Raising Two Kids in Missouri on $168,000 a Year

Mandy works as a copywriter. Matt is an architect at a midsize firm. In 2016, they relocated their family from New Jersey to Missouri to reduce their cost of living—but her paycheck took a hit along the way. Now they're shouldering day-care costs and a kitchen reno, and they're trying to save for the future. This is Real Moms, Real Money...

fall family portrait outside under trees
Mandy, 35, Matt, 38, and their two sons, ages 3 and 1. Photo: Matthew Kirschner Photography

How Matt and I got here …

I was working in New York City in beauty public relations but was laid off in the spring of 2016. Our older son was almost 1 then, and we realized that we probably wouldn’t be able to afford the kind of house we hoped for on the East Coast. Plus, we wanted another baby and knew being closer to family would help. Matt’s parents and his brother live here in St. Louis, and my mom is an easy-ish seven-hour drive to Omaha.

Our annual income …

Together we earn $168,000 per year, which breaks down to about $8,600 each month after taxes. Things are definitely cheaper in the Midwest. For example, in New Jersey we paid about $3,500 a month for our apartment and a parking space. Now we pay about $2,700 for our house and two cars. In New York, I was earning more than Matt. But my salary has decreased nearly $30K, which has been a blow to my ego—and to our wallets. While the cost of our mortgage, cars, groceries, and day care is down, so is our total income.

Our biggest monthly expense …

Day care costs about $2,500 a month, and it honestly feels like it might break us. But we’ve seen huge developmental benefits in our kids as a result of it, and we know the situation is only temporary. Our next-biggest expense is the mortgage, which is $2,100. After we moved, we needed a second car, so now we own one and lease the other. Together, the payments are $650 a month.

Unlike many couples …

We keep our incomes separate. We each have our own checking account—Matt pays the mortgage and I pay for day care and utilities, and we split credit-card bills evenly. We also each have a personal savings account that the other isn’t allowed to touch. Finally, we have a joint savings that we used for the down payment on our house. We lived together when we were dating, so having separate accounts made sense, and after we were married, it seemed too complicated to combine finances. And really, there was no benefit to sharing money until we had a baby.

As for the future …

We both have a 401(k) through our employers, although we’re definitely not contributing enough. We’ll probably start making larger contributions when the boys are going to school full-time.

We earn extra income from …

Matt’s freelance architecture photography business. In 2018, he didn’t have as much time to devote to it, and took in about $3,000. But in 2017, he was much busier and made about $20,000. It can be hard, though, because these projects usually require him to travel over a weekend, and I really miss the extra set of hands when he’s gone!

man and woman couple near fence
Matthew Kirschner Photography

We save money by …

Matt does all of our home repairs. We try to be smart about unnecessary expenses—our DirecTV contract expired recently, so we went with an online streaming service. We also use Amazon’s Subscribe & Save option for toiletries, diapers, and wipes, and Chewy for dog food.

We fight about …

One sticking point is that we split expenses down the middle even though our salaries aren’t equal. Matt makes more than I do, so sometimes we’ll find ways to even things out on a month-to-month basis, like maybe he’ll pay all his usual bills plus a week of daycare. We’re striving to find a longer-term solution that will work for us.

In terms of credit-card debt …

I’ve never carried a balance, but I hoped that Matt’s debt would be taken care of by the time we got married in 2011. He was able to pay it off in 2014, before we got serious about having a baby. When Matt made his final payment, I brought home a Mylar balloon in the shape of a zero, and we had a little celebration.

Our smartest money hack …

Putting almost everything on a credit card that earns airline miles, and paying it off every month. Our family has flown round-trip to Denver, where my dad lives, and to Omaha, for a total of only $22 each time. Our points also covered a rental car on one of those trips.

When it comes to food …

Every week we spend about $100 on eating out: $50 for lunch at work, and another $50 to go out as a family. We have most of our groceries delivered—I’ll happily pay the delivery fee just so I don’t have to go to the store—and that’s around $150 a week.

brothers sitting together in rocking chair
Our boys are thriving in day care, but we can’t wait to be done with that expense. Matthew Kirschner Photography

Our parents help us by …

Instead of buying gifts for Matt and me, they generally give us cash. They also contributed to the down payment on our house, and my mom helped us buy our second car. Plus, the kids have their own college funds set up through both sets of grandparents.

Our main frustration …

I feel like I don’t have enough money to save after paying our big expenses. Prior to my pregnancies, I had a healthy personal savings account, but during both of my maternity leaves, it got drained—by the rent, and then by our mortgage and other bills. My first maternity leave was six months, and I received about $1,200 a month plus disability for six weeks. But during my second leave, I was transitioning from a freelance gig to a full-time salaried position at my current company, so I wasn’t paid anything and wasn’t eligible for disability pay. I’m still annoyed that I had to take a financial hit for staying home with our babies.

Our big-picture financial dream …

Paying for both of our boys’ college educations so they don’t have to take out loans. We would love to be comfortable enough to go out to dinner or take a trip without really having to budget. And retiring on the early side sounds like a nice thing to do!

Our most recent “screw it, let’s do it” splurge …

When we moved into our house, the kitchen was functional, but ugly. We originally planned a small-scale makeover, but then decided to do it right. We spent close to $10K, and that money came from our monthly take-home pay as well as some savings from Matt’s photo business. Because we DIYed pretty much every aspect, we were able to space out the big projects and purchase materials when we could afford them. We finally finished in February! I’m happy we went this route and didn’t take out a home-improvement loan; Matt thinks hiring contractors would have doubled our total cost. It may not end up being our dream kitchen, but it’s much better organized now, and we built storage that fits our lifestyle. It’s nice to feel like we’re making this house our own.

The Expert Says:

“Cash-flowing their renovation instead of taking out a loan was a great decision. And cutting cable? Another smart move!” says Jamila Souffrant, creator of the personal finance podcast and financial advice website JourneyToLaunch.com. “While they may not be in the position to max out their retirement contributions, they should think about increasing their contributions by 1 or 2 percent. Because it comes out of their paychecks before taxes, it might not be as big a decrease to their take-home pay as they think. Since they’re looking for a simpler accounting system, they could try this: If Mandy’s salary makes up 40 percent of the total income and Matt’s makes up 60, they could each contribute to a single family checking account according to those percentages.”

This article originally appeared in Parents Magazine as 'Our Salary Story: The Kirschners.'

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