Eye popping spending and overwhelmed about how to cut down to a reasonable lifestyle

[Aerides]

Boy, groceries are waaay too high for that size of family!

$1200 a month for a family of 4, in a HCOL area, in 2023? Doesn't seem like that's a big deal.

 

[Gumby]

That also seems reasonable to me. It is the $12-15k per month on the credit card, not otherwise characterized in any way, that seems unreasonable. That's between $144K-$180K in annual spending going who knows where? 130% to 160% of the total of all the listed items (which include mortgage, school, nanny, insurance, food at home and eating out). I can't imagine spending that much more than the key drivers of most ordinary budgets.

In my budget, the largest items are income tax (which is not paid with a credit card if you are withholding from wages), property tax (which is usually escrowed as part of the mortgage payment), and food (which was separately broken out). The only other large expenses I have that are typically put on the credit card are utilities, and it's difficult for me to believe that the utilities on a house of the size implied by the mortgage could run over $10k per year.

So where is the money going? Vacation, clothes, furniture, hobbies, charity, personal services? That's where the real savings are to be found.

 

[samcat]

You're right, the keeping up thing is so nefarious. I had an awesome used Toyota Matrix in 2013 that I traded up for a used Camry in 2017 which then I traded up for a used Tesla. Now I wish I just kep the Matrix all along, I don't know what validation I Was seeking with the cars. I've been shopping for used minivans (WAY awesomer than an SUV, we rented one off Turo on our recent vacation and my wife and I both were stunned how much we liked it compared to the SUV) and considering selling the Tesla and getting an ebike that I can commute with for the 4 miles to work. I paid 60k for the Tesla and 40k for the SUV, now their values are 20k and 30k respectively Still would get us ahead to sell them and trade in for a minivan.

We have had two vans since 2000. Vans can be so much better than SUVs. A friend and I took our kids bike riding. I had a van, she had a Tahoe. All three of our bikes fit in the van (up the middle putting one seat down) without taking off a tire. She had to remove a tire from two bikes to get them in her Tahoe.

 

[zippy2020]

I'm not surprised at $12K for insurance in a HCOL area, depending on the type of risk mitigation purchased. Less than 2 yrs ago I finally went over our homeowners/quake/auto insurance with our broker, and after almost 7 yrs we were SERIOUSLY underinsured.

Considering that I live in what's considered a starter home (gentrified urban neighborhood) in a HCOL area, I can easily imagine the OP probably has an insurance premium bill proportionately comparable to ours. We are well over the $600/mo mark, and I was considering calling our agent and bumping some of our limits even higher due to inflation returning.

 

[Rianne]

Some of the lyrics...

The world was like an Amoco and I said "Fill er up!"
With a house, a car, a VCR, a lawn and all that stuff
But I got a nagging notion that enough did not exist
And at the end of every day I'd wonder "is this all there is?"

But I'm waking up, but I'm waking up
I'm waking up from the American Dream

It seemed that the beginning of the dream was so benign, I mean
All I ever wanted was a smidgen of the pie
And some comfort and security and good things for my kids
And, OK, to please the neighbors and my ego while I did
Anyway, it's great to be awake and feeling satisfied
With seeking out the simple and the deeper things in life

++Awesome

 

[tryan]

Its not what you make.,. Its what you keep that counts.

I can vividly remember, as a young buck in the mega-corp slog, sitting with other young bucks (college friends) and they are comparing salaries and raises. Bragging.

Then they turned to me, and I quoted above and asked "what's in YOUR retirement fund?!?!" They looked at me like I head 3 heads.

Well I got out of mega-corp 16years ago. Each of them are still in ... slogging away. BUT I am sure they have bigger salaries than I ever had.

 

[Koolau]

Some people can juggle those balls and live large... I had a BIL that seemed to do that... but when he passed we found out that my sister was not in as good a place as she thought... BIL was just fine with his lifestyle and died before the bill came to roost...

Yeah, BFF was explaining to me one day how he juggled his bills. This one could slide a month. That one had a penalty, so had to be paid on time. Another one could be put on a CC which gave another month before he had to worry about paying the minimum, etc., etc. It made me dizzy thinking about it. I told him "I couldn't live like that." He just chuckled and said "I've been living like that most of my life."

 

[skyking1]

Yeah, BFF was explaining to me one day how he juggled his bills. This one could slide a month. That one had a penalty, so had to be paid on time. Another one could be put on a CC which gave another month before he had to worry about paying the minimum, etc., etc. It made me dizzy thinking about it. I told him "I couldn't live like that." He just chuckled and said "I've been living like that most of my life."

I could not either. We have been debt free since 2003. We don't make much, but we don't spend what we don't have. Maybe we are doing it wrong?

 

[dixonge]

Oh interesting, thanks for sharing. I'm curious, how long did it take you to turn it all around?

Within a couple of years we had paid off our debt and saved up a decent amount of money. There are old threads here about how I tried to kill this plan via crazy investment schemes, but eventually we quit our jobs and went traveling. Our income and debt were far below yours, however, so your mileage may vary...

 

[EastWest Gal]

$1200 a month for a family of 4, in a HCOL area, in 2023? Doesn't seem like that's a big deal.

Except 2 and 6 year olds are not expensive to feed. They don’t eat very much. And $500/month eating out on top of that, so the total food budget is $1700/month.

 

[target2019]

If you knock out the $500 per month eating out, then $1200 per month sounds reasonable for a family of four.

But for us that would have been 50% too high ten years ago.

It's also possible that the amount includes other items purchased at a big box store.

 

[aja8888]

A question I have is do people with this kind of income and lifestyle even actually do their own shopping for groceries? With a full time very expensive nanny, I'll bet the nanny does the shopping or placing online orders for groceries, etc.

 

[skyking1]

OP will confirm but I would wager on the instacart delivery. It all adds up.

 

[HGTVFanatic]

Haha sorry I kept meaning to log in and update you all but didn't have time with a super hectic weekend. I'm on a short break at work now, thought I should post my very delayed update.

It didn't go super great, the Mrs was quite overwhelmed but she agreed it was an issue for our lifestyle and what we want for the future. We're going through all the credit card bils the next few weeks, starting 30 days back and then 6 months back. Our bgigest issues are 1) fancy travel and 2) eating out and 3) luxury one time expenses. The $2k VIP San Diego Zoo tour, the $10k ebike to haul the kids, the $800 fly fishing guide along with $800/nt 5 star hotel, it all adds up quick. ALso it turned out I miscategorized some stuff and our expenses were 310k, 160k of that was credit card. 50k mortgage. 50k nanny with taxes. She's looking at whether we can transition to much cheaper childcare for the little one. 25k for private school that goes away when the almost 6 year old goes to public kindergarden.

Oh My God. This made my brain hurt.

 

[killingme]

I would wager the OP is also drowning in "hidden" monthly expenses like auto-paid subscription expenses that don't really appear anywhere but the credit card statement. Having cable, but then paying for Disney + for the kids, Hulu, hbo max etc., multiple gym/club memberships, the infamous subscription box delivery services, even overpriced cell service. I assisted a friend who was struggling to budget and just addressing those buried monthly charges saved him $800-900 a month. But what it really did was help make him more aware of how he was spending and develop a discipline while still enjoying the fruits of his labor. Dropping cable and using roku saved him $200/month by itself...the age old question of how do you eat an elephant...one bite at a time.

 

[autonomousdog]

A question I have is do people with this kind of income and lifestyle even actually do their own shopping for groceries? With a full time very expensive nanny, I'll bet the nanny does the shopping or placing online orders for groceries, etc.

Since you asked, I thought back to what services I've used in the past 2 years that prolly cost a ton but may have been worth it. My goal at the time was to minimize unwanted chores and maximize time with family outside of work.

• Nanny also tidies up the house and cooks meals, folds laundry, when baby is napping. She'll take kids to apponitments, etc, too.
• We have a cleaner who comes 2x a month and occ on weekends, folds laundry, etc.
• Lawn maintenance service (considering Xeriscaping to avoid water waste and then we won't need lawn care anymore).
• Handyman who would come once every 1-2 months to fix stuff around the house (definitely stopping, I can do most of this stuff myself with Youtube and my 5 year old loves to use tools and help me).
• a delivery food service that dropped off a weeks worth of healthy plant based meals (learning to cook now, just need to get better at it)
• virtual assistant service to take care of "chores" like DMV registrations, booking doctor/dentist appointments, bookingflights and hotels, and responding to emails and voicemail - i'm on the fence, it's amazing not to have to deal with this crap when you're busy but i wnat to be less busy in life so i can slow down and do this myself).
• A pro car detailer to clean the cars every 4 months (this is going away for sure)
• Instacart and Whole foods delivery, this might be worth it for the $/time tradeoff, we'll do our own grocery shopping for now.
• Grubhub to the max when we were too lazy to cook/just wanted some yummy food out - going away as much as possible
• Nutrionist - was super helpful in getting me back on track with diet, I think worth the $. Subscription fee got me immediate access, could text her and she'd write back what I should get, answer questions, etc.

But like I said, everything else is on pause, except the house cleaner and nanny for now.

 

[autonomousdog]

I would wager the OP is also drowning in "hidden" monthly expenses like auto-paid subscription expenses that don't really appear anywhere but the credit card statement. Having cable, but then paying for Disney + for the kids, Hulu, hbo max etc., multiple gym/club memberships, the infamous subscription box delivery services, even overpriced cell service. I assisted a friend who was struggling to budget and just addressing those buried monthly charges saved him $800-900 a month. But what it really did was help make him more aware of how he was spending and develop a discipline while still enjoying the fruits of his labor. Dropping cable and using roku saved him $200/month by itself...the age old question of how do you eat an elephant...one bite at a time.

Yup exactly this, we spent mindlessly. Honestly, the advice to get Quicken was great, and we're enjoying torturing ourselves by going through the old credit card expenses and asking if that was worth it, whether we should continue, etc. I don't knwo if my wife is enjoying it necessarily, but she's on board at least.

 

[autonomousdog]

autonomousdog, you might enjoy this song since it sounds like you are Waking Up (from the American dream)...

Some of the lyrics...

The world was like an Amoco and I said "Fill er up!"
With a house, a car, a VCR, a lawn and all that stuff
But I got a nagging notion that enough did not exist
And at the end of every day I'd wonder "is this all there is?"

But I'm waking up, but I'm waking up
I'm waking up from the American Dream

It seemed that the beginning of the dream was so benign, I mean
All I ever wanted was a smidgen of the pie
And some comfort and security and good things for my kids
And, OK, to please the neighbors and my ego while I did
Anyway, it's great to be awake and feeling satisfied
With seeking out the simple and the deeper things in life

I really love this

 

[autonomousdog]

I'm encouraged that your first thought was to have a sit-down with your wife. If she's not on board, it won't happen. If she can see the advantages of saving more (spending less) then half the battle is done.

I think you have a big advantage over many in that you have a very good income. You can still indulge some passions and even a few frivolous expenditures without breaking the bank. I think it's important not to feel deprived. Simply setting priorities in spending may be all that is required to get you where you want to be.

Welcome to the forum and let us know how this is all going for you.

Yeah, definitely. And you know what's interesting, she initially got defensive and thought this was all punitive. It took some time to explain that I'm not trynig to act like a gatekeepr taking away her allowance but that we're partners in this and that we're the only 2 people spending money in this household so it's a WE issue for the future (even if the spending problem is a ME issue haha, the consequences are a WE issue). If we keep spending this way, I'll honestly never be able to retire and she definitely wants me aroudn more at the house and with the kids, so I think she's coming around.


My daily job involves smooth talking people and allaying fears all day, so it helps sometimes in my personal life too.

 

[autonomousdog]

I think you can get the info you need to get started cutting back by looking at just the past 90 days of credit card bills.

If you really want to go back 2 years then get quicken and import and categorize.

But don't wait till that is done. Start now.

Also, if you can get DW involved that will pay dividends. Let her work on the Amazon card analysis, for example.

And as Disneysteve suggested, start tracking going forward.

With all the low hanging fruit in credit cards, you could begin by focusing on their use, rather then jumping into tracking everything.

Baby steps, get some quick wind and stay motivated. And keep talking with your wife, keep this on the table and keep her involved.

We got the Every dollar app on both our phones, and agreed to daily check ins of what we've spent that day and why, and whether it's adding to our lives. Quicken per recommendations above, I'm enjoying learning it and playing around with it. DEFINITELY lots of low hanging fruit to go after with our expenses, it'll be fun to see how this all progresses in teh next year or so.



My biggest worry is that the initial burst of motivatio and energy will dissipate and we fall back to our old ways.

 

[luckydude]

A question I have is do people with this kind of income and lifestyle even actually do their own shopping for groceries? With a full time very expensive nanny, I'll bet the nanny does the shopping or placing online orders for groceries, etc.

I think this kind of income/lifestyle is fairly common among high-earning professionals. A lot of them are busy with jobs and families, and they have the resources to outsource some of the more mundane day-to-day activities. OP might be a bit of an outlier in terms of the amount of expenditure relative to income, but in terms of the list of services outsourced by OP, I think that's pretty common for a lot of upper-middle class families I know.

In our case, Our HHI is higher than OP's, but nowadays we only outsource yard maintenance (once a week) and handyman work (on demand). We employed a nanny when our two kids were infants/toddlers, but once they started kindergarten and I FIRE'd, I took over the childcare duties full-time and took care of shuttling kids to schools and activities (which by the way I really enjoy because I love spending time with my kids).

In terms of other outsources services listed by OP, we do our own shopping, wash our own cars, and handle our own day-to-day scheduling/appointments/errands. We are able to do a lot of these ourselves because even though DW still works, I'm retired so I have lots of free time to take care of all this stuff. But I can totally understand why OP chooses to outsource many of these services.

 

[luckydude]

Since you asked, I thought back to what services I've used in the past 2 years that prolly cost a ton but may have been worth it. My goal at the time was to minimize unwanted chores and maximize time with family outside of work.

• Nanny also tidies up the house and cooks meals, folds laundry, when baby is napping. She'll take kids to apponitments, etc, too.
• We have a cleaner who comes 2x a month and occ on weekends, folds laundry, etc.
• Lawn maintenance service (considering Xeriscaping to avoid water waste and then we won't need lawn care anymore).
• Handyman who would come once every 1-2 months to fix stuff around the house (definitely stopping, I can do most of this stuff myself with Youtube and my 5 year old loves to use tools and help me).
• a delivery food service that dropped off a weeks worth of healthy plant based meals (learning to cook now, just need to get better at it)
• virtual assistant service to take care of "chores" like DMV registrations, booking doctor/dentist appointments, bookingflights and hotels, and responding to emails and voicemail - i'm on the fence, it's amazing not to have to deal with this crap when you're busy but i wnat to be less busy in life so i can slow down and do this myself).
• A pro car detailer to clean the cars every 4 months (this is going away for sure)
• Instacart and Whole foods delivery, this might be worth it for the $/time tradeoff, we'll do our own grocery shopping for now.
• Grubhub to the max when we were too lazy to cook/just wanted some yummy food out - going away as much as possible
• Nutrionist - was super helpful in getting me back on track with diet, I think worth the $. Subscription fee got me immediate access, could text her and she'd write back what I should get, answer questions, etc.

But like I said, everything else is on pause, except the house cleaner and nanny for now.

TBH I don't think the list of services you outsource is excessive. A few high-income professional families (especially for dual-income couples) I know outsource many of the services you listed because they are too busy with jobs and families.

 

[SecondAttempt]

TBH I don't think the list of services you outsource is excessive. A few high-income professional families (especially for dual-income couples) I know outsource many of the services you listed because they are too busy with jobs and families.

I agree. OP you should not knock yourself too much. If you work hard for a high income you should be able to enjoy it, give your kids a good education and happy childhood, including luxury travel.

But you also need to plan for your future and your retirement. That means understanding your finances. It is entirely possible that there is no need for any changes but until you know where your spending is going and what you future plans are, you can't make that determination.

 

[Ronstar]

Since you asked, I thought back to what services I've used in the past 2 years that prolly cost a ton but may have been worth it. My goal at the time was to minimize unwanted chores and maximize time with family outside of work.

• Nanny also tidies up the house and cooks meals, folds laundry, when baby is napping. She'll take kids to apponitments, etc, too.
• We have a cleaner who comes 2x a month and occ on weekends, folds laundry, etc.
• Lawn maintenance service (considering Xeriscaping to avoid water waste and then we won't need lawn care anymore).
• Handyman who would come once every 1-2 months to fix stuff around the house (definitely stopping, I can do most of this stuff myself with Youtube and my 5 year old loves to use tools and help me).
• a delivery food service that dropped off a weeks worth of healthy plant based meals (learning to cook now, just need to get better at it)
• virtual assistant service to take care of "chores" like DMV registrations, booking doctor/dentist appointments, bookingflights and hotels, and responding to emails and voicemail - i'm on the fence, it's amazing not to have to deal with this crap when you're busy but i wnat to be less busy in life so i can slow down and do this myself).
• A pro car detailer to clean the cars every 4 months (this is going away for sure)
• Instacart and Whole foods delivery, this might be worth it for the $/time tradeoff, we'll do our own grocery shopping for now.
• Grubhub to the max when we were too lazy to cook/just wanted some yummy food out - going away as much as possible
• Nutrionist - was super helpful in getting me back on track with diet, I think worth the $. Subscription fee got me immediate access, could text her and she'd write back what I should get, answer questions, etc.

But like I said, everything else is on pause, except the house cleaner and nanny for now.

TBH I don't think the list of services you outsource is excessive. A few high-income professional families (especially for dual-income couples) I know outsource many of the services you listed because they are too busy with jobs and families.

I don't think that the list is excessive either. Back in my working days, I had some of these services. It makes sense to have some of these services when you're working (seemingly 24/7) and you don't have the time and sanity to get everything done.

 

[Philliefan33]

I’m not picking on her, but I am curious. How many hours a week does your wife work, and what does she do on her days off? Do you have the nanny every day or only at times your wife is working?

Many of the services that you are paying for could be done by a non-employed partner. Heck, back when the kids were 2 and 4 years old, DH and I were each working full time and the only help we had was daycare (offsite, I did drop off and pick up) and a cleaning service every other week. I would think a spouse working part time could do the grocery shopping and make phone calls/answer emails.