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?
December 14th, 2006 at 11:05 pm 1166137514
December 14th, 2006 at 11:43 pm 1166139807
December 15th, 2006 at 12:01 am 1166140898
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!
December 15th, 2006 at 12:09 am 1166141368
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...
December 15th, 2006 at 12:42 am 1166143362
December 15th, 2006 at 01:06 am 1166144818
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.
December 15th, 2006 at 01:19 am 1166145576
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.
December 15th, 2006 at 02:09 am 1166148598
December 15th, 2006 at 03:45 am 1166154333
December 15th, 2006 at 04:52 am 1166158379
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!
December 15th, 2006 at 04:54 am 1166158444
i like your 2007 plan! the family in article lives in Nebraska, i would think their money goes a long way.
December 15th, 2006 at 04:55 am 1166158550
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.
December 15th, 2006 at 04:57 am 1166158671
entertaining, indeed. maybe CNN should do an article on average american family.
December 15th, 2006 at 05:40 am 1166161249
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.
December 15th, 2006 at 05:45 am 1166161529
December 15th, 2006 at 06:40 am 1166164833
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.
December 15th, 2006 at 07:46 am 1166168787
In that case, my 4 E-s of overspending...add a 5th: Evil.
December 15th, 2006 at 01:42 pm 1166190123
*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.
December 15th, 2006 at 02:02 pm 1166191349
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?
December 15th, 2006 at 06:25 pm 1166207149
hehe, i thought pets were expensive. an exotic one like a horse is gonna be a lot.
December 15th, 2006 at 06:27 pm 1166207272
what are the 4 (5) E's?
December 16th, 2006 at 07:54 am 1166255665
http://baselle.savingadvice.com/2006/04/08/the-four-e-s_7135/
December 16th, 2006 at 03:57 pm 1166284625
December 16th, 2006 at 11:59 pm 1166313552
thanks for the link. actually, you're right on!
December 17th, 2006 at 12:00 am 1166313657
the article didn't list specific figures, but it does sound like their landlord dream backfired and they're paying 3 mortgages!
December 17th, 2006 at 06:08 pm 1166378936
sorry I would love to make 150K
December 20th, 2006 at 12:30 am 1166574638
December 20th, 2006 at 10:48 am 1166611682
i detect so much "sympathy" there :-)
December 21st, 2006 at 05:27 pm 1166722062
December 22nd, 2006 at 04:50 am 1166763029
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*)
December 22nd, 2006 at 07:37 pm 1166816229
December 23rd, 2006 at 08:13 pm 1166904797
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.
December 26th, 2006 at 05:32 am 1167111170
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 . . .
December 26th, 2006 at 11:13 pm 1167174804
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.
December 27th, 2006 at 04:05 am 1167192300
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 . . .
December 28th, 2006 at 12:51 am 1167267079
January 1st, 2007 at 03:10 am 1167621016
like big time money to me.
January 1st, 2007 at 06:57 am 1167634678
January 2nd, 2007 at 05:54 am 1167717296
you're exactly right! many of the comments agree with you!
January 2nd, 2007 at 05:59 am 1167717590
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!