case here.

[Peace Of Mind]

Dec 15, 2014 14:48:34 GMT -5 swasat said:

If you live so modestly how come your stepkids constantly hit you up for money??  And all your threads start and end up with "money".


I think you are projecting a wrong image to the world.

Because compared to the step kids they ARE rich.  And aren't we a money board?  Isn't that the point of being here - to talk about money? 

And the point of giving money to the step kids is to control them (per me).  

Ya'll stop chasing off new victims posters! 

[Plain Old Petunia]

Dec 15, 2014 14:58:02 GMT -5 TheHaitian said:

Dec 15, 2014 14:48:34 GMT -5 swasat said:

If you live so modestly how come your stepkids constantly hit you up for money??

I believe it is a matter of perception.

To someone in poverty or slightly above poverty, someone living a fairly "middle class" life to them might seem rich.

I know I had friends growing up that I thought were RICH but looking back their families were just barely middle class... But compared to "my" reality at the time, their life seems fairy tale like aka rich.

Absolutely. To some people, if you have $5, then you have $5 to spare, so hand it over you Ebenezer McScrooge.

[swasat]

Peace Of Mind, you don't think its has anything to do with the lavish monetary gifts, parties, money talk etc that the stepkids feel OP has a LOT of money?

[Peace Of Mind]

Dec 15, 2014 15:05:25 GMT -5 swasat said:

Peace Of Mind, you don't think its has anything to do with the lavish monetary gifts, parties, money talk etc that the stepkids feel OP has a LOT of money?

   I don't read her threads that much to know.  I wasn't a Doxie follower either.  People who have the same issues over and over and over drive me nuts and I tend to yell the truth at them after awhile like I do in RL. 

[swasat]

Dec 15, 2014 15:07:47 GMT -5 Peace Of Mind said:

Dec 15, 2014 15:05:25 GMT -5 swasat said:

Peace Of Mind, you don't think its has anything to do with the lavish monetary gifts, parties, money talk etc that the stepkids feel OP has a LOT of money?

   I don't read her threads that much to know.  I wasn't a Doxie follower either.  People who have the same issues over and over and over drive me nuts and I tend to yell the truth at them after awhile like I do in RL. 

Its the same issue over and over and over again in this case, in case you wish to follow the threads....

[giramomma]

I think this posting doesn't really address your wealth, either.

For the most part I get it. Most of our wealth is tied up in our retirement. We don't make a ton of money. So, when one looks at us in the short term, financially, we don't look all that good right now, frankly. And, that's the part I choose to talk about more on here.

But, you add in long term savings, and well, we are doing quite well. 

I would never choose to call us wealthy, though. Comfortable and on-track come to mind.

What do you mean by you could be funding retirement better? Does that mean you currently don't fund it fully (17.5K+11K for IRAs) but you do put 15% of your income to retirement..

But, I think of our budget and unpredictable costs...when the AC went, that was over 1 month of my dayjob salary. We spend $50/month on eating out, spend $20 on prepaid cells, and $20 on Netflix. Clearly cutting these for a few months won't equate 3K. Our downpayment on phase two of braces (a surprise!) was 2.5K. Again, not something we can cover by cutting out our extras for a few months.

So, if you are spending 500-1K/month on things like eating out, maybe you need to change your budget to reflect different priorities. And, if you have $500-1K/month at your disposal for things like eating out, I wouldn't really think you were struggling.

[Peace Of Mind]

Dec 15, 2014 15:09:42 GMT -5 swasat said:

Dec 15, 2014 15:07:47 GMT -5 Peace Of Mind said:

   I don't read her threads that much to know.  I wasn't a Doxie follower either.  People who have the same issues over and over and over drive me nuts and I tend to yell the truth at them after awhile like I do in RL. 

Its the same issue over and over and over again in this case, in case you wish to follow the threads....

You just want to read me yelling at people, don't you.   

[Abby Normal]

Actually, I had a coworker (and good friend)  that was very much like moneymom.

Her DH had a very volatile relationship with his kids (her steps).  The kids seemed to think that SM and Dad could afford to help them out because they were both working.  DIdn't matter that they were saving for retirement.  The kids continually saw them as a bank.  The dad had so much guilt about their early lives, he always felt bad saying no, so he rarely would.  She then became the bad guy.  It was a continual battle and cause a lot of stress.  

If the OP was retired, I would swear this was my friend.  So I can see being in between a rock and a hard place.  Even if the kids are manipulating you, sometimes it's hard to destroy that relationship when you can "afford" to help. 

My suggestion to OP is the same as it was to my coworker.  You and your DH need to go see a counselor and get some tools in your toolbox for dealing with the kids.

Afford-  the ability to do something with your money that does not comprise your financial priorities. 

[muttleynfelix]

Thankfully we have had no emergencies in 9 years that we couldn't just save up for in a couple of months (but cutting out eating out, fun money, etc).

Lucky you.  I think you probably have a more extravagant lifestyle than you think or you have just been damn lucky and better think that your good luck is going to end some day. 

[moneymom]

I'll come back and post our budget when I get a free moment to do so.

[Deleted]

I am guessing that you are very wealthy by many of our standards. You don't equate it as such because you aren't in the big leagues.

Otherwise, save your $$$ for an EF, etc. I never considered my Roth an emergency fund even when I earned less than $25,000 a year working two jobs. Retirement $$$ are retirement $$$. Even at almost-61 faced with a really expensive emergency (we aren't sure how much), DH said, "We can't let this affect your retirement money."

[gooddecisions]

Taking a vacation doesn't have to be super expensive or elaborate. I get a 3 bedroom condo at the beach every year for a week in the summer. I budget about $1000 for the condo, food, entertainment and gas. We have a great time.

[Deleted]

What is career you had before SAHM and what is earning potential in that track for part time and full time work?

[moneymom]

Dec 15, 2014 22:47:27 GMT -5 @patstab said:

Well we are quite well off and I'm not funding anything for our son. We are 68, he will be 45, we also have

a challenged daughter. Now if something happened he ever got in dire straits from health or something we would

and some day when he settles back in the states we may help him buy a house, it will be from whatever he might inherit.  But he has always been self supporting wouldn't even ask for money back when he needed it.  I would give him a thousand or so at Christmas and his birthday.    When we die they will split our savings between them but if we have to care for her before then we can. I would not be giving anyone anything without a huge emergency fund and extra money. A huge mortgage, lady forget it. I too read it as you had lots of money, if you are sending those vibes here what kind of vibes are you sending to the stepkids?  Until then we are enjoying life. If he feels that kind of guilt he needs to deal with it some other way.

If they come for money all the time tell them exactly what you have said here, YOU DO NOT HAVE THE MONEY!  I'm thinking you are trying to make it look like you are loaded. 

We downplay having money where we live.

We have folks here you see at our local diner you would think didn't have 2 dimes to rub together and they are multi millionaires. That's the way we try to be too.  People here are very laid back, I mean we know the ones that truly have a lot but they don't put on the dog so to speak.  Learn from that.

We've told them we don't have money to spend, when we don't.  However their mom is constantly telling them that DH has a great job and can help them.  And we have been remodeling off an on for the last few years that I'm sure they think that we could be spending that money on them.  It's tough because their mom is at poverty level, so when she says we should be helping more, it really looks crappy on us (to the kids) that she is struggling so much and we are feeling happy overall with our financial situation.

[Deleted]

I'll second what others have said, get a real emergency fund. A one income family with a large mortgage and no liquid emergency fund is a recipe for disaster and quick if something happens to your husbands job. I would suggest at least 6 months, maybe a year.

[moneymom]

Dec 15, 2014 23:30:03 GMT -5 @taliare said:

What is career you had before SAHM and what is earning potential in that track for part time and full time work?

My last job paid $20k p/t and $40k f/t.  However now that I stay home, I better organized our finances to bring in extra income (better investments, spend lots of time figuring how to save, etc).  I also coupon now, spend less, sell on craigslist and ebay, etc.  I couldn't really do all that while working and caring for my kids.  DH has a tough job so I take on all the finances and home stuff.  Without being employed, I've cut cable and I do all our gardening which saves us a bit.

[Deleted]

Dec 16, 2014 0:01:34 GMT -5 moneymom said:

Dec 15, 2014 23:30:03 GMT -5 @taliare said:

What is career you had before SAHM and what is earning potential in that track for part time and full time work?

My last job paid $20k p/t and $40k f/t.  However now that I stay home, I better organized our finances to bring in extra income (better investments, spend lots of time figuring how to save, etc).  I also coupon now, spend less, sell on craigslist and ebay, etc.  I couldn't really do all that while working and caring for my kids.  DH has a tough job so I take on all the finances and home stuff.  Without being employed, I've cut cable and I do all our gardening which saves us a bit.

Sound like you don't want regular job because you save money to earn money in different way as SAHM. Why you asking question about work for vacation money if that not what you want to do? This question cannot be answer here, only you have answer. What more important for your family? Support you give home or work 50 week of job for 2 week vacation every year?

[Shooby]

moneymom - You really don't have to explain or justify your position to anyone else. Your finances are your business. As long as family is self sufficient and you pay your bills you don't have to explain to anyone why you choose to stay home, work, buy this or that or whatever. I feel no compunction to explain what I do to other people. We do what works best for our family. Nobody else's business.

[giramomma]

Dec 16, 2014 0:22:29 GMT -5 @patstab said:

And a $40k salary is nothing to sneeze at.

A 40K salary in a HCOLA or even MCOLA where it won't even cover child care may not always be worth it.

We live in a MCOLA, and DH would need to net a little over 3K/month to cover child care for two school aged kids and a toddler, and close to 4K/month to cover child care and private school.

If DH worked full time, he'd gross 35K-40K. So, that leaves us short, but quite a bit actually.

Plus I would not get any relief in my work schedule. I would have to work MORE to cover the difference. Plus, we'd be bumped up into a higher tax bracket and we'd begin to be phased out of things like a traditional IRA. Our dividends would also be taxed.

So, yes, nothing to sneeze at, but may also not be "worth it" i the short run.

I also am reflecting more on the dividend/passive income. If one is getting enough to have a some extra income coming in, one must have a decent sized taxable portfolio. I've observed that most people think wealth when one talks about passive income. Just saying. (Though, I don't consider us wealthy because of our passive income. )

[Shooby]

Decide what works for you. And, don't march to everyone else's drumbeat. People are always going to tell you what you "should do". Oh, you should do this or you should do that, blah, blah. Sit back and assess your own family and lifestyle and make your own decisions.

[Deleted]

I'm also a little interested in how your being home has allowed you to make better returns in your investments? Are you actively trading a lot? 

Definately seems to be some disconnect between some of your statements.