How much income is enough?

  • Guest, it's time once again for the hotly contested and exciting FoH Asshat Tournament!



    Go here and fill out your bracket!
    Who's been the biggest Asshat in the last year? Once again, only you can decide!

Lambourne

Ahn'Qiraj Raider
2,689
6,488
I find my biggest challenge right now at 30 is balancing the savings/retirement vs spending for fun/enjoyment.

I try to look at saving now as a big payoff for years later down the road but obviously there are some things that I will forfeit in the now. But then I think "is it worth the sacrifice?" Living like a pauper so that you can retire 20-40 years later has its drawbacks. But I don't want to be one of those people living paycheck to paycheck because "you could die tomorrow brah enjoy life!".

What is the sweet spot? Does it change based on age?

There's really no need to live like a pauper, but it is smart to make a habit of thinking things through when it comes to expenses. For example, eating out is supposed to be a fun occasion. If you're doing it 3 times a week it's not really an occasion anymore, just an expensive habit.
#1 tip is definitely to get rid of consumer debt, such as the car loan treadmill. These days it's not really the interest that kills you, it's that you're paying for those first few years of heavy depreciation over and over again. Doesn't mean you need to sell the car and ride a bike, just pay it off and take care of it. There's no reason a modern car shouldn't last 10-15 years with regular maintenance and the occasional repair.

Even if you want to YOLO it up in some aspects of your life, getting your finances in order will help achieve those goals. If you want to go on a long cruise or own a Ferrari someday, being smart with your money will make those goals achievable.
 
  • 1Solidarity
Reactions: 1 user

Gravel

Mr. Poopybutthole
36,050
113,852
I just don't understand people who are able to burn through a six figure household income, paycheck to paycheck. We currently save somewhere around $60k a year. I have no idea what I'd buy every month to burn through that.

As is, we spend pretty lavishly (we just went to Disneyland this week, and are putting in new counter tops in the kitchen and bathrooms next week). The only thing we don't really do is buy new cars and eat out. But I can't imagine that by itself being enough to take us paycheck to paycheck. We generally get by on $40-50k in annual spending.
 
  • 1Solidarity
Reactions: 1 user

BrutulTM

Good, bad, I'm the guy with the gun.
<Silver Donator>
14,366
2,139
I think Brutul honestly kind of hates living.

You couldn't be more wrong. I spend every day doing what I like to do. Maybe that's the reason I don't think it's worth thousands of dollars to hike in mountains that are halfway around the world instead of the ones I can drive to in a couple hours.
 
  • 1Like
Reactions: 1 user

Jysin

Ahn'Qiraj Raider
6,259
3,971
Yea, because the Everest Base Camp experience is totes the same as hickville Appalachia.
 

Jysin

Ahn'Qiraj Raider
6,259
3,971
My take is people prioritize what is important to them. I DO love to travel. I've lived in London, driven across Europe in a convertible, skied the Alps, 4x4 dune bashed the deserts of Dubai, hiked Nepal / Bhutan, got divemaster in Seychelles, trekked my ass all over New Zealand and visited Hobbiton, helicoptered to the top of glaciers, bounced around Philippines, Thailand, Japan, been caving, surfing, and a million other things BrutulTM BrutulTM thinks is a waste of money. Next trip is a week long liveaboard dive boat in the Maldives coming up in May. I wouldn't trade any of it for the world. I'd like to think those memories, experiences, and people I have met along the way will last a lifetime. Worth every penny.

To the earlier posts: It's been said a ton already, but 401k max if at all possible! My big pay leap came from being an E-5 in the military and in less than a week after getting out making 6 figures as a contractor. While I wasn't particularly financially savvy at the time, it was the best decision 24 year old me made. At the time, I simply thought it was new money I had never seen, so I wouldn't miss it. Here I am at 39 years old and over halfway to a million in that 401k account. Invest it, keep it simple with index / target date funds, and never touch it until retirement.
 

Crone

Bronze Baronet of the Realm
9,690
3,201
Yea, travel is bad ass. Unfortunately it exponentially gets more expensive as you start having kids. With just having my 3rd child, I don't expect to really travel anywhere other than to see family. Maybe in retirement? And maybe that's why so many travel after retirement. They don't have the kids to bring along anymore?
 

Khane

Got something right about marriage
19,789
13,298
It's almost like different people value different things... differently.
 
  • 3Solidarity
Reactions: 2 users

AngryGerbil

Poet Warrior
<Donor>
17,781
25,896
For the record, I'm not saying you can't go on vacation or ever go out to eat or whatever, you should just prioritize it behind your savings, because compound interest is so fucking effective on money you save in your 20s and 30s and so much less effective on money you save in your 50s and from what I've seen most people do little to nothing for retirement in their 20s.

Cars are a great example of this. You can get a reliable used car that will get you to work every day and need little to no repairs for $10-15k yet people I know who are definitely not rich are buying cars that cost $50k and paying interest on them. When you look at the amount of "happiness" that a 50k car brings you vs. having 5-10 times that amount in your retirement account down the road it's really questionable. Some friends of mine spent $60K putting a small pool in their backyard in the middle of the 2008 stock market crash. If they had invested that money then it would have more than doubled...probably tripled by now and I really wonder how much they use that pool vs. the amount of time they spend maintaining it.

Personally, I think happiness comes from things you accomplish, things you build, and your family, not from how fast your car does 0-60 or going to a museum in a foreign country. A fancy car makes you happy for a week or two after you buy it, but eventually it's just the thing that gets you to work every day. I'm not saying you need to be Warren Buffett with $60B in the bank and still living in a small, old house and using coupons when you go out to dinner but you have to look at vacations and such as an extravagance, not as a priority and don't compromise stuff that's important for stuff that's not.

It's definitely a balance. I have been driving the same $8,000 (12k miles when I bought it) used car for 9 years now. No glamour to it at all, ugly as all fuck, but I have probably spent less money per mile up to this point in my life than most of my friends around my age have, and all without ever having to limit myself or say no to things simply for a lack of a car. I've always had a car, it was just always cheaper to operate than my friends.

Deciding, back in '08, to buy this car and then ride it into the ground was a fantastic decision. It's still only at 94k miles so I have reason to believe I can ride it out for several more years to come. Later in life maybe I can buy the nicer car I'd want if I work and save for it, but for now I am totally okay with my bucket on 4 wheels.

I began saving for retirement at 24 and can already support myself at a low level for 10 years if I retired tomorrow. I hope to increase the number of years and the level of support. Medical is the only scary thing, but I suppose we're all in that boat. I do have a growing HSA, for what that's worth.

That said, I went to Costa Rica last summer with my gal and I honestly would not trade that back for the money spent. I would do it again. The money was a thing, to be sure, but we are still young and like others say, we are still working and will be for a long time to come. So long as we stay balanced we should hopefully be able to go every 2-3 years on a medium-ish vacation, all while still saving for later life. (I consider Costa Rica to be a medium sized destination. Large sized would be Europe or China or something.)

I'm aiming to be where my Dad is at. He just retied and has at least $500k set aside. He can live long and comfortably at this point, is going to Europe next year after doing Alaska and Branson this year, and can maybe even leave a little for his family at the end. That's the right way to go, imo.

That being said, I mostly agree with your last paragraph. That is truly the more important thing. How you spend your time is more important than how much money you spend in that time.
 

BrutulTM

Good, bad, I'm the guy with the gun.
<Silver Donator>
14,366
2,139
Yeah, I have no argument with anything you said here. Going on vacation is fine, it's just about where you prioritize it. I went fishing in Alaska this summer, although it was only for 4 days and I don't feel the least bit bad about it because I didn't sacrifice anything more important for it. I also have a '99 Oldsmobile sitting out in the driveway that I bought in 2002 and paid off in 2003. I hadn't bought another car since then until yesterday when I bought a 2011 F-150 and paid cash for it. I am hoping to drive that thing well into the 2020s.
 
  • 1Like
Reactions: 1 user

Asshat wormie

2023 Asshat Award Winner
<Gold Donor>
16,820
30,963
Car is an issue for me. I drive around 18k miles a year. Not sure if buying a car makes sense with such usage.