Exactly. I have relatives like that. They always have a new leased luxury car and expensive jewelry and watches. One sister and brother in law in particular live way beyond their means. They have a need to show off to and keep up with their dipshit friends. They are counting on getting a nice inheritance and they’ll be fucked without it. I am definitely living much better than when I was renting a house with three other people when I was a new engineer but I didn’t let lifestyle creep consume me.
LOL. I “won’t” because living on $32k a year sucks.
Particularly where I live around the NYC metro area. I used to have to pay our kid’s nanny between $40k and $50k a year.
The crappy 1BR condo my wife own as a rental property rents for $36,000 a year. Most of that used to go to our nanny.
We could live further out into NJ or Long Island but anywhere within commuting distance will still be expensive, plus now you have the cost of commuting.
But my wife and I are content to drive reliable 15 year old cars
Ah, but I don’t live “around the NYC metro area”. I live in Northwest Indiana where the cost of living is significantly cheaper. So my life doesn’t suck. YMMV.
I remember years ago in my late 20s I flew out to South Bend, IN to visit a friend of mine, shortly after I had just moved to Manhattan. It’s nice out there. He could afford a nice house, car, furniture and so on. His wife asked me how much I was paying in rent in Manhattan and I told her (around $1800 a month IIRC in 2001). She was in shock.
“That’s more than our total expenses each month! How many rooms do you live in?!!”
“Well…it’s a studio apartment”, I replied, “so just the one.”
You don’t really need to sell me. I mean I like New York and all, but I think I’d be perfectly happy find a nice smallish city to raise my kids in. I don’t think that’s going to happen though. My wife’s and my job are too closely tied to Wall Street. More so hers than mine. So at least for now I guess we’ll continue struggling to raise a family on a few hundred thousand a year.
BTW, I’m not living on $32k/year, and this wouldn’t take you to that amount either, but I did switch to an MVNO (Tello) and now our cell phone bill is much less than $150/month for basically the same service we were getting before - it’s less than $45/month for the two of us for a data plan of 10G each (and another $10/month for teenager who doesn’t get much data). (And I’m planning to move spouse to a lower plan because he doesn’t use even close to 10G a month. I don’t either but I like having the cushion just in case.)
Are we talking net or gross? Maybe at $32,000 they’re the same, depending on the local tax code.
Net, that’s $2600 a month. I can imagine survival at that income, but not living. Ok, I pay off the house, but my property taxes are still $1000/month. Gas, water, electric, food.
Okay, I sell the house, because my taxes are obviously too high to my house is worth a lot. I move to a house with half the value. Except, the taxes reset, and I’m still paying $1000/month, but in a smaller house. I suppose using the capital gains from the sale is how I’m paying the taxes?
I kind of understand all of the idiots that defended the SALT deduction. Except I’m only making $32,000 and it doesn’t really matter at that income.
OK, I’m trying out Tello.
It seems too good to be real, but I’m game!
Thanks for the tip.
Uh… no. There is a marked difference between gross and net at $32,000/year income.
That’s the gross. Net it is around 1800-1900 a month because of taxes (I also withhold at a slightly higher than required level). OK, I believe you’d have difficulty with the budgeting given that you have erred on calculating net vs. gross to that extent.
I assure you I do actually live quite well. Usually have $100-200 at the end of the month to put into savings. Also have a tax refund although that has been shrinking in recent years.
It requires a frugal lifestyle, but frugal is not the same as deprived. At least for some of us.
It is honestly insane to me how much less I’m paying while not noticing any actual difference in anything like coverage, etc. Tello piggybacks off T-Mobile, and my old provider was Verizon, but where I live the coverage is pretty similar. I think maybe there was one time when we were traveling and in the middle of nowhere that my spouse’s phone (which was still on Verizon at the time, because I was skeptical and wanted to try out one phone at a time) had slightly better reception than mine did.
It also might be different for people who use a ton of data, like more than 5G/month (I think after a while the speeds start getting throttled) but that’s not me.
Wow. When I grumble to myself about the university not giving us a raise at all again this year, I guess I should remember that we have really good insurance benefits. With the most expensive plan of three available, I pay less than $150 a month for coverage for myself, and coworkers with kids pay no more than $550 a month for that plan.
It wouldn’t surprise me if FIRE would be a lot more feasible if the US ever adopts single payer health care like elsewhere in the world. It’s unfortunate that it’s such an enormous expense for most Americans.
Absolutely - the only reason I could retire at 58 is because I still get insurance through my former employer. Costs me $300 a month * but if I had to pay COBRA rates it would be $2489/month and no way could I afford that.
* It would be $600 if I was still working but I got credit for unused sick leave.
The only reason I could retire at 56 is California ObamaCare. Free premiums because I’m “low income”.
My BIL just retired at 63, and my SIL is still working. But her income is comparatively low, and they’re still putting the max into her 401K, so they qualify for health insurance through the state HC Connector. It makes getting through until 65 much easier.
I just got laid off this week and they’re paying my COBRA premiums for the next 4 months. I should be able to get a new job in that time, or we can switch to my wife’s insurance if needed. When I get a new job my insurance will probably be better than hers, but who knows?
Of course I could just retire now but I need to make it a few more years.
Sorry about the layoff. I hope your last job starts soon and lasts as long as you need.
Thanks, we’ve got plenty of savings, a big 401K that I can now withdraw from without penalities, good severence, unemployment insurance, and my wife’s income. And I’m pretty sure I’ll find a job shortly. But I could also retire now if nothing happens. We aren’t FIRE devotees, but we’ve done a good time preparing.
I assumed zero taxes at that low income, thus net. Not a mathematical mistake, but perhaps a political mistake. I wonder, though, what living “quite well” entails. My mother, who lives in poverty, insists that she lives "quite well,: because she can attend the cinema a few times per week.
Given that she can go to the cinema more than I can actually might mean that she lives better than I.
Political. $32,000 a year for an individual is considered middle class. Granted, it’s the bottom of the middle class, but it’s where that category starts. Zero breaks on taxes.
Now, if you live in NYC or LA $32k is crap, but that’s connected to the cost of living in those cities. Over the majority of the US territory you can live decently on that income if you’re reasonably smart about it (unfortunately, a lot of people aren’t).
Average US income is currently $60,000. The median is $40,000. At $32K I’m below both, but still not considered poor.
Top of the “poverty” category is $15,000/year for an individual.
That depends on the individual. A safe place to live, good food to eat, bills reliably paid, able to purchase needed clothing and other essentials, able to put a little aside, able to take the occasional trip, a few small luxuries… that’s “quite well” for a lot of people.
Others “require” expensive clothes/cars, extensive trips, keeping up with “appearances”, etc. And, of course, kids are expensive which is why someone with my income raising a kid(s) is much more likely to get assistance than I am, but then, in that case, that income isn’t supporting just one person.
If you include health insurance premiums, our medical expenses alone are $30,000 a year.
There is no way we could live on $32K a year. I have gone through our budget repeatedly to try to shake money out of it. The one and only ongoing large discretionary expense is private swim lessons for my son, because he is unable to participate in group classes due to his developmental issues. No amount of skipping vacations (which I don’t take) and expensive cars (which I don’t drive) is going to make up for the massive medical expenses, childcare bills, grocery bills (my son has an eating disorder) and student loan payments.
Yes, the moral of the story is, kids are expensive. But it could just as easily be one of us with a debilitating and expensive medical condition so that’s not even the whole story. The whole story is don’t be sick in America.
Yes. You raise a good point.
However, I have found that if you are aggressive about asking for help/discounts/etc. from medical systems someone at my income level can get assistance from some medical systems. Which is why last year’s surgery was at a Catholic hospital, as will next week’s surgery be - I find the Catholic ones tend to be more generous than others. As nothing involved things Catholics get hung up about that worked out for me.
I also get health insurance from my employer and the benefits are pretty good by today’s standards. Together, I can take care of my needs although the amount of phone calls and paperwork is a drag.
Medical expenses can quickly suck the life out of anyone in this country.
This is the “let them eat cake” of financial advice. You might as well simplify it to “be rich”. it is based on the presumption that by “tightening your belt” you can afford to reduce your outgoings enough save huge amounts each month and retire early. That simply doesn’t work unless you are well off and frittering your money away on luxuries.