Wednesday, March 28, 2012

Your not poor if you earn $100,000 a year

There was a recent article on Yahoo finance How to Earn $100,000 and Still Feel Poor.    My husband and I have never made 100k a year we have been close-our highest before takes was 95k. Certainly we didn't feel poor then and don't feel poor now even when our annual earnings are down. .  I think they need to reevaluate what "the basics" are and what "poor" means.  I think she could have rephrased poor with the word tight...but that really would be as good as poor and not have over 10k comments. 

They really said : "Is six figures the new minimum wage?"  

No.   It is not.   Making $100,000 is nothing at all like making minimum wage in any way.  There is really absolutely  no comparison   Minimum wage is $7.25 an hour in this country with some states a bit more.   That works out to $15,080 per year if you assume 40 hours a week for 52 weeks.    Making less than $300 a week is  not the same as $1900 a week.  

Here is their monthly expense breakdown 

$ 350 a month for utilities-  Not unreasonable 
$ 300 for car insurance,  -Seems high we have  $120 a month for 2 cars 
$ 175 for Internet, cable and phone.   High-Comcast or many other places have triple play deals for $100 or are they including cell phones 
$1222 a month on our mortgage  Actually not too bad 
$ 250 a month extra on the mortgage
$ 300 on a car loan.    Hmm they claimed no  debt  highly recomnmed that they look at Dave Ramsy drive free plan. 
$ 500 a month on gasoline  higher but they maybe driving alot could look at way to save on gas 
$ 800 on retirement  way too low they should be saving double to even hit 10% of their income 
$1250 for college ($15,000 a year for tuition and books)  Kids need to pay for this and for community college it seems very high.  $4k annually for community college. 
$1000 a month on food.  way to high for a family of 4 even with growing boys- I have 3 and we spend $600 the most a month

I am seeing alot of missing categories  clothes, vacation entertainment.   I don't live in their shoes but their cost of living area is lower than mine and we are  making less than they.   I don't feel poor.    

So what are you thoughts.... 


Tiffany @ DontWastetheCrumbs said...

I think that people have a poor concept of needs vs. wants and in turn, the more they make, the more they "need" and spend. If someone is making $100k/yr and feeling poor, then they've made poor financial decisions.

$350/mo for utilities is very high, in my opinion. This makes me think that they have a very large house, or are not efficiently using their heating/cooling systems (i.e. programming to set temps & times).

$300/mo for car insurance is high to me too. I can only think that they have newer and more expensive vehicles that cost more to insure.

$175 for Internet/cable/phone - high indeed.

$1472 towards mortgage - seems fair, but I'm not sure how accurate given the cost for utilities...

$300 car loan - average price for a car note

$500 gas - this is very high. Perhaps they have a vehicle that is not fuel efficient and drive more than truly necessary

** so far, I'm thinking this person owns a new BMW or Mercedes SUV

The prices for retirement shouldn't even be included since in most cases, contributions to 401k are pre-tax (so they wouldn't even see the money in their paychecks.)

$1250/mo for community college is high - this is about average though for a state school if you're not living on-campus.

$1000 for food seems high too. I can see being able to "splurge" more if you make more, but that is a large number.

Sorry for the novel - thanks for sharing the information!!

Admin said...

Good points Tiffany they are totally living about their means.

April said...

wow, $300 a month for insurance? We pay less than $400 every 6 months for 2 trucks and a motorcycle. I guess if you had payments(which we dont) and had to have full coverage...

the gas is around what we pay, but we have trucks that are at least $80 each to fillup....

I wouldnt know what to do with 100,000 a year. we are a family of 5 and hubby makes 22,000-30,000(he's a mason so it varies) a year.

Anonymous said...

Car insurance depends on previous driving records and the state you live in and the coverage that you have and how many drivers you have in the house. $400 every six months? Lady, how many drivers? where do you live? what coverage do you have?
It's kinda unfair to judge since we don't have all the information.

I do agree that people forget wants vs. needs.

bsavage said...

Live in Pa. Old Toyota and new Mazda = 230 a month in insurance