$175K household income - expenses [Archive]

ApatheticNoMore

1-26-15, 4:05pm

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/detailed-budget-of-high-earning-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. >8) (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).

awakenedsoul

1-26-15, 5:54pm

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.

rodeosweetheart

1-27-15, 4:22pm

ApatheticNoMore

1-27-15, 6:30pm

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.

dmc

1-27-15, 6:45pm

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.

ApatheticNoMore

1-27-15, 8:16pm

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.

rodeosweetheart

1-27-15, 9:23pm

Those are all good reasons, and I overlooked them--thanks!

ToomuchStuff

1-28-15, 2:58am

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.

dmc

1-28-15, 7:43am

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.

pinkytoe

1-28-15, 9:25am

Lifestyle creep
It seems expectations grow too. Some things are no longer sufficient - sending children to public schools or colleges, cars older than three years, houses less than 3000sf and on and on. Which I believe is why some of us started talking about simple living here over a decade ago.

ToomuchStuff

1-28-15, 11:55am

It seems expectations grow too. Some things are no longer sufficient - sending children to public schools or colleges, cars older than three years, houses less than 3000sf and on and on. Which I believe is why some of us started talking about simple living here over a decade ago.

As stated above yours, its all choice. I just stated the common term I have always heard it referred as. I wouldn't think the friend of mine who makes large 6 figures to live on what he was making when he started out as an extreme example, but your example is more typical of how I see people justifying this.

Rachel

1-29-15, 3:15am

For a couple with 3 children and necessity of maintaining 2 cars I thought their expenses are pretty reasonable. They would be smart to cut back on vacation, holiday, and entertainment in order to increase their emergency fund. I noticed they do not have any charities in their budget, and it would be nice to see that even if it is a very small amount. It's an amazing feat to keep 3 young children well cared for while maintaining 2 professional careers. The photo shows a beautiful family.

jp1

1-29-15, 5:36pm

Packy

1-30-15, 12:43pm

They should cancel their gym memberships--obviously, they haven't been using it. Mommy prolly has to have that robust neighbor help get the cap off a new jar o' mayonnaise. Also, mommy and Daddy both definitely need to get "fixed". They've produced enough dorky offspring, already. People I call "Young Americans" have a basic agenda, the Three N's: A New car, a New house, and a New baby. It's conspicuous consumption. This guy no doubt still tries to hold onto some kind of manhood, vicariously, by watching TV Sports, on cable. Other than that, he is a pxxy-whipped he-slave. So, cancel the cable. No, wait--she needs the made-for-teeevee wimmins moooveees. So, keep the cable. Just sitting here, wondering which Fundamentalist Christian Church they attend? It doesn't even show a "church contribution" in their budget, and yet they are such typical nerdy "Church People". Maybe it is under "Entertainment".

Packy

1-30-15, 1:07pm

Also, in a few years they won't have the child care costs that they have now. As long as they don't succumb to 'lifestyle creep' as those shrink and start saving an extra $2.000/month they will be in good shape.It never ends. Till Death Do Us Part. Chances are, by 2020, they will have divorced and he will have remarried, but she will be Liberated, and going to Graduate school to get her Masters Degree in Office Work(M.S.O.w.), so she can buy a REAL Dream Home, a DECENT car(new 'cedes) and hopscotch across Europe once in awhile, and he will be paying alimony and child support, plus still playing man-slave & catering to the nice, new little wummmun, and his-, hers- and their- kids. See how that works?

gwendolyn

1-30-15, 1:34pm

Way to kill a thread, Packy. Death by vitriol.

Packy

1-30-15, 2:03pm

Way to kill a thread, Packy. Death by vitriol.Why, thank you Gwendolyn! It was going nowhere, and a thread that needed killing. I noticed that there were too many apathetic: "I really don't see much wrong with their spending habits" type of responses. I just thought I would throw in a reality check, there. (Hope that helps you some.) Thankk Mee.

Rachel

1-30-15, 10:21pm

I noticed that this publication is going to publish more of these stories. For some strange reason I am always interested in seeing these snapshots of how other people run their money. Thank you, OP, for posting!

Packy

1-30-15, 11:30pm

Have you Kids ever read "Money" Magazine? I bought a years subscription a long time ago at an introductory price, like maybe 59 cents an issue. Every month, they would give several household profiles--usually 30-something family types. They typically had very good incomes, and were quite often as ridiculously "spendy" as the couple profiled in the link the OP gave. But, they were all living the American Way Of Life, consuming as best they could. (Hope that helps you) some. Thankk Mee.

jp1

1-30-15, 11:57pm

Meh. These people aren't living beyond their means by any stretch and there's enough wiggle room in their budget that they can, if necessary, make changes to weather a crisis like a lost job, especially since they could drop their single biggest expense, childcare, if one of them lost their job. If a couple earn that much and can save 20% for longterm expenses like retirement and their kids' educations, plus pack away money for stuff like future house repairs, I'm not going to tell them they spend too much. Why bother having high paying jobs if the only goal is to live in a small dumpy house with one 40 watt lightbulb hanging from the ceiling, driving a 20 year old car with faux wood panneling on the side just so you can put 60% of your income in the bank for some undefined future "need".

On the other hand if, in reality, they hate their jobs and find them soul sucking then maybe they should be trying to save more and trying to reach FI3 as soon as they can. It's entirely possible, though, that they may actually like their jobs. Especially the wife. I mean lets get real. All the blood and gore of surgery? That's gotta be pretty cool! [/sarcasm]

ApatheticNoMore

1-31-15, 1:36am

I don't think they are living beyond their means. I can say for sure I don't save as much as them (yes I'm a single person it's true so I don't have two incomes to work with, but that doesn't really help me any financially). Now of course I don't earn anywhere near what they do, nor is that kind of income remotely in the cards. But earning more means you can spend more if you like and still end up ok obviously. Which is how I regard that couple.

Now yes of course after adjusting for being a single person I spend less in every category EXCEPT notable ones:
1) housing (I spend more per adult)
2) healthcare (my health insurance costs a lot more than they have allocated for medical)
3) and car insurance (and it's an 11 year old car with minimal coverage and I got a good drivers discount this year. I have one minor accident on my record).

zeaxmays

2-1-15, 2:03pm

that packy guy is a total d-bag. cant believe hes tolerated here.

iris lilies

2-1-15, 3:21pm

that packy guy is a total d-bag. cant believe hes tolerated here.

In the new SL environment I am indifferent about moderation, but your name calling is what it is. There are more interesting ways to address trolls and pot-stirers.

Packy

2-1-15, 6:50pm

In the new SL environment I am indifferent about moderation, but your name calling is what it is. There are more interesting ways to address trolls and pot-stirers.Stop calling littlebittymee a Troll!! I, am not a Troll! As for pot-stirrer, that must be a compliment coming from you--you are a major consumer of Tee-Vee and other pot-stirring media. Well, aren't you? So, I must thankk you! As for that dude "zanyexlax" or whatever, if he ever comes through town he is welcome to stop by, so I can show him just what a "d. bag" I really can be. Go ahead--(pejorative deleted)--make my day. Hope that helps you some.

Alan

2-1-15, 7:38pm

OK folks, there's no justifiable reason for name calling or back-handed threats. If we moderated every little thing that got someone's panties in a bunch this would be a full time job and, in my opinion, would completely violate the concept of simple living that attracted most of us here in the first place. As adults, I believe we each have the option to either ignore those who get under our skins or give it back to whoever the target of the day happens to be. It can be done without making it personal.

That said, I draw the line at name calling and threats. There will be consequences if it continues.

Packy

2-1-15, 8:10pm

Yes, I agree--name calling, is uncalled for. So is the bullying; the snarky comments, the harassment and snide remarks and sarcasm. Plus, bad spelling, grammar, sentence structure, and punctuation. Not to mention lack of paragraphs. From now on, I will be ignoring just about everything These People say. Folks seem to like me very much, on the other boards I participate in, opinions and all. This one, is the one where you have all those---oh, I won't say it. Wouldn't be prudent & would be uncalled for. Forget I even mentioned it. Anyway, I was reading one of those online articles about the "50 Most Dangerous Cities In The World". The majority of them were in Latin America, several in South Africa, and three(or 4) were in the USA. The ones I recollect were: Saint Louis(of course), New Orleans, and Baltimore. Can't recall another, but based on news accounts, you'd think Dee-troit and Chicago or one of its' suburbs would be on the list , too. Certainly, someplace in Callyfornya, as well. But, Mexico--hey, they got violent crime. Look out. But, what I was wondering about, is if there is a list of the: "50 Most Contentious Online Forums"? Just Curious. I will let everyone know if I encounter such a list. You kids may be very interested in signing up on one. Hope that helps you some. Thankk Mee for using fairly good punctuation, too.