How much more income a month would be life changing? (payments, rate)
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If my income increased, I don't think it would really change my life much. I'd still be me and I would still live fairly simply. But it would allow me to stop pretending that I'm financially okay when I'm really not.
I HAVE to assume she meant $20K/year NOT per month. I HAVE to assume that! Right!?! No way can somebody be this oblivious. If I even made $20K/month I sure as heck would not be cleaning my own home or clipping coupons! Hahaha!
My original post, before I edited it, I commented that maybe they meant $20k a year. But then I did the math. I think my parents made about $15k a month when I was growing up. We did live in a 6000 square foot house with a pool, volleyball court, and basketball court, but we didn't have a maid, a gardener, or a nanny, and we were in a very low COL area. $20k a month will make you pretty well off if you live in most of the country, but is only ok income for someplace like Manhattan or LA and want to have a family and own a house.
I'm somewhat surprised by the answers here. My wife and I started out in a horrible 4th floor walkup apartment. I finished school and with my income we were able to move to a much nicer area in a better building, it was life changing for an extra $2,500 a month. Then a few years later my wife and I both got small promotions. We were no longer living paycheck to paycheck, we had an extra $1,000 a month coming in and it completely changed our life. We then started budgeting and got a few small raises probably totaling another $1000 a month and it let us move to a beautiful townhouse in a great area and life changed again for the better. Then most recently my wife got a new job and was able to remove a ton of daily cost from commuting and health coverage. Saving us upwards of $1,800 a month. It allowed us to save and buy our current "dream home" that we plan to stay in for a very long time and start a family in.
I never thought I'd be where I am today while we were living in that 4th floor walkup apartment. We did it in steps and it was life changing every time. If it takes $5,000+ to make a real change in your life you must already be totally rich.
Imagine what you could do with an extra $2,000 a month. In the first year you could, Lease a new Maserati, vacation in Hawaii, And hire someone to clean your house every week at $100 a week. That's not life changing? I mean, like I said, unless you're already rich and doing that kinda thing.
I think that in the Personal Finance subforum, you are going to find a higher than average percentage of people who DON'T live paycheck to paycheck. Therefore, extra money just gets saved or invested. They may be able to retire sooner, but it wouldn't significantly, immediately change their life. For the average American, who is living paycheck to paycheck, I think that 25-40% more income would make a drastic, immediate difference, but then most Americans would feel the lifestyle creep start to use more and more of that up, and find themselves right back living paycheck to paycheck again, at a higher level.
Also depends on where you are in life.age and financial journey. We also ingrain attitudes towards money. i.e. we tell ourselves that we don't need anymore in response to an actual scarce resource. 20-30 years of telling ourselves builds a lot of fiscal discipline, and we might find no need for extra money.
I HAVE to assume she meant $20K/year NOT per month. I HAVE to assume that! Right!?! No way can somebody be this oblivious. If I even made $20K/month I sure as heck would not be cleaning my own home or clipping coupons! Hahaha!
My original post, before I edited it, I commented that maybe they meant $20k a year. But then I did the math. I think my parents made about $15k a month when I was growing up. We did live in a 6000 square foot house with a pool, volleyball court, and basketball court, but we didn't have a maid, a gardener, or a nanny, and we were in a very low COL area. $20k a month will make you pretty well off if you live in most of the country, but is only ok income for someplace like Manhattan or LA and want to have a family and own a house.
$20k a month ain't mansion living in Dallas, either.
My original post, before I edited it, I commented that maybe they meant $20k a year. But then I did the math. I think my parents made about $15k a month when I was growing up. We did live in a 6000 square foot house with a pool, volleyball court, and basketball court, but we didn't have a maid, a gardener, or a nanny, and we were in a very low COL area. $20k a month will make you pretty well off if you live in most of the country, but is only ok income for someplace like Manhattan or LA and want to have a family and own a house.
Quote:
Originally Posted by stan4
Man. You are so wrong about that.
NO WAY! $20K per month is $240K per year. That is much much better off than a majority of the rest of the population. You CAN definitely afford a maid should you choose. I am not saying you would own a yacht and go sailing year round or anything but you can afford a mansion in a majority of the country and probably a very nice home in most major cities. I live in Chicago and live comfortably on less than half of that. You might be an "average" family in places like San Francisco or New York but you would still live a comfortable lifestyle if not very comfortable.
To say that they can't afford a maid is a slap in the face to the average american household. My uncle has a maid service for like $150/month who come out once a week. I would love to make $20k/month.
NO WAY! $20K per month is $240K per year. That is much much better off than a majority of the rest of the population. You CAN definitely afford a maid should you choose. I am not saying you would own a yacht and go sailing year round or anything but you can afford a mansion in a majority of the country and probably a very nice home in most major cities. I live in Chicago and live comfortably on less than half of that. You might be an "average" family in places like San Francisco or New York but you would still live a comfortable lifestyle if not very comfortable.
To say that they can't afford a maid is a slap in the face to the average american household. My uncle has a maid service for like $150/month who come out once a week. I would love to make $20k/month.
I apologize for being unclear.
I did not mean that you could not have a maid if you made $240,000 a year. What I mean is that the idea that you would stop looking for bargains, clipping coupons, or suddenly start living the high life is not really true at all.
We make more than that and still budget, consider each purchase, look for sales, recycle/reuse/repair what we can, etc.
And maybe you and I have different definitions of mansion, but no one around here could have one on $240k salary. Not without being so far out in the boonies that you're practically out of civilization. Or some off-chance foreclosure.
I apologize for being unclear.
I did not mean that you could not have a maid if you made $240,000 a year. What I mean is that the idea that you would stop looking for bargains, clipping coupons, or suddenly start living the high life is not really true at all.
We make more than that and still budget, consider each purchase, look for sales, recycle/reuse/repair what we can, etc.
And maybe you and I have different definitions of mansion, but no one around here could have one on $240k salary. Not without being so far out in the boonies that you're practically out of civilization. Or some off-chance foreclosure.
In NYC, there is the 40x rule of thumb: your annual income should be at least 40 times your monthly housing cost. At $240k a year, that would be a budget of $6000 a month. You can get a very nice place in both LA and NYC with that budget, maybe not a mansion, but definitely a "very nice home" and certainly much better than "slightly nicer than a starter home", which is what SandyJet claimed.
In NYC, there is the 40x rule of thumb: your annual income should be at least 40 times your monthly housing cost. At $240k a year, that would be a budget of $6000 a month. You can get a very nice place in both LA and NYC with that budget, maybe not a mansion, but definitely a "very nice home" and certainly much better than "slightly nicer than a starter home", which is what SandyJet claimed.
Agreed. But those " rules" usually are insanely overestimating what you'd want to do if you had an ounce of fiscal sense.
Taxes, 401k, savings, property taxes, utilities, maintenance, wanting to have a life and go places once in a while, etc...I would NEVER take on a $6k mortgage.
My monthly mortgage payment is $2400, but once I factor in insurance, utilities, prop tax...it goes up to $5k! For housing! Financially dumb.
So you can use 40x rule, but that is nucking futz.
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