You be a frugal person. I know people who are multi-millionaires who watch every penny. It may be your personality to be concerned over every expense. That will not change no matter how much money you have. You have to change yourself if this bothers you. My wife and I have a combined income of over 300K but we watch every expense. It is just the way we are.
should read "may be a frugal person"
one thing i dont understand wrote:
Lots of good stuff in this thread. Good ideas, pretty good back and forth, kudos to letsrun.
One thing I don't understand is the saving for kids college. That should be on them. It was for me and I can't begin to explain how that matured me faster than my peers who had it paid for. I think people need to consider this when planning household budgets.
This may lead to more frugal decision making when it comes to entering the industrial academic complex, and hopefully, a complete reimagining of what higher education is, as well as where, when, and how it happens.
The "I'm going to pay 250k for 4 years of school and watch the tuition go up 10% every year right when my kid graduates high school" model is outdated, corrupt, and needs to end.
I think people that say this about paying for college education do not understand college costs these days and the fact that half of kids that graduate from college with jobs take worked that they are underqualified for, or don't get jobs at all. I know there are many reasons for this, but it is an important consideration when expecting your kids to pay for their own very expensive college education.
As a parent, I understand the importance of instilling a sense of humility, hard work, hustle, and responsibility into your children as young adults, because it will prepare them well for the rest of life. But do you want to cripple their finances with a small house payment the moment they throw that cap into the air after the stale commencement speech? Or would you rather help them graduate debt-free, so they can enter the economy with more financial and employment flexibility beyond working a crappy job in order to be a debt slave?
There are many ways to instill desired attributes into your children beyond handing them the entire burden of paying for their education and living expenses.
musings of an idiot wrote:
vivalarepublica wrote:I always found spending so much on a wedding ridiculous. Yes, they are a great opportunity to bring people together, create a memory, and celebrate love. But at the cost of a new car, house down payment, solid bedrock for savings or investment account, a number of great vacations, and various other more practical expenses or investments, is a weekend of fun worth all those? Are not the memories you create before and after the wedding more important?
^^Flagpole in disguise.
No, not really, but I'll take that as a compliment. Thanks.
And I'm still surprised how much of 1% are frequenting this site. Perhaps we should start a thread about how to make it into the 1%. Seems like some people would have a lot of advice to offer. Unfortunately, they seem to be short on advice for financial security.
viva,
I don't expect my kids to choose to go into debt for what may be a worthless education. They will have skin in the game. I will council them and help them make the right decision, which may be no college after high school. Get a job, go to community college and transfer when you have some scratch saved etc etc.
electron1661 wrote:
This thread has to have trolls. I mean, right? Seriously, what kind of jobs do you people have if you're making a few hundred thousand dollars a year and you're in your early 30s. I don't think that's even possible.
I'm only in my 20's, but I'm an MD.
one thing i dont understand wrote:
viva,
I don't expect my kids to choose to go into debt for what may be a worthless education. They will have skin in the game. I will council them and help them make the right decision, which may be no college after high school. Get a job, go to community college and transfer when you have some scratch saved etc etc.
I re-read your original comments and noticed there was more nuance than expecting the kiddos to pay their way through a traditional four-year institution. Thanks for the clarification.
vivalarepublica wrote:
And I'm still surprised how much of 1% are frequenting this site.
It's hard belonging to a minority.
Uptight Spender wrote:
Wife and I make a combined ~$180k a year. Two kids ages 12 and 14. It always seems like we're living tight, even though we both have very reasonable salaries. Mortgage payments, car loan payments, cell phone bill, groceries, Internet bill, etc. All compounded by trying to make sure we save enough for our kids' college educations. It's just very frustrating at times. Wanted to buy a new pair of running shoes today but needed to make sure it was within our budget first. How do you need to make before you stop worrying about your budget before buying a damn pair of running shoes?
You do NOT have a budget. A budget INCLUDES things like new running shoes...you should know how frequently you need new running shoes and it should be part of your budget as a clothing or extracurricular line item. Your budget should be conservative so that it is LIKELY you have extra money at the end of each month. You then decide what to do with that extra money, but it should NOT be needed for running shoes. Running shoes are a regular recurring expense like the gas bill is.
Beyond actually making a budget, it would be good to know why you are having trouble with that income. Do you live in a high cost of living area?
How much is your mortgage? What kind of cars are you buying?
Why are you paying for a car loan? With your salary, you should save up and pay cash. Even if you get a loan for 0% interest, you then have to put that amount in your budget every month, AND you can fool yourself into thinking that you can afford more car than your can.
So, it's not "how much do I need to make" which determines when you can be more casual about a budget, but "how much debt can I carry". Car loans do not have to be a given. Mortgages that are more than 25% of your take home pay do not have to be a given.
Also, there are many ways to go about paying for college, and in many cases, the more you save, the more you will have to pay. In your case though, assuming you may likely have a salary of over $200,000 by the time your kids start college, saving might be a good idea. For families that make under ~$120,000 a year, if you can get accepted to a great college (one of the 62 that provides full financial need), you can pay for college with small student loans, work study and a modest contribution from parents.
Living free of debt other than for a mortgage is pretty freeing. I haven't concerned myself with buying something as inexpensive as a pair of running shoes for at least 10 years now, and we make a lot less than you do. Unless you are paying WAY too much for a house, you can do it, brother!
I think most people here are arguing about zip codes and real estate, albeit indirectly. Here in the SF Bay Area the zip code I live in has an avg house Iisting price of $4.5 million. It may sound outrageous, but VCS, hedge fund managers and tech execs with IPO stock have to live somewhere... The houses here are appreciating more than the value of the average US house *each year* and creating a tremendous amount of wealth.
If you want to live in the area, have an average sized house and send 2-3 kids to school, $500,000 per year could get tight. In NYC, LA, Boston Washington, Chicago and other places, the situation is very similar.
In the Midwest and South, particularly in rural areas, smaller towns and smaller cities, you can divide these numbers by 10 or 20 and get the same situation, but essentially with a different currency multiplier.
It is all about location, knowledge workers, entrepreneurs and scalable incomes. Thinking of red and blue states is just the beginning. Now think more in terms of wealth creation centers.
This all starts with tracking your spending in great detail. Get a program like Quicken, and for a few months record every penny. You will be surprised at where it all goes and how easy it is to find savings without a lot of sacrifice.
Everyone worries about their budget.
Freespending, ultra conservative, rich, poor, everyone.
Those that scrimp and save are obviously conscious of every expense.
Low income people always have tough decisions to make.
The wealthy sweat the returns they are making on their investments and get anxious at downturns in the markets.
Those that save heavily to be prepared for the worst are always worried about the worst.
But why private schools? You really think gov't provided, tax-payer supported education is better than religiously-backed, narrow-minded education? I've never understood why it makes sense to send kids to private schools that cost nearly as much as a mid-major university...
For college:
ROTC scholarship. Free undergrad, free masters with TA while making an officers salary and separated by 26, if you want to be, with more experience than most mid-twenties folks. Then you have the GI Bill if you just cannot get enough school.
I don't understand why more people don't do this...unless you are just really averse to good job experience and serving for 4 years.
Holiday Inn Expert wrote:
But why private schools? You really think gov't provided, tax-payer supported education is better than religiously-backed, narrow-minded education? I've never understood why it makes sense to send kids to private schools that cost nearly as much as a mid-major university...
Not all private schools are religiously backed.
Private School Kids wrote:
Holiday Inn Expert wrote:But why private schools? You really think gov't provided, tax-payer supported education is better than religiously-backed, narrow-minded education? I've never understood why it makes sense to send kids to private schools that cost nearly as much as a mid-major university...
Not all private schools are religiously backed.
Yeah, not even close, and among those that are, a small percentage of them really wield any "religion" on the students. In researching colleges, I was surprised by how many "Christian" colleges there are. I don't consider a college to be a "Christian" college just because it may have been founded by a Christian denomination. It's really only a "Christian" college if they talk about growing in your faith or mention faith-based education or something like that on their website. Taylor University, Biola University...those are "Christian" colleges. Ohio Wesleyan University, founded by United Methodists, is NOT a Christian College.
Holiday Inn Expert wrote:
But why private schools? You really think gov't provided, tax-payer supported education is better than religiously-backed, narrow-minded education? I've never understood why it makes sense to send kids to private schools that cost nearly as much as a mid-major university...
1) Private colleges often cost less than big universities. The very elite among them typically offer full financial need, so if you have low to moderate income and you get in, you will pay less than you would at most big state universities. There are some middle of the road private colleges that rival the cost of Big State University also.
2) SOME of the private schools have extremely loyal graduates who do everything they can to hire other graduates from their school or offer internships, summer jobs, etc. When everyone and their brother graduated from Arizona State in the west or Ohio State in the midwest or Florida State in the south, it's not all that exclusive. Exclusivity sometimes has perks, and it does here often.
3) Many students prefer the smaller school atmosphere. Smaller class sizes with more individualized attention and discussion-based classes. Also, many of the smaller private schools don't have graduate programs so you are never taught a class by a graduate student...always by a professor whose first priority is teaching; a professor who knows your name.
4) Many private schools (definitely not all) have a more intellectual student body than Big State University. If you are a top student and an intellectual, it is desirable to be surrounded by like students rather than having to really seek them out at Big State University.
Investment guy wrote:
I think most people here are arguing about zip codes and real estate, albeit indirectly. Here in the SF Bay Area the zip code I live in has an avg house Iisting price of $4.5 million. It may sound outrageous, but VCS, hedge fund managers and tech execs with IPO stock have to live somewhere... The houses here are appreciating more than the value of the average US house *each year* and creating a tremendous amount of wealth.
If you want to live in the area, have an average sized house and send 2-3 kids to school, $500,000 per year could get tight. In NYC, LA, Boston Washington, Chicago and other places, the situation is very similar.
In the Midwest and South, particularly in rural areas, smaller towns and smaller cities, you can divide these numbers by 10 or 20 and get the same situation, but essentially with a different currency multiplier.
It is all about location, knowledge workers, entrepreneurs and scalable incomes. Thinking of red and blue states is just the beginning. Now think more in terms of wealth creation centers.
Wow! Thank god Obama gets to live in the White House for free then, otherwise even he could hardly afford to live in DC on his salary then!
It's no wonder your generation has run this country into the ground when people like you think it's hard for a family to get by on half a million a year in a large city. Thanks baby boomer scumbag! (cue post about how you're 26, 3:55 mile PR, MD&MBA degrees $900,000/yr salary entrepreneur who bangs two models a day)
A lot of posters in favor of having kids pay for their own college education.
I worked and paid my way through college. Not because my mom wanted to teach me a valuable life lesson, but because my mom couldn't afford it. While I'm sure part of her feels a sense of pride for what I was able to accomplish on my own, I'm sure a part of her wishes she could have sent me to school. What good parent wants to see her child struggle through working while going to school full time? Personally, I don't feel as though I turned out any better for it either. On the contrary, my grades weren't as good as they would have been had I not had to work, I didn't get to enjoy the typical college lifestyle, I didn't get to make connections that would have helped later on in my professional career, etc.
I will gladly pay for my son's college education. College is hard enough without having to worry about expenses. I will make sure that my son at least enjoys what are supposed to be the best years of his young life. He has the next 40 years to work.
Also, for those questioning private school. I live in one of the best public school districts in my state, but I still send my kid to private school. The fact that the school can kick kids out, at will, for bullying, being intellectually slow, or even for just being a constant distraction, is worth all the money in the world.
Richy wrote:
Also, for those questioning private school. I live in one of the best public school districts in my state, but I still send my kid to private school. The fact that the school can kick kids out, at will, for bullying, being intellectually slow, or even for just being a constant distraction, is worth all the money in the world.
Do you think children should be allowed to cross the street by themselves before turning 18 or are you like me and think 21 is a better age?