Author Topic: SAHP & the salary needed to make this happen plus which city ur in  (Read 5487 times)

MrsCoolCat

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SAHP & the salary needed to make this happen plus which city ur in
« on: September 05, 2015, 09:02:50 AM »
Happy long weekend! Mustachianism aside my uncle pretty much once told me he thinks that $50k take home money (after taxes) is enough for his fam of 4 (twin girls). They live in the best school district in this area & their property taxes are $5k even though their home was a short sale (good neighborhood). He owns a restaurant so he said food is usually not a big chunk of their income. His wife SAH but helps out at the restaurant on weekends when they drop their kids off at their grandparents.

So for SAHP, where do u live & how many in ur fam, what's ur breakdown of expenses since only one person works & what income do u think a Mustachian fam needs in ur area to live on to make the SAH possible? I've always been curious about the varying cities & how this works. I'd like to get more exposure to these types of families bc ideally, I think it would be nice if kids grew up without nannies, but I understand every person & fam is diff. Thanks.

use2betrix

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Re: SAHP & the salary needed to make this happen plus which city ur in
« Reply #1 on: September 05, 2015, 11:32:40 AM »
I've lived in 5 states the last 7-8 years and I can tell you, MOST places in the U.S. are pretty similar. The exceptions being like California, New York City, and a few other very sought after places. Of course, amidst each city is the expensive and cheaper parts. Outside of housing, standard costs are typically more regular.

Emilyngh

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Re: SAHP & the salary needed to make this happen plus which city ur in
« Reply #2 on: September 05, 2015, 12:16:25 PM »
Happy long weekend! Mustachianism aside my uncle pretty much once told me he thinks that $50k take home money (after taxes) is enough for his fam of 4 (twin girls). They live in the best school district in this area & their property taxes are $5k even though their home was a short sale (good neighborhood). He owns a restaurant so he said food is usually not a big chunk of their income. His wife SAH but helps out at the restaurant on weekends when they drop their kids off at their grandparents.

So for SAHP, where do u live & how many in ur fam, what's ur breakdown of expenses since only one person works & what income do u think a Mustachian fam needs in ur area to live on to make the SAH possible? I've always been curious about the varying cities & how this works. I'd like to get more exposure to these types of families bc ideally, I think it would be nice if kids grew up without nannies, but I understand every person & fam is diff. Thanks.

I live in central Va in an area where the COL is slightly (a few percent) below the median for the US.   

My spouse is a SAHP to our 1 daughter, and we are paying for another child in college.   We live on $2500 a mo, including health insurance and all expenses other than savings/investing and what we spend on the child in college.   We live in a very nice condition 2000 sq ft house on 2 acres (that we have a relatively low mortgage on aided by putting 20%+ down), have 2 cars, our child participates in activities, we have a gym membership, etc. 

So, that's a total required income of $30k a year (if you still have a mortgage), plus 10% for fica and state taxes (really no federal tax liability for us b/c we stash almost all of our income other than this in 401ks), plus whatever one wants to save for FIRE.   

MayDay

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Re: SAHP & the salary needed to make this happen plus which city ur in
« Reply #3 on: September 05, 2015, 04:25:16 PM »
I'd say in most medium and low COL, 50k a year after taxes is fine for a family. I'm assuming you would actually pay very little in taxes at that income level with kids and some 401k deductions.

starterstache

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Re: SAHP & the salary needed to make this happen plus which city ur in
« Reply #4 on: September 05, 2015, 07:08:09 PM »
Interesting thread, thanks for starting it! 

My wife and I live in very HCOL southern California, but we are a single income family and she stays home with our 3 and a half year old son.  While she does have a side business to bring in a small amount of income, the majority comes from by engineering job at around 90K/yr.

Our typical yearly budget is around 50-55k, which might seem high but our mortgage is a good portion of that at around 1.7k/mo., incl all taxes.

We are in a great neighborhood with pre/elementary schools walking distance from our home.  I've definitely thought of moving out of state to find even lower COL, however, it's hard to find similar amenities and weather for the price we are paying right now; not to mention the salary difference.

Not sure if you had specific questions related to single income families, but I'd be happy to answer.  It's certainly not easy and requires a lot of sacrifice to save aggressively (I max my 401k every year), but we're managing for now and expect it to become easier as we both continue to make more income over the next few years.

By the way, it would be incredibly difficult to live on 50k here if you had a family to support.  Unless you are willing to live in a studio apartment or something that extreme (and/or remote), which isn't going to workout long-term if you have a kid at home.
« Last Edit: September 05, 2015, 07:10:14 PM by starterstache »

clarkfan1979

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Re: SAHP & the salary needed to make this happen plus which city ur in
« Reply #5 on: September 05, 2015, 08:00:26 PM »
I like the thread and that you specifically said family of 4. I think it would be a different conversation for single people.

I don't think housing is always cheaper in lower cost of living areas. Because it's so easy to "upgrade" many people buy houses that are way too big. Their mortgage might not be bad, but furniture and utility costs are high.

Being in a high cost of living area kind of forces you to live in the smallest place that you would feel comfortable. You are then indirectly rewarded for lower costs of furniture and utilities.

I think MMM people think of the world differently and anything is possible. When I rented a room from a friend, he claimed that he couldn't live in North County San Diego without making at least 150K. I think he was making around 100K at the time as a small business owner. He claimed that if he wasn't up to 150K in a couple years, he would move. I'm not sure if he ever did. 

I applied for a job in Santa Monica and was told by another friend that you need to make 400K a year to live in Santa Monica. My wife and I would have made a combined income of 125K to start, which I think would have been more than enough. We might have never bought a house in Santa Monica, but I'm ok with that.

Below are the places I have lived and the take home pay I would want after taxes. These numbers do not include a paid off house. I could always improve, but this is where I'm at right now. This could be two parents working part-time or one parent working full-time and the other stay at home. If both parents are working, pay would need to be higher to pay for child care. This does not include any savings, only spending.

Southwest Florida: 40K
Suburbs of Chicago: 45K
City of Chicago: 55K
San Diego: 65K
North County San Diego: 70K
Denver: 65K
Fort Collins, CO: 60K
Kauai, HI: 65K

Mikila

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Re: SAHP & the salary needed to make this happen plus which city ur in
« Reply #6 on: September 05, 2015, 08:55:00 PM »
We have happily lived with a SAH parent, 2 kids, and 1 income of $28k in the rural panhandle of Texas.  It was tight, yet we had a $96/ month car payment so we had some wasted $.  At that salary we rented a nice 2 bd apt for $500/ month, covered our own utilities, and saved 6% in a 401k. 

A year later when our salary increased to 32k, we were really living high on the hog!

This was only a few years ago.

Thegoblinchief

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Re: SAHP & the salary needed to make this happen plus which city ur in
« Reply #7 on: September 06, 2015, 08:13:34 PM »
If you knock the remainder of our student loans away but left the mortgage we could our current lifestyle as a family of 5 in the city of Milwaukee on a gross salary of about 40K.

With some modification and if we'd been smarter about buying our house (bought right before the peak in a neighborhood that hasn't recovered at all) we could still live quite well with $5-10K less salary. Wouldn't be able to save much at that low of an income but we could live easily.

FLA

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Re: SAHP & the salary needed to make this happen plus which city ur in
« Reply #8 on: September 06, 2015, 08:46:20 PM »
This is based on old info as my kids are 16 and 18. My ex-husband pushed hard for me to be a SAHM.  And it wasn't that I didn't want to, it was my dad's voice in my head, "make sure you can earn a satisfactory living if you end up divorced."  If I dropped out of nursing for 5 yrs, who would hire me when I was ready to go back? Financially, we could've done it, our costs were low and the ex was a very hard worker, getting OT all the time. But some not so great stuff had happened with him that I could not pull that trigger and totally quit.  Both of us are in the medical field and have lots of options for shifts.  So I went half-time, he did 3 12 hr shifts and covered the kids when I was at work. 

2 yrs later, I was right about him, very right. And as I prepared for leaving, I was so fortunate to be able to go right back to full time.  My lawyer said he has to give you alimony, you can wait. Nope, I would not take alimony (probably a dumb idea to leave money on the table but I did) and off to work I went.

This is probably the wrong thing to say, especially on this forum where the goal is to stop working when you've become FI.  But SAHMs that do it through many years, like even through HS, I always worry. What happens to them in a divorce? How do they find work in their field if they've been out of it so long?  Alimony does not go on as long as it used to. There would've been benefits to me staying home, but the way we did it, they were always with one of us, not daycare. I'm probably speaking out of turn and I do not mean this as a dig at any stay at home parents. It just made me, personally, worried.

use2betrix

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Re: SAHP & the salary needed to make this happen plus which city ur in
« Reply #9 on: September 06, 2015, 09:35:33 PM »
This is based on old info as my kids are 16 and 18. My ex-husband pushed hard for me to be a SAHM.  And it wasn't that I didn't want to, it was my dad's voice in my head, "make sure you can earn a satisfactory living if you end up divorced."  If I dropped out of nursing for 5 yrs, who would hire me when I was ready to go back? Financially, we could've done it, our costs were low and the ex was a very hard worker, getting OT all the time. But some not so great stuff had happened with him that I could not pull that trigger and totally quit.  Both of us are in the medical field and have lots of options for shifts.  So I went half-time, he did 3 12 hr shifts and covered the kids when I was at work. 

2 yrs later, I was right about him, very right. And as I prepared for leaving, I was so fortunate to be able to go right back to full time.  My lawyer said he has to give you alimony, you can wait. Nope, I would not take alimony (probably a dumb idea to leave money on the table but I did) and off to work I went.

This is probably the wrong thing to say, especially on this forum where the goal is to stop working when you've become FI.  But SAHMs that do it through many years, like even through HS, I always worry. What happens to them in a divorce? How do they find work in their field if they've been out of it so long?  Alimony does not go on as long as it used to. There would've been benefits to me staying home, but the way we did it, they were always with one of us, not daycare. I'm probably speaking out of turn and I do not mean this as a dig at any stay at home parents. It just made me, personally, worried.

All depends on the relationship and the family. How long was your dad married to say something like that? I would be appalled if either of my parents ever made that comment, and I wouldn't get married if divorce was such a fore front thought in my mind.

FLA

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Re: SAHP & the salary needed to make this happen plus which city ur in
« Reply #10 on: September 06, 2015, 09:56:37 PM »
my parents are still happily married.  He just has a very strict work ethic and being able to stand on your own two feet in case you are a single parent (his dad was sick all of my dad's life and he died when my dad was a teen) so he saw my grandmother struggling to work full time, raise the kids and care for a sick husband. So he wanted me to be able to take care of myself and kids if I had to.  He said this kind of stuff growing up, practical advice that you would use if bad things happened or advice on how to handle money.  It was not directed at my husband since he said stuff like this since I was 8, lol.

When this subject came up with my ex at first it was just that "you have to be able to take care of yourself" running through my head, so I worked part time to keep my license active. As the years went by, there were more and more signs that divorce may happen.  I gave it all I had but tried to protect myself in the event that it happened.  I did not go into the marriage thinking of divorce, of course.  This was years later and there were signs, which prompted a response in me to plan for the worse and hope (and strive) for the best. 

what is it, 1/3 marriages end in divorce and a percentage of women end up near the poverty line?  I have no clue, anymore, having not read the statistics in years.  But the last I heard, the wife usually makes out worse. I just think it's wise to keep up with your field, in case someday you need it. Sometimes divorce hits out of the blue and IMHO, I would be scared as a SAHM what would happen to me financially? That's just me.  Plus, I liked working, I think being out of the home part time working was healthy for me and good for the kids to develop closeness with their dad one on one

okits

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Re: SAHP & the salary needed to make this happen plus which city ur in
« Reply #11 on: September 06, 2015, 10:06:39 PM »
This is based on old info as my kids are 16 and 18. My ex-husband pushed hard for me to be a SAHM.  And it wasn't that I didn't want to, it was my dad's voice in my head, "make sure you can earn a satisfactory living if you end up divorced."  If I dropped out of nursing for 5 yrs, who would hire me when I was ready to go back? Financially, we could've done it, our costs were low and the ex was a very hard worker, getting OT all the time. But some not so great stuff had happened with him that I could not pull that trigger and totally quit.  Both of us are in the medical field and have lots of options for shifts.  So I went half-time, he did 3 12 hr shifts and covered the kids when I was at work. 

2 yrs later, I was right about him, very right. And as I prepared for leaving, I was so fortunate to be able to go right back to full time.  My lawyer said he has to give you alimony, you can wait. Nope, I would not take alimony (probably a dumb idea to leave money on the table but I did) and off to work I went.

This is probably the wrong thing to say, especially on this forum where the goal is to stop working when you've become FI.  But SAHMs that do it through many years, like even through HS, I always worry. What happens to them in a divorce? How do they find work in their field if they've been out of it so long?  Alimony does not go on as long as it used to. There would've been benefits to me staying home, but the way we did it, they were always with one of us, not daycare. I'm probably speaking out of turn and I do not mean this as a dig at any stay at home parents. It just made me, personally, worried.

I'm not the OP but I appreciate your sentiments.  Any prolonged absence from paid work risks reducing one's earning power or ability to get rehired. Until FI there's always the possibility the SAHP will need to earn a paycheque if unforeseen circumstances arise (illness incapacitates the other spouse, spouse's industry crashes, etc.) It is a less-discussed cost to SAH.

OP, perhaps not so relevant as we're in Canada (HCOL: Toronto), but we ran the numbers and could do it (with lots of frills) for $45k USD take-home (one kiddo.) Ultimately, we didn't go this route but did consider it.

Goldielocks

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Re: SAHP & the salary needed to make this happen plus which city ur in
« Reply #12 on: September 08, 2015, 12:41:29 AM »
Our History

ETA:  The following area all PRE TAX, PRE HEALTH CARE DEDUCTION numbers...  Taxes tended to be 32% of gross for tax and health care at all locations.

SAHP - Calgary, AB   $75k/yr - allows some savings. had 2 cars (paid off) - high heating / electrical costs, water costs higher than on the coast.
SAHP - San Francisco, CA   $125k/yr  (Did allow a good 10-15% savings rate on net take home, though, and covered $2700/mo rental plus utilties)  One car 8 y.o.& bikes
SAHP - Vancouver, BC  $100k/yr - with a very modest detached home 1 hr drive to downtown.  1-2 cars, (paid off), city transit.  Our rental home was $2250/mo for an older place far from city core.

In addition to housing costs....  (e.g., CA was nearly double), we noted the following:

A)  Kids activities cost a fair amount in Calgary, YMCA membership $1200/yr for family (we declined), but were very expensive in CA (very limited city subsidized recreation funding), yet is highly subsidized (for team sports and swimming / city recreation, not things like dance) in BC.

B) Food costs also vary -- CA was high cost outside of ethnic markets, which were far far away from where we lived.

C) Child care -- $580 to $650/mo per child in Calgary, vs $1800/mo in other areas...   big difference.  Preschools in CA were private, and not the $100/month or less as in Canada (for parent coop preschools) but more like $600/month.

D)  A lot less outdoor clothing needed in CA.  I was in despair over all the snow suits, rain coats, mitts and boots we had to buy in Canada.  California clothing was cheap! 
« Last Edit: September 08, 2015, 01:16:34 AM by goldielocks »

little_brown_dog

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Re: SAHP & the salary needed to make this happen plus which city ur in
« Reply #13 on: September 08, 2015, 10:14:59 AM »
HCOL Boston area – personally I wouldn’t want to try to manage on 1 income in this area without a substantial household income from the main breadwinner. I’d estimate that 100k gross would be a comfortable amount for a family who wants a sahp but didn’t want to give up saving. Like other HCOL areas, fixed costs like home mortgages, property taxes, insurance are very high and eat up significant portions of the budget. I don’t think I know anyone around here who’s mortgage and property taxes alone are under 2k per month.

OP – I think the bigger question here is what would you be willing to give up for a sahp? There are plenty of one income families that live paycheck to paycheck or forgo retirement savings, stronger healthcare benefits, or other important financial considerations. If you are comfortable with that, then you won’t need a large income at all. If you want a strong efund, retirement savings, college savings, good healthcare, a home, and some luxuries like a yearly vacation, I would expect that you would need an income much higher than 50k gross in most moderate to high COL areas.

catccc

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Re: SAHP & the salary needed to make this happen plus which city ur in
« Reply #14 on: September 08, 2015, 10:26:08 AM »
I think this varies greatly.  with our first I stayed at home and we lived on my husband's salary of $27K per year.  We lived in a tiny apt and we did fine.  That was 2009.  A year in we switched.  Now he stays at home and I work (to the tune of $88K/yr) and we do fine.  Our expenses have doubled with another kid and a bigger place, and preschool tuition.  Obviously we save a lot more with me working, but we made it happen without going into debt or even touching any savings or interest on savings with the $27K.  This is in a philly suburb.  Probably just above average COL.  I think.  IDK.  It's not the bay area.  It's not the midwest.

abiteveryday

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Re: SAHP & the salary needed to make this happen plus which city ur in
« Reply #15 on: September 08, 2015, 11:22:20 AM »
It's more complicated than just the city and the number.   I'm in Seattle, the number is about $60k.    But we bought a 4br house at the bottom in 2009, my wife used to work making about the same amount of money, we have no other debt, and we put down a big down payment even then.     So could someone starting out make the same decision today, and live in the same house in the same city?    Probably not, which is why I think my data point is of pretty limited value for predicting/recommending anyone else's future behavior.

charis

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Re: SAHP & the salary needed to make this happen plus which city ur in
« Reply #16 on: September 08, 2015, 11:55:47 AM »
It's more complicated than just the city and the number.
^ this

We live in a relatively LCOL city in the northeast with two kids.  We've been living on one income up until now, with a home/mortgage (5K+ in property taxes/year), student loans, and modest child care costs.  Our "spending" has been about 40K/year including everything (except overpayments on SL).  So 50K after taxes would be more than enough to live on, but more difficult for paying down debt and reaching FI.

Giro

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Re: SAHP & the salary needed to make this happen plus which city ur in
« Reply #17 on: September 08, 2015, 11:59:14 AM »
my parents are still happily married.  He just has a very strict work ethic and being able to stand on your own two feet in case you are a single parent (his dad was sick all of my dad's life and he died when my dad was a teen) so he saw my grandmother struggling to work full time, raise the kids and care for a sick husband. So he wanted me to be able to take care of myself and kids if I had to.  He said this kind of stuff growing up, practical advice that you would use if bad things happened or advice on how to handle money.  It was not directed at my husband since he said stuff like this since I was 8, lol.

When this subject came up with my ex at first it was just that "you have to be able to take care of yourself" running through my head, so I worked part time to keep my license active. As the years went by, there were more and more signs that divorce may happen.  I gave it all I had but tried to protect myself in the event that it happened.  I did not go into the marriage thinking of divorce, of course.  This was years later and there were signs, which prompted a response in me to plan for the worse and hope (and strive) for the best. 

what is it, 1/3 marriages end in divorce and a percentage of women end up near the poverty line?  I have no clue, anymore, having not read the statistics in years.  But the last I heard, the wife usually makes out worse. I just think it's wise to keep up with your field, in case someday you need it. Sometimes divorce hits out of the blue and IMHO, I would be scared as a SAHM what would happen to me financially? That's just me.  Plus, I liked working, I think being out of the home part time working was healthy for me and good for the kids to develop closeness with their dad one on one

This is very true.  And even if your marriage is perfect, what if your spouse gets sick and dies at 40?  You just never know.  I work with MANY people who have SAHW and they are really great providers and seem to be great spouses other than their mistresses. 

It's good to be able to provide for yourself and your children.  I know too many divorced mothers who are really struggling. 

COlady

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Re: SAHP & the salary needed to make this happen plus which city ur in
« Reply #18 on: September 08, 2015, 12:45:07 PM »
I like the thread and that you specifically said family of 4. I think it would be a different conversation for single people.

I don't think housing is always cheaper in lower cost of living areas. Because it's so easy to "upgrade" many people buy houses that are way too big. Their mortgage might not be bad, but furniture and utility costs are high.

Being in a high cost of living area kind of forces you to live in the smallest place that you would feel comfortable. You are then indirectly rewarded for lower costs of furniture and utilities.

I think MMM people think of the world differently and anything is possible. When I rented a room from a friend, he claimed that he couldn't live in North County San Diego without making at least 150K. I think he was making around 100K at the time as a small business owner. He claimed that if he wasn't up to 150K in a couple years, he would move. I'm not sure if he ever did. 

I applied for a job in Santa Monica and was told by another friend that you need to make 400K a year to live in Santa Monica. My wife and I would have made a combined income of 125K to start, which I think would have been more than enough. We might have never bought a house in Santa Monica, but I'm ok with that.

Below are the places I have lived and the take home pay I would want after taxes. These numbers do not include a paid off house. I could always improve, but this is where I'm at right now. This could be two parents working part-time or one parent working full-time and the other stay at home. If both parents are working, pay would need to be higher to pay for child care. This does not include any savings, only spending.

Southwest Florida: 40K
Suburbs of Chicago: 45K
City of Chicago: 55K
San Diego: 65K
North County San Diego: 70K
Denver: 65K
Fort Collins, CO: 60K
Kauai, HI: 65K

We live in Denver and I think this is right on. We spend about $65k per year and we have 6 month old twins. Biggest unexpected for us was sickness. One of our twins was hospitalized for 2 weeks with RSV.  The bill was $97,000 of which we had to pay our insurance out of pocket max - $11k.

Easye418

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Re: SAHP & the salary needed to make this happen plus which city ur in
« Reply #19 on: September 08, 2015, 02:03:19 PM »
Great topic.... preparing to drop to one income and have my wife stay home.

In Dallas...

We currently have $117k salary, $308k mortgage ($2,550 payment FP), $61k SL, $100k Retirement, 18% savings clip.

We are going to sell our home after 1 year ::fingers crossed:: for $70k more than we paid for, this will cover capital gains and transaction costs.  We are looking at homes price in $250k-$275k range.  I will be able to put down around $50k-70k down so the mortgage will drop to $200-$225kish.

So I plan to drop down to one income to $70k currently (think I will be promoted within 6 months, should bump to $80k with bonus), $200k-$225k mortgage (~$1,800 all inclusive mortgage payment).  I think that will be comfortable enough. 

MrsCoolCat

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Re: SAHP & the salary needed to make this happen plus which city ur in
« Reply #20 on: September 15, 2015, 06:00:07 PM »
Ooh. I meant to respond. I know there's no set figure or number & that things vary greatly, but i like provoking thought, research, opinions & pretty much a topic, so ty for all that contributed!