Majority Of US Prefers Communities With Big Houses, Even If Local Amenities Are Far

[Steely Dan]

Originally Posted by mja

I'm a teacher. My wife is adjunct faculty. We do just fine, but we're far from upper class. That's neither here nor there though. My point was simply that it's a perfectly valid choice to raise a "normal" family in a walkable urban environment, since that seems to be something of an open question in the thread.

My kids are a bit younger than yours (2nd & 3rd grade), but I'm essentially living the Chicago version of your life.

How class gets defined is always a contentious issue, so sometimes it's best to just use real numbers. We're a two-income family with two young children and a household AGI of $125K. We bought a 2,300 SF 3 bed/3 bath condo in a Chicago 3-flat for $420K almost 6 years ago now. We own one extremely non-fancy car (7 year old Mazda CX-5), that we try to drive as little as possible on a daily basis (it's basically our road trip device).

Yeah, we gotta carefully budget and — like most other families, but we're doing alright living our city dream in one of chicago's absolute best family-friendly urban neighborhoods.

Place my family in whatever "class" you really want to, but I would reject any suggestion that we are "upper class".

This would be a very doable thing for many other non-upper class families to do as well, but different choices/priorities need to be made from the typical suburban American default.

[mja]

Originally Posted by Steely Dan

My kids are a bit younger than yours (2nd & 3rd grade), but I'm essentially living the Chicago version of your life.

How class gets defined is always a contentious issue, so sometimes it's best to just use real numbers. We're a two-income family with two young children and a household AGI of $125K. We bought a 2,300 SF 3 bed/3 bath condo in a Chicago 3-flat for $420K almost 6 years ago now. We own one extremely non-fancy car (7 year old Mazda CX-5), that we try to drive as little as possible on a daily basis (it's basically our road trip device).

Yeah, we gotta carefully budget and — like most other families, but we're doing alright living our urban dream in one of chicago's absolute best family-friendly urban neighborhoods.

Place my family in whatever "class" you really want to, but I would reject any suggestion that we are "upper class".

This would be a very doable thing for many other non-upper class families to do as well, but different choices need to be made from the typical suburban American default.

Very similar situation, I think I'm just 5-10 years further down the line. Drove a Kia Soul for 10 years before buying a new car a few years ago (again a Kia) that I'm also going to drive for 10 years or more. Only one 48" TV in the house that we need to switch out that we've had for 9-10 years. Otherwise, we don't eat out a ton or anything, and we mostly just visit family during the summer.

That doesn't sound terribly upper class to me, but what do I know?

[subterranean]

Originally Posted by Steely Dan

My kids are a bit younger than yours (2nd & 3rd grade), but I'm essentially living the Chicago version of your life.

How class gets defined is always a contentious issue, so sometimes it's best to just use real numbers. We're a two-income family with two young children and a household AGI of $125K. We bought a 2,300 SF 3 bed/3 bath condo in a Chicago 3-flat for $420K almost 6 years ago now. We own one extremely non-fancy car (7 year old Mazda CX-5), that we try to drive as little as possible on a daily basis (it's basically our road trip device).

Yeah, we gotta carefully budget and — like most other families, but we're doing alright living our city dream in one of chicago's absolute best family-friendly urban neighborhoods.

Place my family in whatever "class" you really want to, but I would reject any suggestion that we are "upper class".

This would be a very doable thing for many other non-upper class families to do as well, but different choices/priorities need to be made from the typical suburban American default.

You must have been living a fairly meager existence prior to kids entering elementary school because my wife and I paid half for our house as you did for your condo (speaking nothing of your HOA dues), make nearly double your household income, have just one car payment, have a budget, and we still struggle. Granted, we save for retirement and travel (nationally) a few times a year for family visits, but we are not living high on the hog.

Our daycare bill is much more than our mortgage at $2500/mo. We each save 15-20% into retirement depending on the year, and save a couple hundred bucks per kid per month into their college funds. We eat out maybe once every other week. We each work from home 3 days per week and have a hybrid so our gasoline costs are pretty low at maybe $130/mo., mostly weekends. We have an emergency fund that should be bigger, but we certainly have to make sacrifices to decide how our money is spent. We’ve had the same crappy 80s kitchen for example since I bought the house 7 years ago because we choose to save instead. I’ve driven the same crappy 12 year old car because it’s paid off and who cares, really.

We basically refuse to move (because comfortably we can’t) until that part of our budget is freed up.

[Crawford]

20% of salary saved into retirement account sounds high unless you're playing catchup or something. My parents can basically live off of SS payments, and in an area like Portland, one would assume your home sale/downsize will yield a significant nest egg. I only do the minimum 401k match, though I have other untaxed or lightly taxed income sources that will serve me in retirement.

[iheartthed]

I agree that 20% sounds like a very high 401k contribution, especially if you don't have at least a year in your emergency fund accounts.

[subterranean]

I didn’t start my savings until I got my first professional job at nearly 30. Also, my wife is 5 years younger than me and I would like to retire long before she can collect social security. Believe me, I’ve done the math.

[Investing In Chicago]

Originally Posted by iheartthed

I agree that 20% sounds like a very high 401k contribution, especially if you don't have at least a year in your emergency fund accounts.

Well 401K's have a max contribution, for 2023 it's $22,500 or $30,000 if you're 50+ years old, and depending on company match, maxing out 401K is a good choice for most people.

The problem is, depending on other factors of course, people shouldn't rely on 401k alone for retirement income.

Especially true with young kids, but it's crazy how expensive it is to just live.

[subterranean]

I’ve got both a 401(a) as a component of my pension plan, as well as a 457, each with their own limits. Wife is technically at a nonprofit so hers is a 403(b).

[Steely Dan]

Originally Posted by subterranean

You must have been living a fairly meager existence prior to kids entering elementary school because my wife and I paid half for our house as you did for your condo (speaking nothing of your HOA dues), make nearly double your household income, have just one car payment, have a budget, and we still struggle. Granted, we save for retirement and travel (nationally) a few times a year for family visits, but we are not living high on the hog.

First off, my condolences on the day care payments. That timespan of child rearimng truly — from a finance standpoint


Secondly, your life will change when, one day, they magically get to go to public school for free!!!!!!! for some reason.


Third, back during our day care days, my wife had a significantly higher salary at an ed-nonprofit. She HATED it, but hey, we needed the money for those crippling double daycare payments. Once the sun started setting on our daycare years, she quit that job to become her own boss as an independent ed consultant. She only makes about half of what she did, but she now has 100% control of her schedule, and has maximum freedom/flexibility to do the vast majority of the heavy lifting on all of the kids stuff, since I'm now in an old school M-F 7-4 office job toiling away for some of that sweet sweet family health insurance nectar.


We ain't rich, but like most families, we do our best to live within our means and find a way to make it work.

[Crawford]

Originally Posted by subterranean

I didn’t start my savings until I got my first professional job at nearly 30. Also, my wife is 5 years younger than me and I would like to retire long before she can collect social security. Believe me, I’ve done the math.

If you're paying >$2500/month in daycare, that's obviously an expiring expense. That's a huge money bump that should give you guys huge flexibility.

[subterranean]

Originally Posted by Crawford

If you're paying >$2500/month in daycare, that's obviously an expiring expense. That's a huge money bump that should give you guys huge flexibility.

Yeah, we will be fine and will have more options in the future, but that’s a severely limiting constraint of many young two-earner families who don’t have family support, either financially or through childcare.

[subterranean]

Originally Posted by Steely Dan

First off, my condolences on the day care payments. That timespan of child rearimng truly — from a finance standpoint


Secondly, your life will change when, one day, they magically get to go to public school for free!!!!!!! for some reason.


Third, back during our day care days, my wife had a significantly higher salary at an ed-nonprofit. She HATED it, but hey, we needed the money for those crippling double daycare payments. Once the sun started setting on our daycare years, she quit that job to become her own boss as an independent ed consultant. She only makes about half of what she did, but she now has 100% control of her schedule, and has maximum freedom/flexibility to do the vast majority of the heavy lifting on all of the kids stuff, since I'm now in an old school M-F 7-4 office job toiling away for some of that sweet sweet family health insurance nectar.


We ain't rich, but like most families, we do our best to live within our means and find a way to make it work.

Thanks lol. One more year on one, 4 more on the other. I love being their dad, but wild how much things cost these days. Kudos to you, brother.

[iheartthed]

Originally Posted by Investing In Chicago

Well 401K's have a max contribution, for 2023 it's $22,500 or $30,000 if you're 50+ years old, and depending on company match, maxing out 401K is a good choice for most people.

The cap is so that rich people don't abuse it. People with very high incomes are exactly the ones where a very high contribution would make financial sense, because 1) they should need less of their income to cover living expenses and 2) they can defer taxes on a substantial amount of money while still putting the money to work in 401k funds.

You should max retirement account contributions as much as you can afford to, but I wouldn't recommend prioritizing them over a comfortable rainy day fund.

[Steely Dan]

Originally Posted by subterranean

Yeah, we will be fine and will have more options in the future, but that’s a severely limiting constraint of many young two-earner families who don’t have family support, either financially or through childcare.

Yeah, it's nuts how expensive the first 5 years of a childs' life have become for families that don't have a full-time care-giver available

"So, you're a young couple just starting out to build a life and a family for yourselves? That's wonderful, how exciting!

Now, and I hate to go into these kinds of sordid little details right off the bat, but if you two are both going to keep your jobs and continue to build your careers, we are going to need to go ahead and set your wallet completely on fire, and keep it burning for about 5 years. Hopefully that's not a problem for you.

"uhhhhhh...... okaaaaaay? What happens after 5 years?"

"Oh, we take it from there. You'll still be responsible for all of the other crushing expenses of raising children, but from 8-3 Monday thru Friday, we got you covered for the next 13 years (except for those niggling little 3 months of summer each year)!"

"13 years? What happens when they turn 18?"

"We'll discuss that later. For now, enjoy a little temporary poverty as you lose both your sanity and any savings you might've had. Good luck!

Oh, and one more thing, we're now headed towards a demographic black hole, so we're gonna need you to go ahead and do that at least 3 or 4 times because this whole "1 or 2 kids per family" thing just isn't pencilling out. So, yeah......... that would be great."




I don't know what the solution is, I just know that current policy ain't working.

Originally Posted by subterranean

Thanks lol. One more year on one, 4 more on the other. I love being their dad, but wild how much things cost these days. Kudos to you, brother.

And thanks to you.

It's hard, I know, but you'll get there.

There was one other piece I forgot to mention that allowed us to get our $420K condo, and that was some dumb luck on the part of my wife. She bought her first condo before we met back in 2009, after the local condo market here had completely imploded. She had a real estate agent friend who tipped her off on a West loop condo project that was under construction at the time and almost finished and the developer was letting units go at fire-sale prices just to get out of the damn thing

She bought a unit there for a song and the West loop then proceeded to BLOW UP!, and 8 years later we were able to sell that condo she bought at $150K for $250K, which allowed us to put 25% down towards our "forever home".

So we owned 1/4 of our home with a nice low 30-year fixed rate on the first day we moved in, which is obviously WAY harder to do these days for most younger couples.

[Investing In Chicago]

Originally Posted by iheartthed

The cap is so that rich people don't abuse it. People with very high incomes are exactly the ones where a very high contribution would make financial sense, because 1) they should need less of their income to cover living expenses and 2) they can defer taxes on a substantial amount of money while still putting the money to work in 401k funds.

You should max retirement account contributions as much as you can afford to, but I wouldn't recommend prioritizing them over a comfortable rainy day fund.

Agreed. Get the rainy day fund going, and get bad debt paid off. The thing with 401k's is that for many it is their only savings heading into retirement, and so like a home, it's a forced savings account.

[SnowFire]

Originally Posted by mja

Very similar situation, I think I'm just 5-10 years further down the line. Drove a Kia Soul for 10 years before buying a new car a few years ago (again a Kia) that I'm also going to drive for 10 years or more. Only one 48" TV in the house that we need to switch out that we've had for 9-10 years. Otherwise, we don't eat out a ton or anything, and we mostly just visit family during the summer.

That doesn't sound terribly upper class to me, but what do I know?

tv size is a very old metric of wealth. odd to use that.

[Crawford]

A TV costs about as much as two days of childcare.

[mja]

Originally Posted by Steely Dan

Yeah, it's nuts how expensive the first 5 years of a childs' life have become for families that don't have a full-time care-giver available

"So, you're a young couple just starting out to build a life and a family for yourselves? That's wonderful, how exciting!

Now, and I hate to go into these kinds of sordid little details right off the bat, but if you two are both going to keep your jobs and continue to build your careers, we are going to need to go ahead and set your wallet completely on fire, and keep it burning for about 5 years. Hopefully that's not a problem for you.

"uhhhhhh...... okaaaaaay? What happens after 5 years?"

"Oh, we take it from there. You'll still be responsible for all of the other crushing expenses of raising children, but from 8-3 Monday thru Friday, we got you covered for the next 13 years (except for those niggling little 3 months of summer each year)!"

"13 years? What happens when they turn 18?"

"We'll discuss that later. For now, enjoy a little temporary poverty as you lose both your sanity and any savings you might've had. Good luck!

Oh, and one more thing, we're now headed towards a demographic black hole, so we're gonna need you to go ahead and do that at least 3 or 4 times because this whole "1 or 2 kids per family" thing just isn't pencilling out. So, yeah......... that would be great."




I don't know what the solution is, I just know that current policy ain't working.






And thanks to you.

It's hard, I know, but you'll get there.

There was one other piece I forgot to mention that allowed us to get our $420K condo, and that was some dumb luck on the part of my wife. She bought her first condo before we met back in 2009, after the local condo market here had completely imploded. She had a real estate agent friend who tipped her off on a West loop condo project that was under construction at the time and almost finished and the developer was letting units go at fire-sale prices just to get out of the damn thing

She bought a unit there for a song and the West loop then proceeded to BLOW UP!, and 8 years later we were able to sell that condo she bought at $150K for $250K, which allowed us to put 25% down towards our "forever home".

So we owned 1/4 of our home with a nice low 30-year fixed rate on the first day we moved in, which is obviously WAY harder to do these days for most younger couples.

Again, similar story. We bought a cheap loft in 2003, the market took off and we sold it for more than 100K more just 2 years later. A little luck never hurts; we'd be in a smaller home for sure without it.

Also, I'm at the post-13 years part. It's a whole new thing.

[mja]

Originally Posted by SnowFire

tv size is a very old metric of wealth. odd to use that.

I'm nearing 50, what can I say? The day we finally got a VCR and the day we finally got cable TV are core childhood memories. It felt like we were finally getting somewhere.

Also, if I were really upper class, I would have surely already replaced my 10 year old 48 inch Samsung with progressively failing pixels years ago. A nice 55 or dare I dream 65 inch 4K OLED? Spending 1 or 2K on a luxury item feels wrong right now though, what with the whole college tuition thing, but I'll probably finally bite the bullet in the fall.

[JManc]

Originally Posted by SnowFire

tv size is a very old metric of wealth. odd to use that.

Now they are but if you were rocking a 32" Sony Trinitron back in the day, you made it in life.