We Earn $200,000 and Can’t Save. Help!
Mia, 35 and her husband Luke, 36, earn a combined $200,000 per year. But after paying their mortgage and rental property loan, as well as car and student loans, child care, and other living expenses, the Los Angeles couple has... Full Story The post We Earn $200,000 and Can’t Save. Help! appeared first on MintLife Blog.

Mia, 35 and her spouse Luke, 36, earn a combined $200,000 each year. However after paying their home mortgage and rental residential or commercial property loan, in addition to cars and truck and trainee loans, child care, and other living costs, the Los Angeles couple has a tough time socking away money in savings.

They do have about $10,000 in a rainy day account, which might cover their costs for about one month. But adding to the account has actually been showing difficult.

Luke feels positive that if they ever run into a severe financial bind, they could always take advantage of their low-interest house equity line of credit.

A bit more background on the couple and where they stand economically:

Luke just recently transitioned to a brand-new task as a federal government lawyer, which he loves, but it also suggested taking a 50% pay cut.

Mia and Luke would like an objective appearance at their finances to find ways to decrease spending, increase saving and possibly discover new income streams.

Here's a better take a look at their financial resources:


  • Combined incomes: $200,000 per year
  • Net rental earnings: $6,000 each year


  • Cars and truck and trainee loan debt. $13,000 integrated at 2%
  • Home loan at primary house $845,000 at 3.625%
  • Home loan at rental property $537,000 at 3.5%
  • HELOC on primary home: $200,000(have not utilized any of this credit)


  • Mia: contributes about $1,000 overall every month, consisting of a company match
  • Luke: contributes about $1,000 total each month, including a business match

Emergency Cost Savings: $10,000

College Savings: The couple has 529 college savings funds for both of their children. They allocate their cash back benefits from charge card towards these accounts. Presently they have about $10,000 saved for their 4-year old and $5,000 conserved for their 1-year old child.

Top Month-to-month Spending Classifications:

  • Main house home loan: $4,000
  • Main home real estate tax: $1,100
  • Child Care: $1,900(daycare for both kids, 3 days weekly. Granny watches other 2 days weekly)
  • Food (Groceries/Eating Out): $800
  • Car and trainee loan payments: $450

From my point of view, I believe the biggest hole in Mia and Luke's financial resources is their rainy day savings bucket. Depending on a HELOC to cover an unanticipated expense is not truly an ideal strategy. In theory, the cash can be utilized to cover costs and the interest rate would probably be far lower than the rate on a charge card. In reality, tapping a HELOC suggests falling even more into debt. They do have $10,000 saved, which is great. But it's not terrific.

If not for an emergency, the savings can enable them to attain other objectives.

Here are my top three recommendations:

Transfer Rental Income Towards Savings

Their previous house is now a rental property. The way I see it, they ought to have a proper six month cushion in savings to tide them over in an emergency situation and/or if they require cash to resolve their objectives.

Carve Out Another $500 for Cost Savings

While I do not have an in-depth breakdown of all of the family's month-to-month costs, I can bet that they can pare their costs to conserve an extra $300 to $500 Whenever I desire to conserve more, I schedule money to transfer out of my checking and into cost savings at the top of the month.

Can Mia Adjust Her Work Structure?

Mia is interested in a side hustle, too, to bring in additional income (which I extremely advise).

Mia's commute to work is one hour each way.

Bottom line: When Luke's earnings dropped by 50%, the couple didn't adjust costs. Unless it's an absolute need that they can easily manage it, think about shutting it off till they have actually reached a 6-month cost savings pad.

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