Country Living Series

Saturday, March 24, 2012

Poor with a hundred thousand dollars a year

So here's an interesting piece that I saw this morning on the Yahoo Contributor Network -- How to Earn $100,000 and Still Feel Poor.

Yes really.

Now I'm sure whoever wrote this absolutely believes what she wrote: that her family is struggling even though they earn over $100,000/year.

Granted there are some places in this country in which it is extraordinarily expensive to live (New York City comes to mind) (the writer lives in the Tampa, Florida area). And I also grant that being underwater on one's mortgage is a great financial hardship. It doesn't sound like she lives in an extravagant house or flaunts flashy clothes or vehicles.

But somehow my sympathies failed to rouse at her plea for understanding as to why she's "poor" with $100,000/year. I tallied the expenses she listed and came up with $80,500/year, leaving her with a "surplus" of about $20,000/year (what many ordinary people live on). Nothing was said about taxes, which undoubtedly eat up an enormous chunk of her earnings.

I can't help but feel someone should take this poor woman by the hand and walk with her through a typical month, demonstrating how to cut her expenses. I'm quite certain endless people can show her how to trim her utilities costs, car insurance premiums, and food bills ($1000/month for four people!).

You'll note that the comments afterward were almost universally hostile. I almost feel sorry for the writer of this piece, though. Apparently she genuinely believes she cannot economize. As one commenter put it, "If you can't live off a $100,000 a year something is terribly wrong with that lifestyle."

Am I being unjust here? Is $100,000/year truly a tough budget to live within? Thoughts?

Just some Saturday morning ramblings as I start pulling together the documents to file our taxes, which will unquestionably prove that we live on MUCH less than $100,000/year....

33 comments:

  1. Under $20K a year here, although we don't live in a high-priced home area. Husband, wife and 3 year old. And we don't "feel" poor!

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  2. Living in California my wife and I struggle to make ends meet on $100k per year income. We were making double that when we purchased our home but both our industries have been hit hard lately and our home is worth 60% of what we owe. We have no car payments and try to live frugally. I can understand feeling poor but we also remember actually being poor, never filling the tank, just a few gallons to get you through. Ramen noodles were a legitimate meal.Feeling poor is much easier than being poor. She feels poor because she also feels entitled to comforts and conveniences.

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    1. You have hit the nail on the head, Anonymous. It's all about perception. To have a roof over one's head, food on the table, and fresh water to drink is abundant richness if you live in a third world country.

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    2. BINGO!

      Just Me

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    3. Amen to that!

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  3. $100k sounds like a lot, and it USED to be alot, but today it's not as much (with a family of 7)and that's what is shocking. You shouldn't have to severely pinch pennies if you make that kind of money, but you do now! I can relate because we never go on vacation, we buy $3,ooo cars, we cook home often, breastfed my kids, cut our own hair, do our own repairs, etc, and the bills (utility, insurance, taxes, medical bills,fuel,etc) continue to eat up what we make. We look for the cheapest deals possible. Suppose we can cut more, but the savings on those cuts don't last long because of inflation. Yes, $100K is now the new $50k. Shouldn't be.

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  4. My husband makes $60,000 a year. We have 6 children and make do without any extra "help" and live in the Seattle area.

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  5. I agree with you Patrice. Most people in our country have no idea of what going without really means and it's going to be a shocker to them. They will be so very angry and they will want to vent their anger on someone.

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  6. I can't imagine earning $100,000/year. And there are some line item expenses that seem ridiculous. That said, I can understand her position. She bought at the top of the housing bubble. I was in Florida at the time. I didn't see it coming.

    She has two huge positives going for her. She is a disciplined saver and lives debt-free! How many Americans can say that? I think she will be OK.
    Montana Guy

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  7. Okay...I read that article the other day, and see the comments from folks here that make 100k a year.
    Sheesh!
    When I worked running a rooming house, I made under 300 dollars A MONTH. I didn't pay rent on my room, sure, but $300 (and frequently less) to buy all my groceries, hygiene supplies, etc. I did it PLUS added to my food storage, and was able to save money. That was 2 years ago.
    I raised 7 kids on a shoestring. Never made much money, owned *beater* cars, shopped at thrift stores or made clothes, gardened, canned food, hunted for meat and dressed out the kill myself. We lived in poverty. 100k a year is NOT poverty.
    If I had 100k a year, I would be living "fat and happy".
    On the other hand, I still would be shopping at thrift stores, using coupons, canning my own food, etc. I would NOT be buying a house in an "upscale" neighborhood, buying new cars, buying designer clothes, etc.
    I know this is a harsh statement, but if you cannot make it on 100k a year, you need to see what your priorities are. Somewhere along the way, you have put SOMETHING (house, car, whatever) to the top of your priorities.

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  8. I got a real feeling of entitlement out of that article. "Our retirement accounts do not reflect the balance I would have expected once we earned six figures." I have a big fat hint, your retirement account reflects what you have saved. It doesn't matter if you earn 500k or a million a year unless you transfer some of that to retirement the value of that account will not go up.

    I suspect a lot of normal folks with some common sense could help these folks slash their living expenses. Furthermore I wonder how folks's expectations have gotten so out of line with reality. Personally I do not make anything near 100k but we aren't hurting for money. We have everything we need, a reasonable amount of what we want and can save. Of course there are things we would like to have and do which we cannot make happen, that is called life.

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  9. I rarely comment on things I read, BUT I also read this article yesterday and you left out one issue that really jumped out at me. The author bought her child a new car so he could deliver PIZZAS! So he could save money for college! My husband, myself, and our two (soon to be three) children live on $28thousand a year and we certainly dont feel poor....

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  10. My husband's income recently went to the $100k range. After taxes and ins and 401k, he brings home about $74k. I have to say, it is not as much money as we thought $100k would feel like, but it is sooo NOT POVERTY! We are very frugal, and we live on 55% of our take home pay (including tithe), and the rest we are saving for a homestead. Our budget is tight, because we choose for it to be. We drive 3 paid for cars, all bought used (1995,1997,2005), 3 of us get our hair cut at home, I cook from scratch, we homeschool and buy used books, I don't drive much to save on gas, I coupon and buy in bulk, we garden some (will do more at the homestead!). 2 yrs ago, i stopped buying paper towels and bought 40 some dish wash cloths that we use instead. It has saved a good bit of $.

    We save $ every paycheck for Christmas and for vacations. Not this yr, but most yrs we take 2 vacations, spring and fall. We rent a cabin for several days, I cook, we explore, and we spend less than $1000 per vacation, including gas and food and lodging. It's fun for us to get away and enjoy the mountains or the beach.

    I wish I had been more frugal all along. We wasted so much $ on eating out and on foolish grocery shopping. I wish I had done better, but I have learned so much and am glad for it!

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  11. Having read the article too, I noticed a mourning by the writer for dreams that didn't pan out the way she had hoped...the perfect neighborhood that is now deteriorating, the value of their house that is upside down, the retirement account that has shrunk or not grown at the rate that would provide for the dream retirement. Having high expectations (perhaps fueled by the you deserve it mentality) that have been majorly tarnished.

    My prayer is that she would count her blessings (and there appear to be many), accept this life she has been given as the "new normal" and perhaps rethink the priorities in her life...as in the basics versus status and the illusionary security of wealth.

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  12. %#&*$ I support 10 people on 65 a year, one income. 4 kids and a lazy ex who eat up large amounts of child support, and the wife and kids at home. I don't want to flippin' HEAR it.

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  13. When my wife and I were first married back in 1970, we spent $20 every two weeks on groceries, and we did fine. The fellow who was my best man at our wedding told me he and his wife were spending $100 a WEEK on groceries! I was flabbergasted. I asked him what were they eating, filet mignon and caviar every day? He thought he was spending a reasonable amount until I told him what we spent. Then HE was flabbergasted!

    Some neighbors of ours here in Arizona are struggling to keep from losing their home. They're elderly and in poor health, less than barely getting by, yet they insist on having satellite TV with all the channels and options, as well as a brand-new pickup truck in their driveway! They eat all the best foods, too, and eat out at least 3 times a week. They're so in debt they'll never recover. No doubt they nave no intention of getting caught up on their bills before leaving this orb.

    No matter who you are or where you live, you CAN live quite comfortably on whatever you're making, as long as you force yourself to live within your means. We bought a mobile home for $30,000, instead of a frame home for darn-near ten times that! Since then, housing prices have dropped considerably. Whatever. We're quite content in our little 3-bedroom, 2-bath 40' by 24' home. It's cheaper to cool in the summer and heat in the winter than a big ol' house. (Less to have to clean and dust, too!)
    --Fred & Deb in AZ

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  14. We bring home less than $15,000 a year and are a family of 7. Our home is paid for. We have 2 VERY used vehicles and thankfully are rarely ill or have need of doctors. We have no insurance on our home which is something that I don't like but it isn't in our budget. When we need something we SAVE for it! We do have about $1000 in debt currently from when we had an engine blow on the only vehicle that could haul our family. It can be hard to change the way you live but it depends on your priorities and goals in life. Ours is to be debt free and self-supporting.

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  15. $100K isn't poor.

    The writer just needs to dump her entitlement mentality. Or the stunned resentment she feels at the fact that not all her dreams are going to come true. Not all mine are either. I grew up and I'm over it.

    Xa Lynn

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  16. In all fairness, not everyone is taught how to budjut or shop. I was very fortunate to have a Mother who took the time to teach me these things. I also learned how to cook from scratch like her. It never ceases to amaze me,that people are surprised that I can cook that way,and without a microwave to boot. i always managed to keep my family well fed on very little money.I watched my sister in law who had far more money to work with not do near as well.Of course the ate only fast food and microwavable meals.I'm afraid that it has become way to common to bring up children this way.When they get out on their own, they just don't know what to do.Then they pay the price.yes its easy to say you can do better whether you have that kind of money or not,but I believe compassion is far better.If you have the chance to teach someone a better way and they want to learn,by all means do it.That will do far more good than making negative comment.Who knows you might make a new friend, and they may pass on the knowledge you give them.

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  17. xa lynn is right..this gal and a multitude of others are living in lala land...they need to grow up and become less self absorbed....perhaps they "feel poor" because they are starting to realize what they have been spending their money on...and dont have the life skills to downsize their lifestyle.

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  18. Family of six, western Washington. We live on less than 30K per year. We spent $200 per month for groceries for our family of six, I kid not, and it's not even difficult. With $200 per month, we are able to put some towards long-term food storage and I bet we have a good 6-8 months worth of food. We also homeschool...it can be done on the cheap, but there are some added expenses for sure. I don't feel sorry for people like the writer...not.one.iota. We have friends in Tacoma that make about 200k per year. They have two young kiddos at home. They can't afford the dollar menu or McDonalds or even have the gas to drive to our house for a birthday party. We have more liquid cash than they do. I don't feel sorry for them either. YOu make your bed, you lie in it. You think a car with car payments is a need? Well, welcome to the poor house.

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  19. Fwiw, right now my family is making closer to $100K/year than $30K/year, and we about had more money at the lower income. More tax breaks, more programs available, lower insurance premiums, and so on. Although I will fully admit we pay a bit more more for groceries now for six than we did for a family of four (especially as we prefer local/non-processed food like a grass-fed cow and such), and that I can't resist good books on sale for the kids to read (we homeschool), even though we *gasp* make the four kids (and guests!) share two bedrooms for sleeping in our medium sized house.

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  20. I lived in the Tampa Bay area for 11 years, and I actually completely understand the perspective -- not that I agree. It pretty much all gets summed up in the comment about buying a new car so her son can deliver pizzas. Really? I'm betting if they took the cash price of the car, registration, taxes, and insurance, they could HAND their son more money than he can earn. Or he could earn it working for them. But they probably didn't actually pay for the car, but financed it. Did they really "spend" $183K for that house...or did they just promise to pay the bank on that amount (plus interest) for the next 30+ years? During the entire time I lived there, I met very few (if any) people who could think outside of this pattern.

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  21. Wow, if these people are poor, then I'm destitute! Right now, I barely make around 12k a year and have to live with my father, so I can concentrate on getting rid of my student loans and finding a real job (if there's any to be had. I've been looking for quite a while, as in a few years). In turn, I plan meals and buy a good chunk of the groceries, cook and clean the house, pay for the gas I use up whenever I borrow somebody's car (usually my sister's), walk to work a good forty-five minutes most days, put off getting anything I want until its my birthday or Christmas and even then its a tossup, save literally every penny I find so I can at least do something I like every once in a while to keep my sanity, and I'm learning how to sew and make jewelry in hopes of increasing my savings and getting myself out of the hole. I still have to pay for all my insurance and for the dentist out of pocket. It ain't easy, but I'm alive, get to take care of the house I grew up in, keep my widowed dad who's stressed a lot of the time company, and make it easier for my little sister to concentrate on herself and work on her student loans that are three times as much as mine. Within the last year and a half, she's been doing really well tackling that debt.

    When I read that article, I wavered between sympathy and anger. I know 100k isn't what it used to be, but they're being really stupid about it. The only thing I could applaud them for is keeping out of debt. Debt, as I have found out the last few years, can make one a slave, especially in an economy were you have few opportunities to pay it off. Even being creative with a sewing machine won't help much.

    ~Lily~

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  22. Wow, what a pity party she's having. This story highlights a common mistake many people make, and that is they change their lifestyle when they begin to make more money and they are "keeping up with the Jones's". If you want more in your savings account, you have to put more there, sweetie. If you want to teach your kid responsibility, they get to get a job that allows them to buy their own junk vehicle, or they get to pay you "something" for the use of one of the family's vehicles.

    This just rubs me the wrong way, not because of the mistakes they've made, but because she's whining about it.

    sidetracksusie

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  23. It all comes down to what you think you need, want or deserve in this life. Obviously this woman thinks she deserves more than she's getting. She wants more stuff, nicer stuff, newer stuff.

    Sorry, I'm having trouble finding that tiny violin to play so sad music for her. Those who think like her will never see the point unless they are plunged into true poverty. Give them half a lifetime on 18k with 4 kids, then come back and tell me about it.

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  24. I live 30 minutes to an hour away from Tampa depending on the traffic. Tampa is a college town. If 40,000+ college students can make it on nothing while living in that same city, she should not be "feeling poor" while making 100 grand a year.

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  25. Boy, you sure know how to pick a topic! Time for me to pile on...

    I'm sure the author of that article THINKS they're getting shafted (is that okay to say?).

    But until they've LOST a home, or a job, or their health...or feel euphoria at finding 2 quarters in the pocket of their one ten-year-old coat...or had to walk through the doors of a church food pantry...they're on their own.

    No judgment from me. But, please, no whining, 100k-ers. It's not becoming.

    Just Me

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  26. $100,000 a year SOUNDS like a pile of money. But the part you get to keep is considerably less. And the cost of everything - necessities most of all! - keeps climbing. I'm a little dismayed by how quickly it goes. (We're not there, but we're close.)

    But...BUT, it would NEVER occur to me to wail about my circumstance, or regard this income level as any kind of hardship, or ever occur to me to use "poor" in a sentence. That's insane! How ridiculous! How absurd! How utterly insulting to the many, many folks who have to get by on MUCH less.

    We have been very fortunate to be so richly blessed. And frankly, if we can't manage to not only "get by" but prosper - and more importantly - help others along the way, we don't deserve what we have now.

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  27. I feel sorry for this woman. Not because of he income, but because no one has been able to (perhaps they have tried) teach her how to live within her means. I was just thinking about how "rich" we are because we make almost 2/5ths of what she does and I have a larger mortgage, and I have a large savings account set asside for the purchase of a smaller, more affordable home.

    I am of the distinct impression that whether she was making 100k or a million, she would still feel it was not enough to keep her family comfortable. the mentality that "When I start making X-amount each year, we will have ____, ____ and ____." is the problem. It's not how much you make, it's how use you use it.

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  28. Hmmm...

    Well, let me preface this first by stating that I have been on both sides of the spectrum. I grew up dirt poor on a farm in the Midwest. I spent 10 years with a family as an enlisted man in the military. After I got out, I was blessed to have the ability to work and do very well financially. I say that to qualify the fact that know both sides of this spectrum well. I have been on both sides of the $100k line.

    With that said, I just finished up out taxes for last year and we paid in $50,715.24 in State and Federal income tax. For the folks who commented above who list as having large families and earn a small annual salary, did you take the Earned Income Credit last year? If so, you're welcome.

    We homeschool. We tithe on our gross income. We grow a garden and can and freeze all of the vegetables we can. We buy a full beef and a full hog from one of our neighbors a year. Our vehicles are paid for and we lease our house. But honestly, I find that we have about the same "disposable" income as we had when we were making about $50k/yr.

    Why? The obvious first is the taxes. We get absolutely raked over the coals in taxes. Second, we give a lot more away now than we used to. We help our Church more above and beyond our tithe. We help young families and younger couples in our homeschool coop.

    Wealthy is not good. Wealthy is not bad, but it is not good eather. Being content with what you have is the key. Me, I've never been happier than where I am right now. God has truly blessed us. However, I don't pity the poor, nor do I envy the rich - each has its blessings and challenges.

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  29. You can be poor at any income level, if you spend more than you get.

    Truth is, I have more sympathy than most of the commenters here. $100K sounds like a lot more money than it is, once you factor in the tax bite and the rising costs of just about everything. She made some choices that weren't good, and she definitely isn't going to win the "frugaler than thou" contest that seems to be springing up 'round here...not now, and probably not ever. Neither, for that matter, am I. The major difference between us (besides the fact that I make a bit less than she does) is that I'm not trying to.

    I remember when having a $100K annual income necessarily meant you were either insanely imprudent, or else you were rich. I also remember when a $20 bill bought a full tank of gas with money left over for a Slurpee and a pack of cigarettes, and when a $300 household electric bill would have prompted outrage, rather than the relief it does today.

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  30. My household makes 100k a year but we have 10 children its all in the life style you choose sure I would live to go on vacations but I chose to have a large family and most of the money goes to food.

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