31 years old. My wife (32) has been unemployed for 3 months. Looking for input on our financial position.

[alicia0201]

No kids yet. We’re definitely suffering from some lifestyle creep. What’s a good level of monthly expenses to get to?

My income: 200k base, 30 bonus

Her income: 0

Monthly income: $10,400

Rent: 2850

Monthly expenses: 4k

Leftover (put into savings): 3550

—

Combined cash: 81k

CDs @4.9%: 231k

Investments (mostly s&p and VT): 208k

401k account 1 (from my old job): 111k

401k account 2 (my current job): 51k

401k account 3 (her old job): 20k

Debt: 0

Now that she’s employed, and has passed the 3 months of severance mark, we really need to cut down on our monthly expenses. We live in a VHCOL area, so it might not be easy. I’m also not sure what to do about the multiple 401ks, there’s some process for rolling them over, but I don’t know what it is.

 

[kindnesskellie]

@alicia0201 You guys have a very strong financial position in my opinion. What are you worried about?

 

[b55]

@kindnesskellie Worried about 29 year old Reddit guys who have 500k stashed i guess…

 

[alicia0201]

@kindnesskellie Honestly? I’m trying to buy house and start family in a specific neighborhood in New Jersey, but with mortgage rates at 7% and property taxes at 2.1%, buying a 2 bedroom apartment will end up being about 5.5k per month, even if I plop down my life savings. This leaves little left over after things like childcare and savings.

So that’s what’s stressing me out. Yes, I’m aware I could choose to live elsewhere, but I have strong pressures and incentives to live in that particular area.

 

[bperry]

@alicia0201 Dude... your life savings are over 700K and your wealth is growing ~100K a year. Keep it up and you will be a millionaire before 35. Just wait a year or two to buy that 800K (yes I did the math) apartment in New Jersey. Stop stressing. You are in the physical prime of your life, have married your soul mate, and will likely live for 50-60 more years in great wealth and prosperity. Will you please smell the roses? Cherish being 31 and stop chasing the next shiny thing, just for like one month. You'll get your dream house within a few years. I'll eat my Rolex if you don't.

 

[shasikatesl]

@bperry Not to nitpick but actuarial life table says he has about 45 years of life expectancy at 31

 

[bperry]

@shasikatesl Rich people live like 5~10 years longer on average.

 

[shasikatesl]

@bperry *than the poorest people, who probably can't afford good food or living conditions. I doubt they are living 5-10 years longer than middle class people.

 

[bperry]

@shasikatesl Figure 2 of this research study has that info. Men in the 95th percentile, like OP, have life expectancy of 87 yrs.

In the 70th - 83 yrs

In the 50th - 82 yrs

In the 30th - 79 yrs

In the 10th - 76.5 yrs

So OP, at age 40, is expected to live ~5 years longer than 50th percentile man. Keep in mind this research was from 2014, and I'm 99% sure that richer people are less likely to die from Covid (unvaxxed are lower income on average, and even vaxxed, low-income people are more likely to die of Covid for many systemic reasons) so the gap is probably years wider today. Those studies are still in-progress.

 

[wordjockey]

@alicia0201 Budget and cut back on your lifestyle creep until you can get your finances to where you need them t accomplish your goal. That would be my overall suggestion.

 

[pinion39]

@alicia0201 Postpone buying a home until interest rates are better. Stay where you are and add your wife’s money to the saving and investing pile.

 

[resjudicata]

@pinion39 Bad advice.

Interest rates may never “get better”.

Can always refinance.

 

[herrf]

@alicia0201 $5500 a month for a 2 bedroom apartment? This has got to be across the water from NY. You're right, if that's the plan, having a kid will be mega stressful although many have had 4 kids on a quarter of your income. If I could do it all over again, I'd have bought a smaller house. And the second I'm not tied down to a HCOL area, I'd move.

 

[matthewv]

@alicia0201 Monthly income = $10,400

Rent + monthly expenses = $6,850

Sounds like you have a monthly surplus of $3,550? Seems like you’re doing just fine, shouldn’t even be dipping into savings.

Has she applied for unemployment yet?

 

[resjudicata]

@matthewv His surplus is more than the average person earns per a month in total. I am so confused on how they are struggling. I understand everyone lives differently but I'm so curious where that 3.5k is going, if that's left over after bills, groceries and gas.

 

[bperry]

@resjudicata Plus $1000/mo income from his 231K in CDs. Plus dividends and capital gains on 390K in the stock market...

 

[truthseekerinchrist]

@resjudicata I can spend that much on food every month. I’m buying for 6, but I can see how even two people eating out a lot will drive food costs up by that much.

In addition, my power, water, internet, and phones will run about 700 in even the low months; as much as 1500 in the summer when the ACs have to run a lot; so bills might actually cut into that by a good chunk of they have a large or older house.

 

[resjudicata]

@truthseekerinchrist He said the 3.5k is after their bills so the only thing I can think of is they're eating out every meal every day and going to some nice places.

 

[truthseekerinchrist]

@resjudicata Just saying, $100/day is 3k a month. For two people, that’s an average of $16 per meal, 3 meals a day. In a HCOL area, that’s nothing out of the ordinary.

 

[b55]

@resjudicata I was eating out all day every day for years. Horrible way to live!!! I made breakfast at home and ate out three additional meals a day. 7 days a week. Not a great way to live. i love cooking. I was just in a bad place in life.