It is always interesting to me to see how a family making a healthy income spends their dough; in this case, they spent around $350 less than they earned:
http://www.businessinsider.com/detai...-couple-2015-1
It is always interesting to me to see how a family making a healthy income spends their dough; in this case, they spent around $350 less than they earned:
http://www.businessinsider.com/detai...-couple-2015-1
That what they say, but with over 1k going into each person's 401k a month (on average?), it's hard to see how it would be possible to get to that conclusion. Some definition by which 401ks are not savings or something.Originally Posted by pinkytoe
(but, but it's investment not saving ... yea, yea, while technically true, everyone else pretty much counts it as the money they "save", as in saving for retirement).
Trees don't grow on money
That's amazing to me. I like seeing how people spend their money, too, pinkytoe. I'm used to living on so much less than what they have in their budget.. My accountant told me that as people earn more, they spend more. I guess this type of budget is common for many couples with high incomes. The only problem is, if one of them loses their job, it's going to be a rude awakening.
Two things I wonder about are why their Roth IRAs are inactive, and why they only have 7000 in the "savings pot" with two little kids and a high cost of living to maintain? Am I missing something obvious?
Depending if that is their after tax or before tax income they may very well be above the ROTH IRA income limits (there is a maximum income you are allowed in order to make use of Roth IRAs and if that's your after tax it will likely exceed it).
Also maybe if your are able to pull in that kind of income, your enough in demand to not worry much about say unemployment (I guess a medical emergency could still happen of course!). It depends of course.
Last edited by ApatheticNoMore; 1-27-15 at 8:28pm.
Trees don't grow on money
Maybe they like there 401k options better. They are putting $2500 per month there.
i never bothered with a Ira when I was working, the $30,000 to $$40,000 we put into the 401k's plus company matches were plenty for us. But this was later in our careers, we did not max them out when we were younger.
Also it's bound to be a pretty high tax bracket which can make putting it in the 401k first before you put it in a Roth pretty tempting, even if you qualify for a Roth.
Trees don't grow on money
Those are all good reasons, and I overlooked them--thanks!
Awakened, the term your accountant referred to is Lifestyle creep.
The big question is an individual thing (how much is/should be allowed, and how much is bad).
That term came up in a discussion I had with a friend on Monday, about someone we know (who would be the black sheep in most peoples families) and how they weren't, and how their father, at 70 isn't able to retire, due to supporting them. I don't get that.
Lifestyle creep is of coarse a choice. And when your income is increasing its understandable to want to enjoy some of the things the added income can buy. When we turned 40 we decided early retirement was a goal. So we started investing a large part of my year end bonuses. We also saved about half of my yearly raises. We were able to ER at 50 and still was able to maintain our lifestyle we had when we were 40 or a little better.
We now spend more than we ever did while working, our retirement lifestyle is expensive.
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