If you live in a HCOL area do you live paycheck to paycheck?

[niccig]

Annie I suspect alot of people in your area/income bracket have had significant support from parents and other relatives - - in the form of down payment money, loans, child care, paying for private school, etc.

In that case all I can tell you is that you can't get behind alot of debt, with your income/expenses. The mortgage I think is a problem for you. I def. agree to look int refinancing . . .

Or they bought their home years and years ago and their mortgage is very low!! We have friends who bought 20 years ago and they're mortgage is under $1500. I know..crazy crazy low. Not sure what percentage of your take home your mortgage is but do look into a refi. It's made a HUGE difference to us dealing with DH's pay cuts and decreased our stress. Our home value has increased since then so hoping to refi again. In our area, there seems to be more sales in the Fall/early winter, so we're waiting for a few more home to go through escrow before we apply. The next couple of weeks we're prepping the house to appraise better - things like touching up paint, getting carpets cleaned. We need to do these things anyway, but hoping it helps a little for appraisal.

[abh5e8]

We could sell our house we think (this is based on my searching Zillow for comps...although the broker is suppose to search for us as well) for between $485k and $500k so after 6% standard realtor fees we would probably net between $11k and $25k on the sale of our home and that is assuming we wouldn't have to put any money into it in order to sell. Rental prices here are kind of high and if all goes well our mortgage payments (including impounds and pmi) will be about the same as rent of a 3 bed., 1 bath 1100 sq. ft. house about $2600 a month in our same area, and in some areas with great schools the rents are even higher. I know I sound like I am making excuses, but this is simply life for us. We were young and stupid (27, and 30) when DH took the job here, but DH had been out of work in a competitive field, area, and time (post dot.com bubble bursting) for almost two years so he took the best offer and the most stable offer he had received at the time. We had 6 months of our income saved when we moved (DH had saved the bulk of this money when he was with that first job out of college) but we opted to buy a house before prices went really crazy, but were still high, and we wanted kids so that money has been used in various ways so I could take extended maternity leave, covered a majority of DH's 25% pay cut he had for 3 yrs. during the CA budget crunch (he had 36 furlough days a year) and so we were able to make improvements to the house (new windows, new heater, new window AC units) as needed.

We also don't do crazy stuff like buy expensive cars, take expensive trips, buy expensive clothes, we chose a reasonable summer camp this year, and had it not been for work trip to San Diego DH had and my parents paying for myself and the girls to come and visit them we would have gone no where this summer.

Vludmilla, we make $160k combined gross so I am not making what my DH makes, if we were making equal salary that would be awesome. Yeah maybe I am in denial a bit about what we spend, but it doesn't really add up to anything really nice, it is just normal everyday stuff for us. We commute a lot too and have no public transportation options to get to work so we commute each about 12k miles a year, and our gas bill is probably high too, maybe $400 a month, and hence why we have a car payment (we were putting a ton of miles on our Pilot vs. our much smaller 01 Corolla because that was no longer comfy for two tall adults and two growing kids to go pretty much anywhere than church in).

We did not invest the 10k and we didn't take a vacation. We used it to pay property taxes, the income taxes we owed in 2013, a portion of DD1's summer camp, and yeah it really sucks that we didn't invest it and don't have 14k or so, but even if we invested it instead of using where we needed it instead of racking up credit card debt we wouldn't have been able to reach it without taking out a penalty so it would have become un reachable income too and we'd still be in the same spot as we are now.

You can invest in a regular taxable account and the sell anytime, no penalties or anything.

I would also take agood look at your expenses. You take home 8800 a month and have no emergency fund? I know you listed some expenses...

2600 mortgage
1000 private school
400 gas

That still leaves 4800 a month.
? Car payment

We don't live in a Hcol area, but we are saving more, with a family of 6 on half that much!

You can spend however you like, but i would not be comfortable with that level of spending and no savings. I age with the pps who said only you and your Dh can decide what is best for your family. But it does sound Luke from your first post you are unhappy with threw way things are.

[bigsis]

We do too We make less than you, live very frugally, but at the end of the day living in SoCal is crazy expensive. Our tiny house comes with a big mortgage payment per month. I can't complain though bc I hear other ppl's rent around here and it's about the same as my mortgage + property taxes.

ETA: I know ppl who make more than double what you make *and* live paycheck to paycheck.

[niccig]

You can invest in a regular taxable account and the sell anytime, no penalties or anything.

I would also take agood look at your expenses. You take home 8800 a month and have no emergency fund? I know you listed some expenses...

2600 mortgage
1000 private school
400 gas

That still leaves 4800 a month.
? Car payment

We don't live in a Hcol area, but we are saving more, with a family of 6 on half that much!

You can spend however you like, but i would not be comfortable with that level of spending and no savings. I age with the pps who said only you and your Dh can decide what is best for your family. But it does sound Luke from your first post you are unhappy with threw way things are.

I think she said they're hoping to get the mortgage to $2600, it sounded like it's higher now. Our mortgage was crazy high too. We bought at similar time to Annie and house prices were quite high and so was mortgage rates. Then when house values crashed, many of us didn't have 20% equity to refi when interest rates also dropped. We had to wait until house value increased enough then we managed to refi, but still had a heloc. We think we have 20% now and we've been in the house 10 years!!!

[amandabea]

I think the important thing is not if there are others struggling in HCOL areas (I know there are) but how you & your DH feel about your current living and financial situation. If you are both comfortable with it, then carry on. If not, then you should look at realistic things you can do to change it. Maybe you can sell your house, maybe you can move, maybe change jobs or cut expenses. But I think you should first have an end goal before you make any of those decisions. Once you decide what you want for your family lifestyle & financially then I think it will be easier to come up with a plan to meet your goals.

while I *feel* like we live paycheck to paycheck and that I never have extra money, that is because of how we budget money for savings and prioritize our spending -- mortgage, cars, vacation, retirement, emergency fund, 529, property taxes, etc. everything is in the budget. We live in a very HCOL area not too far from you, Annie. My DH doesn't work and I make a very good salary, but no matter how much my pay has gone up over the years, I still don't feel like we are ahead. Some of that is my personality because I feel we spend too much money on luxuries that are important to DH (nice cars, nice vacations, etc.). Newer SF homes in our neighborhood are well over a million dollars...actually even the older ones are...and these are 2-on-a-lot homes without yards! But the weather is great, the schools are good and I have a short commute. Ultimately, it's all about choices. I've had one pedicure in the past year, because I prioritize other things to live where we live.

[bisous]

We don't live paycheck to paycheck. But we're in debt. So maybe that is even worse! It is all student loans but it is daunting. We make less than any of the scenarios presented in this thread I think (just over 6 figures for what is essentially one income). We live in a very inexpensive place. I am realizing that since the birth of my DD I have been paying money because I don't have time. Things like eating prepared meals instead of from scratch, doing venue parties, new clothes for baby girl instead of buying used, etc. Nothing earth shaking but it adds up! We really want to be in a good place financially and I truly feel like I'm getting more on top of my crazy life. So it is back to cheap home cooked meals and parties at the park. We want to be financially sound and are willing to work hard to get to that place!

[blisstwins]

We are not paycheck to paycheck, but years ago we had a very different financial situation. My husband was just starting his practice and our income was SIGNIFICANTLY less than posted here, and I was home with our twins. Guess what? We were fine. We rarely ate out, I was great at finding free activities/museums, etc. Now, 7+ years later, I work and my husband is a partner at his practice. We make 5X what we used to and though we have savings, etc. it is no where near what you would expect at this income. I am still frugal-ish, but we do big birthday parties, travel more, and have the kids in a million expensive extracurriculars. When you live in a HCOL area things are more expensive and what you come to think of as normal is cracked out in other parts of the country. Still, we resist a cleaning person, garaging our car, and ordering out a lot so that we can save and do what we want, but it is hard. I do not feel well-off at all, though our income is high for most other parts of the country.

[essnce629]

We are in the valley and no, we don't live paycheck to paycheck. DH makes a pretty good salary as an attorney, but works crazy hours and hates it (is currently looking for a job in-house somewhere). But it's enough to allow me to stay home indefinitely as we have no family around to help out which is kind of needed if I was going to go back to working as a doula or start midwifery school. I grew up with a single mom who lived paycheck to paycheck and still does in San Diego (as do all of my best friends back home). DH is from Greenwich, CT and his family has money. His grandparents paid for all his private school education (including boarding school, undergrad, and law school) so he has zero student debt. His grandparents still gift him money every single year, the max they can without him being taxed, so that helps a ton since that just gets saved pretty much. We were able to put a large amount down on our house when we bought 3 years ago at the very bottom of the market (we watched our house sit for 10 months and drop in price by $100K). And now all the houses in our neighborhood, including ours, have gone up in price by $300K. Both our first cars were paid for by family so we didn't have any auto debt and our subsequent cars were paid for with cash. Our kids are in awesome small independent charter schools that are equal to private school in my eyes. We did spend $$$ for Montessori preschool for DS2, but that was pretty much our biggest expense and just for 2 years (since he was home with me for 3 years). We will most likely pay for private high school. I didn't grow up with money so I'm still really frugal and love to get deals. I hate to pay full price for anything and don't buy expensive things at all. Except for our 3 week Europe trip this summer for DH's brother's wedding, most of our vacations are pretty inexpensive road trips. DH and I are pretty low key with inexpensive tastes, but we do have money to spend on excellent quality food, private speech therapy for DS2, a weekly housekeeper and gardener, lots of extracurricular activities for the kids, and donate generously to the kids' schools without thinking twice about it. Our only debt is our mortgage and my student loan. We don't have luxury cars (Mazda3 and Mazda5 is what we drive) or anything like that. We are definitely not living above our means. And we chose the valley since it's a little bit more affordable than other areas in LA. Everything is within 2 miles of my house so I don't need to be stuck in traffic constantly.

Financially we do well, but socially I am usually like a single parent.

This is how I feel as well. DH doesn't get home till 10pm-midnight every night during the week. Even on the days he works from home he is sitting at his desk from 8am-1am usually. And on the weekends he never goes a full day without working either and usually spends half the day/night at his desk. So yes, there are definite trade-offs. If my mom lived nearby I would feel much better about the situation.

[TwinFoxes]

I make 66k gross, I added my net to DH's gross by mistake and I have now changed that above, but yes if I worked in my job in private sector I would make close to DH's salary, but the stress, 50 hr. work weeks (mandatory overtime) wouldn't be worth it to me.

Have you considered doing something like selling Scentsy or Thirty-one? If you can't move, or cut expenses, then you have to bring in more money. Or just live with the status quo, because it's not going to get less expensive in LA. My parents would work extra jobs now and again when I was a kid.

But maybe you're looking for commiserations more than solutions.

[elizamom]

I think the fact that you and your dh will both have a pension is a huge deal. Depending on what that amount is and your benefits, I think your gross income could be much more than it sounds. Benefits and pensions are a BIG DEAL. Sounds like you don't want to make any major changes like moving to a lcol area so the best route is to take a serious look at your monthly expenses and cut back.
Personally, we chose to move from a hcol to mcol area and I don't regret it for a second, ever. But it does not sound like that would be a good decision for your family/situation.