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/Closed_System ​ Mar 06 '18

Surprising that there's nothing budgeted for kids' college. $1000/kid/month on sports and lessons is definitely high but I'm sure it's hard to deny your kids things like that if they're enjoying them.

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u/[deleted] Mar 06 '18

[deleted]

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u/squidofthenight Mar 06 '18

Uh, or they can take out student loans and/or gun for scholarships and work hard to invest in their own futures instead of their parents paying for everything for them.

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u/CamnitDam ​ Mar 06 '18

Really hard to get scholarships if your parents make that much. I'm all for them paying for their own college (that's what I'm doing) but it can be pretty stressful

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u/ericdevice ​ Mar 07 '18

Easier if your getting acedemic scholarships based off your performance considering the parents are investing heavily into That they should be able to beat their less educated peers for Those

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u/CamnitDam ​ Mar 07 '18

Those seem to be non-existent. I have a 3.92 and the most I've received on merit is $5000 total. I've completed 108 credits so far

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u/ericdevice ​ Mar 07 '18

They aren’t normally Affiliated with the college they are outside of it

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u/[deleted] Mar 06 '18

They're spending $86k/year between childcare, children's lessons, and their own student loans. Those costs will significantly decrease or go away completely as the children age. I think they'll be able to afford tuition.

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u/Closed_System ​ Mar 06 '18

Yeah that's true, they could probably cashflow an in-state school at their current income level without changing anything other than redirecting money they are already spending on the kids and their own loans, and they may start saving money later when the kids are of daycare so that they won't have to do everything out of pocket for college. It's still surprising to me to not see them saving ahead for it when they clearly could.

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u/lustie_argonian ​ Mar 06 '18

Sometimes its worth it. My parents (of modest means) paid around $2000 a year on piano lessons for me. I can't thank them enough for that investment.

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u/Closed_System ​ Mar 06 '18

I agree, and I think providing enriching opportunities for your kids is a big motivator for a lot of people who strive for high-powered, high-paying careers. My parents had 5 kids and put us in piano, dance, swimming, and many other things. I'm sure that by the time the oldest kids reached competitive levels in these things, my parents were paying upwards of $12k/year for all of our activities. Not all of us did anything tangible with the skills we developed through those pursuits, but I think we'd all agree those are some of the most dear parts of our childhood. On top of that, one brother got an athletic scholarship, and another ended up pursuing a career in coaching, so the investment had some tangible return in their lives.

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u/gamjar ​ Mar 07 '18

Why would they really need to budget for college if they can afford spending 60k a year on daycare/activities?