This is only somewhat related, but I am always amazed that people can buy houses. We have a pretty high HHI and it feels like it will never be possible so we don't even really think about it as a real option. I am always a little in awe of people who own property.
I remember when we bought (both times, actually) the MM board was horrified at the mortgage amount vs. our income. But it was actually a good thing we stretched as our mortgage now is less than rents in our area.
I know this happens a lot and it can be good to get in while you can because prices some places will always go up. I just convince myself that we have already missed that opportunity and will be locked out forever even if I know that this isn't really true.
We also still have absolutely no idea where we want to live long term, so that doesn't help.
Post by Velar Fricative on Dec 5, 2017 20:52:35 GMT -5
The post about vacuums got me thinking lol.
I know we decry the consumer culture and all but there just weren’t as many options back in the day either. There are a million kinds of vacuums on the market. Look at how many kinds of cell phones there are. Cars have more features than ever. In many cases, technology has become cheaper than ever (wasn’t a VCR, like, a million bucks in the 80s?). But there weren’t this many options, and that makes the line between necessity and want a little more blurry, IMO. And shit was built to last, it seemed. Now technology is so replaceable.
I am not removing personal financial responsibilty from this equation but there is just so much shit out there. And we see more of it thanks to all kinds of media growth. So our dollars get stretched accordingly.
I do feel for these people. $100k is a lot of money to a lot of people, and I won't sit here and call them poor by any stretch, but it doesn't mean it's objectively easy. It is hugely problematic in this country that now you have to make way more than our parents ever needed to make to live a similar lifestyle, even with adjusting for inflation.
I am here. 100k would be amazing for us. I am unable to work so only H works. Hopefully he will just keep doing well At his job.
I do feel for these people. $100k is a lot of money to a lot of people, and I won't sit here and call them poor by any stretch, but it doesn't mean it's objectively easy. It is hugely problematic in this country that now you have to make way more than our parents ever needed to make to live a similar lifestyle, even with adjusting for inflation.
I am here. 100k would be amazing for us. I am unable to work so only H works. Hopefully he will just keep doing well At his job.
Post by goldengirlz on Dec 5, 2017 21:07:57 GMT -5
One thing we haven’t discussed, but that I see in my peer group, is this deep anxiety UMC parents have about their kids’ futures. They see how much harder it is to get ahead compared to their own parents and we also hear all the time about how much harder it’ll be for our children compared to how “easy” we had it. Everyone I know jokes about how they’d never be able to get into their alma mater if they were applying today because of how competitive it’s gotten. As just one example.
I don’t think this is about bad spending habits. I think it’s about this worry that UMC families have that they’re perpetually falling behind. I know this board collectively rolls our eyes at these people, but that’s why they feel like they HAVE to live in a “good” school district, they HAVE to pay for tutors, they HAVE to download all the coding apps. I would argue that giving your kids a better life than you had is a big part of the American Dream.
We also haven’t discussed the massive wealth transfer that’s going to occur once the Baby Boomers start dying off, which will further separate the haves and have nots. I don’t begrudge anyone their economic angst right now.
I have to agree with this. My family really struggled when I was a kid, and I now have a household income of right around $100k, in a fairly high COL area in the Philly suburbs. Compared to my childhood, I feel rich. We can buy clothes and shoes (on sale, at places like Penny's and Target and Kohls) when we need them. We regularly get take out for dinner, just because I don't feel like cooking. My kids are not in expensive activities, but the fact that they can each choose an activity each season feels like a luxury. We go on vacations, even if it means maximizing the use of credit card points or piggy backing off friends vacations. We have two cars.
None of these things were true for me growing up. Yes, we have to make choices and save up for larger expenses, and yes, we are surrounded by people who can afford much more than we can. But overall, I feel fortunate on the income we have.
I agree, I feel very blessed by what we have so I try to recognize this. My childhood was Kmart layaway once a year, I slept on a mattress on the floor (or straight up on the floor) and the truck my mom drove had a hole rusted in the floorboard so if you stepped wrong, your foot could go through. My parents struggled until I was a teenager, so there was no college fund and no help paying when I started like some of the other kids I went to school with. My oldest has no idea how lucky he is already and some days it’s really a struggle to not yell at him because of it.
My dad had a truck like this and I used to think it was SO COOL that you could see the road under you as you were driving down the road.
Post by seeyalater52 on Dec 5, 2017 21:38:41 GMT -5
I really appreciate this conversation as this is a topic that has been on my mind a lot these days. I grew up very low income and had a completely warped sense of the true value of salaries when I graduated from college. Back then I thought $40k was an amazing salary and I’d be rolling in it (since that was more than my parents made combined) but we live in a M/HCOL area (moved from a VHCOL area so we could purchase a home.) Our combined income is just over $100k. We do own a home but it was pretty inexpensive compared to rents in the area (which continue to go up) and our commutes are about an hour so we can continue to work where salaries are higher and professional jobs are more readily available. We have significant student loan debt and spent almost 15k trying to have a baby this year and after all that just had an unexpected home expense and a job loss that now precludes us from continuing to try to get pregnant since we can’t comfortably afford daycare, which is insanely expensive in our area. It’s so frustrating to feel like we are constantly one disaster away from financial ruin, but we aren’t going hungry or anything. We have everything we need and many things we want but we can’t afford a lot of frills - no vacations.
I have to say I’m a little salty about how screwed my generation is between stagnant wages and increasing COL. Things will only be worse under the tax bill if it gets passed. I know very few people who don’t have access to significant support from family - either practical or financial or both - and I’m jealous because neither of our parents are in a position to help and we are basically on our own. Obviously I am intimately aware that my perspective is skewed by our current middle class lifestyle and upper middle class social circle and things could be much worse but we stress about money a lot and it’s a burden.
This is only somewhat related, but I am always amazed that people can buy houses. We have a pretty high HHI and it feels like it will never be possible so we don't even really think about it as a real option. I am always a little in awe of people who own property.
I remember when we bought (both times, actually) the MM board was horrified at the mortgage amount vs. our income. But it was actually a good thing we stretched as our mortgage now is less than rents in our area.
Didn't your house nearly double in value? Good thing you didn't listen to MM! suckers!
I remember when we bought (both times, actually) the MM board was horrified at the mortgage amount vs. our income. But it was actually a good thing we stretched as our mortgage now is less than rents in our area.
Didn't your house nearly double in value? Good thing you didn't listen to MM! suckers!
I fully admit to being skeptical on affordability but I've finally come to terms that a lot has to do with state and local taxes. It's the no income tax in Washington that helps her budget.
I think you are taking what I wrote personally. This is what I see in my social circle. We have high medical debt and don't go on trips to Hawaii and have no credit card debt and a "starter" home we plan to stay in with our family of five. We did/do send our kids to private school while paying if our student loan debt. My point is that you you still need to choose at $100k and that not being able to spend freely doesn't mean you aren't actually living the American dream.
The whole point of the article is that you still need to choose at 100k. The 3M family chose to have the wife stay home and the husband says now, with hindsight being 20/20, he wishes they had chosen differently. etc. But often 100k is pushed as this magical number and the reality is, you can make 100k and you still have to make tough financial choices, and its not just about going to Hawaii or not.
I know I’m taking my chances responding when I have two pages left to read, but this resonates with me. I grew up thinking $100K was the end-all, be-all. I remember from my FAFSA that my parents combined made $39K my senior year (99-00.) $100K seemed like a fortune to me. Now my FI and I live together in LCOL and make about $140K gross combined. Mortgage, two car payments, and student loan payments. We take vacations and want for nothing, but this is not the life 17 year old me thought I’d be living on this income. It doesn’t suck, though.
We also haven’t discussed the massive wealth transfer that’s going to occur once the Baby Boomers start dying off, which will further separate the haves and have nots. I don’t begrudge anyone their economic angst right now.
I'm not convinced the wealth transfer after the boomers die will be that massive.
They'll spend it all and through the miracle of modern medicine live decades longer than previous generations, spending their cash stash along the way.
We also haven’t discussed the massive wealth transfer that’s going to occur once the Baby Boomers start dying off, which will further separate the haves and have nots. I don’t begrudge anyone their economic angst right now.
I'm not convinced the wealth transfer after the boomers die will be that massive.
They'll spend it all and through the miracle of modern medicine live decades longer than previous generations, spending their cash stash along the way.
LOL at your last sentence
I guess I was referring to the coastal phenomenon where homes they bought in NY or SF for $75k in the 1970s are now worth $1m and above. But you’re right they’ll probably spend it all on robot body parts.
Have we not seen all the land yachts pulling the SUVs being driven by us gray-haired retirees, hailing bumper stickers reading “I’m spending my children’s inheritance.” (Land yachts, btw, costing as much as a house - which appreciates - which will likely sell for no more than half what they paid for them.)
I'm not convinced the wealth transfer after the boomers die will be that massive.
They'll spend it all and through the miracle of modern medicine live decades longer than previous generations, spending their cash stash along the way.
LOL at your last sentence
I guess I was referring to the coastal phenomenon where homes they bought in NY or SF for $75k in the 1970s are now worth $1m and above. But you’re right they’ll probably spend it all on robot body parts.
H and I were just musing on whether his parents house will still be there when they die or if they will have sold it to pay for assisted living like his grandma did. It's a ranch so they can age in place to an extent but it's not small and it's not transit accessible so if they can't drive anymore it's a no-go.
Post by Black Lavender on Dec 6, 2017 6:21:06 GMT -5
People may not be swimming in coins Scrooge McDuck style at the $100k threshold, but an income at that level sure as shit gives you a lot more freedom with choices and options than someone at a $30k income. We always get into the COL discussion when HHI comes up, but I don't give a damn where you live, $100k a year as a single person is a lot of money. Maybe the title of the article gave me a different takeaway, but it very much seemed to give me the impression that people at this income level "deserve" the tax break the new plan would give them...and I don't agree with that.
I remember when we bought (both times, actually) the MM board was horrified at the mortgage amount vs. our income. But it was actually a good thing we stretched as our mortgage now is less than rents in our area.
I know this happens a lot and it can be good to get in while you can because prices some places will always go up. I just convince myself that we have already missed that opportunity and will be locked out forever even if I know that this isn't really true.
We also still have absolutely no idea where we want to live long term, so that doesn't help.
I very much so feel the same way, rupertpenny. I know several people who bought in the NYC metro area or the Seattle area within the past 10 years and have seen such incredible growth in their property value. We could now afford the type of prices they paid 5-10 years ago.... but no way in hell can we pay what things cost now. I feel like we'll always be one step behind and left out.
People may not be swimming in coins Scrooge McDuck style at the $100k threshold, but an income at that level sure as shit gives you a lot more freedom with choices and options than someone at a $30k income. We always get into the COL discussion when HHI comes up, but I don't give a damn where you live, $100k a year as a single person is a lot of money. Maybe the title of the article gave me a different takeaway, but it very much seemed to give me the impression that people at this income level "deserve" the tax break the new plan would give them...and I don't agree with that.
Sent from my XT1650 using proboards
How is the new tax plan helping someone who makes 100k?
The whole point of the article is that you still need to choose at 100k. The 3M family chose to have the wife stay home and the husband says now, with hindsight being 20/20, he wishes they had chosen differently. etc. But often 100k is pushed as this magical number and the reality is, you can make 100k and you still have to make tough financial choices, and its not just about going to Hawaii or not.
I know I’m taking my chances responding when I have two pages left to read, but this resonates with me. I grew up thinking $100K was the end-all, be-all. I remember from my FAFSA that my parents combined made $39K my senior year (99-00.) $100K seemed like a fortune to me. Now my FI and I live together in LCOL and make about $140K gross combined. Mortgage, two car payments, and student loan payments. We take vacations and want for nothing, but this is not the life 17 year old me thought I’d be living on this income. It doesn’t suck, though.
I don't mean this in a snarky way at all, I am just curious based on some of the comments in this thread. What kind of life did you expect at 17 to be living now based on that income?
I know I’m taking my chances responding when I have two pages left to read, but this resonates with me. I grew up thinking $100K was the end-all, be-all. I remember from my FAFSA that my parents combined made $39K my senior year (99-00.) $100K seemed like a fortune to me. Now my FI and I live together in LCOL and make about $140K gross combined. Mortgage, two car payments, and student loan payments. We take vacations and want for nothing, but this is not the life 17 year old me thought I’d be living on this income. It doesn’t suck, though.
I don't mean this in a snarky way at all, I am just curious based on some of the comments in this thread. What kind of life did you expect at 17 to be living now based on that income?
I don’t even know if I had concrete ideas, but $100K was RICH to me back then. Like, fancy wealthy rich. Big house, luxury cars, ski vacations, etc. I basically was lower middle class and naive.
Not to say that that income isn’t “rich” but my parents in addition to being lower earners also were horrible with money, so I never really knew how much things cost or what was “normal.”
I don't mean this in a snarky way at all, I am just curious based on some of the comments in this thread. What kind of life did you expect at 17 to be living now based on that income?
I don’t even know if I had concrete ideas, but $100K was RICH to me back then. Like, fancy wealthy rich. Big house, luxury cars, ski vacations, etc. I basically was lower middle class and naive.
Not to say that that income isn’t “rich” but my parents in addition to being lower earners also were horrible with money, so I never really knew how much things cost or what was “normal.”
No, I totally get it, that's why I was asking. Wondering if it was typical 17 year old expectations that most of us had, or something different. It's just interesting to me, because while I come from a similar background, I struggle to leave the mindset that $100k+ isn't "rich" and that things like having 2 cars and taking an annual vacation are middle class.
I grew up similarly, my parents made about the same or less some years, and we really struggled a lot when I was growing up. But they also made me feel like some of my friends whose parents had more money were RICH RICH, because they had a lot more than we did, and the reality is, looking back, those friends were just more solidly middle to upper middle class. I kind of think that's part of why my views on money and this topic are a little skewed. I admittedly think of A LOT of things as luxuries or extravagant when they probably really aren't, but I was raised thinking that "only rich people have _____."
I'm not convinced the wealth transfer after the boomers die will be that massive.
They'll spend it all and through the miracle of modern medicine live decades longer than previous generations, spending their cash stash along the way.
LOL at your last sentence
I guess I was referring to the coastal phenomenon where homes they bought in NY or SF for $75k in the 1970s are now worth $1m and above. But you’re right they’ll probably spend it all on robot body parts.
My friend's mom is a late boomer and her mother is still alive and owns one of those million dollar ranch houses that will likely be torn down so a $4 million house can be built on the property when she dies. My friend's mom is adamant that she will be taking and spending her inheritance post-haste, since she deserves it. Fucking boomers.
People may not be swimming in coins Scrooge McDuck style at the $100k threshold, but an income at that level sure as shit gives you a lot more freedom with choices and options than someone at a $30k income. We always get into the COL discussion when HHI comes up, but I don't give a damn where you live, $100k a year as a single person is a lot of money. Maybe the title of the article gave me a different takeaway, but it very much seemed to give me the impression that people at this income level "deserve" the tax break the new plan would give them...and I don't agree with that.
Sent from my XT1650 using proboards
How is the new tax plan helping someone who makes 100k?
Depends on the version of the plan, the graphs in this piece break it down
I wish I understood all of this better. Our HHI is over 100k, but nothing I've seen about this tax bill makes me think our taxes would go down with it. Even absent the tuition remission problem I keep obsessing about. Our tax bracket remains the same in pretty much every iteration I've seen, and we will likely lose daycare and transit fSA, which combined is 10k of newly taxable income.
I wish I understood all of this better. Our HHI is over 100k, but nothing I've seen about this tax bill makes me think our taxes would go down with it. Even absent the tuition remission problem I keep obsessing about. Our tax bracket remains the same in pretty much every iteration I've seen, and we will likely lose daycare and transit fSA, which combined is 10k of newly taxable income.
My understanding is that for people in our bracket (I'm assuming we're in the same bracket) the savings will come to those for whom the increase in the standard deduction outweighs the decrease in available deductions. I think being in a high tax state, with a good sized mortgage and two kids worth of deductions we fall into the screwed either way category depending on what they do with the SALT and property deductions. People with only one kid, or who currently deduct just barely enough to make itemizing worthwhile will almost definitely pay less. People who have a giant raft of deductions that are getting cut, will most certainly pay more, but there's less of those people overall.
In theory, under I think the House plan, we end up just taking the standard deduction because all of the things we itemize go away, and we wind up paying more. I think under the senate plan it's closer to a wash? I might have those backwards. Or just totally wrong since I can't read senator handwriting....
I wish I understood all of this better. Our HHI is over 100k, but nothing I've seen about this tax bill makes me think our taxes would go down with it. Even absent the tuition remission problem I keep obsessing about. Our tax bracket remains the same in pretty much every iteration I've seen, and we will likely lose daycare and transit fSA, which combined is 10k of newly taxable income.
My understanding is that for people in our bracket (I'm assuming we're in the same bracket) the savings will come to those for whom the increase in the standard deduction outweighs the decrease in available deductions. I think being in a high tax state, with a good sized mortgage and two kids worth of deductions we fall into the screwed either way category depending on what they do with the SALT and property deductions. People with only one kid, or who currently deduct just barely enough to make itemizing worthwhile will almost definitely pay less. People who have a giant raft of deductions that are getting cut, will most certainly pay more, but there's less of those people overall.
In theory, under I think the House plan, we end up just taking the standard deduction because all of the things we itemize go away, and we wind up paying more. I think under the senate plan it's closer to a wash? I might have those backwards. Or just totally wrong since I can't read senator handwriting....
I wish I understood all of this better. Our HHI is over 100k, but nothing I've seen about this tax bill makes me think our taxes would go down with it. Even absent the tuition remission problem I keep obsessing about. Our tax bracket remains the same in pretty much every iteration I've seen, and we will likely lose daycare and transit fSA, which combined is 10k of newly taxable income.
My understanding is that for people in our bracket (I'm assuming we're in the same bracket) the savings will come to those for whom the increase in the standard deduction outweighs the decrease in available deductions. I think being in a high tax state, with a good sized mortgage and two kids worth of deductions we fall into the screwed either way category depending on what they do with the SALT and property deductions. People with only one kid, or who currently deduct just barely enough to make itemizing worthwhile will almost definitely pay less. People who have a giant raft of deductions that are getting cut, will most certainly pay more, but there's less of those people overall.
In theory, under I think the House plan, we end up just taking the standard deduction because all of the things we itemize go away, and we wind up paying more. I think under the senate plan it's closer to a wash? I might have those backwards. Or just totally wrong since I can't read senator handwriting....
Yeah we have tried to figure it out and I think we end up paying more, but we file separately which hurts us. Maybe under one of the plans we would pay slightly less, I'm not sure. It's hard to figure out how the bill affects us....which is ridiculous.
But we felt extremely lucky because the alternative would have been making half the money in our home country. How folks make it work there is you usually live at home till you’re married and/or buy a home. Being middle class outside the US often includes multiple generations living in one home.
I know a lot of people who lived at home here in LA and paid "rent" to their parents who put the rent into a savings account. The account was then used as a downpayment on a house. It's how my DH was able to buy our house on his own before we met.
It's also how I was able to pay for grad school - picked a school near my parents and had the money I would have spent on living expenses for school.
I recognize we were both very lucky to have those options. But that's how we were able to get ahead in a VHCOL area.
Here is a question I have. Why does EVERYONE seem to think that a college education and funding their children's college education is a necessary bottom line expense?
At this point, IMHO, a bachelor's degree is completely devalued. But there is a significant lack of truly skilled laborers/trades. And while being an electrician, HVAC technician, carpenter, plumber, etc may not land someone a job sitting behind a desk 9-5, a lot can be said for NOT being saddled with $xx thousand in student loan debt starting out adult life. And by the time peers are graduating from traditional 4 year universities and accumulating student loan debt to attain their BS or BA in <insert field here> the kid that went the trade route has already built up X years of experience and is potentially moving up the ranks, saving for retirement, saving to buy a house, etc.
As I said up-thread, I didn't come from a white collar family. And to MY family, a college education seemed like the "way" for me to change my financial circumstances.
But my husband? He came from a family of tradesman. Were they 'wealthy'? No. But they were solidly middle class. He wasn't pressured to "go to college" (the option was there if he WANTED to...but it wasn't an expectation). He went to trade school. Union apprenticeship.
In 2001? I was graduating from college with almost $70K in student loan debt? He? Was buying a house with a 20% downpayment in cash.
And then I look at peers from college who had parents of similar backgrounds. They didn't jump directly into a 4 year university experience. They were encouraged (unless they had received scholarships) to go the 2 year community college route and then transfer to a university to finish their degrees HOPEFULLY with scholarship based on grades from the community college experience.
Why does it seem like SO many people are saving for children's college expenses at the expense of paying down their own debt/saving for their own retirement vs. setting up the expectation that little Jane or Johnny can do community college and/or go into a trade?
I wish I understood all of this better. Our HHI is over 100k, but nothing I've seen about this tax bill makes me think our taxes would go down with it. Even absent the tuition remission problem I keep obsessing about. Our tax bracket remains the same in pretty much every iteration I've seen, and we will likely lose daycare and transit fSA, which combined is 10k of newly taxable income.
My understanding is that for people in our bracket (I'm assuming we're in the same bracket) the savings will come to those for whom the increase in the standard deduction outweighs the decrease in available deductions. I think being in a high tax state, with a good sized mortgage and two kids worth of deductions we fall into the screwed either way category depending on what they do with the SALT and property deductions. People with only one kid, or who currently deduct just barely enough to make itemizing worthwhile will almost definitely pay less. People who have a giant raft of deductions that are getting cut, will most certainly pay more, but there's less of those people overall.
In theory, under I think the House plan, we end up just taking the standard deduction because all of the things we itemize go away, and we wind up paying more. I think under the senate plan it's closer to a wash? I might have those backwards. Or just totally wrong since I can't read senator handwriting....
The calculators i have seen make me think DH and I may pay less in taxes if this all goes thru. DINKs, we rent, we pay state income tax, but only on part of our income (our state doesn't tax military pensions). Always take the standard deduction, too.
That doesn't mean we think the bill is good. But, we do realize we might be in the fraction of the not super rich to see a tax decrease from it.