High Income Earners

[marchmom06]

Nonny - YGPM

[Deleted]

Aug 3, 2012 10:11:51 GMT -5 mrsmayhem said:

Or those of you with a lot of disposable income. When you are used to being able to afford whatever you want and need, how do you limit yourself to stay within a budget?


In some ways, I think high earners can have a harder time staying on budget than those who make less because they are so used to having a surplus. Thoughts?

I don't think income has anything to do with how one can stay on a budget or not.

[Deleted]

Aug 3, 2012 10:18:41 GMT -5 v said:

Not sure what qualifies as "high earner," but at any rate, we don't stay within a budget. Our wants don't exceed what we bring in, so it kind of takes care of itself. What goes into savings may fluctuate from one month to another though.

This. And our income would have to go down a lot (close to six figures down) for that to change. But if it did, we could make it work. I'm both smart and resourceful.

[kadams767]

Aug 3, 2012 14:44:14 GMT -5 swank said:

Aug 3, 2012 14:33:04 GMT -5 d0ri said:

I don't think income has anything to do with how one can stay on a budget or not.

I totally disagree. We are not high income earners but our income has changed significantly in the past few years (mostly because I started my career at 28). When I was a poor grad student, we had a strict budget and stuck to it. Now that we earn more, we still have a budget but we are much less tied to it. Our savings & retirement has increased but so has our ability to splurge on travel or a nice dinner out, etc.

Agreed. And conversely, if someone is making very little, it may be impossible to stick to a basic budget if they aren't bringing in enough to cover necessities. You can budget all you want, but if food and shelter are X and you make X-Y, you are never going to stay on budget.

[WOT?*]

Aug 3, 2012 10:18:41 GMT -5 v said:

Not sure what qualifies as "high earner," but at any rate, we don't stay within a budget. Our wants don't exceed what we bring in, so it kind of takes care of itself. What goes into savings may fluctuate from one month to another though.

This is where we are. We pay the bills, put money in savings, spend within reason, and put what we don't spend at the end of the month into additional savings. We start each pay period fresh. Anything over the cushion in the checking account goes to savings when the next money comes in. We make enough that we always remain above our target. We live in a house we can afford which we're not selling even though that was our intention when we bought because we don't plan on losing money on a purchase, we drive cars we can afford (I did buy DH the obligatory Lexus but that was a one-time splurge on a car he's going to drive for 7-10 years and I bought it two years used which got us only 24K miles on the odometer, an additional 90K miles on the warranty since it went from the new to the certified used warranty program and it saved us about $30K in depreciation so it was MM in multiple respects even if it wasn't a $10-20K vehicle) and we keep our bills and expenses stable.

[gtkim]

Aug 3, 2012 10:59:48 GMT -5 @esquirefish said:

We may be high income earners, but we have only a few places where we enjoy spending our money. Otherwise we like to find deals or save money generally. We love to travel, and our travel budget is really high. We also love to eat out and see concerts, so our entertainment/eating out budget is also high. Other than that, we shop for deals (Target for general groceries, outlet shops for clothing basics) and we don't feel like we are depriving ourselves because we spent money on the things that were important to us, not frivilous stuff. We drive a basic Ford, whereas our friends didn't understand why we didn't buy a Lexus or something.

This is us. We save first, and then we spend money where it means the most to us so we feel like we are getting the most for what we spend.

[mokes]

I think we try to maintain a relatively modest lifestyle compared to our income, so we're able to save a lot of our income and basically just transfer it to savings right away.

This is probably flameworthy and I hope it doesn't come across the wrong way--it strikes me sometimes that I pay no attention to prices and don't really know what things cost or what's a "good price," especially at food stores. Someone asked me what gas costs near me, and I had no idea. I know I should take the time to pay attention to these things, but I never focus on them.

I think one thing that can be difficult for some high earners is that there tends to be a lot of variation in income each month because they're more likely to have jobs with commission, bonuses, etc. So budgeting in general isn't as straightforward.

[CloudBee]

I try to avoid impulse purchases. We weigh the majority of our purchases before pulling the trigger. Both of us has personal Amazon wish lists, and I keep a LOT of items sitting in online shopping carts linked to my account.

When it comes to large purchases like cars, we have a trend of buying nice, but gently used to keep spending down slightly. As for vacation... we sometimes spend big on the destination, but we don't go overboard with fancy meals as we prefer more local/casual.

Even with no debt other than our mortgage and decent investments, it's still important to weigh purchases in advance.

[Deleted]

We follow the Pay Yourself First rule and habit. We have assigned a fixed percentage to each of our retirement savings/general savings/spending/charity giving and so on categories and stick to the plan very diligently.
This is what happens regardless of how much money gets deposited. I keep a notebook where I record the income of the week [before tax] and then calculate how much needs to be moved to where. It might be a little old fashioned but it works for me, although my mint.com tools also help to keep track.

Over the years we have adjusted the various percentages as we became aquatinted with our figures (we're not very high earners anyways), so for example we started out by setting a 5% savings for our travel basket but later increased it to 8% since it seemed doable.
We also increased our retirement savings by a couple of percentage points every year, in the attempt to offset inflation.

Whatever's left is enough to cover the basic expenses and all the extras we like to indulge in. So in the end, provided we never cheat on this system, all we have to do is make sure we don't over spend the "whatever's left" money.

[Deleted]

We pay ourselves first. We have very ambitious retirement goals (@ age 40), we are both 27 with DS who is 3mnths old, so we will have to continue to be thriftyish to retire when we'd like. DH's parents retired at that age so we know its possible.

If it weren't for that I'd probably be a spender.

[thumper55]

We don't have a budget. But we make enough to spend what we want and still have money to save. Other than the mortgage and a $100 car payment, we pay cash and pay in full for everything.

Sometimes we make extra money on stocks, work bonus, or extra projects that came our way.

I grew up poor. I'm a cheap ass and I am the person buys stuff for the kids, our home, and the groceries. So I save us a lot of money because of my buying habits.

DH spends money more freely, but he doesn't want much. So if he wants something, it's no big deal if he just buys it . He doesn't care if I buy stuff because he knows that I would only buy something if I am getting a rock bottom deal. I don't care if he buys stuff, because he hardly ever does.

we don't put money aside or cut back from our lifestyle when we want to make a large purchase. For example, if we want to take a vacation, we would just do it. (This was just an example. we rarely take vacation)

When I was younger, I was laid off more than once, and had to cut out a lot of things and I haven't forgotten that experience. If I had to do it now, I could stay on a budget.

[Deleted]

Aug 3, 2012 14:44:14 GMT -5 swank said:

Aug 3, 2012 14:33:04 GMT -5 d0ri said:

I don't think income has anything to do with how one can stay on a budget or not.

I totally disagree. We are not high income earners but our income has changed significantly in the past few years (mostly because I started my career at 28). When I was a poor grad student, we had a strict budget and stuck to it. Now that we earn more, we still have a budget but we are much less tied to it. Our savings & retirement has increased but so has our ability to splurge on travel or a nice dinner out, etc.

Yes, I agree with Swank. We're not "high income" either, although we're higher income than average for our area or the country. I do find it harder to stick to a budget because there are not the same consequences. Now that we don't have to choose between paying the rent and going out to eat, it is too easy to decide to go out to eat, even if it means we're not saving as much or working as much at reaching goals.

I still don't think "more money more problems" because I find this much nicer than when we had to watch things more! Far less stress since we both tend to overspend and it used to be a lot more scary when we did. Now I've learned to chill out a bit and not get so worked up over stupid purchases because I know we'll be ok anyway.

[Deleted]

Aug 3, 2012 10:46:11 GMT -5 @jimbooo said:

This. And I don't mind spending on experiences, however tangible purchases just add clutter to our home. I constantly remind myself of this as I strive for us to be clutter free!

I really like this philosophy, especially after spending YEaRS working w/ DH to get rid of JUNK (middle school student body cards?). Our prerogative is to buy nice stuff, treat it well and buy as little STUFF as necessary.

[Deleted]

We do not worry because in general we are not in to expensive clothes or cars or other stuff. My car is a 9 year-old Hyundai and I have no plans to sell it. So when we do want something, there is not need for discussion or checking our budget to make sure we can afford it.

[boiler717]

I found it annoying to track all different categories of spending, so we just aim to keep our Amex under $2k-3k/month -- that includes dining out, groceries, shopping, house stuff, gifts, etc. That still enables us to save $6k/month on top of our retirement savings and bills, and I'm okay with that. We could definitely cut back on the spending but I try not to stress about it.

[Deleted]

Funny enough, overspending or keeping in line with our budget wasn't an issue while we were DINKs. I worked so much that I rarely had time to actually spend the money. It got harder once I quit working.

Our biggest problem was/is eating out and traveling However, our situation is a little unique since DH's annual bonus is usually around 50% of his base salary. We live off of the base salary alone and budget down to the penny. But, we have lots of months where we transfer money from savings. Thankfully, we still end up where we project at the end of the year.