6 ms·

What I'm saying is that the metric of 'happiness' to determine whether a salary is enough or not is flawed. In most major cities, $75k is simple not enough to

by daeken 14y ago

What I'm saying is that the metric of 'happiness' to determine whether a salary is enough or not is flawed. In most major cities, $75k is simple not enough to live well, save for major purchases, and put away enough money to retire. The reason that 'happiness' isn't good here is that most people don't understand how much they actually need to save for the short and long term, but rather look at their bills and extrapolate from there. In other words, it's happiness in the short term ("are my bills covered and am I able to go out to dinner occasionally?") at the expense of the long term big picture.

Evbn 14y ago
And yet this woefully imprecise factoid getsa resputtered every 3 mmonths like it's some major revelation, even though it is completely obvious that everyone who can count can figure out how much is the cost of a middle class lifestyle plus retirement plus college for kids.
- pwthornton 14y ago
  You guys are making the US tax code out to be much simpler than it is. The more you save for retirement, the lower your taxable income is. We also have deductions for mortgage interest and student loan interest. Our system is also progressive, so a lot of people making less money have very little taxable income. Maybe you make $90,000 a year and can't fathom how someone could live off of and save off of $75,000 a year, but the difference in your take home pay is not $15,000.
  - malandrew 14y ago
    Yup. IIRC a former roommate of mine has a plan on how to get every deduction under the sun to the maximum amount and it is actually possible to pay no taxes on like $100k, but it requires putting something like $40k towards savings each year.
    - pwthornton 14y ago
      Yes, and there are deductions for charity and this and that. And some of these deductions start to phase out with the more money you make. The point is that you can't take two people's incomes and assume you know what their tax bills will be.
pwthornton 14y ago
A lot of people end up married, and when you put two $75,000 salaries together, it can make living and saving much easier. Unmarried people in big cities often have roommates, which makes it much easier to save and pay off debt. When I first moved to the DC area, I had three roommates and paid around $500 a month in rent and had no car. Let's also not forget that around half the people in New York do not pay market rate for their rent. Talking about income and rent in NYC is more complicated than this thread would lead you to believe. And if you live in a major city, you often have significantly lower transportation costs. Yes rent is high in urban areas, but transportation costs are very low. The two should be added together to compare cost of living between two areas.
- Domenic_S 14y ago
  > And if you live in a major city, you often have significantly lower transportation costs. Yes rent is high in urban areas, but transportation costs are very low. Eh? MTA: $104/month, unlimited Muni: $74/month, "A" pass CTA: $100/month, unlimited You can buy a car for $150/month, and call it another $200 for gas/insurance, so $350 total. The rent difference is way more than $350/month for an equal size/quality place. Then consider all the other costs of urban living, like high sales tax: SF: 8.5%, Auburn: 7.5% NYC: 8.88%, Westchester: 7.38% (!)
  - tedunangst 14y ago
    You forgot $300/month for a parking spot for your car.
  - pwthornton 14y ago
    I highly doubt the average car payment is anywhere near $150 a month. That's really low for even a lease, let alone actually trying to own it outright. And you're completely forgetting maintenance and repairs (oil, tires, batteries, lights, environmental checks, repairs). Even a modest car is probably at least $500 a month with everything added together, and from what I've seen, a lot of people can't make do with a modest car. And then if you lose your job, you have no defined transportation expenses. Lose your job and you still owe all of that money for your car payment, insurance and whatever else. And again, many of us are married. Needing multiple cars, gas, parking for two people (or additional cars for kids stuck in the middle of nowhere) starts to ad up.

by daeken 14y ago

Evbn 14y ago

And yet this woefully imprecise factoid getsa resputtered every 3 mmonths like it's some major revelation, even though it is completely obvious that everyone who can count can figure out how much is the cost of a middle class lifestyle plus retirement plus college for kids.

pwthornton 14y ago
You guys are making the US tax code out to be much simpler than it is. The more you save for retirement, the lower your taxable income is. We also have deductions for mortgage interest and student loan interest. Our system is also progressive, so a lot of people making less money have very little taxable income. Maybe you make $90,000 a year and can't fathom how someone could live off of and save off of $75,000 a year, but the difference in your take home pay is not $15,000.
- malandrew 14y ago
  Yup. IIRC a former roommate of mine has a plan on how to get every deduction under the sun to the maximum amount and it is actually possible to pay no taxes on like $100k, but it requires putting something like $40k towards savings each year.
  - pwthornton 14y ago
    Yes, and there are deductions for charity and this and that. And some of these deductions start to phase out with the more money you make. The point is that you can't take two people's incomes and assume you know what their tax bills will be.

pwthornton 14y ago

A lot of people end up married, and when you put two $75,000 salaries together, it can make living and saving much easier. Unmarried people in big cities often have roommates, which makes it much easier to save and pay off debt. When I first moved to the DC area, I had three roommates and paid around $500 a month in rent and had no car. Let's also not forget that around half the people in New York do not pay market rate for their rent. Talking about income and rent in NYC is more complicated than this thread would lead you to believe. And if you live in a major city, you often have significantly lower transportation costs. Yes rent is high in urban areas, but transportation costs are very low. The two should be added together to compare cost of living between two areas.

Domenic_S 14y ago
> And if you live in a major city, you often have significantly lower transportation costs. Yes rent is high in urban areas, but transportation costs are very low. Eh? MTA: $104/month, unlimited Muni: $74/month, "A" pass CTA: $100/month, unlimited You can buy a car for $150/month, and call it another $200 for gas/insurance, so $350 total. The rent difference is way more than $350/month for an equal size/quality place. Then consider all the other costs of urban living, like high sales tax: SF: 8.5%, Auburn: 7.5% NYC: 8.88%, Westchester: 7.38% (!)
- tedunangst 14y ago
  You forgot $300/month for a parking spot for your car.
- pwthornton 14y ago
  I highly doubt the average car payment is anywhere near $150 a month. That's really low for even a lease, let alone actually trying to own it outright. And you're completely forgetting maintenance and repairs (oil, tires, batteries, lights, environmental checks, repairs). Even a modest car is probably at least $500 a month with everything added together, and from what I've seen, a lot of people can't make do with a modest car. And then if you lose your job, you have no defined transportation expenses. Lose your job and you still owe all of that money for your car payment, insurance and whatever else. And again, many of us are married. Needing multiple cars, gas, parking for two people (or additional cars for kids stuck in the middle of nowhere) starts to ad up.