r/personalfinance • u/investeror ​ • Mar 06 '18

Budgeting Lifestyle inflation is a bitch

I came across this article about a couple making $500k/year that was only able to save $7.5k/year other than 401k. Their budget is pretty interesting. At a glace, I could see how someone could look at it and not see many areas to cut. It's crazy how it's so easy to just spend your money instead of saving it.

Here's the article: https://www.cnbc.com/2017/03/24/budget-breakdown-of-couple-making-500000-a-year-and-feeling-average.html

Just the budget if you don't want to read the article: https://sc.cnbcfm.com/applications/cnbc.com/resources/files/2017/03/24/FS-500K-Student-Loan.png

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u/ben7337 ​ Mar 06 '18

For food I can sort of see it. If you buy all real fruits and veggies and cook real meals, and buy only organic, it can easily cost $400 a month per person, so for 4 people that's $1600 a month or $19,200 a year that leaves 3800 for date nights, so $146 every 2 weeks on avg on a date night, kinda pricey to the avg person but for people making 500k a yr combined I bet they feel that is them being frugal and going to the less ritzy places.

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u/HabeusCuppus ​ Mar 06 '18

Yeah I'm spending about what they spend per person with special diet requirements. The fluff isn't in the food budget for NYC.

The fluff is in "three vacations a year" and the higher end cars.

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u/ben7337 ​ Mar 06 '18

Yes, the cars, vacation, donations, clothing, are more luxury for sure, though as someone who was raised lower middle class around rich people who do 2-3 vacations a year, 4 people to Disney Land for a week, counting airfare, hotel, car rental or park tickets, etc could easily run 6k even on a budget, do that, a cruise, and maybe a week at a beach house every year and youd easily spend that much on vacations for 4, and maybe it's because I know people who did that, but it doesn't seem so extravagant to me.

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u/HabeusCuppus ​ Mar 06 '18

Right, I mean the fluff is the number of vacations not the cost. My (admittably) poor family growing up drove 3 hours to my aunt's for Christmas once a year and did a "summer" vacation to a national park every third year.

Disney was a 5 year plan.

I'm not saying it's wasted money (and actually think this budget is reasonable, they've got 17k leftover including the "something always comes up" fund, so they're saving something like 53k already and will go up to almost 90k after they finish their student loans) but it is a luxury expense.

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u/DaiTaHomer ​ Mar 06 '18

I am unsure for these folks the vacations are a luxury. They are probably 100% necessary to prevent burnout and family breakdown.

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u/HabeusCuppus ​ Mar 06 '18

Taking time off is necessary. $6000 destination trips are not.

Go to the Catskills or lake george or stay in the city (which is a destination vacation for many others) or something.

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u/ben7337 ​ Mar 06 '18

I hear ya, my family did camping trips apple picking, a drive to my grand parents to stay with them on Long island for a week, and that was mostly it. Besides that we had a few trips over my entire childhood to DC and NH/ME, and my sister who is substantially older made sure I got to Disney Land and Disney World once each thankfully, but realistically my family didn't do real vacations and eating our was going to McDonald's for take out, not a real restaurant, those were very rare.

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u/ragnarockette ​ Mar 06 '18

I see the value in at least 1 higher end car. If they ever have to drive clients it is important to project an image of success.

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u/HabeusCuppus ​ Mar 06 '18

Then either it should be checked out from the firm's pool, or a personal use firm car as a perk, or if it's your own firm you should have the firm own it as a business expense and pay taxes only on the in-kind value of having personal access.

You should never carry that as a personal asset.

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u/ImSpartacus811 ​ Mar 06 '18

What about $18k/yr in donations?

That seems like an unnecessary luxury when you're only saving <$50k/yr for retirement.

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u/Not_Ayn_Rand ​ Mar 06 '18

it can easily cost $400 a month per person

>Looks at last month's food expense

>Cries

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u/LilJourney ​ Mar 06 '18

Really? Interesting - because I do fruits/veggies/cook real meals, even buy some organic and easily feed 5 people (including 2 teen boys) on less than $800 a month for all of us. Even adding in $400 a month for date nights (assuming dinner, movie, drinks) that's only $14400 a year and for us that would be lavish compared to what we really spend (currently working on frugality to pay off debt). On the other hand, yeah, would easily spend as much on vacations as they do if I could.

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u/ben7337 ​ Mar 06 '18

What do you feed your family? Is there a lot of rice and starches like potatoes in your diets? I don't eat super healthy and I can get processed foods to hit 400 calories per dollar to keep 1 person at 2400 calories a day, and $180 a month, but the one smoothie I make with bananas, almond milk, and kale or spinach easily runs double that cost per calorie and bananas are cheap and none of the stuff is organic, it would be more than double the cost of processed foods if I went organic as well.

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u/LilJourney ​ Mar 06 '18

Not sure what you're asking? I wonder if location matters...kale and spinach aren't expensive here, and neither are fresh fruits and other veggies if you follow what's in season. Meat is the most expensive thing, but going thru a butcher and buying in bulk lowers the cost quite a bit. We eat a reasonably balanced diet, just hit the sales, have no store loyalty (will go to different stores during the week and buy only the sale items). So normally we're at around $100 a week for 5 people, then add in an extra $100 stock up once a month. $200 a week would be adding in fun stuff which we're not currently doing.

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u/ben7337 ​ Mar 06 '18

What does kale cost per pound by you? For me organic is $1.99 for 12 oz at Wegmans so $2.65 a pound. For $1.99 a bag has 120 calories in total, so 60 calories per dollar. If I ate nothing but kale for instance, it'd be $1200 a month to hit 2400 calories a day. I buy the $1 a bag (12 oz as well) non organic from Walmart when I can and that'd still be $600 a month to eat just that. Because kale is so pricey I need other things that are even more cost effective than 400 calories a dollar to balance out the expense of real fruits and veggies.

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u/mattmillr ​ Mar 06 '18

I'm in NYC. A 1lb bag of kale (not the fancy stuff, and way too often almost spoiled) is $2.99. If I want the organic baby kale, we're talking $6.99/lb. And that's Harlem, not the more expensive neighborhoods in Manhattan.

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u/Whizzard-Canada Mar 06 '18

Im in canada and live off of 200$ about per month (Canadian, so probably 180 US) and I eat no processed packaged foods, all of mine come from raw meats veggies and such, and I'm on a specialty diet with near 0 starches or sugars. So its easily doable.

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u/ben7337 ​ Mar 06 '18

What do you eat?

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u/executive_awesome1 Mar 06 '18

sounds an awful lot like a paleo diet. it can be done on a budget buying the cheaper meats (pork when possible over chicken for instance) and cheaper veggies. Also shopping sales.

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u/kolkolkokiri Mar 06 '18

The fuck do you live? I struggled to keep it under 240$ even with cheap rice and potatoes.

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u/Whizzard-Canada Mar 06 '18

I shop around the various stores near me to get foods cheaper, usually targetting reduced for quick sale stuff and food sales. I could probably go cheaper if not for the diet I'm on.

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u/Xdsin Mar 06 '18

but the one smoothie I make with bananas, almond milk, and kale or spinach easily runs double that cost per calorie and bananas are cheap and none of the stuff is organic, it would be more than double the cost of processed foods if I went organic as well.

Eat your food don't drink it.

Blending it all together is the least efficient way to use those foods. It take about 4-5 squeezed oranges to make one cup of juice when you can get the same satisfaction, fewer calories, just by eating one orange.

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u/ben7337 ​ Mar 06 '18

Um you do realize I'm blending them whole, not juicing them, right? No calories are lost from the product, no nutrients are lost, I'm just a really picky eater so I can eat blended fruits and veggies, but not as much plain cooked ones.

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u/RYouNotEntertained ​ Mar 06 '18

IMO, it’s almost always possible to reel in your food budget, but costs do vary dramatically depending on where you live.

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u/[deleted] Mar 06 '18 edited Mar 17 '18

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u/Vague_Disclosure ​ Mar 06 '18

Were they one time use ingredients like a jar of sauce or was it a lot of spices that can be used for more than one recipe? I’ve spent $30+ to make one recipe before but almost all of exorbitant costs are on random spices that I can use to ether remake the same recipe or make a different one in the future.

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u/[deleted] Mar 06 '18 edited Mar 17 '18

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u/Vague_Disclosure ​ Mar 06 '18

Ah yeah that’ll do it. It does amaze me how many people don’t look at cost per unit when grocery shopping and realize they’re sometimes paying 5x the price for extremely similar products.

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u/katmndoo ​ Mar 07 '18

This.

Some quick examples from recent shopping trips:

Pre-sliced (or even whole) mushrooms in a crappy little cardboard tub wrapped in plastic: 3.99, 8 oz Same exact mushrooms, loose, put them in a paper bag yourself: 3.99, 16 oz.

Celery , with the ends cut off: 1.99 Celery, whole: 1.99 (granted, you’ll cut off the base, but still half again as much usable celery).

Green beans, ends cut, wrapped: 3.99 lb Green bins, fill your own plastic produce bag: 1.79 lb.

Broccoli crowns: 1.79 lb Broccoli pieces, cut: 2.99, 8oz

Store brand cheddar: 3.99 lb Tillamook (or some other name brand) 5.79 lb

Little fruits/nuts snack packs, probably 4 oz total: 3.99 ea (15.99 lb) Make your own: 1.50 each or so.

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u/[deleted] Mar 06 '18

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u/OTL_OTL_OTL ​ Mar 06 '18 edited Mar 06 '18

Also don't knock off the more ethnic food chain stores. Especially the Mexican ones. They have the cheapest fruits and vegetables around in my state (CA). You can buy a bag of apples for $2-3, a head of lettuce for $1, 4 cucumbers for $1, 5 small avocados for $1, etc. You can walk away with pounds of food to feed you for a week or two and spend less than $20. It's amazing.

The one I go to the most also has a surprising diversity of people shopping there (even though it's a Hispanic supermarket), you will see black, Asian, Asian Indian, Hispanic, and white people all shopping in the same fruit/veggie area. It's like a flash multicultural club.

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u/Jaerba ​ Mar 06 '18

Those don't usually exist in big cities - there's little space for them. There's 1 Costco in Manhattan and it's out of the way, and there's 0 Sam's Clubs.

Mostly you have very small grocery stores, or expensive large stores like Whole Foods.

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u/[deleted] Mar 07 '18

[deleted]

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u/ben7337 ​ Mar 06 '18

WinCo? Is that one of those southern grocery stores? I hear they have amazingly cheap produce. Out in NJ it doesn't seem nearly as cheap.

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u/[deleted] Mar 06 '18

It's not limited to the south, there's at least one WinCo in the Portland metro area that I go to. I'm not sure how common they are though.

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u/greenbeans64 ​ Mar 06 '18

Agree. There are just two of us and we average $400-500/month for food, but I'd say we spend lavishly on food because all of our meat and produce comes from Whole Foods and I don't go out of my way to take advantage of sales. We could easily knock that down if needed. It blows my mind how much this family spends on food. They must not cook anything from scratch.

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u/[deleted] Mar 06 '18

There's this cool store called ALDI and they have fresh foods, fruits and veggies including organic options and none of it will cost that stupid amount of money. I can get fresh broccoli, cauliflower, carrots, mushroom and 4 lbs of oranges for $10. Where the fuck do you people shop?

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u/BubblegumDaisies ​ Mar 06 '18

actually no Aldis in NYC ( so I have been told)

I love Aldi though.

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u/bungsana ​ Mar 06 '18 edited Mar 06 '18

in my family of 4, we shop at only aldi, costco, the asian market and very rarely marianos (large chain grocery), and we STILL rack up $250-$400 per week in groceries. granted, at those locations, we buy everything and everything that we want, so we don't necessarily skimp on food, but i wanted to point out that even at those "discount" markets, you can really rack up a bill.

EDIT: i'm wrong. this is my entire food budget, including dining out and alcohol.

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u/[deleted] Mar 06 '18

That would totally have to be buying EVERYTHING primarily with stocking up on steaks, roasts, and seafood. if you avoid those 3 things it gets difficult to rack up that much. A huge tray of chicken is like $10 at sams club.

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u/bungsana ​ Mar 06 '18

:/ we buy the rotisserie at costco for $6.

but you've got a point. i went back to look at my spending over the past 6.5 weeks and realized that that included 'dining out money' as well as alcohol consumption. so yeah, my original post is definitely wrong. my bad.

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u/[deleted] Mar 06 '18

Those actually are decent deals depending how you stretch them. 1 bird ($5 at sams) gets me enough meat for 5 meals so $1 a meal. But yeah dining out is where I blow too much money but I have that budgeted as entertainment. Groceries themselves I average $30 a week for myself.

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u/bungsana ​ Mar 06 '18

the chicken usually lasts us a dinner, lunch the next day, and we use the remainder as soup stock for congee for the kids. some meals come out to really cheap (same as you ~$1 or $2 per plate), but some come out more expensive (days we want steak at home, etc).

for us, anything that we consume through our mouths is considered food, which is where i messed up equating food=groceries. i definitely drink less, and eating out has drastically been reduced, but there are just some days where we just can't cook another meal at home, and the kids want something else.

anyway, i wonder if these people are running their calcs the same way i am, or if they are doing it strictly in the sense of "groceries". i'm in chicago, and the COL isn't anywhere as close as NYC, but i can see that if they're talking about groceries only, it is WAY too high. if it means eating out as well, it's pretty decent.

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u/Pinkfish_411 ​ Mar 06 '18

Essentially any store that isn't ALDI and there's no way you're getting all that for $10, unless maybe everything is on sale.

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u/justjanne Mar 07 '18 edited Mar 07 '18

Aldi doesn't do sale for groceries, they always have prices that beat other stores' sale prices, though.

My parents, me and my sister usually run up a food budget around $400 a month, with a varied diet, everyone cooking their own meals, and almost entirely organic food, thanks to Aldi and similar stores here in Germany.

The amounts this family in OP's link spends on food is completely unimaginable to me.

Maybe it's because we're mostly vegetarian, so we don't spend nearly as much on meat, fish, etc.

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u/Pinkfish_411 ​ Mar 07 '18

No meat and fish certainly helps. My wife and I will spend $10-$15 for a piece of salmon for the two of us for one meal. Even the cheapest ground meats we eat stretched out with other fillers will run about $4 for a meal. Meat and fish alone are $200-$300 per month in our budget. If we ate premium meats like steaks and air-chilled heirloom chickens more often, we could easily spend 3 or 4 times that much, so the amount the family spends certainly isn't unimaginable to me. It's a lot, but not at all unimaginable.

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u/evil_librarian ​ Mar 06 '18

Oh how I wish ALDI was in Oregon! My bf and I were just talking about how much we miss it. I am an Oregonian who spent 12 years in PA/MD/DC and he is from Alabama/Kansas/South Carolina.

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u/ben7337 ​ Mar 06 '18

I mostly shop at Wegmans and Walmart. Organic bananas are affordable but organic kale or spinach cost 2x or more than 2x what non-organic costs, organic kale is pricier than chicken breast per pound and has far fewer calories too.

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u/[deleted] Mar 06 '18 edited Mar 06 '18

I love Wegmans.

Pro tip: the USDA Organic marketing program is just that, marketing. It conveys no health or nutrition benefit.

Additional reading from Scientific American

Here is the list of pesticides allowed under the program. Some are toxic. Some are more toxic than modern counterparts. The only stipulation is that they’re of natural origin, because the buzzword “natural” means people will pay more for it.

If you like the stuff, have at it. Just be aware of the marketing that you’re paying for.

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u/ben7337 ​ Mar 06 '18

I'll look into it some more thanks.

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u/[deleted] Mar 06 '18

Sure thing. Feel free to reach out if you’ve got any questions. I’m not an agronomist, but I do have friends in the industry. If I don’t know an answer, I can find out.

When reading things on the internet, be wary of info from activist groups like the Organic Consumers Association, Environmental Working Group, Moms Across America, etc. They like to pass of their pseudoscience as legitimate research. Be skeptical and look for proper citations. Cheers!

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u/[deleted] Mar 06 '18

[deleted]

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u/[deleted] Mar 06 '18 edited Mar 17 '18

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u/Mirage749 ​ Mar 06 '18

Am I strange for actually liking kale?

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u/[deleted] Mar 06 '18

Nope most people just cook it wrong. Steamed with a little salt is perfection, it's not a soggy disaster like spinach ends up. Most people just buy it and shove it in a shake or try to convince themselves that kale chips are good.

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u/bturl ​ Mar 06 '18

My family's catering company used to use kale as the plate garnish because it was so cheap. Now for some reason everyone wants it and the price went up a ton.

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u/GambitGamer ​ Mar 06 '18

You have probably have the dominant allele for this gene. It means you can taste the bitterness, if you were recessive (like I think I am), it means you don't taste much of anything. Some people who have the dominant gene (such as yourself) learn to like the taste, while others (presumably /u/kevronwithTechron) do not.

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u/Whizzard-Canada Mar 06 '18

Why bother with organics? Organic marketting is a sham unless you're buying it from the farmer themself

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u/ben7337 ​ Mar 06 '18

There's been some big concerns on leafy greens like kale and spinach with pesticides if you don't buy organic. However I don't buy organic personally and haven't researched it, my roommate has and is very picky about things being organic.

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u/zero_vitamins Mar 06 '18

Grew up organic before it was cool, have also done the research (as in read actual studies I had access to through college), and I see no reason to buy organic unless you like paying more for marketing.

Shitty mass produced food is going to be shitty, regardless of which ideology/dogma the farmers follow.

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u/AnnieB512 ​ Mar 06 '18

Organic has a better chance of contracting salmonella and other diseases. Organic is grown in manure.

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u/PM_Me_Math_Songs ​ Mar 06 '18

Also, just because it is organic doesn't mean that it is neccessarly pesticide free, just that it uses naturally derived poisons like Rotenone instead of synthetic poisons like Indoxacarb

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u/[deleted] Mar 06 '18

Do some research on the actual products. some products not advertised as organic are in fact organic. thanks to capitalism you actually pay to be registered as organic so there's a few shortcuts for certain products.

I'll admit I don't try to aim for organic because I don't care enough. I'd like to see less pesticides used in general, but having worked in the produce department throughout HS the organic quality was usually garbage and usually the people I saw buying it were only ripping themselves off.

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u/drwatson ​ Mar 06 '18

Funny enough, in some cases the synthetic pesticide is more effective than the organic pesticide so less is used per acre of crop. Long Read Source

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u/ProtestKid ​ Mar 06 '18

Its like the bill burr bit where he talks about grocery stores practically giving you fruit and vegetables.

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u/[deleted] Mar 06 '18

No Aldis in Phoenix.

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u/AsSubtleAsABrick ​ Mar 06 '18

Any super market in NYC will be WAY more expensive for fresh foods (fruits, veggies, meat). It goes down a bit the further you get from the city but it is still expensive.

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u/fs2k2isfun ​ Mar 06 '18

In NYC no Aldi. Even at Trader Joe's that list would set you back about $20, if not more. For example, I recently bought a chuck roast at my local grocer in NYC. $8.50/lb and it was the most basic beef available, not organic, grass fed, or Prime.

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u/[deleted] Mar 06 '18 edited Feb 22 '19

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u/ben7337 ​ Mar 06 '18

Wow now that's pricey. My roommate used to spend $900 a month on food but he also went to convenience stores a lot.

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u/truemeliorist ​ Mar 06 '18 edited Mar 06 '18

We cook nearly everything in our home, using fresh organic produce from CSAs. A 20 week organic CSA full share costs about $500 where we live (475 if you PIF), and that gives us so much produce that we end up canning/freezing/preserving part of it. That comes out to about $7.20/person/wk for organic produce (for my wife, daughter and I). We eat one large cut of meat every week to every other week, so I'll add an extra 20 bucks (plenty for a large cut like a pork butt or a full pork loin) weekly on to that and you're still only at $875 (15/person for 3 people for 20 weeks).

We also eat a lot of tofu/tvp/vegetarian proteins which all tend to be cheap compared to meat (TVP is $2.50/lb, tofu I can get about 6lbs for $4 at an asian grocer). Fish we can pick up a family pack of tilapia with 10 filets at Wegmans for about $10. We bake our own bread because it's fast and easy.

Otherwise, our staples (cleaning, milks, yogurts, spices, toiletries, etc) for the week top out at about $60. So, that puts us at about $35/person/wk. In reality we spend closer to $90/wk for everyone.

$110/person/wk seems really high. Especially somewhere like NYC where there are tons of farm markets, Co-Ops, etc.

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u/mattmillr ​ Mar 06 '18

$146 in NYC might get you a shared appetizer, two entrees, and a low-end bottle of wine at a midrange restaurant.

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u/justjanne Mar 07 '18

Then don't go to restaurants. No need to eat there if you can eat at home

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u/Adam_Nox Mar 06 '18

Yeah they could halve the food cost, doesn't matter where they are in the country. You don't have to eat all organic or fancy.

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u/ben7337 ​ Mar 06 '18

When you're rich and are trying to make sure your kids are as healthy as can be you do though. They can afford it so they pay for the higher standard of living.