65,000/Year Income - Enough?

We make do w/$40,000/yr w/a family of 6. One income + putting me through school. You can make anything work if you are willing to make cuts in unneeded areas, spend frugally, and save before spending on the wants. Check out financial peace university. Save first for your retirement then as able save for kids' college funds.

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Depends on where you live and how you live.

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You don't HAVE to pay for your child's education... if you can help them out, fine... if you CAN do it, fine......

3 of my 4 kids have gone to college on their own...student loans, scholarships (never big ones, though... $###-###-####, usually, but it all helps), grants, part-time jobs...

We've helped when we could, and still carried them on our health insurance, auto insurance, etc.....

My two oldest are basically finished (oldest is still working on her doctorate), 3rd just started last year, and youngest will be starting in January, I think. He just finished a 10 month program with Americorps NCCC and plans to go to culinary school in the spring.

Two of them joined Americorps NCCC (10 month national service program) and got a large education grant to help... daughter #2 got $3725 (I think), but the education award is much larger now... #4 (son) got $5,550. That will help a bunch!

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All I can say is WOW!
I've never made the kind of $$ I see on some posts - but somehow we got by and are still getting by on my second round of raising my grand! More $$ would be good, obviously, but I'm not willing to give up the time I have w/her after school/work and weekends.

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We live not far from you, and we have a family of 5, make about that (one income, I'm an at home mom) and we have zero debt except for our mortgage (4br, 3ba on 4 acres) and we do just fine. We also just completed an international adoption without using loans. We are able to put money into retirement every paycheck, and each child has a savings we put money into every month. My husband has a pay as you go phone, I have Virgin Mobile $25/mo for the unlimited thing. So we don't have extravagant cell plans. We aren't paycheck to paycheck, but we budget and some months its tight, some months we have extra. We are comfortable. Of course making $95,000 would make things easier, but I think its crazy that people below think making $65k is hard to live on.

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Yes, $65,000 is enough. I have no idea how much Eddie Bauer/JJill type of clothes cost, but I would start buying Target brand on sale instead, if you were struggling with making ends meet.

As for paying for college, I think you could consider other options. You're meaning paying for college for your kids? I don't personally think it's the parent's job to pay for college for their kids. Our thought is to maybe pay for half of it and let them pay for the other half. Or, they could pay for all of it like we have had to. Just another thing to consider if you are tight on money.

As for $95,000 a year that is way more than enough. You could save so much money if you follow a budget. You could probably pay your house off pretty fast and put tons of money in retirement, etc.

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I remember long ago when that seemed to be a huge income. Two kids later, a mortgage and kids going off to college, and medical worries coming down the pike with this difficult political and economic climate, it seems very low. Plus, you are talking gross, not net.

I would just try to keep your expenses down and put as much in your retirement account as possible.

Good luck!
D.

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In our area it wouldn't be. The things you're describing as a cost baseline are pretty standard nationwide. Here are the things that hit hard in different areas:

Housing: In our area a 2b/1ba house is about half a million to buy. Which means a mortgage of about $2500-$3500 a month. RENTING (2b/2b apt) is about $1600, and a house is about 2k.

Childcare: In our area infants are $1600 p/month each, todderls about 1k, and school aged kiddos between $500 & $1000 a month.

Food: The average food budget for our area is about $750 a month. Most people spend more, some spend less. A lot depends on quality and quantity.

1 kid in daycare and owning your own home means you need at LEAST $4500-6000 per month (depending on how old your children are, and that's before paying bills (car, gas, power, etc.), much less casual living (clothes, haircuts, movies/books, girl's night) OR saving. AKA min of 54k-72k to be hand to mouth. AKA why 100k is solid middle class, an 44k is poverty line. You can't afford to feed yourself at 44k per year.
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Can a single person live on 65k? VERY easily. Can a small family? Yes, but it's TIGHT, and one person usually needs to stay home to negate childcare costs or spouses trade. 65k would be lower middle class (for a family of 3 the poverty line/welfare is apx 44k in our area). Our family has lived on 50k for years, and on FAR above that.

In our area 100k per year is "solid" middle class. Enough to be in the black even with a modest vacation every year but you still have to budget very carefully and there will be times when you're completely strapped. $150k is upper middle class.

In other areas 100k per year would be lower middle class OR upper middle class OR quite wealthy.

It all depends on what the cost of living is in your area.

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We make less then half of that, for a family of three. From my perspective, that is SO more then enough. However, we don't have to pay for daycare. We also live in the south, where quality housing is plentiful. Our house payment is half the cost of yours. We own one car, and are about to pay off the other next month. I am able to take on odd jobs (with my son in tow) and funnel all of that directly into savings. We don't really buy clothing. I think the last time I bought any clothing, was many years ago. Thank goodness, I fit into my regular clothing right away after pregnancy! That is mostly a choice, I suppose. For us, clothing allowance money, looks much better in the savings account for college.

95,000...that's WAY more then enough. If you can't do all that with 95,000...personally...I think there is something wrong.

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that is about double what we live on right now.
If I spent $70 on a pair of pants I would honestly be mortified. $20 is the max I would spend on any clothing, for anyone, apart from shoes.
We really pinch pennies though, I am not knocking you for spending that much on your clothing - but that is an area where you could save big - charity shops, or walmart clothes, nobody knows the difference.
I line dry my clothes, saves me $50 a month at least. I also have no car notes, but one car is 20 years old, and the other 10. We have no mortgage, and that is how we can live on $38k a year, but we live in a tiny 2 bed mobile home.
Yes 65k is enough, but you will need to be frugal and save for your retirement. Also you will save a bunch when both your kids are in school.

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Are your kids going to public schools?
Do you drive older cars until they need to be replaced?
Do you take family vacations? Can you do with camping, rather than exotic locations?
Do you take advantage of free activities (Como Zoo, rather than the MN Zoo)?
Are you able to tell your kids "no" when they want things that they don't need?

I think it is feasible if you are smart about it. $95k should be NO problem at all.

My parents raised 5 kids in St. Paul. We all went to Catholic school and my parents worked FT, probably pulling in about $65k.

ETA:
Oh, yes, and paying for college? We are in the top 5% of wage earners and my hubby has NO plans to pay for our kids' college. He expects them to earn scholarships and work to put themselves thru school. He didn't take out a DIME in undergrad loans because he busted his butt to pay his own way, thru working FT and getting good grades in high school to earn scholarships. His parents were immigrants who left their fortune behind in their native country and entered the US with only a few thousand dollars.

My parents didn't pay for my college. I have a wealthy aunt who reimbursed me for my books, but that's about it. The rest was financial aid. Yes, I have loans, but it held me accountable so that I HAD to get a job as soon as I graduated and I WILL have to go back to work after my kids are all in school so I can pay those loans off.

ETA2: Also, choose your kids' extracurriculars wisely.

Take advantage of the St. Paul Parks & Recreation t-ball, soccer, etc. Don't pay big bucks for traveling leagues, because only a small fraction of those kids end up with college scholarships.

Choose basketball over hockey--MUCH cheaper and you don't have to bend over backwards to accomodate rink time.

Will write more later--kids are done eating lunch and need naps!!

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Not us, no, we're at more than double that and it's tight.

:(

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The faster you can pay that mortgage off, the easier it will be.
For our first house we had a 30 year mortgage and paid it off in 15 years.
Once that was paid it was much easier to save.

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In St. Paul, it is close, especially at what your mortgage is costing you, but yes, you can do it. Of course, 95 grand is better but certainly not wealthy, but will you be tempted to spend more and up your quality of life if you were to acquire a bigger income? In the end, more money might not really do much for you at all if you're not into frugal living. If you want savings, you have to live frugally whether you have a big income or a small one.

In the end, I think it's about choices, sacrifices, and doing your homework. Life can be ideal if you pay off the mortgage. But that could be years, you haven't said when you'll be done. You also didn't mention utilities, whether there are association fees, high property taxes, and so on. In the interim, if you find a good investment specialist, are careful with your savings, you should do fine.

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That's about 25,000 more than what we make, and yes we struggle and make sacrifices and looking for something that does pay a little more since it's mostly living paycheck to paycheck and I do worry about saving for college every day. But, if we can make it on 40, it can be done on 65. We make just enough to not qualify for any govt assistance. So my answer is based on with no food stamps or assistance of any sort. If we had a larger family, we would probably qualify, we are a family of 4.

But like what Jen said, it depends on where you live and how you live.

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Sure. It all depends how you manage the amount you make--whatever the amount. Sure the college & 401Ks might build more slowly on 65K vs. 95K but I know families that make it work with less.

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Is this your combined two incomes or 65 a person? If you want to have adequate retirement for two people at age 65 AND two college funds, then no, 65,000 is not enough. I supposed in some places where the cost of living is extremely low it may possibly be, but I think it would still be a great stretch. I think 95K would still be quite a tight stretch as well.

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Gee, we make about $20,000 and pay bills.

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I don't think so. I think it would be hard to just cover day to day expenses for a family of 4 on 65K let alone save for two college tuitions and retirement.

I think even at $95K it wil be tough to save enough for two kids in college.

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Totally depends on where you live and how you live. Where I live (absolutely, 100% totally my choice) there are no mortgages or rentals for $1,200. I also have a 20 year mortgage so it costs me even more per month. Retirement, college for my only daughter, savings, travel, activities and sports, living in a great area and not having to worry if I'm going to have to feed my kid beans and rice at the end of the month has been a huge motivator for me.

Do you get to choose at this point if your combined income is $65,000 or
$95,000?

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Yes, it is very doable.

I do it alone.

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It completely depends on the cost of living in your area. More money usually means more freedom but planning is still a must. Denver has a higher cost of living than Iowa but far less than California. I did mortgages for a long time and saw a lot of people with that range of income have a family and a comfortable home. I also saw people with incomes upward of $300k who were so completely strapped in debt, they couldnt do anything.

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I make $42K and we try to live off of my salary. My husband pays approx $600/month for our bills (electricity/health insurance.) But, I pay for everything else (including $1000/month daycare.) If I made about $10k more per year, it would be doable. We live in a small condo ($750/month mortgage) and are trying to save up to pay for a 'real house'. Our vehicles are older and paid for. No credit card debt. I think that $65K would be pretty easy to live on and save, if you live within your means!

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yes. we started out making $65K a year when my husband got out of the USAF and we are in Washington, D.C. We own a nice town house and have no debt other than the mortgage (which should be paid in 7 years).

You can do what ever you want to do...the world is your oyster! If you want make it on $65K a year - you can...

College? Well, do the upromise or 529 plan. Make sure your kids do well in school so they get scholarships....you don't have to plan to pay for their college - while it's nice in theory - there's nothing wrong with expecting them to pay for it either through student loans...

At $95K a year in the midwest you should be sitting pretty....

GOOD LUCK!

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Depends where u live! Seattle I believe the average medium home price is almost 400,000 . Our sales tax is high.. Our property taxes are high.. I think everything is all relative..

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That's what we make (66,000) and I don't have to pay for daycare. Yes, it's enough.

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I live in NY so no, it's not enough. My hubby and I cannot survive on what we make right now, which is about 90k a year combined. (me working part time). We are making some major changes, including no more paying for childcare, but sending the 4 yo to Catholic school pre-k (because it's full days M-F 9-3) and 5 yo starting full day kindergarten. But I'll be working from home with a baby, we'll see how that works out! Our mortgage is $2300 a month. And that is with a refi done recently and INCREDIBLY low interest. Ay yay yay. It's all relative right? We need to actually make about $140k.

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It depends on where you live and your lifestyle.

Could we live on $65,000.. Of course but with a lot of sacrifices and we would not have the lifestyle we currently have.

We live debt free with exception of our mortgage which is lower than most nice 1 bedroom apartments in our community ($1064. for a 4000+ sq ft house on 1/2 acre)... we run our own company which has yearly sales of $3+ million a year, I also substitute teach, daughter babysits.

We believe in multiple income streams and delayed gratification.

As for college, we started saving for daughter's college before she was born. At 16 she is fully funded. If she gets scholarshiops, which she probably will, then whoo hoo... some of the money can go towards her children's education.

Unlike some others, we feel it is our parental obligation to get her through college debt free and off to a good start. She is very driven (like her parents) has specific goals and has her mind set on nothing but the best. Failure is no option.

What about your cars... are they in good shape? Your house.. potential repair issues? Rainy day fund for whatever needs to be about 6 months salary. We keep about 6 months worth of food/toiletries stocked up. We have also funded our retirement... we did not have our daughter so she would be our retirement plan.

We do eat out a lot, we do travel a lot, we do dress well, we do the country club routine and we spend a ton on $$ on daughter's cheerleading training plus the fundraising that goes along with it at school.

So, it just depends on you, your lifestyle and what is right for your family. We are in the top 5% of earners, we are very much numbers people (we plan like crazy) and we live below our means.

Good luck to you with this decision!

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Depends on other factors in your budget. I suggest meeting with a credit counselor and asking them to prepare/review a budget for you. This is a totally free service and will not affect your credit.

Here is one option:
http://www.consumercredit.com/

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It Is as long as you live below your means. I suggest you read the following book. http://www.amazon.com/Wealthy-Barber-Updated-3rd-Commonse...

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Sounds perfect! 65 is a great income, especially if you are not on the west coast.

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Wow, let me just say that I hope we someday have a combined income that high! :)

You'll need to itemize your own budget based on your net income and look at what you can put into savings and investment accounts for retirement and college. Consider your area's child care options and see what would best meet your needs (different types of care cost different amounts, see what is best and most affordable for you). For my family, we work opposite schedules so we only have to pay $120 a week for our shift overlap with people coming to our home. It works better and saves us a lot. We could not afford to do without our two incomes, even with paying for care, but we also could not afford to both work days.

So, it sounds like an unbelievable income to me, but that is because we live on much less. (Not easily, or comfortably some days, but we manage.)

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That really depends. Wouldn't do it here. Mortgage payment is $2400 a month. Save for college? Even a state university is about $20,000 a year all inclusive - and my oldest is going in two years, if you have small kids it could be much more costly. Save for retirement? Keep in mind that if you retire at 65, you could be alive 25 years. If your kids are daycare age, think about the expenses as they get older - braces (I've paid over $10,000 both kids combined), sports, scouts, what big kid clothes cost, the costs of SAT/ACT tests, prep courses for those tests, drivers ed, how much more expensive it is to have a teen on your auto insurance - yes, I know I'm at a very different stage of parenting than you probably are if you're still doing daycare and I'm 44 with a 12 and a 16 year old, but when I downgraded my career, these were not expenses that I had envisioned and made allowances for back when my kids were 1 and 5.

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I think you need to find out how much you need to save to get through retirement (and college if you want) and THEN decide if it's enough.

I personally don't think it's enough if you don't save enough, or if you have emergencies, like health issues or house issues. You're going to need new (buy used) cars soon. What is one of you loses a job? How much do you have in saving now?

It's great you don't have a lot of debt, but I'm not sure you have a lot of cushion right now.

Addition: I read another question from a mother you was struggling b/c she didn't have savings and was unexpectedly put on bed rest. So no amount of income will save you if you don't have a bunch put away. Good luck!!

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I think you're doing great! Debt-free is awesome!!

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I think that's totally doable. When we lived in CA, my husband made $93000 per year. We were barely making it but that's because we had a high rent (lived near Laguna Beach), and he has a TON of student loan payments that were just killing us.
Now he makes almost half of that, and it's been a killer since we moved here to VA. But, somehow we are still here, fed, clothed, still have a house and cars and healthy. Plus he works a lot of overtime

So, if you have no debt, then that should be more than enough

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Nope - that would be enough for each of us if we were both making it. To live very modestly and within our means (meaning paying down current debt and accruing no more debt) we would need to consistently bring in $125 a year combined, which we don't do consistently. To actually get ahead and start serious savings (our first two will be off to college in 5 years! yikes!) our target household income is more like $150. Now that all of my kids are in school I hope I can position myself for a promotion and a serious raise because we need it! That said, the cost of living here is relatively high. My mortgage is $2500/month for a small ranch home that is one bedroom shy of the number we need.

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I'm not familar with the cost of living in your area, however, I would say YES, a family could live a modest comfortable life on that amount. However, I don't think that they would be able to fully pay for college for 2 children. Of course, who knows what investments will do in the next 10-15 years?

I know several families living in CT that are making less than that (and CT has a fairly high cost of living) are are doing ok.

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65K is about what my husband makes working two jobs. Once I start working again, we'll hopefully bump up to 100K. So far what my husband has been making has been doable, but we live in CT so it's been very stressful. The cost of living continues to rise but most employers are not giving adequate raises to reflect or accommodate cost of living. We just scrimp and cut and save where we can. We play bills off of each other. We do a lot of couponing. We try to make sure to use as much energy-saving behavior as possible and we don't drive a lot or take traveling vacations.

I think it really depends on where you live, your spending habits, your saving habits, and your debt load.

In Phoenix you could live & save quite nicely on a combined salary like yours. In the Bay Area in CA, not so much.

You could make 200k a year but have a 5k house payment, 800 a month car payment, and 100k in debt.

The answer to a question like this is not so cut & dry.

Dave Ramsey teaches you that you CAN save & pay off bills on most any salary. It's a matter of telling yourself "no" & having goals & willpower.

I say sit down and put it on a spreadsheet to get your answer. Keep in mind an emergency fund for cars. Cost of living is so different from place to place that your answers will vary tremendously. Consider a financial planner just for a discussion as well. They can let you know how much you need for retirement and college.

We are living on about $40k per year right now.
For 3 of us.
But that is just his income. Pretty soon I will be going back to school and becoming a RN and then a morgue tech.
His job will increase in it's annual salary as he goes higher up the "food chain".

We should be bringing in about $150k per year when we are both done with school.
I mean, right now we are doing $40k and making it,
BUT I do not think we would get through her teenage years or her college years making this little,
and $65k doesn't seem like a whole lot more to me.

So my vote is no, it's not enough.
$95k would or should be though :)