Anyone under 30, and not buy nicer things as your salary increases?

[KingGheedora]

I was talking to a friend about income the other day. He brought up the good point that when people start making more money, they tend to start buying nicer things (BMW, nicer clothes, etc), which offsets their increased income.

I noticed that my friends and I for the most part have done this too. Making ~30K after college, we were all poor and spent our cash on rent, booze, and eating out. At that stage we were basically check to check but could probably save some of our incomes if we tried.

Then then 40-60k stage comes. Instead of saving, people are moving to their second, nicer post-college apartments, and wearing nicer clothes. Eating out habits get worse, booze about the same (you really reach a plateau to how much you can booze in a given time when you're about 21 anyways. No one I know is into table service or other expensive stuff).

The 60-80k stage. I've lived in big cities where you don't need a car. I don't know anyone who's gotten a car. My theory starts breaking down here. But bigger purchases are starting to be made: plasma tv's, stereo systems, laptops, nice vacations, vegas trips. Every once in a while you eat at a really nice restaraunt. It's kind of funny now that I think about it, it's kind of a way of showing off to each other that we have attained enough success to drop $60-80 on a nice steak dinner. Not that I'm into that, I've only spent that much on dinner a couple of times, because I'm not gonna be the one to whine about the price if everyone else is cool with it.

I only know one or two people past that income level so I can't really notice trends there. And honestly I don't know how much these friends above the 40K mark are saving. But it would seem that we were all happy and enjoyed life even at the 30K stage. We could be saving up a ton of money if we didn't spend more as we earned more. Has anyone here actually tried doing this? If so, how has it worked out for you, do you just not get urges to buy gadgets, electronics, whatever? Are you still happy with your life?

 

[sjwaste]

Depends. I wouldn't say I spend poorly. I have a plasma TV and I eat out at nice places fairly often, but I curb the other expenses (for instance, I love to go out, but pregaming at home saves money and is a lot of fun). It's all about setting your priorities. That and saving money off the top of each paycheck. Can't spend if it's transferred to Emigrant Direct right away. I could transfer it, but the impulse has passed once it gets to my checking acct 3 days later.

I say this: Put 15-20% into 401k right up front, then transfer as much as you can to savings/brokerage so that you can pay rent/utilities and have a few hundred bucks every 2 weeks to do whatever. Does your car run? Great, keep it until it costs too much to keep it that way. A new car is a quickly depreciating asset, so buy 2-3 years old if you must. Buy it out of savings, not a loan, unless you can earn more on the cash than the interest rate of the loan. Learn to put off purchases until that next few hundred rolls around (next paycheck) rather than racking up the credit card, and suddenly you have discipline.

I have a pretty good career now and go to law school at night. I don't expect my habits to change once I'm an attorney making, presumably, more money. Hell, I might not even buy a house if rent stays where it is (don't want to be house-poor). Believe me, I used to be awful, especially when I first got out of school. If you're not careful, you'll be catching up for the rest of your life.

 

[Geekbabe]

About the time people's salaries start climbing is also about the time the clothing they wore in college or during interships is no longer appropriate.People pay you a professional wage,they expect you to be dressed and groomed accordingly.Same thing goes with furniture,appliances,those cast off things that the family gave you when you moved into your first place all tend to die around the same time.

 

[judasmachine]

Nuevo Riche...

Usually followed by gawdy and insanely overpriced crap.

 

[imported_cheapdude]

Whats the point of making that extra buck then?

 

[shilala]

I'm old. I've had one of everything along the way.
At this point I'm getting rid of stuff because I'm tired of cleaning everything and taking care of all the stuff.
Now I just want time.

 

[NanoStuff]

Originally posted by: Geekbabe
About the time people's salaries start climbing is also about the time the clothing they wore in college or during interships is no longer appropriate.People pay you a professional wage,they expect you to be dressed and groomed accordingly.

If you feel it's appropriate to suck off your boss because he's paying you enough, go ahead. I on the other hand do what I'm required by the job specification. If someone asks me to wear a monkey suit, that's the last request they will ever get to make. If you're willing to bend over for the company at your inconvenience, I pity you, and I congratulate your company. They've found themselves a well trained monkey.

As for the initial question, the niceness of my things has remained pretty constant with my increasing income. In fact I'm spending less than ever because I already have most of the things I want.

 

[spidey07]

People are stupid. That's guaranteed.

You see it all the time. Kids finally getting a taste of decent money - they run out and buy a 35K car, blow all their money....no house, negative net worth, complaining they don't have enough money.

If only they realized they were on the path to financial ruin.

The day my net worth started growing exponetially was when I didn't eat out/go out every other day.

-edit-
to your last question, I don't buy much of anything I don't need. Problem is, the things I DO buy are really expensive (audio/video/furniture/art)

 

[PhoenixOrion]

I have.

Spending habits have been pretty constant and consistent from one salary level to the next.

But if there's one thing that changes with the money that I make then its the house(s).
Seems that more money equals bigger/better primary residence, then there's the condo on the west coast, then there's the beach house on the east coast, etc, etc. you get the picture.

 

[mercanucaribe]

I make 30k and I spend all my money on drugs, prostitutes, and computer hardware. So I guess that's worse.

 

[j00fek]

when i get a raise, i put it into the bank and into 401K.

iv had 2 raises since i started but living off the same pay ck every week as i started with. this proves to be a good way to save for me.

 

[nageov3t]

I don't spend my money indiscriminately, but in some areas, you really get what you pay for... when I was in college, all I could pay for was the crap on the low-end in the clearance aisle at wallmart. now that I have the money, I buy the nicer things simply because they're better long term investments.

 

[erub]

Originally posted by: mercanucaribe
I make 30k and I spend all my money on drugs, prostitutes, and computer hardware. So I guess that's worse.

winnar!

Right now I'm a graduate student, and subsit off of stipends and family handouts/handme downs..but I can't really complain, as I usually have better stuff than my friends who are working fulltime. Then again I'm not wasteful either..I'm fortunate to say that there's nothing I really need now that I can't purchase..

 

[PingSpike]

I usually buy a small toy for myself when I get a raise. But I'm actually pretty happy with all the stuff I have right now, I don't really need anything else.

I want a house, so I have to keep the cash going towards that.

 

[FoBoT]

yes, most people spend what they make, overall for most people the OP theory is correct

 

[grohl]

I try to establish a savings goal at the beginning of each year. Anything more than that (bonuses, dividends, gifts, tax refund, etc) I treat myself.

The word "budget" is painful, and one of the most difficult things to sit down and come up with. It will be the most important habits to establish when you are young, but once you get in the habit of spending within a budget, it gets a lot easier.

Having said that, I have also seen my spending increase throughout the years, but I am saving more also. Life is short; find a balance, and enjoy your money!

 

[Descartes]

As my income increased I did increase my spending to some degree, but right now my lifestyle is easily maintainable on about half of my income. Much of that increase in spending is necessary, because to make more money you often have to spend more as well. This could be in the form of clothes, business meetings, people needed for investments, etc.

 

[iversonyin]

It depend on what's important to you? Would you like to have cash so that you can invest in opportunities? or enjoyment of life?

There's a balance to strike here and everything is a trade off. I would say for most people, they should max out their retirement saving (IRA and 401k) and emergency account (money you need to live for 6mos - 1 year), and SPEND AWAY!

 

[EXman]

Originally posted by: judasmachine
Nuevo Riche...

Usually followed by gawdy and insanely overpriced crap.

Followed by Nuevo in Debt for many

 

[ultimatebob]

When I got up to the $60-80K salary range, I bought a condo. After paying the mortgage payments, property taxes, and condo fees, I now have LESS money left over than when I made $50K a year and rented an apartment

 

[grohl]

Originally posted by: ultimatebob
When I got up to the $60-80K salary range, I bought a condo. After paying the mortgage payments, property taxes, and condo fees, I now have LESS money left over than when I made $50K a year and rented an apartment

Not exactly true - you are contributing equity to an asset and getting a tax break on your loan interest, as well as being able to deduct your property taxes.

 

[skyking]

No, we just got rid of all the debt and are looking for a new piece of property to develop. Buying for the sake of spending has never been a vice for either my wife or myself.

 

[Legend]

Eventually. I just started my first full time job as an engineer, so I'm pretty much spending all of my income on filling up my apartment. But after that, I'm bumping up my 401k from 6% to 15%, and even then money will pile up. I'll save up a lump sum for my 07 Roth contribution.

By the time I'm 30 (22 now), I'll probably stop 401k and Roth entirely and focus on a house. That way I get to enjoy the comforts of home living while my investments compound for decades.

 

[ponyo]

You just have to make more money and faster than you can spend it. Or work so much you don't have the time to spend it.

My spending hasn't really changed much over the years. But my wife makes sure she spends enough for me, my daughter, and who know how many of her relatives I'm supporting without knowing.

 

[fire400]

i plan on getting my masters in computer science and a business degree. I don't plan on buying nice things, only enough to keep me satisfied with the minimum. work and play is sufficient for me.
being a stay-at-home person is not my thing, thus the need for nice things does not appeal for me.
the older you get, the less time you have to achieve your dreams. and if small touchy things or big boats and SUV's get in the way, then my friend, I will have to tell you that you will become a spoiled adult unless you know what's coming in the future.

measure politics ans survival skills, as well as family and friends and leadership. you can live today, but tomorrow will be another on of the busiest days of your life.

good luck