$100,000 a Year and Struggling. Lesson: Learn to Budget Early.
From 2012.
Here is a story that did not evoke my sympathy. A woman laments that $100,000 a year leaves her family struggling. She does not live in New York City. She lives in Tampa.
They bought a new car. I earn a lot more than $100,000 a year. I bought a 1993 minivan for $2,200 in 2003. I bought a 2005 minivan in 2009 for $10,000. I have not bought a new car since 1971 — a small Toyota — when I was young (29) and foolish.
They bought it so that her son could do pizza deliveries. A new car for pizza deliveries? Are they out of their minds?
He may need to borrow money for grad school. Is he out of his mind? There are no jobs!
She asks: “Is six figures the new minimum wage?” Is she trying to look like a fool?
Although I admire people who live on fixed incomes or minimum wage, I have no idea how they do it.
It’s time to learn! I have a free Website that shows you how: www.DeliveranceFromDebt.com. Use it.
What’s up with my net worth?I always figured my net worth would increase as I earned more income. In fact, I thought that clearing that six figure “hurdle” meant we would be financially set. However, our net wealth plummeted since the housing bubble popped. Our home is on the “liability” side of our net worth chart. Although the stocks have recovered, our retirement accounts do not reflect the balance I would have expected once we earned six figures.
So, they bought a house in a bubble. They will probably never get the money back. They are like millions of others. They did not know how to handle their money.
“Why don’t I have money to burn? My lifestyle isn’t extravagant.” Yes, it is. It is wildly extravagant. Anyone who lives in a low cost of living area, which Tampa is, should be able to live on $100,000 a year — twice the national average.
Housing: We live in the Tampa, Florida area, where we had our 1,800-square-foot home built at the top of the housing bubble.
Do stupid things, and it costs you.
I’d feel a lot richer if I could take the $183,000 we spent seven years ago and buy a home twice the size today in a better neighborhood.
No doubt.
Education: We are spending about $15,000 a year for tuition and books to send our two sons to community college. When they transfer to the university in another year, those expenses will more than double. My older son pays $5,000 or about half of his tuition costs since he has a part-time job, but my younger son hasn’t been able to find employment. I’d feel wealthy if I was struggling to send my sons to an Ivy League College, but this is just community college.
He can use CLEP exams to quiz out of community college. Total cost: $1,800. Why doesn’t he?
We purchased stocks to help fund our sons’ college education, but the stocks took a big dive. We are hoping the value of their stocks will recover to help pay for the last couple years of college. We don’t want them to take out college loans, but they may have no choice.
He can earn an accredited degree online for under $15,000, total. No loans. I am working with a man who graduated with his B.A. at age 18. Total cost: $11,000. Why didn’t her son do this?
If you don’t know how to cut costs, this economy will chew you up. This woman has been chewed up. Don’t imitate her.
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Published on March 23, 2012. The original is here.