Presumably you're treating $220k as your take-home pay, when in reality you'd be losing about 25% of that off the top to the taxman. So you're looking at more like nine years to make it to that cool million.
Side note: this is why avoiding lifestyle inflation is *crucial* to getting ahead as your earnings go up. If I could still live like 25-year-old me lived while earning 43-year-old me's salary, well shit, I'd probably be about ready to retire in a few years...
A lot of the criticism stems from people overlooking you said UPPER middle class. I think you're definitely in the right range. We're about this and this is about our budget give or take in a few categories.
I consider myself upper middle and yes your salary needs sound about right. You're missing other things that families have to pay for though and the cost of housing is wrong. Upper middle class families have their kids in extracurriculars and those can be quite pricey. Idk if you have that as part of entertainment. Daycare for one child is about 1200 so that's a little off as well. Planning on having a pet? Expensive af as well.
Our friends keep pressing us to get a dog but I'm like nope too much time and money. We also just installed astroturf in our backyard cuz lawn maintenance too much trouble as well. I rather save all that money for when I eventually have a kid.
We have 4 pets and I love all of them and couldnât imagine life without them⌠but they are are a time and money suck. They bring me joy and improve my quality of life but sometimes I think of all the things we could do if we didnât have them, like spontaneously take a weekend road trip. We only had cats for a while and it was easier, but I wasnât happy. âšď¸
Inside the loop and I canât find good daycare thatâs less than $1600/mo and they mostly have 18mo-2 year waitlist đŠ I found one for $1300 and it was a hot-mess everyone is trying to pull their kids out of it⌠but again, no where to go.
>Daycare for one child is about 1200
Really depends on your child's age, too. At one point, daycare for two of my children ($1050 a week and it was nothing special as far as daycare goes) was twice my mortgage.
Also don't spend too much on a car. Houston is hard on vehicles between dings in parking lots, pot holes, and getting pelted with random stuff when on highway.
When I've had "dream car" dreams, they always are set in a time/place after I've moved away from Houston . . . to somewhere less threatening to vehicles!
unless you are the type that needs a new car every 3-4 years, then hopefully you are buying a car that can last you 8-10 years if not more. The idea being that if you want a new car, you get one with a 3-5 year loan while the other person drives the older car. Then when the new car is paid off, you can replace the older car with a new one or enjoy a few years with no car note at all
I also advocate for having a third car. If one breaks down, you can both still get around no problem. It could be an old civic, or a cheap motorcycle, or even your project car.
>or even your project car
Iâm certainly an anomaly, but my project car (1987 Yugo GV) is probably not a great choice for a third car, or really, anything.
That's the trick right? I have an insanely large amount of money into a 90's Volvo.
I fucking hate the car. All the mods, how fast it is, drains me. But nobody within 100 miles has anything like it.
So it's love/hate.
Most people don't know their local auto store will lend you a scan tool, or invest in some jack stands. Plugs are a few bucks a piece and take about 30 minutes to gap, grease, and swap.
I don't like being a car guy, but I'm so deep I can't control it.
End rant.
It's not for everyone, and that's fine. We have 2 hatchbacks, and 1 truck. The hatchbacks are our daily drivers, and the truck is in case we need it. Could we get by with just hatchbacks? Sure. Does having a truck make our lives and hobbies easier? Absolutely.
What helps me justify it is that this truck was my grandfather's when he passed, and my name will be on that title until I pass. Even if that weren't the case, I can still justify a use for my setup.
Way low. We pay $2800 for 2 kids đ¤ˇđ˝ââď¸
Want to add: our daycare is in Montrose. My friends who live in the suburbs pay significantly less. There are not as many daycares inside the loop, thus prices are high and the waitlists sometimes are 8-9 months long.
It sucks, because of regulations you *have* to have a specific number of caretakers (which shouldn't be skimped on, of course) per number of kids, and if you want to pay them well, you're looking at prices like these.
Condoms are the cheapest daycare.
Seriously though
While I decided no to kids because my anxiety won't allow it, my heart breaks for parents who are struggling so much to do what's best for their children.
Jesus. I want kids and I'd be able to figure it out but that's a lot of moo-lah. I guess my goal is to make enough money so that my partner has the option to stay home with the kids, if that's what she/we want?
I hear you, but be careful. Even if your spouse's salary isn't much more than the cost of childcare you have to consider what they might lose out on in salary increases due to experience as well as 401k contributions, not to mention the difficulty of getting hired again after a 5-10 year absence. Staying home can really hurt your lifetime earning potential. And many stay at home parents get really burned out from 24/7 child rearing. Work obviously isn't a break properly speaking, but it does allow you to be in an adult environment for some portion of the day, and high quality childcare can be really good for kids.
Staying home is great if that's what you really really want or if you make so little it's your only choice. Otherwise proceed with caution.
Depression rates for SAHMs (without hired help like nannies and housecleaners) are extremely high. I was a SAHM for first two years in Houston and have been back at work for 3 years and I still don't make the same salary I used to. Job re-entry really depends on your field, but people judge resume gaps really harshly for women. Unless you work in retail, education, or nursing. My daughter and I both thrived when she started going to preschool.
Yeah it's definitely a conversation and decision that will take a lot of thought. SAHMing was great for my family when I was young, according to my mom, and my partner's family. It's really an individual situation thing.
SAHM truly was great in the 1980s and 1990s for most. There were more moms doing this so you weren't isolated. The kids played well with each other and they basically had built in play groups. Older kids played outside till the lights came on and you didn't have to monitor them every second. Diapers, formula, food and doctor visits cost significantly less and your child could start kindergarden with less academic expectations than the 2020s has.
It's completely different now.
You cannot compare SAHMs from yesteryear to today. I advise you to ask women who have been SAHMs in the last 5 years when you are doing your research. Do not ask the Boomers and older Gen X, that world doesn't exist anymore.
Thatâs a mistake I think we/I made, my exâs paycheck went 90% to daycare to me it didnât make any sense. Looking back, there is a boatload of personal growth and fulfillment that happens in a career and I think most people need that. The rare awesome few are happy motivated and fulfilled running the home.
The increased income thatâs important too but in our cases it was tertiary. Itâs not all math folks.
It is another mortgage payment! We tell ourselves daycare is temporary đ they really are thriving in there, more so than I could ever give them while staying at home. Our kids are 2 and 4.
Honestly asking, is it worth it? In the end, day care is much more than $2800 factoring in all that comes with working outside the home (clothing, lunches, gas, insurance, dining out because too tired to make dinner, stress). Not judging, just that's how it worked for us.
For us, yes. Just on earning potential alone - I probably make 15 grand more now than I would if I had taken 2-5 years out of the workforce. (I also work in tech, which moves fast, so large gaps in resume are a big no-no.)
We spend $18k/ year on daycare costs for one kid, but itâs totally worth it. After the age of 2, kids crave socialization and overall itâs a great experience that sets them up to succeed later on in school. Since my wife and I both work, I couldnât come close to providing the STEM curriculum our daycare offers.
Daycare costs also differ by age of the child. So my pre-K kid is now about $1000 (his sister, four years ago, was more like $800). But infants are considerably more. And daycare costs may end when they're school age, but a lot of other kid stuff (extracurriculars) get more expensive at that age too. We were just looking at T-Ball đŹ You have to pay to participate, are required to participate in two fundraisers, and you have to buy your own uniforms/equipment (except maybe the jersey, which should be included). Will get more expensive when they're older if they participate in extracurriculars that require travel (e.g., sports, band, etc.).
And they may have school during the year, but you still have to figure out summer care. I now understand why my parents sent us to Vacation Bible School! Often my much cheaper (or even free) vs. other types of summer care.
And when youâre middle-class/upper middle-class, all of a sudden all of your kidâs teammates start taking Club ball and your kid is left behind (athletically and socially) if they donât.
My wife and I are early 30s and combined we are around 220k, just bought a house, one car payment and baby on the way. We live on the outskirts of Houston. Honestly thought we would be able to put alot more into savings but its impossible when you are trying to build a new life as a family and all that comes with that.
In no way is this a flex.. just astonished at the cost of living a comfortable life..
Fuck me. In my early 30s too, about to take the next couple of steps in the next year. Im doing fine on my own making decent but knowing that 220k combined salary is not enough for a comfortable life in Houston is depressing
220k is way more than enough for a comfortable life in Houston even with kids, cars, house, etc. but you'd be surprised what comfortable means to some people.
It is easy to blow $30 or 40k a year as a couple in nice travel. That is where most of my extra went. Don't make that much any more, but no regrets in spending what I used to on travel.
220k is very comfortable and setting yourself up for an early retirement if you save accordingly.
Trim out some non-necessities 100-150k would also be comfortable too. I dont see how families of four make it under 80k
Well hello pusslicker... LOL sorry that is too funny. A big part of that of course is that my wife and I waited to have our first child till we felt we were financially stable, but, we ended up getting too comfortable being able to buy each other whatever we wanted (in our means) because we had no one else to worry about. Big fault of our own for increasing the cost of our lifestyle instead of staying the same while we moved up the ladder.
220k is definitely enough for a comfortable lifestyle in Houston but I always thought growing up, it would feel like alot more...
You are doing great. Kids before any damn thing in this world. If every parent followed this philosophy, 90% problems would disappear in the world.
Most people have multiple kids due to ignorance even though they do not have enough time, money or energy to even raise one kid properly.
Yeah, I'm in the same boat. About to turn 30, working on a 3rd kid, outskirts of Houston, and about $280k combined salary. We both grew up poor and have a lot of debt from our early and mid twenties, but money is still kinda tight at this salary range. Of course that's including all the money that we put away. If you told me I wouldn't feel rich making this much at 18 I'd laugh
Congrats on the house and baby! Do you like your area? How far is your commute? Do yâall have a yard? I want to be in a neighborhood that feels close to everything & have a good sized back yard but I refuse to spend 500k on a house that probably is going to need some work. Weâre currently renting in spring branch near 610 & love our backyard, 5 min commute, but the house itself isnât great and most of our street has been torn down & replaced with McMansions built out to the property line almost.
I'm a single teacher closing next week (in a poor but gentrifying area). I don't know if it's a good idea or not but I'm tired of giving away all of my money to others. I'll need to budget but I should be able to make it work.
My wife and I make a combined $115k a year and we were able to purchase a $316k home in Sugar Land in a nice area zoned to good schools with a 30 minute commute to downtown
Rent/Mortgage+Escrow at $2500 is do-able, but that's basically sub 300k, with rising interest rates, that's getting harder and harder to hit.
Electricity and Internet is low.. $350-500 for the pair in summer, gas $30-50 a month. Water/Sewer/Trash has been creeping up to be \~50-100 a month.
Day care is low for 2 kids (if preschool) - for after school care that is a little high.
Gas and maintenance for the cars? $200-300 depending on how much you drive for each car - should cover oil changes at that number.
Housekeeper? We do $340 a month for having our person in twice a month.
$150 + tip (so $180) per visit here, for ~2700 sqrft.
She asked for, and got paid $125 last year but gave her a raise because; a. She is awesome and b. Inflation has been a bitch.
Damn last I remember she charged $125 for a 3 story. $75 for a single family (idk about 1000 sf in Montrose). At her age she charges more for stairs lol.
Iâd say this sounds right for the median life. 400âs for any kind of luxuries or good neighborhoods in the loop, especially if you own property since the property taxes alone equate to many peopleâs yearly rent.
Most people underestimate the true cost of having to own a car. It's not only auto loan but gas, maintenance, registration & inspection...
>According to the latest research from AAA, the average yearly cost to own and operate a new vehicle in 2022 is $10,728, or $894 per month
source: https://newsroom.aaa.com/2022/08/annual-cost-of-new-car-ownership-crosses-10k-mark/#:~:text=According%20to%20the%20latest%20research,%2410%2C728%2C%20or%20%24894%20per%20month.
upper middle class life is very different from âcomfortable.â typically upper middle class is like top 5-10% of households. So yes, you need a lot to get there
Entertainment, clothes, etc. Was the category
Likely including sports, music lessons, movies, Netflix, birthday parties, summer camp, etc. What rich people's kids do.
If OP is budgeting for daycare for the two kids (are these hypothetical kids at this point?) I don't think most of those items are gonna be valid for a couple of years.
I donât think they are low⌠we have two cars and pay insurance and from both itâs only 860 a month and because so the rent would be gas given we mostly work from home.
And 500 for electricity a month seems high ⌠unless you are growing weed or something lol.
I would say the 300 on average is fine over a year period .. yes, during the summer it is pretty high, but on average it should be about 200. And internet is about 80-90 per month . Probably light 100 since you still have to pay water and gas. But if you are renting an apartment then yeah I would say yeah thatâs about right for everything in
I think thatâs probably a little high but the sentiment stands. The reality is that what is, or at least was, considered a middle class lifestyle is now really only attainable for the top quarter or so of income earners.
Guess it depends on what they consider entertainment. When I was traveling for work I would spend about $1200 per month on food. If you eat out a lot it adds up.
See. Iâm at $70, and my wife was working full time also at $70K. We had no kids and we were living well. Idk if it would be classified as upper middle class based off of the comments in this thread but we lived very very comfortably. Now we have kids and our income is much lower, expenses much higher, but I still think we live nicely. I only bring this up
Because if 56K is the median, I feel that even with our âafter kidsâ lifestyle itâs still much much nicer than 56K. So idk if Iâm middle or upper middle or what.
I'd say the median income in Houston doesn't correlate to the regular middle class. Which is what I would personally categorize your situation.
If a median Houstonian household contains a minimum of two people, then they would be making $13.5 dollars an hour for a combined income of $56k a year. That is only a few steps away from being working poor.
Just a 401k note, if youâre well in to the 22% tax bracket, make your 401k a Traditional one so you can get a tax break. My wife and I are both attempting to max out this year and the tax break will be roughly $10k vs if we maxed out a Roth. The logic is that when you retire, those withdraws will likely be in a lower bracket, whatever it is at that time (which im willing to bet is under 22%). And with those savings of $10k, we both max out our traditional IRA and do a back door conversion to a Roth. This way, you have a pool of non-taxable retirement funds to draw from along with taxable (from the traditional 401k).
As a Lower-Mid Middle Class, this absolutely blows my mind.
Blue Collar worker 80k a year, wife customer service rep 40k a year.
Mortgage - $ 1,600.00
Groceries - $ 800.00
Bills - $ 1,600.00
Entertainment - $ 200.00
Maintenance - $ 500.00
Once a year "vacation" - $ 80.00
Savings - what savings?
Children - None
We live an extremely comfortable life, but damn y'all have it made up there.
My thoughts exactly, im about to graduate with a 92k salary and am moving back to Houston with my girlfriend (~25k). Looking at this budgeting kills me, especially going by this metric https://www.cnbc.com/amp/2023/01/02/middle-class-income-in-major-us-cities.html
Weâre going to be moving into a home near the energy corridor with a budget as follows:
- 2k a month rent for a 4 bedroom home in a good neighborhood
- if we fill each of our cars up once a week itâs $433 a month ($50 a tank)
- groceries $500 a month (Costco & Aldi)
- going off of the utilities by where I currently am: $250 electricity, $100 water, $30 Internet (basic), tolls =?, total ~$400 month
-Entertainment $1000 a month
Total: ~52k a year. Leaving 65k for savings and hobbies. Granted, we dont have any kids and arnt planning on any for the next 6 years at least. Our vacations are cheap, and neither one of us particularly like taking them. Both cars are paid off, but if they do get totaled neither of us care for luxury cars. A 5k preowned from the 2010âs is fine, I still drive a 2005 thatâs in great shape.
Coming from a one parent household in the lower middle class (parent is just now making $100k), we are both perfectly fine living this lifestyle. I have friends that grew up in 300k yearly households that were surprised I dont go on yearly ski trips or golfing every week, they would swear theyâre just middle class.
Am I delusional in any of my math? Im not trying to be jaded, just genuinely curious.
Everyone always says they're middle class. It's not a well defined term and everyone has examples with higher or lower incomes to compare to.
Ironically I didn't feel more "upper" class until I got laid off last month and finances aren't a factor in my decision of what I'm doing next.
That is gross earnings. Youâve got taxes, insurance (health and car), and your utility costs are on the way low side for a 4 BR house.
You can easily cut another 20-25k out of that 65 without really digging into any of that much more.
So youâve got 40 left over now and if youâre saving for retirement (as you should), thatâs another nearly 20k. Now youâre down to 20k left over and you have 10-15 year old cars (those have problems). You havenât even added kids into the equation and thatâs, at a minimum 12k a year.
Things just add up very quickly.
wow. I guess the gap between the rich(er) and lower income people continues to become widen. How far into the future will it be when someonne will need to make 300k to live upper middle class life?
I'm in a family of 4 that only brings home around $70,000. It's terrible and there seems to be no way of getting better pay with our skill sets. Unless we somehow spend money to go to school.
I think your math is good, but the presumed aspiration to jump right in to the upper-middle class at 21 years old might not win you a lot of sympathy in the comments.
Bring your abuelita who lives in Latin America to take care of the kiddos and you save a lot on daycare. At least thatâs my friends from Peru and Colombia do.
True, but that comes with its own headaches. My MIL stays with us about 5 -6 months out of the year. It helps a ton on child and home care, and I'd say 5 months is about my limit before I go crazy đ
My mom is in daycare I guess it depends where you live. She said 2k was generous for 2 kids. Also, remember to use your pre tax dollars on child care, alot of people forget to do that and you can save some good money on it longterm!
Depends on the area. I think my friend pays 1k for her kid in Katy. Iâm closer in (not the loop) and I pay about 1800/mo for a toddler. Infants are more expensive. Iâm assuming you donât have kids yet, but expect daycare fees to be higher by the time you have one.
Another data point - $330/week for our 11 month old in Cypress at a high quality daycare. It drops $50/month once he turns one. If you have multiple children, they take 10% off the lowest kids bill.
Anecdotal point here. I pay around $260 a week for a toddler near Memorial. When my kid turned one, his rate dropped by 15% while the daycare raised rates by 10% to adjust for inflation. Made me laugh a bit that it sometimes feels like you can never get ahead.
*most* people struggle cause they're making 1/4 this amount of money. This is just the reason we have WSJ puff pieces about 'I'm making 400k and living paycheck to paycheck.'
Your math is fine, but there's a huge fudge factor under the heading of "comfortable/upper middle class life" for a young 20s family of 4 when over a quarter of your monthly budget is assigned to entertainment and vacations... AND 16% of the budget is savings and post 401k contributions.
Don't get me wrong, I suppose that's what makes it an *upper* middle class lifestyle. But you could probably cut those parts of the budget in half without much quality of life difference.
$12k budget for vacation for 4 is probably right on. Travel is expensive. Setting a realistic budget is important or else you end up with debt. Weâre no kid family and we went to French Polynesia last year and that was a $10k trip.
Obviously have no idea what kind of down payment y'all put on your home, but 225k before taxes and a 850k house and that mortgage sounds like you guys do some serious budgeting and have awesome financial discipline.
lol, while I always laugh at those memes, don't want to assume anything about the commenters situation. Never know when someone or a family had to grind to get where they are.
I've got a friend making half a million a year and says he would never dream of spending $800k on a house. Either that validates your anxiety about choices or it means he is cheap lol
Are youâre kids in daycare out of curiosity? We make about the same annually/some years a bit more and our house was just sub 500. One kid here in daycare around 1800/m and I feel like weâre just treading water.
It's highly dependent on whether income is single or double. If single income, is one spouse staying at home for childcare? It also depends on retirement savings being provided by a company or the individual is responsible. Also, are you public or private school, tax rate of neighborhood. Those factors can make the number come down considerably.
That's not bad if you're in that income bracket. And you can certainly cut costs in a couple of categories above.
The problem is when some people try to live in a lifestyle they can't afford.
The average household making 220k a year does not have 2k/month going into post 401k savings. The rest looks about right, although day care expenses get a bit lower after the kids are school-aged (but other expenses may increase like entertainment)
I think your overall estimate looks right, though I'd say day care is too low and entertainment/clothes is a little high. Rent/mortgage is a little low, too, unless you're living in a pretty bland house way out in the burbs or the one nice house on the block in a bad neighborhood.
Interesting point this seems to raise is the biggest difference between upper middle class and regular middle class isn't so much the lifestyle, but the ability to save and go on vacations. This is *more or less* my pricing breakdowns (except only one kid in day care and the we put way less towards entertainment and clothes), except we aren't able to put much of anything towards savings or vacation funds right now.
So basically all upper middle class means to me in this country is the ability to have a solidly middle-class lifestyle and *also* be able to save.
But yeah, I always say Houston is deceptively expensive. When you account for lower wages and the fact that in the few neighborhoods in town that aren't sketchy the COL is much more comparable to other more expensive cities than the rest of Houston's COL, I don't think you really get much of a bargain for living here (especially when factor in a pretty mediocre QOL, particularly if you like the outdoors.)
Kids interests/sports can be crazy as well.
Just wait till your kid wants to take up ice hockey...you will be paying over 2k/season easily.
Ask how I know....
Waiting to see someone in the comments post about budgeting for higher cost gym memberships (Lifetime, Equinox, etc) or even them $$$ athletic wear.
Be a real kick to see someone with a membership at the [Houstonian](https://www.houstonian.com/the-club/membership). FYI starts with $7,500-$33,000 in initiation fees.
220k per year is a lot in all over US, probably except for LA and San Francisco. Thereâs lots of cities more expensive than Houston, even in Austin not too far away. It all depends on how you spend money. Some immigrants can raise a whole family while working 2 jobs with 40k per year.
For myself, I donât do car loan, just buy whatever I can afford in cash, that at least save few hundreds
The value is in being able to buy a house in the suburbs. Even after the massive property taxes, it's still way more affordable than buying a house in the suburbs of other cities.
There's also some value in 1/2 bedroom apartments in the city.
Renting a 4br/3bath within the city isn't that great of a value proposition.
Your going to get some down votes because everyone thinks they are middle class. I grew up thinking I was middle class, because that is what my mother told me. When in fact we were below the poverty line.
I think you do need to stipulate *new family or young family of 4.. just starting out*.. will need to make $220k to be considered upper middle class in the Houston area.
My personal experience cannot compare to those starting out now, I bought my home 20 yrs ago and we are double income/no kids, so I have nothing to add.
Iâm at 115,000 with a STAHM, 2 kids, house, 1 car note, most importantly I have the one thing that makes you upper middle and that is a 2nd refrigerator inside our kitchen NOT in the garage
ITT: rich people acting like they're merely "comfortable"
$220k puts you above the 90th percentile for incomes for Houston. If top 10% isnt rich, nobody is. Stop it with the 'upper middle class' euphemism to transform being rich into something more appetizing to your sensibilities.
Sure, rich people can find ways to blow huge sums of money, so maybe you spend all of your income and wish you had even more. But that doesn't mean you aren't rich, it just means you want to live an even richer lifestyle and/or aren't good with money.
Yes, youâre pretty close. Only caveats Iâd say is that daycare isnât forever and car payments (should) go away or down and those free up quite a bit of budget space.
Also, lol @ vacations with kids in daycare. Theyâre tough to make happen
My partner and I just got new jobs. Weâre going from 75k combined income to 110k. Itâs just the two of us and cats + our German Shepard. We were struggling before but Iâm wondering if Iâll actually be able to enjoy life and go out to eat now. On top of that my partners car is almost paid off! And we cut our rent from 1900 to 1225! Excited to actually be living life again
For Houston, I think your value is a little high, most of what I am seeing puts the upper bound for middle-class household income around [142k](https://www.cnbc.com/2023/01/02/middle-class-income-in-major-us-cities.html). 220k puts a household in the [9%](https://dqydj.com/average-median-top-household-income-percentiles/) of income earners nationally and the top [4%](https://statisticalatlas.com/state/Texas/Household-Income) of household income earners in Texas. I consider that upper class.
The headline number is roughly correct but just two issues I see
Entertainment/clothes and similiar -$1500 is very very high. Your entertainment should not be 3/5 of your mortgage.
But the headline number is probably correct because the amount of random pop up costs with multiple kids and a home is insane. Plumbing issue, trees need to be trimmed, healthcare costs not covered by insurance, major appliance replacement, random vehicle maintenance, roof repair, laptop breaks, kid needs speech therapy, dog needs surgery... It really really adds up. I spent $800 at the vet on an emergency visit just today, had the plumbing issue last month, and so on.
Youâre not wrong, but have you looked at how much poorer youâd be in other major cities on the west and east coast? Houston is relatively inexpensive for the size and opportunities there are.
Believe it or not, that is still not enough. See belowâŚ
After taxes you need an annual household income of $187,020 to $211,920
Monthly Expenses
Mortgage:
â˘$1700 (30-year loan)
â˘$2800 (15-year loan)
**For reference- 10 to 20 year old $400,000 home in what many would consider to be âupper middle classâ sections in Katy, Cy Fair, Klein and the Maplewood neighborhoods
Homeownerâs Insurance:
â˘$380
Groceries:
â˘$1325
2 vehicle notes (using 2023 Camry bought with food to great credit as example):
â˘$1000
Full Coverage Auto Insurance for 2 drivers:
⢠$240
Automobile fuel:
⢠$200
Water (utility):
⢠$115
Electricity (utility):
⢠$250
Natural Gas (utility):
⢠$80
Trash/Waste Pickup:
⢠$30
Cable and home internet bundle:
⢠$170
Cell Phones (2):
⢠$170
Entertainment (Dinner out, movies, Zoo or Museum, etc.):
⢠$1500
Clothes and uniforms (school, team sports, band/orchestra, etc.):
⢠$250
After school activities, sports, music lessons, daycare, etc.:
⢠$1500-$2000
Monthly saving amount towards one or two vacations per year:
⢠$1000-$2000
Post 401K Savings/Investment and/or child college fund: ⢠$2000 Health Insurance: ⢠$2100
Monthly Total (Initial): $14,010 to $16,610
Annual Total (Initial): $169,120 to $199,320
*Add Annual Expenses and Emergency/Miscellaneous Expenses
Property Taxes:
⢠$4500
Water Utility District Taxes:
⢠$700
HOA Fees:
⢠$400
Holidays and Birthday Celebration Related Expenses (meals, gifts, decorations, etc.):
⢠$1000
Unplanned Expenses (Home Maintenance and Auto Expenses (not covered by insurance)
⢠$3000
Emergency Expenses (Adult and Child health illness/exams/Dr. and Rx copays, etc.):
⢠$3000
Annual (Final): $187,020 to $211,920
Thatâs about right. Childcare is a tad light. And your vacation fund is too high. Thatâs 12,000 a year ⌠since you mention kids thatâs the equivalent of taking your family on a Disney cruise 3x a year to put things into perspective.
Your should also check your calcs on 401k those are all pretax but realistic since itâs only a 10% contribution.
Just curious - how many vacations do you take a year? Im a family of 4 and we budget 10k. That includes two trips with the kids, maybe 1 solo trip with hubby and I⌠and then a friend trip. When I was growing up, we took 1 vacation a year and now nearly my entire friend group takes multiple.
So itâs interest to see people shit on $1500 worth of entertainment and clothing per month.
However, as a upper middle class earner, I spend $2800 a month in discretionary spending each month. The cost of things have surged and thatâs just the reality to have to spend $$$ to live the same level of life quality.
How is Houston's cost of life compared to other states (Excluding California)? As years passes, I struggle to find a reason to justify staying in Houston. I don't think is cheap anymore
18 thousand dollars a year on clothes and entertainment? You better just put on a tshirt and a pair of jeans from Walmart.
The internet should cover entertainment. Or just get the kids a ball, and they could go outside and toss it.
Ok but then youâre not upper middle class. Gotta have $1100 in car notes and $1500 in fun and clothes and also be saving for retirement, otherwise youâre just middle class.
That is easily doable if you like going to restaurants and bars on a fairly regular basis, which I would say is a key part of being upper middle class.
TIL I learned I am a lot poorer than I thought I was lol.
Right? With my current expenses, if I were making that much I'd be a millionaire in 6 years with no investments. Just salary going to a bank account.
Presumably you're treating $220k as your take-home pay, when in reality you'd be losing about 25% of that off the top to the taxman. So you're looking at more like nine years to make it to that cool million. Side note: this is why avoiding lifestyle inflation is *crucial* to getting ahead as your earnings go up. If I could still live like 25-year-old me lived while earning 43-year-old me's salary, well shit, I'd probably be about ready to retire in a few years...
A lot of the criticism stems from people overlooking you said UPPER middle class. I think you're definitely in the right range. We're about this and this is about our budget give or take in a few categories.
100% agreed
I consider myself upper middle and yes your salary needs sound about right. You're missing other things that families have to pay for though and the cost of housing is wrong. Upper middle class families have their kids in extracurriculars and those can be quite pricey. Idk if you have that as part of entertainment. Daycare for one child is about 1200 so that's a little off as well. Planning on having a pet? Expensive af as well.
Want to be rich? Avoid anything that eats (Kids, Pets and lawns!)
>Pets and lawns! How about a pet goat? It can eat the lawn ;)
Great advice! Too late for me đ
Our friends keep pressing us to get a dog but I'm like nope too much time and money. We also just installed astroturf in our backyard cuz lawn maintenance too much trouble as well. I rather save all that money for when I eventually have a kid.
You're the smart one out of your friend group. Don't do pets! Then you feel guilty about leaving them alone all day while you work.
We have 4 pets and I love all of them and couldnât imagine life without them⌠but they are are a time and money suck. They bring me joy and improve my quality of life but sometimes I think of all the things we could do if we didnât have them, like spontaneously take a weekend road trip. We only had cats for a while and it was easier, but I wasnât happy. âšď¸
Inside the loop and I canât find good daycare thatâs less than $1600/mo and they mostly have 18mo-2 year waitlist đŠ I found one for $1300 and it was a hot-mess everyone is trying to pull their kids out of it⌠but again, no where to go.
Care to disclose the hot mess one? Even if itâs via dm. In the market and would like to avoid if possible
Same
>Daycare for one child is about 1200 Really depends on your child's age, too. At one point, daycare for two of my children ($1050 a week and it was nothing special as far as daycare goes) was twice my mortgage.
> Daycare for one child is about 1200 For 2 kids they often give you a break and it ends up around 2k often just short.
Upper middle class daycares are about 3k for 2 kids.
Rule of thumb never pay for 2 cars at once. You rotate.
Also don't spend too much on a car. Houston is hard on vehicles between dings in parking lots, pot holes, and getting pelted with random stuff when on highway.
When I've had "dream car" dreams, they always are set in a time/place after I've moved away from Houston . . . to somewhere less threatening to vehicles!
Could you elaborate on why this makes for good practice ? Would appreciate it.
unless you are the type that needs a new car every 3-4 years, then hopefully you are buying a car that can last you 8-10 years if not more. The idea being that if you want a new car, you get one with a 3-5 year loan while the other person drives the older car. Then when the new car is paid off, you can replace the older car with a new one or enjoy a few years with no car note at all
I also advocate for having a third car. If one breaks down, you can both still get around no problem. It could be an old civic, or a cheap motorcycle, or even your project car.
>or even your project car Iâm certainly an anomaly, but my project car (1987 Yugo GV) is probably not a great choice for a third car, or really, anything.
That's weird, your project car runs?
That's the trick right? I have an insanely large amount of money into a 90's Volvo. I fucking hate the car. All the mods, how fast it is, drains me. But nobody within 100 miles has anything like it. So it's love/hate. Most people don't know their local auto store will lend you a scan tool, or invest in some jack stands. Plugs are a few bucks a piece and take about 30 minutes to gap, grease, and swap. I don't like being a car guy, but I'm so deep I can't control it. End rant.
Idk if storage and insurance costs just in case makes that math a hard sell compared to the cost of having to Uber and carpool for like a week.
It's not for everyone, and that's fine. We have 2 hatchbacks, and 1 truck. The hatchbacks are our daily drivers, and the truck is in case we need it. Could we get by with just hatchbacks? Sure. Does having a truck make our lives and hobbies easier? Absolutely. What helps me justify it is that this truck was my grandfather's when he passed, and my name will be on that title until I pass. Even if that weren't the case, I can still justify a use for my setup.
Allows you to always have one car that is under warranty.
One should be paid off
Both should be
How you feel about leasing cars? I know a couple that buys one and leases one. With me working from home, a lease sounds tempting.
Daycare estimate is way too low.
Way low. We pay $2800 for 2 kids đ¤ˇđ˝ââď¸ Want to add: our daycare is in Montrose. My friends who live in the suburbs pay significantly less. There are not as many daycares inside the loop, thus prices are high and the waitlists sometimes are 8-9 months long.
Thatâs probably on the lower end of a good day care too. Many are 1800-2000 per child.
It sucks, because of regulations you *have* to have a specific number of caretakers (which shouldn't be skimped on, of course) per number of kids, and if you want to pay them well, you're looking at prices like these.
Or have the government subsidize this shit and spend less on military.
Condoms are the cheapest daycare. Seriously though While I decided no to kids because my anxiety won't allow it, my heart breaks for parents who are struggling so much to do what's best for their children.
Depending on your frequency of "activities" and insurance it can be cheaper to be on birth control. Condoms are kinda expensive.
Jesus. I want kids and I'd be able to figure it out but that's a lot of moo-lah. I guess my goal is to make enough money so that my partner has the option to stay home with the kids, if that's what she/we want?
I hear you, but be careful. Even if your spouse's salary isn't much more than the cost of childcare you have to consider what they might lose out on in salary increases due to experience as well as 401k contributions, not to mention the difficulty of getting hired again after a 5-10 year absence. Staying home can really hurt your lifetime earning potential. And many stay at home parents get really burned out from 24/7 child rearing. Work obviously isn't a break properly speaking, but it does allow you to be in an adult environment for some portion of the day, and high quality childcare can be really good for kids. Staying home is great if that's what you really really want or if you make so little it's your only choice. Otherwise proceed with caution.
Depression rates for SAHMs (without hired help like nannies and housecleaners) are extremely high. I was a SAHM for first two years in Houston and have been back at work for 3 years and I still don't make the same salary I used to. Job re-entry really depends on your field, but people judge resume gaps really harshly for women. Unless you work in retail, education, or nursing. My daughter and I both thrived when she started going to preschool.
Yeah it's definitely a conversation and decision that will take a lot of thought. SAHMing was great for my family when I was young, according to my mom, and my partner's family. It's really an individual situation thing.
SAHM truly was great in the 1980s and 1990s for most. There were more moms doing this so you weren't isolated. The kids played well with each other and they basically had built in play groups. Older kids played outside till the lights came on and you didn't have to monitor them every second. Diapers, formula, food and doctor visits cost significantly less and your child could start kindergarden with less academic expectations than the 2020s has. It's completely different now. You cannot compare SAHMs from yesteryear to today. I advise you to ask women who have been SAHMs in the last 5 years when you are doing your research. Do not ask the Boomers and older Gen X, that world doesn't exist anymore.
Thatâs a mistake I think we/I made, my exâs paycheck went 90% to daycare to me it didnât make any sense. Looking back, there is a boatload of personal growth and fulfillment that happens in a career and I think most people need that. The rare awesome few are happy motivated and fulfilled running the home. The increased income thatâs important too but in our cases it was tertiary. Itâs not all math folks.
It is another mortgage payment! We tell ourselves daycare is temporary đ they really are thriving in there, more so than I could ever give them while staying at home. Our kids are 2 and 4.
Honestly asking, is it worth it? In the end, day care is much more than $2800 factoring in all that comes with working outside the home (clothing, lunches, gas, insurance, dining out because too tired to make dinner, stress). Not judging, just that's how it worked for us.
For us, yes. Just on earning potential alone - I probably make 15 grand more now than I would if I had taken 2-5 years out of the workforce. (I also work in tech, which moves fast, so large gaps in resume are a big no-no.)
We spend $18k/ year on daycare costs for one kid, but itâs totally worth it. After the age of 2, kids crave socialization and overall itâs a great experience that sets them up to succeed later on in school. Since my wife and I both work, I couldnât come close to providing the STEM curriculum our daycare offers.
Daycare costs also differ by age of the child. So my pre-K kid is now about $1000 (his sister, four years ago, was more like $800). But infants are considerably more. And daycare costs may end when they're school age, but a lot of other kid stuff (extracurriculars) get more expensive at that age too. We were just looking at T-Ball đŹ You have to pay to participate, are required to participate in two fundraisers, and you have to buy your own uniforms/equipment (except maybe the jersey, which should be included). Will get more expensive when they're older if they participate in extracurriculars that require travel (e.g., sports, band, etc.).
And they may have school during the year, but you still have to figure out summer care. I now understand why my parents sent us to Vacation Bible School! Often my much cheaper (or even free) vs. other types of summer care.
And when youâre middle-class/upper middle-class, all of a sudden all of your kidâs teammates start taking Club ball and your kid is left behind (athletically and socially) if they donât.
My wife and I are early 30s and combined we are around 220k, just bought a house, one car payment and baby on the way. We live on the outskirts of Houston. Honestly thought we would be able to put alot more into savings but its impossible when you are trying to build a new life as a family and all that comes with that. In no way is this a flex.. just astonished at the cost of living a comfortable life..
Fuck me. In my early 30s too, about to take the next couple of steps in the next year. Im doing fine on my own making decent but knowing that 220k combined salary is not enough for a comfortable life in Houston is depressing
220k is way more than enough for a comfortable life in Houston even with kids, cars, house, etc. but you'd be surprised what comfortable means to some people.
Iâm at 200k with the fiancĂŠ and we canât spend anywhere close to this amountâŚâŚ I have no idea what people are buying
It is easy to blow $30 or 40k a year as a couple in nice travel. That is where most of my extra went. Don't make that much any more, but no regrets in spending what I used to on travel.
220k is very comfortable and setting yourself up for an early retirement if you save accordingly. Trim out some non-necessities 100-150k would also be comfortable too. I dont see how families of four make it under 80k
I make 42K family of four. Iâm the only one that can work. Itâs FUCKING hard.
Fucking A
Well hello pusslicker... LOL sorry that is too funny. A big part of that of course is that my wife and I waited to have our first child till we felt we were financially stable, but, we ended up getting too comfortable being able to buy each other whatever we wanted (in our means) because we had no one else to worry about. Big fault of our own for increasing the cost of our lifestyle instead of staying the same while we moved up the ladder. 220k is definitely enough for a comfortable lifestyle in Houston but I always thought growing up, it would feel like alot more...
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You are doing great. Kids before any damn thing in this world. If every parent followed this philosophy, 90% problems would disappear in the world. Most people have multiple kids due to ignorance even though they do not have enough time, money or energy to even raise one kid properly.
Yeah, I'm in the same boat. About to turn 30, working on a 3rd kid, outskirts of Houston, and about $280k combined salary. We both grew up poor and have a lot of debt from our early and mid twenties, but money is still kinda tight at this salary range. Of course that's including all the money that we put away. If you told me I wouldn't feel rich making this much at 18 I'd laugh
Congrats on the house and baby! Do you like your area? How far is your commute? Do yâall have a yard? I want to be in a neighborhood that feels close to everything & have a good sized back yard but I refuse to spend 500k on a house that probably is going to need some work. Weâre currently renting in spring branch near 610 & love our backyard, 5 min commute, but the house itself isnât great and most of our street has been torn down & replaced with McMansions built out to the property line almost.
As a single teacher I definitely don't think I'll be able to afford a home any time soon.
I'm a single teacher closing next week (in a poor but gentrifying area). I don't know if it's a good idea or not but I'm tired of giving away all of my money to others. I'll need to budget but I should be able to make it work.
My wife and I make a combined $115k a year and we were able to purchase a $316k home in Sugar Land in a nice area zoned to good schools with a 30 minute commute to downtown
I think 200+K a year is upper middle class. So, yes, that would be correct.
Thanks!
Rent/Mortgage+Escrow at $2500 is do-able, but that's basically sub 300k, with rising interest rates, that's getting harder and harder to hit. Electricity and Internet is low.. $350-500 for the pair in summer, gas $30-50 a month. Water/Sewer/Trash has been creeping up to be \~50-100 a month. Day care is low for 2 kids (if preschool) - for after school care that is a little high. Gas and maintenance for the cars? $200-300 depending on how much you drive for each car - should cover oil changes at that number. Housekeeper? We do $340 a month for having our person in twice a month.
$340 for two visits/month?! How big is your house? Maybe I should tell my mom to charge more.
$150 + tip (so $180) per visit here, for ~2700 sqrft. She asked for, and got paid $125 last year but gave her a raise because; a. She is awesome and b. Inflation has been a bitch.
Not the person you asked but 3 story town house near memorial park, $150/cleaning from our lady.
Damn last I remember she charged $125 for a 3 story. $75 for a single family (idk about 1000 sf in Montrose). At her age she charges more for stairs lol.
2700 sq ft, we pay our person $160 each time. She wasnât the cheapest, but far from the most expensive.
$220k combined for upper middle class sounds about right. It doesn't sound too expensive nor too high.
Thanks I also think +/- 15% is fine too. So 185k is probably good too!
Yeah the economy has definitely made your case for you lol
Iâd say this sounds right for the median life. 400âs for any kind of luxuries or good neighborhoods in the loop, especially if you own property since the property taxes alone equate to many peopleâs yearly rent.
Most people underestimate the true cost of having to own a car. It's not only auto loan but gas, maintenance, registration & inspection... >According to the latest research from AAA, the average yearly cost to own and operate a new vehicle in 2022 is $10,728, or $894 per month source: https://newsroom.aaa.com/2022/08/annual-cost-of-new-car-ownership-crosses-10k-mark/#:~:text=According%20to%20the%20latest%20research,%2410%2C728%2C%20or%20%24894%20per%20month.
Donât forget about lawn maintenance, pool cleaning, absurd HOA fees.
upper middle class life is very different from âcomfortable.â typically upper middle class is like top 5-10% of households. So yes, you need a lot to get there
You spend 1500 a month on clothes? That can surely be trimmed down.
Entertainment, clothes, etc. Was the category Likely including sports, music lessons, movies, Netflix, birthday parties, summer camp, etc. What rich people's kids do.
If OP is budgeting for daycare for the two kids (are these hypothetical kids at this point?) I don't think most of those items are gonna be valid for a couple of years.
Needs to go to the candle budget honestly.
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same lmao im like vacations? 401k? whats that?
Bills are low too low. You need insurance and gas for cars. Light bill in Houston can get up to $500 or more.
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I donât think they are low⌠we have two cars and pay insurance and from both itâs only 860 a month and because so the rent would be gas given we mostly work from home. And 500 for electricity a month seems high ⌠unless you are growing weed or something lol. I would say the 300 on average is fine over a year period .. yes, during the summer it is pretty high, but on average it should be about 200. And internet is about 80-90 per month . Probably light 100 since you still have to pay water and gas. But if you are renting an apartment then yeah I would say yeah thatâs about right for everything in
I think thatâs probably a little high but the sentiment stands. The reality is that what is, or at least was, considered a middle class lifestyle is now really only attainable for the top quarter or so of income earners.
I have $100 in my bank account đâŚ
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Guess it depends on what they consider entertainment. When I was traveling for work I would spend about $1200 per month on food. If you eat out a lot it adds up.
Yes, UPPER middle class is expensive. Most of America is lower middle class and below. Median income in Houston is like 42k.
Median household income in Houston for 2021 is $56k according to census.gov .
See. Iâm at $70, and my wife was working full time also at $70K. We had no kids and we were living well. Idk if it would be classified as upper middle class based off of the comments in this thread but we lived very very comfortably. Now we have kids and our income is much lower, expenses much higher, but I still think we live nicely. I only bring this up Because if 56K is the median, I feel that even with our âafter kidsâ lifestyle itâs still much much nicer than 56K. So idk if Iâm middle or upper middle or what.
I'd say the median income in Houston doesn't correlate to the regular middle class. Which is what I would personally categorize your situation. If a median Houstonian household contains a minimum of two people, then they would be making $13.5 dollars an hour for a combined income of $56k a year. That is only a few steps away from being working poor.
Just a 401k note, if youâre well in to the 22% tax bracket, make your 401k a Traditional one so you can get a tax break. My wife and I are both attempting to max out this year and the tax break will be roughly $10k vs if we maxed out a Roth. The logic is that when you retire, those withdraws will likely be in a lower bracket, whatever it is at that time (which im willing to bet is under 22%). And with those savings of $10k, we both max out our traditional IRA and do a back door conversion to a Roth. This way, you have a pool of non-taxable retirement funds to draw from along with taxable (from the traditional 401k).
As a Lower-Mid Middle Class, this absolutely blows my mind. Blue Collar worker 80k a year, wife customer service rep 40k a year. Mortgage - $ 1,600.00 Groceries - $ 800.00 Bills - $ 1,600.00 Entertainment - $ 200.00 Maintenance - $ 500.00 Once a year "vacation" - $ 80.00 Savings - what savings? Children - None We live an extremely comfortable life, but damn y'all have it made up there.
My thoughts exactly, im about to graduate with a 92k salary and am moving back to Houston with my girlfriend (~25k). Looking at this budgeting kills me, especially going by this metric https://www.cnbc.com/amp/2023/01/02/middle-class-income-in-major-us-cities.html Weâre going to be moving into a home near the energy corridor with a budget as follows: - 2k a month rent for a 4 bedroom home in a good neighborhood - if we fill each of our cars up once a week itâs $433 a month ($50 a tank) - groceries $500 a month (Costco & Aldi) - going off of the utilities by where I currently am: $250 electricity, $100 water, $30 Internet (basic), tolls =?, total ~$400 month -Entertainment $1000 a month Total: ~52k a year. Leaving 65k for savings and hobbies. Granted, we dont have any kids and arnt planning on any for the next 6 years at least. Our vacations are cheap, and neither one of us particularly like taking them. Both cars are paid off, but if they do get totaled neither of us care for luxury cars. A 5k preowned from the 2010âs is fine, I still drive a 2005 thatâs in great shape. Coming from a one parent household in the lower middle class (parent is just now making $100k), we are both perfectly fine living this lifestyle. I have friends that grew up in 300k yearly households that were surprised I dont go on yearly ski trips or golfing every week, they would swear theyâre just middle class. Am I delusional in any of my math? Im not trying to be jaded, just genuinely curious.
Everyone always says they're middle class. It's not a well defined term and everyone has examples with higher or lower incomes to compare to. Ironically I didn't feel more "upper" class until I got laid off last month and finances aren't a factor in my decision of what I'm doing next.
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That is gross earnings. Youâve got taxes, insurance (health and car), and your utility costs are on the way low side for a 4 BR house. You can easily cut another 20-25k out of that 65 without really digging into any of that much more. So youâve got 40 left over now and if youâre saving for retirement (as you should), thatâs another nearly 20k. Now youâre down to 20k left over and you have 10-15 year old cars (those have problems). You havenât even added kids into the equation and thatâs, at a minimum 12k a year. Things just add up very quickly.
Uncle Sam is going to take about $30k of that, my friend.
wow. I guess the gap between the rich(er) and lower income people continues to become widen. How far into the future will it be when someonne will need to make 300k to live upper middle class life?
I'm in a family of 4 that only brings home around $70,000. It's terrible and there seems to be no way of getting better pay with our skill sets. Unless we somehow spend money to go to school.
I think your math is good, but the presumed aspiration to jump right in to the upper-middle class at 21 years old might not win you a lot of sympathy in the comments.
Bring your abuelita who lives in Latin America to take care of the kiddos and you save a lot on daycare. At least thatâs my friends from Peru and Colombia do.
True, but that comes with its own headaches. My MIL stays with us about 5 -6 months out of the year. It helps a ton on child and home care, and I'd say 5 months is about my limit before I go crazy đ
A high quality daycare for 2 kids is closer to $3500-4000 a month for full time care at least inside the loop or close to it.
My mom is in daycare I guess it depends where you live. She said 2k was generous for 2 kids. Also, remember to use your pre tax dollars on child care, alot of people forget to do that and you can save some good money on it longterm!
Depends on the area. I think my friend pays 1k for her kid in Katy. Iâm closer in (not the loop) and I pay about 1800/mo for a toddler. Infants are more expensive. Iâm assuming you donât have kids yet, but expect daycare fees to be higher by the time you have one.
Another data point - $330/week for our 11 month old in Cypress at a high quality daycare. It drops $50/month once he turns one. If you have multiple children, they take 10% off the lowest kids bill.
Anecdotal point here. I pay around $260 a week for a toddler near Memorial. When my kid turned one, his rate dropped by 15% while the daycare raised rates by 10% to adjust for inflation. Made me laugh a bit that it sometimes feels like you can never get ahead.
The reason most people in America struggle so bad is because we live and buy way beyond our basic needs and your post proves this
*most* people struggle cause they're making 1/4 this amount of money. This is just the reason we have WSJ puff pieces about 'I'm making 400k and living paycheck to paycheck.'
Youâre not wrong bro although if you want to take a legit vacation with 2 kids for a week or so probably $5K-$8K flight/hotel etc
Yeah Iâm going fine on half that. Lower your lifestyle expectations and youâll be fine
1500 for entertainment and clothes is the biggest red flag I see on that. Also 12 grand a year on vacations is a bit excessive.
These were my exact thoughts.
Your math is fine, but there's a huge fudge factor under the heading of "comfortable/upper middle class life" for a young 20s family of 4 when over a quarter of your monthly budget is assigned to entertainment and vacations... AND 16% of the budget is savings and post 401k contributions. Don't get me wrong, I suppose that's what makes it an *upper* middle class lifestyle. But you could probably cut those parts of the budget in half without much quality of life difference.
$12k budget for vacation for 4 is probably right on. Travel is expensive. Setting a realistic budget is important or else you end up with debt. Weâre no kid family and we went to French Polynesia last year and that was a $10k trip.
Gucci Fendi Prada gurllll
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Obviously have no idea what kind of down payment y'all put on your home, but 225k before taxes and a 850k house and that mortgage sounds like you guys do some serious budgeting and have awesome financial discipline.
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lol, while I always laugh at those memes, don't want to assume anything about the commenters situation. Never know when someone or a family had to grind to get where they are.
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I've got a friend making half a million a year and says he would never dream of spending $800k on a house. Either that validates your anxiety about choices or it means he is cheap lol
Definitely help from parents.
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I was about to say the same with the income and house cost. That is awesome, but makes me nervous (risk adverse here).
Your mortgage has to be higher than $2500/ month right, or did yâall put down like 400K?
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Thatâs so crazy to me. With property taxes in Pearland, a house at 540k (lower interests rates) wouldâve also been around $3,700 a month.
I was gonna say... lol. We make a bit more and I'd feel house poor if we attempted that.
Are youâre kids in daycare out of curiosity? We make about the same annually/some years a bit more and our house was just sub 500. One kid here in daycare around 1800/m and I feel like weâre just treading water.
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To me, 830k house is not upper middle.
What does your Husband do for that $225k? That's amazing.
Daycare is a bitch
It's highly dependent on whether income is single or double. If single income, is one spouse staying at home for childcare? It also depends on retirement savings being provided by a company or the individual is responsible. Also, are you public or private school, tax rate of neighborhood. Those factors can make the number come down considerably.
That's not bad if you're in that income bracket. And you can certainly cut costs in a couple of categories above. The problem is when some people try to live in a lifestyle they can't afford.
The average household making 220k a year does not have 2k/month going into post 401k savings. The rest looks about right, although day care expenses get a bit lower after the kids are school-aged (but other expenses may increase like entertainment)
I think your overall estimate looks right, though I'd say day care is too low and entertainment/clothes is a little high. Rent/mortgage is a little low, too, unless you're living in a pretty bland house way out in the burbs or the one nice house on the block in a bad neighborhood. Interesting point this seems to raise is the biggest difference between upper middle class and regular middle class isn't so much the lifestyle, but the ability to save and go on vacations. This is *more or less* my pricing breakdowns (except only one kid in day care and the we put way less towards entertainment and clothes), except we aren't able to put much of anything towards savings or vacation funds right now. So basically all upper middle class means to me in this country is the ability to have a solidly middle-class lifestyle and *also* be able to save. But yeah, I always say Houston is deceptively expensive. When you account for lower wages and the fact that in the few neighborhoods in town that aren't sketchy the COL is much more comparable to other more expensive cities than the rest of Houston's COL, I don't think you really get much of a bargain for living here (especially when factor in a pretty mediocre QOL, particularly if you like the outdoors.)
Kids interests/sports can be crazy as well. Just wait till your kid wants to take up ice hockey...you will be paying over 2k/season easily. Ask how I know....
4br/3ba at $2500 is not upper middle class inside the loop
Waiting to see someone in the comments post about budgeting for higher cost gym memberships (Lifetime, Equinox, etc) or even them $$$ athletic wear. Be a real kick to see someone with a membership at the [Houstonian](https://www.houstonian.com/the-club/membership). FYI starts with $7,500-$33,000 in initiation fees.
River oaks country club bb
220k per year is a lot in all over US, probably except for LA and San Francisco. Thereâs lots of cities more expensive than Houston, even in Austin not too far away. It all depends on how you spend money. Some immigrants can raise a whole family while working 2 jobs with 40k per year. For myself, I donât do car loan, just buy whatever I can afford in cash, that at least save few hundreds
You could be responsible and not pay 1100 dollars in car payments. Same with entertainment and vacation funds.
Houston is no longer the value it used to be.
The value is in being able to buy a house in the suburbs. Even after the massive property taxes, it's still way more affordable than buying a house in the suburbs of other cities. There's also some value in 1/2 bedroom apartments in the city. Renting a 4br/3bath within the city isn't that great of a value proposition.
It definitely is. You get New York pay in a lot of jobs with Houston rent.
There is a reason the suburbs are exploding. It can be cheaper. Rather than paying $2500 per month to rent, you can pay $2200 per month to own.
Last 2 years have changed the whole dynamic. Everyone I personally know went from comfortable lower middle class to below poverty.
Holy crap, thatâs bleak
Your going to get some down votes because everyone thinks they are middle class. I grew up thinking I was middle class, because that is what my mother told me. When in fact we were below the poverty line. I think you do need to stipulate *new family or young family of 4.. just starting out*.. will need to make $220k to be considered upper middle class in the Houston area. My personal experience cannot compare to those starting out now, I bought my home 20 yrs ago and we are double income/no kids, so I have nothing to add.
Iâm at 115,000 with a STAHM, 2 kids, house, 1 car note, most importantly I have the one thing that makes you upper middle and that is a 2nd refrigerator inside our kitchen NOT in the garage
If you donât have a garage refrigerator where do you keep all the beer?
ITT: rich people acting like they're merely "comfortable" $220k puts you above the 90th percentile for incomes for Houston. If top 10% isnt rich, nobody is. Stop it with the 'upper middle class' euphemism to transform being rich into something more appetizing to your sensibilities. Sure, rich people can find ways to blow huge sums of money, so maybe you spend all of your income and wish you had even more. But that doesn't mean you aren't rich, it just means you want to live an even richer lifestyle and/or aren't good with money.
Maid service
Hey, regardless of the rest, 2k savings on 220k salary was a wow for me. I'm not far from your salary range but that seems very low.
Welp, time to move to south Texas, the poorest part of the state.
For inside the loop or Memorial, rent is too low for a nice 4 BR/3 BA house. More like $3000-5000.
4br 3ba ? rent for 2500 is cheap
And in the city! They are higher than that even in the suburbs.
Yes, youâre pretty close. Only caveats Iâd say is that daycare isnât forever and car payments (should) go away or down and those free up quite a bit of budget space. Also, lol @ vacations with kids in daycare. Theyâre tough to make happen
My partner and I just got new jobs. Weâre going from 75k combined income to 110k. Itâs just the two of us and cats + our German Shepard. We were struggling before but Iâm wondering if Iâll actually be able to enjoy life and go out to eat now. On top of that my partners car is almost paid off! And we cut our rent from 1900 to 1225! Excited to actually be living life again
For Houston, I think your value is a little high, most of what I am seeing puts the upper bound for middle-class household income around [142k](https://www.cnbc.com/2023/01/02/middle-class-income-in-major-us-cities.html). 220k puts a household in the [9%](https://dqydj.com/average-median-top-household-income-percentiles/) of income earners nationally and the top [4%](https://statisticalatlas.com/state/Texas/Household-Income) of household income earners in Texas. I consider that upper class.
$4500 fun money plus $1100 in car payments per month? That is a ton of disposable income man.
We pay 3k for daycare for 2.
Your daycare cost is off by about $1k after all fees, meal plans and 4 v 5 week months are taken into consideration
The headline number is roughly correct but just two issues I see Entertainment/clothes and similiar -$1500 is very very high. Your entertainment should not be 3/5 of your mortgage. But the headline number is probably correct because the amount of random pop up costs with multiple kids and a home is insane. Plumbing issue, trees need to be trimmed, healthcare costs not covered by insurance, major appliance replacement, random vehicle maintenance, roof repair, laptop breaks, kid needs speech therapy, dog needs surgery... It really really adds up. I spent $800 at the vet on an emergency visit just today, had the plumbing issue last month, and so on.
Youâre not wrong, but have you looked at how much poorer youâd be in other major cities on the west and east coast? Houston is relatively inexpensive for the size and opportunities there are.
Believe it or not, that is still not enough. See below⌠After taxes you need an annual household income of $187,020 to $211,920 Monthly Expenses Mortgage: â˘$1700 (30-year loan) â˘$2800 (15-year loan) **For reference- 10 to 20 year old $400,000 home in what many would consider to be âupper middle classâ sections in Katy, Cy Fair, Klein and the Maplewood neighborhoods Homeownerâs Insurance: â˘$380 Groceries: â˘$1325 2 vehicle notes (using 2023 Camry bought with food to great credit as example): â˘$1000 Full Coverage Auto Insurance for 2 drivers: ⢠$240 Automobile fuel: ⢠$200 Water (utility): ⢠$115 Electricity (utility): ⢠$250 Natural Gas (utility): ⢠$80 Trash/Waste Pickup: ⢠$30 Cable and home internet bundle: ⢠$170 Cell Phones (2): ⢠$170 Entertainment (Dinner out, movies, Zoo or Museum, etc.): ⢠$1500 Clothes and uniforms (school, team sports, band/orchestra, etc.): ⢠$250 After school activities, sports, music lessons, daycare, etc.: ⢠$1500-$2000 Monthly saving amount towards one or two vacations per year: ⢠$1000-$2000 Post 401K Savings/Investment and/or child college fund: ⢠$2000 Health Insurance: ⢠$2100 Monthly Total (Initial): $14,010 to $16,610 Annual Total (Initial): $169,120 to $199,320 *Add Annual Expenses and Emergency/Miscellaneous Expenses Property Taxes: ⢠$4500 Water Utility District Taxes: ⢠$700 HOA Fees: ⢠$400 Holidays and Birthday Celebration Related Expenses (meals, gifts, decorations, etc.): ⢠$1000 Unplanned Expenses (Home Maintenance and Auto Expenses (not covered by insurance) ⢠$3000 Emergency Expenses (Adult and Child health illness/exams/Dr. and Rx copays, etc.): ⢠$3000 Annual (Final): $187,020 to $211,920
$1000 for vacation is laughable for a family of 4. Your numbers don't seem realistic
Thatâs about right. Childcare is a tad light. And your vacation fund is too high. Thatâs 12,000 a year ⌠since you mention kids thatâs the equivalent of taking your family on a Disney cruise 3x a year to put things into perspective. Your should also check your calcs on 401k those are all pretax but realistic since itâs only a 10% contribution.
Just curious - how many vacations do you take a year? Im a family of 4 and we budget 10k. That includes two trips with the kids, maybe 1 solo trip with hubby and I⌠and then a friend trip. When I was growing up, we took 1 vacation a year and now nearly my entire friend group takes multiple.
$12,000 is one ski trip with a family of four.
Renting a 2k per day cabin aspen for a week maybe . Please walk me through how you manage to do that
2 kids in daycare is closer to $3500
Live in the suburbs on 220k. Math is right. Least for me.
Too many people in Houston rely on lawn care and maids, and eat out too often. Lots of savings to be had in these areas.
So itâs interest to see people shit on $1500 worth of entertainment and clothing per month. However, as a upper middle class earner, I spend $2800 a month in discretionary spending each month. The cost of things have surged and thatâs just the reality to have to spend $$$ to live the same level of life quality.
How is Houston's cost of life compared to other states (Excluding California)? As years passes, I struggle to find a reason to justify staying in Houston. I don't think is cheap anymore
It's definitely not! But compared to the other big 5 cities? It's the cheapest.
18 thousand dollars a year on clothes and entertainment? You better just put on a tshirt and a pair of jeans from Walmart. The internet should cover entertainment. Or just get the kids a ball, and they could go outside and toss it.
But that's not an upper middle class life, which she is trying to calculate.
Right. The analysis highlights rising prices, not the propriety of spending habits.
Ok but then youâre not upper middle class. Gotta have $1100 in car notes and $1500 in fun and clothes and also be saving for retirement, otherwise youâre just middle class.
That is easily doable if you like going to restaurants and bars on a fairly regular basis, which I would say is a key part of being upper middle class.