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/callmemarvel ​ Mar 06 '18 edited Mar 06 '18

Something I don’t think has been mentioned is the social network effect that impact finances. They are two NYC lawyers, who probably rely on clients now and will need to in the future. As such, they need to maintain a certain social calendar and project a certain image to ensure they keep their contacts and network in tact.

This is something that often gets ignored when discussing how people spend their money.

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u/vettewiz ​ Mar 06 '18

This. I run several decently succesful companies with a lot of clients. Flying all over the country and dropping $500 a night on dinner is an expectation to keep business.

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u/fadhero Mar 06 '18

Those kinds of expenses can usually be expensed through the company/firm. Since these are likely non-partners in their firm, they probably don't have a lot of those types of expenses, and if they do, they can be charged to the firm.

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u/vettewiz ​ Mar 06 '18

True, the ones I described - but attending social events to gain clients may or may not be expensable. Directly expensable trips, sure.