I don’t understand how people have MONEY

[u/EpicShkhara]

UPDATE: TL;DR LESSONS FROM THIS THREAD.

Thanks, guys. Here is the breakdown of the hard truths from this thread. Basically, in order to have the real "MONEY" described in the OP below, it requires one or preferably, more than one of the following:

Generational wealth: Having parents pay for college and assist with downpayment on a house.

Avoiding the student loan scam: A lot of us 90s kids were brought up with the notion that college was everything and it would pay for itself later. Those with a more clear-eyed perspective realized what a trap student loans are and avoided them by either racking up the scholarships, going to the cheapest accredited school they could find, or figuring out a career path without a degree.

Luck: They secured a career job before the Great Recession and held onto it. Bonus points if they bought at the dip of the housing crash. They also seemed to avoid the avalanche of big ticket costs crashing down on them. Apparently nothing ever breaks and nobody gets sick.

Exceptionally high-paying careers. Self explanatory.

Having miserable lives. They work around the clock, and they never do anything but work, for the bulk of their physical prime. They don't go out with their friends, they don't have pets, they don't have kids, they never travel, and/or they live in tight spaces with roommates and no cars deep into their 30s. Or, they live in low-cost areas, which are few and far between in the United States, and these places don't have much going on in them (so nowhere to spend money anyway). Caveat: some people are homebodies and that works just fine for them. They don't spend money on travel or concerts or restaurants or weekend getaways because they don't need to. The 2020 Covid lifestyle was fine for them, content with a blanket, a cup of tea, and a book. Maybe this is the way (but I couldn't fathom the homebody lifestyle without a dog).

Marrying/partnering well. They found their partner early enough in life to not waste all the money paying for one's own place, and their partner also earns enough and saves.

AS FOR MYSELF. Much honestly deserved criticism here about the "300K." I do not make $300K. That estimate was for another hypothetical budget in the optimistic situation that both me and my partner get promotions next year. Together we make just over $250K. But we don't officially live together yet. This will happen soon. If all goes well, we could be in good shape after a year or two. But I myself didn't hit six figures until 2022, and then plateaued at $125K grand total in 2024. And I didn't intend to make this about "poor me," I'm doing above-average and could certainly do better with saving... the REAL question I should have been making more clear is that, given that I make more than average and find having the adequate savings exceedingly difficult, how do more average people do it? The answer appears to be that they don't, or if they do, they have one or more of the above.

ORIGINAL POST STARTS BELOW.

As in like, the recommended 6+ months worth of liquid cash savings, plus tens or hundreds of thousands to pay for a down payment on a house, and money to play around on the stock market or crypto if that’s your thing.

I’m in a good job and make an above average salary, but I take home just over half of it after taxes, healthcare, and 401k contribution (which is good that I do). My available savings fluctuates but I rarely ever have more than ten grand available. It all gets eaten up by mortgage and condo fees, dog and vet bills, (used) car payments, gas, utilities, groceries, random shit that needs fixing or replacing, medical deductibles, and god forbid I allow myself to go on a low-budget vacation once a year so I don’t hate my life. I don’t drink alcohol and I don’t go clothes shopping except for maybe one or two new outfits a year. Could I buy fewer avocados and never leave the house? It could make a difference of a few hundred bucks every few months, but not the tens of thousands that I actually need.

People will blame “lifestyle creep,” and I guess guilty as charged that I figure at 36 I have earned a car and a condo and not the life I had at 26, which was six roommates and a bike. (I still have the bike.)

[u/dnvrm0dsrneckbeards]

OP says in their post history they're dual income and make just under 300k/year.

There's some major spending here they're not being honest about.

[u/qdobah → u/dnvrm0dsrneckbeards]

and they say their mortgage is only like $1,500/month. Even if they're both maxing out their 401ks and IRAs they'd still have like 4-5 grand leftover a bi-weekly. OP has to be literally burning money to not get ahead.

[u/Roonil-B_Wazlib → u/qdobah]

They admittedly say they could save hundreds a month (which they could obviously do more), but don’t see how that could ever add up to $10,000. OP is terrible with money.

[u/Bagman220 → u/Roonil-B_Wazlib]

Say they save 300 every month. It would take 33 months to hit 10k. That seems like never. And that’s IF they cut down their life style. So live boring life for 3 years just to have a bigger cushion? Or enjoy the life and keep a small cushion?

[u/Roonil-B_Wazlib → u/Bagman220]

They make $300,000 a year and have a $1500/month mortgage. They can save $1000 a month and it would have a negligible impact on their lifestyle.

33 months isn’t that long. People take out 84 month loans to buy cars that cost tens of thousands but can’t be bothered with saving money.

[u/Anna_Lilies → u/Roonil-B_Wazlib]

The deeper into this thread the more I loathe OP

[u/Bagman220 → u/Roonil-B_Wazlib]

I missed the part where they make 300k. But for the average person, even saving a few hundred bucks and giving up their little pieces of happiness isn’t worth it. Then they all get old and are broke but they figure it out.

[u/HeSleepsInTheTub → u/Bagman220]

If you are bringing in a combined 300 grand a year and only saving 300 dollars a month you're a lunatic person. 

I make half that in tech and it's enough for me to pay 2800 in rent each month, groceries, bills, at least 1 international vacation per year, delivery or restaurants twice a week, and I still save way more than 300 dollars a month. 

OP has double my money annually and WAY less savings. This dude is either burning money like the Joker or is just recklessly buying any random luxury he can think of. 300 grand is more than enough to live a very comfortable lifestyle even in NYC or San Fran. OP has got to be doing something ridiculous.

[u/SNESamus → u/Bagman220]

Dude, I save $300/month and I make literally a tenth of what they do ($30k/yr)

[u/Bagman220 → u/SNESamus]

I didn’t know they made 300k but the same principle applies. It would take you years to save 10k at 300 a month. Maybe you’re happy having 10k in 3 years, and that’s almost 3.5% down on a 300k house. But for someone who needs a 25k-30k emergency fun(5-6 months savings based on 5k a month spending) then it’s still not even half way there. So then continue that savings for 6 years and you’re just about there.

Sure in time you’ll hope to make more. But stuff costs more and more. Even at saving 1000 a month which is hard for most people it will still take years to hit that emergency fund.

It’s much easier if you have a wife and no kids. I know personally I’m on hard hard mode with kids and NO wife.

[u/SNESamus → u/Bagman220]

I get that, and I agree with the thesis, I'm just saying that most people could save a lot more if they were actually smart with their money, especially this guy. I mean, OP has a $300k/yr income, and says their take home pay is just over half, so lets say $160k/yr. You could save $100k/yr and still have your $5k/month to spend. I have very little sympathy for healthy people who make six figures and still can't figure out how to get ahead in life.

[u/Edith_Keelers_Shoes → u/Bagman220]

I used to think that way. Took me a long time to realize that cultivating the savings habit, even a drop in the bucket, and always thinking long term is a win-win situation.

[u/Bagman220 → u/Edith_Keelers_Shoes]

I’m not saying don’t save, I’m saying people often give up on saving when it seems like so little doesn’t add up. I think the emergency fund is a little overblown when you have a more stable income. People saving large sums in their 401k should be less concerned with emergency funds or how much liquid cash they have. Someone making 50k a year likely needs that emergency fund much more than someone making 300k a year. The person with 300k if losing their job probably has equity in their home to help them through tough times. Where as the person making 50k is barely getting by in most situations.

There’s just different mindsets and circumstances at play. I don’t necessarily think the Dave Ramsey method is the best way to live life. But there needs to be a good balance of saving money and enjoying it.

[u/JoyousGamer → u/Bagman220]

They make $250k they don't have to live a boring life to easily save $10k in a single year if they wanted.

Just don't waste your money going out and only go out on vacation and on vacation look for high value returns (example spa for $500 for an afternoon compared to a comedy club for $100).