Acting Rich

[Planogirl]

I pay over $200 every two weeks for healthcare.

I see that a person would have to make $35,438 to match up with that $30,000 in Cedar Rapids. I would definitely hope to make more to live in this area.

 

[Quiksilvr]

The guy who wrote the article makes excellent points. A lot of sound financial management is just discipline, whether you make $30,000 or $100,000. Everyone's situation is different of course, but I think as a general rule, people who are disciplined can save something from what they earn.

I see the "consumption" thing every day. As a young, mid-level attorney at a big law firm, I am smack in the middle of the "high income, low net worth" bracket, and so is everyone else I work with. My wife and I are pretty frugal, all things considered, and we manage to save 35% of our gross income. Our net worth is climbing at a pretty good clip. I can't say the same for many of my colleagues.

This may be a predictable result from giving a 25 year old kid a job making over $150,000 a year, but a lot of the people I work with are extremely conspicuous consumers. I have several friends who haven't contributed a cent to a 401(k) account in the years since leaving law school, but who go on $15,000 vacations (no kids!) twice a year, buy designer clothes, never cook meals for themselves, have maid services clean their apartments, etc., and are regularly complaining about money and lamenting about how they'll never be able to afford a house because of their student loan payments. They are exactly what the author of that article describes.

The only thing I can figure is that no one ever taught them to be disciplined with their income, and I'm guessing they'd act this way (to a lesser degree, of course) if they made only $35,000/year.

 

[crjack]

The guy who wrote the article makes excellent points. A lot of sound financial management is just discipline, whether you make $30,000 or $100,000. Everyone's situation is different of course, but I think as a general rule, people who are disciplined can save something from what they earn.

I see the "consumption" thing every day. As a young, mid-level attorney at a big law firm, I am smack in the middle of the "high income, low net worth" bracket, and so is everyone else I work with. My wife and I are pretty frugal, all things considered, and we manage to save 35% of our gross income. Our net worth is climbing at a pretty good clip. I can't say the same for many of my colleagues.

This may be a predictable result from giving a 25 year old kid a job making over $150,000 a year, but a lot of the people I work with are extremely conspicuous consumers. I have several friends who haven't contributed a cent to a 401(k) account in the years since leaving law school, but who go on $15,000 vacations (no kids!) twice a year, buy designer clothes, never cook meals for themselves, have maid services clean their apartments, etc., and are regularly complaining about money and lamenting about how they'll never be able to afford a house because of their student loan payments. They are exactly what the author of that article describes.

The only thing I can figure is that no one ever taught them to be disciplined with their income, and I'm guessing they'd act this way (to a lesser degree, of course) if they made only $35,000/year.

Very true. I have to admit that both DH and I can fall into the trap of "the more we make...the more we spend". We don't have to be as disciplined as we did when we first started out but we both know that's it's never smart to be careless with how we spend our money.

Visits to the budget board definitely help bring us back to reality but we also see lots of lifestyles that we know are beyond the means of many living them. Growing up we never saw parents trying to impress anyone with material items but now I feel like that is all around me.

 

[golfgal]

Very true. I have to admit that both DH and I can fall into the trap of "the more we make...the more we spend". We don't have to be as disciplined as we did when we first started out but we both know that's it's never smart to be careless with how we spend our money.

Visits to the budget board definitely help bring us back to reality but we also see lots of lifestyles that we know are beyond the means of many living them. Growing up we never saw parents trying to impress anyone with material items but now I feel like that is all around me.

One easy way to help is to think that with every new raise 1/3 will go to taxes, 1/3 into savings (retirement or otherwise) and 1/3 to whatever you want. It make spending that new 1/3 a lot easier knowing you are saving some too. Part of the benefit of making more is being able to spend more but you also need to save more so this gives you an easy formula to do that.

 

[npmommie]

Your imaginary situation is really just that. Not reality here in Mass sorry to burst your bubble.

If you were able to find an apt in the Boston area for 700 per month (which is highly unlikely and prob just a scam on CL) I would hate to see where it is actually located. And a $1000 car (if it runs at all) is prob taking a risk on a 35 minute commute in an area with New England weather. And prob is not 4wd, so your 35 minute commute in the snow/ice is going to take well over an hour, which ups your gas consumption well above 200 per month. Oh, and you also neglected to budget for Boston area parking, which is going to be almost equal to your rent. You would NEVER have car insurance that low in the area you are probably living in, nor the Boston area, or area near the T since these are "high theft" areas according to my insurance company.

In theory these numbers look nice on paper, in reality, you would be broken down on the side of the road in the snow, at least 25 minutes away from work and in a pretty dangerous neighborhood.

BTW I am also quite frugal these days, I am a student and just barely scraping by. I have an older car, and although it is payment free, the repairs are killing me.

even out here in the sticks where I am I pay 3x that for car insurance

Wow, you have it all figured out! That's amazing.


Problem is, your scenario is full of holes. The rat trap you found in Boston for $695 will probably mean that your paid for car will be stolen or stripped in short order.

And do you figure health costs into your rosy scenario? Minimum wage jobs have few decent benefits, and one illness will throw you so deep in debt at that salary rage that you'll never climb out.


And while you pooh-pooh the whole children thing, it is a total game-changer in regards to finances. And if you spend any amount on the DIS boards, you'll find out that babies often come into families, ready or not.

I DARE you go actually go to Boston and try to put this into practice.

I remember moving to Fort Lauderdale, and looking up classified for these great, CHEAP, UNIQUE apartments. Then I drove by the neighborhood, and realized that I could never live there. Vagrants everywhere, bars on the windows...etc. REALITY CHECK!!!!!!!!!!

I agree, and bringing up health care is another issue, massachusetts requires everyone to have insurance,so if your employer does not pay yours then you will be paying, and on 30,000 a year income you may qualify here for help but you will still be paying over a $100 a month, if you qualify.

 

[wvjules]

Your healthcare is really affordable! When I worked 6 yrs ago, it was $450/mth for me and dd. I know the individual with no dependents rate would be cheaper, but I bet my single co-workers were still paying more than $98 per mth.

It goes up to $110 in January.

It is a plan from Carefirst BCBS that I got through ehealthinsurance.com. I have been very pleased with it so far.