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Breaking down Avg American Spend
10-10-2019, 07:32 PM
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#1
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Thinks s/he gets paid by the post
Join Date: Aug 2013
Location: North
Posts: 4,031
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Breaking down Avg American Spend
I usually don't like to link to MW but in this case the data came from the BLS Bureau of Labor Statistics. I debated attaching this to the chart of the day so someone feel free if obliged.
Since I know all my ER friends like Synopsis:
There are 2 charts the first is of a typical 78k budget, the second in the MW artical is of a "expensive" city budget of 350k which I totally cannot relate to but know there are some on this forum that can. Debate away, and please for the love of $$$ let's not get this thread shutdown like my past 2 heh.
https://ei.marketwatch.com/Multimedi...0123701_NS.jpg
And here a link to the original MW artical showing a "city budget" that might be typical of some of the Dual Incomers on this forum:
https://www.marketwatch.com/story/wh...ney-2019-10-10
All twitter comments aside from it...I think its probably somewhat accurate. I thankfully do not live in a big city, I live outside it and nor do I commute into it...we pay less for daycare fam of 4 and WILL continue to pay less as we expand to 5.
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Time > $$$ ~ 100% equities ~ FIRE @2031
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10-11-2019, 05:40 AM
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#2
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Thinks s/he gets paid by the post
Join Date: May 2019
Posts: 2,727
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It's a little interesting, but it doesn't do much for me. My income is a little higher, and I'm single, so a much bigger chunk comes right off the top for taxes if I only save the amount listed. And that would include payroll taxes (FICA) that aren't listed in that chart. Obviously, budgets vary widely. Not much time for me to analyze further right now.
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10-11-2019, 06:53 AM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,821
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Quote:
"Since I know all my ER friends like Synopsis:
There are 2 charts the first is of a typical 78k budget, "
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Is it? I couldn't tell from what was presented, or I missed it. It looks to me like those are overall averages of everyone. But that doesn't mean that someone with an average income spends the average amount in any of those categories. I'd expect these things to not be a linear relationship. Every word that I saw just talks about "the Average American".
What they would need to do is something more like look at the group of people in the $78,000 income range (maybe $70~80,000?), and break down the spending of that group. If these are averages (which I think they are), I don't think it works.
As an example, since some people buy very expensive 3rd homes, that would show up in the averages. But I'm pretty sure almost no one in the $78,000 income range owns an expensive 3rd home.
Another example:
Quote:
The average family consists of 3.14 persons in 2018, down from 3.7 in the 1960s.
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But no family is 3.14 or 3.7 persons.
-ERD50
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10-11-2019, 09:33 AM
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#4
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Thinks s/he gets paid by the post
Join Date: Aug 2013
Location: North
Posts: 4,031
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Quote:
Originally Posted by ERD50
Is it? I couldn't tell from what was presented, or I missed it. It looks to me like those are overall averages of everyone. But that doesn't mean that someone with an average income spends the average amount in any of those categories. I'd expect these things to not be a linear relationship. Every word that I saw just talks about "the Average American".
What they would need to do is something more like look at the group of people in the $78,000 income range (maybe $70~80,000?), and break down the spending of that group. If these are averages (which I think they are), I don't think it works.
As an example, since some people buy very expensive 3rd homes, that would show up in the averages. But I'm pretty sure almost no one in the $78,000 income range owns an expensive 3rd home.
Another example:
But no family is 3.14 or 3.7 persons.
-ERD50
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Totally understood. I am not a fan of averages without the context. Unfortunately its how a lot of data is presented... YMMV.
__________________
Time > $$$ ~ 100% equities ~ FIRE @2031
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Perhaps they are adjusting family size for BMI
10-11-2019, 10:02 AM
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#5
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Thinks s/he gets paid by the post
Join Date: Oct 2016
Location: The Shire
Posts: 1,504
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Perhaps they are adjusting family size for BMI
Quote:
Originally Posted by ERD50
Another example:
But no family is 3.14 or 3.7 persons.
-ERD50
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You are what you eat. Some families eat a lot of pi.
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Paying it forward is the best investment.
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10-11-2019, 10:39 AM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 17,173
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Average is an interesting term.
Three friends and I were sitting at a bar drinking beer. I estimate we had an average net worth of $82,000. Bill Gates dropped in an joined us. Our average net worth was now an estimated $10,000,000,000.
Note: Since fabulously wealthy people are known for not carrying much cash on them, we had to pay for Bill's beer.
__________________
Comparison is the thief of joy
The worst decisions are usually made in times of anger and impatience.
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10-11-2019, 02:58 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Jan 2017
Location: Hog Mountian
Posts: 2,077
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Quote:
Originally Posted by ERD50
Is it? I couldn't tell from what was presented, or I missed it. It looks to me like those are overall averages of everyone. But that doesn't mean that someone with an average income spends the average amount in any of those categories. I'd expect these things to not be a linear relationship. Every word that I saw just talks about "the Average American".
What they would need to do is something more like look at the group of people in the $78,000 income range (maybe $70~80,000?), and break down the spending of that group. If these are averages (which I think they are), I don't think it works.
As an example, since some people buy very expensive 3rd homes, that would show up in the averages. But I'm pretty sure almost no one in the $78,000 income range owns an expensive 3rd home.
Another example:
But no family is 3.14 or 3.7 persons.
-ERD50
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I dunno. At 5' 0" and a buck-10, DW is about .7 of a people. Okay, maybe .8
__________________
Never let yesterday use up too much of today.
W. Rogers
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10-11-2019, 10:33 PM
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#8
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Full time employment: Posting here.
Join Date: Feb 2011
Posts: 852
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Looking at the $350,000 family the child care expense for the 4 year old is extremely temporary and should shortly become significantly less. This should free up $20000 a year in free cash flow for starters.
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10-12-2019, 12:14 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Mar 2012
Posts: 3,931
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The expense table was lifted from the Financial Samurai article/website and it's had tons of comments as to how unrealistic it is. You need to take it in the context of the original author and his motive. He was trying to show/justify that he was unable to survive on $200,000 of passive income annually...because he FIRE'd in San Francisco in his early 30's with a family of four.
Here is the "original" original article from earlier this year (and I believe that was also updated from an earlier version). Apparently he is getting $50,000 more taxable income today, yet also manages to have almost $500 per month less.
https://www.financialsamurai.com/liv...xpensive-city/
It's laughable that he chooses to spend almost $70,000 a year for his home between mortgage and property taxes.
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10-12-2019, 12:31 PM
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#10
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Recycles dryer sheets
Join Date: Dec 2017
Location: CarUpOnBlocks NY
Posts: 178
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Quote:
Originally Posted by urn2bfree
Looking at the $350,000 family the child care expense for the 4 year old is extremely temporary and should shortly become significantly less. This should free up $20000 a year in free cash flow for starters.
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I don't know about freeing up $20,000 at 5 years old. Would likely turn into $25,000 private kindergarten.
Need to think about averages more as I eat (and factor in) my free bag of chips I got for volunteering...
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10-12-2019, 01:20 PM
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#11
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Thinks s/he gets paid by the post
Join Date: Apr 2012
Posts: 2,911
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__________________
"Do not spoil what you have by desiring what you have not; remember that what you now have was once among the things you only hoped for." - Epicurus
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10-12-2019, 01:24 PM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2016
Posts: 8,968
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It costs a lot to live in San Francisco. Thanks to Google, Facebook, Twitter, Zynga...
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