(Closed) I find myself wondering often, how does anyone afford life?

posted 4 years ago in The Lounge
Post # 121
Member
1450 posts
Bumble bee
  • Wedding: May 2016 - St. John\'s Lutheran Church

I have the opposite thought: sometimes I don’t understand how people spend so much.

Last year, I made $19,000. And I saved $4,000 of that.

I have two major advantages: First of all, I have no student debt. I’ve been incredibly blessed in that respect and I am aware of how much privilege I have because of it.

I also don’t have a car payment. I still drive the used car my parents bought for me ten years ago when I got my license. It has served me well.

Other than that, my major bills are rent, car insurance, health insurance, phone bill, gas to get to work, and groceries. I even manage to go out to eat a couple times a month. 

When I first met my fiance, he was making three times as much money as me and not saving a penny. It blew my mind that anyone could be spending that much, and he knew that it wasn’t good. Ever since, I have been trying to take baby steps with him to curb his spending and increase his savings. It has been incredibly frustrating at times, but because we love each other and want to make a good life together, we keep making goals to work toward.

Post # 122
Member
783 posts
Busy bee
  • Wedding: March 2015

COL is a major factor and I don’t think people really understand that. I’m sitting here laughing reaeing comments about people paying $400-600 a month in rent or anywhere in the $100,000 range OR LESS! for a home. I happen to live in one of the highest COL areas in the entire country. I would kill to pay that on housing. That does not exist here. A friend of mine just bought her first house with her husband for around $330k in my neighborhood. Not anything special, just a regular house in a regular neighborhood, 3 bedrooms. But the thing is the wages here are not much more than other places. It has nothing to do with mismanaging money sometimes. I very rarely buy myself new clothes, new shoes, new makeup. I cook dinner 6-7 nights a week and try to bring lunch to work on most days. We don’t buy expensive technology. We have pre paid cell phones at the cheapest plan we could find. But we are nowhere near having money to buy a home. I have student loans which is a burden. Also the cost of healthcare. I have a car that I make payments on but it was used and is a good car that will last me a long time hopefully. My husbands car is used and paid for in cash. Right now I am working hard on creating and following a savings plan that will help us reach our goals (I do the money management in our home.) But it will take time to get there. One day in te future we would like to move to a lower COL area but right now that is not an option for us. 

Post # 123
Member
1310 posts
Bumble bee
  • Wedding: April 2015

I wonder this all the time. I say it to my husband everytime we look at floor plans to build a house. My husband and I make good money, I have a little debt I need to finish paying off and we have been saving for a down payment for a house or to build. But when I think about a new mortgage, car payment, power bill on the size house we are looking at, wanting kids soon, etc. I don’t know how people afford it!!!

Post # 124
Member
437 posts
Helper bee

LilliV:  100%.

It is all about the choices we make. Everytime we got raises we increased our retirement percentage until we were maxed out. Raises after that meant increases in savings. For the majority of our careers we have both been racking up our savings as acting as if we have entry level jobs. Our standards haven’t changed too much.

We make solid money and live within a high COL area. We chose to live in the suburbs though, so my commute is nearly 50 minutes each way. That choice while it sucks has allowed us to save a lot of money because the houses there are a quarter of the price of similar houses in town. We have purchased land closer to work and will one day build.

We don’t have debt. We don’t take on new debt. If we can’t afford to pay cash then we don’t buy it. Neither of us have well off parents who help us out. We just know exactly how much it takes to run our household and where every dollar goes.

I hate when people assume our parents help us out or we have a ton of debt because it’s not true. Perhaps people should ask me if they don’t quite understand how we function and maybe I will help put their concerns at ease. Because I am sure they are simply concerned and not jealous, right?

Post # 125
Member
24 posts
Newbee
  • Wedding: December 1969

@leilalexicon

So…I remember having this same exact feeling – 6 years ago.

It was 2009. I was 26 and living in the very $$ Bay Area. While I was watching my ‘zero-debt’ classmates BUYING houses in the SF Bay Area for 1/2 million (…seriously, 500K 2-bedroom shacks were and are a bargain in that area) I was living debt heavy and struggling to survive layoffs from 38K and 50K jobs. In terms of debt: I had 50K of student loans, and was juggling 5-7K in credit card debt. I also was far from owning any assets – as I was splitting a master bedroom with my future hubby in a 5 person shared house (for a combined 1.2K/mo). My retirement had a measly 2-5K in it (and my then companies 401K stock plan was nuking it every quarter), and I considered it a good month in my emergency savings if the balance stayed above 500.00.

A life without financial struggle – let alone home ownership – seemed absolutely unobtainable to me.

Fast forward to 2015. I am 33. I make over the median income in my field (about 90K – and with stock it is coming out to be 150K before taxes). I paid off all my student loans a year ago (credit cards many years before that). Also, I just closed on a 415K house (10% down – with 12K just added on top of our first mortgage payment) in Seattle (…not as pricey as the Bay Area – but still, not a cheap city). My retirement isn’t exactly flush – but I am in a position finally to max it out every year, and that seems to be a good enough start for now. My Emergency reserves stay between the 5K-10K range right now.

Financially – I’m many light years ahead of what I thought would be possible back in the lean years of 2009.

Reflecting on this, I didn’t know it in 2009 – but I was measuring myself by the wrong financial yardstick. I was comparing myself and my financial circumstances (as a fresh-out-of-grad-school-paid-for-college-herself persona) to people who had completely different circumstances in life. I went to school (a very prestigious state school) with a fair amount of students whose parent’s footed the bill. These kids had never worked minimum-wage jobs (like I had), and they all had ‘near big city homes’ to crash at after college (so they could save for their future downpayments). I really couldn’t emulate their life patterns and financial timelines because I just didn’t have those circumstances. And it was kinda stupid of me to expect that I could.

However those 6 years of me feeling like I was behind the curve weren’t without some serious benefits for myself. The biggest of all was I learned to live well while living cheap. I never acquired the “must-have-it-all” feeling I see with some of my classmates – which I think can be attributed to them really having “it-all” way too soon.

For example: while I was still eating Top Ramen – some of my friends had parent-paid weddings that matched the balance of my student loans (50K). Also, post-marriage, while they were getting weaned off of the parental dole – they still kept up the lifestyle trends (i.e. new clothes, newest tech, new cars) that they had acquired in their single days on their leaner maritial incomes. Some of these luxeries became charges on credit cards.

Some of these early home purchases were tapped for equity pretty rapidly due to extensive decorations – some of which became martial battlefields (one of my friends split during a very pricey and emotionally taxing kitchen remodel). Some added kids – and left jobs to raise them – but still didn’t offset their lifestyle trends to adjust for the income flux. There were divorces too – which are never cheap.

Now in 2015 – my cheap tastes combined with some very good luck on the job front (keep in mind: I was laid off twice and my husband once during this 6 year period) – I am in a very good position financially. 3 of my classmates – not so much.

 

I’d encourage you – and anyone else – to really value the broke years of your life. They will teach you alot. Not only how to live cheap (because there is no choice), but how to find the ‘gold’ in the cheap. You will develop a good sense of what “worth” is to you. For example – my husband and I didn’t value having a wedding or honeymoon. So we did some pictures in a park with 3 witnesses (no family), a 75 dollar gold band (that did double duty as my engagment ring), and a 100.00 dress. Then we flew around to see the families for a dinner in their home towns. The whole thing – with airfare to two different states – was under 2.5K.

For us – it was worth it – and we had no feelings about trying to “have it all” when it came to our wedding. Could we have afforded to do more (…on a combined income of 250K** – uh, I sure hope so!!!) but we didn’t want more. I think this has been key to my whole financial quest. Keeping the wants in check.

All this came from living cheap by necessity in 2009. Now I live cheap (but not as cheap…there is a 415K house I’m sitting in right now) by choice in 2016.

**obviously, another big key to this picture is the huge income leap between 2009 and 2015. In 2009, my future husband and I weren’t even breaking the 100K threshold combined. With him still in grad school – it was something like 60-70K after tax. Now it is 200K without stock sales. With stock sales it can be between 250-350K. I should add that company stock sales have been huge in this picture. I used them for the down payment and to nuke 1/2 of my student loan balance. When I was buying, I was told by my mortgage broker that most down payments in my neck of the woods comes from vested stock payments. 

Post # 126
Member
169 posts
Blushing bee

I have learnt that a large portion of people “afford life” through credit cards. I use to think my brother was loaded because he bought a house fairly early on in his life, and he always bought the best name-brand products. Nice furniture, clothes, cars, etc. Then I eventually learnt that while he had all this nice stuff, he was actually in major debt because he was continuously using his credit card. Things aren’t always what they seem on the outside.

  • This reply was modified 4 years, 2 months ago by  june2017bride.
Post # 127
Member
118 posts
Blushing bee
  • Wedding: July 2016 - Blue Devil Golf Club

My Fiance and are are thinking about this every day.  Where we live the average price of a home is $400K and if you want to be nearer to the downtown or in a slightly nicer home you’re now looking at 1 million as the average price.  FI has makes more money than I do and he is making more money than he did when he worked for the health region in another province, but it seems like we can never crawl out of debt and the bills just pile up.  I’m currenlty taking courses so that I will be able to get a job at one of the hosptials in the city and be able to contritbute more, but we have a constant fear that we will never make enough to afford a house and have children and save for our future. It is so stressful.

Post # 128
Member
42 posts
Newbee

littlebee94:  my ring cost over $10k and we paid cash for it. Fiance bought the setting and diamond and I spent $3k on our bands. We had savings and also lived in my Dad’s RV for 4 months after each getting promoted at work and moving long distance for the second time last year. Because we paid cash, we bought my diamond at cost and it now appraises at almost twice what we paid. I think it’s ridiculous to hear that a lot of people finance their rings.

Post # 129
Member
118 posts
Blushing bee

babeba:  I just checked out blonde in a budget and she’s definitely more relateable! I think this may be my new budget blog to follow! 

Post # 130
Member
158 posts
Blushing bee

We are currently in our broke years. To be honest it’s not as bad as I thought. What keeps us going is the fact that we have paid off about $30K of debt in the past 24 months, we have been able to travel over seas for me to say goodbye to my dying grandmother, we did furnish our apartment top to bottom for cash and have two cars and a motorcycle paid for with cash. So in case things get bad I guess we can sell? we live in chicago so COS is up there we rent and pay $900 a month for a one bedroom apt. Not the highest I’ve seen on the bee but it’s up there. I think we’ve done pretty good. Worst part is that we both have bad credit.. I’m not ashamed to admit it, I was a stupid kid that trusted the wrong person with my info and I am in the situation I am in today. I have been able to bring my credit up by almost 100 points and little more and I’ll be able to buy a house.. One mistake we did make, I purchased a car thinking it would help my credit and well now I have a car loan with a 16% APR, which we are hoping to refinance Or trade in. Worst case scenario we end up paying it off. But both Fiance and I have dedicated all our spending to up and being completely outta debt. We use to have a combined income of about $150K +15K depending on my commission. Now that we have payed down our debt I quit my job and opened a business… I hope that in 5 years I will be able to give some kick ass advice on here about how the struggle made us much stronger… I have never been so driven in my life to be successfull since we just cut our income in half and we need to make it work… 

On a side note, Fiance is about to receive a raise that will push him a little over six figures, and we still sit there and wonder how people support families on half of that… Maybe we are spoiled? However I have gotten very very good at discount and bargain shopping and no longer over spend on Starbucks… Those days are long gone and to be honest I do not miss them…

Post # 131
Member
9595 posts
Buzzing Beekeeper
  • Wedding: September 2015

goldfishnmuskie:  great post.

I feel like I was spendy-er early on in my lean years (which I’m still slowly emerging from), right out of college, because I was so broke… I had this mentality that any surplus that came in above bills was “extra” money… And I would spend it like a Great Depression Okie finally seeing a hot meal… Now I know that until retirement is paid for, home, kids etc… There is no such thing as extra money haha.

I am trying very consciously now to NOT get swept up in competitive consumption. Wealth isn’t wealth anymore when it leaves your bank account. FIs circle is all gold coast LI… the culture is ALL ABOUT how much $$ you are wearing/driving/spending/bragging about at any given moment. Im not one of them and resist my urges to play that game. I love fashion but I can be crafty, resourceful, creative to scratch that itch. Taste and money… Not the same thing! 

This is a huge reason I want to move away (and not to Gold Coast LI). I don’t want my 9 year old daughter whining for a Chanel bag, and thinking her worth derives from the amount of Yurman she’s wearing. That and the insane real estate prices, COL, and traffic of course. 

Post # 132
Member
896 posts
Busy bee

DaniAnnie: Hmm Interesting. And yes I agree, I would definitely avoid financing a ring. My e-ring was bought at the budget we currently could afford, not a budget we would need to finance. It would be so stressful to have to pay bills for your house alongside bills of a piece of jewelry. To each their own I guess

Post # 133
Member
472 posts
Helper bee

julies1949:  I agree!  when I moved out of my parents house and in with my husband 2 years ago we stripped my life down to the basics.  We dont even own a microwave.  (It keeps us from spending so much on pre-made junk)  We also avoid clothing stores, they suck you into thinking you need to update your wardrobe.  We HAVE enough clothing.  We dont have a lot but its actually a liberating feeling!

Post # 134
Member
1831 posts
Buzzing bee
  • Wedding: November 2013

I always think this when I start paying attention to cars. Everywhere you look you see Lexus, Audi, BMW, or some giant SUV that starts at like $30,000. Luxury cars seem to make up way more of a proportion of cars on the road than what you’d expect when you consider how few people earn enough to afford them.

Post # 135
Member
9595 posts
Buzzing Beekeeper
  • Wedding: September 2015

Also, whoops… He’s my Darling Husband now, not FI! Still getting used to that 🙂

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