Almost Rich: Earning $160,000 – $200,000 a year and barely making it
There was an article shared by Single Mom, Rich Mom in her post Judgey McJudgeypants referencing a Toronto Life article entitled: “Almost Rich: an examination of the true cost of city living and why rich is never rich enough“.
FYI, SMRM makes more as a single income earner than any of these people, and she is even more frugal than I am, which isn’t saying much because I don’t really consider myself super frugal (more of a conscious spender if that exists)… but I thought I ought to point out!
As a short recap, these people earn about $160,000 – $200,000 gross a year and are saying that it still isn’t enough to live the way they want and save. Toronto Life writes:
…the threshold for the top one per cent of income earners is much lower than you’d expect: $196,000, in the latest Statistics Canada numbers.
That’s no small amount of money, but hardly the means for a life of leisure.
In an increasingly pricy city like Toronto, where we pay a premium for everything from milk to car insurance, $196,000 can seem positively middle-class.
I am no good at reading these expenses in a huge paragraph, so I made graphs for two profiles I thought were the most interesting:
At the end of the month, after all the bills are paid, they usually find they have nothing left. “We have a weakness for designer furniture,” says Suzanne. “In 2010, we spent $5,000 on a table and Eames chairs for our dining room.”
THE LEWIS-KOONINGS BUDGET:
I estimated that they earn $125,000 net a year after taxes.
NOTES I’D LIKE TO POINT OUT:
- They’re saving 1.18% of their income for their kids and 0% for themselves
- …but are spending 4.73% of their income on Wine and 3.78% on Eating Out
He tries to stay debt-free, but occasionally he splurges on travel or a big-ticket toy, like the $7,500 Royal Enfield motorcycle he bought last year. “People think I make a lot of money,” he says, “but I lose so much of it in tax.”
THE HAYNES BUDGET:
I estimated that he earns $115,000 net after taxes.
Updated Note: Retirement should be “Need”, not “Want”, although he has a solid saving balance at the end of the year.
NOTES I’D LIKE TO POINT OUT:
- I don’t think his budget is that bad…. because he prioritizes what he wants to do!!!
- He also seems to be saving a total of about $40,000 a year based on his budget ($20K in retirement and $20K in budget leftover).
- I’m sort of curious about his quote about not making a lot of money and losing most of it in tax — he’s a single income household earning about $115k net a year which is a phenomenal amount of money
Read the Toronto Life Article here.
THEY EARN PLENTY TO SAVE, THEY JUST SPEND TOO MUCH
Same old, same old.
I will admit, I was reading the article and I was a bit shocked that they think what they earn, is not enough, but maybe that’s just Toronto Life’s spin on things to garner some shock so that the article goes viral.
I earn $30,000 less than the lowest earner, and I think what I earn is more than enough as a dual income no kids (DINK), although BF and I don’t share our income, we do split the essential bills 50/50 like Rent, Household and Groceries.
For those couples who say that they don’t seem to have money at the end of the day (Lewis-Koonings), they need to re-examine their budget.
The rest, seem to be saving, although not as much as they’d like.
EVERYONE PRIORITIZES WHAT THEY WANT TO DO WITH THEIR MONEY
They either want to spend it on Wine and Eating out instead of saving for their kids or their own future (Lewis-Koonings), or they decide that Wine is important, but they still make it a point to sock away the maximum for their retirement (Haynes).
I am not saying that NO ONE should be able to eat out or have a great bottle of wine a week.
I’m saying that if you feel like you don’t save enough, and you’re always living cheque to cheque then you need to re-examine your budget and put your money where your mouth is.
People who claim that they HAVE to eat out because they don’t have time to cook when they get home or are tired, are people who are not organized and conscientious about their money to be prepared for those weekly challenges.
I’m tired too. I get home, it’s late, I’m annoyed, but I cook ahead of time so that I don’t go hungry and start eating condiments and spices.
I AM NO SAINT… BUT I DO SAVE MY MONEY
I am no saint. I definitely spend when I want to spend, and I do what I want with my money, but that’s because I can afford to and I know it.
I save when I can, and when I feel panicky or anxious that I might be turning into a McSpenderson, I cut back and start re-evaluating my goals.
I try to be conscientious about my money, but I also want to live my life and be happy, even if it means spending $2.50 on a single macaron! (OK who am I kidding, I eat 4 macarons at a time… so make that $10.)
SO, IS A 6-FIGURE INCOME MORE THAN ENOUGH FOR YOU?