5 spending diaries - interesting article

[disneysteve]

http://newyorkmetro.com/guides/money/2006/23490/index.html

This article features a one-week spending diary for 5 people in NYC earning a broad range of incomes. Very interesting snapshot.

 

[allison443]

Thanks for posting this! Very interesting! I think spending diaries are a great tool for everyone.
I am from NYC, so the amounts didn't surprise me, but I think a lot of people in other areas might be surprised. Especially how it seems there is so much take out food and eating out.

 

[Danemom]

I am from NYC, so the amounts didn't surprise me, but I think a lot of people in other areas might be surprised. Especially how it seems there is so much take out food and eating out.

The amount of eating out is what surprised me - seemed like most of them ate every meal out! I have to say though, even if I earned over a million a year, I could never spend over $500 on dinner out for two people. That's nuts!

 

[Adi12982]

WOW - even the student (I guess since mommy and daddy are paying for most of his expenses) was spending recklessly. Sorry, but you should live like a student if you are a student - that means bi-passing starbucks and popping a couple Exedrine Migraine's (a few cents) or a prescription versus spending over a hundred dollars on acupuncture. I mean to each his own, but I think they should spend more responsibly!

 

[dvcgirl]

Very interesting!

It was amazing to me to see the spending of the student and the junior professional....way above their means. At the same time it's easy to see how that's possible trying to keep up with the other three "Joneses" in NYC. So much on eating out and on alcohol too!

 

[disneysteve]

I agree that the student is overspending, but I really didn't pay much attention to him because his true "income" is far above 20K when you add in parental support. I focused in on the other 4 people.

Just for perspective, I calculated out what percentage of income they each spent during the week.

Weekly spending as a % of income.

$1 million: 0.46%
$700,000: 0.28%
$150,000: 0.35%
$54,000: 1.19%

When you look at it that way, it is actually the guy making 54K who is overspending the most. He is spending 4 times as much of his income as the one earning 700K.

 

[MrsPete]

Thanks for posting this! Very interesting! I think spending diaries are a great tool for everyone.
I am from NYC, so the amounts didn't surprise me, but I think a lot of people in other areas might be surprised. Especially how it seems there is so much take out food and eating out.

Yes, I did find that surprising, but then the people who bought groceries seemed to pay too much for them too (judging by my Southern standards): one guy spent $20 (and his fiancee spent another $20) on HALF a bag of groceries. I guess it's just really expensive to eat in New York, no matter how you do it.

It did seem to me that these folks were spending way too much eating out -- I mean, $7-10 for a take-out salad? Almost $2 for an apple? Even if the guy is a millionaire, if he eats an apple that often (and that is a good choice), why doesn't he bring in a bag of them on Monday? He's riding in a taxi; it's not like it'd be difficult to haul them through the subway. And the spending on coffee, other drinks, and alcohol seemed way out of proportion to me.

Several had some "big-ticket items" in their weekly spending: Iron Maiden tickets, Lollipop concert tickets, fund-raiser dinner tickets. Those probably wouldn't be every-week purchases.

I think the student and the young professional shocked me the most. These folks can't afford to spend lavishly -- the million-plus professional can. Proportionally, the younger folks are spending more than he is on luxury items like meals out. At first glance, it seems that the third guy -- the mid-level professional -- is most realistic in his spending, though it's still high.


These people would probably be equally shocked by my spending habits. Let's see, what have I spent recently?

Saturday:
Groceries for a family of four: $168, kind of high for us, but it includes canned sodas and snacks for work (so we don't buy $2 apples or $1.50 Diet Cokes), pumpkins for Halloween, and steaks for Dad's birthday dinner
Supplies for oldest daughter's school project: $4
Total: $172

Sunday:
Tithe at church: Won't say, doesn't seem right to discuss
Buffet lunch for me, two kids, great-grandma after church -- Dad left at noon for business trip, so he didn't eat: $35 + tip
Gas: $30
Total: $70

Monday -- no school:
Haircuts for me and one kid: $24
Lunch for me and two kids while running scout errands: $15
Back to grocery store for frozen pizzas and junk food for last-minute kids' sleepover: $25
Badges for scout troop: $12 (will be reimbursed)
Craft supplies for scout troop: $25 (will be reimbursed)
Camp rental for scout troop: $140 (will be reimbursed)
Total: $64 actually out of pocket

Tuesday -- no school:
Nothing spent
Will eat free hot dog dinner at church tonight, then work at Fall Festival carnival; donated lots of candy for the festival earlier, but will pay nothing tonight
Total: $0

Wow -- I seem to be eating away from home a lot too; however, this isn't typical for me. On school days we always "brown bag" it. This represents four no-school days, and I know that I tend to spend MUCH more on no-school days. Dad is out of town on business, so he's eating out every meal, but he's eating on the company's dime -- I won't count that.

 

[MrsPete]

I agree that the student is overspending, but I really didn't pay much attention to him because his true "income" is far above 20K when you add in parental support. I focused in on the other 4 people.

Just for perspective, I calculated out what percentage of income they each spent during the week.

Weekly spending as a % of income.

$1 million: 0.46%
$700,000: 0.28%
$150,000: 0.35%
$54,000: 1.19%

When you look at it that way, it is actually the guy making 54K who is overspending the most. He is spending 4 times as much of his income as the one earning 700K.

That's an interesting way to look at it.

Without having done the math like you did, I thought the 54K guy was overspending the most, despite the fact that with NY rents, he's almost poverty-level. If this is genuinely typical of his spending, he is spending more than he earns and is accumulating debt (and he doesn't seem to have much to show for it -- at least the 700K earner bought some nice clothes).

Remember, too, that the one-mil guy was supporting a stay-at-home wife and two small children, so it's logical that his spending is higher. The others had no dependants (well, the 150K guy had a fiancee, but I had the impression that she had an income as well).

 

[Disneycrazymom]

Makes me appreciate living in the mid west. Our 2 house payment don't add up to the rents of most of these people and ours will be paid off one day!

I also was surprised that the 1,000,000 mom had change to do laundry! I cannot imagine having to go out to do laundry every week. I guess I am spoiled and we don't make near that much!

 

[disneysteve]

I don't keep a diary, but let's see how I'm doing so far this week:

Sunday:
Went to Boston Market for dinner, using a coupon and a gift card: $0
Stopped at craft shop. DW and DD both needed yarn: $8.98
Cut my own hair: $0

Monday:
Quick grocery stop, including candy to give out for Halloween: $22

Tuesday (today):
No spending anticipated

So I'm 3 days into the week and have spent a grand total of $31.

 

[mt2]

Weekly spending as a % of income.


$700,000: 0.28%

I didn't do the math so I'm going by your numbers but did you include the portion that she is getting reimbursed for? If they are, I don't think those numbers should be included because it is company related.

I think the % should be on what she doesn't get reimbursed for. That would be a more fair % based on personal purchases, don't you think.

 

[NotUrsula]

One of the more amusing things in the article is how little the highest-income man really spent when he was not with his wife (not counting the payment to the contractor.) He does have a monster sweet tooth, but I'm guessing that may be his version of stress relief; perhaps he needs it with a dependent wife who spends as freely as his does. He did also take a lot of cabs, but at his earning level time is money; taking cabs makes sense for him.

Another interesting thing is which grocery stores which people chose to shop at. The "poorer" people went to the tonier ones. I don't think of Gristede's as a supermarket, it's really more a gourmet store, IMO. Groceries in general *are* more expensive in NYC, especially in Manhattan; the stores tend to carry only small sizes of most products, because people are carrying the groceries home on foot. (For example, I doubt very many Manhattan grocery stores actually stock 24-pks of soft drinks or 10-lb sacks of apples.) A lot of NY'ers I know rent/borrow a car once a month and drive out to the suburbs to stock up on staples -- which is only a workable system if they actually have space in their apt. to store the stuff.

 

[disneysteve]

I didn't do the math so I'm going by your numbers but did you include the portion that she is getting reimbursed for?

No. I only used the part she was actually paying.

 

[MrsPete]

One of the more amusing things in the article is how little the highest-income man really spent when he was not with his wife (not counting the payment to the contractor.) He does have a monster sweet tooth, but I'm guessing that may be his version of stress relief; perhaps he needs it with a dependent wife who spends as freely as his does. He did also take a lot of cabs, but at his earning level time is money; taking cabs makes sense for him..

It's interesting that a stay-at-home mom puts her twins into a 28K/year preschool (over $1000/child/month for building blocks and crayons?) AND has babysitting costs AND has a cleaning lady. Sure, they can afford it, but those aren't the choices I'd make!

I also found it interesting that the student (who's not supporting himself) has a $140/month gym membership and pays $125/month for cable TV. Don't most colleges have gyms, weight rooms, pools, etc., which the students can use for free? Mine did.

Another interesting thing is which grocery stores which people chose to shop at. The "poorer" people went to the tonier ones. I don't think of Gristede's as a supermarket, it's really more a gourmet store, IMO. Groceries in general *are* more expensive in NYC, especially in Manhattan; the stores tend to carry only small sizes of most products, because people are carrying the groceries home on foot. (For example, I doubt very many Manhattan grocery stores actually stock 24-pks of soft drinks or 10-lb sacks of apples.) A lot of NY'ers I know rent/borrow a car once a month and drive out to the suburbs to stock up on staples -- which is only a workable system if they actually have space in their apt. to store the stuff.

I'm not familiar with those particular stores, but I've always wondered why people choose to shop at more expensive stores -- canned soup is canned soup, whether you buy it on sale for .50 or pay 1.19 for the exact same brand. My husband says he was guilty of this in college; when he first moved out on his own, he tried shopped at the less expensive grocery store and had trouble paying with a check. He shopped at the fancier store, more expensive store and had no problems, so he continued to shop there -- until I came into the picture and taught him better!

The other links at the end of the article are just as interesting -- especially the 100 service people vs. 100 teachers vs. 100 suits link.

 

[disneysteve]

It's interesting that a stay-at-home mom puts her twins into a 28K/year preschool (over $1000/child/month for building blocks and crayons?) AND has babysitting costs AND has a cleaning lady. Sure, they can afford it, but those aren't the choices I'd make!

I'm one who believes that there is more to preschool than building blocks and crayons. I think learning happens younger and younger. My daughter was reading by kindergarten. That wouldn't have happened without preschool. I also think the social interaction and the seperation from mommy is important for kids to develop on their own. I also think that it is good for mommy to have some time away from junior. Some days my wife couldn't wait for me to get home so she could escape and clear her head for an hour or so.

I also found it interesting that the student (who's not supporting himself) has a $140/month gym membership and pays $125/month for cable TV.

Can't argue with you here. I earn several times his income. We exercise at home (spent $700 on a treadmill about 7 years ago). And we pay $10.35/month for cable.

 

[MrsPete]

I'm one who believes that there is more to preschool than building blocks and crayons. I think learning happens younger and younger. My daughter was reading by kindergarten. That wouldn't have happened without preschool. I also think the social interaction and the seperation from mommy is important for kids to develop on their own. I also think that it is good for mommy to have some time away from junior. Some days my wife couldn't wait for me to get home so she could escape and clear her head for an hour or so.


Can't argue with you here. I earn several times his income. We exercise at home (spent $700 on a treadmill about 7 years ago). And we pay $10.35/month for cable.

My daughters both read before kindergarten and both are excellent students now, though neither attended preschool. Both of them had LOTS of preschool type activities at home: lots of books, lots of puzzles and blocks, lots of craft projects, lots of simple science projects. I definitely see the value in the activities, but I don't see that it's worth $1000+/month to do what mom could easily do at home.

I also remember NEEDING time away from the kids, NEEDING a break -- especially if the kids are just barely three years old -- but preschool PLUS a babysitter? How much time could she have left with them each day?

 

[dvcgirl]

My daughters both read before kindergarten and both are excellent students now, though neither attended preschool. Both of them had LOTS of preschool type activities at home: lots of books, lots of puzzles and blocks, lots of craft projects, lots of simple science projects. I definitely see the value in the activities, but I don't see that it's worth $1000+/month to do what mom could easily do at home.

I also remember NEEDING time away from the kids, NEEDING a break -- especially if the kids are just barely three years old -- but preschool PLUS a babysitter? How much time could she have left with them each day?

Well, remember, even though these folks are making a cool million a year in salary, they live on the Upper West Side of Manhattan....where probably everyone is making a similar income. And not only do these folks have their kids in very expensive pre-schools, but many have live-in au-pairs. I think it must just seem "normal" to them because everyone in their very small world is living the same way. Did you see their share of the meal out with friends? Their share of the check with two other couples was $520. A dinner for six for $1500 with tip....they have very wealthy friends too. And they are all likely living the same lifestyle....

I thought the guy making 54K is in the biggest trouble though. My DH and I make considerably more than that and spend far less on groceries and spending money each week. He'd better hope his goes from a junior to a senior professional really quick .

We make a lot more than the fund-raiser too....and spend a lot less then he does as well, but we didn't see what his fiance' earns, so it wasn't the whole picture.

 

[disneysteve]

I definitely see the value in the activities, but I don't see that it's worth $1000+/month to do what mom could easily do at home.

I also remember NEEDING time away from the kids, NEEDING a break -- especially if the kids are just barely three years old -- but preschool PLUS a babysitter? How much time could she have left with them each day?

I agree with you, but at the same time, I recognize that not all moms are cut out for the "home preschool" type of activities. Some kids are far better off in preschool. As for the price, somehow that doesn't surprise me when talking about NYC. In no possible way do I mean to imply that kids who don't do preschool aren't getting good educations. I know you can give the kid everything he needs without paying someone else to do it for you, if that's what you are comfortable doing. Personally, we did a little of both. DW was a SAHM but we still sent DD to preschool part-time. I think there was benefit to both paths.

As for the babysitting, not trying to defend that, but I suspect there is more to the story there. Folks who are earning $1 million are often involved in societal events that most of us don't even know exist. For example, the diary had $650 for charity ball tickets. I'm sure there was a babysitting bill when they were out at that event.

These are usually the types of people who are on the board of trustees for charities, hospitals, private schools, etc. I have friends like this. They live in Central Jersey. Husband works for a major financial company in Manhattan. She's on their synagogue executive board. He is on the parent advisory board for son's private school. Or my cousins in CT. He is a financial analyst in Manhattan. She is a successful Ob-Gyn. They have 3 kids and have had a nanny/au pair since day one. They spend a lot of time together as a family, but also spend a lot of time apart (by my standards and probably yours). But the parents are very active and involved in their communities, professional organizations, charities, etc. It is just a different lifestyle and mindset than many of us are accustomed to. Not saying it is right or wrong, just different. But not at all unusual in their local areas.

ETA: Looks like dvcgirl was making the same point while I was typing.

 

[punkin]

My daughters both read before kindergarten and both are excellent students now, though neither attended preschool. Both of them had LOTS of preschool type activities at home: lots of books, lots of puzzles and blocks, lots of craft projects, lots of simple science projects. I definitely see the value in the activities, but I don't see that it's worth $1000+/month to do what mom could easily do at home.

I also remember NEEDING time away from the kids, NEEDING a break -- especially if the kids are just barely three years old -- but preschool PLUS a babysitter? How much time could she have left with them each day?

Let me explain. This is Manhattan. The children have to be in the right pre-school so they can get accepted into the right kindergarten so they can get into the right prep school so they can get into the right college. If they are not in the right pre-school, you may as well call them failures at 3yo.

 

[disneysteve]

Let me explain. This is Manhattan. The children have to be in the right pre-school so they can get accepted into the right kindergarten so they can get into the right prep school so they can get into the right college. If they are not in the right pre-school, you may as well call them failures at 3yo.

Manhattan could just as well be a foreign country for how different the culture is when compared to the vast majority of the rest of the US. Life is truly different there (for better or worse).

I'd be willing to bet that $1,000/month preschool has a waiting list a mile long. Parents probably sign up right after their child is born, or maybe even before.