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Here is the thing: All of this money as a whole amount makes the choice seem silly. What happens when you factor in cost of living is that the 10% starts growi
by agloeregrets 5y ago
Here is the thing: All of this money as a whole amount makes the choice seem silly.
What happens when you factor in cost of living is that the 10% starts growing incredibly fast.
If their current spend is 80% of their salary, then the 10% is actually a 50% post-expense difference. Suddenly that drive makes sense.
- tnorthcutt 5y agoThis is an interesting and thought-provoking way of framing this! I'd never thought of pay increases/decreases in these terms before (or not consciously), so thanks for sharing this.
- hyperpape 5y agoAlso, it is much easier to not start spending money, than it is to give up expensive habits that you've acquired. This goes double, once you're a family. Negotiating between partners and children about which things to cut back on is unpleasant. My advice (which I've followed imperfectly) is that if you have the income to make this reasonable, leave a cushion where you can handle setbacks without having to make the hard choices.
- omgwtfbbq 5y agoIf you're making 200K plus and spend 80% of your take home you've got serious issues.
- Rebelgecko 5y agoOn the other hand, if your marginal tax rate is 38%, a 10% pay cut will only cut your take home pay by around 4%.