Home Economics No. 1: Living in Brooklyn on $466k joint income
Welcome to our new series where we get a peek at someone's financial life.
Welcome to our new series HOME ECONOMICS, where we take a deep dive into someone’s financial situation by looking at their earnings, monthly expenses, and general money story.
To kick off our series, we have a 38-year-old working mom living in Brooklyn with her husband and baby.
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Age: 38
Location: Brooklyn, NY
Relationship status: Married
Age of partner: 39
Income:
Your job title/salary: Senior Vice President, Media Planning - $286,000
Partner’s job title/salary: Managing Partner - $180,000
Your monthly take-home pay (paycheck amount after taxes and other deductions): $14,892
Partner’s monthly take-home pay (paycheck amount after taxes and other deductions): $10,500
Total monthly take-home pay: $25,392
Account balances:
Checking account balance: $3,910 total; $825 in personal (I always keep a low balance—gotta get that extra bit of savings interest!) + $3,085 in our shared checking account (which is where we draw money to pay for our mortgage and utilities)
Savings account balance: $19,376 (4.35% APY) total; $12,950 in personal + $6,426 in joint savings
Emergency fund: $16,098 (5% APY)
Monthly contribution to savings account: $2,000–$3,000
Retirement account(s) balance:
401(k): $117,616
Roth IRA: $88,928
Monthly contribution to retirement accounts: $2,490
Investment account balance: $0 (but opening one soon)
Housing & Utilities:
Size of your home: We own a townhouse: The main residence is 3 bed/2.5 bath; the garden apartment unit is 1 bed/1 bath; total living space is roughly 2,100 square feet.
Mortgage: $6,497
Current home value: $1,406,000 (based on New York tax assessment; the Zillow estimate is $1,537,000)
Current mortgage balance: $1,190,300
Year you bought your home: 2022
Price you paid for your home: $1,530,000
Mortgage interest rate: 3.875% (10/1 ARM)
Property taxes: $570
Home insurance: $1,500/year
Electricity: $370 average
Water: ~$50
Internet: $80
Housekeeper: $500 for one visit per month (includes tip)
Natural Gas: $50 average
Transportation:
Monthly car payment: No car
Monthly public transportation: $100
Ride shares (Uber, taxi, etc.): $200
Children:
Number of children and their ages: one, 8 months old
Extracurricular activities: ~$150 in crafts + music classes, etc
Other: Au Pair - $2,230 total: ~$1,550 for their stipend + $130 for transit + ~$500 food + space in our home to live (garden apartment) + $50 in occasional gifts/extras
Debts:
Student loan total balance: $0 (I did have student loans; the beginning balance was around $66,000 but after interest, I paid closer to $104,000. I went to a private college for undergrad but most of my tuition was covered by scholarships. The bulk of my student loans was from my one year of grad school. It took me 10 years to pay them off.)
Personal loan total balance: $0
Credit card balance (if you carry a balance month to month): I pay my credit card off in full each month. (I never carry a balance unless I absolutely need to, which is rare.)
Food:
Groceries: $200 (husband also contributes this amount or more)
Dining out: $500 (including delivery; husband also contributes)
Socializing & Entertainment:
Subscriptions (streaming services, magazines, etc.): $60 (Spotify premium family, Netflix, Peacock [for Housewives, LOL], and we usually flip back and forth with AppleTV+ and Hulu depending on what shows are out. I pretty much always pay for no-ad options.)
Memberships (museums, etc.): $225 annual (We just joined the local children’s museum this year!)
Movies, concerts, other events: $50
Other: $200 (not every month, but we like to have friends over from time to time)
Miscellaneous:
Clothing: $400 (including baby clothes)
Home supplies: $250
Exercise: $44 (Peloton subscription)
Personal and self-care (haircuts, manicures, massages, etc.): $50 (I rarely do/pay for any of these types of things, but I get my hair cut 2x a year, and it costs $250/cut. I added a bit more for some small beauty purchases, such as cosmetics or moisturizers. A perk of my job is that we are often treated to things like manicures and massages from our partners, so that's how I usually experience those things. But generally I don't do nail polish or much cosmetics, etc.)
Pet expenses: $250 (food, litter, etc.)
Pet insurance: $382 annually
Donations: $200/month recurring + additional throughout the year (We donate regularly to abortion access funds, library funds, and a local food kitchen. I probably donate another $1,000 or so throughout the year when friends are fundraising, and we participate in a fundraiser for reproductive rights each year.)
Insurance:
Health: $550 (family insurance; comes out of my husband's paycheck)
FSA: $416 (family insurance; comes out of my husband's paycheck)
Tell us more:
What are your top financial priorities?
Security for the unexpected
Future retirement
Setting up my kid for success in the future
How do you feel about your current financial situation?
I feel okay. I make a good salary (but in an industry with a degree of instability). I am a strong saver, but I am also an over-spender, and our expenses have grown dramatically since buying a home and having a baby. I would like to be more intentional with my shopping so that I have an even stronger savings safety net.
What are your money stressors?
Mostly fear of the unknown. Plus, I am the more money-minded person in my relationship, so I feel like I take on the lead role here. Buying a house has been a money pit, and it's a decision you can't take back for a while. So we have to find ways to make our finances work for this while still enjoying our lives living in Brooklyn. I am also a person who wants to always feel like I could survive on my own, so keeping my own personal finances and retirement funds secure is very important to me.
Do you expect to receive (or have you received) an inheritance from a family member?
I will not directly receive anything. If anything I will become more responsible financially for the care of my family. My husband will likely inherit a substantial amount of money from his parents. As a very pragmatic and money-cautious person, I don't look at that as a certainty and don't take it into account when I think about the future.
Do you receive any financial support from your family?
We received money as a gift from my husband's parents when we got married and then also when we bought a house (they gifted us $250,000 for our downpayment; they gave the same amount to his sister for the same purpose). We do not get any ongoing financial support, but if we desperately needed it (due to loss of income, illness, etc.) they would certainly help us.
Do you financially support any family members beyond yourself and your nuclear family?
Not on an ongoing basis, but I have given significant financial gifts to my mother and sister at various times. I expect to have to support my mother in the future, possibly soon. I would help my sister if she ever needed it.
How do you and your partner split your finances? How did you decide to go that route?
We manage our money separately with the exception of a shared checking for mortgage and utility payments and a savings account for big or unexpected home expenses (e.g. we had to get a new roof last year). We cover any joint costs at a ratio based on our incomes (roughly 60% me/40% him), and we don't police this very closely when it comes to things like groceries/eating out/home supplies/etc., but it mostly comes out to half or 60/40 when you take a closer look. I do tend to be the buyer of most baby clothes and equipment, but this is a newer aspect of our lives that we haven't fully figured out yet.
There is no expectation for either of us to consult the other when we make any purchases, even big ones. We sometimes ask each other for thoughts, but we never imply that there is judgment of a purchase. Despite that, I think sometimes we're both still anxious about feeling judged by the other.
What is one financial goal(s) you still want to achieve?
This year my big financial goal is to have an income-generating brokerage account. Long term, I would like to retire as early as possible, and having funds that create high interest will need to be a part of that. This year, I've begun working with a financial advisor who is building a proposal for me with these goals in mind. I'm working to reduce my mindless/unnecessary spending so that I can put that money to better use.
What do you regret spending your money on the most?
In all honesty, I wish we had waited to buy a home. It has been one headache after another, and beyond just the massive cost of a mortgage/taxes/insurance, we also have had to spend tens of thousands in repairs. There's also a momentum that pulls you into spending more: We have a basement, so we should set it up with a storage system; we should install a closet system; we should get a new couch; we should buy more decor, etc. It's an expense that never really ends.
I also regret the mindless Amazon spending that I do. Sometimes it's an Instagram ad that gets me in a moment of boredom; other times it’s just the knowledge that I can get what I want right away without thinking if I actually need it.
What is one thing you spend money on that makes your life better?
Cleaners. We started hiring cleaners every few months last year, and it has changed my life. We now upped this to a regularly monthly schedule, and it has made me less stressed overall, especially with a bigger home and a baby now.
What is one thing you spend money on that drives you crazy?
Both my husband and I EACH have an Amazon Prime subscription. I hate it. It feels like a waste of money each year. BUT it's impossible to truly merge our accounts last time I checked, and that means one of us would completely lose their purchase history, and neither of us is willing to, haha. I’m probably insane, but I’m always looking up things I bought years ago. I think he is also uncomfortable with the idea that I could see every purchase he makes on Amazon. Maybe I am, too?
Is there anything else you would like to add?
My salary jumped up significantly twice over the last three years based on job changes I made. I went from $140,000 in 2020 to $200,000 in 2021 to $286,000 + bonuses at the end of 2023. That represents leaving a toxic job in 2020 and taking six months off to now being in a really rewarding role that is also well-paid. I also saw my title go up a level in each move. Three years ago I would not have predicted that I would be here, but I chose to be really intentional with the jobs I went after.
My mentality about money was very much shaped by growing up very poor. We were even homeless for a while when I was young. I've always been very motivated to be a high earner because I crave security and safety.
I’m excited to open the comments for Home Economics, but I ask that people please be thoughtful in what they post. I reserve the right to delete any comments that are not kind. Thank you!
Hi there! The OP came back w/ some additional details on the two biggest points of discussion FOOD and the AU PAIR. Here are her notes. :)
Monthly Food:
-We do a heavy mix of home-cooked PLUS delivery food from all kinds of restaurants/cuisines (not things like McDonalds). This may be strange for people outside of NY, but it feels pretty normal to us.
-Yes, I spend about $200/month on going to the grocery store; but my husband spends between $400-500/month total
-The food bought at the grocery feeds me, my husband, and the au pair, but so does the delivery based food
-When we grocery shop, our au pair goes along and picks out anything/everything she wants or needs for her apartment. She prepares her own breakfasts and lunches (as do we each) and for dinner she always has the option of eating what we have prepared, eating something she prepares herself or going out (which we do not give her extra money to pay for, it's at her discretion).
-As it says in the survey, our take out/delivery/eating out expenditure is roughly $1,000 between the two of us and that includes lunches when at the office (those $15 salads add up) and dinners a few nights a week, which also result in leftovers most of the time. It also includes a couple of nice date nights out a month.
-I also forgot to include a big expenditure - baby formula. We spend $280/month on formula (it's a subscription delivery service). Our kiddo recently started eating solids, but is still mostly getting calories from formula. I pay for this myself.
Au Pair: The monthly hard costs are accurate, and meet U.S. mandates. However there are many other ways she is receiving both monetary support and other kinds of support too.
-The stipend has a minimum mandate established by the US government. We pay ~17% over that based on talking to other families in the area.
-We cover all of her transportation costs. This is not required, but we felt it right to ensure she could get around easily in the city.
-We pay for any toiletries, feminine hygiene products, kitchen etc. products. She has a fully equipped kitchen and any time she needs something, I get it for her.
-We have her on our phone plan (this is required) and covered the majority of the cost for her to get a new iPhone (not required).
-We paid for a good winter coat because she is not accustomed to winters like we have and we felt it was unfair to expect her to spend that money.
-We gave her a holiday bonus of $350
-She is required to take an accredited education course during the year and host families are required to cover $500 in that educational expense.
-She gets 2 weeks of paid vacation. We gave her extra days off during Thanksgiving and Christmas that do not count against her vacation time.
-She works a consistent schedule of 8:30-5:30 Mon-Fri, with some slight changes when we have traveled. She takes breaks when the baby is napping (usually about 2.5-3.5 total hours/day) but has to stay at home. It is a legal mandate that au pairs cannot work more than 45 hours per week and must have at least 1 weekend off a month - we rarely if ever have her work outside of the aforementioned schedule.
-The garden apartment she is living in is a 1-bedroom / 1-bath apartment. In this area, we would be renting it out for ~$2,200/month based on same size rentals on our street for comp. The utilities that she generates in that apartment are roughly $150-250/month depending on seasonal usage, which we pay for.
Hope everyone is having a good Sunday. I've been following the comments closely, and so has the OP. She wanted to add a few additional details.
She writes: One thing ppl seem concerned with is retirement - so I figured I’d add that those are just MY retirement numbers. I don’t know my husband’s current numbers. But for me, I max out both my 401k and Roth IRA contributions (401k = $23k/year; IRA = $7000/year). My employer matches 100% of first 4% of salary contributed to 401k which comes to an additional $11,400/year. I didn’t include the employer part bc it doesn’t come from my paycheck, so that might be a good additional q for the questionnaire. Also Lindsey was correct in her conjecture that I didn’t put a ton away for retirement while I was paying off loans. At the time I was making $75-100k in New York and my loan payment was about $1500/month so I was really struggling to pay that off.
It also may be interesting to people that I pay ~36% in total taxes. I don’t complain about that at all, but it does mean that big income number drops by $100k annually.
I put $78k of my own savings (just me, not my husband’s) into our down payment/fees. So that wiped a big part of my savings. Then having a baby has similarly brought down my savings too as I mostly pulled from that rather than carry a cc balance to buy the equipment and pay for medical bills. I’m in a rebuild mode now.