Do you not save any money when you work? If you are not saving 10% - 15% of your paycheck into an account where the money is immediately accessible, you are living above your means.
I'm the sole breadwinner with a wife and two kids, and we pack away 20% out of every paycheck. We own our home and both cars.
Do we live a garish lifestyle? Certainly not, but we travel a lot and adhere to our budget (thank goodness for remote jobs).
Whether that is possible depends a lot on where you live - from what I can tell, outside of a few major cities there are plenty of places in the US where you can buy a house for <$200k in the US, good luck with that anywhere in Canada.
Given that it takes money to move, no, you do not always have a choice in where to live.
I lived in Chicago on a $800/mo salary for a year and a half. Yes eight hundred dollars a month, in the city of Chicago. I had no money, but I made it work, then I moved back home to small town Iowa and make a lot more now, and live a better life. Nobody made me do either of those things.
It takes money move, to or from any city. It's nice that you were able to make it work, and yes, it means others could as well but you wold look like a little less of an asshole if you would consider not everyone is in the same situation as you were.
Were you single
Did you have kids
Did you have any medical conditions that needed care
Did you use to have a better job before
That's just a few things that are part of everyday, normal life that can make the cost of moving and living on very little somewhat difficult.
> Nobody makes you buy a million dollar house
I don't remember saying anything close to that.
No.
> Did you have kids
Yes.
> Did you have any medical conditions that needed care
Not that I know of.
> Did you use to have a better job before
I moved to the city with a $100 loan from my step-father so I could afford gas to do the 4 hour drive taking nothing with me but what I could fit in my car, which took a 3rd of that $800/mo just to pay.
You know how I moved? I asked a friend, he came and helped me and packed his truck with what I couldn't fit in my car.
Excuses, excuses, excuses.
> Did you have any medical conditions that needed care > Not that I know of.
Others do, it's often sort of important to handle them. It can also limit the cities you can live in.
> Were you single > No.
Right here I start thinking your now being disingenuous, second income?
> car, which took a 3rd of that $800/mo
So you lived in Chicago on 528 a month and saved enough to move. You are leaving things out. This was either 40 years ago, you were getting significant social assistance or something.
Lets go ahead and throw out another perfectly, though unfortunate, normal situation. You had parents to even move back in with.
Now then, I don't live in a particularly expensive city. The 'million dollar house' you want to keep throwing around as if everyone has is almost 10 times the cost of where I live. Yet I can still see that not every one is in the exact same situation I am in. Moving to another city would not be something I could do on a whim, though I've had to cover medical expenses this year that are more than what your supposed monthly income was.
I mentioned it once. You're the one who keeps bringing it back up.
> Right here I start thinking your now being disingenuous, second income?
No second income. My fiance has never, and will never pay anything for me.
> So you lived in Chicago on 528 a month and saved enough to move. You are leaving things out. This was either 40 years ago, you were getting significant social assistance or something.
Oh sorry, I left out the $600/mo the startup I worked for paid the owner of the spare bedroom I lived in. My bad. $1400/mo. And 40 years ago? I'm 30, I moved from Chicago in March of this year.
Were your SO and kids not living with you? I cant imagine putting 3+ people into a spare bedroom. If you guys did do that, its impressive but its certainly not within the realm of normal in the US. If you didn't have them with you, than saying you had 1400 a month to support yourself, your SO, and your kid/s is not an accurate accounting of your living expenses for Chicago
It's dumb to devolve this argument down to "But what if you have cancer and 7 dogs and 3 kids, how would you move?"
Because the average person reading hacker news with a tech job in the valley does not have 7 dogs and 3 kids and cancer. We can feel sorry for that person, but I am pretty sure we can blame all 200k software developers living in SF as having 7 dogs 3 kids and cancer.
Hard to imagine that housing prices have gone up 10x in that time.
http://www.macleans.ca/wp-content/uploads/2014/03/Rabidoux_h...
In their index, housing prices were about 100 in 2000 and about 180 in 2013, so houses were about 80% more expensive in 2013 versus 2000. That is in real terms. You'd expect it to be more like 103% more expensive in nominal terms (assuming 2%/year inflation).
Here's a good source for recent housing prices in Canada:
http://crea.ca/content/national-average-price-map
It shows that the average sale price in Canada was $433k in August 2015. But there's tremendous variation within Canada. Vancouver was around $900k; PEI was $158k. It looks like Saskatchewan was around $253k, so a bit over half the national average, with Regina and Saskatoon being more expensive in the $310-320k range.
About 15 years ago you would have expected prices to be about half that in Saskatchewan, or maybe $125k. So no, house prices have not gone up 10x in the last 15 years and $20-30k were not typical house prices in Saskatchewan at the time.
Is that including retirement savings or not?
I do not. I make just over $70k a year now (a lot more than a few years ago) and before we had kids, we cut back so that my wife's income at the time went entirely to paying off debts. Our home is worth ~135k (three bedroom in a nice cheaper US city), and our cars are nothing to write home about but they get us where we need to go. My total income now is higher than our combined income was then. Like I said before, planning goes a long way.
Your comment does come off as a bit dickish, by the way. You made a lot of assumptions about me that are not true.
Absolutely understandable. We certainly went through a few years where we were just happy that we didn't have debt and could live off my income. Good luck with your own journey!
Anyway, I just noticed that you said "no way," and I wanted to provide a counter example. Good luck!
I am well compensated now, but right after college I was making 15k a year (it was in the arts) and I still managed to save money.
The angles I look at this raise the same question: how can people do this? If people have no savings and no job lined up, how can they put food on the table? If they have savings, and know the value of safety net and how unpredictable financials are, how can they do this? It's not unreasonable to think they might have some kind of outside assistance.
More likely you have a lot of optional things that you can trim away. Do you have cable? How often do you eat out? Do you smoke? Do you have a budget that you stick to?
It's all about priorities. If you don't prioritize it, it won't happen. It's not easy and emergencies and unexpected bills come up but the freedom is amazing.
Check out the Ramsey Plan. We wiped out most of our debt in about 2 years while saving for a house. And that's while renting, 3 kids, and living just outside DC.
Unrelated: I know a bunch of the Watson team here in Austin. Good group, cool tech. :)
Looks like it's too naïve, but it's good advice for people living in the U.S. and that have mortgages.
The point is that - like with most things - if you don't have a plan and you haven't defined success, you can't get there.
A plan doesn't make it easier but it makes you think about the details, gives you something to work against, and lets you track progress.
@hoorayimhelping SF also have ridiculous salaries compared to the rest of the world. Everybody seems to be making at least $120k starting out, and many up to $300k. I make way less than that, but also live in a pretty expensive city. I just bypass that by not buying a lot of stuff. It's only possible because I reject the average consumerist middle-class lifestyle. I won't buy a house, I'll never buy a car again, I bike to work, I don't have expensive hobbies. You can't have the cake and eat it too. However most people should be able to save more than they do.
Expenses: $1500
Children: none yet, but subsidized child care, paternity leave and other subsidies makes it pretty cheap
Food: $500
Housing: $400 (own apartment with my SO)
Student loans: $150
Car payment: no car, bike most places
Income tax rate: 32%, but employer pays another 30%, so effectively 62%
Sales tax: 25%
Insurace: $15
Phone: $15 (cheapest possible plan)
Internet: included in housing
Note: I also lived in the US before, with simliar savings rate, which was even easier.
My housing is 3 times your housing budget.
My student loans are $200/month.
My car payment is 300/month.
Income tax rate 9%.
Sales tax: 0
Medical insurance: $8000/year
Auto (and other) insurance: 1200/year
What I do have an issue with is "if you can't save x amount per month, you're living beyond your means". It's not that black and white. My trust fund question was legitimate. I also think that if you have a support system behind you (i.e. parents you could ultimately live with if you couldn't find work), it makes taking a year off with very little income, much more likely....as does, having a trust fund backing you up.
I recommend reading this: http://www.mrmoneymustache.com/2013/02/22/getting-rich-from-...
I pay for health insurance out of my own pocket, which is over 8000/year.
http://www.numbeo.com/cost-of-living/compare_cities.jsp?coun...
According to Numbeo, even if you live in Dubai you're way ahead of someone living in San Francisco, and even Montevideo, Uruguay (where I'm from)
Should I just blow it all on something ridiculous? Like what? Every single month?!
It's easy to waste money on small things. Some people buy expensive coffee and eat out everyday for example. It adds up really fast.
Let's see if you agree with the following:
If tomorrow you are fired from your job, and you can't afford to live on your state's unemployment aid for six months (that's not an arbitrary number, most states' unemployment period is 6 months) then you are living above your means.
So basically, yes, my entire family would be homeless if I were to get fired tomorrow. This has caused unimaginable stress on me, being the sole breadwinner of my current predicament. Do I wish it were different? Sure. But for you to base whether or not I'm a "responsible human" on this, speaks volumes about how you walk around in this world.
And yea, I stand by my statement, even though it makes me sound like a dick. How well you are prepared for "when the shit hits the fan" (in the order of most probable to least, so don't think I have a basement full of guns and canned food like a Mormon would. As far as eventualities go, getting fired is the most likely one to happen, and the Apocalypse is pretty low on that list), even if it never does, matters just as much, if not more, than what you do day to day, in my evaluation of what a responsible human is.
You keep on and on about how no one here knows anything about you, and that's irrelevant. Whether someone lives beyond their means or not is not dependent on their personal situation, it's a calculation of "money in, money out". It doesn't matter that all of the things you are spending your money on are obligations, rather than toys. It just means you took on obligations in your life above your means. That's irresponsible.
It doesn't change the fact that if you're not putting money aside for emergencies & retirement you are living above your means.
Sometimes it's OK to live above your means. I'd willingly go into major debt for my children. But not acknowledging you're doing so while you're doing it will cause problems.
Also - that percentage should be a minimum of 50%. More info on why here - http://www.mrmoneymustache.com/2013/02/22/getting-rich-from-...