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Old 06-01-2011, 07:19 AM
 
Location: On the Beach
4,139 posts, read 4,506,043 times
Reputation: 10317

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well, I don't find this article surprising at all. 95% of my savings are retirement savings. Everything you read talks about how you never have enough retirement savings. That, coupled with the lack of return on CDs and other savings means that I save very little outside of retirement 401 savings and, I wouldn't touch that for an emergency. I'm not alone, although I make fairly decent money, most of my co-workers and friends don't keep a lot of cash in the bank. I keep a few grand for unexpected household problems and that's it. I know financial experts saw you should have at least 6 months income in savings (aside from retirement). I know very few people who live by that rule.
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Old 06-01-2011, 10:03 AM
 
Location: The Ranch in Olam Haba
23,709 posts, read 30,623,585 times
Reputation: 9985
Quote:
That isn't a single person who is making any effort to live within their means and save anything, so yeah they won't have any savings.
Then you list one with what you think is realistic numbers. I have 30 years of memories to go on.


Quote:
Given the overall stagnation in wages over the past 30 years,
Stagnation? They're lower than they were 30 years ago in many fields. most people entering the work market dont know that we made more dollars in the same fields when we entered the fields 25-30 years ago. Comparatively expenses were nothing compared to now. When we graduated college, we were on 5-10 year plan for payoff, they are on 20-30 year plan for pay off now. People from my age group have the words "liquid savings" built into our budgets. We come from the generation with no credit cards. I can go on fo pages.
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Old 06-01-2011, 10:24 AM
 
8,263 posts, read 12,165,346 times
Reputation: 4799
Quote:
Originally Posted by NeilVA View Post
Then you list one with what you think is realistic numbers. I have 30 years of memories to go on.
Sure. Here in Phoenix, for a single person a reasonable budget for the essentials would be:

1BR apartment - $750
Utilities - $150
Cable/Internet/Cell - $120
Food - $300
Car/Ins - $400

That is $1720 of the approx $2800/month take home pay. Could probably have a 3BR home for another $300 or so per month more.
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Old 06-01-2011, 12:19 PM
 
Location: The Ranch in Olam Haba
23,709 posts, read 30,623,585 times
Reputation: 9985
Quote:
1BR apartment - $750
Utilities - $150
Cable/Internet/Cell - $120
Food - $300
Car/Ins - $400
Cable/Internet/Cell - $120 This is a promo rate. Whats the rate outside of the promo?
College loan repayment?
Credit cards?
Gas for car?
Maintenence (Car & Home)?
Clothing?
Haircuts?
Medical Insurance?
Apartment Insurance?
Guys/Girls night out (1-2 per weekend)?
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Old 06-01-2011, 01:26 PM
 
8,263 posts, read 12,165,346 times
Reputation: 4799
- I had deducted the medical insurance from paycheck calculator to get 34k take home. I'm still not sure how you came up with 24k take-home from 45k even for a single person.
- Maintenance on an apartment?
- No, that is what I pay for internet/tv bundled, you can call the provider for almost any new offer they have and they'll match it if you extend your contract. I use prepaid cell phone very cheap.
- I showed over $1000/month extra per month, that'll cover for misc expenses, spending money, and student loan payments.

Point is I believe you purposely picked big numbers and called them average to try to prove people couldn't live off 45k, and I don't think you made a realistic case. Now you are creating line items for guys night out? Come on.
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Old 06-01-2011, 02:04 PM
 
3,763 posts, read 12,507,007 times
Reputation: 6853
I don't think anyone doubts that at every income level, there are some people who manage to survive and might even have some left over. When I was single person, 45K would have allowed me a small savings account, while living at an okay comfort level.

And by the way - I finally looked it up -- the last year reported (2009) - median HOUSEHOLD income was just over $49K. So - a little more than I guessed, but not for a SINGLE person - for a household.

So possibly a non working spouse, or two low earning spouses, or a spouse and a kid or more than one kid, etc..

Which raises some expenses (definitely food/personal items, possbily some utilities, etc..).

And I also come from a household from the great depression. My parents put in Central Air after I left for college, and there was never cable television when I lived at home. I didn't get a cell phone until most people I knew had had them for nearly 10 years...

however, that being that, I do think it is much harder not to have these things today when they are ubiquitous in the culture, than it was not to have them 50+ years ago. There is a lot more societal pressure to have cable, a cell phone, an okay car.... to live "middle class" - even if your income is not middle class.

And its easy to say - $166/month ($2000K/year) isn't that much to save. Except I know a lot of people for whom $166 might as well be $5000 -- because there's no way they could spare that much. They're lucky if they could come up with $20 to spare out of their monthly budget.

And lets not forget -- 49K is the median (as of 2009) -- which means approx 50% of households are making less than that. Some are making a lot less.

I think the 50% of households making more than the median -- they probably are able to put together an emergency fund without too much hardship. But the people making less than that ... yeah, I think its totally understandable that they might have some difficulties.
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Old 06-01-2011, 02:07 PM
 
Location: The Ranch in Olam Haba
23,709 posts, read 30,623,585 times
Reputation: 9985
Quote:
Point is I believe you purposely picked big numbers and called them average to try to prove people couldn't live off 45k, and I don't think you made a realistic case. Now you are creating line items for guys night out? Come on.
Forget the 24K, I used a big city. I'm working off of the 32k number.

Point is people can live frugally and can live within their means. Problem is many don't. Just look at the amount of homes that have gone into forclosure. Do you really think that most of these people were all gullable and signing their contracts with blind faith in the banking system on repayments or did they buy these 5 year ARMS in order to flip the home in under 5 years so they could get into a even bigger home?

Cable/Internet/Cell - $120
This is a promo rate that includes home phone. Whats the rate outside of the promo? Walk around, most people have smartphones so service (w/texting) plus data is $70 and up by itself.
College loan repayment?
If your making $45k, then you currently have loans to repay.
Credit cards?
Most are carrying a balance due to those flat screen TVs, game units, stereos, ipods, computers, etc
Gas for car?
$200 a month or more
Maintenence (Car & Home)?
Car oil changes, items not covered by car warranty, items the LL does not pay for, etc
Clothing?
Everyone buys clothing, shoes, etc
Haircuts?
once a month
Medical Insurance?
$100-$200 a month and then co-payments
Apartment Insurance?
To protect the toys
Guys/Girls night out (1-2 per weekend)?
Well you could stay home every weekend. And never eat out, and never date, and.........

So who is not being realistic??
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Old 06-01-2011, 02:12 PM
 
3,644 posts, read 10,915,683 times
Reputation: 5514
We recently 'lost everything' and have nowhere near $2k any longer, anywhere. Medical bills, living expenses and a major client who 'led us on' for months on end, ate it all up - we're bone dry. As a matter of fact, I had to pawn my rings (wedding/engagement) to pay to go to a memorial service out of town a couple months ago. As I learn to 'live without', and we adjust our life to our new reality, I have met literally thousands of people, in RL who this applies to. It comes as no surprise to me. At one point, we had to borrow the cash for gas so that dh could get to work at his new job (which thankfully came in the 'nick of time' - kept us off the streets, though we're still 30 days late on the essential bills, stopped paying non-essentials 60+ days ago). Those we turned to for help didn't have much to give - things are just THAT tough.

A year ago, I was donating $100 to my children's classroom end of year parties with the thought that it's 'only a hundred'. This year, I'm room mom (again, as always). 6 of the kids haven't paid and I, as room mom am being expected to cover the $18 difference. Except I can't - and I'm furious that others expect me to!

What a difference a year makes.
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Old 06-01-2011, 02:39 PM
 
8,263 posts, read 12,165,346 times
Reputation: 4799
Quote:
Originally Posted by NeilVA View Post
Point is people can live frugally and can live within their means. Problem is many don't.
Agreed.

Quote:
Walk around, most people have smartphones so service (w/texting) plus data is $70 and up by itself.
Ah, these people making 45k NEED to spend $70 on a data plan? Picking unnecessary luxuries and expenses as reasons 45k isn't enough seems kinda silly to me. What you are trying to prove is that it is possible to live beyond your means on 45k, something I've not disputed.

Quote:
If your making $45k, then you currently have loans to repay.
So you are taking the position that everyone making 45k has student loans? Don't be absurd, my plumber probably makes 45k.

Quote:
Most are carrying a balance due to those flat screen TVs, game units, stereos, ipods, computers, etc
Again, you are taking things people might not be able to afford, tacking them onto their living expenses, and declaring a salary insufficient. If your whole point here is that people buy things they shouldn't, then yes we are in agreement. That isn't the same as saying 45k isn't enough salary for an individual to live on.

Quote:
Gas for car? 200 a month or more. Car oil changes, items not covered by car warranty, items the LL does not
Again picking the high end, but I know that is your mission here. Oil change? What is that $25 every few months? Okay we'll be sure to add that $9 line item into the monthly budget.


Quote:
Medical Insurance?
$100-$200 a month and then co-payments. Apartment Insurance?
I already entered $200/month pretax for medical to get 34k take home in AZ. Honestly how much is apartment insurance?

Quote:
Guys/Girls night out (1-2 per weekend)? Well you could stay home every weekend. And never eat out, and never date, and.........
You could go out plenty with the budget I demonstrated, you just refuse to believe it. Not everyone's budget works out like you calculate where you take home only 24k from 45k and as a single person spend $500/month on utilities.
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Old 06-01-2011, 02:58 PM
 
Location: Los Angeles area
14,017 posts, read 20,852,384 times
Reputation: 32530
Default Huh??

Quote:
Originally Posted by Briolat21 View Post
C-D is beyond an ivory tower, it borders on a closed feedback loop. Like minded individuals all say the same thing and reinforce each others opinions. Especially on the financial forums! About the only place you see disagreement is parenting or sometimes the health forum when someone with "alternative" views shows up.
How you come to that conclusion is a great mystery. Just read this thread and note that there is substantial disagreement. There is substantial and very lively disagreement in pretty much every forum where I spend much time: Retirement, History, Great Debates, Real Estate, and yes, Finance too. I don't get it. Your other posts in this thread are very rational and reasonable, but the above is way out in left field.

Note that I am not claiming that City-Data posters represent a cross-section of the population of the United States; in fact it seems logical to me that they do not. It's the "little disagreement" part that is totally contrary to my one year and three months of experience here. I long ago lost track of the number of people I've gone head to head with, and very vigorously too. It's almost a daily occurrence.
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