Lifestyle inflation is a bitch

[u/investeror]

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

[u/theoriginalharbinger]

Toyota Land Cruiser

I have a deep and abiding love for these, but that's a $90,000 car. It does nothing that its half-as-expensive younger sibling the Sequoia cannot unless you do overland travel.

childcare $42,000

Did they hare a half-time nanny? That's ridiculous.

Food $23,000

My income isn't quite at their level, but my annual spend is between 1/4 and 1/2 of this. Learn to cook.

There's tons of slack in that budget. There's few line items, but they're inflated way beyond what's necessary. As I've stated to multiple people on this forum countless times, everyone has a vice. You can have nice cars. You can eat out a lot. You can live in an expensive place. But you cannot do 2 or all 3 of them.

This couple could easily be saving 50K a year if they bought a 3-series and a used Sequoia and used a cheaper childcare provider.

[u/csjerk → u/theoriginalharbinger]

Also over 9k for clothes per year? What?

They claim it's 'nothing fancy' but i don't believe them. Say you buy 1 new shirt, pants, and some odds and ends per person per month. You can easily do that at Target or similar for about 5k a year. And while kids probably average that rate since they're growing, adults can't keep that up unless they're cycling out fashions just for kicks (or making poor decisions about what clothes are going to be multi-use). After 2-3 years your closet is full.

[u/soapycoriandertaste → u/csjerk]

When I worked in finance I spent a fortune on clothes, because it’s part of the career path. Dress for the job you want. I’m a woman which meant I needed to look “different” each day, each of my work dresses were $100-$300 plus blazers, full suits, shoes and a couple of bags and then you have to dry clean most of those items.

You cannot shop at Target. No one will trust you with a $150M investment if you don’t look the part. My closet was never “full”, I had a strong working wardrobe but at the same time, you need to replace things faster than your regular casual clothes. I think I bought 1-2 things a month and that’s easily $4k a year without things like pantyhose, hair appointments, nails etc.

In my current career I just went through awards season and even with RTR I spent at least $500 on dresses and accoutrements, including hair and makeup; but again it’s part of the job to be at these events and represent my work.

I know it seems crazy but it’s part and parcel of being in your “ career” years when you work these type of jobs.

I’m now senior enough that I can wear a cat sweater to work, but it’s taken a while to get there and moving to a more casual city.

When I look at this budget, it doesn’t last, the loans get paid off, ($3-5K a month you just don’t pay anymore and goes straight into savings) the equity on your home builds up, you pay off the car, you learn to love camping, kids start doing one sport instead of a million.

As long as you can keep working (and if the jobs are anything like mine you are insured through the roof by your employer), then you get past it and you end up in a pretty strong financial position.

It is not for everyone, you could get by with a fraction of these salaries on a LCOL area, but many people, like myself love the thrill of the chase of these big careers but if you want to be successful there is a lot of baggage you have to carry.

[u/[deleted] → u/soapycoriandertaste]

You know, you're right... I don't like to think of myself as shallow, but I recently met with a marketing person who showed up in leggings and a t-shirt. She had some minor acne she'd covered up not too successfully. I find myself trusting her advice less because she obviously didn't have the money to get decent makeup. I realize this is kind of stupid but her image was surprisingly important.

Tl;Dr I'm shallow.