16 ms·

“House poor” was typically having to pay at least 25% of your take-home income on housing.

gambiting 4y ago
Sure but obviously that number needs some common sense, right. To make a clearly ridiculous example - if you were making 100k a month and paying 25k for rent you wouldn't be poor in any possible meaning of that word. If you bring home 6k a month after taxes, and after rent you're left with 4.5k, I'd also argue that's not "barely making ends meet". That leaves a very comfortable breathing room that is unimaginable luxury for most of the world.
- llbeansandrice 4y ago
  Now add on: - All forms of insurance - saving for retirement - Rising food costs - Any Healthcare expenses - Car costs - Child care - Subscriptions (phone, internet) - Utilities All in Seattle
  - deleted 4y ago
    [deleted]
  - gambiting 4y ago
    If you can't fit all of that in four and a half thousand dollars then I don't know what to tell you. I'll repeat myself - someone who has 4.5k left after paying rent is not struggling to make ends meet by any definition of the word, in Seattle or elsewhere.
    - pertymcpert 4y ago
      Ummm childcare is like 2k a month.
      - gambiting 4y ago
        Ok, that leaves another 2.5k to use. Once again, that's not struggling to make ends meet.
        AstralStorm 4y ago
        That's assuming you do not want to save anything, or a medical emergency does not wipe you out. Or a car crash. Or any other utterly forseeable common event. This is called precariousness, not comfort.
        gambiting 4y ago
        Again, nothing to do with struggling to make ends meet. By going further with your argument you aren't fully comfortable until you can cover any possible event that might happen, since a dire enough event will exhaust any possible amount of savings you could have unless you're a billionaire. Medical emergencies and car crashes are covered by insurance for nearly everyone, if you make that much money I would think you have appropriate policies in place.
        pertymcpert 4y ago
        I don't think you have kids (especially infants/young ones) because in a high cost of living area, 2.5k a month is HARD. You can do that in Europe, not in the US. Those situations also happen, they're not black swan events. My current medical plan for my family has a deductible of $3k. Every year we end up hitting that number. That's excluding the actual premiums which are deducted from your pay. Do you have ANY idea what you're talking about?
        pertymcpert 4y ago
        Ah I just realized you're in the UK. I'm also from the UK but live in California. Now it all makes sense! I agree that 4.5k after tax is fine to live on in the UK. Here in the US where a carton of basic eggs cost $6+, a box of standard brand milk costs $4/5, that $2.5k is going to disappear pretty fucking quickly. I was astounded at how expensive it was here. Even in London, you could buy Warburtons for £1.30 or so back when I moved a few years ago. 1L of Cravendale (I liked the good stuff) was still £1 IIRC. Now it's like £1.30? Still, way cheaper.
      - sunnynuts 4y ago
        I live in the Seattle area, please direct me to where I can find child care for 2k a month without a 1 year+ waiting list... please?!?
        pertymcpert 4y ago
        I was trying to average it out across the low COL areas :). But here in the Bay Area, for 2Y+ you can find daycares for that amount. Also home day cares are also an option and they tend to be between 1.5-2k a month. When you're looking for <2Y care though? That fucking sucks, because of the (understandable) ratio laws, prices are high 2ks to 3k here.
    - Forgeties79 4y ago
      $4500/mo for everything after the roof over your head is not enough. Living alone? Probably, assuming you have no major debt and are in great health/have no emergencies. 2 of you? Maybe. Definitely not putting anything away for later that’s for sure. Better not have any emergencies. Kids? No way. $4500/mo after paying for your home basically leaves little room for error or, frankly, joy in your life. Can't take trips, can't have pets, can't donate to causes, can't go out to eat much or anywhere nice, etc. We aren't supposed to just work/eat/sleep, we need something to look forward to, we need to be able to weather financial emergencies, and we need to be able to save for later.
      - gambiting 4y ago
        >>$4500/mo after paying for your home basically leaves little room for error or, frankly, joy in your life. Can't take trips, can't have pets, can't donate to causes, can't go out to eat much or anywhere nice, etc None of this is "struggling to make ends meet". I've seen this before though - people make good money, have a place to live, make payments for a nice car, have enough to put food on the table, to pay for their energy bills, to send their kids to school/childcare, and yet they will say they are barely hanging on because they can't save a lot every year or go on holidays. Like, I really sympathise, but that's not barely making ends meet. 4.5k after rent is enough to live on almost anywhere in the world.
        deleted 4y ago
        [deleted]
        Forgeties79 4y ago
        We are talking about the United States. Not “anywhere in the world.” I find those arguments very frustrating because I don’t really feel like I should have to say that. We are not talking about somewhere where $10 can last you a week.
  - hahla 4y ago
    Most of these costs (saving for retirement, insurance, subscriptions, car) would be consistent across the US and is not unique to Seattle. $100k in a very expensive city is not much by any means, however what's more concerning is the costs you outlined are consistent and rising for even those living in LCOL or making even less than $100k.
- nottathrowaway3 4y ago
  >If you bring home 6k a month after taxes, and after rent you're left with 4.5k, I'd also argue that's not "barely making ends meet". That leaves a very comfortable breathing room that is unimaginable luxury for most of the world. Another aspect of this issue is that, when you take out a typical mortgage, you take a 4-5x leveraged long position on real estate. Rent for a nice 1br in Seattle area is $2K, but the hidden aspect is the landlord is holding the RE risk on your behalf. Even if mortgage was $1K/mo, I would rather rent (which I do) to avoid this risk in volatile, tech-dependent area like Seattle.
  - pertymcpert 4y ago
    That's true about the risk, however before the recent spike in rates, that leverage was ultra-cheap.
    - nottathrowaway3 4y ago
      >however leverage was ultra-cheap In nominal dollars yes... but the downside risk was the true cost. Get in at a low rate and comfortably afford it, then you're doing great despite maybe being underwater for now. But default while underwater and lose whatever you put down plus the difference in price. TINFA but, exposure to real estate is generally/historically a good hedge to keep pace with wage inflation. I disagree with OP; getting in before rate hikes wasn't necessarily a mistake. But mortgages work the same way that ESPPs and RSU grants work, banks/companies/governments hedge downside risk by convincing a whole bunch of people to be long on a stock (or real estate).
- whateveracct 4y ago
  $90k salary and $2k rent was my situation when I moved to Seattle many years ago. It definitely was comfortable. My wife was able to also get comparable work and that money wasn't at all needed to help make ends meet, so it went right into student loans and those got paid right quick. I moved from the Midwest and people warned me about the CoL etc. But you just gross more even if the apartment etc is a bigger percent. And cash is king especially if you have debt or just like buying nice things or both.
judge2020 4y ago
"was"? When? Federal DTI maximum for mortgages is 45% with a good credit score and/or cash reserves. For apartment complexes, they typically won't lease, or will require a bigger deposit, if your gross monthly income isn't 3x the rent (which typically means it's 40%+ of your net income). If 25% 'was' house poor, then at least 90% of today's mortgage-holding and rent-paying Americans are house poor.
- t-writescode 4y ago
  Yes. Correct.

Sure but obviously that number needs some common sense, right. To make a clearly ridiculous example - if you were making 100k a month and paying 25k for rent you wouldn't be poor in any possible meaning of that word. If you bring home 6k a month after taxes, and after rent you're left with 4.5k, I'd also argue that's not "barely making ends meet". That leaves a very comfortable breathing room that is unimaginable luxury for most of the world.

llbeansandrice 4y ago
Now add on: - All forms of insurance - saving for retirement - Rising food costs - Any Healthcare expenses - Car costs - Child care - Subscriptions (phone, internet) - Utilities All in Seattle
- deleted 4y ago
  [deleted]
- gambiting 4y ago
  If you can't fit all of that in four and a half thousand dollars then I don't know what to tell you. I'll repeat myself - someone who has 4.5k left after paying rent is not struggling to make ends meet by any definition of the word, in Seattle or elsewhere.
  - pertymcpert 4y ago
    Ummm childcare is like 2k a month.
    - gambiting 4y ago
      Ok, that leaves another 2.5k to use. Once again, that's not struggling to make ends meet.
      - AstralStorm 4y ago
        That's assuming you do not want to save anything, or a medical emergency does not wipe you out. Or a car crash. Or any other utterly forseeable common event. This is called precariousness, not comfort.
        gambiting 4y ago
        Again, nothing to do with struggling to make ends meet. By going further with your argument you aren't fully comfortable until you can cover any possible event that might happen, since a dire enough event will exhaust any possible amount of savings you could have unless you're a billionaire. Medical emergencies and car crashes are covered by insurance for nearly everyone, if you make that much money I would think you have appropriate policies in place.
        pertymcpert 4y ago
        I don't think you have kids (especially infants/young ones) because in a high cost of living area, 2.5k a month is HARD. You can do that in Europe, not in the US. Those situations also happen, they're not black swan events. My current medical plan for my family has a deductible of $3k. Every year we end up hitting that number. That's excluding the actual premiums which are deducted from your pay. Do you have ANY idea what you're talking about?
        pertymcpert 4y ago
        Ah I just realized you're in the UK. I'm also from the UK but live in California. Now it all makes sense! I agree that 4.5k after tax is fine to live on in the UK. Here in the US where a carton of basic eggs cost $6+, a box of standard brand milk costs $4/5, that $2.5k is going to disappear pretty fucking quickly. I was astounded at how expensive it was here. Even in London, you could buy Warburtons for £1.30 or so back when I moved a few years ago. 1L of Cravendale (I liked the good stuff) was still £1 IIRC. Now it's like £1.30? Still, way cheaper.
    - sunnynuts 4y ago
      I live in the Seattle area, please direct me to where I can find child care for 2k a month without a 1 year+ waiting list... please?!?
      - pertymcpert 4y ago
        I was trying to average it out across the low COL areas :). But here in the Bay Area, for 2Y+ you can find daycares for that amount. Also home day cares are also an option and they tend to be between 1.5-2k a month. When you're looking for <2Y care though? That fucking sucks, because of the (understandable) ratio laws, prices are high 2ks to 3k here.
  - Forgeties79 4y ago
    $4500/mo for everything after the roof over your head is not enough. Living alone? Probably, assuming you have no major debt and are in great health/have no emergencies. 2 of you? Maybe. Definitely not putting anything away for later that’s for sure. Better not have any emergencies. Kids? No way. $4500/mo after paying for your home basically leaves little room for error or, frankly, joy in your life. Can't take trips, can't have pets, can't donate to causes, can't go out to eat much or anywhere nice, etc. We aren't supposed to just work/eat/sleep, we need something to look forward to, we need to be able to weather financial emergencies, and we need to be able to save for later.
    - gambiting 4y ago
      >>$4500/mo after paying for your home basically leaves little room for error or, frankly, joy in your life. Can't take trips, can't have pets, can't donate to causes, can't go out to eat much or anywhere nice, etc None of this is "struggling to make ends meet". I've seen this before though - people make good money, have a place to live, make payments for a nice car, have enough to put food on the table, to pay for their energy bills, to send their kids to school/childcare, and yet they will say they are barely hanging on because they can't save a lot every year or go on holidays. Like, I really sympathise, but that's not barely making ends meet. 4.5k after rent is enough to live on almost anywhere in the world.
      - deleted 4y ago
        [deleted]
      - Forgeties79 4y ago
        We are talking about the United States. Not “anywhere in the world.” I find those arguments very frustrating because I don’t really feel like I should have to say that. We are not talking about somewhere where $10 can last you a week.
- hahla 4y ago
  Most of these costs (saving for retirement, insurance, subscriptions, car) would be consistent across the US and is not unique to Seattle. $100k in a very expensive city is not much by any means, however what's more concerning is the costs you outlined are consistent and rising for even those living in LCOL or making even less than $100k.
nottathrowaway3 4y ago
>If you bring home 6k a month after taxes, and after rent you're left with 4.5k, I'd also argue that's not "barely making ends meet". That leaves a very comfortable breathing room that is unimaginable luxury for most of the world. Another aspect of this issue is that, when you take out a typical mortgage, you take a 4-5x leveraged long position on real estate. Rent for a nice 1br in Seattle area is $2K, but the hidden aspect is the landlord is holding the RE risk on your behalf. Even if mortgage was $1K/mo, I would rather rent (which I do) to avoid this risk in volatile, tech-dependent area like Seattle.
- pertymcpert 4y ago
  That's true about the risk, however before the recent spike in rates, that leverage was ultra-cheap.
  - nottathrowaway3 4y ago
    >however leverage was ultra-cheap In nominal dollars yes... but the downside risk was the true cost. Get in at a low rate and comfortably afford it, then you're doing great despite maybe being underwater for now. But default while underwater and lose whatever you put down plus the difference in price. TINFA but, exposure to real estate is generally/historically a good hedge to keep pace with wage inflation. I disagree with OP; getting in before rate hikes wasn't necessarily a mistake. But mortgages work the same way that ESPPs and RSU grants work, banks/companies/governments hedge downside risk by convincing a whole bunch of people to be long on a stock (or real estate).
whateveracct 4y ago
$90k salary and $2k rent was my situation when I moved to Seattle many years ago. It definitely was comfortable. My wife was able to also get comparable work and that money wasn't at all needed to help make ends meet, so it went right into student loans and those got paid right quick. I moved from the Midwest and people warned me about the CoL etc. But you just gross more even if the apartment etc is a bigger percent. And cash is king especially if you have debt or just like buying nice things or both.

judge2020 4y ago

"was"? When? Federal DTI maximum for mortgages is 45% with a good credit score and/or cash reserves. For apartment complexes, they typically won't lease, or will require a bigger deposit, if your gross monthly income isn't 3x the rent (which typically means it's 40%+ of your net income). If 25% 'was' house poor, then at least 90% of today's mortgage-holding and rent-paying Americans are house poor.

t-writescode 4y ago
Yes. Correct.