4 people who earn six figures and still feel broke

[dmcowen674]

1-16-2014

http://finance.yahoo.com/blogs/daily-ticker/i-earn-six-figures-and-still-feel-broke-215546862.html

4 people who earn six figures and still feel broke

To most working class families, a six-figure salary may seem like the antidote to all financial troubles. But earning more doesn’t necessarily confer superior financial management skills, and even high-earners find that it’s shockingly easy to fall into one particularly nefarious debt trap — living beyond one’s means.

 

[dmcowen674]

This couldn't possibly happen to any ATers could it?

 

[Exophase]

Seems like common sense to me. You'd have to make a crazy amount of money before you run out of ways to easily overspend it.

 

[ImpulsE69]

It could happen to anyone. This is why even though I make 12 figures, I live on bread and water....and I recycle my urine.

 

[Markbnj]

Well, I make six figures, and my wife is a nurse and with her income added in we make a solid six figures... and we feel broke a lot of the time. Trying to maintain the lifestyle we both grew up with - couple of kids, middle class home in a suburb, nice yard, couple of cars, couple of pets - has become a very expensive proposition in the northeast. We chose the town we live in twelve years ago for the excellent schools, but we often feel like we made a mistake. If we had chosen a town with a lower median income then perhaps our children would have noticed how much they have, rather than constantly being confronted with people who have a lot more. I don't know. What I do know is that the middle class is getting squeezed to the breaking point in America.

 

[WaTaGuMp]

Just wait till they are paying $6.00 a gallon for gas.

 

[Daaavo]

Well, I make six figures, and my wife is a nurse and with her income added in we make a solid six figures... and we feel broke a lot of the time.

Preach on, Brother.

 

[phucheneh]

It could happen to anyone. This is why even though I make 12 figures, I live on bread and water....and I recycle my urine.

Dave Ramsey, is that you?

I wish I could come up with enough bad financial advice to make 12 figures.

 

[madoka]

This couldn't possibly happen to any ATers could it?

I completely understand how those people feel.

 

[ImpulsE69]

Dave Ramsey, is that you?

I wish I could come up with enough bad financial advice to make 12 figures.

It's easy.

XXX,XXX.XXXXXX

 

[Kadarin]

I make six figures, but in no way do I feel rich. Part of it comes with living in the Bay Area with it's very high cost of living, and the rest I think comes from the fact that my salary here is pretty average.

 

[Kaido]

Well, I make six figures, and my wife is a nurse and with her income added in we make a solid six figures... and we feel broke a lot of the time. Trying to maintain the lifestyle we both grew up with - couple of kids, middle class home in a suburb, nice yard, couple of cars, couple of pets - has become a very expensive proposition in the northeast. We chose the town we live in twelve years ago for the excellent schools, but we often feel like we made a mistake. If we had chosen a town with a lower median income then perhaps our children would have noticed how much they have, rather than constantly being confronted with people who have a lot more. I don't know. What I do know is that the middle class is getting squeezed to the breaking point in America.

That's the thing, you can't just say someone is rich because they make 6-figures - it depends on where you live and depends on your lifestyle, because living in a normal area with kids can be pretty expensive these days. I have buddies making less $50k who drive insanely nice BMW sports cars because they're single and can afford to. And then I know people making $100k+ who are really struggling because they want to live in a decent neighborhood and send their kids to a good school.

I have a lot of friends with $1000 - $2000 monthly student loan bills too, and that's what scares me the most - we are screwing over the current generation in terms of educational costs. If you don't have rich parents and don't get a scholarship but want to go to a good university, then you can look forward to paying the equivalent of a monthly mortgage for the next 25 years on your student loans. And it's turning a lot of people off to college - I have a number of friends who would absolutely love to go back to school, but can't afford to. And a lot of times they make a decent wage, but that disappears into the regular bills of rent & gas, and yet they don't qualify for assistance because they make too much.

And you mentioned the northeast...yeah, it's expensive up here. I didn't understand why there were so many dual-income families when I moved here (where I came from in the south, most women stayed home because families could afford to do so), but it's just super hard to to live in this area on one income unless you make a ton of money & pay attention to your budget. Taxes, cost of living, etc. all add up, especially if you have a family.

 

[mztykal]

I'm up at almost 6 figures and I feel broke most of the time...it's just bills and life.

 

[kranky]

A quote from the story:

I get a little overwhelmed. At the same time I [think] I shouldn’t feel that way because I’m making that much money. You feel that you deserve nice things and you just have to get over that.

The "deserve nice things" comment is always a red flag to me when I hear white collar workers say it. They HAVE nice things. I bet they have a reliable late model car, eat fresh food, a comfortable place to live that's adequately furnished, a job that doesn't require manual labor, a decent wardrobe.

They just aren't satisfied with the nice things they already have.

 

[RockinZ28]

That's why I'm not having kids. And I moved the fuck out of Los Angeles in November. Have a lot of surplus each month, even though I don't quite make 6 figures on my salary alone.

 

[OverVolt]

Nobody cares if you make $100k a year if you are in so much debt you have the buying power of someone who makes $35k a year. Take your W2 subtract taxes and student loans, remember that anyone making $35k practically gets all their taxes refunded, and yeah.

 

[Ricochet]

No sympathy for those "wanting nice things". The idea of doing good making six figure is to live like you're making $40-50k.

Don't we have a resident AT member, M3 driving, six-figure earner who has money trouble?

 

[Jimzz]

These will also be the same people at 60 years old complaining they can't retire and/or they get laid off and can't get a new job etc...

I live in a high cost area and our household income is around 180k. But we don't have cable, no cell phone data/text, we drive used cars, etc... What they gets us is paying off the house before we are 40 and retiring cleanly by 50. That's worth a lot more than keeping up with the jones.

 

[BikeJunkie]

Well, I make six figures, and my wife is a nurse and with her income added in we make a solid six figures... and we feel broke a lot of the time. Trying to maintain the lifestyle we both grew up with - couple of kids, middle class home in a suburb, nice yard, couple of cars, couple of pets - has become a very expensive proposition in the northeast.

I hear ya; we're in the same boat. I'll clear about $150k - $170k this year, and my wife's salary will push us just into $200k territory (I hope that doesn't read as a brag - I'm just trying to illustrate Mark's point). We don't feel broke, but we actually aimed pretty well below our means when we bought this house ($235k) and her vehicle is paid off. I drive a 2013 Honda Accord that we're purchasing, as well.

This level of living, mind you, came after years of constantly pushing the envelope (new cars every 2 - 3 years, tons of eating out at high end restaurants, buying tons and tons of shit we just don't need).

I would LOVE to move to a small town (Moab, Grand Junction, Golden, Bend) and settle for a lesser standard of living, but she's not quite game for that, which is understandable: she wants the best schools for our kids, and right now they go to one of the best districts in the nation. Personally, I'm starting to think that going after the best schools is overrated, and it can sometimes come at the expense of teaching children (and ourselves!!!) to appreciate the simpler things in life. I think safety is a much more important quality in a school than how many kids are passing the AP tests.

With that in mind, I'd love to live in an outdoos-ey town with a lower median income and pump the brakes a bit on constantly "keeping up."

 

[CPA]

Well, I make six figures, and my wife is a nurse and with her income added in we make a solid six figures... and we feel broke a lot of the time. Trying to maintain the lifestyle we both grew up with - couple of kids, middle class home in a suburb, nice yard, couple of cars, couple of pets - has become a very expensive proposition in the northeast. We chose the town we live in twelve years ago for the excellent schools, but we often feel like we made a mistake. If we had chosen a town with a lower median income then perhaps our children would have noticed how much they have, rather than constantly being confronted with people who have a lot more. I don't know. What I do know is that the middle class is getting squeezed to the breaking point in America.

Pretty much this for me and my wife as well. But, of course, it doesn't matter to people like Dave. In his eyes, we are rich, the scum of the earth and should pass the majority of our money back to people like him. That way he can pay for his $10 gas and tug his yacht to the nearest lake.

 

[Demo24]

Nobody cares if you make $100k a year if you are in so much debt you have the buying power of someone who makes $35k a year. Take your W2 subtract taxes and student loans, remember that anyone making $35k practically gets all their taxes refunded, and yeah.

Ummm, no not really. Maybe if you have a lot of deductions or other things to get refunded. I make about that and won't see much at all refunded to me, and I lose Like $4300 a year just in fed/state taxes. Makes a big difference to someone on my pay scale.

 

[DrPizza]

I think it goes far beyond how much you earn - where you live can have a huge impact. We too are a pretty solid 6-figure household income - teacher in NY & nurse in administration of a hospital. I'm pretty sure I'd feel broke living in San Fran or NYC on this income, though of course, if I lived in those cities, our household income in the same occupations would be higher - significantly so for my wife.

I'm fortunate enough to live in an area with a vast range of house prices (decent houses). Our first mortgage broker was very surprised that we weren't looking in our "proper price range." We were very happy with a smaller house (especially since we knew in a few years it would just be the two of us; as it is now), though with plenty of land & barns. So, instead of getting a house that was a multiple of our combined salary, we purchased a house that is a fraction of either of our annual salaries. This weekend, we're going to purchase a new car. Though, instead of new, I'm getting a 2 year old vehicle off of fleet or lease. I could "afford" a, say, a brand new M3, but instead will be just as happy to drive around in a Fusion or even a Fiesta as the daily driver. I have no one to impress, and my personal preference is to spend that expendable income on things like dining out, nicer meals at home (filet mignon rather than hamburgers - I HATE cleaning the George Foreman grill when making hamburgers.) If I drove the M3, I'd look wealthy. Because I don't, I feel wealthy. Apologies, if it applies to anyone here, but I don't have a lot of sympathy for people who choose to drive $40k SUVs and feel broke.

 

[BikeJunkie]

I'm pretty sure I'd feel broke living in San Fran or NYC on this income, though of course, if I lived in those cities, our household income in the same occupations would be higher - significantly so for my wife.

We're probably moving to Austin as soon as the school year is over, and one of the things I'm really trying to talk my wife into is getting a 3 BDR house (if/when we buy our next one - I'm not even sold on home ownership anymore, honestly).

We have only two kids, and while they seem young, it's shocking when you realize they'll only be living with us for another 8 years (this is a FACT, mind you ). We don't need 4 bedrooms. We don't need a huge finished basement. When we got my Accord, I actually wanted a Civic, but she drew the line there on my newly minted minimalist worldview hehe.

Still need to reign things in on our Christmas spending, but all in all, we've gotten much better over the years... it's almost a hobby seeing what we can cut.

TimeWarner - I'm looking at you, motherfucker.

 

[halik]

I make six figures, but in no way do I feel rich. Part of it comes with living in the Bay Area with it's very high cost of living, and the rest I think comes from the fact that my salary here is pretty average.

This. Household income in solid 6 figures, but cost of living eats up quite a bit of that, in housing alone ($400K townhouse, comes in at $7K in taxes )

 

[JManInPhoenix]

Six figures aint what it used to be.