7 ms·

I chalk it up to things simply costing more. I make more than my dad did. I dont take any major vacations, go out much, or live in a McMansion, yet we struggle

I chalk it up to things simply costing more. I make more than my dad did. I dont take any major vacations, go out much, or live in a McMansion, yet we struggle to save.As a kid we took lots of vacations, they saved a good amount of money (stock market was good for them) and are doing well for themselves. I imagine it's only going to be worse for my kids.

wernercd 6y ago
My problem with "life" is all the... nickle and dimes... $10 for Nextflix, $90 for Amazon, etc. On top of Gas, Electric, Phone, Internet, Car, Insurance, Gas, etc. It's easy to watch the money flow in... and right back out.
- moopling 6y ago
  pretty sure my problem is >50% of my pay goes on rent :P
- PaulStatezny 6y ago
  But the thing is, nobody said you have to pay for Netflix or Amazon. Each person is responsible for making good choices with his or her money. Lack of financial discipline is not society's fault. Yes, managing finances takes some level of skill when there are many different expenses in a modern personal budget. But there are ways to live frugally and get ahead. They just aren't flashy or fun. On two very small incomes my wife and I made big financial strides early in our marriage. We were very frugal but we made it work. We had the lowest tier Internet. We had a very conservative budget for eating out and groceries. We didn't have Netflix or Amazon. Once we paid off a number of debts, our spending was able to increase responsibly. Edit: More tactful wording.
  - _qulr 6y ago
    Standard Netflix is $12.99 per month currently. So that's $155.88 per year. Over 4 years, $623.52. You didn't pay off $60k in student loan debt and buy a house by refraining from Netflix.
    - PaulStatezny 6y ago
      Correct. It was from being very frugal in _all_ areas of the budget. Eating out, entertainment, internet, not taking vacations that wouldn't be financially responsible. Frugal dates, frugal Christmas/holiday celebrations, living in an extremely inexpensive apartment in a not-wonderful area of town. We were pretty late adopters of smart phones because we had cheap flip phones. We gave to charity too. It's all about priorities, and having a vision for being financially "free". The victim mentality is an _enemy_ of human creativity. You can say, "this area is too expensive; we need to find a way to move somewhere else". You can say, "I need to sell this gas guzzler and get a cheap, used commuter car." These things aren't _fun_. But they set you up for success.
      - _qulr 6y ago
        The crucial data point is missing: "two very small incomes". US minimum wage is $7.25 per hour. 2 people working full-time at minimum wage would bring in a household income of $30k per year. But you couldn't possibly pay off $60k in debt and buy a house with that. So your household income had to be much, much higher. One cannot save oneself into a higher income.
        leetcrew 6y ago
        presumably GP and their wife did not go on to both earn minimum wage after getting their degree(s?). even today when a bachelor's degree is worth less than it once was, the median wage for college graduates at their first job is around $48k. only about 2% of people with any amount of college education actually make minimum wage. it's pretty rough living on minimum wage, but paying off student debt is very rarely a contributing factor.
        PaulStatezny 6y ago
        You're right. It was about [REDACTED FOR PRIVACY - but much much less than parent's 48k medium income per person for college grads] before taxes, both with college degrees. I'm sorry lapcatsoftware if it sounded like I was making light of poverty. Poverty is terrible. But at least in the US, there is _so much_ opportunity to not be stuck on a minimum wage salary. Resigning to the idea that, "Well, I guess I just have to work for minimum wage" is not going to help and it doesn't have to be true. It's sad to think that people give up mentally when there's so much they can do to help themselves.
  - Sodman 6y ago
    Outside of the obvious "don't buy a gas guzzler" tropes, most of the best ways to save money will end up costing you time. Whether it's living with a longer commute or working more hours, there is a point at which people are just happier living their lives than wasting years in their prime scrounging and being miserable to afford a downpayment on a house in worse condition than what they could afford to rent. Big budget decisions like vacations and cars will obviously factor into this in a big way, but nobody's financial situation is changing massively over a Netflix subscription. Following your own logic, it's almost like saying how dare you say you had _any_ budget for eating out? Why not just save even more money?
    - abnry 6y ago
      I think part of the disconnect is that many people today assume that life will be, or should be, pain free. Life is hard. It's always been hard. It's hard today. I think the reason we want to believe otherwise is because of the tremendous wealth we have experienced recently, so we expect that trend to continue indefinitely. To me, it is the lack of gratitude for what we do have and can afford that galls me.
      - shakethemonkey 6y ago
        The generation immediately after WWII gave a glimpse of what was possible, before crafty people figured out how to siphon off the majority of that wealth to those already at the top. And over time, that siphon has grown stronger.
      - selfhoster11 6y ago
        Life should not be as hard as it is. It is hard, and it is not painless, but it's harder and more painful than it must be. We have billionaires siphoning money from the masses (either directly, or indirectly via government action) that are already struggling. Redistributing even half of their net worth would be a life-changing amount for the average person, and could put wind in the sails of many charitable/educational/scientific/medical causes. There is no reason why the current situation should be allowed to continue, and many reasons why it should not. Obviously it's a hard practical problem to crack (given that a naive approach to redistribution of this kind would be met with a great pushback and implode various systems that we depend on), but unless we do something effective, we'll keep ruining the planet while trampling the poor at the same time.
- JanisL 6y ago
  Most of the people I know who are struggling are stuggling because rent and utilities takes the vast majority of their post-tax income. There's a few people I know who are just terrible with their finances (people who no doubt would have had problems at every previous time in history), but now seems a bit structurally different to some of the boom times due to the number of people I know who have hardship due to expenses they can't easily drop.
- TuringNYC 6y ago
  This is the "Avocado Toast" argument that we're poor because we spend $10 on Avocado Toast. It is totally false. It blames citizens for national structural economic problems like hidden inflation and like bad housing policies discouraging building/planning. People spend $10 for Nextflix, $90 for Amazon, etc as short term pleasures because they cant spend $GIANT on a mortgage. What are you supposed to do? Might as well treat yourself. Of course, I'd rather get a home, but if I cant afford it, I wont just sit at home staring at a wall.
  - treis 6y ago
    >It is totally false. It's false for some locations but not for others. I checked on the two homes I lived in growing up and both appreciated slower than inflation from the late 90s to the early 2010s when they were last sold. In real terms they are about 20% cheaper than they were when my parents bought/sold them. Flyover suburbia is more affordable than it was 20-30 years ago. All major physical items are better and cheaper than they used to be. Netflix is cheaper and better than VCRs + rentals + expensive cable. The big difference is health care and college costs. But most people don't have huge medical bills and college is somewhat of a choice. The cost of living increase is largely driven by California, NYC, and Seattle. Pretty much every where else things are cheaper than they used to be.
    - TuringNYC 6y ago
      I dont quite agree. I dont think you can compare home to inflation only -- you have to also look at the income in that area as well as total cost. If incomes have also fallen, then the relative cost/income ratio may have remained the same (or as i'm proposing -- has increased.) As an example, there are depressed areas in flyover states where costs have indeed gone down. But incomes have gone down even more -- they are once thriving places like Binghamton NY which had industries that have since moved overseas. There is also the cost of healthcare, education, and retirement savings. My father benefited from a pension plan -- I have to save myself in a 401k. My father paid no employee premiums for healthcare, I pay about $900/mo for the family premium (before copays and coinsurance.)
- leetcrew 6y ago
  this is a variation of the "avocado toast" argument. if you go crazy and subscribe to amazon prime, a music streaming service, and several video streaming services, you're paying somewhere around $100/month. if instead you invested the $100 every month, you could expect to have an extra ~$200k (inflation adjusted) after forty years. that's not nothing, but it doesn't add a whole lot to your safe withdrawal rate in retirement (roughly $8000/year). if you're only able to save a couple hundred bucks every month, that extra $100 makes a big difference. if you're saving $1000+, your subscriptions aren't going to make or break your retirement; you need to dig into those bigger fixed costs to really move the needle.
  - Gunax 6y ago
    We might be talking about different budget levels, but to normal people (people who don't have the word 'software' in their job title), 200k in retirement is a lot. Actually the median 401k balance at retirement is only around 60k, so that alone would quadruple their retirement savings.
    - leetcrew 6y ago
      yeah, I'm assuming most of the people on this forum have upper-middle salaries or will likely have them in the future. I mostly wrote the post with this audience in mind, though I think the bit about analyzing spending in relation to your savings rate is relevant to everyone. I am very fortunate to have the opposite "problem": I tend to be very stingy and waste a lot of time and energy trying to save amounts of money that just aren't very meaningful compared with my savings trend. unless you're unable to save anything at all, I think it is very important to strike a balance between saving for retirement and spending on stuff you enjoy in the moment. also minor addendum: someone with the median 401k savings might receive something close to the median social security payout of ~$15,500/year. since this is a guaranteed payment until end of life, this is like having >$375k in a retirement account at age 67. $200k is a meaningful amount to add to a $60k retirement account + social security payments, but it doesn't do anything close to quadrupling the person's safe spending capability. it's more like a 45% increase, which is still nothing to shake a stick at!
lordnacho 6y ago
> I chalk it up to things simply costing more. Every price is an exchange rate. If things cost more, it's because your income gets less stuff.

wernercd 6y ago

My problem with "life" is all the... nickle and dimes... $10 for Nextflix, $90 for Amazon, etc. On top of Gas, Electric, Phone, Internet, Car, Insurance, Gas, etc. It's easy to watch the money flow in... and right back out.

moopling 6y ago
pretty sure my problem is >50% of my pay goes on rent :P
PaulStatezny 6y ago
But the thing is, nobody said you have to pay for Netflix or Amazon. Each person is responsible for making good choices with his or her money. Lack of financial discipline is not society's fault. Yes, managing finances takes some level of skill when there are many different expenses in a modern personal budget. But there are ways to live frugally and get ahead. They just aren't flashy or fun. On two very small incomes my wife and I made big financial strides early in our marriage. We were very frugal but we made it work. We had the lowest tier Internet. We had a very conservative budget for eating out and groceries. We didn't have Netflix or Amazon. Once we paid off a number of debts, our spending was able to increase responsibly. Edit: More tactful wording.
- _qulr 6y ago
  Standard Netflix is $12.99 per month currently. So that's $155.88 per year. Over 4 years, $623.52. You didn't pay off $60k in student loan debt and buy a house by refraining from Netflix.
  - PaulStatezny 6y ago
    Correct. It was from being very frugal in _all_ areas of the budget. Eating out, entertainment, internet, not taking vacations that wouldn't be financially responsible. Frugal dates, frugal Christmas/holiday celebrations, living in an extremely inexpensive apartment in a not-wonderful area of town. We were pretty late adopters of smart phones because we had cheap flip phones. We gave to charity too. It's all about priorities, and having a vision for being financially "free". The victim mentality is an _enemy_ of human creativity. You can say, "this area is too expensive; we need to find a way to move somewhere else". You can say, "I need to sell this gas guzzler and get a cheap, used commuter car." These things aren't _fun_. But they set you up for success.
    - _qulr 6y ago
      The crucial data point is missing: "two very small incomes". US minimum wage is $7.25 per hour. 2 people working full-time at minimum wage would bring in a household income of $30k per year. But you couldn't possibly pay off $60k in debt and buy a house with that. So your household income had to be much, much higher. One cannot save oneself into a higher income.
      - leetcrew 6y ago
        presumably GP and their wife did not go on to both earn minimum wage after getting their degree(s?). even today when a bachelor's degree is worth less than it once was, the median wage for college graduates at their first job is around $48k. only about 2% of people with any amount of college education actually make minimum wage. it's pretty rough living on minimum wage, but paying off student debt is very rarely a contributing factor.
        PaulStatezny 6y ago
        You're right. It was about [REDACTED FOR PRIVACY - but much much less than parent's 48k medium income per person for college grads] before taxes, both with college degrees. I'm sorry lapcatsoftware if it sounded like I was making light of poverty. Poverty is terrible. But at least in the US, there is _so much_ opportunity to not be stuck on a minimum wage salary. Resigning to the idea that, "Well, I guess I just have to work for minimum wage" is not going to help and it doesn't have to be true. It's sad to think that people give up mentally when there's so much they can do to help themselves.
- Sodman 6y ago
  Outside of the obvious "don't buy a gas guzzler" tropes, most of the best ways to save money will end up costing you time. Whether it's living with a longer commute or working more hours, there is a point at which people are just happier living their lives than wasting years in their prime scrounging and being miserable to afford a downpayment on a house in worse condition than what they could afford to rent. Big budget decisions like vacations and cars will obviously factor into this in a big way, but nobody's financial situation is changing massively over a Netflix subscription. Following your own logic, it's almost like saying how dare you say you had _any_ budget for eating out? Why not just save even more money?
  - abnry 6y ago
    I think part of the disconnect is that many people today assume that life will be, or should be, pain free. Life is hard. It's always been hard. It's hard today. I think the reason we want to believe otherwise is because of the tremendous wealth we have experienced recently, so we expect that trend to continue indefinitely. To me, it is the lack of gratitude for what we do have and can afford that galls me.
    - shakethemonkey 6y ago
      The generation immediately after WWII gave a glimpse of what was possible, before crafty people figured out how to siphon off the majority of that wealth to those already at the top. And over time, that siphon has grown stronger.
    - selfhoster11 6y ago
      Life should not be as hard as it is. It is hard, and it is not painless, but it's harder and more painful than it must be. We have billionaires siphoning money from the masses (either directly, or indirectly via government action) that are already struggling. Redistributing even half of their net worth would be a life-changing amount for the average person, and could put wind in the sails of many charitable/educational/scientific/medical causes. There is no reason why the current situation should be allowed to continue, and many reasons why it should not. Obviously it's a hard practical problem to crack (given that a naive approach to redistribution of this kind would be met with a great pushback and implode various systems that we depend on), but unless we do something effective, we'll keep ruining the planet while trampling the poor at the same time.
JanisL 6y ago
Most of the people I know who are struggling are stuggling because rent and utilities takes the vast majority of their post-tax income. There's a few people I know who are just terrible with their finances (people who no doubt would have had problems at every previous time in history), but now seems a bit structurally different to some of the boom times due to the number of people I know who have hardship due to expenses they can't easily drop.
TuringNYC 6y ago
This is the "Avocado Toast" argument that we're poor because we spend $10 on Avocado Toast. It is totally false. It blames citizens for national structural economic problems like hidden inflation and like bad housing policies discouraging building/planning. People spend $10 for Nextflix, $90 for Amazon, etc as short term pleasures because they cant spend $GIANT on a mortgage. What are you supposed to do? Might as well treat yourself. Of course, I'd rather get a home, but if I cant afford it, I wont just sit at home staring at a wall.
- treis 6y ago
  >It is totally false. It's false for some locations but not for others. I checked on the two homes I lived in growing up and both appreciated slower than inflation from the late 90s to the early 2010s when they were last sold. In real terms they are about 20% cheaper than they were when my parents bought/sold them. Flyover suburbia is more affordable than it was 20-30 years ago. All major physical items are better and cheaper than they used to be. Netflix is cheaper and better than VCRs + rentals + expensive cable. The big difference is health care and college costs. But most people don't have huge medical bills and college is somewhat of a choice. The cost of living increase is largely driven by California, NYC, and Seattle. Pretty much every where else things are cheaper than they used to be.
  - TuringNYC 6y ago
    I dont quite agree. I dont think you can compare home to inflation only -- you have to also look at the income in that area as well as total cost. If incomes have also fallen, then the relative cost/income ratio may have remained the same (or as i'm proposing -- has increased.) As an example, there are depressed areas in flyover states where costs have indeed gone down. But incomes have gone down even more -- they are once thriving places like Binghamton NY which had industries that have since moved overseas. There is also the cost of healthcare, education, and retirement savings. My father benefited from a pension plan -- I have to save myself in a 401k. My father paid no employee premiums for healthcare, I pay about $900/mo for the family premium (before copays and coinsurance.)
leetcrew 6y ago
this is a variation of the "avocado toast" argument. if you go crazy and subscribe to amazon prime, a music streaming service, and several video streaming services, you're paying somewhere around $100/month. if instead you invested the $100 every month, you could expect to have an extra ~$200k (inflation adjusted) after forty years. that's not nothing, but it doesn't add a whole lot to your safe withdrawal rate in retirement (roughly $8000/year). if you're only able to save a couple hundred bucks every month, that extra $100 makes a big difference. if you're saving $1000+, your subscriptions aren't going to make or break your retirement; you need to dig into those bigger fixed costs to really move the needle.
- Gunax 6y ago
  We might be talking about different budget levels, but to normal people (people who don't have the word 'software' in their job title), 200k in retirement is a lot. Actually the median 401k balance at retirement is only around 60k, so that alone would quadruple their retirement savings.
  - leetcrew 6y ago
    yeah, I'm assuming most of the people on this forum have upper-middle salaries or will likely have them in the future. I mostly wrote the post with this audience in mind, though I think the bit about analyzing spending in relation to your savings rate is relevant to everyone. I am very fortunate to have the opposite "problem": I tend to be very stingy and waste a lot of time and energy trying to save amounts of money that just aren't very meaningful compared with my savings trend. unless you're unable to save anything at all, I think it is very important to strike a balance between saving for retirement and spending on stuff you enjoy in the moment. also minor addendum: someone with the median 401k savings might receive something close to the median social security payout of ~$15,500/year. since this is a guaranteed payment until end of life, this is like having >$375k in a retirement account at age 67. $200k is a meaningful amount to add to a $60k retirement account + social security payments, but it doesn't do anything close to quadrupling the person's safe spending capability. it's more like a 45% increase, which is still nothing to shake a stick at!

lordnacho 6y ago

> I chalk it up to things simply costing more. Every price is an exchange rate. If things cost more, it's because your income gets less stuff.