agracer said:

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beerad12man said:

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MemphisAg1 said:

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I am a 37yo "millennial" who is happily paying a mortgage already but I feel like the older crowd is way out of touch on this issue. Your options as a youngster today are to pay out the nose to live somewhere safe and close to work, to live somewhere in BFE to meet the safe and affordable combo, or to roll the dice on safety and live somewhere close but sketchy. Folks who bought prior to 2000 didn't really face this problem.

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I'm not saying that the housing market today isn't tough for younger folks, but that bolded statement about people not facing this problem before is categorically false. I remember as a teenager living in Huntsville, TX when my best friend's dad worked out of Houston but commuted roughly 70 miles each way because of affordability. That was 1978-82. Several years earlier when I lived in Conroe, TX, my friends' parents lived there and commuted 40 miles to Houston, again in the name of affordability.

The "live close but expensive" or "further out and cheaper" is a dynamic that's been around for awhile.

Brings to mind another guy I knew around 2000 who lived in Pennsylvania and commuted 2 hours each way into NYC for work. Four hours on trains/buses each day just to afford a place for his family!

I feel for the younger crowd, but you're not the Lone Ranger here either.

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It's still not on the same scale, regardless of anecdotes. Yes, every generation faced problems. Yes, some commuted far. Yes, some paid out the ass and were house poor just to make it work.

But no, you don't have to spend as much of a percent of your income back then as now to get the same quality in the same location. It just mathematically is very easy to prove. There's simply less options now and you have to sacrifice distance or percent of income at a higher level now than back then. What my parents did is just not feasible for me even though I actually have a higher paying job (inflation adjusted) than them. The same house would cost me significantly higher in percent of my income and I could not afford it despite more income.

The houses in or even within an hour of any decent job market simply have gone up quicker than wages.

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Interest rates are still half what they were in the late 70's early 80's.

People are more entitled now than ever before. They want 10-ft ceilings, granite counters, 5 subscription services that cost $200/mo., newer cars/trucks/subv's, newest iPhone every 24-months, Starbucks 5x a week, eat out all the time, etc.

My wife and I did not have cable TV, hardly went out to eat, stopped going to movies, owned a 5 year old Honda and 10 year old car, a 30-year old home with formica counters and old painted cabinets, etc. when we started our family b/c she wanted to be a stay at home mom. There were times when she'd have to make a grocery list based on how much money we had, bill that were due, and when my next paycheck was coming and leave stuff off the list b/c money was too tight.

Now, I will agree, housing has gone up a lot, and the cost that used to average about 30-35% of your salary is now above 40%. But it' snot impossible. Stop *****ing and find a way to make it work.

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Wrong. Some of yall just cant do it can you? You just can't admit that the MACRO economics favored you (or at least didn't hinder, like they do now). The data is everywhere. The builder I quoted below blows a hole in the "consumerism" aspect of it.

There also seems to be a tinge of jealously as well. Travel, tech, and even everyday luxury over the last 20-30 years has never been more democratic than it is now. Some of that is within reach to everyday people way more than it ever has been. And, moreover, Macro economics affect the affordability of homes way more than someone who grabs starbucks.

But, for some reason...yall can't admit this. Why?

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I Just wonder how much a house these days might cost if it was built like a boomers first house:

Built with no 10-16 ft ceilings.
Lower pitch to roof-- no high roofs with enough attic space for another whole floor
LOL, no "office"
Linoleum and carpet-- no wood floors or laminate or tile floors, they got your floors done in one day! Just roll it out!
Tub and shower combo if you were lucky-- No "master" ( Realtors cant say that now) retreat and spa. No jets in bathtub, unless you had to bathe in same water as your brother to save money, and he farted. No tile separate shower
Slide in stove, no double ovens
No double entry doors.
Paneling!! No extra tape and mud of drywall.
Lots more insulation these days.
No three car garage. 22x22 was huge!
Fomica and not granite or quartz on counters.
no wifi wiring
no folding area in laundry room- space for washer and dryer about it.
No sodded yards and landscaping-- you did that.
And of course boomers didnt have Blackrock and Chinese buying up houses for rentals and crowding out young people.
At new wages, even for illegals, you are putting more labor money along with putting more material in a house.

Not discounting pain of kids today. Heck I couldn't afford new house. And i know what my wife would say if I asked her to live in the above house

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I've responded to posts similar to this before. The notion that consumerism/fomo alone is driving the affordability issue is nonsense. I work in construction currently and used to work in the volume builder world. The cost of the things you've listed as upgrades are pretty negligible in the grand scheme of things. Some of the things you listed(insulation) aren't even optional due to building codes. Even ditching things like high ceilings and 3 car garages which would have a fair impact, housing costs are stupid these days. LGI probably builds homes as efficiently as anybody out there these days and Century Communities is one of their competitors. Here are a few of their current models. In my opinion, you truly can't build a house much cheaper than these unless you are swinging the hammer yourself.

https://www.lgihomes.com/texas/houston/freeman-ranch/bridgeland
3/2 - 1,366 SF - Starting at $289,900. These homes have "fancy" granite that is about 1cm thick and the rest of the finishes will be basically the same as any low end apartment. LGI targets 45 days from pouring the slab to handing over the keys. Did I mention efficiency lol? Subdivision is 40 miles from downtown Houston.

https://www.centurycommunities.com/find-your-new-home/texas/houston-metro/brookshire/laurel-farms/lots/010522-3906-glory-green-drive-324887cd/
3/2 - 1,288 SF - Starting at $279,990. 40 miles from downtown. Same quality and "amenities" as above.

If you want to live closer to town...
https://www.lgihomes.com/texas/houston/wayside-village/atticus
3/2 - 1,076 SF - Starting at $240,900. This house will shave 30-45 minutes off your commute(each way) and will likely shave years off your life ... https://crimegrade.org/violent-crime-77016/ Hope you don't have kids also, because the HS that this hood is zoned to proudly graduates 75% of their students and 9% are proficient in math! https://www.usnews.com/education/best-high-schools/texas/districts/houston-independent-school-district/north-forest-high-school-147684

I am a 37yo "millennial" who is happily paying a mortgage already but I feel like the older crowd is way out of touch on this issue. Your options as a youngster today are to pay out the nose to live somewhere safe and close to work, to live somewhere in BFE to meet the safe and affordable combo, or to roll the dice on safety and live somewhere close but sketchy. Folks who bought prior to 2000 didn't really face this problem. Plenty of affordable and safe neighborhoods, close to high number of well paying jobs existed back then. Now it's a pick 2 situation for most.

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I swear boomers have this idea that every young person spends $10 every morning on Starbucks, eats out at nice restaurants every day, is always traveling, has a new truck or Range Rover and all the latest tech gear.

This is just simply false. You're selling a lie

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2.95% interest rate and we're never moving.

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Same.

2.375 and never moving or selling in this lifetime.

And part of the problem with that is the lack of mobility of the workforce. People moving to upgrade to a better job, better quality of life is a factor in driving the economy.

Don't see that happening. People going to sit on what they got for the foreseeable future. We'll see stagnation like they have in SA and Europe. A lot of nice places but nobody is selling or buying because they can't and there's no where to go.

Everyone on here is lucky as hell though. Not discounting hard work, but in hindsight most on here simply born at the right time.

Another problem I see is a glut of boomer houses coming on the market. Built with 90s materials these beasts are not energy efficient, due for new roofs, new HVAC and cost a ton to heat cool.

Aside from Indians who roll 10 and 12 deep, who is gonna be buying these houses in this market?

Stat Monitor Repairman said:

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2.95% interest rate and we're never moving.

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Same.

2.375 and never moving or selling in this lifetime.

And part of the problem with that is the lack of mobility of the workforce. People moving to upgrade to a better job, better quality of life is a factor in driving the economy.

Don't see that happening. People going to sit on what they got for the foreseeable future. We'll see stagnation like they have in SA and Europe. A lot of nice places but nobody is selling or buying because they can't and there's no where to go.

Everyone on here is lucky as hell though. Not discounting hard work, but in hindsight most on here simply born at the right time.

Another problem I see is a glut of boomer houses coming on the market. Built with 90s materials these beasts are not energy efficient, due for new roofs, new HVAC and cost a ton to heat cool.

Aside from Indians who roll 10 and 12 deep, who is gonna be buying these houses in this market?

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Completely agree. Every home sold in our neighborhood over the past 2 years has been boomers moving into retirement communities. They sit on the market for 90 days even with the demand because people can't qualify.

Stat Monitor Repairman said:

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Everyone on here is lucky as hell though. Not discounting hard work, but in hindsight most on here simply born at the right time.

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Yup. Everyone on here has worked hard. Not discrediting that and sacrifice at all. But it IS done against Macroeconomics (one that has never been worse than right now).

Anybody who didn't make it a priority to Refi in January 2021 missed the boat. The slowest moving pitch of all time to step up and knock out of the park.

Also buying a brand new vehicle for the long haul at 0% to 1.9%.

Was talked about a lot on here at the time.

Find a place for the long haul, Refi if applicable, buy durable goods, upgrade or replace anything that needed it because it would be all up hill for the foreseeable future. Was beating this like a drum with friends and family throughout out covid. You cant print $8 trillion and simply glide out of it.

Problem is not everybody was in a position to do that, especially folks just entering the workforce and building credit. So again, luck of the draw.

There were winners and losers in covid that were in position to strike while the iron was hot. Gonna be a lot of resentment from people when they come to terms with how all that went down.

Good news is that if you are under 40, your kids, if they survive the next world war, will be the next greatest generation. Your grandkids will be the next boomers. You yourself just need to HODL, safeguard your assets as best as possible, protect your family, and guide your kids in the right direction.

The next 20 years are going to be a completely different financial paradigm from the previous 20, and maybe even the previous 80.

Stat Monitor Repairman said:

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Anybody who didn't make it a priority to Refi in January 2021 missed the boat. The slowest moving pitch of all time to step up and knock out of the park.

Also buying a brand new vehicle for the long haul at 0% to 1.9%.

Was talked about a lot on here at the time.

Find a place for the long haul, Refi if applicable, buy durable goods, upgrade or replace anything that needed it because it would be all up hill for the foreseeable future. Was beating this like a drum with friends and family throughout out covid. You cant print $8 trillion and simply glide out of it.

Problem is not everybody was in a position to do that, especially folks just entering the workforce and building credit. So again, luck of the draw.

There were winners and losers in covid that were in position to strike while the iron was hot. Gonna be a lot of resentment from people when they come to terms with how all that went down.

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Unfortunately, most people are dumb enough to blame the people lucky enough to take advantage of the situation and not the government buearocrats and politicians that made every single possible situation worse with their decision making.

Like others have said, I don't think anyone is saying some didn't have it rough before, but just looking at 76's numbers suggest they made less than average. Not knocking you, just posting based on facts. The last time the median home price was 49k was 1977. Household averages were closer to the 25-27k instead of 9k.

All some of us are saying is that the average now doesn't stretch as far when it comes to buying a home. Average in 1977 would be 25k buying a 49k home at 16%. If you saved 20% for a down payment (or about 40-45% of your annual income), you could get a payment around 650-675/month with taxes/insurance. That would be about 33% of your annual income of 25k (median).

Now, that median home is 400k. Lets even reduce 50k lower than median so someone doesn't accuse of buying a home with bells and whistles and go with 350k. On a household of 78k. That means you need to save up about 95% of your annual income for a 20% down payment after closing costs to get a payment that would be about 40% of your income. And again, this isn't the median. This is 50k below. Go with median, and you need basically 100% of your income to put down for a payment closer to 45%.

Don't forget groceries now are also a higher percent of income than any point in the last 30 years. So even someone who cuts cable, internet, and all the non-necessities, they are going to live tighter just to buy a home and put food on the table than anyone in the last 30 years. The two most basic needs on a budget. You are also indirectly proving another point. A person wouldn't be able to do what you did today if food was as high of a % of income as it is now (inflation adjusted). A person simply cannot tie up 55% (500/900) to their home and expect to put food on the table and gas to get to their job in 2024. Food would take up on average 10% (not eating out). 65% of your GROSS income to food and shelter is absurd, just to be average. With utilities higher, it's actually like 75% unless you go no AC in texas. I suppose one could argue this is a want.

It's all about averages and percent of income here. No one (reasonable) is denying many had it rough before

Also, congrats on being debt free! I will love it when/if I ever have a house paid off. I'm already in good shape in terms of my savings / investments. Well above the average person my age. Now I just need a paid off residence and early retirement is a possibility. That will be the main focus the next 2-3 years, to save up enough for a down payment and get a 15 year note if at all possible.

The fact that I cannot come even close to buying the house I bought in 2019 today is all I need to know. It's rough out there if you aren't already in a home.

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The fact that I cannot come even close to buying the house I bought in 2019

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Would estimate that 75% of people on here would get a rejection letter from TAMU if they had to apply today. Maybe higher.

Would for sure get rejected before the glue on the stamp even dried. Without a doubt.

beerad12man said:

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It's all about averages and percent of income here. No one (reasonable) is denying many had it rough before

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At some point we're going to have to throw averages away as a useful metric for the whole of our citizenry. The dispersion between top quintile and bottom quintile is likely larger today than ever - I haven't checked but intuitively I'm going to guess that is the case.

... I went and checked...don't mistake my use of the following info as an endorsement of "equality" in outcomes...don't believe in that at all. Just a source of data.

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Gini index measures the extent to which the distribution of income or consumption expenditure among individuals or households within an economy deviates from a perfectly equal distribution. A Lorenz curve plots the cumulative percentages of total income received against the cumulative number of recipients, starting with the poorest individual or household. The Gini index measures the area between the Lorenz curve and a hypothetical line of absolute equality, expressed as a percentage of the maximum area under the line. Thus a Gini index of 0 represents perfect equality, while an index of 100 implies perfect inequality.

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Data discontinued in 2021...can only imagine it's worse now after several more trillion in asset inflation.

Just look at median then. Average has a static lower bound and endless top bound. MEdian takes the exact middle person, and it's likely a bell curve on each side, so much more representative.

I agree, I was just responding to the sentiment of "it's all about averages." Nothing more.

Ive bought and sold a couple houses in that range. I wouldnt want to buy this house or my last one again at current prices or rates. Appraisal on my last house in CS is 38% higher than I paid in 2015. I sold for 21% more in 2020. My current house is up 40% since then. But I doubt I could really sell it for that.

I hit the jackpot moving in 2020, getting more house for less money with more down at a lower rate and getting kids out of daycare. But Inflation, taxes, insurance, and minimal wage growth have eaten away at a lot of that because we were flush with extra cash in 21 and 22. I could see it eroding in 23 and still in 24. Now, we eat out less, cheaper/fewer vacations, still driving 10yo vehicles, etc to adjust.

Wish I'd bought land and two new cars back then too....probably even earlier on the land.

Also agree with lots of others that I don't know how others make it when they had no cushion or saving in the first place with large existing debt. Plus not investment income. And, It would be a lot different if I was just starting out making what we did back then.

Overall still very fortunate but hate to lose ground.

Agreed that things are more stretched out on the top and low end than it likely was in the past. I keep hearing the middle class is dying, and it may be true. But I haven't quite done those numbers to say definitively.

But either way, I still used 50k less than the median. I think 350k can buy you something decent. You CAN get something less. But again, then you are (Likely) either in a bad area, or adding costs in fuel to drive to and from work.

And FWIW, I misspoke. I am using median. Not average. So I'm trying to account for that and just take the middle guy.

I'm curious what will happen if and when rates come down, especially if home prices will stay at their current rates until that time comes. I feel that with lower rates, it could exacerbate the issue for new buyers with prices going up due to greater buying power. On the other hand, getting rates down to 5% or lower could lead to people listing their homes and being more willing to give up previously locked-in rates and driving prices down with an increased supply.

For those who have seen a huge increase in their valuation over the last few years, especially outside of what would be deemed as typical appreciation, is there any part of you that would be massively disappointed if a big portion is wiped out due to market conditions? (Assuming property tax bills are lowered appropriately - lol). Not that I see something like that happening, more just a thought exercise.

What I cannot come to grips with is how a family of college graduates only makes $78k in 2024.

My god, was there no planning about the economics of their profession choice.

A uniformed police officer with a GED almost makes that.

FancyKetchup14 said:

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I'm curious what will happen if and when rates come down, especially if home prices will stay at their current rates until that time comes. I feel that with lower rates, it could exacerbate the issue for new buyers with prices going up due to greater buying power. On the other hand, getting rates down to 5% or lower could lead to people listing their homes and being more willing to give up previously locked-in rates and driving prices down with an increased supply.

For those who have seen a huge increase in their valuation over the last few years, especially outside of what would be deemed as typical appreciation, is there any part of you that would be massively disappointed if a big portion is wiped out due to market conditions? (Assuming property tax bills are lowered appropriately - lol). Not that I see something like that happening, more just a thought exercise.

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helsinki thinks that both rates and interest rate will move down in tandem.

As for value… market conditions givith, and market conditions taketh away. An asset is only worth what someone will pay for it. Some of these home values now are absolutely inflated.

If they're right out of school that's not that shocking. Lot of new grads only make around ~40k

hedge said:

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If they're right out of school that's not that shocking. Lot of new grads only make around ~40k

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If that doesn't rapidly climb to close to six figures after a few years, they chose poorly.

Tex117 said:

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FancyKetchup14 said:

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I'm curious what will happen if and when rates come down, especially if home prices will stay at their current rates until that time comes. I feel that with lower rates, it could exacerbate the issue for new buyers with prices going up due to greater buying power. On the other hand, getting rates down to 5% or lower could lead to people listing their homes and being more willing to give up previously locked-in rates and driving prices down with an increased supply.

For those who have seen a huge increase in their valuation over the last few years, especially outside of what would be deemed as typical appreciation, is there any part of you that would be massively disappointed if a big portion is wiped out due to market conditions? (Assuming property tax bills are lowered appropriately - lol). Not that I see something like that happening, more just a thought exercise.

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helsinki thinks that both rates and interest rate will move down in tandem.

As for value… market conditions givith, and market conditions taketh away. An asset is only worth what someone will pay for it. Some of these home values now are absolutely inflated.

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Not

Tom Fox said:

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What I cannot come to grips with is how a family of college graduates only makes $78k in 2024.

My god, was there no planning about the economics of their profession choice.

A uniformed police officer with a GED almost makes that.

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The smarter everyone is, the more they plan, the harder it is to keep up with them.

It all still balances out. There can only be so much income going around. It isn't like it used to be 100k and then we became stupid. It's just been a slow, steady rise over time.

And there you have it. The police officer who has their 2nd child and the wife quits their job has a household income of 65k. Below median. Not everyone makes a career choice solely on income. I know many of which making 60s who are happier and more fulfilled than some I know who make six figures. It isn't the only criteria to lead a happy, fulfilled life.

And there are only so many 6 figure jobs to go around. Less than college degrees. So again, even if everyone decided to choose the perfect career path, only so many could make it. It all balances out, anyways.

Heineken-Ashi said:

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Tex117 said:

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FancyKetchup14 said:

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I'm curious what will happen if and when rates come down, especially if home prices will stay at their current rates until that time comes. I feel that with lower rates, it could exacerbate the issue for new buyers with prices going up due to greater buying power. On the other hand, getting rates down to 5% or lower could lead to people listing their homes and being more willing to give up previously locked-in rates and driving prices down with an increased supply.

For those who have seen a huge increase in their valuation over the last few years, especially outside of what would be deemed as typical appreciation, is there any part of you that would be massively disappointed if a big portion is wiped out due to market conditions? (Assuming property tax bills are lowered appropriately - lol). Not that I see something like that happening, more just a thought exercise.

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helsinki thinks that both rates and interest rate will move down in tandem.

As for value… market conditions givith, and market conditions taketh away. An asset is only worth what someone will pay for it. Some of these home values now are absolutely inflated.

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Not

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yeah, i couldn't remember how to spell your tag. So I went with Helsinki, a cool place and a name of a character from a great show. You are Helsinki to me!

beerad12man said:

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Tom Fox said:

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What I cannot come to grips with is how a family of college graduates only makes $78k in 2024.

My god, was there no planning about the economics of their profession choice.

A uniformed police officer with a GED almost makes that.

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The smarter everyone is, the more they plan, the harder it is to keep up with them.

It all still balances out. There can only be so much income going around. It isn't like it used to be 100k and then we became stupid. It's just been a slow, steady rise over time.

And there you have it. The police officer who has their 2nd child and the wife quits their job has a household income of 65k. Below median.

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A Midland officer that has completed probation makes 77k. He probably makes another 12k on off duty gigs and gets his apartment for half price as the courtesy officer.

There are currently 50 vacancies at Midland PD.

Hedge is talking about college graduate from A&M making 40k. Why would you ever do that?

It only rapidly climbs if they job hop. Companies don't reward loyalty anymore. Unless it's sales they also don't reward performance either

Most people don't want to be cops.

The whole purpose of a degree is to get job using your brain and not having to be in a labor job

hedge said:

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It only rapidly climbs if they job hop. Companies don't reward loyalty anymore. Unless it's sales they also don't reward performance either

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To the degree that a skillset and/or qualification has become so ubiquitous that performance within that discipline isn't rewarded but rather a minimum expectation, I can see the point of why it's happening that way.

Great, you have a college degree...like everyone else. Great, you can use Microsoft Office....like everyone else.

I think people need to worry less about performance (in terms of meeting expectations) and more about differentiation.

A Net Full of Jello said:

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barbacoa taco said:

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and this is why younger generations get annoyed when boomers say things like "back in my day i bought a house at age 23 during my first job out of college, why can't you?"

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That is a frustrating thing to hear, for sure, because circumstances are not equal now to how they were when Boomers were in their twenties and thirties. I think that we can all agree, though, that younger millennials and older Gen Zs who are entering the workforce have different priorities than Boomers and even GenXers. They do not remember the years their parents struggle financially and used only one car or two beat up cars, didn't go on nice vacations and would settle for a trip to Six Flags every couple of years, and didn't eat out often at all. They remember the prosperous years and expect to have a similar lifestyle right out of college. And even if they don't consciously realize it, many do prioritize the latest gadgets and toys, evenings out with friends, and fun vacations. They aren't saving for an investing in the future.


Well said. When my wife and I go married 20 years we didn't take a honeymoon either and had a smaller wedding to be able to save up to get in a house. Its funny these days how this new generation wouldn't even consider going without to make it work. They also all have an xbox, buy cars like they are investments, and are on 30 different trips in a year so they can post their pics on instigram so everyone thinks they are doing well.

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hedge said:

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Most people don't want to be cops.

The whole purpose of a degree is to get job using your brain and not having to be in a labor job

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You joked that office jobs only work 15-20 hours of actual work. I am telling you that you're an idiot if you went to college for a degree without a direct path to 6 figures.

Those blue collar chaps are killing it. You just want to earn it where, how, and when you want. Life doesn't work like that.

Before becoming a lawyer I earned my living with a gun and never made less than 100k after the first couple of years.

A lot of people need to stop going to college and going into debt for no real reward.

I'm sure they are, they also ruin their bodies by the time they are 40 and have a **** ton in medical bills. I'm good not doing that, and I do a labor job on the side so I would know

AlphaBean said:

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ChoppinDs40 said:

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I'll play and show you how the middle class American can easily get into a position to not stash cash. This is what I'd consider a pretty standard upper middle class lifestyle in a decent suburb in Texas.

Family of 4, both of us work. Took a little longer than we'd have liked to have kiddo #2 (not by choice) but here we are. Ages 4.5 and 4 months.

Pre-bonus, our gross income is right at $400k.

Health insurance, employment taxes, federal income tax (suck it feds), 401k contributions, life insurance and HSA max contributions puts us right around 18k take home. Roughly 222k take home. Taxes crush the upper middle class. My paychecks are ~10k and the net is barely half of that.

It goes real quick. Mortgage, insurance, property taxes (astronomical), roughly $5,250 a month. 2.5% mortgage.

2 car payments plus modest rv, $2,600
Gas $600
Maintenance $150
Rv storage $185

Home improvement/lawn care, mulch, new potted plant flowers every year, pest service, tru green, house cleaner once a month or every other
$450
Internet, YTTV, water, trash, gas, electricity - $550

All food $1,500

Travel budget $1,000 (traveling is stupidly expensive even with miles, points, driving, etc)

Entertainment/fun/country club dues $1,200

Haircuts, nails did, hootiehoo waxed $270 (women's hair is ridiculous)

Random Amazon/BestBuy/Target shopping $400 (kids always need something)

Clothing $200
Childcare $2,600
Child activities $215
Medical out of pocket $400
Gym $50
Rv and auto insurance $400
529 plans $400
Extra brokerage $500

Now when I see neighbors around me with this and more… I really wonder how they do it.

If you'd told me we were making $400k/year 5 years ago… I'd tell you I was retiring by the time I was 50. lol

We're in a worst position than I want to be but cars are 3 years to payoff and once we're not paying $30k/year in childcare, we'll have a little more room to save.

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*blinks*

I am really not sure what type of response you were hoping to generate but I can tell you there is zero excuse for you to not have monthly savings beyond retirement. You sir DO have a spending problem. You have several thousand in luxury absolute wants not needs. Country club dues? More on cars and a "modest" rv than many folks spend in rent or mortgage? But things are just sooooo tight with no ability to save? As respectfully as possible, get outta here with that.

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Nowhere did I say things were so tight we couldn't save. We could easily cut lots of things. Also, I think putting back, checks math, $70k or so a year isn't so bad, bonus not included.

It was more supposed to show that what many Americans (I sure did 5 years ago) thought was some insanely high income ($400k) doesn't afford you all what you think it can.

Things add up.

There are many households just like mine, 2 car payments, kids in daycare, local country club, take 1 or 2 small vacations a year, that still doesn't add up.

I say all this because many things we do are not luxury. Don't drive luxury cars, don't wear luxury clothing. Don't have a pool. No neighborhood golf cart. Only thing I would call somewhat luxury is the $700/month country club dues. Fine - scratch that, saves 8,400/year. Ok gets me to retirement…how much sooner?

We bought a travel trailer to save on trips and doing things with the kids vs how crazy expensive every AirBnB, flights, hotel has gotten.

Wasn't looking for a "man that sucks" but the rise in cost of everything from utilities, to food, to travel, has creeped into everything and is felt all the way up.

I grew up dirt poor and we did camping trips my whole life… what used to cost $15/night for a campground is now $50+.

Things that were once very attainable have become much less so.

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We could easily cut lots of things.

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Only thing I would call somewhat luxury is the $700/month country club dues.

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If you can cut it and don't, that's a luxury to the vast majority of people who are not subject to your definition of luxury.

I'm all for making and spending money but be real about it.

Your budget seems entirely reasonable for a high earning family.

I don't think people are going to sympathize with you chopping. I think you have changed the definition of luxury because you are out of touch with what many people consider luxury since you likely only hang around the top 1-2% of the world. That's pretty obvious with how you compare yourself.

You are living a more luxurious lifestyle than probably 99.9% of people who have ever walked this earth.

Now, I want to start by saying I'm not saying don't do any of these things. You earn it with that money. Just be honest about your luxury expenses versus your necessities. If I were you, I'd be putting away probably a 170k a year. Not 70k.

You talk about luxuries? Start with the 5250 housing fees. A shelter is the necessity. You could have quality shelter for about half that. Anything spent beyond that is a luxury. That's fine, at your income, I would be spending more than 2600 on housing, too. Probably closer to 3500-4000 than 5200, but that's neither here nor there. But I wouldn't be so ignorant to ignore the that that this is, IN FACT, luxury.

At your income, you could easily avoid car payments. I haven't had one for 4 years. No idea why you coulnd't pay cash. I may never carry another one again. I would consider 2600 to be very luxurious in regards to car and rv payments. You could pay cash for vehicles at your salary. Anything you are spending here, is IN FACT, a luxury. At the most, this should be 1k. Anything beyond that is extreme luxury.

The Rv is a luxury. The storage is a luxury. The insurance for the Rv is a luxury.

All the travel is a luxury. Yes, every single bit of it. Many working class people, especially with kids, may not travel the entire time they are raising the kids.

Even the women's hair stuff is a luxury for the most part. I get you want to be somewhat groomed, but 270 a month is more than 99% spend on that.

All the random shopping that the kids "need" from target? I bet the actual need is closer to 10% of that 400.

I'd say it's closer to about 8,400 a month you spend in luxuries. Not 8,400 a year.

But even 8,400 a year is MORE than some save total. How much quicker to retirement? For a keeping up with the joneses lifestyle, maybe not much. For my lifestyle? If I saved another 8,400 a year? Probably about 5-7 years earlier.

You are playing keep up with the joneses which is what delays your retirement more than anything. You're currently saving 70k and talking retirement issues. I am lucky to save 20-25k a year and am still on pace to retire early, simply because my expenses are far less than yours.

AlphaBean said:

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ChoppinDs40 said:

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I'll play and show you how the middle class American can easily get into a position to not stash cash. This is what I'd consider a pretty standard upper middle class lifestyle in a decent suburb in Texas.

Family of 4, both of us work. Took a little longer than we'd have liked to have kiddo #2 (not by choice) but here we are. Ages 4.5 and 4 months.

Pre-bonus, our gross income is right at $400k.

Health insurance, employment taxes, federal income tax (suck it feds), 401k contributions, life insurance and HSA max contributions puts us right around 18k take home. Roughly 222k take home. Taxes crush the upper middle class. My paychecks are ~10k and the net is barely half of that.

It goes real quick. Mortgage, insurance, property taxes (astronomical), roughly $5,250 a month. 2.5% mortgage.

2 car payments plus modest rv, $2,600
Gas $600
Maintenance $150
Rv storage $185

Home improvement/lawn care, mulch, new potted plant flowers every year, pest service, tru green, house cleaner once a month or every other
$450
Internet, YTTV, water, trash, gas, electricity - $550

All food $1,500

Travel budget $1,000 (traveling is stupidly expensive even with miles, points, driving, etc)

Entertainment/fun/country club dues $1,200

Haircuts, nails did, hootiehoo waxed $270 (women's hair is ridiculous)

Random Amazon/BestBuy/Target shopping $400 (kids always need something)

Clothing $200
Childcare $2,600
Child activities $215
Medical out of pocket $400
Gym $50
Rv and auto insurance $400
529 plans $400
Extra brokerage $500

Now when I see neighbors around me with this and more… I really wonder how they do it.

If you'd told me we were making $400k/year 5 years ago… I'd tell you I was retiring by the time I was 50. lol

We're in a worst position than I want to be but cars are 3 years to payoff and once we're not paying $30k/year in childcare, we'll have a little more room to save.

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*blinks*

I am really not sure what type of response you were hoping to generate but I can tell you there is zero excuse for you to not have monthly savings beyond retirement. You sir DO have a spending problem. You have several thousand in luxury absolute wants not needs. Country club dues? More on cars and a "modest" rv than many folks spend in rent or mortgage? But things are just sooooo tight with no ability to save? As respectfully as possible, get outta here with that.

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I don't think I have seen a gross mismanagement of income like that quoted in some time. Just a cursory run down of that list, I can kill over 7,500 dollars of expenses that are complete and total luxuries/wastes of money, and that is even leaving in childcare and kid activities.

This is a real eye opener as to why people supposedly 'can't make it work' and 'don't have money'. Lots of people do have money, they just piss it away instead of doing smart things with it and sacrificing appropriately. It's none of my business, ain't my money, but damn. What a shame. I know people want to keep up with the jones, but a little sacrifice early on can yield huge benefits. When we have extra money, we dump it into savings, investments, kids savings, etc. It does not get spent and I think that is were a lot of people these days wind up like the post above. Personally, we set up our money and work so that we could dial back working in our early 40's and quit in our late 40's. We don't, because we like to work and all that extra goes into more savings and giving our kids a massive leg up on life.

I can tell you there is a huge HUGE amount of peace that comes from working when you want to work because you want to work and not because you have to work. How high earners these days seem to miss that mark by a mile is astounding.