Financial worries

Reading lingyi’s thread on what you do with an extra $10-$15 a day, and several people’s responses regarding not having any extra disposable income, to splurge on things like coffee, cigarettes, lunch splurging, etc. made me wonder at what income level do most people feel they need to be at to not have those types of financial worries.

I remember early in my career living pretty much paycheck to paycheck. After rent, car payment, 401k savings, health benefits, groceries, utilities, etc. that there was not much left over for entertainment, travel, etc.

As my career progressed, and I got raises and promotions, and the cost of living stayed relatively flat (only modest increase in rent, groceries, utilities) my disposable income did increase, but was offset by having kids, and then eventually offset by buying a house, which resulted in a draw back on disposable income. This was primarily due to my own decisions to increase the quality of my own lifestyle, through home ownership and newer cars from time to time.

I’m at a point in my life, where my costs of living have continued to stay relatively flat while my earnings continue to increase…so each year those financial worries have lessened.

What amount or % of income increase per year would you need for you to no longer have financial worries?

I’m tempted to just say “More” but that would be glib.

I am making ten or eleven times what I did when I started out, and I still worry. OTOH we still are making budget, and we have enough in investments that I could theoretically retire next year. I don’t plan to, but I could.

Maybe if I won ten million, after taxes and as a lump sum, in the lottery, that would be enough that I would be able to stop worrying. But probably not.


I’m pretty lucky. The only financial worry I have is having enough in investments to retire in 9 years at 55 years old.

(Divorced with two kids, a house, and a military retirement paycheck already)

My response is also sort of relevant to the other thread.

A few months ago another modest retirement stream kicked in. Not as big as any of the others. But like the other thread, enough that we could spend some extra bucks per day if we wanted.

Apparently it was this small stream that kicked things up for us. So if I want a doodad from Amazon I just get it. Don’t worry about asking Mrs. FtG and she’s the same. Hey, if it’s small we can afford it so just get it and move on.

We were doing okay, more than okay before but something happened mentally. It’s weird to have crossed some sort of invisible financial wellness line because of this.

I’m an ex-college prof and one thing to remember is we’re all ex-graduate students. We kept around the old grad student skimping mentality. (We also both had less advantaged childhoods.) Which is why we have reasonable amount of retirement income now and no debts.

There’s still the Big Stream starting up a few years from now. I don’t know what we’re going to do with it. Save for the nursing home, I guess.

I have no idea. As it is now, I still live paycheck to paycheck- especially now that I am a single dad raising three kids. I make “too much” to qualify for any kind of aid, and can’t afford to get my kids on my insurance through work. Household fixes generally take a backseat to making sure I have food on the table, a roof overhead, heat, and electricity.

I have literally $0 in savings, the only retirement plan I have is 5% of my paychecks go into a simple IRA, with 60% of that matched dollar-for-dollar by my employer.

Tomorrow is payday, I was flat broke 3 days ago.

So… double what I make now, I would have no issues, I think. The house would be able to be kept up much better than it is now, there would be no concern of having utilities shut off (which has happened multiple times even this year!)

For the record, I seldom ever drink, only have one car, all of my clothes are cheap jeans and t-shirts (most 5+ years old). I live in the gap, where I’m too affluent (ha!) to qualify for any sort of assistance but too poor to actually afford to live! To top all of that off, I will likely be getting a wage garnishment soon for medical bills I literally can’t afford to pay- and again, I’m so “rich” they take a full 25% of my wages, considering that “disposable” income.

I can’t ever imagine NOT living paycheck to paycheck. I can barely afford a 3% 401k contribution, I have no car payment because I can’t afford one, and I have absolutely no savings. My heater in my 40 year old manufactured home is dying, and even when it does work, only half the house gets heated cause the ducting under the house is broken. My roof is leaking and held together by moss and a prayer. I have one working burner on the stove and there’s a hole in my floor covered by a chunk of plywood. It’s only a matter of time before the floor under my bathtub gives way and I have a nasty morning surprise in my shower lol. None of this is getting fixed. Ever. Cause there is NO way I can afford it.

But, I have a (leaky) roof over my head, I can afford food and clothes for my daughter and she doesn’t realize we’re ‘poor’ from what I can see. I have a job I don’t dread going to every morning and is flexible with me as far as scheduling goes. I would love to get a better paying job, but it’s just not in the cards for me.

If I were being like, totally dreaming? I’d say making like…$5000 a month just sounds so absolutely exorbitant…I can’t even imagine how my life would change with that. Yet I know to other people that’s just chump change.

I could get away with spending $10 a day on lunch and still pay bills and put away enough for savings and retirement. But doing so would require me to be more conscientious about my other “splurge” spending. I would rather eat a simple crackers-and-an-apple lunch and be able to spends freely when I go on vacation than have splurge daily and have to restrain myself while on vacation.

I don’t make enough money such that I can spend freely all the time. I would probably only be that carefee if I made six figures.

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I don’t really have any real financial worries, especially since my newly-hired financial adviser has told me that I will indeed be able to retire someday.

That said, I still worry. Even though I know it’s stupid and unneeded and we make plenty of money and we have no real debt, I worry.

So I’ll never make enough not to worry, I guess. My brain is against me.

As long as kids are in the house money is not. Just how it is. When the lil’wrekker graduates from college I’ll feel free and easy. She’s in a full ride but her expenses are crazy. We have the budget talk every month. She actually asked me not to do ‘the talk’ this month because it causes her stress. Holy cow! She’s getting a double talk this month. She doesn’t understand stress, YET!

I haven’t had financial worries for decades, so to answer the OP: zero.

I’ve posted here before that I started the 80’s mostly broke and recently evicted. I started the 90’s as a one percenter*.

This is how we did it.

When Mizpullin and I teamed up at the start of the 80’s, we decided to spend a decade living very frugally and saving as much as possible. Neither of us had trusts, inheritances, or any family money, so our method was work as many jobs as possible, and save like mad. I asked her about it (she remembers the details better) and she told me we spent 1981 living on <25% of our income. I went to wherever and whatever paid the most and she did the same. IIRC, we were apart more than together for the first 3 years. I worked driving trucks and on oil rigs and at times would spend a full six months with no phone nor any contact with her other than letters. During this decade we both finished STEM degrees by taking classes when we had the time, and I went independent (engineering contractor) as soon as I could. After that we followed the money wherever it was, and in total moved 11 times. This includes 3 different countries and 5 US states. After enough time we built up a sufficient buffer that we no longer had any real worries about money.

It seems we were doing what is now part of the FIRE movement, although we just built up enough to remove any money stress, not enough to retire.

Other than those first years, I can’t remember being worried about finances. Retirement’s covered, the house is ours, and our only shortage is time. The kids have never known money problems in their lives; They got new cars for high school, college paid for, and when my eldest decided to pursue a flying career we leased an airplane for him. I spend about half the US median income just driving my big boat around, and took a 40% pay cut earlier this year because I didn’t need to work so much anymore.
*Just barely, and I’ve drifted backwards over time.

My husband and I both have post-retirement jobs, a couple of decent annuities waiting in the wings, a nice CD, and a chunk of change in savings. We’re in our 60s. On one hand, I know we’re doing OK, and I don’t fret over dining out or buying stuff for our granddaughter.

On the other hand, I fret about potential expensive unknowns in our future and how they might affect us. Over the last dozen years or so, we’ve replaced our HVAC, our well, our roof and windows, several appliances, and a couple of vehicles. Theoretically, the only thing we should be worrying about is the water heater, and really, that’s not a biggie (unless it craps out in the middle of a shower… :eek: ) But health issues could kick in big time. Or other things I haven’t thought of.

I might feel better if we had an additional million bucks standing by. Maybe. I don’t want to have to find a job at 75 because some disaster drained our savings.

Yeah, I know, I’m overly dramatic, but that’s what lingers in the back of my mind - the unknown “what if???”

For me, a lot of those worries evaporated not so much with how much I was making or how much I owed, but more with when I created a budget for myself. Well, not really a budget so much as a plan. I made a list of bills I had to pay each month (this was probably 15 years ago and I still use it), Electric, Cable, Rent/mortgage, can, insurance, this credit card, that credit card etc. Next to each one I list how much it is (or as close as I can guess). Each month, as I pay each bill I can check that off the list. Even better, every week when I would sit down to pay all the bills I had, I could look at what I had in my checking account, subtract off what I still had to pay for the month, add back in the paychecks I would still receive and know exactly where I was going to land by the end of the month.

Doing all that, made it easy for me to decide which bills to pay this week or put off until next week, easy to decide how much to pay on this credit card or that credit card, easy to decide if I should dump $200 into my savings or pull $50 back out etc. It got rid of so much guesswork. On top of that, checking everything off made it so I never, not once, missed a payment. Both because I could plan for it and because if a checkmark was missing, I’d go back and find the bill I forgot about.

Granted, I had to have the money to cover all the bills, but doing this helped me organize it so much better and it helped me dig out of credit card debt, never giving them too much and shorting myself elsewhere or paying off too little and blindly chucking the excess in my savings account.

The OP does a good job of describing the “step up” nature of life that I think a lot of us went through. You make a little more, expenses go up a little more, you change your lifestyle to absorb it, so you never really feel like you’re ahead. Until one day the promotion puts you up by a greater amount, and the expenses stabilize, and there you are.

For me, I’ve always been frugal, and consequently felt like I made more than I needed, even when I was in college and just starting out. So, I’ve never really felt strapped. Back then if I ever got low on money I just didn’t spend, I’ve always been good at putting off. So, the feeling of worries is something I’ve thankfully avoided.

My wife and I have always lived frugally (we bought a small house, only have one vehicle, walk/bike to work, take leftovers for lunch, no kids, etc). When we first started off, we didn’t make much combined but we were able to get by. With each payraise, we upped our retirement contributions, paid more on the student loans, and paid a bit more on the house. We continued to do that and our take home stayed the same. Eventually, we were maxing out our 401’s and IRA’s, the house was paid off and we are still living on the same amount (debt free is awesome). We also now have a large amount extra going into savings every month.

We were both lucky to get into career paths that pay well. Neither of us make 6 figures but we are both upper 5-figures. We’ll retire when I am 60 (my wife is 7 years younger than me).

In my early to late 20’s, I was very much paycheck to paycheck. I cannot believe how much ramen I ate. I also could not picture a time in my life where money wasn’t my main worry. We still have worries (aging parents for example), but money is not one of them.

For me, it’s not really about income. My income is currently basically peanuts, but I’m not worried about money. I was, until I inherited a little money a few years ago, unexpectedly. I’m very far from wealthy- it’s a sum many people on the board would spend on a nice holiday- but I know that if I had to, I could live, albeit very frugally, entirely on savings for about 2 years, which basically took all the pressure off.

Ironically, due basically to the Sam Vimes ‘Boots Theory’ (basically being able to buy reasonable quality rather than repeatedly buying crap, and being able to plan forwards a little), I’ve been spending less having a cushion than I did when I was living strictly paycheck to paycheck- on the same income, I went from not being able to save at all to my savings growing pretty steadily, even if I did very rarely have to ‘borrow’ from them in the short term. Plus I’ve felt a lot more comfortable taking risks, like going back to University (on government loans), which will hopefully lead to better stuff in the future.

From reading this board, I’ve also really grown to appreciate how much worry having a UHC system takes away. I don’t have to think about health costs, I don’t have to budget for health insurance, and I don’t need to think about saving anywhere near as much for retirement (unless the NHS gets all screwed up by then of course, which is a distinct possibility). Under the US system, on my income, I think I’d be a quivering ball of stress held together by more stress.

I managed to save up money living on a stipend and student loan when in university. Finishing university and getting a job with decent pay allowed me to increase my expenses while also increasing average savings. I’ve never felt comfortable without having several months of pay in case of emergencies, and the emergencies have been very far apart, so the reserves could cover very many months indeed.

Our worries went away the day our third kid graduated from college in 1995. But even before that I was able to max out my RRSP (Canadian equivalent, more or less, to a 401(k)) and we could eat out occasionally. My income was around CDN 85,000 and my wife make maybe half that. Then I retired the last day of the millenium and started collecting my pension, Quebec pension, federal old age security, even a bit of US social security and suddenly things were very easy. Although I still worry about the future, if any.

We have about 30 years of our current spend rate in retirement savings, a house that’s paid for (but $11k property tax!) and kid’s college fully funded. We are in our early 50’s, and I have a good job with a seemingly solid company.

Twenty years ago when we got married, we couldn’t have dreamed we would be this well off, we would have thought we’d be set for life. But you know what, we still worry. We try to save at least 20% of our income and review our spending for the last year each January.

The big unknown is medical and long-term care costs. It seems there is no end to what a serious illness could cost, especially if the ACA goes away.

Have you checked your retirement lately? We’ve lost almost $200K this quarter (thanks, Obama ;-). You might’ve lost a few years. I’m not worried though since we still have 11 years until I hope to retire at 60.

BTW, I’m so thankful for my low property tax area. Our annual tax is about $2000. Of course, is a postage stamp size house. The garage is bigger than the house (it is a nice large, detached garage though).

We’ “lost” a lot more than $200k in the last few weeks but yes, I’ve accounted for that.

I didn’t lose any sleep over the crash in 2008 either. And now I have a somewhat lower exposure to equities than I did ten years ago.