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Because income is always reported as gross pay hence the reason everyone assumed it's gross. It's not that you were being far fetched but that's just the tradition. When someone receives a salary, that's gross pay. If they are referring to net income, they will report it as such or "my take home is...."
I may not earn an income in the traditional sense but I do know how gross and net pay work I actually posted about this very same thing about two years ago when my husband was looking to get out of the Army and enter the civilian world. I'm used to budgeting down to the last dollar (a necessity when you have children) so my mentality is a reflection of that but not necessarily reflective of everybody and I know that. Children also deplete ones inference skills, obviously.
Maybe you shouldn't have bought that home in DC Ranch. j/k
Not far from there actually. The cost of living thing really depends on where you live in the Valley. Since moving from a relatively nice (believe it or not) suburb of Detroit, my cost of living has gone up quite substantially. The only thing I've caught a break on is property tax. In MI we were paying around $7k/yr and here barely $3k. That does make a big difference when considering home affordability, but back home I'd have a nice lake house compared to my somewhat modest home here. I still think I'm way ahead of the game considering all the Valley has to offer though!
I was just making up hypothetical figures and I would agree you're living a decent lifestyle but there are still many expenses I did list including, but not limited to... health insurance, miscellaneous expenses, student loans? credit card bills?, savings, IRA contributions, utility bills, rainy day funds, etc.
I'm a firm believer in saving/investing and I also firmly believe it's prudent to save at least 20% of ones gross income.
Your 20% savings per year is also hypothetical. Most people cannot do that. At least not myself or anyone I know.
I do not live a life of luxury. I cannot spend money and lavish entertainment and vacations. Still, if I was making $72k, I could do a lot. Anyone that cannot live on $72k has the wrong priorities.
Just to clarify, yes I meant 72,000 gross-income. I surely wished it was 72,000 after taxes!
I do have a sig other and looooooooooots of money I own on student loans to get both college and grad level degrees. So not everything is as perfect as it may seem. It is not that I would have tons and tons of money to waste in fun things.
Lesson of the day: having college education opens some doors but getting an education is very expensive!! Student loans is like having a mortage
This discussion has been very helpful. Salary negotiations are quite stressful. My new employer was arguing all along that the salary cut I am taking evens out with the cost of living on that part of the country. Still, the whole idea of determining what numbers really mean in that part of AZ is complex.
My new employer was arguing all along that the salary cut I am taking evens out with the cost of living on that part of the country. Still, the whole idea of determining what numbers really mean in that part of AZ is complex.
That seems like a BS argument. If that's the case, then why move? The point of uprooting your life and moving across the country is to have a better life, not to live the same way you did before.
It all depends on where in the valley you live, Ed. You're employer is probably right if you're moving to Glendale or Gilbert. While still far cheaper than NYC, you won't make up a $20-30k salary hit if you live in Scottsdale, for example. I guess the point is that you can't really say, the cost of living in PHX is... and it really depends on specifically where in the valley, at least as far as housing costs go.
The one thing that is relative "cost of living." As I continue researching, I find that it is true housing is significantly cheaper than NYC. But other things such as sales taxes and even gas are not that much different than over here.
You are correct; sales tax isn't much different.
Gasoline today at most Manhattan stations is running between $4 and $4.20/gal. In Mesa, it is $3.70-$3.75/gal. at most stations. Before you go counting the savings there, remember it costs a LOT more $ here to register your cars annually than it does in NY. (Think around $400/year for a late model car. Registration costs decrease as the vehicle ages.) There are no toll roads/bridges here, but if you live & work in Manhattan, you probably won't be saving much there.
Another thing to consider is electric. Electric is pricey here too, except during the winter. Depending upon how hot/cold you like your apartment and other things, (orientation of windows, window quality/coverings, building insulation, etc.), you may be running your air conditioning for several months longer than you're accustomed to. On the flip side, it's much cheaper to heat a house out here and we don't get NYC winters. As a renter you may not get to appreciate that savings, unless you're in a house rather than an apartment. (There are ways around the high electric rates with time-of-use plans, especially if you two aren't home much of the day most weekdays. However, if your SO is working from home and likes the house cool, your electric bills will be higher than they are in NY for several months.)
If you're used to grocery shopping at stores like D'Agostino's or Gristede's, you will be pleasantly surprised at how much lower grocery prices are out here, assuming you don't buy most of your groceries here at Whole Foods. (If you perfer organic options, there are other, less expensive places to buy many of the things you find at WF.)
The largest savings, by far, is on housing - both rentals and purchasing. Property taxes are relatively low here, but they are also low within NYC limits.
As others have said, it all depends on how responsible your are with money. I was raised with the mentality to abhor debt in all its forms. It has served me well through the years. I had a car payment with my first car for two years. Every car I have bought since then I have paid cash for. When me and my wife were married, we lived in a condo for the first 7 years while I went to school and worked full time. I graduated with $0.00 in student loan debt. Our rent was 600.00 per month, and what money we had left we banked. We made approximately 35k for those fisrt few years. Now that I have graduated, my salary is around the 70k mark and we live like kings even having 3 kids. How do we do it??? Debt free living. No credit card debt, no auto loans, no extravagant vacations. We bought our first house November of 2011 for 185k. We were able to put down 85k, giving us a 100k mortgage. After seeing the large chunk that banks take in interest for the first half of the life of the loan, we decided to throw all of or extra income at it until it was paid off and then when/if we decided to upgrade, we would pay cash for a house next round. So far, we have paid off 30k of our loan by tripling up on payments. Some might say that my lifestyle is a crappy way to go through life without enjoying, but once the mortgage is paid, that is ALOT of disposable income to start enjoying life without the stress of debt. Guess what I am trying to say is that 72k is a massive amount of money to live on if you have the discipline and can sacrifice
That seems like a BS argument. If that's the case, then why move? The point of uprooting your life and moving across the country is to have a better life, not to live the same way you did before.
Indeed. It makes sense that I would want to "move up" as opposed to "moving down." Yet there is no way - seems like - I would get a salary in AZ that would be equal or higher than what I have here in NYC.
This is more of a personal journey for me. Things are getting serious with my SO, and we DO NOT want to plan having a family in NYC. No way, this is just no place to raise a family.
So my choice to take a salary cut comes from deep within me since I have more meaningful goals like starting a fam.
Quote:
Originally Posted by DetroitN8V
It all depends on where in the valley you live, Ed. You're employer is probably right if you're moving to Glendale or Gilbert. While still far cheaper than NYC, you won't make up a $20-30k salary hit if you live in Scottsdale, for example. I guess the point is that you can't really say, the cost of living in PHX is... and it really depends on specifically where in the valley, at least as far as housing costs go.
Thanks, that was very helpful.
Quote:
Originally Posted by CheyDee
You are correct; sales tax isn't much different.
Gasoline today at most Manhattan stations is running between $4 and $4.20/gal. In Mesa, it is $3.70-$3.75/gal. at most stations. Before you go counting the savings there, remember it costs a LOT more $ here to register your cars annually than it does in NY. (Think around $400/year for a late model car. Registration costs decrease as the vehicle ages.) There are no toll roads/bridges here, but if you live & work in Manhattan, you probably won't be saving much there.
Another thing to consider is electric. Electric is pricey here too, except during the winter. Depending upon how hot/cold you like your apartment and other things, (orientation of windows, window quality/coverings, building insulation, etc.), you may be running your air conditioning for several months longer than you're accustomed to. On the flip side, it's much cheaper to heat a house out here and we don't get NYC winters. As a renter you may not get to appreciate that savings, unless you're in a house rather than an apartment. (There are ways around the high electric rates with time-of-use plans, especially if you two aren't home much of the day most weekdays. However, if your SO is working from home and likes the house cool, your electric bills will be higher than they are in NY for several months.)
If you're used to grocery shopping at stores like D'Agostino's or Gristede's, you will be pleasantly surprised at how much lower grocery prices are out here, assuming you don't buy most of your groceries here at Whole Foods. (If you perfer organic options, there are other, less expensive places to buy many of the things you find at WF.)
The largest savings, by far, is on housing - both rentals and purchasing. Property taxes are relatively low here, but they are also low within NYC limits.
I hope these comparisons help some.
It was very helpful, thanks!
I get my gas outside of NYC. There gas is still bellow $4
Wow, I am really shocked about the prices for car registration. I have two vehicles but they are older. My SO has another car. So we would have to re-register 3 vehicles But I am not getting rid off mine, they are a hobby...and expensive hobby nonetheless That's really the one area in which I indulge....
I remember paying super mega high bills for electricity when I lived in TX. I gets hot down there too, LOL.
And although I am into healthy living and fitness, I actually hate Whole Foods. It is the most overrated and overpriced store ever. Too much bling all over and people end up paying for the extravaganza.
As others have said, it all depends on how responsible your are with money. I was raised with the mentality to abhor debt in all its forms. It has served me well through the years. I had a car payment with my first car for two years. Every car I have bought since then I have paid cash for. When me and my wife were married, we lived in a condo for the first 7 years while I went to school and worked full time. I graduated with $0.00 in student loan debt. Our rent was 600.00 per month, and what money we had left we banked. We made approximately 35k for those fisrt few years. Now that I have graduated, my salary is around the 70k mark and we live like kings even having 3 kids. How do we do it??? Debt free living. No credit card debt, no auto loans, no extravagant vacations. We bought our first house November of 2011 for 185k. We were able to put down 85k, giving us a 100k mortgage. After seeing the large chunk that banks take in interest for the first half of the life of the loan, we decided to throw all of or extra income at it until it was paid off and then when/if we decided to upgrade, we would pay cash for a house next round. So far, we have paid off 30k of our loan by tripling up on payments. Some might say that my lifestyle is a crappy way to go through life without enjoying, but once the mortgage is paid, that is ALOT of disposable income to start enjoying life without the stress of debt. Guess what I am trying to say is that 72k is a massive amount of money to live on if you have the discipline and can sacrifice
wow, that's impressive. I was not able to go both to college and grad school without student loans. actually, I had a full scholarship in college, so most of my student loans are from grad school.
But thanks for sharing your story. It is very inspiring in terms of knowing that with discipline one can live debt free.
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I actually posted about this very same thing about two years ago when my husband was looking to get out of the Army and enter the civilian world. I'm used to budgeting down to the last dollar (a necessity when you have children) so my mentality is a reflection of that but not necessarily reflective of everybody and I know that. Children also deplete ones inference skills, obviously.
But I am not getting rid off mine, they are a hobby
That's really the one area in which I indulge....
