High HHI Budget/Finances

[bigdogbudget]

Someone expressed interest in a high household income budget, so I will oblige, although we have not yet crossed the $500k line (but likely will this year).

DH has a PhD and graduated 10 years ago. He did a few years in academia and then moved to industry and has had steady income growth since then and is now a director of data science. First job out of postdoc was $100k or so, first job in the tech industry was $150k, and current comp is $180k base, 20% bonus, and RSUs in the $250k to $350k range per year. Obviously a huge portion of his comp is stock, and that can fluctuate in value.

I am in healthcare and have had slow but steady income growth from $60k my first year out of grad school to just under $100k last year. I quit to stay home with the kids due to the pandemic mid-2020, but will likely go back in a year or two when my youngest is in school full time.

Our AGI in 2020 was $410k - $407k was wages and $3k was dividends and interest. A lot of our investments are in tax-deferred accounts, especially those that produce larger dividends. I then added back pre-tax stuff taken out of our paychecks for a total of $463k.

At a very high level, we spend about 35% of our income, save 38%, and taxes are 27%. The numbers don’t add up exactly because daycare is in there as both DCFSA and a line item in the budget, and some stuff crossed the calendar year that I don’t think I accounted for quite correctly.

AGI - $410,192

Pre-Tax Paycheck Deductions (annual for 2020)
My 401k - $19,500
H’s 401k - $19,500
Health Insurance - $3146
Dental Insurance - $444
Health Care FSA - $3800 (plus $1000 match from DH’s employer)
DCFSA - $5000

Total income - $462,582

Taxes (annual for 2020)
Federal Income Taxes - $82,120
Additional Taxes (additional Medicare, NIIT, and nanny tax) - $2,276
State Income Taxes - $19,456
Payroll taxes - $20,941

Total Taxes - $124,793

Housing
Mortgage - $2975/month (PITI, 30 year mortgage)
Home Maintenance and Improvement - $1569/month (most of this was replacing our boiler and adding additional heat to our basement, a usual year it’s closer to $8k)
Utilities - $285/month
House Cleaning/Help - $517/month (biweekly cleaning plus 4 hours a week of someone who helps with laundry and meal prep)
Household supplies/goods/furniture - $785/month (we spent a bunch of money in early 2020 on furniture - we moved into our house from a smaller home and had several rooms to furnish)

Food & Booze
Groceries - $922/month
Dining Out/Takeout - $500/month
Alcohol - $145/month

Kids
Preschool - $950/month (2 days a week)
Behavior Therapy Class - $950/month
Kid Clothes - $103/month
Kid Supplies/Toys/Activities - $213/month
Babysitting - $38/month (this is higher in non-pandemic times)

Fun Stuff
Entertainment - $76/month (subscriptions, date night activities)
Travel - $128/month (actual for 2020, is closer to $10k/year in non-pandemic times)
Holidays and Gifts - $211/month
“Fun” (untracked personal spending) - $477/month (this includes adult clothing, personal care, health and fitness, hobbies, etc.)

Boring Stuff
Medical - $634 (we have unusually high medical expenses, this is our OOP expenses beyond the FSA)
Insurance - $217/month (auto, life, umbrella)
Transportation - $176/month (gas, registration, parking, public transit, uber)

Other Stuff
Charitable Giving - $153/month (we gave an additional $12k out of our DAF in 2020)
Pets - $410/month (this is unusual, two elderly cat end of life expenses in 2020)


Total Spending - $161,598 (includes pre-tax spending like health insurance, FSAs)

Savings

529s - $4800 (we haven’t prioritized this yet)
Cash savings - $18,000
Mortgage paydown - $91,000 (we refi’d and paid down the mortgage to conforming to get a better rate)
Backdoor Roths - $12,000
Taxable investing - $16,400

Total Savings - $177,200 (includes pre-tax savings like 401k)

Happy to answer any questions that may come up.

[wanderingback]

Thanks for sharing!
I actually would be open to sharing my numbers with a higher salary without an AE, however even though I've been on this board for 15 or so years, I do not know the breakdown of numbers like that, ha.
Do people just use software like mint (do people still use mint these days?) to track closely every month and get the breakdowns?
I am a competitive person, ha, so I'm sure it would be motivating to keep closer track of the total savings number and see it going up!

[bigdogbudget]

I use YNAB to get the breakdowns, although I used to use Mint. Because our income comes in weird chunks it's easier to see what is going in and out.

[imojoebunny]

Interesting. Thanks for sharing. I couldn't manage this level of detail. Good for you for saving so much of your income. We did that, too. We are retired, as of this year.

[fryjack2]

Similar HHI and my take away was wow! Her mortgage is so low! I just assumed you lived in HCOL as well. Ha.

wanderingback We throw everything we can on our one credit card that we actually use and we can see the breakdown of spending categories there.

A decade ago, I actually made a hand drawn chart with lines up to our down payment savings goal and colored it in as the money was put in our account. It hung on the fridge and was super motivating! H and I would challenge each other to see who spent the least each day/week.

OP, love that you have a DAF. We do as well and its been a nice way to keep track of donations.

[purplepenguin7]

thank you for sharing! Very interesting to see other people's budgets. I was also shocked at how low your mortgage is. Would you be willing to share your general location (if not, I understand). My H and I currently house hunting and we can't find anything with a mortgage less than $3k due to our high property taxes.

This might be a dumb question but I see you have included a nanny tax, but only pay for 2x a week pre-school.  Did I miss a nanny salary, or is that all included in the tax amount?

[bigdogbudget]

Mar 10, 2021 23:11:57 GMT -5 purplepenguin7 said:

thank you for sharing! Very interesting to see other people's budgets. I was also shocked at how low your mortgage is. Would you be willing to share your general location (if not, I understand). My H and I currently house hunting and we can't find anything with a mortgage less than $3k due to our high property taxes.

This might be a dumb question but I see you have included a nanny tax, but only pay for 2x a week pre-school.  Did I miss a nanny salary, or is that all included in the tax amount?

We’re in the Midwest, and we live in a place where tax assessments are a little weird/uneven. Our taxes are about $9k/year and we expect them to go up next assessment cycle. Paying down the mortgage also lowered our payment.

Nanny tax is for our household helper who comes 4 hours a week.

[bigdogbudget]

Mar 10, 2021 22:12:03 GMT -5 fryjack2 said:

OP, love that you have a DAF. We do as well and its been a nice way to keep track of donations.

Thanks. I want to expand our giving over time, but it took us a bit to begin scaling up donations to match our income.

[yupthisismyae]

Mar 10, 2021 17:31:11 GMT -5 wanderingback said:

Thanks for sharing!
I actually would be open to sharing my numbers with a higher salary without an AE, however even though I've been on this board for 15 or so years, I do not know the breakdown of numbers like that, ha.
Do people just use software like mint (do people still use mint these days?) to track closely every month and get the breakdowns?
I am a competitive person, ha, so I'm sure it would be motivating to keep closer track of the total savings number and see it going up!

I used my last paystub of the year to get the deductions to gross pay, like my taxes. 

Then with my takehome pay, I used my main monthly budget spreadsheet to get most of it, and then I use mint for the credit card breakdown. So the only accounts I have linked to Mint are my credit cards, and the only thing I use it for at all is to get a breakdown across multiple cards. If I only had one credit card, I would just use the year-end summary that most(?) cards make.

[aspentosh]

Thanks for sharing! I always love seeing these because I appreciate how others go about prioritizing their money.

Like you, we spend close to $10k in an average year for travel and we make less than half what you do.

[purplepenguin7]

bigdogbudget , thanks for the answer! i didn't want to quote in case you want to delete any details later on.

[ohgillian]

Mar 11, 2021 7:30:16 GMT -5 aspentosh said:

Thanks for sharing! I always love seeing these because I appreciate how others go about prioritizing their money.

Like you, we spend close to $10k in an average year for travel and we make less than half what you do.

This is true for me too, but I don't have kids that are daycare age anymore. We didn't travel much in those years b/c it was just so exhausting. 

[aspentosh]

Mar 11, 2021 11:57:10 GMT -5 ohgillian said:

Mar 11, 2021 7:30:16 GMT -5 aspentosh said:

Thanks for sharing! I always love seeing these because I appreciate how others go about prioritizing their money.

Like you, we spend close to $10k in an average year for travel and we make less than half what you do.

This is true for me too, but I don't have kids that are daycare age anymore. We didn't travel much in those years b/c it was just so exhausting. 

@@@
We still traveled when she was young because we only had one and she traveled very well (and slept, lol!). But they were all domestic (except a couple port stops on a cruise). Our first international trip was 2019 to Ireland and was amazing. She was 7.5 and did great.

Now she is 9 so we have to do a lot of our vacations around breaks, which adds cost. But having lived overseas for five years, it's a huge priority for me. Conversely, but husband didn't get on a plane until college and didn't go overseas until he met me (24yo). We have a lot to make up for, lol.

Also, in relation to the OP budget, we have no big medical needs, our dog is healthy (though did need hip surgery after we rescued her), etc etc etc. So that saves us a huge chunk each month.

[chpmnk1015]

thanks for sharing.. curious- how many kids.. just looking at the grocery budget so wondering.. i am around that w 2 kids..

[ellipses84]

I love looking at others budgets so thanks for posting!

I use Mint for tracking and although I don’t love it for monthly budgeting, the tracking by category / over time for expenses and income features are great!

[lolalolalola]

Here is ours. This was for 2020 which of course had some differences from 'regular' years. Regular years would have higher travel, transit & parking, house cleaners. It would have lower groceries, other household /kid spending, etc. 

It's also based on our after tax income, and doesn't take into account other payroll deductions. Our net pay is after DH's 12% of his gross salary in retirement, and my 18% of gross. These are not reflected below. We also have charitable deductions taken from my paycheck so the below donations are on top of our regular giving. 

We are in our mid 40's

Income:
$210,260 Paychecks

$102,795 Bonuses & LTI's

$46,511 Tax Returns

$359,566 Total Net Income


Expenses:

$5,245 Auto & Home Insurance

$6,678 Property Taxes

$48,000 Mortgage  (we doubled up our monthly payment- 6 years remaining) 

$10,205 Insurance (life (whole + term) and critical illness)

$5,637 Utilities

$4,880 Cable/ cell phone/ internet

$5,280 House cleaners

$928 Transit & parking

$4,034 Car Expenses

$28,343 Private School

$89,792 Investments / savings

$45,000 Mortgage prepayment 

$5,280 House cleaners

$928 Transit & parking

$1,558 Misc. Recurring Annual Fees

$3,164 Dining

$10,588 Misc. Kids

$5,781 General Household items

$992 Gifts (outside of kids and each other)

$11,779 Groceries

$2,476 Alcohol

$1,236 Pets

$13,800 Untracked Personal Spending

$6,110 Donations

$4,645 Fitness, Health & Beauty

$19,087 Furniture, Appliances, Home improvements

$18,119 Vacation/Travel

$359,566 Total expenses

[bigdogbudget]

Mar 11, 2021 19:35:30 GMT -5 chpmnk1015 said:

thanks for sharing.. curious- how many kids.. just looking at the grocery budget so wondering.. i am around that w 2 kids..

We have two kids.  I know people make much tighter grocery budgets work and I am impressed because that's with shopping mostly at Aldi and separating out alcohol.

[chpmnk1015]

Mar 14, 2021 18:41:00 GMT -5 bigdogbudget said:

Mar 11, 2021 19:35:30 GMT -5 chpmnk1015 said:

thanks for sharing.. curious- how many kids.. just looking at the grocery budget so wondering.. i am around that w 2 kids..

We have two kids.  I know people make much tighter grocery budgets work and I am impressed because that's with shopping mostly at Aldi and separating out alcohol.

Lol my alcohol is in the grocery budget too haha... so maybe thats the problem.lol

[kadams767]

lolalolalola, can I ask what the two insurance line items cover? It looks somewhat duplicative, but perhaps they are different types of home or auto insurance? Just curious, as that is a fair bit higher than I’m used to seeing.

[lolalolalola]

Mar 14, 2021 19:07:55 GMT -5 kadams767 said:

lolalolalola , can I ask what the two insurance line items cover? It looks somewhat duplicative, but perhaps they are different types of home or auto insurance? Just curious, as that is a fair bit higher than I’m used to seeing.

Sorry that was my error, I intended to combine them into one line but forgot to. I've fixed it now (I kept them separate but accurately described them). 

The $5.2K amount is home & auto.
The $10.2K amount includes $8K in whole life insurance + $1K in term life insurance, and $1200 in critical illness insurance.  The critical illness insurance is a return of premium policy so we should get $12,000 back at the end of the policy term (in 2 years). 


NTD: Also-  I am not a fan of whole life but DH pushed so I compromised and agreed to half the amount he wanted... I also made him put it in the insurance category in our budget - he wanted to lump it in with investments which would have reduced our overall annual investment goals. 

[wanderingback]

Mar 14, 2021 20:04:27 GMT -5 lolalolalola said:

Mar 14, 2021 19:07:55 GMT -5 kadams767 said:

lolalolalola , can I ask what the two insurance line items cover? It looks somewhat duplicative, but perhaps they are different types of home or auto insurance? Just curious, as that is a fair bit higher than I’m used to seeing.

Sorry that was my error, I intended to combine them into one line but forgot to. I've fixed it now (I kept them separate but accurately described them). 

The $5.2K amount is home & auto.
The $10.2K amount includes $8K in whole life insurance + $1K in term life insurance, and $1200 in critical illness insurance.  The critical illness insurance is a return of premium policy so we should get $12,000 back at the end of the policy term (in 2 years). 


NTD: Also-  I am not a fan of whole life but DH pushed so I compromised and agreed to half the amount he wanted... I also made him put it in the insurance category in our budget - he wanted to lump it in with investments which would have reduced our overall annual investment goals. 

What did you spend $18k on in travel in 2020? What’s your typical travel spend?

[lolalolalola]

Mar 14, 2021 20:50:56 GMT -5 wanderingback said:

Mar 14, 2021 20:04:27 GMT -5 lolalolalola said:

Sorry that was my error, I intended to combine them into one line but forgot to. I've fixed it now (I kept them separate but accurately described them). 

The $5.2K amount is home & auto.
The $10.2K amount includes $8K in whole life insurance + $1K in term life insurance, and $1200 in critical illness insurance.  The critical illness insurance is a return of premium policy so we should get $12,000 back at the end of the policy term (in 2 years). 


NTD: Also-  I am not a fan of whole life but DH pushed so I compromised and agreed to half the amount he wanted... I also made him put it in the insurance category in our budget - he wanted to lump it in with investments which would have reduced our overall annual investment goals. 

What did you spend $18k on in travel in 2020? What’s your typical travel spend?

We are usually around $25k or so.

We went camping three times, rented RV’s for each of those trips. We went on a ski trip in February before things locked down. We also own a 1/8 fraction of a vacation condo a few hours away, and this amount includes maintenance expenses. We also pre-paid for a ski trip scheduled in 2021.

ETA Oh, also- we had flights booked that were cancelled and unfortunately we got credits not refunds for those...

[sadlebred]

Thank you both for sharing your budgets. I'm always curious about what people who make different amounts of money spend it on.