Blog about high-income households barely making by gets noticed

[Rianne]

Cravings to spend, often come from your neighbors, social life, community. Ads don't influence me, at all. We lived in an affluent suburb of Chicago for @ 9 years. Anything social, going out to eat, a sports event, going over to a friends spurs judgement. I listened to women brag about their $300 haircut, watched the clothes change with every season and new designer fad, witnessed children learning these behaviors. The cars, sq. footage of a house, landscaping, decorating OMG. I firmly believe these people were in debt. I confess, there were many times I felt "lower class" b/c I didn't follow that crowd. I had to be around them since we lived in the community. Our house on the lower end of the spectrum, a small ranch. Builders knocked down existing homes (nice ones) and built McMansions on a tiny postage stamp lot.


I'm happy we lived the way we did.

 

[Mdlerth]

The way to stop a snowball is to slow it down early

I always thought it was unfair that federal taxes focuses on hard dollar amounts with no consideration to cost of living in each zip code.

I dunno. Having a uniform tax policy might be the only brake that keeps high rent districts from becoming super- or hyper- or ultra-high rent.

From my observations, there's a self-reinforcing cycle that goes on in places like NYC and SF. Ignore for a moment such handsomely-compensated professions as doctors and lawyers and ER.org Moderators. It's so expensive to live in Manhattan or the Bay Area that employers have to pay radically more for even bottom-tier jobs, which raises the cost of everything. Taxes rise endlessly to pay for public services which in LCOL areas would cost much less. Once a place reaches some HCOL critical mass, "school's out".

I predict that if you restructured the tax code to reflect local prices, it would simply enable those pricey zip codes to become even pricier.

 

[nancyfrank232]

Posts like these make me want to swear...
Look, we moved somewhere expensive and now we have less disposable income.
Look, my spouse stopped working and now we have less money.
Look we are living beyond our means and can't afford it.
Feel sorry for me!
If you don't do the research stop whining about the surprises.
I am moving to somewhere. OK, What is the COL? What are the taxes? What is the cost of childcare, medical, local taxes, food, etc.
If you don't know this before a move then piss off. Don't want to hear it.

+ 1

This reminds me of students who complain about being hundreds of thousands of dollars in college debt

Um, didn’t you know that before you went into massive debt? Don’t cry about it afterwards when you should have know about it a long time ago

 

[daylatedollarshort]

We used to be a two income tech worker household n the SF Bay Area. We were always kind of shocked at how much many of our co-workers spent and how many were in financial difficulty despite good incomes. I get a kick out of retiring early and living well here on a modest budget. I'm also pretty happy our kids have followed in our frugal footsteps and are good savers despite living in HCOL cities. If I had to do it over I would have saved even more and retired in our 40s instead of our 50s.

 

[dg001]

I think there are two different discussions here. One is spending beyond your means or spending when you don't have to. Fine, that is wrong, and we are a self-selecting group of frugalites - so of course that behavior will be dissed.

However, there are reasons why younger two-income couples in big cities, who in fact make a lot of money, feel stressed and hard up. There are legitimate issues there, and the purpose of web sites like this should be to help them recognize what expenses can be deferred or controlled, and what cannot.

Not all those $ are being borrowed and wasted away on champagne lifestyles. There are expenses like housing and childcare that are a extreme burden - and Mdlerth is absolutely right that it is a self-fulfilling cycle of increasing costs due to increasing costs, but individually there is little one can do to change that. Dismissing all those complaints as "bad decisions on your part" is wrong.

Someone suggested "if you don't like it, stop yer whining and move!" In the end its a valuation decision everyone makes, and moving is certainly an option many people make - but that is not the only option. And not everyone has that option - careers, family, business interests all have a say in a decision like that.

I recognize the feeling behind the complaints in that website - but I was able to overcome them, and I recognize others might have a harder time doing so. Not all of it is whining.

 

[jollystomper]

Cravings to spend, often come from your neighbors, social life, community.

+1

The Temptations sang it best years ago when I was a kid. I am glad this song stuck with me as I grew older.

 

[dtbach]

Great song, but I don't remember that one at all.



I checked and it peaked at 20 so maybe didn't get that much playtime.

 

[Gumby]

At least some of the pressure on upscale young couples in the big metro areas comes from the way they were raised. They grew accustomed to living in the bubble that envelopes the upper classes in this country - the house in the good neighborhood, the nanny, the proper private school for the children, the country club, the vacation homes and trips to the destinations appropriate for people of their group, the appropriate Ivy League college education. For them, that is just the way life is lived. And when they can't immediately duplicate the life their parents gave them, they are confused and depressed.

I recall being dumbfounded back in about 2005-2006, when the first year associates at my NYC law firm (a pack of single 25 year-olds who could not yet do anything useful) were complaining vociferously that while my firm had just raised starting salaries to $160k per year, Skadden had set theirs at $165k. How could they possibly live on what we were paying them? Their angst was real enough, even if divorced from the reality of the rest of the world.

By contrast, my expectations for what constitutes an adequate lifestyle are and were far different. I grew up poor, living in a series of crappy neighborhoods in trailer parks and cheap apartments. We moved a lot and I went to whatever the local public school was. They were usually pretty bad. "Vacation" was not a word in our vocabulary, and I never knew anyone who ever went to college (well, I suppose my school teachers did, but not any real people). For me, living large is being able to buy anything I want at the grocery store, without knowing or caring how much it costs. Throw in a house and a car and I'm as happy as a clam at high tide.

A lot of the "must haves" that drive these expensive lifestyles look far less necessary when you come from the other side of the tracks.

 

[brett]

We were in that group for eight or so years prior to retirement. Our lifestyle did not change. No one knew until we pulled the plug and retired early. Left money on the table but so what. It was a case of money or time. We took the latter. Such a good feeling when you realize that you are not beholden to a company or to a job. Very liberating.

A number of my colleagues in the same income range could not even think of retiring. Their respective lifestyles, spending, and financial commitments rose to the the level, and in some cases, above their income level. Not certain how it happens but it does. I think ego comes into play a little bit.

 

[Dalmore]

I think it all comes down to where and how you want to spend your money. I know a guy who makes under $100K, lives very modestly, but always has a new, well maintained, expensive Mercedes.

Every time I see a new Tesla going down the road, I think it would be awesome to have one....then I consider that I would rather spend the $100K on my retirement.

 

[CardsFan]

I predict that if you restructured the tax code to reflect local prices, it would simply enable those pricey zip codes to become even pricier.

Kind of like the price of college increasing with the amount of loans and grants available?

It is amazing how expensive "free" can be.

 

[Teacher Terry]

I worked with someone that came from a modest background and they were careful when young to live within their means. Eventually he rose to a high position with the university and they were expected to entertain large groups of people. It was only then that they bought a big nice house. They ended up in a great financial situation because they didn’t go crazy buying a ton of stuff as their situation improved.

 

[Badger]

I don't buy into all the excuses and whining especially the ones about "they worked so hard". So who doesn't work hard for a living? It's all about choices, expectations, and lifestyle.



Cheers!

 

[brett]

^+1

 

[RenoJay]

I saw that article referenced in a lot of the online financial press. Just click bait for the Financial Samurai to get his name out.

 

[Old Microbiologist]

We were in a similar situation back in 2007. I was retired from the military with a $65k pension and working as a civil service employee at the grade of GS-15 step 10 and was pay-capped at $175k (regular civil servants can't earn more than a freshman Congressman). My wife stopped working her $100k job to do full time Day Trading which she is very good at. We lived in the DC in Northern Virginia in a modest townhome ($750k is modest) and owned 3 others which we rented out. We were doing okay and not spending wildly or doing much travel. What was eating us alive were the mortgages on the 3 rentals, the property taxes, and insurance. The rents we were able to charge just weren't sufficient to cover everything so we were out of pocket so other people could live in our homes. I also had child support payments plus I had major commuting costs (not reimbursed by the government) with working a couple days a week in doing non-human primate exposures at Fort Detrich in Frederick Maryland (60 miles each way) and once a week in Aberdeen Proving Grounds (I was the Chief of Microbiology detection for a biowarfare unit there [part time under orders]), Maryland (120 miles) but my actual laboratory was in Silver Spring MD a 30 mile commute in terrible traffic. I was also working a lot in fun places like Peru, Azerbaijan, Kazakhstan, Uzbekistan, Tajikistan, Kyrgyzstan. All this was wearing me out and I was not making big money in the process. My civilian counterparts from American Universities were raking it in for these overseas trips but government employees don't get paid anything extra and we can't even fly Business class. Uzbekistan is a 24 hour trip which really sucks. After all expenses we had about what I was getting from my military pension after taxes. This is the reason we retired and left the country to live in Hungary where there are simplified taxes, zero property tax and zero inheritance tax. We sold all the homes and took the equity out (roughly a million) and took SSA at the minimum. The money is invested in various IRA's and brokerage accounts although never touched at all for any living.We packed it all up and I ditched the government work and we retired to Hungary. Yes, I could have bagged it all and got a job as a Professor and made some but frankly I was burnt out and all the new generation military officers I would still have to work for are beyond horrible. We don't regret retiring early at all and are enjoying an amazing life in retirement.

 

[Old Microbiologist]

I can also say as an aside my ex-wife, an attorney in DC and her wife who is a GS-15 level step 10 employee are barely making it on $750k a year. I have no clue where their money goes but I do know she is not flush so there is something wrong in an economy where people who should be rich aren't. So, this is a real thing.

 

[BeachOrCity]

If you do t like financial samurai as a blog just stop reading it. I stopped a few years ago due to the decline in getting anything useful from it.

 

[Music Lover]

I can also say as an aside my ex-wife, an attorney in DC and her wife who is a GS-15 level step 10 employee are barely making it on $750k a year. I have no clue where their money goes but I do know she is not flush so there is something wrong in an economy where people who should be rich aren't. So, this is a real thing.

I'm pretty sure that if they posted their expenditures on this site people would find plenty of ways for them to reduce expenses.

If you can't get by on $750,000 a year you don't need a raise, you need a reality check.

 

[FANOFJESUS]

I can also say as an aside my ex-wife, an attorney in DC and her wife who is a GS-15 level step 10 employee are barely making it on $750k a year. I have no clue where their money goes but I do know she is not flush so there is something wrong in an economy where people who should be rich aren't. So, this is a real thing.

That's wild. The other day I heard a couple on Dave Ramsey having a hard time making it on 500k a year. The two of us can do it for 20k

 

[nancyfrank232]

That's wild. The other day I heard a couple on Dave Ramsey having a hard time making it on 500k a year. The two of us can do it for 20k

Actually you probably couldn’t do it for $20k in the city where the caller lives

 

[Born2Fish]

Posts like these make me want to swear...
Look, we moved somewhere expensive and now we have less disposable income.
Look, my spouse stopped working and now we have less money.
Look we are living beyond our means and can't afford it.
Feel sorry for me!
If you don't do the research stop whining about the surprises.
I am moving to somewhere. OK, What is the COL? What are the taxes? What is the cost of childcare, medical, local taxes, food, etc.
If you don't know this before a move then piss off. Don't want to hear it.

+1

 

[FANOFJESUS]

Actually you probably couldn’t do it for $20k in the city where the caller lives

True but I could do it way less than 500k

 

[explanade]

I can also say as an aside my ex-wife, an attorney in DC and her wife who is a GS-15 level step 10 employee are barely making it on $750k a year. I have no clue where their money goes but I do know she is not flush so there is something wrong in an economy where people who should be rich aren't. So, this is a real thing.

The one you pay child support to have a household income of $750k and is struggling?

 

[Badger]

Posts like these make me want to swear...
Look, we moved somewhere expensive and now we have less disposable income.
Look, my spouse stopped working and now we have less money.
Look we are living beyond our means and can't afford it.
Feel sorry for me!
If you don't do the research stop whining about the surprises.
I am moving to somewhere. OK, What is the COL? What are the taxes? What is the cost of childcare, medical, local taxes, food, etc.
If you don't know this before a move then piss off. Don't want to hear it.

+1