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Hard to live on 100K per year ?
Old 12-03-2017, 09:35 AM   #1
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Hard to live on 100K per year ?

Twice now I've heard stories on NPR about how tough it is to live on $100,000 income per year for a family.

Since this is almost twice the median family income, I wonder what poor folks are doing ?

We are struggling along on about $56,000 this year and could only afford:
  • one week in FL,
  • a week Caribbean cruise
  • two week European river cruise
  • a month long trip in Canada
I'm not sure if we would have the energy to spend another $44,000

https://www.cnbc.com/2017/12/01/livi...dle-class.html

How do folks go on the air/news to report they are suffering along on $100,000/yr
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Old 12-03-2017, 09:38 AM   #2
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Haven't we had a couple of posters saying they were having problems making it on $250K per year? All depends on your perspective of what "making it" entails.
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Old 12-03-2017, 09:44 AM   #3
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$100K..less income and FICA taxes...less retirement and college savings...other costs associated with kids. Not as much as you might think. Not saying they aren't spending on things they shouldn't, but $100K working wage is not the same as $100K retirement withdrawals which may be lightly taxed.
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Old 12-03-2017, 09:46 AM   #4
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What do you pay your housekeeper? Your lawn maintenance people? Your day care? Your TV service with all the channels? Your golf club membership?

What about the costs to maintain your boat? And your 3-cars for two people? And when you go out every night, how much do you spend?

What about costs of ...
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Old 12-03-2017, 09:47 AM   #5
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I think it is a "Millionaire Next Door" moment. Either you can LBYM (whatever that is) or you spend all that you make (whatever that is). Of course, this assumes you are above some base level income that allows you to save, if you choose.
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Old 12-03-2017, 09:48 AM   #6
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My wife and I never made anywhere near $100K in any year yet we've managed to save close to a mil, and take nice vacations. No kids, though. Two nephews who don't make $100K and both have two kids seem to be doing fine. I know the one is saving well, the other no idea. We live in Mi, I'm sure it's much harder in NY or Cali
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Old 12-03-2017, 09:52 AM   #7
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Originally Posted by Sunset View Post
Twice now I've heard stories on NPR about how tough it is to live on $100,000 income per year for a family.

Since this is almost twice the median family income, I wonder what poor folks are doing ?

We are struggling along on about $56,000 this year and could only afford:
  • one week in FL,
  • a week Caribbean cruise
  • two week European river cruise
  • a month long trip in Canada
I'm not sure if we would have the energy to spend another $44,000

https://www.cnbc.com/2017/12/01/livi...dle-class.html

How do folks go on the air/news to report they are suffering along on $100,000/yr
$100k in Cali is $71,435 after FICA, Federal and State...still a lot for me and DW (if we still lived there). One kid didn't cost us much additional since she attended county / state college and didn't gouge us on her wedding...

We live comfortably on about $43k (after tax) this year in a no-income tax state...taxed up I'm looking at needing about $50k pre-tax
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Old 12-03-2017, 09:52 AM   #8
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Of course the article is about working people and families. That changes the equation a bit. What bothers me most about the article is that while it does direct the reader to start saving, it says nothing about controlling spending. Unless you're in a high cost of living area and have a significant mortgage, $100,000 is still a lot of money. However, it can be spent just as easy as $50K or $500K. Saving is an important brake on spending (if you don't have it or see it you won't spend it), but the mentality to live below your means is critical. Right along with prioritizing spending (kind of the same thing). DW and I use the term "selectively broke" for many of these folks. Never money for savings or important things, but always money for entertainment, Starbucks, beer and a host of other things.
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Old 12-03-2017, 10:01 AM   #9
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When I see the shows on HGTV, I am amazed that the people only use their modern kitchens to reheat pizza unless they are holding a dinner party. One such person I know personally had a $750/mo communications budget for the family. He was paying for 5 cell phone plans, high end TV service, etc.
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Old 12-03-2017, 10:06 AM   #10
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Originally Posted by Sunset View Post
Twice now I've heard stories on NPR about how tough it is to live on $100,000 income per year for a family.

...

https://www.cnbc.com/2017/12/01/livi...dle-class.html
That article is so generic and shallow it reads like it was written by Capt. Obvious. Oh, some people who make a fair amount of money don't feel rich? Really?

If the reporter had done even a minimal amount of digging, there's no doubt the people quoted in the story would have been revealed to be classic spendthrifts, allocating every dime of current income to spending and placing near zero emphasis on saving or frugality. And, yes, having a couple of kids to support through their college years does cost a heck of a lot of money. Is that really a surprise to anyone?
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Old 12-03-2017, 10:10 AM   #11
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DW and I use the term "selectively broke" for many of these folks. Never money for savings or important things, but always money for entertainment, Starbucks, beer and a host of other things.
I choose to be selectively broke. I max 401K, back door ROTH IRA, 2K into taxable each month and pay extra on the mortgage. After all that I end up broke a day before the next check hits the account. Well, only if I forget about the couple grand stashed in the gun safe, the zero balance on the credit card and the "other" checking account that I rarely look at (emergency fund). I work with a few people who make 100K plus and they aren't really strugling but are pretty much pay check to pay check with little to no travel.
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Old 12-03-2017, 10:10 AM   #12
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My nephew, a pharmacist in NYC, last year bought a 1-BR, 1-BA condo in Queens and paid close to $600K. I have not visited him, but his parents have and said they could not see paying that much for such a place, but that is the going price. He was tired of having to move every couple of years. I learned that it cost him $7K once to hire a broker to find a tiny studio.

Now, imagine if you have kids in school. The sky is the limit for a budget to live in places like that, or in SF.
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Old 12-03-2017, 10:13 AM   #13
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My nephew, a pharmacist in NYC, last year bought a 1-BR, 1-BA condo in Queens and paid close to $600K. I have not visited him, but his parents have and said they could not see paying that much for such a place, but that is the going price. He was tired of having to move every couple of years. I learned that it cost him $7K once to hire a broker to find a tiny studio.

Now, imagine if you have kids in school. The sky is the limit for a budget to live in places like that, or in SF.
That won't change, until people choose not to live there. I never have understood it myself.
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Old 12-03-2017, 10:13 AM   #14
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This year we anticipate our expenditures coming in at around $47k Canadian, (~$37k US), which is high for us and includes property tax but not income tax.

And...once in a while...we get to do a little traveling.
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Old 12-03-2017, 10:15 AM   #15
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If you live in Wash DC or NYC like most of the NPR gang and guests, $100K is probably tough...
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Old 12-03-2017, 10:15 AM   #16
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My nephew, a pharmacist in NYC, last year bought a 1-BR, 1-BA condo in Queens and paid close to $600K.
Too bad they only hire pharmacists in HCOL areas like NYC. Wouldn't it be nice if a pharmacist could get a job in a LCOL area maybe an hour or two from NYC? Imagine if we had freedom of choice like that.
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Old 12-03-2017, 10:17 AM   #17
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We used to spend too much without really living the high life and then stumbled across the Consumer Expenditure Survey. It was a real eye opener for us. We realized if we could get our spending down we already had enough to ER and live a nice life. It has been pretty cool. We used to be like the people in the articles and just woke up one day and revamped our spending. We live in the same house and actually bought nicer cars and go out more than we used to on a much lower run rate.
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Old 12-03-2017, 10:18 AM   #18
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That won't change, until people choose not to live there. I never have understood it myself.
Many people like crowded cities, because they think it is fun. Not too many are like me, who has a main home in a Southwestern suburb, and still bought a 2nd place up in the high-country boonies.

My two homes together cost less than one tiny home in San Francisco, where I read that it is tough to get anything for less than $1M. Well, there are, but they are in less desirable neighborhoods, and are only 1BR, 1BA.
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Old 12-03-2017, 10:21 AM   #19
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They are loath to use anything for fear the kitchen will look "used," and will turn off future buyers! Kitchens must be pristine!

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When I see the shows on HGTV, I am amazed that the people only use their modern kitchens to reheat pizza unless they are holding a dinner party.
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Old 12-03-2017, 10:23 AM   #20
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Too bad they only hire pharmacists in HCOL areas like NYC. Wouldn't it be nice if a pharmacist could get a job in a LCOL area maybe an hour or two from NYC? Imagine if we had freedom of choice like that.
+1
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