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I am a 25 year old single guy who earns about 70K a year. Looking at household income in that US, looks like put me at top 30% or so household income in the US. Yet it seems like everyone I come across is outspending me. It sometimes does make feel a bit poor since I don't the money to buy all these things.
For example, at malls I visit people seem to buys tons of items while I usually window shop or get 1-2 items. At Wal-mart, people checkout with carts full of goods, and spend like $25 usually. Not mention, I know a lot of people my age working at retail store yet they can buy latest smart phones, LCD TV, brand name clothes, and not mention nice loaded cars.
I don't consider myself very frugal, I spend most of my take home income due to various expenses. Most of my expenses goes to things like car, housing, basic utilities, and paying off debt. And yes, I sometimes even have negative budget (spend more than income) in a month. Now I don't have any credit card debt, and always spend money if I have cash to pay for it. Wonder if that is the difference? I really do wonder where people managed to find so much of money to spend? Or maybe I am just around people who have more money than me?
Most of my expenses goes to things like car, housing, basic utilities, and paying off debt.
A lot of the people you see are probably in debt and will regret their spending someday. If you want to have money later, live more frugally now. A single person making $70,000 should be able to build up some savings easily, even while paying back student loans.
Are you paying too much for car and housing? Get a cheaper place to live, if you rent. A smaller place will also help you cut down utility expenses. Get a cheaper car, if you can.
Reduce your eating out.
Don't carry more than a little cash.
I've probably prepared or reviewed 10,000 tax returns over my 45 year career. One of the least reliable ways to know how much money people make is how much they spend. Having said that, remember that we live in a big world and just because there are 2500 people at the mall buying everything in sight doesn't mean they there are not 25,000 people staying home and not buying much.
Also, be wary of comparing your inside persona to other peoples' outside appearances. The guy sitting next to you at the expensive restaurant may not be the same guy with the new Lexis, may not be the same guy with a new ride on mower, etc. And, one or more of those guys may be really stressed by the payments he has to make to keep the spending going.
Last edited by Wilson513; 11-26-2010 at 05:43 PM..
I hear you brother.... sometimes i look at all these 20somethings shopping at Best Buy or A&F and seriously wonder how they can afford EVERYTHING.
Here are a few thoughts to consider though. People with babies & kids are forced to shell out $$$ for all kinds of household items at Target & Costco & Ikea out of sheer necessity. They skimp elsewhere in their budget to make a happy home. Even the per-hour lady who cleans our offices feels she needs to buy Wii and annual passes to Disneyland.
Some of my under-30 friends have moved back home to save money during the current recession. I've noticed this is especially true among those who have foreign-born parents who're actually glad to have their children close-by until married off. One Armenian girl in our office (who lives with her parents) drives a new Lexus and carries around a $1500 Hermes bag because she doesn't have to worry about rent.
Also, another thing i've seen is that many upper income parents are actually continuing to pay for their kids' rent/utilities out of college, even if they've landed high-paying engineering or IB jobs. I know that's not uncommon in mega-high rent cities like SF, NYC or LA, but i've even heard from friends of friends in places like Raleigh and Seattle who're going on trips to Paris or Virgin Islands-- courtesy of overgenerous helicopter parents. My friend's sister actually convinced her dad to buy her a duplex, saying it with the real estate market crash it's a great investment! lol
Some of my under-30 friends have moved back home to save money during the current recession. I've noticed this is especially true among those who have foreign-born parents who're actually glad to have their children close-by until married off. One Armenian girl in our office (who lives with her parents) drives a new Lexus and carries around a $1500 Hermes bag because she doesn't have to worry about rent.
Also, another thing i've seen is that many upper income parents are actually continuing to pay for their kids' rent/utilities out of college, even if they've landed high-paying engineering or IB jobs. I know that's not uncommon in mega-high rent cities like SF, NYC or LA, but i've even heard from friends of friends in places like Raleigh and Seattle who're going on trips to Paris or Virgin Islands-- courtesy of overgenerous helicopter parents. My friend's sister actually convinced her dad to buy her a duplex, saying it with the real estate market crash it's a great investment! lol
I am actually surprised to hear many people parents are still helping them that much. Probably, because it is reverse for me. My dad retirement income isn't that much, so my parents are living with me. I actually did buy a bigger house than need since I was quite sure they would have move in with me. They help out by giving me some money for utilities and lawn care. Not mention I don't eat out much anymore since they are cooking.
Now that said, I can see if people have parents who are well off are getting support. I am actually 100% if my parents actually did have good income they would happily pay for my vacation, car, and maybe even housing. I heard of older co-worker as well executives in my company paying for their kids stuff. You know that makes me sometime I did have rich parents!
Are you paying too much for car and housing? Get a cheaper place to live, if you rent. A smaller place will also help you cut down utility expenses. Get a cheaper car, if you can.
Reduce your eating out.
Don't carry more than a little cash.
I do think my housing costs are bit too much. As mentioned, I bough a bigger house since my parents are living with me. Also, I stopped eating out since my parents cooking / buying groceries. Hence, why my wal-mart trips are usually $25.
In recent months I have been spending a lot of money on unplanned expenses. For example, car service bill hit over $200. Then my dentist wanted to do a $400 "deep cleaning" procedure. Now recently, my HoA is upset about weeds / grass on my lawn and I may need to spend $500-$2000 to fix this all up...
I am a 25 year old single guy who earns about 70K a year. Looking at household income in that US, looks like put me at top 30% or so household income in the US. Yet it seems like everyone I come across is outspending me.
I really do wonder where people managed to find so much of money to spend?
many older americans have wealth and assets that have accumulated over time. that is different than being an above-average earner for a year or two.
the national average income is not important. you live in a major metro area. 70k does not go as far in Dallas, TX as it does in Roaring Springs, TX.
if it makes you feel any better, i know people who are going through the same thing, where they 'expect' some kind of lifestyle based on their income alone. it takes time and diligence to build assets, and learn to manage your expenses.
In recent months I have been spending a lot of money on unplanned expenses. For example, car service bill hit over $200. Then my dentist wanted to do a $400 "deep cleaning" procedure. Now recently, my HoA is upset about weeds / grass on my lawn and I may need to spend $500-$2000 to fix this all up...
I hate unexpected/unplanned expenses too.
For your dentist visit, you may want to sign up for an FSA at work if it is available. It will help you pay for the dentist using tax free dollars. It was really helpful. I got a deep cleaning treatment from the dentist as well; you may want to look for a second opinion just to be sure of the cost.
As for the grass/lawn, landscaping is a good project to do yourself if you are physically able to do so. If you need a truck and don't have one, you can rent one at Home Depot or Lowes to use for the hour/day, something like it.
Just finding little things you can do to help reduce your expenses.
As for how it seems others are spending lots of money on items at the mall/stores, some are spending money on a certain category while not spending in another. My hubby loves technology and has lots of computer gear but he doesn't drink much so he has a very small entertainment budget but he looks for deals online for computer equipment instead of retail.
My hubby loves technology and has lots of computer gear but he doesn't drink much so he has a very small entertainment budget but he looks for deals online for computer equipment instead of retail.
FYI, I will admit when first got my job I spent a lot of money on credit! In 2007, I spent $3,000 to buy a 61" TV and Home theater computer. It all paid of finally this year, and I don't want to buy another TV.
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