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@MrsTiz: but to me a 401K and retirement savings are a necessity. I wouldn't ever feel comfortable not saving for those. If that means we can only have one child to do so, then that is what DH and I will do.
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To cover basics about 30k. We could live on less if we: went down to one car, sold the other for a cheaper car, ate ramen noodles etc. Of course this is just a guess I'd have to do the math to know for sure.
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@Smurfette: Everyone has different "necessities", but that doesn't make them actual necessities.
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@Smurfette: I think the discrepancy is really people's different interpretations of "get by." You might not feel comfortable not putting money into savings and a 401k, but you could definitely "get by" aka pay bills and survive, without doing that.
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@IRunForFun: @MrsTiz: To me it a necessity. There is no question that it happens with every single pay check. Even if DH or I lose our job, we would never cut out that expense from the other's check. It is far too important.
Which is why these threads so are hard to answer, everyone's answers and cost of living are different.
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To me contributing and saving is necessary because it's what we dipped into when my husband was laid off for a year. Without that we would've been in huge trouble, and lots of cc debt.
When looking at our amount you have to realize that we have 3 kids, and my Husband pays child support on his two daughters.
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@MrsTiz: if your mortgage is $5000/ mo as it is in many large metros, you are already at $60,000 and then you add childcare and you are at $80,000... Then there is food and utilities and you are easily at 100k. That doesn't even include any savings!
I know I'm lucky to live in a lower cost city!
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This is difficult for me to answer since there are so many factors at play. I mean I know we could make less $ than we do now, which makes me feel good since we live in NYC and are clearly not living above our means (even though I was recently accused of this but that's another story), but the exact amount is tough to determine since sometimes when you take away one expense you add another. For example, we pay $350/month to park our car in the city. This seems ludicrous to most people. But if we stopped parking our car then if we were ever to leave the city we would have to buy an expensive train or plane ticket or rent a car. I dont' really think it's feasible to say never leaving the city is "bare bones" since we would then never see our families (who do not travel to NYC).
I've cut out cable before and that's fine. But I do need a strong internet connection to ever be able to work from home and time warner is a gangster and prices it so that you HAVE to spend a certain amount to get internet, so you might as well add cable TV. WE could absolutely do without dining out which is a huge expense and buy less clothes.
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@Mrs. Jacks: That is exactly what my life looks like
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Before we moved a couple months ago, we lived in a townhouse that was way too small for us and in a really bad school district (outside of a major metropolitan area). At that time we needed about $70k/year after taxes to pay the mortgage, utilities (electricity and gas), 1 car payment, gasoline, groceries and daycare. Add in taxes, retirement savings and health insurance, and we're well over needing $100k.
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Very little. We own our house outright and don't have any auto debt or other things. We already live very sparingly. We could deal with about $1500 a month or less.
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I think part of the challenge in answering this question is that once you get in a habit of allocating money in a certain way, it's not so easy to unwind yourself.
But I do think if push came to shove and we're talking about catastrophic loss situations and we had to choose between food on the table or money in a retirement account, we'd choose food on the table.
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I'm not sure, I'd have to calculate it BUT I do feel the same as the OP bc we have some friends that drop money on things like crazyyyyy and I know they make similar to what we do. However, I truly have no idea what their situation is... I'm betting they don't save for retirement like DH and I do and I know they mess with their deductions every year so they end up owing money so that right there gives them over $1000 more a month than we have so I guess it all makes sense. Like PP's said you can never truly tell someone elses situation... they could be charging on ccards or they could have gotten an i nheritance.. who knows...
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Sorry ladies, but I'm totally raising my eyebrow over here at what some consider to be necessities! People who are truly just getting by are not contributing to savings, they don't have internet or cable, etc. They are pinching pennies, scraping by, and living paycheck to paycheck to make ends meet so that their bills are paid and their families have transportation and food! Our bare minimum, assuming we stayed living in our current home (since I could downsize and have a lower mortgage if I needed to) is about 30k, and we live in Michigan.
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So I found this nifty New York salary calculator, that shows take home pay after federal and state taxes, social security, etc. http://payrollnewyork.com/PayrollCheckCalculator.aspx
For a couple making 100,000 a year, filing jointly with 1 deduction:
Gross Wages : 100,000
Federal Tax : 37,363.23
Social Security: 1054.00
Medicare: 1450.00
State Tax: 9458.56
State Other Tax: 1.20Net Pay Amount : $50,673.01
Let's not forget...if you live in NYC, you pay a NYC city tax as well. I don't live in NYC so I'm not even figuring that in. So now, after taxes, this couple has $50, 673.03
I don't live in Manhattan (where rents are even higher), but a 1 bedroom in my neighborhood is about $2300-$2700 a month. Yes, that's right...a 1 bedroom. That amount can go up if you want a parking space and an elevator in your building.
rent: $27,000-$32,400. For a 1 bedroom. Now you are left with $20, 643 a year. You have 2 working parents and a kid that has to go to daycare? Deduct $22, 800 a year. Because the cheapest daycare in my town is $1900/month for 1 kid. A Nanny is quite a bit more.
That's right, now this "rich" couple making $100,000 a year is in the red. They literally can't afford to both live AND have a child in daycare. Maybe they can find a nanny share...that will save them $300 a month.
That means now they have $1943 dollars, or $161.9 dollars a month for commuting costs, food, diapers and wipes, clothes, and everything else under the sun.
Sure, they could move to a worse neighborhood and trade safety for lower housing prices. They could move much further out to the suburbs (my neighborhood is already a suburb), but then commuting costs will also increase. A commuter rail pass plus a subway monthly card is over $200 a month. The mom could stay home, but then income is cut.
I think if you don't live in an expensive area, it's difficult to wrap your head around how prices for "basics" can be so much higher, but they are.
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@wonderstruck: forgot to tag you in my above post. =)
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@Anagram: I didn't mention dollar amounts at all because I know that varies greatly based on the area you live in (and another area lacking clarification - my 30k minimum would be how much I would need after taxes, not before!) I was more talking about how people are discussing what is and isn't a necessity. I have a lot of friends and family who are in bad financial situations where they are living on their bare minimum, and they don't have extra money to contribute to savings, they don't have cable, internet, or smartphones, etc.
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@Anagram: I can understand how some people can legitimately need that much to live in expensive cities. That said, I completely agree with @wonderstruck.
I hope people realize how ridiculously fortunate they are to be able to consider retirement savings a "necessity". Surviving, for most of America, means a roof over your head and food on the table.
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@Anagram: Do you know what the average salary is in NYC? I didn't read the article so I apologize if its states in there.
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I think it's time to stop being so judgmental about what others view as necessary or not. The OP specifically said, "we save for retirement" as part of their costs. And then when talking about cutting out non-essentials, they mentioned "occasionally eating out, our trip, any new clothing for anyone, cable, traded our newer car with the payment for an older one we would buy outright etc..." They did NOT mention cutting out retirement of savings, so it's reasonable for someone answering the question to assume that their view of "getting by" still includes those things.
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@Adira: I think that's partially the point of the discussion. And as far as judgement goes, well, OP even said that the entire conversation started because she can't believe how much some of their co-workers spend on their lifestyles and how it seems to be pretty extravagant to her and her DH. So what you consider to be getting by or a necessity seems like a pretty key factor here.
And I'll be honest, my views are probably a bit swayed by the fact that I often think the same thing about some of the bees that OP thinks about her/her DH's co-workers - there are a LOT of threads on here about money, shopping, brands, etc., and most of it is stuff I could just never afford or justify the expense of. I usually just don't comment on those threads since they don't really apply to me, but I saw this thread as different for the reasons I stated above.
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@Lindsay05: It's about $52K
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@BKCaribBaby: Thanks.
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@wonderstruck: I really don't think the OP was referring to their co-worker's retirement accounts and savings though when speaking of their extravagant life styles! She even said herself that they save for retirement, so I'm not sure why people are getting all bent out of shape because some people are giving a number that they would "get by on" that includes still saving for retirement. The OP talks about cutting out eating out and going on vacations and buying new clothes as non-essentials. She didn't mention cutting out her retirement account in order to cut back.
ETA: I'm with you on some of the other threads. I don't buy expensive bags or clothes either, so I just stay out of those threads too.
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@Adira: I don't think it's judgmental to acknowledge that our collective privilege is showing in threads like these.
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I have been doing my sums and have worked out that the bare minimum we could live on in our current home is £32,000pa before tax. That would involve us making a number of cuts:
- One person giving up work so we can cut daycare fees
- Getting rid of one of our two cars (which we could do if one of us didn't work)
- Giving up Sky TV (but keeping internet because I consider that to be essential these days)
- Not putting any money into savings or pensions.
- Not eating outIt is actually really shocking to think that our bills (not including daycare), food and only half of our travel expenses come to more than the average household income in the UK (£26k). How do other families survive?? We are very fortunate - not wealthy by any means and we can't afford designer stuff (I buy my clothes from the local supermarket!!!) but we are very comfortable compared to some. It makes you think.
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@rattles: It comes across (to me at least) as judgmental to say things like " these answers still strike me as pretty ridiculous."
I DO think that probably the majority of HBers ARE fairly privileged. And I mean, just the fact that we all have internet access and time to spend on HB shows that we're privileged! There's nothing wrong with admitting that the majority of us are fairly lucky. But a few of the comments are just striking me as judgmental about what others consider "necessary" or not, and given how ambiguous the question was asked, I don't think it's fair to put our own assumptions on what the question is really asking onto other posters.
Answering the question from the state of "this is how much I need to literally keep a roof over my head and feed my family ramen noodles every day" is totally legit. But so is answering the question from the state of "this is how much I need to maintain my life and just cut out stuff like ordering take out every night and HBO."
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@wonderstruck: you are right! I think it was Rattles and Mrs.Stiz that mentioned dollar amounts or "top 20%" of wage earner"s.
Because looking at the national figure of top wage earners doesn't really work when you consider certain urban areas. And HB skews urban and educated ---there are a lot of Bees from the NYC, Boston, Philly, DC urban areas, plus the cities in California. And I'm guessing most of those Bees, like myself, consider it a necessity to pay for housing in neighborhoods where you don't have to worry as much about shootings and street violence (expensive), childcare (expensive), and commuting costs to work (expensive).
You can be making a household income of $100,000 and be just living paycheck to paycheck, if you choose to live in a "middle class" neighborhood.
To put it in perspective, you have to be clearing over $750,000 a year to be in the top 1% in NYC.
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@Adira: I agree with you. It's no secret that most HBers have white collar jobs and are educated. Personally, I like that because we get more frequent posters that we probably would if say...we all worked on a factory floor.
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@Adira: The wording "bare minimum" to "live on" seems to me to imply more hardship than just a lack of HBO.
@Anagram: It was the original post that framed the discussion around dollar amounts. -
@rattles: I think some people may just be reading the poll question: "What is the bare minimum before taxes you and your family could get by on?" and answering solely on that. Others are probably reading the OP post with comments like "we save for retirement" and cutting out the non-essentials included "occasionally eating out, our trip, any new clothing for anyone, cable, traded our newer car with the payment for an older one we would buy outright etc...". To me, the POST implied that they were still saving for retirement, keeping their same house/apartment, keeping jobs and/or daycare costs, etc. The non-essentials were eating out, vacations, clothing, cable, newer cars. So based on the post, answering the question assuming you're keeping most things the same but cutting out dining out and cable is a legit way of answering the question.
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@rattles: @Adira: Can I ask - what happens if you don't save for retirement in America? Here in the UK, you get a tiny state pension (£100pw) and you get welfare to top that up, pay your rent etc if you have no savings. So for us it's totally viable (although not particularly sensible) to not save for retirement. What happens to you where you live?
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@Adira: I agree with you, that you can answer the poll title and the poll post in two totally different ways, and I think that's what has happened in this thread.
But regardless, there are always going to be differences in how people classify necessities. No need to judge people for those classifications.
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@Adira: Perhaps so, but I don't think that invalidates my surprise at how out of step the numbers are with the general population (even in an urban area, where I also live). I don't think there's been much judgment of how people spend their money, just judgment of whether it's a necessity, and that seems to me more debate than judgment.
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@Cherrybee: Honestly, I'm not entirely sure. I think there is government help for the elderly who have no money, but... I really don't want to find out... I think a lot of people end up having to work a lot longer and/or maybe never retire. Probably their children are burdened with taking care of them and/or paying their medical bills?
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@Cherrybee: Social Security, Medicare.
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@rattles: I guess I feel statements like saying the answers are "ridiculous" feels more like judgment than debate to me. But we can agree to disagree.
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@looch: which SS will be broke by the time we retire. So you can't even count on that.
@Adira: I agree the question is being taken two different ways in this thread. -
@Cherrybee: @Adira: They live off social security and Medicare pays the majority of medical expenses. My grandparents live on about $1800 a month which is their social security.
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@Adira: I said it and I'll say it again, considering saving for retirement a necessity is ridiculous. There is no planet or city where that isn't a luxury. Trust me, as someone who has no form of 401k or savings outside of my basic savings account I can assure you it is a LUXURY. All day, every day.
I agree that this post seems to ask two different questions but to say your savings account is a necessity is an insult to average joes who can't afford those things. It's implying that if you don't have those things then you are below poor because even if you were "poor" or just able to scrape by you would have a retirement account or 401k or whatever.
Necessities for survival are food, water and shelter. That's it. You need a serious reality check if you think 401k is a basic necessity or would still be a priority if you suddenly had to cut costs in order to avoid your home getting foreclosed on.
Thank you to those who told how 100k could be a necessity. I can't imagine having rent that high! Holy crap.
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