Politically_Incorrect12
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Post by Politically_Incorrect12 on Apr 5, 2011 23:20:37 GMT -5
What income level made you realize that money never seems to go as far as you think it does in terms of lifestyle? It seems that people have this imagined lifestyle at different salaries, and my guess is that if they ever reach that salary mark they will be surprised that it doesn't go as far as they think it will go. Unfortunately, it also seems that people who make what many consider to be a really good income, also continue to try to live the lifestyle they think they should be able to live; which doesn't always match up with reality.
Thankfully, I learned this lesson kind of early on. When I made $20k/year, I used to wonder how people who made $30k or more had issues living on it. When I made $30k, I realized that my lifestyle didn't really increase that much, but I was able to actually afford to eat better and actually go out from time to time. It was also then that I started looking at things like health and life insurance. So for me it was when I hit that $30k mark.
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Deleted
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Post by Deleted on Apr 5, 2011 23:50:18 GMT -5
For us it was when my wife got her first job after graduate school. During undergrad and grad school we always thought that once she got a job we will be on easy street.
Yep, she makes 42K/year and added to my income we make a grand total of 95K which in our mind would have provided a nice lifestyle. God we were wrong!!!
We forgot to add her student loans (+100k), the fact that we live in a HCOL area and the everything adds up pretty quickly... Also we went from 15% tax bracket to 25% bracket.
So for us it was when we went from a 1 income family to a 2 income family.
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Sum Dum Gai
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Post by Sum Dum Gai on Apr 5, 2011 23:52:13 GMT -5
$60k. It was the starting salary I was asking when I got out of the military. I was asking for way too little for my experience and area, which is a whole other thread, but damn did that not stretch as far as I thought it would.
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Apple
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Post by Apple on Apr 6, 2011 0:10:17 GMT -5
I'm not sure. The money I make now well supports the lifestyle I want to live, except for the fact I'm trying to build one house while owning the current one. So far I've got over $65k cash into the property and the new house. Once that's built (and then mortgage it so I have some of that cash back) I'll be happy again with what I make, knowing I can save for retirement, buy more land if I want, help DS out a little with college (if he chooses to go) and still go on awesome vacations. I've worked since I was a kid though, so maybe my views on money and lifestyle have just always been extremely realistic.
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Deleted
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Post by Deleted on Apr 6, 2011 2:02:57 GMT -5
Probably at the $100k mark or reaching $1M NW many years ago. Part of that was due to living in the SF Bay Area, a very HCOLA. But we were also advised about "lifestyle creep" about 12 years ago when we attended a financial planning session given by my employer's pension plan. The instructor was outlining how people felt when they got a raise when DH piped up with "More Deserving!". I was recently reminded of this phenomenon when my best friend was complaining about what a short financial leash her (new) husband keeps her on. Obviously there's some control issues (they are finally working on a budget after being married for 3 years ), but my gf is nearly 50 and has historically spent all that she's made. Part of that is due to living in a HCOLA and being in a lower paid profession. However now that she's teamed up with someone making a lot more money she doesn't understand why they can't go out to dinner and have nice vacations. Well, they've upgraded their apartment and have two properties and have 5 kids between the two of them. She going to inherit some money and wanted to buy a place in the south of France...<sigh>. She did ask for my financial help so I started her with the Millionaire Next Door, LOL!
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Post by cytoglycerine on Apr 6, 2011 6:29:06 GMT -5
What income level made you realize that money never seems to go as far as you think it does in terms of lifestyle? The first full year Hubby and I lived together (2005), we grossed $88k, and peaked out at $110k a few years later. The difference in net incomes for us from the $88k to the $110k wouldn't have made a major difference in daily lifestyle - we could have bought a second car, or maybe a fancier condo, or more dinners out, or a really killer annual vacation, etc - but it made a HUGE difference in terms of savings goals. Whenever our incomes rose (it happened in half a dozen small steps, not all at once), I just allocated all the extra money to savings. I never increased our spending allowances, or got us iPhones, or whatever. I just ran the household budget as if we were still making $88k, and stashed away the rest. In short, I resisted the "lifestyle creep" trap. The extra money I stashed away piled up quite quickly, and when the cancer diagnosis came, I was infinitely more happy to have a big fat EF than I could have ever been with that new car So to answer the question, I think I pretty much realized right away that (barring HUGE income increases) earning more money but spending all the extra doesn't improve your life anywhere close to as much as saving the extra. Of course, that assumes you made enough money in the first place to support yourself, and don't actually NEED the additional income to pay for necessities.
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Pants
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Post by Pants on Apr 6, 2011 7:19:08 GMT -5
$100k. Last year, when we were living off $20k of student loans per year, $100k was a fabulous number. Now that we're actually living it in a HCOLA, paying off those student loans, and trying to do all those things one does at 30 (kids, house, etc.) it's ridiculous how little it actually buys.
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jeffreymo
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Post by jeffreymo on Apr 6, 2011 7:29:54 GMT -5
$100k for us. We bought our house and got married in 2007. At that time we were making $74k. Now we're at $100k which on paper looks like a big increase, but in reality doesn't feel like much of a difference.
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brdsl
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Post by brdsl on Apr 6, 2011 7:40:14 GMT -5
It has always been my goal to live off the least amount possible, and still enjoy life.
So, I am not really sure I have ever worried about it.
I think I spent around 6k to live last year.
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Politically_Incorrect12
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Post by Politically_Incorrect12 on Apr 6, 2011 7:44:13 GMT -5
It has always been my goal to live off the least amount possible, and still enjoy life. So, I am not really sure I have ever worried about it. I think I spent around 6k to live last year. $6k for rent, utilities, food, etc. Assuming that you don't have a car, I am trying to figure out where you can live off $6k/year.
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Regis
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Post by Regis on Apr 6, 2011 7:46:14 GMT -5
Whatever income level I was at when my first child was born.
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Post by Deleted on Apr 6, 2011 7:47:18 GMT -5
It has always been my goal to live off the least amount possible, and still enjoy life. So, I am not really sure I have ever worried about it. I think I spent around 6k to live last year. $6k for rent, utilities, food, etc. Assuming that you don't have a car, I am trying to figure out where you can live off $6k/year. My brother lives for around that much a year. But he is a weird dude, so probably most people would not want to live his live, although sometimes I wish i did.
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Deleted
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Post by Deleted on Apr 6, 2011 7:48:50 GMT -5
To answer the OP, the income I had when I moved out of my parents house. I was making $35k or so and living high on the hog at home. Then I quit my job and got another one for $50k and moved out. That is when I realized I wasn't really making that much.
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brdsl
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Post by brdsl on Apr 6, 2011 7:52:21 GMT -5
LCOL living area, paid cash for house. small house, low taxes.
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bman
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Post by bman on Apr 6, 2011 8:04:27 GMT -5
Crossing the $100K per year mark made me realize the opposite. I realized that I made way more money than I needed to live very comfortably. I am single with no kids and live in a low cost of living area, so maybe that is part of the reason.
But, really I have every material item that I want: a nice house, two paid for vehicles (one that I bought brand new, in cash, a few months ago). I also save/invest several thousand dollars each month. I have enough saved up that if I want some new toy, I just buy it, no budgeting / planning needed; granted I am talking about toys that cost hundreds of dollars, not thousands.
This post may come off as arrogant, but I assure you I have plenty of problems in my life, but money is not one of them. I typically make between $120K and $130K a year. That is more than I really need, but I am happy to invest the extra that I don't spend.
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brdsl
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Post by brdsl on Apr 6, 2011 8:48:29 GMT -5
I can't believe someone actually posted this ^^^^^
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qofcc
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Post by qofcc on Apr 6, 2011 8:53:31 GMT -5
$100K household income did it for me. I thought when we got to that level, we would be rich, but we accumulated so much debt along the way that we're nowhere near comfortable yet because 30% of our net pay is going to debts other than the mortgage and another 20% of our net pay is going to the mortgage & taxes and I've had to help DD and dad financially a lot the last couple of years. When that short-term debt is gone in another 5 years or so and relatives stop needing to ask for money (coming soon - dad starts a new job next week), I think I'll feel like I thought I'd feel at this income level.
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Anne_in_VA
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Post by Anne_in_VA on Apr 6, 2011 9:25:29 GMT -5
$100K - we make more than that, but with a house in another state, taxes, rent in the house we're in now, and everything else, it doesn't go nearly as far as we thought it would.
That said, we are meeting our savings goals and we live pretty well although we're not rich by any means.
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Bob Ross
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Post by Bob Ross on Apr 6, 2011 9:33:25 GMT -5
TBH I couldn't tell you, since I've been in the same salary range for quite some time now. One thing I do know, due to moving around a lot when I was younger, is that what will have you living high on the hog in a LCOL area can have you squeaking by in a HCOL area. That's also why I'll never live in a HCOL area again. The salary adjustments are never enough to offset the increased cost. They might...MIGHT pay you 20% more to live in a place that costs double, and where real estate costs are quintuple (or more). No thank you.
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Tiny
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Post by Tiny on Apr 6, 2011 9:50:37 GMT -5
I'm not sure... but it was somewhere in my late 20's - I was earning good money (and spending alot of it on trivial stuff). I was running the Football pool and an Office Lotto pool. I had finished automating the football pool and was working on setting up a database for the Lotto Pool (didn't need to automate that) when I started thinking about actually winning the lotto and what I could buy with a Million dollars... or how far it would go. After actually plugging in some numbers into a calculator and doing alittle serious thinking... I realized that a one time hit of a million dollars wouldn't necessarily set me up for life - nor would it allow multiple mansions (one on each coast) and jetting around the world at the drop of a hat... Nor would it solve 'all my problems'. Not to imply that I wouldn't want to win (or have) a million dollars. That's really when I started looking at money differently... from a "if I only had X number of Dollars" to "Will X number of dollars make me happier? How do I accumulate X number of dollars? Is it worth it?" ADDED: I think I was earning in the 30K to 35K range back then... which was a good salary.
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Post by Deleted on Apr 6, 2011 9:51:50 GMT -5
I realized it early on, even when I was making 30K per year and had no expenses.
But I'll never forget my buddy coming to this realization. He basically went to pharmacy school cause he thought he'd make a lot of money. He was making $125K, with 3 kids, and a wife that stayed home. And he said something like "I figured that my money would go a lot farther. I basically just have a pretty nice house, with pretty nice cars, and I can take a nice vacation every year. But I'm not rolling in cash!"
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Deleted
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Post by Deleted on Apr 6, 2011 9:53:39 GMT -5
When I got the offer for my first job out of college, I said, "Wow- what am I going to do with $200 a week?" Well, it was Cincinnati in 1975 and it seemed like a lot of money at the time. I got out of the single room I occupied in the off-campus student hovel, got an apartment and bought a used car, and after taxes and savings I wasn't exactly rolling in dough. So, I learned early that any salary can turn out to be inadequate if you're not careful. <snip> I'll never live in a HCOL area again. The salary adjustments are never enough to offset the increased cost. Absolutely agree. DH and I are in bman's position- live in a LCOL area on a high salary and DS' SS. We're throwing mad amounts of money into the savings because we spend enough to make us happy and give a reasonable amount away and there's still plenty left over, mostly because we bought a lot less house than we could afford.
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Post by illinicheme on Apr 6, 2011 10:39:44 GMT -5
The only "realization" moment I think I had was the very first paycheck I ever got from a part-time job in high school. You've been told that there is this thing called taxes, but it's still a shock to the teenage brain to see it taken out for the first time.
Other than that, I think I've had pretty realistic expectations of how far my salary would go. I was lucky to receive an uncommonly good financial education from my parents (who have built a substantial net worth out of a lifetime of a single earner's salary). So I was well-versed in reasonable expectations. Not that I wasn't thrilled at the end of grad school when I nearly quadrupled my salary. It was very exciting to finally have things like a 401k.
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lynnerself
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Post by lynnerself on Apr 6, 2011 10:42:21 GMT -5
My main shock was getting an inheritance that was 5 times our AGI, and realizing that it meant that "maybe" we could retire 2 years earlier.
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Firebird
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Post by Firebird on Apr 6, 2011 10:52:52 GMT -5
Actually, this never happened to me. I always made whatever amount I was making work for me, but when I was 21, I thought, "Man, if I can just get up to $40k I'll be set - that will be plenty for me." A couple of months later, that's what I was making. And it did turn out to be enough for me - plenty, in fact. For the first time, I had enough to save half of my salary, which was my goal at the time.
To this day, $40k is still my baseline number. I wouldn't like to try getting along on much less. My committed expenses have risen, so I doubt I could still save half of $40k, but I'd be able to save something.
The salary I have in mind for myself eventually is $100k. I think that's a good number for my goals, and it shouldn't be too difficult to get there with some hard work. I'm paid pretty well for my age, but I would like to reach this goal by the time I'm 35. I think that's reasonable.
But I don't anticipate my lifestyle changing dramatically at that point - I just see that number as a good goal. It's plenty high enough to qualify for a mortgage and cover a SAHP (while still saving) if DF and I decide to go that route, and it will require me to work hard but not to make it my entire life, so it's a good balanced figure.
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Firebird
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Post by Firebird on Apr 6, 2011 10:53:12 GMT -5
It has always been my goal to live off the least amount possible, and still enjoy life. So, I am not really sure I have ever worried about it. I think I spent around 6k to live last year. $6k for rent, utilities, food, etc. Assuming that you don't have a car, I am trying to figure out where you can live off $6k/year. I too would like to know how you did this! I'm no queen of frugality but I've made small salaries in my life and I don't think it's ever cost me LESS than $6k to live.
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brdsl
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Post by brdsl on Apr 6, 2011 11:11:19 GMT -5
roughly.
utilities were 65 per month. (50 electr/gas 15 water/sewer) prop taxes 25. car ins 25. home ins. 35 food 120 gas 120-150. misc. 80 (oil changes, small household items, etc.)
Some months were a little higher, some a little lower.
I wasn't intentionally doing this, but working a couple jobs, etc. there isn't much home time. Basically a place to sleep.
Also, like I said, no house payment, and single.
Now two years ago, college tuition blew this out of the water.
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Firebird
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Post by Firebird on Apr 6, 2011 11:14:09 GMT -5
Crossing the $100K per year mark made me realize the opposite. I realized that I made way more money than I needed to live very comfortably. I am single with no kids and live in a low cost of living area, so maybe that is part of the reason. But, really I have every material item that I want: a nice house, two paid for vehicles (one that I bought brand new, in cash, a few months ago). I also save/invest several thousand dollars each month. I have enough saved up that if I want some new toy, I just buy it, no budgeting / planning needed; granted I am talking about toys that cost hundreds of dollars, not thousands. This post may come off as arrogant, but I assure you I have plenty of problems in my life, but money is not one of them. I typically make between $120K and $130K a year. That is more than I really need, but I am happy to invest the extra that I don't spend.I don't think that sounds arrogant, personally. Others may disagree but it sounds like you've set yourself up well. That's a good salary that I would like to make myself, but it can subsidize as frugal or extravagant a lifestyle as you want it to, and if you're saving/investing thousands each month, I'd say you're safely on the frugal side. As for the bolded part, not having money problems is why I spend so much time and energy making my money work as hard as I can. Life is difficult enough when you don't have money problems. Having more than you need, enough to invest and share, is a good spot to be in, and one I strive for myself. You shouldn't feel bad that you've worked hard and are now in a position to enjoy the fruits of your labor. IMHO.
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Firebird
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Post by Firebird on Apr 6, 2011 11:14:56 GMT -5
Wow, brdsl. Color me impressed.
*gives you karma*
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trytofindbalance
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Post by trytofindbalance on Apr 6, 2011 11:30:49 GMT -5
I agree that living in a HCOL area really makes a difference. Housing, taxes, insurance, etc are all very, very expensive here. I make almost a $100k myself and up until 2 years ago, DH was netting another $60k or so. Well things have really changed for us, as DH is working on starting a new business and his income has severly dropped. My $100k really doesn't go that far. We live in a modest 3 bed/2 bath home and we aren't remotely rolling in anything, as a matter a fact, we're trying really hard just to keep up with the expenses right now. A budget (based on our old incomes) that was more than reasonable, with lots of room to save and spend, is very, very tight now.
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