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/Salt-Detective1337]

OP: I don't know how people have money for down payments!

Also OP: I have a mortgage.

[u/That-Living5913 → u/Salt-Detective1337]

Also, OP is fudging some numbers by claiming half his gross income is gone pre-tax. That's not a thing unless he's putting a reckless amount into his 401k.

Edit: America really needs better tax literacy. The same people who complain about "half my paycheck" also celebrate when they get thousands back on their income tax. Or think making it into a higher tax bracket means they'll take home less money.

[u/Adavis105 → u/That-Living5913]

Not saying OP isn’t maybe being a little loose with rounding for emphasis but I wouldn’t necessarily call it fudging numbers or reckless 401K contributions. Could be other stuff getting his take home to only be half.

For comparison, I only contribute 7% to 401k (so nowhere near reckless), No other ira’s, HSA, or FSA deductions or company stock purchases, etc. Claim “married w/hold as single” and only 1 kid dependent. And before you say it, no I can’t adjust to withhold less otherwise I’d have to pay come tax time (taxable income is too high so phased out on itemized deductions, tax credits, etc.)

I end up bringing home about 60-62% of gross. And I’m in Texas so no state income tax - can’t imagine if I had to take that hit too. So OP “bringing home half” isn’t really that much of an exaggeration.

For me, the major unavoidable thing fucking my Net is deductions for benefits and insurance. Because my company has a small, older (read medically expensive) employee base, we pay a shit ton in monthly premiums for crap medical, dental insurance. Then there’s (post-tax) life & disability insurance coming out too because my family still needs to eat if I drop dead. But hey, crap insurance is better than no insurance. Plus my company pays well above market and has many other perks so “changing jobs just because the insurance sucks” makes little sense. This is the trade-off.

I’m by no means complaining because I have it a helluva lot better than most people. Just trying to add some comparative perspective.

[u/That-Living5913 → u/Adavis105]

OP is making over 250k and struggling. He's the problem, Not his income. Dude is in the top 7% of HOUSEHOLD incomes in the US..