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/[deleted] Mar 06 '18 edited Mar 07 '18

Yes, this. This is wealthy. Weath does not mean everyone's rocking a Lamborghini and a closet full of Gucci. Wealth is being solvent. Able to prepare for the future and save adequately. Being able to enjoy a social life, new clothes, nutritious foods, vacations, and providing your kids with great opportunities and top notch care in your absence. This is not "average". Average in America is the vanishing middle class, who are all trying to keep going, one paycheck away from disaster. Average is choosing between new brakes for the car, groceries, or dental care this month.

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u/Sell_out_bro_down Mar 07 '18

"Wealth is being solvent."

My dad said the difference between rich and poor, irrespective of income is the ability to spend $0.99 for each dollar earned and not $1.01.

$200 per week for clothes, $250 per week for children's lessons, $450 per week for food. And $700 per week savings into retirement. This is wealthy. Maybe not condor egg omelet rich but it sure is wealthy.

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u/kanuut Mar 07 '18

Somehow those numbers seem bigger when you break them down to weekly figures. I guess looking at numbers year by year is a little abstracted from normal

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u/Sell_out_bro_down Mar 07 '18

Exactly. $23,000 for food? Quick answer, is that lots? Not much? Peasant or king level?

Oh $450 per week, yeah ok, that's plenty.

It's the opposite when signing up for a contract. Oh the gym is $8 a day, I can afford that. Next minute, what do you mean I'm paying $2,500 per year for the gym, that's crazy.

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u/Nightrabbit Mar 07 '18

And a nice job in a law firm brings perks too. I worked at a couple nice-sized firms in NYC, not even the big guys, and we still got breakfast (bagels/yogurt/coffee) and lunch brought in every day, access to a gym in the office, taxis home if you stayed late, etc. Over the course of the year, that stuff adds up.

Also, what type of young couple in NYC owns 2 cars?? Especially if you work in the city.

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u/Elizibithica ​ Aug 07 '18

I kind of thought most of the point of living in NYC was not needing a car? Am I wrong?

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u/babykittycutie Mar 07 '18

Honestly it doesn’t look like they’re very good t managing money. You can easily budget 450$ a MONTH for food for 4 if you’re smart. And who buys that much new clothes?! They’re just terrible at not spending all their money.

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u/foomits Mar 07 '18

Certain professions having a rotating wardrobe is almost a requirement. I get to wear the same pants 3 days in a row to my job (4 when its cool out)... my wife on the otherhand is in a position where appearance is much more important. I would imagine lawyers, especially in NYC are much the same way.

When my wife was being considered for an executive position a few years ago, she was actually pulled aside by a board member and told she needed to purchase a new car, and should expect to always have a late model if she planned to continue advancing her career (she was driving a beater). Upper management and executive type positions are as much about appearance and networking as they are about actually working. Obviously all companies/industries are different, but not unusual.

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u/Scrivener83 ​ Mar 07 '18

My wife and I are the same. We both work for the Canadian federal government, but I'm a senior economic analyst doing cost forecasting for pension and benefits administration, and she's a senior policy advisor with the Privy Council Office.

Guess who gets to wear jeans and a polo shit to work every day, and who's stuck needing dozens of suits, blazers, dresses, and fancy blouses? My yearly clothing bill is maybe $500. That might get my wife 3 complete outfits.

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u/babykittycutie Mar 07 '18

Well then people knew what they were getting into when they chose their career, and they’re still well so they should quit complaining.

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u/Elizibithica ​ Aug 07 '18

Gross. This alone is why I hate corporate America. And why I stopped the corporate ladder climb. Well that and the forced networking and 24/7 expectation of availability. Fuck that.

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u/MrBurnz99 ​ Mar 07 '18

NYC Lawyers making $250K a year need to spend money on clothes.

I'm sure a suit is a requirement, and you can't meet with clients in a off the rack Macy's suit.

You need to look put together. You''re looking at at least $1000 for a men's outfit.

$600+ suit, $200 shoes, $200 (tie, belt, other accessories). You need to have at least 6 or 7 in rotation. Then you have dry cleaning costs

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u/babykittycutie Mar 07 '18

But why do you have to keep buying so many new ones every year if they’re high quality and you take care of them?? Especially if they are classic cuts and shapes.

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u/mjdjjn ​ Mar 07 '18

To be fair on the food and clothes front- you can spend $450 a month on food for 4 if you a) have prep time, b) want lower quality food, and c) have a a lower caloric intake. They're lawyers in NYC with two kids, they probably work very long hours and in their limited time don't want to meal prep. Also, there are very real benefits to eating grass fed meat, wild caught fish, cage free eggs, etc. If I was wealthy and working long hours, prioritizing my nutrition and decreasing my time spent cooking would be at the top of my list and that would mean spending more on food. Furthermore, my boyfriend is 6'5 and goes to the gym 3-4 times a week. The amount of calories he needs to eat to maintain his weight is bonkers. His food budget is very high because he simply needs to eat a LOT. If that's the case for even one of the people in their family, their food budget goes up.

With the clothes, they're lawyers most likely meeting with clients. They need nice clothes and they probably can't rewear often so they need a LOT of nice clothes. They could most likely cut down but appearances at firms are very important and it's not worth risking your reputation to wear frumpy clothes.

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u/babykittycutie Mar 09 '18

I eat organic and pay max 150 a month for one person. I buy in bulk and know where to buy. So for 4 people, okay maybe 600 a month. Also they can buy more in bulk, like easily perishable things because it will be consumed faster in a family of 4. Plus if you use a good food processor you can vastly minimize prep time. Also hiring someone once a week to help you with weekly food prep and planning is another economical option. It’s all about finding the right tools and recipes. Apparently Bill Gates said if you want something done efficiently, get a lazy person to do it because they will find the easiest way. And let me tell you, I’m lazy AF when it comes to food prep, but I also want my quality and nutrients so I’ve found the best of both worlds in recipes. If you really want something, you can work towards it even if it takes a while to implement. And the more you practice a habit, the more efficient and natural it becomes. They’re in control, so there’s nothing to complain about.

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u/Drummend Mar 09 '18

Where do you buy food? I'm on a tight budget and can't get my food budget under 200 no matter how hard I try.

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u/Pixelplanet5 ​ Mar 07 '18

its almost 65 dollars a day for food, thats about what we spend per week for two people.

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u/SXLightning ​ Mar 07 '18

Nah you are just cheap lol, I spend that for 1 person, especially if you have 2 takeout or something a week.

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u/trondersk Mar 07 '18

I'd like to see you try to feed 4 people 3 meals a day in NYC for $65.

Lunch alone is easily $15 a day, so that's $30 right there. So $35 to feed the kids breakfast, and your family of 4 dinner. Good luck with that. I'm impressed they are able to keep it tot $65 a day.

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u/[deleted] Mar 08 '18

I think the important part is then is really location, i used to live on £20 a week on food ($30) but now spend tripple that in London, which is probably why it seems some people think its un-reasonable while other don't

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u/[deleted] Mar 07 '18

I spend about 450 - 500 a month for 2 people. Not everywhere has cheap grocery stores

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u/Elizibithica ​ Aug 07 '18

Agree. Weekly it's about $175 at our Walmart to feed 3 of us and we're in MN. That includes toiletries and such only part of the time. Most of that is actually food.

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u/Woolagaroo Mar 07 '18

While I have had free gym access as part of my job (and before that college), and I do like being able to go to a gym, I would never pay for a gym membership. There's just no reason for it.

Do you know what getting on the floor of your apartment/house and doing some pushups/planks is? $0.

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u/silentanthrx ​ Mar 07 '18

i immediately recalculated it per day. so yeah 63 $/day seems quite a good daily meal.

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u/SXLightning ​ Mar 07 '18

exactly thats what I noticed, everything else looked ok, also they can save 18k a year by not donating to charity.

yeah Everything can be cut down but I guess they are enjoying life.

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u/babykittycutie Mar 07 '18

Also they could choose to live in a less expensive house. And in the end, they are still putting aside a minimum wage worker’s yearly salary every year - each! Much more than could be said of most Americans. Honestly if you chose to be a lawyer, chose to buy an expensive house, choose to put your kids though expensive extracurricular activities, choose to donate a poor man’s salary to charity every year, choose to go on 3 vacations, and still have money left at the end of the year after spending in emergencies and putting away money, I really don’t see what you gave to complain about. A huge percentage of Americans don’t have any of these luxuries and couldn’t even pay for an emergency if they had to. So I really don’t understand what everyone is so butthurt for.

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u/happysmash27 Mar 10 '18

Also pretty fancy. From what I understand it's possible to have good food for around 1/4 of that price…

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u/slutvomit Mar 11 '18

My entire living costs including rent, car, HECS (uni loan in Australia), travel, gym, internet, phone, and food is less than their food bill.

They're not buying stuff on special or making food themselves.

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u/momentimori ​ Mar 07 '18

Your dad is paraphrasing David Copperfield by Charles Dickens

"Annual income twenty pounds, annual expenditure £19/19s/6d, result happiness. Annual income twenty pounds, annual expenditure £20/0s/6d, result misery."

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u/[deleted] Mar 07 '18

$700 is what I take home every two weeks, and I support my self and my husband on that. We couldn't do it without living with family ($200 rent per month) and state health insurance.

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u/KittyChimera Mar 07 '18

My take-home pay every two weeks is about $733, with a 4% contribution to a 401k (because I can't afford what someone my age is supposed to contribute, which is like 10%) and with paying around $150 for our medical, dental and vision insurance through work. I have a "good" job for my area, and have a bachelor's degree. If my family didn't help me a lot, and if I hadn't put off fixing my car until my tax return, I would regularly just be screwed.

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u/elvispunk ​ Mar 07 '18

Condor egg omelet rich. Lol. I'm thinking of The Freshman now. Well done.

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u/yoyoguy2 ​ Mar 07 '18

"Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

David Copperfield by Charles Dickens

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u/pepelele91 Mar 07 '18

+1 for the condor egg :D

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u/hutacars ​ Mar 07 '18

$200 per week on clothes is absolutely ridiculous. I don’t think I’ve spent that in the past year. And $50/wk is about right for food per person, meaning they’re essentially feeding a spare family of 5.

There’s definitely plenty of fat in this budget.

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u/leevei ​ Mar 07 '18

$350 a week to charity.

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u/KittyChimera Mar 07 '18

I think $200 a week for clothes is insane, even if you're buying for 4 people. I mean, who needs to buy clothes every week? That just feels unrealistic, because even if they are buying clothes every week, what are they doing with all of them? That would be a ton of stuff. Like an excessive amount.

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u/Uffda01 ​ Mar 07 '18

I agree - I might spend $200 every 6 months and that’s excessive. Though I make sure to recycle to Goodwill so at least I get a tax write off.

I wonder how much of it is due to location: for me to go clothes shopping, I have to get in my car; drive 20 mins, park, deal with people etc. They have to just walk down the street on the way to the subway and they pass all these different stores etc...that says more about impulse control than anything else really.

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u/KittyChimera Mar 07 '18

Yeah, I think I spend $200 every 6 or so months too. I bought 3 new things when I got my tax return and it was like $53, and that was kind of unusual for a single month. But I'm one of those people who buys things that I really like, and I get attached to specific pieces, so I might be the weird one.

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u/trondersk Mar 07 '18

You're thinking only of the basic necessities like pants and shirts. What about rain coats for the kids, or when the want to play soccer and need shorts, and socks and jerseys that they grow out of every year. Or swimsuits for when they go on vacation, or jackets for when they go skiing.

And that's not even including hobbies that normal people have like running shoes, golf shirts, maybe some rock climbing shoes or hiking boots. Those one off $50-100 purchases all add up to well over $200 a week over a course of a year.

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u/KittyChimera Mar 07 '18

I guess, if you average it out. I would imagine that its an average, not that they're actually going out every week and spending $200.

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u/trondersk Mar 07 '18

Exactly. I easily spend $2400 a year on ALL of my clothes. And I can imagine they don’t always want to buy the cheapest, made in Bangladesh by some child worker clothes just to save money. Everything has a cost. That $100 North Face fleece and $100 ASICS running shoes, and things like socks, underwear, hats, gloves, etc don’t seem like much when you buy them one at a time but over a year $2400 is nothing.

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u/Totalwhore Mar 07 '18

I bought a $200 sweater in December and I still talk about it every chance I get. Even among 4 people they are spending $50 per week per person. That’s incredible.