Household spending and inflation 2022

[thinkorswim]

I could definitely live more frugally, but I feel perfectly comfortable spending every last penny of that $250k as long as I hit my savings goals, which I have automated. Should be on track to retire comfortably in my mid 50’s.

I couldn’t agree more. I will never understand how some people can live so frugally and budget every little expense, yet still enjoy their lives.

The only budget you need is the amount you’re saving on the top line for retirement. Everything else can be spent making your day-to-day life much more pleasant and comfortable.

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[finalpsychyear]

I couldn’t agree more. I will never understand how some people can live so frugally and budget every little expense, yet still enjoy their lives.

The only budget you need is the amount you’re saving on the top line for retirement. Everything else can be spent making your day-to-day life much more pleasant and comfortable.

Yes, and if you love your job and want to work a full career into your late 50s then this approach is great. However, most people i feel would like to get there a bit earlier. socking away an extra 50-100k per year can dramatically incr the retirement time table. For example the person above spending 250 and saving 200 could reverse that and reach their goals 5 years earlier. Again we are all wired different. I'm not suggesting bare bones living but I struggle to spend 10k/mo and that;s with 5 vacations (2 international) since july 2022. I don't have kids or a house and have pd off my loans.

Example: if someone's number is 5m assuming they invest 200k yearly at age 30 they hit it by age 45, 250 invested is 43 and 300 invested is 41.5.
Maybe that timeline isn't significant for some but for me it is.

 

[thinkorswim]

Yes, and if you love your job and want to work a full career into your late 50s then this approach is great. However, most people i feel would like to get there a bit earlier. socking away an extra 50-100k per year can dramatically incr the retirement time table. For example the person above spending 250 and saving 200 could reverse that and reach their goals 5 years earlier. Again we are all wired different. I'm not suggesting bare bones living but I struggle to spend 10k/mo and that;s with 5 vacations (2 international) since july 2022. I don't have kids or a house and have pd off my loans.

Good for you, but you’ve missed my point entirely. I never said one needs to work into their 50s and I’m not the one here questioning others on their budgets. Everyone has a different situation and end goal in mind.

All I said was that it’s pretty simple to figure out how much to save in order to retire with a desired amount of money at a certain age. In my opinion, any significant budgeting beyond that just adds stress and takes away from day-to-day happiness. If I die tomorrow, I would at least like to have enjoyed part of my life.

 

[ERRES2288]

Yes, and if you love your job and want to work a full career into your late 50s then this approach is great. However, most people i feel would like to get there a bit earlier. socking away an extra 50-100k per year can dramatically incr the retirement time table. For example the person above spending 250 and saving 200 could reverse that and reach their goals 5 years earlier. Again we are all wired different. I'm not suggesting bare bones living but I struggle to spend 10k/mo and that;s with 5 vacations (2 international) since july 2022. I don't have kids or a house and have pd off my loans.

Example: if someone's number is 5m assuming they invest 200k yearly at age 30 they hit it by age 45, 250 invested is 43 and 300 invested is 41.5.
Maybe that timeline isn't significant for some but for me it is.

To each their own. Personal finance is personal. Most important thing is coming up with a plan and following it.

 

[DaisyBuchanan]

I'm in a two-anesthesiologist marriage in income-draining LA. "We're millionaires," we whisper to ourselves as we clip coupons for the cheapest grocery store in our neighborhood.

 

[aneftp]

I think long term health is poorer for those that don't get married/partner. I would think wealth would increase the longer you stay single and thus becomes premarital assets. The other side is if your single your going to need less money and may not be motivated to pursue it.

It all depends.

Many have kids in their mid 40s. Those who stay single longer.

Kids are a wealth killer. You figure it does really cost 600k plus to raise a kid. And I think that number is true. Plus time off to coordinate their vacation during school breaks.

Spring break and Xmas breaks vacations are often times 2x more expensive than off peak times.

 

[ERRES2288]

I think long term health is poorer for those that don't get married/partner. I would think wealth would increase the longer you stay single and thus becomes premarital assets. The other side is if your single your going to need less money and may not be motivated to pursue it.

This is so dependent on who you marry obviously. If spouse doesn’t work and spends a lot it’s obviously a wealth killer. If marry other high income spouse with mutual goals, stay married, your wealth will be much higher.

 

[aneftp]

This is so dependent on who you marry obviously. If spouse doesn’t work and spends a lot it’s obviously a wealth killer. If marry other high income spouse with mutual goals, stay married, your wealth will be much higher.

Well my buddy (anesthesiologist) married a much higher earning spouse who made 1 million nastiest divorce/child custody. Now that’s the wealth killer

Fighting in the courts.

 

[ERRES2288]

Well my buddy (anesthesiologist) married a much higher earning spouse who made 1 million nastiest divorce/child custody. Now that’s the wealth killer

Fighting in the courts.

Yes must have missed the part where I said stay married

 

[luckybuck]

Yes must have missed the part where I said stay married

No one plans for divorce but half of marriages end in it. You're taking a risk by getting married imo.

 

[ERRES2288]

No one plans for divorce but half of marriages end in it. You're taking a risk by getting married imo.

Down around 10% for physician spouses

 

[DirtDocMD]

Yes must have missed the part where I said stay married

Well my buddy (anesthesiologist) married a much higher earning spouse who made 1 million nastiest divorce/child custody. Now that’s the wealth killer

Fighting in the courts.

Was the spouse an attorney??? I’d say that 50% goes to about 80-90% when one spouse is a physician/one an attorney. Don’t know why, but seen multiple nasty divorces, when that was the mix...

 

[coffeebythelake]

This is more expensive than my divorce was.

My wife did not appreciate my joke. I apologize to her. (She tells me that Chanel is too cheap and that she only likes Hermes now)

 

[Gasworks]

How about living it up in your 40s - 50s and paying it off in your 60s? I know this sounds a bit midlife crisis-ish but as we get older it seems making all these sacrifices while you’re young for some sort of reward you may be too old or dead to enjoy might not be the best way to live your life.

Losing people around you <50 years old.. watching aging parents sit on multi million dollar net worths with no ability to enjoy a penny of it.. these are the things that plague my sleepless nights.

Any thoughts?

 

[finalpsychyear]

How about living it up in your 40s - 50s and paying it off in your 60s? I know this sounds a bit midlife crisis-ish but as we get older it seems making all these sacrifices while you’re young for some sort of reward you may be too old or dead to enjoy might not be the best way to live your life.

Losing people around you <50 years old.. watching aging parents sit on multi million dollar net worths with no ability to enjoy a penny of it.. these are the things that plague my sleepless nights.

Any thoughts?

What do you mean when you say living it up? a 400-500k salary should allow anyone to save a ton and spend freely enough within reason to do what they want now.

My plan is living it up now and reaching FI in early 40s. I may do first class when i hit FI but I already take 6-8 trips yearly as experiences and travel are what i like to spend on. Cars, boats, beach houses aren't really an interest now but maybe I'd look into it at my FI point.

 

[ScarfTheVerb]

Yes, and if you love your job and want to work a full career into your late 50s then this approach is great. However, most people i feel would like to get there a bit earlier. socking away an extra 50-100k per year can dramatically incr the retirement time table. For example the person above spending 250 and saving 200 could reverse that and reach their goals 5 years earlier. Again we are all wired different. I'm not suggesting bare bones living but I struggle to spend 10k/mo and that;s with 5 vacations (2 international) since july 2022. I don't have kids or a house and have pd off my loans.

Example: if someone's number is 5m assuming they invest 200k yearly at age 30 they hit it by age 45, 250 invested is 43 and 300 invested is 41.5.
Maybe that timeline isn't significant for some but for me it is.

You’re totally right. But I have a great job and I do awesome stuff with that $50k. I suspect I’ll even work past my mid 50’s, but I have that age penciled in for my last 3am epidural at least.

 

[kidthor]

What do you mean when you say living it up? a 400-500k salary should allow anyone to save a ton and spend freely enough within reason to do what they want now.

My plan is living it up now and reaching FI in early 40s. I may do first class when i hit FI but I already take 6-8 trips yearly as experiences and travel are what i like to spend on. Cars, boats, beach houses aren't really an interest now but maybe I'd look into it at my FI point.

What's your FI number, roughly speaking?

 

[finalpsychyear]

What's your FI number, roughly speaking?

5-7

 

[aneftp]

Was the spouse an attorney??? I’d say that 50% goes to about 80-90% when one spouse is a physician/one an attorney. Don’t know why, but seen multiple nasty divorces, when that was the mix...

Nope. Two physician household. The divorce was the way part. It’s the child custody battle that went on for years and years.

Just remember. When the woman makes more money and is vindictive. They will and can drag it out.

 

[finalpsychyear]

What's your FI number, roughly speaking?

But the thing for me is 5-7 if i worked for the next 20 years into a late 50s career isn't really a challenge and pretty much anyone here could get there in that time span. Doing it by 2030 while still being early 40s would be something just not sure possible as 2030 would mark year 14.

 

[deleted131481]

Interesting thread I keep track of my savings but less so spending. This thread had me curious so I back calculated. Married with 3 young kids.

Spending total 209k including:
mortgage:46k
Tuition/childcare (includes wife's master's): 20k
Vacations: 30k
Car payment: 10k
Babysitter/cleaning help: 12k

Savings:

40k to 529s
180k to retirement savings (pre and post tax)

 

[teacher2md]

Interesting thread I keep track of my savings but less so spending. This thread had me curious so I back calculated. Married with 3 young kids.

Spending total 209k including:
mortgage:46k
Tuition/childcare (includes wife's master's): 20k
Vacations: 30k
Car payment: 10k
Babysitter/cleaning help: 12k

Savings:

40k to 529s
180k to retirement savings (pre and post tax)

Why so much into 529s? Do you plan to continue with 13k/yr/kid?

 

[caligas]

Interesting thread I keep track of my savings but less so spending. This thread had me curious so I back calculated. Married with 3 young kids.

Spending total 209k including:
mortgage:46k
Tuition/childcare (includes wife's master's): 20k
Vacations: 30k
Car payment: 10k
Babysitter/cleaning help: 12k

Savings:

40k to 529s
180k to retirement savings (pre and post tax)

The good thing about spending on things like tuition and childcare is that it is not a permanent expense that needs to be accounted for in retirement

 

[deleted131481]

Why so much into 529s? Do you plan to continue with 13k/yr/kid?

Trying to front load it, roughly 1K a month for a total of 100k each - estimating this to cover room and board for state university for 4 years. Of course this will vary substantially from child to child.

 

[Splenda88]

Family of 4 with an income of 350-400k (income was 405k last year as an internist). Year 2 as an attending

LCOL area

Mortgage and utilities: 28k
Groceries and eating out: 14k
Phone & subscriptions: 3.6k
Gas: 3.6k
Travel: 15k
Miscellaneous: 15k

Total spending: ~80k

I paid off an investment property last year. Balance was 47k
I also purchased a house last year: 40k (down payment and closing cost)

I probably saved/invested about 100k (401k/529/HSA/Roth and stocks) last year.

 

[okayplayer]

Maybe some selection bias in this thread. I have partners who have matching his/her $100k EVs, thrice annual European vacations, etc. Doubt most physicians making $500k a year are eating top ramen based on my conversations with my colleagues.

 

[anbuitachi]

Maybe some selection bias in this thread. I have partners who have matching his/her $100k EVs, thrice annual European vacations, etc. Doubt most physicians making $500k a year are eating top ramen based on my conversations with my colleagues.

a lot of physicians eating ramen here

 

[finalpsychyear]

Maybe some selection bias in this thread. I have partners who have matching his/her $100k EVs, thrice annual European vacations, etc. Doubt most physicians making $500k a year are eating top ramen based on my conversations with my colleagues.

Are these dual MD couples? If they are both gas then they can get away with it. If not they will likely be working into their late 50s. An extra 100k saved and invested over a career leads to a 50% shorter career imo if only looking at the financials.

 

[chocomorsel]

I buy my wife fendi, Chanel, Gucci, ysl, etc.. 1 new bag per month.

from china lol

Luckily she’s low maintenance and doesn’t care.
Uses them for a month and gives them away after.

I don’t buy these things so help me out?
When you buy from China are they cheaper? Knock offs?
And I don’t understand how one can be low maintenance but yet walk around with $1-2K bags. If the Chinese ones are not knock offs.

 

[abolt18]

3.91% with UFB Direct HYSA. Was at Ally before but they're sitting at 3.3%, so I moved my emergency fund.

Just sharing that UFB Direct is now up to 5.02%.

Problem with them is that when they go up on their interest rates, they don't actually increase your rate. They create a separate TYPE of account. So if you want to get the best rates, you have to call or chat them and ask them to change your savings account type. I just did this yesterday. Had a "UFB Best Savings" with a rate of 4.21%. I saw that rates had gone up, so I called (30 minute hold time) and told them I wanted to switch my UFB Best account to the new "UFB Preferred Savings" account. They did it immediately. It's annoying to do this extra stuff, but I appreciate the significantly higher interest rate.

 

[Splenda88]

European vacation is expensive.

Trying to go to Spain for 4 days and then fly to Italy to spend 7 days, that might cost more 15k for 4 of us.

I will never be able to travel first class to Europe.

 

[finalpsychyear]

European vacation is expensive.

Trying to go to Spain for 4 days and then fly to Italy to spend 7 days, that might cost more 15k for 4 of us.

I will never be able to travel first class to Europe.

In 10 years u will be. But then it will be 30-40k just for coach or dare i say double that for first class.

 

[anbuitachi]

I couldn’t agree more. I will never understand how some people can live so frugally and budget every little expense, yet still enjoy their lives.

The only budget you need is the amount you’re saving on the top line for retirement. Everything else can be spent making your day-to-day life much more pleasant and comfortable.

well people enjoy life in different ways. i dont mind sitting on my couch when im off and browsing reddit and looking at memes

 

[anbuitachi]

I don’t buy these things so help me out?
When you buy from China are they cheaper? Knock offs?
And I don’t understand how one can be low maintenance but yet walk around with $1-2K bags. If the Chinese ones are not knock offs.

knock off.
luxury goods in china are more expensive due to tax if real. many chinese people buy luxury bags when traveling abroad bc its cheaper than buying in china.

my wife doesnt think shes high maintenance. she has a 2k bag, and a 7k bracelet among others. just in past couple years. shes also chinese... which is biggest luxury buyer in the world by far. when all her friends got those things, she want too. she thinks its affordable bc we have enough money in bank to pay it off.

then we discuss what the word 'affordable' means. and its very different depending on who you are...