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Can You Live on $150k (Per Year)?

December 14th, 2006 at 10:58 pm

While checking personal e-mail before leaving work today, I jumped to CNN Money to see if there is any funny news. And behold, there is a story about a family of 6 getting by on $150,000 a year. Before you say "these people are money foolish" or "things cost a lot nowadays", you can read the full story here.

I have to admit, depending on cost of living, a 6-figure income may not be much. For example, in the New York City metro, where $1,000-$1,500 for rent is typical, making $60,000 is getting-by. Making $100,000 is comfortable, but definitely not something people would say "you're set". It seems like $100,000 used to be the status of economic success, but $200,000 is the new $100,000 now.

Tell me your thoughts! Do you find it hard to believe a family with a six-figure income would have a hard time making ends meet? Or have you experienced that yourself?

41 Responses to “Can You Live on $150k (Per Year)?”

  1. Ima saver Says:

    Well, if they gave up the two rental properties and the horse, they would do just fine. I have no problem living on that amount, bring it on!!

  2. LdyFaile Says:

    They don't give enough detail about their living situation. Seriously, I don't know why they have that much trouble living on that income with no debt.

  3. monkeymama Says:

    Living in a high COL area, oh yeah I see it a lot.

    Not only is housing high, but so are taxes, and daycare is just crazy.

    What a lot of my friends don't realize is after the expenses of a second job - taxes, daycare, gas, and other expenses, they are coming out behind us on 1 income. Whenever someone laments to me how they are jealous how we can do it, I have the tax talk with them. I see the 2-income trap way too much...

    Plus a little financial planning can go a long way.

    I have a friend trying to dig out of debt and move on. She does not have cable, drives older cars, rents a very modest house, etc. But the more I get to know her the more bad choices I see. She is just not *smart* with money. BEyond that hair salon, nails, etc. are on her list of necessities, her husband has an allowance of $500/month. With mounds of student loans, they are barely getting by on six figures. SImply really bad choices and bad financial planning. When I met her she insisted on priave preschool - very fancy - at thousands a month. I was shocked when I talked her into joining my son's at-home daycare - I think it is costing her $700/month full-time. Doesn't get much cheaper around here, but the lady is the best. She thinks me all the time. THat whole "if it cost more it must be better" philosophy. I am proud to lead by example that this is not the case.

    Most of the people around here are just too busy keeping up with the Joneses though. I know MANY barely scraping by on $150k. When you have the McMansion, new cars every couple of years, private school for the children, etc., it adds up pretty FAST!




  4. monkeymama Says:

    LOL - are you kidding me. Of course owning a horse is going to make you BROKE. OMG! I didn't see that the first time -hehe.

    Oy vey...

    If I alone was making 150k/year, all I have to say Is we would be living the life - hehe. Better yet, retired by 50, easy peasy...

  5. tinapbeana Says:

    150k? wow, i've lived OK on a fifth of that, currently living well on half of that. granted, it's a 2 income household, but i think the COL definitely makes a big difference. those who've seen my 2007 plan know i'm in a low COL area.

  6. baselle Says:

    Sigh. Let me put my tin hat on here.

    Of course living on 150K is going to be hard, according to the mass media - every mass media outlet is dependent on advertising. Advertising is dependent on you buying stuff. If you buy, and buy, and buy, and buy because you're hammered with messages that you have to buy this and that and everything else, or else you are an unkempt, uncool, unwith-it goob - well, 150K ain't going to last long.

    That's if you don't have incidentals, like children. I'm sorry to say it, but 6 kids makes things very, very hard. Not impossible, but hard. The previous paragraph - put it to the sixth power.

  7. Bookie Says:

    This is a recurring theme in pop finance that I know goes back to the 1960s. A New Yorker article in that decade posed the plight of a NYC family struggling to make ends meet on a hundred grand a year. I see a variation every couple of years.

    It's a guaranteed crowd pleaser. The family gets to snivel and smirk about the impossibility of maintaining a decent yacht and a string of polo ponies at today's prices. The reader gets to feel smugly superior to the extravagant wastrels being profiled. And the writer gets to comment gravely on how inflation plays no favorites.

    And a jolly time is had by all.

    Smile

  8. marymara Says:

    I'm feeling really feisty now after a long day and trying to figure out what to do with my $20,000. I know it is Iowa and all, but still...........grrrrrrrrr

  9. paigu Says:

    True, raising children- 4 kids in this case!- is extremely hard, just factoring in grocery and insurance costs. Still, that family can't be doing too badly if they can afford a horse and the kids believe they're going to get another one.

  10. jersey jen Says:

    * monkeymama

    so true! sometimes the extra costs associated with two working parents exceed the additional second income. on the other hand, isn't each child an exemption? i guess the family does get some sort of tax benefits by having more children!

  11. jersey jen Says:

    * tinapbeana

    i like your 2007 plan! the family in article lives in Nebraska, i would think their money goes a long way.

  12. jersey jen Says:

    * baselle

    i hear kids are expensive to raise nowadays. my senior manager at work has 5 kids and his wife doesn't work. no wonder he's working hard.

  13. jersey jen Says:

    * Bookie

    entertaining, indeed. maybe CNN should do an article on average american family.

  14. LuckyRobin Says:

    They have four girls. I wonder if they all get new clothes? For some reason I don't think the words "hand me downs" or "garage sale clothing" are uttered in their household. From the photo, I'm pretty sure we're talking brand name clothing.

    Giving up cable and dance class and stuff like that is not going to pay for a horse! Horses are ridiculously expensive to maintain.

    I know that my sister, who has four boys and is married (so family of six) lived with an income below the poverty level for 14 years, but since they had no debt whatsoever (except their mortgage) you would never know it. She never used food stamps or the food bank, she just cooked everything from scratch using healthy foods, not processed. And she managed to save money! I have no sympathy for people who have a large income who can't make it.

    My DH makes less than half that and though we struggle, its because we're paying off massive medical bills. Without those, we'd be able to save $1000 a month.

  15. boomeyers Says:

    Very interesting. We have been supporting our family of 5 on less than $50,000 a year in St. Louis (sometimes way less than $50,000). We have had 2 years in the last ten when we earned $120,000 and $80,000. We have a lovely 4 bedroom home, retirement investments, I stay home to raise the kids (except for some PT work), and yes we scrimp but still have cable TV. :-) They should dump the money draining houses and hook the cable back up!

  16. Thrifty Ray Says:

    Well...

    I choose to live in a home, in an area, and in a state that provides a place to live at a fairly reasonable price.

    I choose not to own expensive animals or take expensive vacations or have an ocean view or live in a McMansion.

    I choose to wear oldies but goodies for my wardrobe...

    Of course, I could have chose differently and been stuggling living on $150k...but I chose to live on about half that and pretty much within our means and not struggling...

    Its all in the choices we make.

  17. baselle Says:

    I read the article (finally) - three generations of denial. Don't you think that the parents of the parents gave that family a heck of a white elephant gift? A horse like that is one of those gifts that you know you'll be screwed no matter how you play it. Decline it and you get tearful sobbing from both generations, accept it and well, you're in a world of money hurt.

    In that case, my 4 E-s of overspending...add a 5th: Evil.

  18. LuxLiving Says:

    We made it with 5 kids* on MUCH MUCH less than that!! I'm w/Thrifty Ray - it's all in the choices!

    *granted only one was a girl with all that it entails, cheerleading, 5 gazillion purses, shoes, etc.

    Always tight but do-able. We are I suppose in a low COL state as well, but live in a metro area that has ALOT of pretty fantastical McMansions and beyond - we are definitely on the uptrend here in expectations.

  19. Broken Arrow Says:

    Haha, nice one, Bookie.

    I'm sure that, relative to what they had before, they are certainly cutting back drastically. But relative to us (or at least me) who has gotten by with much less, they're not cutting back far enough.

    Without a doubt, they have some serious expenses. 6 kids is no joke. However, a real life pony?

  20. jersey jen Says:

    * LuckyRobin

    hehe, i thought pets were expensive. an exotic one like a horse is gonna be a lot.

  21. jersey jen Says:

    * baselle

    what are the 4 (5) E's?

  22. baselle Says:

    Jersey jen - I'm so shameless, quoting from my blog. Forgive me...:

    http://baselle.savingadvice.com/2006/04/08/the-four-e-s_7135/

  23. DivaJen Says:

    They'd probably be fine if they weren't paying three mortgages. I'd be completely strapped too if I had to pay for two more houses.

  24. jersey jen Says:

    * baselle

    thanks for the link. actually, you're right on!

  25. jersey jen Says:

    * ima saver, ldyfaile, divajen

    the article didn't list specific figures, but it does sound like their landlord dream backfired and they're paying 3 mortgages!

  26. princessperky Says:

    2 rental properties? niether of which getting any back? sounds like denial over the big stuff.

    sorry I would love to make 150K

  27. crazymom Says:

    Did anyone notice the line in the article about the husband getting laid off recently? No wonder they're struggling - they went from a comfortable salary of 258,000 to a meager 150,000. How sad for them.

  28. jersey jen Says:

    * crazymom

    i detect so much "sympathy" there :-)

  29. creditcardfree Says:

    Having lived within twenty minutes of Elkhorn Nebraska I know their home must be worth at least $500K, if not more. There are lots of large homes with horse stables on acregages there. Taxes are high in Nebraksa too. My guess is their horse, large cars (not mentioned...but goes with the territory) and two rental properties are eating them alive. Dave Ramsey would have a field day with them!!

  30. mariannej Says:

    Thrifty Ray said almost exactly what I was going to say. *grin* Life is all about priorities. Clearly saving the husbands pride is the priority at this point. Until that changes they will continue to bemoan the fact that they are living paycheck to paycheck on $150k/yr. *rolling my eyes*

    I do hate the way these news stories make me feel all bitter and annoyed. I should really avoid them, but I am like a moth to the flame. *grin*

    The only stories that are worse for my aura are the ones where some jackass wins the lottery and blows it all in like 6.3 seconds and is whining about it. Damn, why dont people who actually know how to take care of their money ever get a pile dumped in their laps?! (See there I go! *LOL*)

  31. Ima saver Says:

    My BIL and SIL have 4 horses. Everything he makes goes to support those horses. Plus they have to have trailers and big trucks to haul the trailers around. What a waste of money.

  32. paulettegoddard Says:

    For example, in the New York City metro, where $1,000-$1,500 for rent is typical, making $60,000 is getting-by. Making $100,000 is comfortable, but definitely not something people would say "you're set"
    Rents for houses in my zip code are $1000 - $1500/month. $60,000 is median income for my zip code. $100,000 is comfortable -- that's around what we bring home, but not enough left over after daycare, retirement accounts, dental and medical bills, mortgage and other things to spring for a new automobile or trips to Hawaii. I hope one day this decade to know what it is like for my household to bring in $150,000. Also, keep in mind that four dependants go a long way to bringing down one's tax burden.

    Do you find it hard to believe a family with a six-figure income would have a hard time making ends meet? Or have you experienced that yourself?
    Yes, I do have a hard time believing that. Someone should have given them a copy of The Tightwad Gazette.

  33. jersey jen Says:

    * paulettegoddard

    finally, another fellow saver in high c. o. l. area! not that it's good to live in such area, but i'm glad you feel my struggle (and i feel your financial struggle as well). housing and taxes in new york/new jersey are big burdens. it just makes you wonder how does anyone not getting by with $150 or $250 . . .

  34. vsjhoc Says:

    Sorry, but I think some people are taking a bit of a holier-than-thou attitude here.

    One point that was missed was that the family had an income of more than $250k, then dad lost his job and now it's $150k. While $150k may seem like a lot, just consider that they took an unexpected 40% reduction to their income. It would be at least an initial shock to your system if your finances took a hit like that.

  35. jersey jen Says:

    * vsjhoc

    yes, a 40% reduction a quite significant. but $150,000 is still a lot of money to claim "getting by". even u. s. senators make about that, at $165,000. should a $10-million-a-year c. e. o. claim poor when his/her pay is cut 50% to $5-million? probably not . . .

  36. crazyliblady Says:

    Oh, my god. $150,000, and they're just getting by? I guess they would starve on my income of less than $40,000. I agree with another poster who said if they just get rid of the rental properties and the horse, they would probably be alright. They should probably look at any other "necessities" of life that they don't really need. Wow. This is really wild. While I do realize these people took a big hit when the dad lost his job, they also had a reduction in expenses - fewer miles driven to work, fewer lunches out with clients/coworkers, and probably less expensive car insurance because of fewer miles on car. Can't get much better.

  37. flinnie Says:

    When you make less than 15,000. a year and live in a tradler.150,000.look
    like big time money to me.

  38. jessicasue4321 Says:

    flinnie.. im with u looks like big money to me my 4 family house hold lives on 9,000 a year thats with pets yes i have debt but my gosh . theres so much that 150,000. could do to keep a family comfortable or rich if they did it right lol.

  39. jersey jen Says:

    * crazyliblady

    you're exactly right! many of the comments agree with you!

  40. jersey jen Says:

    * flinnie, jessicasue4321

    hey there, i actually wonder how you live so frugally? i personally cannot survive on less than $3,000 (after tax), that would be about $55,000 (pre-tax) of salary. share you money-saving tips!

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