Because $90,000 isn't enough. Clearly.
This morning, I was browsing through my Twitter feed and I saw that Mr. Money Mustache had tweeted out a link to a Washington Post article about the middle class squeeze that's happening.
This sort of thing always piques my curiosity, so I clicked over, read the article, and was left completely non-plussed.
The article profiles a family from Culpeper, VA, with three teenage daughters and a $90,000 annual income between the two parents. This family believes that their income would need to increase by 67% before they would be comfortable.
(Say what??)
I almost sort of can't believe this is for real.
The family has a $700/month mortgage (which sounds positively heavenly), and no child-care bills, yet they don't have enough money to pay for a shingle repair and are behind on their electric bill.
I don't know every detail of this family's budget, but if you can't make it on $90,000 a year (especially with such low housing/childcare expenses), you've probably got a spending problem, not an income problem.
“On the one hand, $90,000 sounds like a lot to most middle-class Americans, because most Americans don’t earn that,†said Joseph Cohen, a sociologist at Queens College in New York City. “But the fact is, the median-income American does not do well in a lot of respects. One $5,000 home repair can wipe out their surplus for a year. A medical event, an auto repair or a temporary job loss can exert a large shock."
Well, yes.
If you expect to weather a $5,000 home repair bill on your regular monthly salary, you're going to be in trouble. This is why it's so, so important not to spend your whole paycheck every month. You know things are going to break and need repairing, so you have to do whatever needs to be done to get your spending below your monthly paycheck.
Otherwise, financial disaster will indeed occur.
It's not that I have no grace for situations where you truly cannot spend less than you earn. But this is not the case here:
While they struggle to meet basic expenses, the Johnsons’ home is filled with the electronics that have become a standard part of middle-class life in the 21st century. For $90 a month, a satellite dish provides basic television service for their three flat-screen sets and for the WiFi connections Scott needs when he works from home. They have one laptop and three iPads, and each girl has a computer in her bedroom. The bill for four cellphones runs about $300 a month.
I'm not trying to say that no one should have a $300 cell bill. If you can afford, it, fine.
But if you can't pay your electric bill, then maybe you should take a good, hard look at the $300 that's going toward cell phones every month. I am completely positive that the family could shave that way down by switching to something like Ting or Republic Wireless.
It would mean giving up unlimited data and such, but paying your electric bill is way more important than unlimited data, you know?
This article is a prime example of how we've turned items that were once luxuries into necessities. Meals out, school picture packages, pedicures, iPhones, and four year colleges are not necessary for survival.
(A daughter from the family said she's scared that she won't have enough money to go to college and may have to attend a community college. Which just doesn't seem like the end of the world to me.)
It is true that some costs of living in America have skyrocketed (health care, anyone??), but if I were going to write an article on the squeeze the middle class is facing, I don't think I'd pick this family.
I promise I'm not trying to be all Judgy McJudgy Pants. While I do strongly disagree with some of their choices, I feel sad about the stressful way this family is living, and I'm concerned that things will never improve for them if they continue to look at this as an income problem rather than a spending problem.
There's so much potential for them to live better at this income level!
Why am I writing about this article?
Because I want to encourage you not to buy into this ridiculous way of thinking.
It is indeed possible to live well on far less than $90,000 and what you make isn't nearly as important as what you do with what you make.
I know this firsthand.
Mr. FG and I lived on $35-$40K for quite a few years (with multiple kids, in an area that is 12% more expensive than Culpeper, according to this calculator), and we lived so much better than the family in this article.
We had no debt, we saved some of our income every month, we went on vacation every year, we were able to weather home repair issues, we had reliable cars, we gave 10% of our income away, we had nice clothes to wear, and we were never behind on any of our bills.
Of course, increasing your income does usually make things easier (we've saved a lot more for retirement now that Mr. FG isn't in warehousing anymore!), but as this article proves, $90K isn't enough to guarantee financial peace.
If you can't live within your means on $90K, you probably couldn't do it on $150K either.
So, if you're in a place where your income is a little on the low side, don't feel defeated. You are not doomed to financial misery, and you can live well even if you never get $90,000 a year.
(And when you know how to live well on $35K, you'll be in really, really great financial shape if your income ever increases.)
_______________________________
LOVED this post :)!!! Excellent points that REALLY needed to be said!!! I can't stand the continuous Facebook feeds from acquaintances that talk about being broke (and they have KIDS!!!) and then the next week are asking for recommendations for photographers and embroiderers to make a custom shirt and take photos of their 2nd 5K. Really??!?!?! Especially at tax time where a lot of "broke" families all of the sudden spend like they won the lottery and then have no reserves for the rest of the year. I don't mean to be judgy either, because I really do feel for any family that struggles, but being financially secure is SOOO misunderstood! I has SO little to do with income and SO MUCH to do with contentment, priorities, and small regular sacrifices. Thanks for the great read :)!
I am just now feeling "comfortable" with what I earn having got a raise to $65k/yr in a fairly "average" city (by Cost of Living Index standards). However, what made me feel comfortable with this raise is that I now don't have to choose between saving for the future and paying off student loans; I can do both. Similarly, I don't have to choose between saving for the future and paying it forward (charitable giving). I can do all THREE at the same time without worrying about anything. On smaller salaries, I was comfortable in the sense that I had all my basic needs met, but now I don't worry at all. That's a fundamentally different definition of comfortable than what a family of four living on $90K would have to settle for, I think.
This is true...but this family doesn't really have their basic needs met even at their income level, with super affordable housing. That's what makes me sad for them. I think they probably could afford to have their shingles replaced if they changed some of their spending habits.
I agree that they need to prioritize their spending a bit, because they theoretically could make ends meet on their income. "Theoretically" because it clearly hasn't happened yet for them. I guess I'm saying that even though I had my basic needs met on $36K, the kind of "comfortable" that it afforded me is not the same as the kind of "comfortable" I wanted and now have on $65K as a single, young female (one-person household). I can empathize with their feeling of dissatisfaction, even if I think I know how they could solve their problems.
Eg, I wonder how much they could save on their energy bill by not using all those electronics?
Oh yes, I'm not saying $36K was awesome or anything, and I wouldn't want to go back to that level of income, given the choice. It's much nicer to be choosing to save rather than having to save.
My point is this, though...if you didn't prioritize your spending, you probably wouldn't feel comfortable even now on your 65K income, you know? If the issue is a spending problem vs an income problem, then it's hard to get enough income to fix things.
It's kind of like trying to exercise enough to lose weight while still eating a crappy diet. The exercise will go a lot farther if you clean up the diet.
Between my husbands income and my SS., we bring home a little over $3,000 per month, have $10,000 in savings and own two homes. We don't eat out alot or take fancy vacations, we dont leave every light in the house on, dont buy name brands and compare pricing on everything. We dont buy coffee at Starbucks, we perk at home. We clean our own home and cars and get movies from the library.
Alright but movies from the library seems a bit extreme.
This is asinine. I calculated what it will cost for our family (two adults one child) to live comfortably, which is a HUGE jump from our current cellphone-less existence. The number, a mere 36 thousand a year, that's a little more than two minimum wage jobs. We live just about 60 miles north of NYC, so things are not cheap here either.
For anyone who thinks you need thousands of dollars per month to live, get your priorities in order. We are lucky to not pay rent right now as we are living with family, but I make about $150 per month, my husband, currently unemployed. From that money I feed the three of us, clothe us, pay a small part of the utility bills (usually $50 or less) and I have managed to scrape enough together to start my own business (a whopping $110).
Would we be able to live in this way without family, no; am I proud or happy with the situation, no. But the point remains we are living, in a lot more comfort that homeless would offer. Anyone who wants to try my lifestyle, please let me know; it has no cellphone and clothes that are about ten years old now. This article maybe about the 'middle class' but those people sound rich to me (in money anyway, value wise they appear to have nothing).
Sounds like you both need better jobs
I almost feel like articles like these really skirt around the real issues and make those of us in the "middle" class who are struggling feel like people just don't get it. $90k a year to me sounds like heaven. We're on a little more than half that income and considering taking on a mortgage almost double that of the article. And somehow, we will be able to pay our bills and have savings, despite it being very tight every month. Sometimes I just want to shake people and yell "WAKE UP!" Sometimes I wish there were programs like Wife Swap or Undercover Boss where those who are in similar situations could switch places with those of us in MUCH lower positions, yet are somehow better off financially to see that it's them, not their income.
I would like to see a show "Financial Makeover" and have someone go into their home and show them how to save. I remember Amy Dacyczyn being challenged and doing this many years ago to a family I think of 10.
I saw a Brit show with this theme when I was in the UK. Super interesting and entertaining.
I remember Amy Dacyczyn writing about a family featured in a news article who could not make ends meet with their food stamp allocation, which was actually more than what she spent a month on food. The mother in the article mentioned that she felt deprived because they could no longer eat steak. Wow!!! Our income is very good, but we eat steak about twice a year! and do not feel deprived!!! I NEVER had steak growing up. I mean. really, never (youngest of 8 kids).
This is just nuts. Nuts I tell you! I feel sad for these people but I also feel like they are making foolish choices. Have you ever seen the Canadian tv show "Til Debt Do Us Part"? It is great. The host needs to see visit these people and teach them how to live money-wise.
Yes! Exactly what I said when I saw this.
Eloquent and spot on. I'm buying a house right now and friends, family and (surprise) our lender, have been pushing for us to spend more due to an average percentage of income people normally spend in their mortgage. I keep explaining our list of must haves is what we require, and more than a hot tub or higher square footage- we want peace of mind and a fat savings account.
Your article has solidified our saving strategy that focuses on managing what we have (fixed income and spending) versus planning for what isn't promised. ('When I get promoted...' Or hoping the price of everything we seem necessary goes down.)
Love your perspective. Thank you for the inspiration.
This is so wise. Buying a house based on what the lender says you can afford can so easily make you house poor, which is a huge problem when said house needs repairs and maintenance!
We're on the other side where we have to choose to be house poor, if we want to be homeowners because home prices are only going up here in Austin. However, it will hopefully be worth it in the long run when we've invested that money v. spent the same amount (or realistically more) renting.
This article is very interesting to me since I actually live in Culpeper! Honestly, 90,000/year in Culpeper is a very good income. We get by very well with far less.
Wow! Interesting article for you to read then. Thanks for posting your thoughts.
I absolutely agree with you. Being in my 50's I can honestly say that over the years my husband and I did live from pay check to pay check for some time. We always were able to put money aside for various expenses that arose and also birthday and Christmas expenses. We always took a vacation which was never elaborate but it was a family time that we enjoyed together. We now have managed to pay off our mortgage and are retired. We don't have 90k to spend each year, but we are able to keep our grand kids every day to save my son expenses on day care. My point is, don't focus your life on what you need just because that's the popular opinion. Focus on your family, faith, and health. Life is much more pleasant that way.
Family, faith & health. Well said from another 50-something. When you get to this stage of life you KNOW what is important 😉
You are gonna get a LOT of traffic on this post! I think that America is in a financial crisis because so many of the people living here have lost sight of what is a "need" versus a "want". We like to blame the government or any other target (and I'm not denying that they are without fault!) but really, it starts at home. It's like when I was 60 pounds overweight. I wanted to blame all sorts of factors, but no one was holding a gun to my head forcing me to overeat and under-exercise. Similarly, no one is forcing me to buy a smartphone/cable/expensive home/multiple electronic gadgets/expensive vacations, etc. I, as a grown-up, make those decisions myself. What I do influences not only how my family lives, but how my children view using money; others watch and are influenced as well. It's a trickle-up theory instead of a trickle-down theory. Sadly, there seem to be too few of us with this kind of mindset.
I totally agree that we need to take responsibility for our own lives, and I think your points are well taken. What I struggle with when reading this is what others have pointed to - that the media or someone, whoever thought to pick these people for their story, just don't get what it means when we say the middle class is being squeezed out. Again, I think it's so great that so many FG readers are proactive and not relying on gov't to fix their problems, but the reality is that the level of inequality in our country is so astronomical and it is partly because of bad public policy. That's why I think it's a shame they chose this family, because the message would be so much better articulated with someone else. I'm a little conflicted I guess.
Yes. I think it was such an odd choice. Many Americans ARE legitimately squeezed, but trying to write an article about that by choosing a family who makes $90,000 probably wasn't the wisest decision ever.
Maybe they picked a $90,000 family because if they chose a $50,000 family, people would have been all, "Of course that doesn't go far enough!"
“If we had an extra $60,000 a year, we’d have some breathing room. I’d like to have some extra things. Not just look at them and drool.”
And there you have it. Not "we could build our savings" or "we could get the girls through college" or "we could maintain our house and car." She wants more stuff, and that's a key indicator that money management, not income, is a key part of the problem.
Oh, thats good!
The problem with drawing conclusions from this isolated comment is that you're relying on the journalist and the editor to present a representative assortment of the subjects' quotes. There is, I'm sorry to say, no reason to think this is the case. The article might even have trended toward the sensationalist, to increase readership and public commentary such as this. The subjects could have had a great deal of sensible insight that went unreported.
I'll save my overall comments about the article and the subjects for later, when I have time to process properly.
I wondered about the sensible insight bit or if there might be mitigating factors that weren't reported (do they have to pay child support? Is there debt from the divorce? etc.)
Regardless, the overall point the author was trying to make is that $90,000 just isn't enough and I think that's not the case.
I am not sure the point was that $90k isn't enough. If that was the author's point, I doubt he or she would have described the family's electronics in that way. The author was reporting on the situation and providing facts from which readers could draw their own conclusions ... And aside from that one point, I agree with yours!
"the overall point the author was trying to make is that $90,000 just isn’t enough and I think that’s not the case"
Huh. Reading the article, I had the impression that the underlying point the author (or the editor) was trying to make was that $90K should be enough but people make bad decisions.
Which is part of why I'm not jumping on the "they don't manage their money well" bandwagon. The article felt sensationalist - specifically slanted to make the reader feel judgemental and superior. It made me feel contrarian and gave me the strong desire to see what wasn't included in the article.
I think the quote from the professor is what tipped me that way...the professor was saying, hey, $90K isn't really all that much and it only takes one small thing to bring about disaster.
Unless they are lying outright about this: "For $90 a month, a satellite dish provides basic television service for their three flat-screen sets and for the WiFi connections Scott needs when he works from home. They have one laptop and three iPads, and each girl has a computer in her bedroom. The bill for four cellphones runs about $300 a month," the facts of their spending speak for themselves, no matter what angle the author intended to emphasize. Three flat screens, one laptop, three iPads, plus each girl has her own computer???? This article needs no analysis whatsoever if this is the truth.
Sorry. I don't think the writer needed to do anything to make it sensationalist. A family that can't afford a pack of shingles ($30 for the "good" brand), but has (I counted) four computers, three iPads, three flat screen televisions and (I'm assuming) 5 smartphones is doing something wrong.
We're a family of 5, soon-to-be 6. We live on around $45K a year. We don't have a ton in savings (usually just our emergency fund), but we support ourselves and have our retirement accounts fully funded.
I find myself wondering if the actual question the reporter asked was "How much would you need to get (all the) things you wanted?"
Sure, every quote in the article may be out of context. The big-screen TV's may be 10 years old and from 2 households. Regardless, they won't sell them to fix a roof that's surely causing water damage when it rains.
I'm very inclined to agree with you. A lot of modern journalism is designed to get you to become outraged, comment and share the article because it's easy to designate them as bad with their money. They may be, or they may be pretty reasonable depending on how they spend the rest of their cash. A private education could be important to them, or extended vacations in a different country that has some significance to them.
I think the other thing also missing from this topic in general is that we should not be like, oh I make way less, therefore you should be happy with having more. Workers deserve salaries that allow them to live comfortable lives. I think we have all heard how CEO salaries continue to climb as the average workers wage stagnates. I have no idea if the breadwinner in this family is making, at, above, or less than industry norms. But I don't believe we have to go along with the slant the writer put on the piece.
I have some in-laws that use to make ~$200,000 a year and now are struggling to get by on just under $100,000/year (due to a job loss by one of them). They are both 60 years old yet have not paid off the house they have lived in since 1989. They spent it as fast as they made it - new cars all the time, eating out, shopping, etc.
Even though my husband has made more the last few years we have not changed anything about the way we live except for upping our giving. We are driving the same old (reliable) vehicles, living in the same small-ish house in the same moderate neighborhood. We are content with the life we have and feel as though we are setting a good example for our children.
Amen. If my husband or I got a higher paying job, the extra money would go towards student loan debt, debt to parents for our house, debt to my grandma for our 14 year old car we bought, and for fixing things that we have put on hold b/c we don't have the money for it now, putting back savings for retirement again and for an emergency fund, and giving more to charity. Our lifestyle would not change at all. We are the middle class that is being squeezed out, b/c I have a BA and my husband has his masters (both of us have many years experience in our fields, too), yet we both are working in retail right now for less than $10 an hour each--and not always getting 40 hours a week.
I'm sorry because I know this will sound a little harsh but I'm thinking you should take responsibility for your debt instead of (as it seems from your tone) feeling victimized. Even if it was for an education, a house, a car loan to your grandma, it was still a choice and we all need to take responsibility for our actions. Who else's fault is it? Life frequently gets in the way of our plans before we pay off our education or home, no different than other forms of debt in my opinion.
Ever try to live on $9.50/hour? Try it for a while, please, before making judgmental comments like that. It's one thing to comment on someone who's struggling to make ends meet on $90K, another thing entirely to criticize someone who's near or below the poverty line.
The problem is, you will ALWAYS find somebody who says they are living well and debt-free on less than you, whoever you are. Struggling to get by on $60K? I'm fine at $40K, so stop your complaining. Struggling to get by on $40K? We have seven kids and no problem getting by on $20K, so you should be just fine! You think getting by on $20K is an accomplishment? We have no income and simply live off the land, so there!
I think it's one thing to note that $90K should be sufficient for a family of five to get by on, and that our culture's consumption habits create problems. I think it's another to start judging specific families for how well they are doing on their income, especially compared to our own, especially when we don't know all the details.
It just seems to me that the takeaway from this should not be, "I am so much better than these people because I make do with much less money" but "How much has this American view of consumption affected my own life and thinking?"
Patti-I'm not complaining--I'm just saying that if we could actually find jobs in our fields (which were lost b/c of the recession, not us) then our standard of living would not go up--any extra money we would be bringing in would go to paying off debt or giving more to charity. I don't think that saying my lifestyle wouldn't change if we had more money translates into me feeling like I'm a "victim." I'm totally fine at our income now, I just wish we could pay off our debt more and give to others more. I'm sorry, but it was not my or my husband's choice to be underemployed, but we are--that is not a complaint but a fact. Everyone at anytime could look back and see that they could have made better choices, but that doesn't help in our present situation. I will totally "take responsibility" for my debt--when I actually have a job that pays a living wage again. Please tell me how you would "take responsibility" for the debt, if you were in my situation, other than sending out the 100's of applications and resumes that my husband and I have both done already, and are still doing on a monthly basis. You can't get a new or better job if you can't even get an interview with an agency. I'm sorry if I sound like a victim, but we are trying like crazy to find jobs in our field and are grateful for the jobs we do have right now, even though we can't "take responsibility" for our debt right now. And yes, right now you would be right in saying that I'm feeling a little grrrrrry right now!
Rebecca - I didn't see you as playing the victim - how very frustrating to get a good education and then not be able to find a job. I have never been able to find a job that was a good fit for me with my degrees in plant biochemistry. I worked in outside sales jobs that did pay very well, but were completely demoralizing. I wish you the very best of luck.
Rebecca,
I can tell by your tone that you are not taking on a victim mentality. I wish you the best in finding work in your field and pay that will be fair for your education and experience. Although it is true there are many people who do not take responsibility for their choices (not you), it is also true that the economy has been brutal and punishing to countless thousands of responsible and hardworking people. I feel sad thinking of all the people who want to work and contribute but are unable to find jobs that fit. Keep up the good fight!!!
I so agree with this article. As a nation, we are becoming increasingly out of touch with what is really important in life and with what the difference is between needs and wants. It is terrible and sad.
I have to say this really chaps my hyde! When people write stories like this it, it just justifies for many that have CHOSEN to live this way.
In Jan 2014 My husbands 1996 Saturn SL with 280,000 miles (with AC that hasn't worked in 8 yrs and we live much further south) died (I mean needed a new engine) and we had to buy another vehicle (our newest vehicle to that date was 2000). We could have very well afforded and luxury vehicle but we choose to buy a 2003 PT Cruiser for about $5700 (we did pay cash). Why did this family HAVE to buy a 2012 which means car payments, I understand there is no way they could pay cash but they didn't need to spend $15K+ on a car (which they had to have spent at least that much). With a car payment they couldn't afford for more than likely another 6 yrs. Our car runs just fine, looks nice and had less than 57k miles on it. It is like they aren't even trying. Or I suppose maybe trying was buying a 2012 instead of a 2014.
I don't understand the $300 cellphone bill, we have a contract with a major carrier and pay for 5 smartphones and pay $175 a month with 10gb data which is MORE than enough. Each of my kids has a game system in their room and 2 of the 3 have at computer in their rooms (they are older kids). My kids actually have had to PAY for their own college.
They have these things called JOBS and community colleges aren't the end of the world, plus you still transfer to 4 yr school. You still end up with the bachelor's degree from the last college you went to. My first kid went to CC, paid for it on his own (from a JOB) then transferred to a state university and graduated with no debt (no scholarship either), it can be done.
All they are doing is teaching their kids that this is how things are supposed to be when really it's about choices we all make.
Since when is paying for your child's college more important than your retirement?
I'm not disagreeing with your premise. I do think, though, that in many ways this is more a social problem than an individual one. Like, we all think we aren't affected by advertising, but if you look at studies, nearly everybody is to some extent or another. I'm not sure it's very easy to immunize yourself against cultural messages to spend spend spend, or that providing a good life for your children means a whole list expensive things.
Part of the issue is that it's families like this--who are making good money, but spending all of it--who keep our service- and consumer-goods-based economy going. They are, to a large extent, living exactly as "we" (and by "we" I mean that collective, societal we) want people to be living.
My husband and I were talking about this the other day in regard to restaurants, and what a significant part of our economy restaurants and fast food is right now, and how huge of a change that is. Like, it must have taken a lot of effort to convince people that going out to eat and spending 3-5 times what they'd spend making a meal at home was something they should do on a regular basis. Going out to eat is nearly always a bad choice, economically. But, what if everybody just stopped eating out, or reserved it for only genuinely special occasions? Restaurants would close down and millions of unskilled workers--who in many cases have no other employment options--would be out of work. It's a catch-22 where these restaurants and fast-food places provide low-paying jobs with few benefits, but the same workers would probably be entirely unemployed if restaurants were to close down tomorrow.
Which I guess is a long-winded way of saying that, our service- and consumer-based economy would collapse if people actually started making economic decisions based on what they truly needed and what was best for them as families or individuals, which is a truly bizarre situation. But families like the one in this article really are what is keeping our economy going to the extent that it is.
I've read some stuff by Juliette Schor about this issue (she's way more knowledgeable than I am!) and she says that as long as a shift is gradual, it wouldn't be an economic disaster. I don't understand it all well enough to explain it here, but she has several books out about it.
I think it's probably a moot point, though, because the odds of Americans quitting things like fast food en masse are pretty low!
I am an economist (by training at least) and I agree with both Lori's comment about self-sufficiency and Schor as reported by Kristen. Gradual changes in the job environment tend to make the economic consequences less ... as long as people try to adapt rather than hang on to the old system. Manufacturing has been on the decline in the US for decades yet a large number of people and institutions are trying to restore old glory rather than adapting to the new circumstances. And the results are highly disruptive.
OTOH, does anyone remember the to-do when telemarking was greatly restricted? On of the bogus arguments put forth by the telemarking industry is that tens of thousands of low-skilled people would be put out of work and disaster would ensue. I didn't see any reports of such disasters.
I just had a book out from the library about manufacturing and the author was arguing for why it is still important for America. Sadly, I had too many books out of the library at one time and had to return it before I read it all. I'd be interested to know what you thought if you read it!
I'm not convinced that American manufacturing is unimportant, but I do agree about trying to adapt rather than prop up out-of-date stuff. For instance, hair spray manufacturers probably experienced a huge downturn when the 80s and 90s were over, but trying to prop up that industry would have been pointless.
I wonder what did happen to telemarketing workers. Where did they all go? Did they get new jobs? Did some of them not get new jobs?
I disagree with Lori about this family being the type of people who are keeping our economy going. Spending unwisely is a fool's paradise. They would still be spending if they eschewed the fast food in favor of saving up for shingles for their house, or the electric bill. I think families like these make for an unstable economy. We are very frugal and conservative - but have a great deal of money invested in mutual funds. Aren't those helping the economy by the investment in corporations? In a much more satisfactory way? And why did we let manufacturing go overseas, eroding the job market for people who choose to forego college?
Interesting points. I think, just as those that might want to judge and shame the poor, it's easy to judge and shame this family. There's a reason that so many Americans are in similar situations - bucking the social norms of your family and friends is a really hard thing to do. Not impossible of course. I remember when my family moved from the city to the burbs and our house was surrounded by mcmansions - I think it took a bit of an emotional toll on my parents. They moved because they wanted us to go to better schools, but I don't think they were prepared for the emotional impact it would have on them. I remember asking for things and my mom crying that she couldn't give it to us. I'm lucky now to be surrounded by frugal people who could give a hoot about 'stuff', and I think that's just so much more important than we sometimes realize, those social pressures and norms.
And it's easy to forget the privileges some of us have had that have helped us to know how to be wise with money. If you grow up with no financial guidance and no good examples, you probably will have a hard time being financially responsible yourself.
If we see the privileges we've had that others haven't, it goes a long way toward helping us have a humble attitude about stuff like this.
Yes, those things and lessons that we can take for granted. I think this was a great post and not at all judgy-pants like! But it can be a slippery slope for some.
I know I feel this when I visit family in NJ. We get by, as a family of soon-to-be-six, in a medium-cost city (our rent for a three-bedroom home is $1000/month, our car insurance is about 3-4 times the national average, but food costs are pretty decent) on $45K/year. I'm not the most frugal person in the world, or the best financial planner, but we manage. We manage largely because we have one, older car (that was given to us, so we have no car payments) and we very, very rarely spend money on clothing. We live in a neighborhood where these things are totally normal. Lots of people have old cars, and most families only have one because they can't afford the insurance on two. There's a lot of families getting by on one or 1-1/2 incomes, so when your kids outgrow their clothes, you pass them on to a neighbor who has a kid that age. (I haven't had to buy clothing for my little two in a long time.) Nobody thinks twice about a person buying clothes at Goodwill or furniture at the Habitat store. In fact, I have learned a lot about doing things cheaply since living here, that I had no idea about before.
But when I go visit the NJ suburbs where I grew up, it's a whole different story. People have two nice cars. People's kids notice and care about where they shop. People's kids are involved in a bunch of expensive activites. You don't openly admit that you got your couch for $40 at a thrift store. It's just a very different sort of life.
It is really hard to buck what everybody around you is doing. We are fortunate to live in a neighborhood where many families are in the same situation we are financially and there simply isn't conspicuous consumption (if anything, there can at times be an annoying amount of conspicuous frugality!). But, especially for people who are in that upper-middle-class or at least upper-part-of-the-middle-middle-class range and live around people making similar amounts of money or more, there can just be massive amounts of pressure, both overt and covert, to maintain a certain kind of lifestyle, and I can see how a family could blow through $90K/year without doing anything really, really stupid financially (like gambling it all away or buying a giant boat they can't afford or something) just by not being particularly conscious about where their money is going.
Well said. It's crazy how fast or how easily I can start to have those same inadequate feelings when I go visit family. I know consciously I prefer the way I live, but it's still hard sometimes.
It is hard. I know that I don't want to feel like, "What's wrong with them? We get by on less than half of that and are better off!," because we get by on what we have to get by on, like everybody does.
I doubt this family started out making $90K/year. They probably started out making less, and with a smaller family. And then, as their income and family grew, so did their spending. It's so easy for that to happen. Sure, if we went from making $40K to making $90K overnight, it would probably be quite easy to retain a reasonable budget. But, if over the next two decades our income rose by a few thousand a year, I can absolutely see how, without conscious, careful planning and thought--and a commitment to living below our means--we could end up in a situation where suddenly $90K is getting us as far as $40K used to get us.
That is not to say that I think this family is poverty or that the average family needs $150K or even $90K to get by. Not at all. I just think that it's easy, when you are making $40K, to say that they should be able to thrive on $90K. At the same time, I'm sure a family surviving on $18K/year would think that the $40K/year we live on should allow us to thrive. I do think the problem with this family is probably poor planning and overspending, but I think poor planning and overspending are incredibly, incredibly easy to fall into--and pretty much the cultural default--unless you consciously decide otherwise. I think that the idea of choosing to live below your means is probably something that would be completely foreign to many Americans, because we do have a consumption-based economy.
If we are going to judge anyone at all, it should be the family in this article over impoverished families. Struggling to pay for material things because you aren't strong enough not to care what people think is not in the same league of seriousness as people who can't afford food or medical care.
That's just so sad that they don't know how to create a basic budget. To make $90,000 and not have barely any retirement savings is nuts. Hopefully they get their act together and speak with a financial adviser to get their priorities straight.
I totally agree with you. I wouldn't consider a $90,000 income for a family of 5 to be rich or upper class, but it is certainly manageable for meeting basic human needs plus many extras.
Crap journalism at its finest. The journalist never concidered for a second how rediculous it is to use this family as an example of the squeeze of the middle class. You didn't even mention that in the article this is a second marriage for both these people, which means that somewhere out there are two people earning even MORE money for the care and feeding of these kids. Big surprise that they just need a little more. I'm sure if they made $150K they would need $200k.
This article clearly has me worked up too. My parents have never made $90K and they put my brother and me through college and retired as millionaires. My husband and I have never made $90K by choice because we have just never needed it (whenever we get close one of us quits our lucrative employment to have a baby or start a business or go back to school) and I concidered us very well off.
I can only assume this is some cruel joke from the Washington Post.
My first thought was to wonder why the family would agree to be featured in the article. I would be embarrassed to assert in public that $7500/month in income is a hardship. I can't help thinking the parents are out-of-touch with what most people experience. Kristen's point—that it comes down to learning to work with what you have and be content—is fundamentally important for every family and person.
Interestingly enough, $90,000 puts you in a higher tax bracket. Son-in-law just got a new job paying exactly $90,000 and his take home pay (after taxes, health insurance and a little retirement savings, he brings home FAR less than $7500. I believe he said it was around $4400.00. Not so much when you look at it that way.
Just a quick note on taxation: if I'm not mistaken, because our taxes are marginal, the "new tax bracket" that higher incomes push you into only applies to the higher income that puts you in that bracket. Or, it's not that a person who makes $90K is taxed more than a person who makes $45K, across the board. The first $45K the person making $90K makes will be taxed at the same rate as the $45K the other person makes total. It's only the income that goes over a certain level that is taxed at a higher rate, and so on. Certainly taxes, Medicare, SS, insurance, and other withholdings take away a good chunk of somebody's income, but that is true for the $40K my husband makes, as well.
Nobody turns down a significant raise because it will push them into a higher tax bracket, because they are still going to end up making more net money, even if the raise is taxed at a higher rate.
If you are filing a joint return, both are included as one. So if each of them were making $45,000, they would be taxed as if they made $90,000 total.
I guess my point was that $7,500 a month sounds like a lot, until you take out for taxes, then it's only $4,400.
For federal taxes, someone who is single with no deductions (no IRA, retirement plans, kids, itemized deductions from state income taxes and mortgages, etc.) making 90,000 would pay $15,819 in federal income taxes and $6,885 from social security and medicare.
As such, the pay check each month would be around $5,600. For joint filers, those with kids, itemized deductions, etc, take home pay would be higher.
That being said, I can believe the $4,400 figure once state income tax, health insurance, retirement contributions, etc. are considered.
$4,400 sounds a bit low even if he is single. He may want to talk to a CPA to have his taxes estimated.
Married with three teenagers and no retirement savings, these folks should be taking home $5,700 - $6000.
Totally agree that this is the wrong family to use. I could believe that a family making $90,000 was struggling if one of them had cancer or some such illness that required frequent hospitalizations and medical treatment, NOT a family who has three flat screen TVs, one laptop and three iPads, each girl having a computer in her bedroom, and a cell phone bill of $300 a month.
Thank you so much for saying what needs to be said! I really think it comes down to this...most people don't want to/are unwilling to tell themselves, "no", as in, "no, I can't afford to buy an ipad; no, we have to drop our cable service; no, we have to drive an older used car, etc." It seems like this generation has been duped into thinking that they have to have everything right now that our parents had to work 25-30 years for. (FYI, I'm 41 and was raised by my grandparents because my birth parents were 17 and 18 when I came along and didn't want the responsibility of raising a child. They (my birth parents) are still somewhat irresponsible, however, we have a decent relationship now).
"It seems like this generation has been duped into thinking that they have to have everything right now that our parents had to work 25-30 years for." Yes ,yes, yes! I so agree with this.
I totally agree with you. How sad that they cannot live on what I think most people consider a very good income.
Reading this article made me sick to my stomach. My husband has made $25,000/yr for the past few years. It would take us almost 3 YEARS to make what they can't live on in one year. We have 6 kids total and are not on public assistance. It is tight to say the least. We have made sacrifices to make it. We won't always make this amount. My husband just started working in a new field and makes a lot more. We are buying necessities and the few little things that would make us more comfortable, but we still find ourselves not spending the rest.
Ohh, that is the BEST...when you're accustomed to a small income and then your income goes up, it just feels like you have so. much. money.
Glad things are looking up for you!
Thank you for this article and your response. It is humbling and convicting for me. We make a very good income in my household and yet poor money management and a staggering (and embarrassing) amount of debt keep us living paycheck-to-paycheck. My husband is about to get his MBA and honestly lately I have fallen back into the trap of thinking "If we just made X then we would be OK." When in reality, just as you say, we don't manage well what we already have. And what we already have is more than enough. Why would I believe that we would manage more better? It doubles my resolve to grow up and start living as we ought to have done many years ago. It is also sad to be surrounded by people in the same predicament I am.
The work you do is so valuable Kristen. Truly. I want to be a good steward of our resources. I want to live wisely and frugally. And yet I have very few models for that. I really appreciate having your dose of reality in my inbox, and encouragement that we can live well and frugally. In fact, at least in our case, the only way to live well is frugally because it is painful to live a life so that is so far from our values.
I know this blog is a great deal of work and time for you. I just want you to know that your following God's call has blessed me and my family so richly, and has been instrumental in helping my family to follow God's call for my family. So thank you 🙂
If you know how to budget and have a solid logic behind "if I only made X" (i.e., I need to make X to have the lifestyle I need/want), I don't see it as a bad thing. It's the trap of ALWAYS thinking you need to make a little more that is the burden.
Awww, where's the like button for the Kristen love? 🙂
And PS - I admire you for admitting to your areas that need improvement. We all have them!
I would HIGHLY recommend reading "The Millionaire Next Door" by Thomas J. Stanley. It's a very fast and easy read. Basically it talks about who America's millionaires really are, and that they aren't people who spend lavishly. Rather, they are people who live in modest homes, drive used cars, shop at JC Penny's, etc. The idea that rich people are all showing their wealth by dripping with diamonds is a false perception the media has given us because most of America's millionaires are people who had to live frugally in order to get there, and those with expensive material possessions often have a low net worth. It was written in 1996, but I think the basic ideas apply, and he has a current blog.
omg really! wow, pretty much everyone i know makes less than 90k and lives very well ! well said, i agree with you 100% 🙂
4 years. Sorry for the typo!
Perfectly said. When my husband lost his job, we decided to reduce our cost of living to meet our new income. We purchased pay to-go-phones and only used them when absolutely necessary and we ditched the FIOS for a year. I also found Aldi grocery stores (unfortunately, not available everywhere) and started buying nearly all my food there at a huge savings. We also nixed eating out - even cheap fast food because you can make it at home much cheaper and healthier. I also love thrifting and have bought most of my clothes (some with tags on still) and even some furniture from there for a fraction of retail costs.
You hit the nail on the head - wants have become absolutely, positively needs for most Americans. It is more important to indulge anything I feel I need, rather than save for a rainy day. Our "progressive" approach to everything nowadays, where it is never YOUR fault even when you make poor decisions, contributes to this attitude.
And as for how much people have in savings, I am not sure people are being completely honest, since by being honest you are then asked in many ways to pay a "greater share" so others less fortunate can benefit. For example, we hear about how little retired people have, yet when was the last time you saw starving retired people perishing on the streets? The same holds true for welfare recipients and others, all of whom are receiving a large amount of largesse. Until America changes its priorities to reward thrift and savings, this sad demise will not end.
I find it interesting that you are decrying people on welfare when the article is about a high-income family making poor spending decisions. Everyone in this country wants to blame the poor for everything when in fact it is the much more populous middle class that is behaving like this family.
They're crazy! You pointed it out Kristen that maybe they have spending problem. We live in $40K/year and thank goodness we're surviving. Maybe they do eat out a lot, their kids have all the gadgets (I know some friends of mine who buy their kids ipads,worth $400!, one of them is only 5 years old,take them shopping to malls if not weekly,every other week because they don't like second-hand stores) and maybe they have all these expensive phone plans unlike us who have prepaids. I don't think $90K is not enough for them,they just think it that way.
I am continually encouraging people to put away food storage and plan for the future. Just spend a little extra each month on food storage or save it. Every little bit really adds up. I feel like I'm just blowing words in the wind. I just finished reading "One Second After" and I can tell you that these types of people would die within a year if the scenario in this book actually happened - and it IS a possibility (EMP). But just an "ordinary" natural disaster would devastate them also.
Amen to everything you said! Our society is always trying to keep up with the Jones's and it gets us in trouble. We should strive to be happy on less and live beneath our means. This means that my family doesn't always look fancy, but we live very comfortably. I love this post! Great job.
Articles like this make me feel slightly crazy, but then I have to remember my younger days. Early in our marriage when my husband and I were both working with no kids we were making about this amount and I often wonder what happened to all of that money. Where the heck did we spend it because it didn't seem like much at the time (then I remember we saved and paid for an international adoption). Now 3 kids later, one of them being special needs necessitating that I stay home, and hard economic times in Detroit and we are earning less than half that. Yet we are not in debt or going without. We are just much, much smarter and careful about money. Would I like to have that income again....absolutely, even if its just for peace of mind and medical bills!
You sound like a much better example of what this article should have been about. There are plenty of families who are making a modest amount of money and yet spend much of it on medical bills.
Hubby and I are raising 6 kids (and hubby pays child support for a 7th) on that income and we have an emergency fund. We spend 1200 a month on groceries and 1300 on rent.
Car repairs are not an emergency and should be factored into the budget. Yep. Spending problem!
And teenagers can get part time jobs. Mine do 🙂
I've never been to VA, but $90K seems reasonable. However, I think there are places where you would not want to raise 3 kid on $90K. For example, the town that I live in is 48% more expensive according to that calculator. Not sure how accurate that is, but I can say the cheapest three bedroom house on the market in my town is ~$400K. Rent for a less than cute duplex (walls separating from the floor so cannot close doors) is $1660. I cannot even imagine having kids here because I do not have a career that can be done from home and my job does not offer paid maternity leave (we'd be living off one income). That said, I love my town and don't want to live anywhere else so I adjust my standard of living accordingly.
Oh yes, if this were, say, NYC or southern California, then $90K is an entirely different thing.
But 90K with a $700 mortgage isn't exactly NYC, which is why I think this isn't really an income issue.
Yes, $700 sounds amazing and you are right it is probably more a problem with priorities than lack of income. I'm glad you posted this blog because it got me thinking about how much I would be comfortable making, given that I live in expensive area, to have a family. I think $90-100K would actually be fine (ie I could maintain my current standard of living) if one of us could work from home/have flexible office hours. I guess I didn't verbalize it very well in first post. 😉
A $700/month mortgage is most likely a 30 year mortgage which is rarely a good idea.
In the article it says they refinanced ther mortgage from 14 yrs to 30 yrs. So now they'll be paying off that mortgage well into their senior years. The reduced monthly payment refinancing got them should have improved their situation and allowed them to get on top of everything else, but no, apparently it was "sucked up" into their daily spending. So they've got a morgage (and more insurance) for an extra 15yrs and nothing to show for it. Brilliant.
Meant more interest, not insurance.
I beg to differ; my husband and I retired in our early 40's, and our combined income over all our working years would most likely be way less than 90k. IN LOS ANGELES. The key is frugality; willingness to be independent-minded (aka not caring what other people think ((at least trying, haha!)); a willingness to do repairs and work yourself without outsourcing; and above all, finding things that you think are fun, and which cost little to nothing!
Also, if you did have those kinds of struggles, you shouldn't be spending that kind of money on three flat screen TVs, iPads, and a $300 cell phone bill.
I just share your blog on FB this morning. Finally! Someone who sees things as I do. The more you make the more likely you are to spend it if you are poor with your finances to begin with. This hits home for so many and I hope by sharing this post, maybe someone will take it to heart and I hope it turns their life around for the better. Do we really need to earn more money to be "comfortable" or do we simply need to learn how to live within our means and make family our priority over "stuff". Great post today!
There are SO many red flags about that article, it's not funny. Not to mention it starts with: "On a routine drive to the beauty salon, "...And then the husband has bad credit, the kids are in Girl Scouts (Which can get pricey). I just hate hearing about how $90k isn't enough when there's a lot of different factors there. And technically they're above the average.
I live on my own and rent a small house. I would rent a small apartment, but there aren't any here. Odd right? My rent includes water, and my work covers my cell phone. I do what I can to keep my only bills (internet and gas/electric) down.
My BIG money-sucker is my student loan. I pay $1200 a month. Do I have to? No. I'm paying nearly double what I need to. But my interest rates are outrageous and should be considered criminal (9 percent for the biggest). So instead of saving a ton, I'm saving a little...and then paying the most I can on the loan. My goal is to have it completely paid off in another two years.
Does it mean sacrifice? Sure does! No salons for me. No more pedicures. No fancy gadgets. I don't have a TV service (and am not missing it!). When something breaks, I buy used. I try to borrow when I can. I eat at home almost exclusively now.
I'm happy.
For the first time in many years.... even with a combined income when I was living with my husband.... this is the first time I've been happy.
It's HARD to stay on budget. And I still have those pangs of "Gosh that would be nifty to own." I had a friend recently buy a house, and he also bought furniture, a new fridge, a new gun, a new computer,.... And I was just amazed at how it was possible. I have friends who have houses (I'm 28 this year), two kids, two new cars AND student loans and I don't understand how they do it.
Everyone manages money a little different I guess. My little ol' excel spreadsheet works great for my needs 🙂
I wish this family had written into Mr. Money Mustache so he could do a case study on their finances. He could get them whipped into shape in a few months. But they would have to WANT to change, and from the tone of that article, they don't. They just WANT MORE.
We are a family of four that lives on about $25K/year. That's only about half of our income. The rest goes towards retirement savings, college savings, and one or two major house projects a year. If we had 90K a year, we would be just about at the point of being able to retire now, or at least we could choose to work, but not have to anymore.
Oh that'd be awesome! MMM is too cool.
And I think you're right, wanting to change is key. It's such a mental thing.
Great points. If you can't live well on $90k, you can't live well on $150k. I especially liked your highlighting a spending problem v. an income problem. The good news for this family is that it's a lot easier to solve a spending problem than an income problem!
Do you mind if I use this blog post in a Financial Management class I teach? I usually teach it in the fall semester. If okay, I'll bookmark it and run copies to link them to the page.
Thanks!
Sure, that's completely fine with me!
I woke up today hoping for a nice meaty, inspiring blog post and you did not disappoint! Our income has slowly been increasing, and unfortunately so has our standard of living. Which would be fine if that had been intentional, but that's not the case. This re-inspired me to sit down with the budget and my husband and be more intentional and aware of how we are spending our money. Also, did you read this blog from thenonconsumer? http://thenonconsumeradvocate.com/lifestyle-inflation-in-the-yogurt-aisle/
I think it's along the same thinking you were expressing.
Just read your post and then the article. I found the husband's comment about the reason he has bad credit facinating. I'm sorry, but you don't plunge into bad credit with ONE late payment!. I'm a single/sole parent and make a lesser but similar income to the couple featured. It's hard for me to have any empathy for the featured couple. I have a 10and 13 yr old. Yes, it's a tight budget-but my mortgage is twice the couple's in the article and I still pay for afterschool care for my 10 yr old and full time summer care. My summer daycare is almost as much as my mortgage. Seriously, if I could just get rid of the child care costs, our financial picture would look much brighter! We live alot more frugally than some, not as much as others, but if push really came to shove, I know I have more things I could give up if needed. Yes, I have a cell phone and this year my 13 yr old got one for Christmas-I was able to get her a free I phone, and just added her to my service. I admit, I like being able to stay connected with her when school gets out and I'm still at work; and she's very good about calling/texting me to let me know where she is and what she is up to. That said, I would give up both our cell phones in a NY minute if I weren't able to pay our electric bill! I think the folks in the article should make a trip to their local library and take out a Dave Ramsey's TMM book!
I gave up a six figure income to be a stay at home mom. My husband's a mechanic and his income was 1/3 what mine was. We are a family of 4 and now live on much less than $90,000 a year. Here are some things I discovered when I gave up my corporate job. First, when working I spent a lot of money on clothes, shoes, gas, haircuts, cell phone, and wear and tear on my car. Second, I had less spare time so I didn't have the time to shop for bargains. Third, having less time at home, we paid others to do things that we now do ourselves. Looking back, we wasted a lot of money, had 2 cars financed, and had no time for vacations .
Now, with our frugal spending, we save up until we have the cash to buy our cars; we'll have our house paid off in less than 20 years by making extra payments to the principal, and we've had more savings than we've ever had and we take vacations all the time, thanks to the money we save by vacationing by travel trailer.
The thing that keeps us on track is....I have an excel spreadsheet budget where I input every $ that we spend so that we can see exactly where our money is going. It's interesting that once you know where you're money is going, you can make the conscious decision on where to control the spending.
For example our entertainment budget....if we go over in the medical category, I just make an extra effort to make sure we cook all our meals for a couple of weeks instead of running through the drive-thru or, into one of our favorite restaurants. Another big area of savings is in our cell phone bill. My son is the only one with a real plan, and it's the $30 virgin mobile plan. The rest of us have a $20 every 3 months pay as you go plan through Tracphone.
I guess my point is...where there's a will, there's a way. Don't try to keep up with the Jones' because the Jones' probably don't own a thing because they've likely financed their world, and more importantly, only spend what you make. If you don't have the money to pay your electric bill, don't spend $15 at the donut store because you woke up late. While $15 obviously won't pay your electric bill, every $ counts....every dollar should be accounted for...and you should make the most of every dollar you make.
God has certainly blessed us! And he gave us the common sense to learn to make the most of what we have and live on what we make....which again....is much less than $90,000.
Well said, Kristen. Well said. My family is soon to be living at a third of their income level as I become a SAHM, but we have a budget in place to make sure we can pay all our bills. I, too, feel sad for this family - and the others - who blindly believe more money would fix all their problems.
I remember a few years ago reading an article about families on government support (which I do believe in, but I am not here for a political discussion).
One of the families had a million dollar house, and went on hugely expensive vacations every year. The year they were on food stamps, they still went to Disney.
Another family had 9 kids. Another family had their photo taken in front of their belongings which were going into storage because they were losing their house - mounds and mounds of brand new clothes, and the woman had more jewelry than I ever owned on just one of her hands.
It was frusterating, because they were in such dire straights, and making such poor choices!! And supposedly they were choosing these families to be sympathetic, but I just could not feel it for any of them. Not when they were taking kids to Disney while accepting food stamps.
Whenever people ask me to do expensive things I don't really value (going out for expensive coffee, etc) and I say no thanks - they say 'why not? you have plenty of money!' Yes, becuase I don't waste it on things I don't even value! When things at my job got really bad, when other people were freaking out, I knew I could afford to leave if I had to. That is worth SO MUCH more to me than coffee!!
An interesting point about people on welfare- other than those you mentioned in your examples, it irritates me how this country likes to blame everything on the impoverished, yet people like the family in this article are spending like this. It's the middle class and upper middle class who are spending beyond their means like crazy, yet people who live in the most dire circumstances are always the ones who get criticized by the public and the media.
Amen! Thank you for the continued encouragement!!
Thank you for this great post. My husband and I are recent college graduates and it's *so* easy to feel like we deserve this or that, when most people have to work decades to get to that point! We definitely aren't living as luxuriously as others we know, but we also realize we can be doing even more to cut back and remember what is truly important.
Hi Kirsten,
Your post is spot on! I also live in the DC suburbs and when I first saw the title, I expected to see a high mortgage or rent payment as the primary culprit, which generally would make this salary a challenge with 3 children. Not so! The technology costs of $300/month and music lessons are just the tip of the iceberg. I suspect that there is a lot of eating out, new clothing, expensive summer camps, and gas for the cars. Given the level of stress associated with bill paying, you have to wonder why the family puts itself through this when the solutions are so simple -- cut the cable, no eating out, drop the iphone plans, kids get jobs to pay for lessons and new clothes (or drop those too).
As I went through the article, I stopped when I read that both parents had experienced divorce. I wonder if there is some guilt going on with the parents that prevents them from placing limits on purchases for their children. I have found that so much of spending is intertwined with emotional needs.
Thanks for the article,
Kamil
I think that's very possible. Guilt can cause a lot of spending issues, and I can only imagine how complicated those feelings might get after a divorce.
I would really like to suggest this family find a Financial Peace University workshop by Dave Ramsey and take the class. If you don't have money for things such as music lessons, track, higher education you don't do those things at this time. Get your bills under control, then you can afford all the other "luxuries". You must be willing to take control of your finances & if that means making difficult budget cuts, then do it.
That class saved our finances and our marriage.
Kristen, I think you hit the nail on the head when you said that if they DID have that 67% more income they want, they probably still wouldn't live within their means. They would just get more stuff.
And thank you for sharing how well you lived on $36K! Mr. FP and I have had free housing provided by his employer, but that gravy train is ending soon and the pay raise will be much less than our rent. We're a little nervous, so it's always encouraging to hear success stories.
I think $90,000 would be great to live on!! LOL~while it is my husband & I now, our boys are grown up~we live on one income. I was a stay-at-home Mom & we lived on one income. We seemed to do fine, yes I did use coupons, refunding, sewed, had a garden etc. We still paid our bills, had a vacation~the boys were active in school things & scouts. It makes me upset to see how people live, have cable, many cell phones & everything but can't pay their electric. Come on, they are spending money on everything but what they should be. If you can't make it on $90,000~try it on $25 or $30,0000 to raise a family. My husband was also out of work many times over those years & with no help we got through. It wasn't easy but we did what we had to do. No sympathy for them, it looks like they are eating well!
You made me chuckle! I have to agree - they could cut way back on the food budget and be fine!
Love this post! I read the article and two things stood out to me in addition to all the other items people have mentioned. One was about the car overheating and breaking down so they went and bought a new vehicle. It wasn't clear whether or not the Durango was fixable. If a car is in good shape and maintained it can be worth fixing even though it has a lot of miles on it.
Secondly, the article mentioned they had refinanced their home around the time they married which dropped the payment in half but extended the term from another 14 years to 30 years. This will leave them paying on the mortgage well into their 70's. That is a very scary idea to me.
I hope everything works out for them but I don't think more money will fix their problems.
I just love your positive - glass is 1/2 full attitude about all things. I agree with you 100% on this article. Thanks for sharing.
I work part time at my local library. That's 25 hours a week. No health insurance, no benefits, AT ALL. I pay my rent, my car payment, all my bills, and save $100/month. I shop at thrift shops for clothing, and never eat out. Until I find full time work, this is how it is, but I am not feeling deprived just because I don't have cable TV, nor a smart phone. I get free books and DVDs at the library, and I sew in my spare time. I am considered poor in dollars, but I am happy in spirit. Money really does NOT buy happiness!
i am floored and am just shaking my head. i am a stay at home mom. we have two boys one just got married and one is still at home. we made the decision 20 years ago for me to be at home.my husband use to work at a lac he made very good money but decided to leave to go to another job and with that had to take apay cut. we are doing jst as good on what he makes now than what he did then because we budget. we tithe. we save and we stll get to vacation. peace of mind is way better than having the latest gadgets ordriving the newest or most expensive cars or staying in the most expensive hotels on vacation. you can find deals every where you go..you just need to look for them...i love dave ramsey saying dont try to keep up with the jones cause they arebroke 🙂
I 100% agree with you! I felt like the article tried to point out the consumerism that might be adding to the Culpepper's problems without getting all judgmental. We make a little more than half their income and we manage to squeak by. My husband and I continue to struggle with money management, though every year we're getting better. When the article talks about the president advocating for better job training, I thought what we all really need is better money management training. I question why the couple would continue to pay $300/month for a phone bill when they're behind on their electric. For one thing, $300 is more than my car payment!!! (yes, I know - this will be the last car payment ever, we have learned our lesson.) And then there's the question of how they will charge those fancy-pants smartphones when the power gets turned off. It really seems like this couple doesn't even realize that they're not doing a good job managing the money they have.
A friend of mine works for a cellular company and they did a study. The majority of cell customers pay their cell bill before anything else.
That's a shame. I believe everyone should pay all of their bills every month, but when you can't, priority should go to housing and electricity first, followed by your car payment, if you have one (since legally most companies can re-possess a car if your payment is even one day late.)
Well, I'm sure you know you're preaching to the choir here, but HOLY MOLY! These sorts of stories just make me want to shake people. Sometimes I feel like everyone around me has drunk the proverbial Kool-Aid, and is walking around in some sort of a marketing & social media induced stupor.
It sorta makes me waffle back and forth between feeling complete outrage at the forces that have duped so much of our population into believing that they cannot survive without all of these crazy expenses, and feeling just really, really sad.
But in the end, I think all we can do is to offer a different voice and hope that the people who are suffering under the "delusional spending syndrome" will somehow hear it.
I just want to offer a HUGE thanks to you, Kristen, for being an enormous part of that voice, and to all of the followers of this blog as well. Finding joy in a different path is the most powerful tool for change that we've got.
Thank you Kristen!!!! I'm sooo glad you wrote this! My husband and I made quite a few reckless mistakes early on in our marriage and we're (quite literally) paying for it. We make VERY little combined (um, no numbers thrown out, but far less than 90K!) We have the cheapest cell phones, we have an antenna attached to our TV to watch the news (okay, and Wheel of Fortune. Seriously, can't pass that up), barely above dial-up internet, and we hardly ever go out to eat. We have 1 car payment (and 2 cars - my husband has a $3500 car we bought when we saved up our pennies because we both work and 1 car was pretty rough). We make it work. AND we're paying off our debt and hopefully will have it gone in 3 more years or less so I can start staying at home with the kids (think REALLY REALLY bad debt here).
We have family who make about what this family makes and they are in the same situation. They eat out ALL the time as a family of 4, buy TONS of nice clothing, a massive car payment, satellite, movie theater every weekend...and they are behind on payments, have had utilities shut off, and no money for food. I'm no financial expert, but you're definitely right. It's not an INCOME problem, it's a SPENDING problem. Be content with what you have. It's getting to be a hard concept to follow now a days.
Sing it Sister!!
I grew up with a frugal father who was secretive about his income who did not did not teach us kids any money management techniques. Later, when I had money to spend, I spent it. Then when I had credit to spend, I spent that, too. When my husband took a nearly 50% pay cut when we had a 3-month old child and lots of debt, I learned how to be frugal because I had to. It is a hard way to learn money management but not learning is expensive. Someone needs to help this family learn.
Aaaaand they show the family eating fast food.
LOVE this post!! Thank you so much for telling us about this ridiculous article.. I can hardly believe they think 67% more will help too! This is proof our generation has never lived through a major world war or great depression.
Was really curious to see how our town and income compared to Culpeper. We live fairly close. We are closer to DC in Burke, VA. We're 36.1% higher cost of living and approx. 22% less in income. We too are committed to some of the same principles such as tithing, frugality, and saving that you are Kristen. I have always wondered how we compared to other folks around us. This was personally both encouraging to me that we're doing so well on what we've been given and saddened at the same time for this family. I really wish a Financial Makeover could be done for them. It sounds like they could really use the help. Maybe we could get Dave Ramsey to do house calls. Now wouldn't that be a fun reality show to watch!!!
Like, like and double like. Clearly seeing the problem is NOT being judgy! When I first stayed home we lived on my husbands $29,000 income, plus any extras to pick up. Since I was staying home with our two (and one on the way) I was completely elated and happy, spending time with the loves in my life is waaay more important than the cable and dinners out- to me that is! Life is all about choices. I get so frustrated when someone I know cannot pay for necessities but have the money for nonessentials, what?!
You go girl!
Wow. Our town is 28% more expensive than theirs and our one income is 13% less than the median for our area, yet we're doing way better than that family. (No debt, no late bills here.) I feel sorry for those girls because they are not going to learn the resourcefulness that comes from being frugal and the sense of pride one gets from WAITING and saving up for something long desired. My son (12) saved for his own iPad (which he uses for homeschooling) and he also begs me for an iPhone weekly but he knows he's not going to get one because as a homeschooler, he's always close by and he can use my phone if he needs to. 😉 When he is old enough to have a cell phone, we'll certainly use our frugal skillz to get a better deal than $300/month!
p.s. my phone is a cheapo prepaid phone, old-school, not a smart phone. Oh, the horror! 😉 but I survive just fine. It's a phone for emergencies, like calling AAA if my battery dies---it's not for chatting or looking up nearby restaurants. Most people think I'm nuts, though, wandering around without an Internet connection at all times.
AGREED! Don't want to come across judging anyone just want to say that there are so many ways to save money that it is frustrating when people don't think there are other ways. It's one of the main pushes behind our site. People didn't know how we lived on so little and to us it's a matter of small choices-big payoff!
Wow, that family whining about 90k a year makes me sick! They are a prime example of what's wrong with our society, want, want, want, consume, consume, consume, never satisfied. My family of 7 squeaks by on about 25k a year in Colorado and I am so tired of seeing families that are clearly only living for their materialistic worship. Puuuh-leeeeze!!! Yes, it would be nice to have a larger income for our family, but we are making do with our current situation just fine. I can't even imagine a 90k income, it would be like winning the lottery! So to that family I say 'grow up and get a life'!
This article makes me all sorts of irritated. Not at the family, but at their situation and general attitude. We have all been fooled into thinking that we *need* the latest electronics and more channels than hours in a day. We've been raised on a steady diet of Keeping Up with the Johnson's and it's really starting to show. People don't know how to save or postpone gratification. I know it has taken me years to change my spending habits and attitudes towards money. I noticed the article didn't mention credit card debt or eating out, two of the biggest money pits. The family profiled doesn't need a raise, they need a financial makeover.
I totally agree that they could save on their phone bill (we pay $65/month (including taxes) for two smart phones with unlimited everything with T-Mobile). They could also cut out the $90 tv bill by switching to Netflix or Amazon Prime. The older girl(s) could be doing part-time work to help support their activities, or at least be active in fundraisers. There is also nothing wrong with community college. Two years at a community college to get the basics out of the way can really go a long way to cutting your overall higher education expenses.
We are actually in a similar financial boat right now. We made a 300 mile move for a new job to a bigger city where everything is more expensive. And while my husband got a sizable raise, my job prior to moving didn't pay me for last 3 months of work and our house took 6 months to sell. We're drowning in debt and trying to get back on our feet. But we haven't been late on or missed paying a single bill. How? By shaving off all unnecessary expenses. I make my own coffee, I bake our bread, we eat at home and pack our lunch, and we have cheap fun. After a year of living lean, we're finally paying things down/off and will be able to add to our sadly tapped out savings again.
There are so many places the family featured could save that would help pay the bills. It might not be terribly fun for a few months, but it's necessary. There are ways to save if you look for them. Not paying the electric bill is not a frugal move. Frankly, there's no excuse other than not wanting to make changes to the level of lifestyle you've become accustomed to.
This story makes me feel really sad for the family in the story. They are clearly living with a lot of fear and pain over their financial situation, and yet the solution is within their reach. It probably seems so painful to sacrifice the material things like the fancy cellphones, when giving them up and building a emergency fund would make their lives so much more comfortable in a different way. It reminded me of one of my favorite shows I used to watch, "Supernanny." Often, the problem on that show was that the family had a lot of little kids (many times multiples) and the parents were so exhausted that they couldn't step back and see the need for (or summon the energy for) things that would take extra energy in the short term but make the family's life so much better in the long term, like sleep training for the children. I suspect this family is so exhausted and frantic from their spend and debt treadmill that it's hard to find the perspective or energy they need to see the changes that will help them so much. (And the dynamics of a blended family are probably in the mix also...) Anyway, I feel grateful to have gotten on a frugal path early on and will hope for this family to find grace and peace in their finances too...
Great post, Kristen! I didn't read this article (but I will after I comment), but the points you make are true. I wish I knew this when I was a lot younger, and lived off of my lower income instead of spending with all of our pay increases. We would be in a different place right now, one that would give us a few more choices. I would love to see more posts about how you save on what we now consider necessities. It is inspiring!
I disagree on your comment that a 4 year college is not a necessity because I think it is. Unless you're not planning on working and staying home then some sort of school is necessary unless you want to be bagging groceries until you're 50. If you plan on working in a professional field, I believe college is necessary. Society has made this a necessity (and I do believe soon we'll be looking at graduate degrees being necessary too) but unlike iPhones, a college degree is more relevant to life.
Also where I live is almost 30% more expensive and we do fine on an income of less than $90K. We also don't have kids though. And I can't help noticing that picture is in a restaurant. Maybe they could start there because I'm sure eating out with basically 5 adults isn't cheap.
I'm not saying that college isn't a good idea. But going to a community college for two years and then a state college is certainly a viable option, depending on the career path you choose.
The idea that you have to spend four years at a $50,000/year college is what I'm arguing against.
Ummm, i did not go to college (although I did take 10 math-related courses at a community college over 8 years - as i could afford to) and I have a decent paying job with fantastic benefits. Even if i had gone to college, i would probably still have the same job, making the same pay. My husband went to college, graduated summa cum laude and is making roughly half of what i make. (he left a six figure income job in 2005 due to unlawful things the pres and vp were doing at that company, was black listed (since the pres knew so many people in the industry) and is now working as a sales rep for a cons goods company. we are living on 48% of the income we made 10 years ago. yes, it's tight. but i also have a vehicle that is over 10 years old - and plan to keep it another 5-6 years. a mortgage roughly the same as the people in the story - but only have 14 years left to pay on mine.
my son - who is 14 - has told us time and time again that he has no plans on going to college. he want's to be a police officer, fireman, sensei (he is a double black belt) or join the army and eventually be in special forces.
while college is necessary and good for some people, for others, it's a lot of money for not a lot of gain.
oh, and i do not work in the retail industry. i am and admin/analyst for a very large and global consumer goods company and have been in this industry for 20 years now.
Mr. FG does not have a four year degree, but he makes a very respectable wage in IT now. He did have to get some certifications and such to make the jump from warehousing to IT, but it didn't require a four year degree.
thankfully we never had student loans to contend with. DH received scholarships and his dad paid the remainder of college. he went to a small school (that is now a large university) where tuition wasn't through the roof back then.
My son knows that if he did choose to go to college, he would have to rely on scholarships and going to an inexpensive state school or community college.
We don't have a lot of debt (hardly any actually) but what we do have are large medical bills from hubby being in the hospital for 2 weeks in 2012 and then on complete bedrest for 3 months (with std pay). i have 17 payments left on what we owe the hospital for 2012 and 2013 - and that is after our good insurance paid! our monthly payments are 100 less than our mortgage.
i shudder to think of the people who live paycheck to paycheck where one medical bill can kill the budget, like the family in that story. and no, we don't have smartphones, fancy cars, eat out, etc. just normal living expenses (which are never paid late) and my sons' karate tuition - which is soooo worth the money we spend.
I agree that a 2 year degree is definitely viable. And I meant to add that trade schools are also good, and an option for people who want to do something like be a chef like Lisey, or a police officer, or a plumber like my BIL, who works hard, but makes decent money. I just think that right now for kids graduating high school college or some additional school is necessary. It wasn't always this way, so I think older people (older than me, anyway) were more accepted without a degree and able to move up in their company easier. Unfortunately, society has made school more valuable (and expensive, of course) in the past 15-20 years. At least that's my opinion and feelings on the matter 🙂
It is a sad state. But I believe that the intent of the article is to show that what used to be middle class in this day does not mean what it did 20 years ago. The statement about the fact that a flat screen TV cost less than medical insurance. The media and retail stores define what it means to be a successful middle class family and the standard cannot be met on a middle class wage. 15 years ago gas was less than $1.25 per gallon. The price has tripled since then. However wages have not gone up to meet the rising costs. To be middle class in America at one time meant you could have the extra's and buy a new car every couple of years, a nice house in the burbs and be able to send your kids to a university. Not now.
Oh, I love "Judgy McJudgy Pants"!
I'm afraid of being accused of same, but I'm going to go out on a limb and say what's on my mind anyway. Am I the only person who is bugged by how overweight this couple is? They appear to be completely unaware of the connection between fiscal and physical well-being. So sad that they have not learned the skills to manage their money, their diet and by extension, their health. How can they teach their children what they do not know themselves?
Well, the food situation in our country has made it cheaper to eat junky food (putting aside future medical expenses for the moment). So people with small food budgets do generally end up eating less healthy diets, which means that the poorest sector of our economy usually struggles with weight the most.
(Not saying this family is poor by any stretch of the imagination, but that their money management issues have probably made them feel like they can't spend money on healthy groceries.)
Fresh air and exercise are free!
Maybe go out and have a family walk/bike-ride each evening instead of hovering over the iPads and flatscreen TVs...
Amen! to that.
I just love you. I have been following you for about 3 years now and have learned so much. But still figuring things out.
Love your article. I'm lucky to be a stay at home mom, but my husband and I make sacrifices. We both have cars that are over 7 years old, but they have been paid off for years. It all comes down to entitlement; that is the world we live in. Parents are teaching there kids about it by overindulging. I hope I can do better for my daughter. I grew up middle class and although my dad always made it seem we were destitute, we always went on vacation in the Summer and always had a nice Christmas.
Thanks for sharing!
People love to talk about how their family is superior. Generating conversation like this blog post was the precise intent of the Washington Journal article, and it comes at the expense of the profiled family.
Why not provide an offer of help, instead of publicly shaming them?
The affiliate links at the end of the blog post mean Kristen is generating revenue from the family's misfortune. Yikes.
The affiliate links actually have nothing to do with the post...yesterday was the last day of the ultimate bundle sale and I'd have put those at the end of my post regardless of what I wrote about. 🙂
The reason I wrote about the article was to provide a counter viewpoint. If the media is always telling us that we need X dollars to survive (where X is a largeish number), some of us start to believe that, and I don't want that to be the only voice out there.
I don't agree that you are shaming them--they agreed to be in in a news article that ran in a national publication, it's not like you are doing an expose on the spending habits of some family up the street from you--but perhaps you should consider some sort of reality show where you went in and created a budget for families like this. It could be "Budget Nightmares" or something like that. 😉
Do a search for "Til Debt Do Us Part". It's a great program (now ended) where financial guru Gail Vaz Oxlade goes in and assesses the finances of a couple or family, identifies the issues and areas for improvement and totally overhauls their finances to get them on track over the span of a month. They have challenges to do, they learn to live on set amounts of money allocated for spending. The best part of all is they get the full "Gail" treatment. She doesn't pull her punches and will tell them they are being morons and need to get their acts together. It's great television and I'm sorry she's not doing those shows any more. I believe they ran on Slice or Bravo but searching by the show name or her name should get you there. Many episodes are still available online. It's a Canadian show but the lessons are universal and she has a huge following. In one of my favorite episodes she made the husband sleep in his giant SUV on the laneway for the weekend. She was trying to get the message through that the huge monthly payment was going to cost them their home and they would all be living in the truck.
Using the family to make the counterpoint implicitly criticizes them.
Put yourself in the shoes of the mother, then read the post and resulting comments. It's painful.
Allowing your family to be profiled in a national newspaper opens you up to criticism. There's an old adage about airing one's laundry that's very appropriate here....
I really hope this family heeds the feedback this article is generating and uses it to make the changes they need to be become financially secure. That would be the best-case scenario, don't you think?
I guess I'm wondering how I could make a counterpoint to something without using the original article.
I genuinely tried to be gracious in my comments and I don't think there's anything in my post that I wouldn't say to this family in person. If one wants to not receive any criticism for one's choices, being featured in a national publication probably isn't the best idea. I'm not saying that we should be unduly harsh on people who put themselves "out there", but I don't think it's wrong to say, "This article says XYZ, using example Y, and I think that's wrong. Instead, I think ABC."
I am not at all down with mean comments or personal attacks, but disagreeing with someone is not the same as that as long as you do it politely.
Don't take the bait.
The original article is intentionally polarizing, at the expense of the featured family. It plays to deep seated insecurities about income, spending, and wealth related status.
The author is manipulating readers to generate traffic. IMO it is best to ignore such writing. When the page views go away, the ad revenue disappears, and the bad journalism stops.
Through modeling the quality of a frugal life in your blog, you are already leading by example. People ready for change will find and follow you. No need to pile on the latest media victim.
Our family of four makes it on under $21,000 (After taxes, ect). We also pay $700 a month of housing. We bought our house 8 years ago for $93,000 and it is the only debt we have. We have two running cars, never had to pay bills late, good healthy food in the fridge, nice clothes and so much more. Things we don't have cable, netflix, I don't have a cell phone but my husband does, a new car every other year, eating out every day ect. On paper my family lives in poverty but, I think the family from the article has more of a poverty mindset them my family. We are happy and blessed.
I'm really frustrated that this family was chosen to represent the middle-class squeeze. How can you claim to be talking about a "typical" family when there are no childcare costs with two incomes? Childcare costs are a big part of the squeeze! Every family I know has done the math to decide if it makes sense for both parents to work and pay for care or have one stay home and save the care costs. According to that linked calculator, my town is 38% more expensive, and that makes sense to me looking at the list of prices on the calculation page. However, if I had their (lack of) childcare expenses and minimal mortgage payment, I would be saving $2000 a month over what I'm paying now, so I can't imagine what their bills actually ARE. I would be beyond set (comfortable and secure with savings set aside for emergencies and an occasional vacation) with that kind of freedom in my budget. Their phone, cable, etc. bills cited in the article certainly don't add up to that. Are things like music lessons THAT expensive? Are they really eating out that much? This article left me with more questions than answers, and thus it's a poor study on the struggles working families are experiencing.
Yes. Why not profile a family struggling with unemployment or burdened by staggering medical expenses? That would be far more realistic!
Thank you for this blog post!
My husband and I live on about half of our take home pay. We live in Connecticut, which is a very expensive state. Our mortgage is approximately 25% of our take-home pay and we are still able to live on 50% of what we take home.
How do we do this? We don't have cable. We don't eat out a lot. We don't have every new gadget that comes down the road. We make a lot of food from scratch. My husband has an older car and neither of our cars has a car payment. We don't have credit cards. We live on a budget.
In most parts of the country, you should be able to live really well on $90,000 a year. I understand that people want to have everything right now no matter how much they make but we really need to start looking at our priorities and examine if our spending really matches those priorities.
You are ABSOLUTELY right in every way. We've lived on far less than 90k with 4 kids and made do for the exact reasons to spell out--living within our means, frugally and still living well. These people obviously don't get it that just because you have the money, doesn't mean you have to spend every cent! I know a family of 4 who made $500k each year for ten years and when he lost his job, they had nothing to show for it. NOTHING, but a house which is worth less now than when they bought it. Can you imagine that??? I certainly could NOT!
It's a shame that this article was written in the way it was, because there are so many important issues facing low/moderate income Americans they could have written about instead. Wages have stagnated over the last decade. College costs (even if you go in state or to a community college) are ballooning. Child care costs are more than college tuition in some states. Health care costs are rising. And often we are investing in our communities less than we should be (if VA had expanded Medicaid, the guy in this article wouldn't have seen his pay frozen!)
Admittedly, we have allowed our lifestyle to improve as our income has gone up. I don't have much interest in going back to our grad school lifestyle, that's for sure! It's nice to be able to buy a maternity shirt on sale at old navy this pregnancy without having a panic attack about it like I did with my first. It's important to live within your means. But I think there are a lot of bigger economic issues that do affect the middle class that could have been highlighted in this article, instead of school pictures. (Though to be fair, I remember as a kid feeling hurt and sad if my mom said school pictures were too expensive. I agree with her now, but I totally understand wanting to buy them for your kid.)
I do wish they had pointed out tht if you think this is hard on 90,000, imagine doing it at poverty level.
Exactly! Middle/working class squeeze is a real thing, but this article isn't really about that, is it? School pictures are not a monthly expense, and really who needs the most expensive packet? What are they doing with 72 pictures, using them for wallpaper? 😉
Great post! I am a single-parent raising two children on about $30,000 a year. Like the Johnson's, I also have a daughter who plays the clarinet and participates in sports. I have the money to afford things like reeds and registrations because I anticipate and BUDGET for them. I also realize that I may have to adjust my budget to reflect those variable expenses. Many of the Johnson's problems reflect a lack of basic financial literacy. The ability to successfully manage the money you do have is much more valuable than a larger paycheck any day.
I agree that $90,000 should be enough in a place where this family lives but no one knows what their extra money goes to. I live in a place, according to the calculator in the article, that is 70.8% higher than where they are. It's all smoke and mirrors in our house to make things work. As the kids get older it gets more expensive for the school functions and for sports and activities. This family might have sports or another family member that they care for. I think it's just tough all around and I have learned that no matter what I do there never seems to be enough money and we don't have debt. But, we live in one of the most expensive areas in the country and can't leave due to my husband's job.
Exactly! We make $90,000 a year. We have 4 kids, so that makes us a 6 person household. Public schools here ask for money for so many things because the teachers don't have the budget for everything they need. We live very frugally and don't have a lot of extra debt and we struggle with a $1000 house note due to taxes going sky high here. We both drive 14 year old vehicles that need repair because we can't afford new ones. Some people can't understand that our payroll taxes are 25% instead of 15%, which hits us pretty hard and every one of our bills has gone up or even doubled this year. It's a nightmare.
I agree that their cell phone bill is quite high and could be cut way back. They may not need to have all of that technology, but it is only one article. Who bought it? How old is it? I have not read many of the comments, but I do think it is important to point out that they are a blended family. They both experienced divorce and going through that is quite costly. They just got together, so maybe they will be able to catch up. It said that she had a lot of debt prior to them getting together. I think it is hard to read one article and really know their story. Their mortgage sounds low, but they may have a lot of debt that they can't get out of. I agree they may not do any better making $150,000 a year if they are currently over spending, but we don't know all the details. They may need someone to look at their income and monthly bills and help them prioritize. I actually think it is nice that they got together.
Love it! Thank you for writing this article!
I love this article. I've been saying the same thing for years. At one point I was a volunteer budget counselor. It took all my will power not to scream when people would tell me they just needed to be paid more and their money problems would be over. I kept volunteering for the rare person that you saw the light click and they made changes, it was so exciting for them and us.
I totally agree!
I'm always shocked at articles like this one. I don't understand why anyone would whine if they are making more than 25K and prefer luxuries over paying a utility bill.
90K and can't pay a utility bill???? Give me a break, that's ridiculous. Someone needs to get their priorities in life straight.
And yes - I consider cell phones, cable TV and all the electronic stuff luxuries. If you can afford rent, utilities, food, staple items, transportation, a modicum of decent clothing and a washer & dryer - then you are not really "poor."
It's articles like this one that make the rest of the world think U.S. citizens have an elitist attitude.
Any time I catch myself thinking I'm having a rough time, I just think back to the way my parents grew up during the Depression - barely enough eat, or wear, felt lucky when they had heat and more than one meal per day and no indoor plumbing. Now that is poverty.
Sorry, I meant it's "families like the one in the article" that make others feel that way, not the article you wrote. I apologize!
Thanks so much for highlighting this article. Currently we live on one income ($60,000) and we do live frugally but have a hard time saving because we have a small amount of debt we need to pay off. We rarely eat out and I always make homemade meals. Our debt is a car repair bill. I, too, would feel positively rich if we had a $700 mortgage (it's about $1000 a month) or we had $90,000 a year! We do both have cell phones but they're through Virgin mobile and very reasonable. We probably could do better but I've been a stay at home mom of two for 9 years now and I'm proud we've made it thus far. We live in Raleigh, NC. There is a lot of pressure here financially as most people we know make way more than we do. But, we're happy and I love being home with my boys!
Excellent Article Kristen!!
I couldn't agree with you more - some folks have taken the "nice to haves" and made them into "must haves", and then they wonder how come their money doesn't last or go far enough. They definitely have a spending problem and their perspective on what is necessary to live comfortably is misguided. And, you're so right that such people will still have these problems even if they earn $150k!
And, in fact with their lifestyle they are digging a bigger hole in the sense that they are not spending enough time doing physical activity, which will lead to bad health later on which in turn will lead to higher healthcare costs and they will get into a spiral that they can't come out of.
And the media is making up and reporting such stories where there are none. In an economy where the median household income is around $51,000 and millions of Americans still cannot find even low paying jobs, to have an income of $90,000 and many controllable expenses that they can rationalize - heck, these guys should be in great shape for their expected life events. Of course, no one is able to prepare for catastrophic events.
With the responses on this writeup, I am happy to know that I am not alone in my rebuke of such wasteful living and lifestyles. Happiness and comfort don't require spending of all the money you make, and savings bring in a different kind of and lasting happiness that these folks don't understand. If you have savings and a moderate lifestyle, you in fact become empowered to make better decisions and choices for yourself and your family.
Amen!
This is just crazy.. to me. I live on practically nothing, and I've worked out that to be comfortable, I'd need to make about TWELVE THOUSAND a year. Total. And that seems like an unattainable lot to me at this point in my life.. hopefully it doesn't multiply by the time I get there, as seems to be the case with financial "need." People look at me like I need help...they don't realize that I look at them the same way.
I so agree with you on every point that you've made in this post! My hubs and I and our two kiddos live in central MT - certainly not an expensive area to live. However, on our single income of $32,000 a year, we've managed to save $50,000 over the last 6 years, start college funds for our kids, contribute to retirement, and prepare to buy a home. Yes, our kids wear mostly hand-me-downs, my MIL patches a lot of my husbands jeans, I don't get a lot of new clothes, and we both have pay-as-you-go cell phones. We do NOT have any iDevices. And we are HAPPY! And debt free! The things that people deem necessary to their existence is so out of whack... I feel badly for the children of these families that don't think they could make it on $90,000 a year. We would be able to pay off our soon to be bought home in 3 years with that kind of money! Thank you FrugalGirl - I am a faithful follower and enjoy your common sense!
bL, impressed that you have managed to save so much in 6 years with that kind of single income and a family of four. Truly impressed and happy for you and your family :-)! Keep it up!
I have lived in Culpeper. Both of my kids were born there. If they can't live on $90,000 a year in Culpeper, they are doing something very wrong! And it's rural. There's not that much to do there!
I completely agree with you. We live in Cincinnati, Ohio now and don't have my income (I was diagnosed with MS in 2010). We are still doing fine because, like you, we are frugal and set our priorities accordingly.
And actually, my 14 year old daughter recently observed that she's happy we aren't "rich." She thinks we are closer as family and she really enjoys all the community service we do. The wealthier friends she has at school don't know a thing about homelessness or poverty. She really values that she is making the world a better place by volunteering. As a parent, my response to that is, "My work here is done!"
I don't mean to be cruel, but any article about a couple struggling through financial difficulties should not begin with "On a routine drive to the beauty salon..."
If this is an indication of their lifestyle, it's not a huge surprise that they are living beyond their means.
We are just a 2-party family - my hubby and myself - and we live far below our means. We cut our hair at home unless we're actually changing styles. We limit eating out and find free or cheap entertainment.
Just sayin'.
I'm linking to this post in my weekly roundup of favorite money saving tips. Every Sunday I do a round up of my favorite things from this week and this was my top choice! I just started a link up in conjunction with it and would be honored if you participated. I call it Share the Wealth Sunday and I would love to bloggers to share their best money saving tips from the week. I've been blogging privately for years and just recently got more involved in the blogging community and would love if you linked up with me! This really was such an inspiring post.
Only one phrase comes to mind when it comes to that family: "that's a first world problem" (Problems from living in a wealthy, industrialized nation that third worlders would probably roll their eyes at).
I agree these people need to make better financial choices. I am 35 and I'm about to pay off my house this year (that I bought when I was 20 - a fixer upper LOL). I have been saving money in my IRA since I was 18. I did this all on my own income, which I realize is probably higher than some people (I do have my own business). However I have been through phases of being broke for one reason or another. I know when to tighten my belt and work hard and pull out of it. My bills were paid even back in the day when I was making $4.75 per hour (back in the 90's). Where is Larry Winget to whip these people back into shape?!? LOL!
My dad makes about $125,000 a year and my mom makes some too (I don't know how much). We live in Charlottesville va, (more than culpepper) in a mid-sized suburban home with 5 acres. My parent seem frugal, I have republic wireless, my mom has a basic phone and my dad gets a iphone through work. Yes, we do have 2 iPads, 2 macs but we get discounts though my dad's work. I have two younger sisters so we have to have a big car (not cheap). Our suv was around 37 and it isn't even fully loaded......... We don't go out to eat a lot, and we don't go out on a shopping sprees or anything like that often. I guess what I am getting at is In this Economy it is hard for everyone. We don't have the freedoms we did when bush was in office.... At least before the housing market collapsed. Also to add on, our family hasn't had a cost of living raise in the lat 6-7 years. Not good. I feel we are frugal and to live more comfortably, we would need at least $180,000+. My dad also hasn't gotten a newer car since 2003 ( although we don't upgrade every few years, we drive them into the ground. Good old Hondas and toyota) We keep are credit card debt low, and you always will have unexpected problems. Having 2 horses doesn't help either I guess. You can make more than 100 and still have problems. There are lots of factors. We are still able to take vacations so that is another contribution. We just got back from the beach and Disney so that is also another big chunck.
My household income has gone from $40,000 last year to $90,000 this year. We are a 6 person household, and had dreamt of the day that we made more money and were so naive to believe that we would be better off. Unfortunately this is not the case at all, and I will break it down once more, so some of you can understand that the middle class really is being squeezed pretty hard. We went from that $40,000 where we were receiving free lunches for our 4 kids, and CHIP health insurance. We live very frugally. All of our vehicles are always bought used, and they are all paid off. We have a 2001 truck and a 2002 truck, both desperately needing thousands of dollars worth of repairs that we can't afford. We own our home and when we moved in, our note was $730. Due to city taxes going up, up, and up every year, our house note is now $1200. Our homeowners insurance went up when our taxes went up. We don't have cable nor do we have any extra expenses other than regular bills, which all have gone through the roof in the last few years. I teach online classes, so internet is a necessity for us, but we pay the absolute cheapest rate we could find in our location. Here's what a lot of people don't get; Yes, on paper it shows that we make so much more, but in reality, we barely bring home the amount of an extra paycheck from his old job and we were struggling hard to make it then. My husband's payroll taxes went from 15% to 25%. That is 1/4 (a quarter) of his income that goes to the government every pay day. At his new job, our health insurance premium is $500 more every month. We live in Texas, and everyone's car insurance went up considerably at the beginning of the year. Our electric company has now doubled the gas surcharges that they charge, so we pay almost double on our electric bill, same for our gas bill, and our water company raised their rates too. We don't take vacations, EVER. We don't have the money to splurge on nice things or going out to eat all the time. My kids and I eat peanut butter and jelly sandwiches every single day during the summer, so we can try to get by on as little money for groceries as possible. I work now as an adjunct professor and get paid a little money each month, which we use to pay our house note, because his income only pays our normal bills. We were extremely behind last year and truly thought this pay raise would be the answer all to our prayers. It definitely was not. It's turning into a nightmare. We don't live in a fancy home either. We don't live out of our means, with frivolous spending We save and try to cut costs every way we can, but we are drowning too. We are supposed to have to pay for our children's health insurance now, because we no longer qualify for CHIP. We cannot afford it though, as the lowest rate we have found was $1000 a month for our 4 kids. We don't qualify for free lunches and so we spend around $60 a week for their lunches and breakfasts. We can barely afford to feed everyone, and I have lost 40 pounds from barely eating, so my kids can eat. The neccesities we need to live, such as toilet paper, paper towels, tampons, pads, toothpaste, shaving needs, shampoo, etc. are killing us. After his weekly payroll deductions for our health insurance and taxes, he brings home $800 a week. Factor in $130 a week for groceries, which is really stretching us thin on food, and we don't eat junk food. We eat mostly chicken because we can't afford really expensive meat, and I cook daily so we have plenty for my husband to eat at lunch during the week. Factor in another $100 for his gas to get back and forth to work, and $50 for myself. Factor in about about $120 for household necessities, which goes pretty fast for a family of 6. That gives $400 to work with for the rest of the week. Now factor in the regular bills, water, gas, electric, cell, and internet. Both are required for our jobs. Now factor in $60 a week for the kids meals. Then factor in extra costs, such as medical issues that arise, which happens a lot with 4 kids, lost money from missing work for those days, and the money that the teachers ask for weekly for stupid class parties and such, and that leaves us with either barely anything or negative in the bank. For all of those who like to sit around being judgemental to those who make more money than you and can't make it, I urge you to come spend a week at our house and see just how unluxurious our lives are. We drive vehicles that are falling apart, live in a house that needs several repairs, don't put our kids in any out of school extra-curricular activities, and we work our butts off just to make ends meet. I have 3 college degrees including a master that allows me to teach at the local college. My paycheck goes straight to the house note, and leaves us with nothing after. There are even more costs that come up here and there. It's not a dream come true to make more money. It's actually causing both of us to lose our hair, literally.
Get real.
There are so many crap comments here. You people are delusional.
Not sure what rent costs where you live but here you cannot live in a nice spot in town with a lower crime rate and bums not all over unless you are getting at least 46k/yr. It has doubled at least in the ten years I have lived in this area.
Houses that once went for 600/monthly now are all being rented for around 1500??? Most of them are trash. Buying around here is the same some how this area was immune from decent prices while the rest of the country enjoyed a nice buyers market for a long time.
Seriously get real. With all the REAL expenses forced on us such as insurance and the risk that is always present if you think people live long happy lives with even 40k a year you are crazy.
stop throwing out your numbers unless you are going to post how you spent that money to see some proof of your claims.
Getreal,
As I stated much, much earlier in this thread, I have lived in Culpeper, both of my kids were born there, and I still have friends and family there. So, I guess I have more right than some, maybe you?, to weigh in on this topic. These people are delusional. My husband and I, with our kids, lived quite well on considerably less. Culpeper is a rural-ish community, mostly farmers and people employed locally. It's actually a very nice community and I miss it.
Wow! No money for roof repair at $90k? We are a family of 3, soon to be 4, in early/mid 30s. We make less than $90k (together) a year although we both have PhD and work in a top tier university. We don't own a house because we don't know yet where we will settle, waiting for permanent jobs. We have money saved up for down payment whenever we are ready to buy a house, have college fund for our 2 year old, we max out Roth IRA and also have decent retirement plans from work. What we don't have- TV, smartphone, big house. We have two cars that are paid for so we are debt free. We pay for childcare that is~$1000/ month and we go to India (to visit my family) every year (additional expense). We don't have time to watch TV so we don't have one, we don't need smartphones, we have our dumb phones, we rent a nice 2 bedroom house that is enough for us. It gives us freedom to spend on what we really care for- spending time with our child, vacations and eating out (not fancy restaurants though) and saving for future.
When I read The Richest Man in Babylon, I was quite young, but since then I have carefully saved 10% of pretty much every penny I’ve earned! God is taking me a step further as I realize that the other part to the saving equation is actually earning money. Ha! So while I love ministry, I’m moving towards restructuring a bit, so that I can earn money while encouraging others.
I’m grateful that I haven’t had great plenty because it taught me to really hang onto my money and spend very carefully. When I released my first book, I wanted to incorporated financial principles into an entertaining story. The female protagonist starts on a quest to earn enough money to make her dreams come true, but along the way, wise advisors encourage her to save towards future goals as well. I love great stories and saving money, so it’s was lots of fun to write.
A rabbit trail brought me to this post, but it was really encouraging to see someone saying what I often feel about people who complain they don’t have enough income! Usually my thought is, “do you know how much money I could save if I had that kind of income?!” ïŠ
Good job. Amen. 🙂
KM
I just read this after seeing it listed in you top post from 2014. Once I read the section pasted below, I immediately "gave up" on these people:
"...Robin, who was accustomed to spending as little as possible. When the time came to buy school photographs for her daughters, she usually ordered the smallest, cheapest package.
Scott, whose salary is more than triple Robin’s, insisted on ordering the biggest package.
“I don’t care if we don’t eat next week, I’m going to get the kids’ photos,” he said. “That’s what you hold onto.
I am lucky enough to have a good education and as a academic professor, make $142K a year, but I STILL look for and choose the absolute least expensive photo package every year! Insisting on buying the most expensive package is nothing other than foolish. If they make all their choices this way, it is no wonder they can't make it.
Sigh!!!
If anyone who might be reading this post or the comments and is struggling financially or wanting to manage their incomes better, (sorry - run-on sentence) I highly recommend Mary Hunt at Debtproofliving.com. I have tried many different financial programs and hers is the absolute best! Give it a try. Costs only $39 a year for the total membership (although you can access tons of advice for free)and will not leaving you feeling deprived and ripe for a setback. You will not be sorry!
P.S. She will also email you personally and answer your questions if you are a member
I remember reading this article when you first posted it, but I decided to reread thanks to your "Best Posts of 2014." So many great points, I totally agree, etc. But can we talk about how you used the word "piques" correctly. I cannot tell you how many people mean "pique" and write "peak" and it drives me ba.na.nas. 🙂 Grammar Nerds Unite!
Phew! I'm always relieved when grammar nerds are pleased with me. Ha.
Let me say first that I did not read all comments. But I have read enought to get the sense that the majority of people commenting here think that 90000$ year is sooooooo much money. And that families living on this kind of salaries are rich and spending like crazy.
Well, maybe in some parts of the world is 90000$ extravagant, but not in mine. Husband and I (and 2 kids) combine about 92000$ before taxes. Which leaves us with about 55000 to 60000$ after taxes. Not poor by any means, but not rich, not living extravagantly.
Small town house that will have been paid for at the 10 year mark (maybe 9...), small 2004 Toyota echo, 1 big old style tv, no cable, a cell phone for emergencies only with a 100$ a year prepaid card, etc.
so, no, no flat screen, no pedicures and spa treatments, no expensive vacations, no second car, no big house, etc.
BUT all of this are choices we make in order to have money aside, money for old age, money for the kids college, so that we feel at peace. We are frugal, we check prices, we buy use, we use coupons, etc. I much prefer having savings and peace of mind than collecting stuff.
Still, we don't have millions in the bank. Enought to hold us for a good 6 months (or a bit more) if we were to lose our jobs. Which is, for me, the perk of a good salary.
Please, don't assume that everyone making a "good salary" is just rolling in gold, it's not the reality. And it's insulting.
I'm with Isabelle above. $90K is entry-level out here in Seattle. My husband lost his job nearly a year ago and the job market is horrendous here if you're over 40 and don't have a MBA. We're squeaking by on a combination of savings and my salary of $62K and that's about to run dry in a few months if nothing changes. We can't leave and move to a less-expensive area because of child custody issues with my ex. We've refinanced our house and car (both old and not at all extravagant), cancelled our cable, dropped our phone plans, eat at home, no new clothes, no traveling (which is tough because we have no family here), etc. We also have no credit card debt. We've cut everything we possibly can and it's still not enough. So yeah, my salary is great somewhere else, but here on the west coast, it's not nearly enough... $90k would be breaking even.
This is true, but you gotta remember that the original family lived in the small town of Culpeper, VA, which is not nearly so high cost as Seattle. Definitely different than your case!
Hey, I think maybe that guy works for the same employer I do! In which case, he gets a 50% discount on his phone bill. (Trust me, getting rid of internet when the big V has you working from home is a BAD plan.) And yes, it seems like the family might have the "we deserve this and want the same things others have" mentality. I wonder what their situation was like before our glimpse into their life?
My household is fortunate enough to make around $90,000 in the Seattle metro, with the grown-ups' wages combined. But when we were making less, and our emergency fund was wiped out by very unexpected car repairs, cat illnesses, and hospital bills...well, we acquired some debt we're still wiping out. It'll be gone by June. I don't mind so much the student loan debts but the credit card and personal loan debt HAVE to go.
After reading this article, I am astonished by how ignorant and reckless Americans are.
There are a million ways to save money and still have money to burn. For example, $300 cell phone bill? I have T - Mobile, nation wide plans gives 2.5 gig data for $100 per month/per line, 5th line is $10 per month extra, therefore with taxes bill is $123 per month. Connecting devices to outside wifi would ensure one never goes past one's data plan, either way, you are not charged data overages, T mobile just slows you down.
Any one with an LLC or who is friends with someone who owns a restaurant can get a restaurant depot card, Jetro or the like. This company caters to restaurants and is cheaper than even Sam's club. I get 40 lbs of chicken breast in a box for $63. Invest in a freezer, portion the chicken and family is fed through whole sale prices. I can't begin to discuss the prices of produce, and just about every other food item one could save money on by shopping here.
As far as health insurance goes, I went to the market place, plugged in the numbers and this family would qualify for subsidies even on 90 thousand per year. For me, one's politics are irrelevant, if one is crying poverty use the health insurance plans available through the market place which will best fit the family's needs. This family's estimated health insurance aid would be around $278 per month based on income, and being non smoking parents of 3 dependents.
Another thing I noticed about Americans is the lack of skill and patience for haggling. I live in Palm Beach Country which is the most expensive county in Florida. I haggle everything from new furniture to my new car. Americans do not seem to realize you can knock off more than $6,000 MSRP price from a new car. I paid $21,900 in 2012 for a brand new Toyota Camry, otd (tax and tag) I was in college with someone who worked for Toyota and paid MORE than I did. This family could get a magic jack for $20 per year hook it to $45 a month internet through Uverse and drastically reduce their bill. Cable could be substituted for hulu or netflix. My family personally has the full package with Uverse and my husband makes approx $65,000 per year. We have 2 children and a third on the way.
I buy clothing once per year for myself when my stores have their 50% flash sales. Yes, even Macy's has flash sales with up to 50% off. I get name brand clothing for my children never more than $15 per item from Macy's, one just has to go online, look for the sales and utilize the coupons. If your children have to wear school uniforms, land's end has sales with penny monogramming plus in August, prices drop dramatically.
Another trick the wealthy use is buying art from struggling artists, donating it to a facility and an art dealer always quotes it much higher than what it was originally purchased for. The wealthy take the receipts into their accountants after donating it, say to a hospital or another worthy charity and boom, another lovely tax write off.
Google shopping should be anyone's best friend. Looking for the cheapest deal is very easy just a little time consuming. All one needs to do is type in exactly what they're looking for, hit Google shopping, scroll down and compare the best rates. It kills me when I see my friends paying $400 for a MK purse I purchased for $200.
Never be afraid to call up a credit card company and negotiate interest rates. Credit card companies are more likely to bargain with someone who owes a balance rather than someone with 0 balance. For people who bark and claim they lack the time to negotiate and deal hunt, its a hell of a lot more time consuming to work your butt off to earn the money to pay for debt one wouldn't accumulate had one been a savvy shopper in the beginning.
Another point I'd like to bring in, my father had a stroke in 2013. I know funeral expenses can slaughter through savings like a typhoon. I called around and negotiated my father's burial expenses. For everything, casket, vault, labor, all the expenses cost me $3,000. I know others who pay more than 10 thousand. This was in Connecticut which is one of the most expensive states in the country. His grave stone was $250 and I see others paying $1,200 for the same grave stone.
I felt compelled to share this information with others ideally hoping one of you at least will get something from my advice. Capitalism has advantages for those who understand how to navigate. My husband makes less than the family in the article, we do only have 1 car but my children lack for nothing. They go to a great school, we eat like kings, fresh sea food, great produce, top quality meat all for less than what the average family would pay for scrap meats at the local grocery store.
My children each have an Ipad, we own 2 brand new lap tops and an Imac computer, I get stuff on sale and negotiate 0% interest terms on credit cards, pay it off in a timely manner and avoid interest. As far as those with vet bills. I have a doll face white Persian cat. If you have good credit, get a care credit card and you can get your vet bills taken care of interest free using care credit. Just remember to pay it off. Haggle your dentist, If you use care credit or cash, haggling is doable. My fillings are never more than $100. I see other people at my dentist office paying $200 or $175.
As far as savings goes, I have a book's worth of advice for this but it all depends on one's financial situation. If an individual has no debt and makes more than 60k than there is no excuse for spending income tax rebates.
Let's be realistic, most people can afford to live easily on $90,000 a year. But there are situations where people can make over $100,000 and still barely get by. My family for instance pays 800 or so a month just to pay off hospital bills and other health related expenses. If you ever go to a hospital, good chance your insurance company will only pay part of the bill. So many people have high health expenses that they have to end up paying out of pocket because insurance companies are hard to get to pay bills. Also many people in America purchase houses well above there means, and there left with mortgages they can barely pay. Add in that wages have stayed relatively stagnant while inflation has caused prices on most things to rise.
I'm sorry, but this article is complete crap. My husband is the only one in our family working. He makes $90,000 annually. I do not work. We have an infant and a special needs child. We have over $20,000 a year of after tax out of pocket medical expenses. We pay extra for our oldest to have aides so he can go to preschool, play sports, and participate in gymnastics. We pay for private swimming lessons. We pay extra for medicine, therapy, social skills class, behavioral therapy (for us) and doctors appointments. I have massive student loans, but had to give up what was a high paying career so that I could take her to her appointments. We spent money on special equipment to keep her safe and help her function. We pay extra to eat a diet that is not full of artificial ingredients that exacerbate her symptoms. We pay extra so she can have comfortable clothes because of sensory issues. We drive old cars. We don't eat out. We don't go on dates. We don't have cable. We don't go on vacations. We are swimming in debt from past medical expenses related to my daughter's condition that weren't covered by insurance. We live in a high cost of living area. How dare any of you judge me, or anyone, who cannot "make" it on this salary and blame it on lack of responsible spending instead of circumstances outside of our control. Shame on you.
I'm so sorry that you've got it rough with the special needs.
Please keep in mind that the original post was written in response to an article about a family in a low cost of living area, with no special-needs children, and that this family was wasting money on unnecessary things.
It was never my intention to speak to situations such as yours.
I can totally see how someone could struggle on $90,000 per year. That's actually about what my girlfriend and I make combined. By time we pay our mortgage, student loans, utilities, and groceries there is very little left over. I'll kind of break out our situation for you, there's just the two of us and our expenses are as follows:
Monthly Net Income $5,000 less Retirement $500, Mortgage $1200, $tudent Loans $950, Utilities $350, Groceries $400, Cars $400, Gas $400, Insurance $200.
This leaves us with $600 to save each month.. if we had three kids, well that $600 would fly out the window in a heartbeat.
I'd love to start a family, get married, go on vacation, etc. I just can't afford it on $90,000 per year. Heck, I can't even afford cable.
per month:
$100 gym
$60 dog food
$400 car payment
$80 car insurance
$140 student loan
$1,800 mortgage/PMI/home insurance
$90 cell phone
$120 electric bill
$40 cable TV (modem only)
$200 gas for vehicles
$600 groceries
$150 fast food lunches for work days
_______________
~3,700 out of $4000 extra each month $320
real talk Maryland
While I certainly wouldn't tell anyone how to spend their money (everyone's priorities are different), I would point out that a gym membership, a $90 cell phone bill (Ting is far cheaper), and fast food lunches are not necessities. Cut those out (in the case of the smartphone, lower the bill), and you'd have another $300 a month, leaving you with $620 at the end of the month.
That's not rich, but it's not scraping the bottom of the barrel either.
I can totally understand. My wife and I make $150k a year in FL and things are tight. Saving for retirement, college for our baby, vacation, student loans, mortgage, cable, cell phones... It adds up!
$90K in 2015 in the Washington metro area is NOT a lot of money at all, even for a single person. When you have student loans and rent for a frickin' STUDIO apartment is $2200 (and that's not even a fancy one)...$90K doesn't go as far as you think. Being single and making a "high" salary you get KILLED in taxes!
Totally agree about the Washington metro area. But the article was about a family who lives in Culpeper, a VA town far outside of Washington D.C.
LOVE, LOVE, LOVED the article, but can you PLEASE, PLEASE, PLEASE stop double spacing after your periods. It makes your otherwise gorgeously worded write-up hard to read. Thanks.
90,000 is definitely a comfortable living it buys you a shelter clothing and food with A LOT of wiggle room. Even when you consider that 15k or more depending on your state goes to taxes. That still leaves a family with roughly 75k a year. A pretty good living. inho taxes are high I advocate eliminating the income tax. Being taxed for working is really silly. In my state on top of 20k in federal taxes we pay another 3k into income tax. With government waste as it is, I have a feeling the average working Joe could do better with that money. For example 3k a year for 18 years could send a child to college.
However all that into account. There is no reason a family with an gross income of 90,000 should be anywhere near broke.
If you cant afford a 5,000 surprise repair you need to rethink your budget.
This is total crap. There is no way you lived as well as you said you did on $30-40K unless you are talking about prior to the 90's. I have 3 kids and my husband and I bring in $110 per year between the two of us. By the time I cover living expenses and food I can barely pay for my school loans. Our kids don't have much, only the oldest has a computer and he is 16. We don't have health insurance because we can't afford it. I think you are generalizing and you have no idea what that family has in costs. We were quoted over $600 a month for terrible insurance coverage and we chose to go without...maybe they accepted. $90K is nothing, honestly. There is no way in hell you were paying all of your bills perfectly on time, giving 10% away (come on now be real) AND going on vacation! Our family has never had money to go on vacation. You do sound judgemental in this article as well as poorly informed, unrealistic, and snotty.
I'm not sure what to say, except that I'm not lying. We have always tithed 10% of our gross income, and our low income period was from 1997-2006.
The vacations we took were week-long off-season trips to stay in a beach condo at $500 for the week or less. We ate our meals in the condo, and we spent very little other than what we paid for the condo rental.
Also, Mr. FG and I haven't had debt, aside from a mortgage, and some car loans here and there, so that made it possible for us to get by on the income that we had.
I'm sorry that you and your family are having such a rough time, and I hope things get better for you all.
Well said Kristen, well said. It's clear Kari is defensive of her bad spending habits.
I agree with the comment above. Uninformed and highly judgmental!
All humans, beginning the first moment they begin to create value, should save every dollar beyond subsistence to pay for the last 10 years of their existence by paying into a medical fund. If you pay for things like entertainment you should forfeit the right to expect others to pay for your welfare. I am not saying people won't help you, just that government can't make them help you.
Sorry, folks, I have to agree with Kari here. This year I should bring in about $92K, and our mortgage / insurance / tax picture is under the recommended 28% gross income. We RARELY eat out - pizza is a luxury - and we don't buy stuff for the house. We have 2 teenage children, shop at thrift stores, use T-Mobile for cell phones ($164/mo.) and can't afford to tithe 10%, much less save money. (We volunteer at church to make up for our financial shortfall). We struggle to put $300/mo. away for retirement. We grocery shop at ALDI on $150/wk. Our cars are old and need frequent repairs. We struggle to pay for our children's braces and other routine medical bills (thankfully we are all relatively healthy). We cut cable TV a long time ago. Our ACA insurance doesn't cover much. Our vacation is a week at the beach, sharing a house with relatives, on a strict budget (no eating out). We heat with wood and turn the thermostat WAY DOWN. I repeat - we are NOT spenders because both my wife and I grew up without much at all. Feeling this pinched on nearly six figures is seemingly absurd, yet it's the reality for some of us. Bad spending habits? We have none. But in Bucks County, PA, an upper five figure salary just doesn't put us within reach of a comfortable lifestyle. Don't judge what you don't know.
As I see, medical costs are what is creating the problem here. We don't have medical costs in the country where I live. So much easier to budget. I don't know how you live knowing that you savings could be wiped out if you get sick.
Completely agree with this post. No matter who you are or what you believe, $90k is A LOT of money. Putting you in the top 1% of the world and probably top 10% of the U.S. I can't say for sure, but this sounds like priorities are our of whack or we are not given the whole picture from this article.
I guess my wife and I are going to be the one of the only people to disagree. We make 90,000 dollars a year with no kids and 690 dollar mortgage and we struggle and do not save a penny!! Between car payments utilities, insurance,cell bill, FOOD, student loans and all the things that go wrong throughout the year we have no money left over. We buy what we need when we need it. We also take a couple vacations a year. Nothing over the top living and 90,000 is not great!!
??? really what are your car payments??? I own six out right an have no payment. Plus if i want to drive them they have to have no problems with the check engine light coming on that is a automatic fail in my state.
I would like to try to live on 90K... fam of five never made more then 35K but have lived well enough thank you!