I'm boggled by the idea that a family can't live on $4,000 take-home each month, especially if the family has no mortgage, debt, or car payments. What could they possibly spend it all on? If the parents are retired, there's no child care (same if the child goes to public school, except for school supplies expenses and, perhaps, sports or activity expenses). Are they eating $2000 worth of groceries? Going out every night? Do they have the biggest cable TV plan known to man? The highest cell phone plan with unlimited data and texts, all on brand-new iPhone 6s, connected to their brand-new Apple watches? Are they buying a new outfit every day and tossing it once it's worn? Did they buy their home in a mega-high property tax area?
Seriously, with no debt, it's kind of hard to spend $4,000 per month on other living expenses unless you really try to be a spendy.
Now, I get that she wants to buy a new house in a great neighborhood. My guess is that is coming out of her $700K expenses. If they don't mortgage the property and simply pay with cash, they are left in the same situation, with only utilities and property taxes as their monthly home expenses. Normal living would allow them to SAVE money every month, and so any emergency could be taken care of with the $1-$2K they are saving per month.
If I didn't have my mortgage, I would be flush with cash if I had $4k take-home. With my mortgage, I would still be flush with cash if I had $4k take-home.