Salary Reality Check
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It seems like the older I get, the more I am uncomfortable
with and just do not know how to handle wealth disparities
between my family and our friends. We are not struggling,
but we are not wealthy by Bay Area standards. I'm a SAHM
and my husband makes 100k a year, we have three kids. I
don't feel deprived, but we do worry about where our big
expenses will come from (preschool, vacations to see
extended family, healthcare, etc.), as we are still paying
off student loan debt. Over the last few years I've had a
harder and harder time spending time with more wealthy
friends, and subsequently a harder time not feeling
resentful. Friends insist they could never be a SAHM
without nanny help, or complaining about how inconvenient it
is to live through an expensive home remodel. Most
upsetting is that my preschool aged daughter is now starting
to pick up on why so-an-so has so many more
I guess I'm asking, how do others deal with this? Somehow
we have ended up with a high percentage of friends who have
trust funds or enormous financial help from their families.
Do your friends just change over the years? I want to think
it shouldn't matter, but I can't help but feel resentful and
can't hang with the joneses
What a great question to post. You are not alone, and your
family sounds very similar to ours.
We have our kids in private schools and thankfully receive
financial aid, otherwise we couldn't afford it. We are
exposed to a wide variety of wealth from families like ours,
to very successful, hardworking people, to trust fund
families whose wealthy grandparents pay the tuition and buy
their children expensive cars. Some of these people are my
friends and I love them. I do sometimes notice the disparity
between their kid's experiences and ours and sometimes
wonder if my kids are missing out (skiing all winter, grand
summer vacations, and expensive birthday parties), but I
don't lose any sleep over it.
Having my have my own business in which most of my clientele
are CEO's, surgeons, attorneys, etc.. I have become very
accustomed to working with families with money, and this is
what I have learned: at the end of the day people are
people. They may not share our financial struggles, but they
might have different struggles (e.g husband is working so
much he's rarely home, they might be living in an unhappy
marriage or going through a nasty divorce. But hopefully
they are blissfully happy and friends should be happy for
their friend's success.
Over the years, I've discovered that many of these people,
some who are my closest friends, are truly delightful human
beings: educated, funny, generous, and they love to enjoy
life. I would encourage you to try focusing on the
individual person more than what they have, and to spend
more time with the truly genuine people in this group of
friends that you have.
yes, 100K/year for a family of 5 is not a lot of money
around here if you need to send 3 kids to college, so i
understand your worry. (i'm in a similar situation as you.)
however, i hope you realize how lucky you are that your
family can have a decent comfortable life on one income when
many families have to rely on two incomes.
maybe your friends changed, but i think the issue is you.
you seem to lack the gratitude for what you have and not
being happy with all you have. why does it matter that your
friend gets to remodel? do you want to deal with the hassle
of remodeling while taking care of 3 kids? as for your
preschooler, you can tell her that 'we only buy what we
need' instead of focusing on the lack of money. it's a good
lesson in life. there's no need for a dozen pairs of shoes.
or another toy which will keep your kid occupied for a few
days, then sit around. and honestly, even if i had a
9-figure bank account, i wouldn't buy my kids more shoes
anyway. i never want my kids to get trapped into consumerism.
it seems like you already know how to live within your means
- keep it up! don't let others distract you. my closest
friends are very rich, like 1% rich. but i'm happy for their
success. sure, it'd be nice to be able to travel, buy a
minivan, etc,... but it's a blessing to be able to live on
one income around here with 3
financially-ruinous-but-wonderful children. yes, the
staggering expenses like college and healthcare are
legitimately worrisome, but trying to keep up with the
joneses is a worthless effort. perhaps there's a deeper
reason for why you feel jealousy towards your wealthier
friends, so maybe some introspection can help you determine
why you feel this inadequacy. you have so much goodness in
your life - i hope you'll realize that in the near-future.
grateful SAHM of 3
Obvious but worth stating right off the bat: If you are
truly bothered that your family doesn't have enough, then
the simplest answer is that you should get a job.
In terms of your other questions, especially to your child,
because I've talked to friends about that same
concern...When my kid asks if we are rich, then I say, ''Yes,
absolutely. We have everything we need and more. We are the
richest people on the planet compared to 99% of the world's
population. We have enough food to eat, enough for
computers, new shoes, and a yearly vacation. Do some people
have more? Yes, they do. But you have more than many, many
others. You have a family that loves you.''
The trick of course, with that little speech is that you
have to mean it. You have to really stop feeling envious
about the wealth of others and start being grateful for all
the things you have.
Time to Grow Up
I could have written your post except I am the worker and my
husband is stay at home (hopefully for not much longer).
Anyways, I go through phases of letting other people's wealth
bother me. I grew up in very modest means among those who had
more. I keep on trying to remember the good in our lives and
that money does not matter. Therefore, I am mostly ok 60% of
Most of our friends have significantly more than us. Most of
them are very modest about it. I sometimes daydream that there
are people like us out there and hope to find more of them.
So, the bottom line is - is that you are not alone. I
understand you and am one of you.
Try to think of what is good in your life versus what you do
not have. Good luck.
My family's income is far higher than yours and I still struggle about
envying others (I have friends who are retiring and travelling while
I'm still working - boo hoo). It's hard to be grateful for what you've got!
When I find myself giving in to the temptation to be envious, I do back
off a little bit from my richer friends and try to fit in some time volunteering
for those less fortunate than me. Even looking around on BART and seeing how
exhausted some people are helps.
I've given this one a lot of thought over the years as my husband and I
have gone from barely making ends meet to living comfortably with
our three kids in a good community with good schools.
IMHO, you do need to make some new friends. By all means keep your
old ones, just limit your contact with them to the ones that don't
make you uncomfortable or who you truly enjoy.
We're in the middle. We do better than a lot of our long-time friends
(frankly, we're more ambitious and just think bigger) and do a lot
worse than some of our tech friends who are now SVPs and General
Counsels at big companies. We do dinners at one of our houses with
the former and dinners in restaurants with the latter. We take the
occasional trip with both -- camping or skiing locally with the former,
Italy with the latter.
And some we have drifted apart from because we couldn't bridge the
Free time is limited for all of us so surround yourself with people you
feel good spending time with.
This is a tough one.
Dear ''Can't Hang,''
Growing up, I lived in a world of privilege. Then,
marriage, kids, loss of husband (doesn't matter how: loss
of high-paid partner equals one much-much-smaller income),
and we were sincerely broke, not well-off like you are now.
We asked for nothing from others. My wealthy family didn't
like my politics (they're right-of-center Republicans, I'm a
left-of-center Democrat), so, we didn't ask my wealthy
family to help and they didn't offer. We made-do. For
example, we were proud to made our bicycles from used parts,
tuned our bicycles well, and, often, though needing paint,
our bicycles rode better than the expensive ones our friends
rode. Often our better-off friends came to our neat,
orderly, clean, crowded home for bicycle-repair advice.
In grad school, I worked nights while my kids slept, raced
home, got kids to school on time, studied, picked kids up
from school, made dinner (often shared with friends), and
when the kids were in bed, slept for a few hours and went to
work. We focused on getting done what had to be done, kept
within our very limited budget, cleaned our home at the end
of each month hoping to find a few dollars that might be
left in a coat pocket, and ''kept our eyes on our prize.''
Friends who could respect that we did the best we could with
the money we had continued to be friends; others we had
known for years and had thought to be friends were
uncomfortable with our financially-limited lifestyle and
My kids grew to be resourceful, inventive, (mostly)
self-disciplined, pretty-successful, and parents of their
own wonderful kids.
Now, years later, I've made a small fortune (emphasis on
''small'' here, because my ''fortune'' only seems to be a
''fortune'' in comparison to where I've been), own a nice
home, and I can afford to help by supporting schools and
music lessons for my grandchildren while my children
struggle financially as young marrieds with kids.
Now, I hope my kids and I will be able to teach similar
lessons of self-respect to grandchildren, not false-pride
based on having money and owning things.
Teach your kids PRIDE of being inventive, PRIDE of being
resourceful, and PRIDE of being hard-working.
Look forward to the fact that, most likely, when you're a
granny you can help in a way you didn't get help, but don't
help too much. Don't teach your kids that money makes
Wow you have three kids? Well, I feel envious of that. I
have one and would love to expand my family, but can't due
to limited finances. My husband and I work full time, so I
feel guilty that I am missing out on my experience with my
daughter. I also have a lot of stress from my job that
leaks into my family life. We live with less than $80,000
in a so so neighborhood even with some help from family.
So, I would try to look at what you have. Time is worth
more than any kitchen remodel. And to share it with your
three children...if only...
Hi- I struggle with this issue as well, wishing I had as much as wealthier
friends and/or feeling mad at them. Here's how I'm growing myself out of it -
First - when your daughter notices so-and-so has 'more' of something else -
talk about how different families make different choices. 'Our family likes to
have lots of organic vegetables instead of lots of shoes (or a garden,or
charitable donations, or college degrees, or whatever). Our family spends
vacations getting to see California and our family, instead of other
countries.'' Then - really believe it! Think about your choices and how they
positively reflect your values (you are a SAHM instead of having two
salaries, why? You invested in college loans, why? Etc)
Also - when your friends comment on their minor anguishes (eg living thru
remodel) - remember we all experience pain despite our financial
situations. And joy too! That is the human condition & we can empathize.
And go back to #1 above to work on the jealousy of wanting that remodel.
And I am not *such* a nice person . So I have also noticed how many of
my acquaintances with fancier houses or vacations -- also have a lot of
debt. So when I'm really jealous, I imagine how much debt the other person
has and their inner pain every time they have to pay their bills ...
Saver not spender
I am surprised that you don't believe $100K a year is not
wealthy by ANY standard. According to the New York Times,
this puts you in the top 25% of earners! You should also
know this: I am a single mom of three kids who up until
one month ago was making $66,000 and now makes $74,000.
You are a very, very, very lucky woman to have the ability
to stay at home and a husband with a job that pays so
much. My children attend private school with financial
aid so we come into contact with wealth every day. How to
deal with it? Thank my lucky STARS that I have my health,
my polite kids who don't expect to have life handed to
them on a silver platter, and the opportunity to
experience the socioeconomic diversity of the BAY AREA.
Other people won't change - you have to. If hanging out
with these people makes you feel ''less than'', you are
ALLOWING yourself to feel that way and should perhaps
think about therapy. Or maybe volunteer with your kids at
a place where there are people who are actually
STRUGGLING. I tell my kids all the time ''Our family is
rich in other ways.'' These people and their attitudes are
not going to change over the years - you need to choose
whether you will change your attitude or change friends.
And also consider financial planning to help you figure
out how to save for your big expenses.
Hang with the Jones on a limited basis, or hang with the Smiths instead
Ultimately, I think wealth should make no difference in
friendship. It's what lives in the person and whether or
not you identify with, like, love, enjoy, feel respect for,
that builds and sustains friendship. If your are associating
with these friends based on economic status (perhaps these
folks live in a similar neighborhood, or go to the same
school) then it seems natural to wonder about friendships if
they are not really authentic, but based only on context.
Why not then question, whether or not these friendships are
based on love, respect, etc.
If they are not, then find friends that are based on such.
Your husband makes 100K a year? Wow, tons of folks would
love to be in your shoes. My husband makes far less and
we too have friends that discuss the $25,000 per kid
tution they pay for elementary school for their two
children under 7, drive fancy cars, buy endless stuff, and
seem to take endless vacations. What percentage of the US
lives on less than one elementary school tution! I guess
the way I think of it is that they have lost their
grounding and sense of judgement. I also wonder what kind
of values their children will be exposed to. I dont have
explicit advice for you but I find comfort in the fact
that my children will be much more grounded and exposed to
children from all walks of life in public school (not just
ones that can spend $50k combined a year on private
preschool/elementary school). Perhaps you should expand
your circle to include like minded folks while holding on
to your old ''wealthy'' friends who you truly enjoy being
around. I feel lucky that I grew up with ''poor''
and ''rich'' friends as a kid. Balance is always good!
Yup people have different levels of wealth and some people
are smarter and some less smart, some are more attractive
and some less so, some had supportive parents happy families
and others had little family support or destructive families
- life is just like that.
Some would be resentful of you too I suppose and others not.
I think one just needs to develop a philosophical approach,
like yes so and so has a remodeled kitchen but I get to stay
home with the kids. Who knows, maybe that person with the
remodel home had it harder than you in another aspect of her
life. My husband and I are relatively well off now, but we
both grew up in modest unstable homes and worked our asses
off, some friends I knew in college whose parents gave them
a lot more support have less than us now but others have more.
If it bothers you that much, than yes find people more
similar to you in things that bother you. For instance if
all your friends want to eat at restaurants you can't afford
or go on vacations that you can't then make plans with the
ones who eat and vacation where you want to, but remember
others may feel resentful of you too with 100k earning
husband and being able to be a sahm - which seems modest to
you but a luxury to many.
I think it may just be easier to remember what you do have
and not worry about others - or look and see that there are
aspects of their life that aren't so great even with that
money because remember that money doesn't buy a happier
marriage or nicer politer kids - in fact maybe the opposite.
I totally understand where you're coming from (4 kids,sahm,
husband makes good money but we're not nearly as wealthy as
our friends). I think there are two issues at play here.
First, I think it's perfectly acceptable for you to back
away from the people that tend to openly display their
wealth by expressing this ''woe is me'' attitude (when they're
hardly struggling!). From my experience, not all wealthier
people are like this at all. I avoid people that discuss
their economic status to me or feel the need to let me know
what kind of money they make. These types are insecure and I
believe that they may internally want others to be jealous
Secondly, there's always a chance that the folks that do
this are just insensitive and honestly might also not
realize that you're not wealthy. Try to get a better feel
for their motives...if you feel that they're sincerely just
not aware, then perhaps you could say something like ''gee,
must be nice''...or ''I certainly wouldn't know about that'' so
they know that it bothers you. Real friends would try to be
more sympathetic to your feelings.
Thirdly, it's very important to not allow your own feelings
about this to be seen by your kids. Your kids must not be
influenced by other people's economic status (or at least
realize what kind of personalities that they should avoid as
they get older). Don't teach them envy because you don't
want their self esteem to suffer or be tied to how much
money one makes. If your child says ''so and so got this toy
or they get to go here'' then don't make an issue out of
your own financial circumstances. Downplay the material
stuff and then redirect about good personal qualities that
her friend has.
On a side note, I have extended family that is very much
middle class/working class and they treat MY family as if
we're wealthy/privileged! They have they're own jealousies
and often treat us different since we own our own home in
the expensive Bay Area! It's strange to be on the other
side of things when I feel pretty average financially.
That's how it is in the Bay Area. There are lots of wealthy
people here. I feel the same way you do, and there's really
nothing you can do about it except to change your own
attitude and work really hard at teaching your children that
they can't have what everyone else has. What else can you
do? Only have friends who are the same financially as you
are? That wouldn't really work. This issue is just one of
the many things we have to deal with, living in this area.
My 7 yr old is also noticing that we don't go on fun
vacations and have as much as others (nice cars, lots of
clothes, ipads, wii games, etc) I am constantly telling her
that not ''everyone'' has more than we do, but that you just
notice those who do. I tell her how it is and try to point
out all the great things we have going for ourselves.
But it's really tough, and I'm always trying to remind
myself that I don't need things and vacations to be happy.
(But it sure would be nice!) Anyway...
I'm definitely not going to avoid being friends with
wealthier families. But I do bow out of events and outings
all the time because I just can't afford it. And they don't
mind. If they do, then they're not my friends.
Poor in the Bay Area
Wow! Your family sounds blessed! You own a home--can afford
to remodel it, and have the ability to live off of one
income. I think you need to just decide what you value-- is
it money? Or your time? Do you have quality days filled with
laughter and love?
Think about when you are old and looking back on your
life... what is really important-- having a nanny to help
you be a stay at home mom?! Or knowing that you cared for
your children every day and made them the focus of your
If you are feeling jealous and valuing more toys yourself of
course your daughter will pick up on that, and have the same
attitude. Go spend some time volunteering in a hospital with
kids with cancer, or in a soup kitchen. Some people have all
the money in the world, and they still don't seem happy...
why would more money make you happy?!
can't take it with you
this is, to me, a glass half-full, glass half-empty
situation. trying to always aim for the half-full option,
my take is, how lucky you are to be finding out about
these truly unbreachable cultural divides now, before you
waste further time on them.
i would say to let by-gones be by-gones in this and
not worry about moving away from such unsatisfying
relationships, even when they involve family (not all
families stay together forever or are even close--very few
in fact, in my 69 year experience).
there are many ways to reach out for new
relationships w/ folks whose life-styles are more similar
to yours; but even absent those (and there are no small
amounts of struggle, even then), there is nothing wrong w/
having your time be more self/immediate family-centered,
if that's how it shakes down. there is no social mandate
to ''be connected'' to any specific degree.
especially if it involves keeping up w/ those nasty
(or at least culturally different) joneses (i feel lucky
that i realized long ago that that was one thing i knew i
didn't want to do).
It may be that you no longer want to hang around people in a different income
bracket, which is totally fine. But consider that your example (complaining about
a remodel) may not be intended the way you think; it's just that you are sensitive
to it. For example, while you may not be put out of your kitchen because of a
remodel, you would be if there was some other serious issue that needed to be
fixed over time. You'd probably tell your friends about it, just making
conversation. That's all they are probably doing to you, too. Just something to
Just think of all the people who have a LOT LESS than you...
it helps you put things in perspective and be thankful for
what you have. Read the article in the Rolling Stone
magazine from last month or so about homeless people, it's
an amazing and humbling article!
We are in the same situation, except I am okay where we are. What I always tell
myself is that we made certain choices according to our values. I chose to stay at
home with my son while he is young, my husband chose to stay in the job that is
not the highest paid but is interesting and is very flexible time-wise. If we
wanted more money, we should have made different choices, but we chose less
stress/more quality time with our son etc.. So the price we pay is less money and
no opportunity to buy a house in a good school district in the near future. So we
rent and it is the only thing that really bothers me once in a while.
Btw, regarding more toys - you know, I am now realizing it's best to have very
few basic old-fashioned toys - natural open-ended toys like simple wooden
blocks, sticks, balls etc. And I notice my son plays with his toys a lot more if I
pack 70% of them
I am from a wealth level several tiers down from you, and
there are so many people living in the Bay who are several
tiers down from me--like barely eating enough, can't buy new
shoes for their kids type of tier. I consider myself lucky.
You are doing pretty well, to be a SAHM with 100k per year,
even by Bay Area standards.
If your friends are good people whom you enjoy being around,
and you mainly feel jealous/insecure because you have less,
you should work through that stuff yourself. Stop comparing
yourself to them, appreciate what you have, and realize that
it's all relative. They are immersed in their culture of
great wealth, and they are cutting according to their cloth.
If they are actually bragging all the time or making
insensitive comments to you, then you could call them on
that and remind them that you don't have the same resources
they do. You could let them know that such comments make you
feel bad/self-conscious/jealous/resentful, etc. They will
probably be embarrassed and quickly change their behavior.
If you find that you don't really relate to them because
their experience is so foreign to you, or you don't really
share their values, or you think they are actually kind of
obnoxious, then maybe you should look for some new friends
in any social class.
Probably the majority of families in the East Bay have to work two full time jobs
just to barely make ends meet. Many of these families still need financial aid to
survive. Perhaps you might find a part time job to bring in some income that
you perceive is needed in your family. Maybe you need to find some friends that
come from the bazillians of middle class families that are out there.
Yes, my friendships did change over the years. I found
people who shared my values, for the most part. I too was a
stay at home mom, and I had a lot of pride over my decision.
I never felt like I was ''not as good as'' the moms who had a
career, and I think that maybe some of your friends who
comment on not being able to stay at home without a nanny
are trying to give you a compliment, that you are able to do
it all, and that you are doing a good job. For me, it was a
value decision, and I tried to raise my children with my
values, so if we couldn't go to Europe for vacation as the
other kids did, I just explained that each family makes
their own choices, and that we were a tight family with a
mom who chose to forgo more riches so that we could be
together more often. We had a great time camping, traveling
the country and a few fun trips to New York, but for the
most part concentrated on good clean living. Remember that
there will always be people with more cash than you, no
matter how rich you become. Even the ones with yachts have
smaller yachts compared to those with cruise ship sized
yachts, so it's a never ending grass is greener scenario. Be
proud and happy of your family and values, and if you are
not, then look at that and examine if you are living what
you honestly believe is a good life. Try to hang with
people who live with meaning, purpose and joy.
Hi there, first let me start this response by saying that
everyone wants more than what they have and everyone will
have more than you, no matter your level of wealth (i.e. I
am sure that even those kids that your daughter is noticing
has more toys than her, are at home bugging their parents
for even more toys!).
I would also like to say that I come from very humble
beginnings and from immigrant parents who worked to their
bones to provide for me and my two brothers. My mother even
had to go on welfare for awhile after my father passed
leaving her to raise us all on her own. I can't help but
roll my eyes at a post where in the first few sentences it
is revealed that your family income is six digits. As a
fellow SAHM in the East Bay, our family income is WELL below
yours and we are surviving... with my son going to a coop
preschool in an affluent community here in the East Bay, so
believe you me, I KNOW the feeling
of being around other families that are much MUCH more well
off than I am.
My three year old son recently asked me, ''Mommy, why are
some mommies and daddies able to buy their kids a lot of
toys and you and daddy can't buy me a lot of toys?''
Here is what I told him, ''Sweetheart, there are two things
your mommy and daddy believe in: One, no matter how much
money anyone has it is more important to cherish and
appreciate things more like the time we spend together, the
fun we have, the stories we tell, and the things we already
have, and when we are able to buy something new we are able
to appreciate it a whole lot more! And two, some families,
like ours, live on a very tight budget and have to
prioritize the things we spend our money on. And I know how
important toys are to you, but out of things like food, the
roof over our head and toys, which do you think are the MOST
important things we need to LIVE?''
He was able to answer that the food and our home were the
most important... and even though he is three, I never shy
away from such an adult conversation with him, b/c even at
this age he is already able to recognize what is more
important than material things, and even though he'll still
whine about wanting more toys, I know that one day when he
really understands, he'll appreciate that we are teaching
him what matters most in life.
Meanwhile, I do not let others who may have more material
things bother me too much, and on days when it does bother
me I remind myself of what I tell my son. I try not to
believe in the haves and have-nots, b/c while I have met
people who live in amazing houses and have a ton of stuff,
they are empty in a lot of other ways that I am not.
Well... I can relate to your feelings, except we do not have
the luxury (yes) of one of us staying home. (So your family
looks pretty well off to me!) We make a bit under six
figures combined, which in the East Bay is barely getting
by, it seems. What works for me:
- Take some friends' comments with a grain of salt. Just
because they are wealthier does not mean they are happier.
This year I have seen my most pampered friend go through a
horrible divorce... the million dollar home, the army of
nannies, didn't make up for a miserable marriage.
- The ones that I find really insufferable, I see less
frequently than I used to.
- Take advantage of the many opportunities to connect with
new friends who may be of more similar economic levels or
- Teach your child your values... and consider sending her
to a school (after preschool) where she will not be around
the wealthiest children.
And, hate to say it but if you really are resentful, and
worried where you'll get the money for luxuries such as
vacations, you do have the option of going back to work.
I struggle with this, too. It seems most of our friends
inherited money, have high-paying jobs, or cashed out stock
options. They are all very nice people, which is why they
are our friends, but I don't think they realize how they
sound when complaining. ''It's just so difficult to find a
house over 3,000 square feet within our budget of $1.5M'', or
''the remodel is so stressful, I'm having second thoughts
about the Italian tile we picked for the guest bathroom''.
And to top it off, many of our friends who talk like this,
the moms don't have to work. I think I'm even more jealous
of their free time. It is hard to listen to how ''busy'' they
are with school meetings, training for marathons, running
errands, planning summer holidays etc. when I have a full
day of conference calls, spreadsheets, clients, and emails
ahead. It is toxic to feel jealous, so I focus on how lucky
we are to have a roof over our head, our health etc - and I
am very grateful for those things - but then my mom friends
jet off for the summer to Europe or their lake house, and
I'm here working with the kids in camp - and I get sickly
jealous all over again. I think the Bay Area just has many
very wealthy people, so it will always be in your face here.
Perhaps it is just the inner Bay Area (SF, Berkeley, Marin,
Peninsula), because we have friends in outlying burbs who
don't feel this way, as their towns are more evenly middle
class. I don't have an answer, just to let you know we have
the same experience, and I find it harder and harder to
listen with sympathy to our friends' ''problems''. The other
thing is our kids are starting to notice, asking why do I
have to be a mommy who works and why can't we go to Hawaii
at spring break etc, and I'm still working out how to
respond to these questions. I usually say we have all we
need, we are so lucky to be in a loving family etc, but they
sense my jealousy and I don't want to pass that attitude on
trying to create gratitude
I can relate to these feelings completely, except we make
FAR less. Around $45,000 a year. Living in Oakland, this
is really really scraping by. We are educated and ''normal''
people who have had bad luck the past several years. Having
a baby this past year has made it even more
stressful...husband working 2 jobs just to have something to
eat. Anyhow, I don't want to turn this into me complaining,
but know that there are many people less fortunate than you.
If we made $100,000 a year (or even $70,000) I would feel
so much stress lifted off my shoulders! Know how lucky you
are. But still, it is all relative, and even though you
make more than many, your feelings are real. It is easy to
get consumed with jealousy, wondering ''why are they so
lucky?'' One thing that helps me is to take joy in the
little small things that don't cost a lot (haha...like I
treat myself to a Diet Coke fountain drink a few times a
week and take a little Forever 21 shopping spree once a
month...silly stuff like that). Also enjoy the most
important things; your family, children, relationships, and
health. These are things that money can't buy. Also,
really get to know people. It is easy to look at someone
you don't know too well and assume their life is perfect.
It usually isn't! My husband always tells me that life is
so short...he is right. Don't waste it away feeling these
feelings. That being said, I know it is easier said than
done. I think about and worry about money everyday. It's
just part of life. Just take it one day at a time and never
give up hope that things can get better.
Switch your children to public school. You'll meet a more
diverse group of parents and your children will have people
above and below them on the income scale for comparison. I
know my child had a different perspective after switching
from a private preschool (why doesn't our house have 2
floors?) to a public K -- seeing herself as relatively
better off than most of the kids because we could afford
luxuries like private music lessons.
I hear you. I had a semi-friend complaining about her life
last year -- SAHM, very rich, highly paid husband, kids in
private school, vacations abroad -- you name it. Her
constant fear was that her husband would be laid off and
how would they support their lifestyle. Anyway, that did
not happen -- the opposite did. He got promoted and salary
was doubled-- but she kept worrying about security/money/
random things. I finally spoke to her about it and told
her how spoiled she sounded and she was mortified. She is
just a high-anxiety person who ran through these scenarios
in her head all the time and was voicing them. I learned
too that her marriage is an unhappy one. The higly earning
spouse cheats when he travels, does not spend time with
the family and all kinds of other things.
Lesson for both of us -- she says less about her money
problems/fears and tries to see herself as truly wealthy &
I recognise that you can have a ton of money but that does
not make up for the other gaping holes in your life.
Try to help your kids understand this too.
No matter how good your life is, it's hard not to wonder how nice it
would be to have the European Vacation, weekly house cleaner,
inheritance etc etc.
It's the modern dilemma isn't it...that most people reading this have
lives that are stable enough to not worry about how they'll manage
food and shelter but yet many are stressed, yearning for something
else. I can't imagine that the people who scolded you for not just
counting your blessings (which surely you do) don't also sometimes
long for more, get jealous...just a bit.
I at the moment, living outside of the bay area and I think that the
extreme wealth, and the expense of living in Bay Area create a stress
that isn't as palpable where I live now.
The reason the topic interested me is because I come at it from the
other end. I am a SAHM with three kids and a husband who makes a good
living. Very good by any standard.... I love to travel and we take
good vacations, I don't worry about money day to day. Although I
still worry about retirement, college... I still don't' do everything
I want to do because of money. And yes when friends do a fabulous
remodel and take a fabulous vacation I sometimes get lost in being
covetous..... Even if I have just come back from a few days at the
beach! I have to reflect that I am so so lucky, that jealousy is
toxic and what's most important, love and good health aren't
guaranteed at any income so best to just appreciate that which I have.
And I do and that quick jab of jealousy passes. So in the end it's
just being mindful really.
I am also do try to be very aware about how much I do and have
compared to many friends and I try to find the balance between sharing
with them...my excitement over something (a Christmas plan, a birthday
idea, an upcoming vacation) or my frustration about say, needing a car
repair. But I do very much modulate myself.... and I NEVER say
things like.... Oh gosh the decorator put the wrong fabric on my new
chair and now I have to re-do it.... or I don't know how I am going to
pack for the Ski trip and go to that nice dinner and make muffins for
I think much would be solved by a little awareness at all levels.
Practicing gratitude consciously.
We live in Berkeley and our net household income (2
adults, 1 teenager) is about $52,000 and I feel completely
happy with all aspects of my life. Needless to say, we
have friends who have more money and that works out fine.
When they get together with us, we always do potlucks.
With careful planning, these are the best meals ever! I
love clothes, looking attractive and professional, but I
would never dream of paying more than $20 for anything,
except shoes. I find good quality cashmere or merino wool
sweaters at Thriftstores for less than $10 and
professional skirts I get at Ross. My size hasn't changed
in 20 years (pregnancy excluded), so I purchase a piece
here and there to add, accessorize well and look updated.
I love my job of more than 20 years, my husband of more
than 25 years, and my reliable car of more than 20 years.
We love to simplify life, get rid of any clutter, enjoy
nature and camping. Insecurity, indecisiveness,
unforgiveness or fakeness/arrogance turns me off in
people. Since I choose my friends, I can make the
friendship experience as nice as possible by accepting
mostly grounded, real and simple people into my life.
Money has nothing to do with it - having time for each
other and relating to each other's core has more to do
with it. Sure, I would love to do repairs or replace tires
whenever I feel I should, but it can all be accomplished
in a matter of time as we prefer to live without debt.
Living on a low budget, without cable or cell phones, can
be less stressful than chasing the fun/occupying all of
your time earning or spending your money.
Happy with what is and what I got
I am in a job that is very stressful and exhausting. It's a
Silicon Valley tech job and I feel utterly burnt out after
six years at this non-stop, always-on job and parenting two
kids at the same time. The problem? It pays $300K a year. I
am the main breadwinner in our house with my partner's job
paying 1/3rd that amount. My question is, how much money is
enough in the Bay Area? We have been, for the six years I've
been at this job, saving massive amounts for retirement and
kids' college, while also paying for private school in SF.
We have stockpiled everything we could, knowing this job
would kill me at some point and I'd have to leave it. I am
at that point; I am so burnt out that I don't know if I have
it in me to keep working in Silicon Valley at all. But I am
terrified to quit this job, because we are afraid for our
future as we have only been saving for retirement in earnest
for the past six years and don't even own property. One way
out of our predicament would be to leave the Bay Area, and
we are very strongly considering that. But, before we move,
we are wondering if it is possible to live in a top school
district or pay for private school making much, much less.
Can it be done? Is there such a place? (We've looked at
Piedmont, Palo Alto, and other districts near to my job, but
they all seem very unaffordable.)
Have you checked out Berkeley? Seems to me there is a
greater income range of housing and of household incomes
with a more academically focused community and public
schools. More diverse too. Just a thought... good luck!
(p.s. we are a single income family with two kids on
1K/year - it can be done but be prepared to make
sacrifices... one car, second hand furniture & clothes, no
dining out... BUT you'll become a better cook and style
requires very little money!); )
think outside the city
Just some perspective, I'm a public school teacher supporting a family of 4,
husband lost his job 2 years ago. I don't even make 1/3 of your income, less
than your spouse, and we are managing just fine. We live in Lafayette where the
public schools are awesome. (now if the politician's would stop vilifying me and
stop trying to take my pension, I might be able to retire...) you on the other
hand sound like you are already in a pretty good position if you left your job.
Wow, I can't wait to see the responses on this one! You are
asking the BPN community if it is possible to make it in the
Bay Area on an annual household income of $400K? I am not
sure what ''saving massive amounts'' for retirement means, but
even with putting away a considerable chunk for retirement,
paying taxes, etc., there must be some flexibility in your
budget. We live in Lafayette on one income that is
considerably less than what you are citing. Granted, we
bought our house a few years ago, but there are plenty on
the market in the range of what we paid 10 years ago. Keep
in mind if you leave the Bay Area for a lower cost of
living, the other side of that coin is that you are not
likely to be earning anything close to these salaries. I am
sorry you are so burned out...it seems to me that a good
plan for you is to meet with a financial planner that can
help you figure out where your money is going and how to
make it possible to live the way you want to.
The problem with earning a lot of money is that no
amount is never enough. You have to be really, really
strong to downscale -- I so admire the people on BPN who
say they have done so. I think it is probably harder than
coming clean from a drug addiction!
In your case, if you are earning a lot of money in a
stressful job you hate, is there any reason it wouldn't be
possible for you to earn something close to that (say 70%) in
a job with better working conditions? I am just thinking it
should not have to be an "all or nothing choice" - either big
bucks or no salary at all. If you have skills that someone is
willing to pay a lot for, they must be translatable to SOME
other job. I would at least try.
There are many nice places in the Bay Area where you can
live comfortably on a fraction of what you currently earn.
Let me share my situation. Both my husband and I work in the
nonprofit sector: I am very well paid for the sector,
earning $100,000 annually. He earns $60,000. We both work 4
days a week. We have a lovely home in Rockridge and our
children attend an excellent public school. We plan to send
them to private school for middle school and then to Oakland
Tech, which is getting good reviews lately. We both save
pretty aggressively for retirement, and should be ok if we
keep at it for the next 25 years, which is how long we have
until we retire. We give about $3,000 annually to charitable
organizations. I'd like to give more, but that's about where
we seem to land each year. As for vacations and leisure, we
go on vacations and travel back east to visit family at
least once a year. Eating out isn't a big thrill for us, so
we tend not to do that very frequently. Generally, I feel
incredibly lucky to earn the wage that I earn, doing work
that I find meaningful. I am not sharing this with you to
gloat about how great I have it, but rather to counter the
prevailing wisdom that you have to be a millionaire to enjoy
a quality of life in the Bay Area. My guess is that if you
are part of peer group where everyone earns a TON of money
and has convinced themselves that it is the only way to be
happy in the Bay Area. It isn't! You need to step away from
this isolated group and start enjoying our wonderful region!
Living the Dream....
I'm sorry, I really don't mean to be rude. But... ARE YOU
KIDDING?!! This question is rather insulting for those of
us (and I am going to assume there are lots of us) who make
do on what your poor partner earns. Not only that, but I
make what your partner earns and pay 20% of it to my
deadbeat ex-husband. There are plenty of people who get by
on less than I earn, and I know it. ''How much money is
enough?'' is really a philosophical question. You have
imagined a world in which basically there will never be
enough. You are working yourself into a frenzy to have more
money than most of the people in the world. Check out this
There is a calculator there that will show you where you
rank in wealth among the world's people. In your case, you
are in the top .001% in terms of wealth. So do you make
enough money? It's good that you asked that question. I
hope you can find a truly satisfying answer.
one of the world's wealthy
I understand your angst (whilst I believe that with a family income of $400K you
will not get much sympathy from this group!). However, your question is not
well formulated, obviously you can get by on a lot less - most of us do, and we
even buy houses and send our kids to private school - but you will have to set
up a spreadsheet, or get a financial calculator, and put *everything* in it using
the amounts you are spending now as a starting point and play with it to see
what works. It's the only way to answer the questions you are asking. If you
want to e.g. move to Piedmont would you be happy in the smallest house on the
edge of the city - or would you want the $2-3mill mansion in the best location?
The East Bay is in general cheaper than the South Bay - how far could you move
if you change jobs? The real issue here is how close to collapse are you willing
to push yourself? If things are as bad as you say you don't have much choice but
to leave. Even if you went to a job that paid half of what you earn now your
family income would still be in the top 1% of the population...
Two words. Palo Alto. You can afford it on $300K.
One thing I learned a while back is that time and quality of
life is more important than money. I was working ridiculous
hours (12-14 per day) but had no life and the health was
suffering. Sure I was making bank but it was not worth the
sacrifice. Balance and a lifestyle that you are comfortable
with is key. I now make a fraction of what I made before,
but I have more than twice the disposable time, no business
travel, and a whole lot less stress. We have time together
as a family, we have no debt, we are able to save, travel,
own a great home in a great neighborhood, send our child to
private school, and we are able to buy what we want without
having to think too hard about it. Sure, we don't live in
Atherton or Belvedere, but we don't need to. They don't call
them golden handcuffs for nothing. Think about what is
important to you - tangible and intangible. Think about
what you realistically need to be able to afford that
lifestyle. I think that you will be surprised at how much
less you can live on. It sounds like you already have a
frugal bent to your personality, so it won't be that hard to
adapt to a different cash flow profile. Another note: very
few of our friends who moved to a good school district and
paid the real estate premium are actually sending their kids
to public school. FWIW, those who moved to Piedmont for the
schools are more likely to go public than those in Mill
Valley. It is also noteworthy that there are terrific
neighborhoods that do not carry the Piedmont or PA premium.
It just takes time to find the right fit. Sure, you could
also leave the area and live really well for less. Friends
moved to Savannah, Portland, and other parts of the country
and found excellent qualities of life and lower costs of
living. The other option is to establish your financial
goals and gut it out until you achieve them and retire early
from full time work and become a consultant. Hope you find
I'm reluctant to respond because I'm having a hard time
reconciling your income numbers with your financial
concerns. You have plenty in the income department.
Plenty. I would guess 99% percent of BPNers get along on
much, much less, so take a big, deep breath. That said,
you seem to be at a point where you are reevaluating your
lifestyle and work choices: high income, high stress,
expensive schooling, no free time, and wondering how you
can make a change that would decrease your stress but
likely mean a lower income. If possible, take a little
time off to clear your head and focus on these things. See
a financial planner and review different income and tax
scenarios. Check out job opportunities that seem more
manageable. Decide whether you want to buy a house or
continue to rent. If you like the Bay Area and have a hard
time seeing your family living elsewhere, don't move. You
can find a local community that adds value and meaning to
you and your family's life, and where you don't feel like
you need to define yourself by your salary. Even with a
lower income, you'll be okay here.
The way you describe your situation, I'm not sure you can
afford to STAY at your job! I'm not a fan of risking
health and happiness for money and that's kind of what it
sounds like is happening
In my professional opinion, you need a financial plan -- a
detailed analysis of your prioritized goals, how much they
will cost, and what steps you need to take (incl. required
income) to make it all work. If your money is being
managed by a financial planner, s/he should be able to do
that sort of detailed analysis for you. If you are a do
it yourself investor or your advisor doesn't do
comprehensive planning, then I would seek out a
professional to help you.
Best of luck!
Money questions usually touch a nerve and yours certainly
got to me. Seems to me what you and lots of rich, over
worked folks want is reassurance that you can ease up on
the work but still keep all the goodies (private school,
college funds, retirement.) When that turns out to be
impossible there's lots of hand wringing about the high
cost of living.
As a lifelong member of the working class I have a
different perspective. My spouse makes 60K a year working
2 jobs and in the best of times I make 25K working 2 jobs
(most yrs closer to 15K.) We live w/o the goodies you
mentioned (the sum total of our savings is $4000 and
that's the most we've ever had), my kids will have to make
their way thru college the way I did, scholarships, loans
and scrambling, etc, etc. Quite frankly it can really
suck to have to stress about money as much as we do.
But having said that our family is not nearly as stressed
as you describe. Maybe its a difference in expectations
or willingness to feel satisfied. When money worries get
overwhelming I don't check my bank account (that will only
enflame them!); I open my fridge door and see that it's
full. If hunger isn't an issue then I remember all's good
and I've got more than most people on the planet.
I love the Bay Area, the network of friends we have, etc,
etc. We have a lovely life, not because we have ''enough
money,'' but because we're able to let what we have be
So the dirty little secret is lots of people rent in Piedmont and Palo Alto
because the mortgages are much too high. We own a big house that is
plummeting in value in a school district that is plummeting faster. We rent in
Piedmont, a modest house, for about $500 more than I rent my house out for.
However my PG&E is about $300 less, my garbage is $80 less and my water is
$100 less. I'll call it even. Our house is smaller so less cleaning(a win!) central
so my kids can walk EVERYWHERE (a Big win) and closer to my husband's
job.(win, win) My husband makes before taxes about the same as you and
your wife and I stay home. We put away the maximum in a SEP
retirement($45,000) save about $750 a month for college, donate $500 a
month to the public schools(it's write off and cheaper than tuition) save
another $600 a month fro emergencies. 27% for taxes and pay out of pocket
for EVERYTHING, he's subcontractor and self employed. We have 3 homes as
rentals which don't make $ yet but are on accelerated pay off schedules. They
all had 15 year loans that are paying off in less than five years from today. We
drive older cars. We don't take extravagant vacations.My kids(gasp) even
share a room, a travesty apparently based on other posters. Moving out of
California is an option. Many states have better school districts. Find a job
then figure out WHERE you want to live based on the school district that is
nearest the job. Most places aren't as liberal as the Bay Area but a quality of
life improvement might make up for that? You make enough money, you just
need to less of it to live so you feel like the personal sacrifice is worth it or
scale back to an easier job and scale back you cost of living equally. Best of
Oy. I sense another round of class warfare starting on BPN.
By my math, you and your partner make $400,000 together.
That's a lot by most people's standards, and the vast
majority of us get by on much less (and many people will
post to tell you so).
The question of how much money is enough, however, depends
on a number of things.
1) How much money you actually spend. It sounds like you
have been saving a lot. But it isn't clear whether you've
been saving $50K/spending $350 K or saving $300 K/ spending
$100 K. That is going to make a big difference in how easy
or hard this will be.
2) How much your current spending can be reduced. You could
send your kids to public school, but would you? You say you
don't own a house and that is good in terms of having the
flexibility to cut costs-- the current housing market is
making it extremely hard for many people to sell their
3) What kind of lifestyle you want to have. This is related
to #2. Public school, small house, no yard, not-so-great
neighborhood, limited dining out, used car (or no car)--you
can cut your spending a lot. But what are you willing to
do? I live in Oakland and send my child to public school,
and we are very happy.
You don't give enough information in your post for anyone
on BPN to answer your question. How many kids? How much
savings? What are your can't-cut-this financial
obligations? How old are you? How old are your kids? What
is your current budget? My point is, there is a lot of
information to answer your question and we (BPN readers)
don't have it.
I recommend that you hire a FEE-ONLY financial planner (the
national association of personal financial advisors has a
useful listing of members http://www.napfa.org/; also Brian
Pon at Financial Connections Group
team.html is very a very sensible planner). A financial
planner can help you figure out a current and possible
future budgets, assess your current savings
(retirement/college/other), help you decide whether you
can/should buy a house, and help you figure out a plan.
In the meantime, find out if it is feasible to cut your
work schedule. Maybe you could stay at your current job and
work 3 days a week for $180K--if you can work out a budget
that makes that work.
Just above Piedmont is Montclair village in the Oakland
School district--don't hang up yet. The local primary
schools are great Thornhill, Montclair, and another in
Montera middle school is survivable. High School is
problematic but Tech isn't so bad. Housing is less than
Piedmont. Then there is Berkeley with great public schools
and Albany as well. Berkeley High is awesome!! Lots of
choices well within your means. I suggest leaving the job
based on your post. Don't let it kill you. Had a friend in a
similar spot and he finally just quit and was unemployed for
6 months and then a much less stress job popped up and all
is well. Best Wishes
I don't think you need 400K to make it in the Bay Area. My
husband and I have lived here since 1994, first as grad
students making about 25K amongst the two of us (renting and
no kids), and later about $110-120K between us--made a
little bit more at one time but our salaries were reduced.
We both have Ph. D.s and work in academia or non-profits,
were salaries are generally low. We were able to own a
house in lower Rockridge and could have probably sent our
kids to Peralta (we have since moved). To own a house, we
have always bought properties with in-law apartments that we
have used to pay our mortgage and make ends meet. We do
contribute for retirement and we don't have any debts other
than our home mortgage. We just opened a savings account for
our children but do not have a college account, we both come
from middle families were we had to stay close to home to go
to college, go to good public schools (e.g., Cal) and get
grants and/or work part time--and we expect our children to
do the same or they might be able to get scholarships for
Ivy League universities...
And, having said that, we also have friends who make it with
much less than we make and have a happy live in the Bay
Area: they just rent, live in small apartments, send the
kids to public school and get involved in it, etc.
Making ends meet
If money and prestigious schools are your priority then
you'll probably always be stressed out. I always worked
and lived in the bay area, then 5 years ago I became a
single mom, NOT MY CHOICE, and I moved to Red Bluff to be
able to afford to be a stay at home mom and a homeowner.
At first glance, yes, it's a low-rent town. But it's
wonderful and the people are my favorite people anywhere.
My son just finished third grade at a public school 1/2 a
mile away from our home and he is HAPPY with his peers and
the social stuff and learned all of the required
California curriculum. He takes piano lessons from a
fantastic teacher and his friends WALK to our
house....it's wonderful living there...we've been very
happy. What you'll get: relaxing lifestyle surrounded by
natural beauty and TIME with your family. What you'll give
up: the rat race, 401k contributions, some cultural
diverstiy (which can be had in surrounding areas several
times per year). Everything starts in the home and I'm
trying to teach my son that happiness and enjoying life is
the goal, more important than money. Hope you find your
An easy answer: much less than you think.
I suggest you read Dave Ramsey's book ''The Total Money
Makeover'' for some advice on how to manage your money. That
will help you greatly when you go from making 400k a year to
The reality is, and you probably know this, you are going to
have to make sacrifices. You are going to have to choose
between a nice house, a good/private school, onice cars,
neighborhood, and lifestyle.
My husband and I saved $100,000 over 4 years making between
$73k and 150k. Granted, this was before we had a kid. She is
still not school age so we don't have that to consider,
however, with our 100k we purchased a very modest 2 bedroom,
1 bath home in Maxwell Park in Oakland. Our mortgage is
$2200/month. To us, this is a FORTUNE because we rented for
years at $1500/month. We don't go out to eat except the
occasional lunch or dinner once a month or so. We buy
premade food from Trader Joes and I take my lunch with me to
work. We drive older cars that we have paid off and don't
plan to buy any more until we can pay cash for them. If you
do these things, you could easily still afford a private
school on 100k. And you don't need to live in an expensive
neighborhood if you pay for private school.
I'm guessing with a job that pays $300k many of your
coworkers, peers, and friends have a lifestyle that you feel
you need to have too. But your kids will be FINE if they
attend a public school. You will be FINE if you don't buy
property. You will be FINE if you don't eat at nice
restaurants frequently or drive expensive cars. If you are
going to be home with the kids anyway, you can help give
them a good education to supplement what they learn at a
public school which will help them excel just as well as if
they were in a private school.
If you prefer public school, you can easily rent in a nice
neighborhood and avoid the property issue. I have a friend
that rents a 3 bedroom, 2 bath duplex in Cupertino for
around $2300/month. It's a great school system and a
reasonable rental rate.
My husband and I pay our mortgage and live fine on
100k/year. I work and he stays home with my daughter. And we
still manage to save $500+ a month, give 10% of our income
to our church, pay all the bills, and get plenty of extras
here and there (nice clothes, going out once in a while). We
could afford to do more, but we don't. Neither of us is
burned out. It is doable. We plan to send her to a public
school and supplement her education on our own. We plan for
her to get loans or scholarships for college.
I applaud your bravery for posting this question. I could have written it
myself; am in the exact same boat. I have been struggling with this for a
while as I would much prefer not to have to work and to pour my energy in
the my kids school (and some exercise/weight loss). My husband more or
less gets it, but isn't ready to let me out yet. He says that I can quit if willing
to send our children to our local public school...but we live in a very nice area
of Oakland which happens to have one of its lowest performing public schools
which is literally attached to the freeway. I just can't do it.
I recently read a book that is somewhat helpful...''If I am so smart, where did
all my money go?'' For us, saving is not a problem (this book assumes you
spend more than you make, which is not our challenge, luckily), but
nonetheless, it was helpful to look at categories of expenses and average %'s
and such...also for calculating future expenses (for us and for you...what will
be the total cost of private school? what is the projected cost of college,
really?) Maybe this will help you think it through?
Moving to another part of the bay area with better schools might or might not
be a better option for you. For us it is not since we are lucky to have a low
mortgage balance and property taxes...moving would dramatically raise both
of those....higher than the cost of private school for us anyway.
A friend in the financial industry tells me that we can retire when we can live
off 3% of our liquid resources...which means $30k per year for each $1M you
have in the bank...which is a LONG way off (if ever) for us. Would need nearly
$2M just to cover private school. Insane.
So back to the question at hand...how much is enough? I think that doing the
calculations in the book mentioned above would really help you get closer to
that answer as it is individual to your expenses and future plans. Different
answer of course between how much is enough salary to live on vs. how much
savings are enough to retire.
Good for you, girlfriend,for making this kind of $$.
Now listen, I am sure that you will find MANY who will
rhapsodize about $ not buying happiness, etc. But the
reality of life is that you need some, esp. if you want to
own a house, pay for your retirement and your children's
college. You have quite an opportunity here.
Now, I'm not saying that you are NOT burnt out, but do you
need a leave of absence (for a month or two) or do you need
a whole new career? it's amazing what a break can do to
To answer your questions: if the 2 of you make $400K
together, you CAN afford Piedmont. As for private schools:
here in East Bay, you can find schools where you child can
speak spanish, french, german, chinese, and even sign.
Where else can you find this?!?
Hey, if you want to move, do so (more room for the rest of
us!), but you need to think this out.
best of luck
Wow, I can imagine it would be hard to leave that kind of
money. I say quit the job for a more modestly paying
local job. Put the kids in public school, reduce your
commute, reduce your stress (and that of your family), and
enjoy life! It'll be scary but so worth it.
Can't buy me love
How much money is enough? It's never enough if you focus on the
money. There will always be some one richer than you.
But what I feel you are really asking is, how to keep the same amount of
money and all it's perks but stay at home.
You want to be taken care of. You don't want to be the breadwinner.
Sorry, that's not a nice response but it's really at the heart of what you are
asking. You really want your spouse to make your salary, let him deal with
the stress and then you can stay home but still keep the lifestyle.
You have options, get another job, get a richer spouse, more to a less
affluent area, win the lottery, learn to be happy with less, keep the job and
learn to deal with the stress, etc.
Figure out what you really want. There are many answers, you just have to
I saw your posting and almost never have the time to respond
to this newsletter, or even to read it, but I felt compelled
on this one to say something about the incredibly outrageous
expectations that some people in the Bay Area have around
how much money is ''necessary.''
We feel very lucky to have an annual income of a little more
than $75K, and know lots of families who live on less than
that -- and we feel like we live well. We have two healthy
and happy kids who absolutely LOVE their education in the
Berkeley public schools, a home that we love in a
neighborhood with trees and gardens and other nice folks,
and jobs that we care about and enjoy. We help out family
in other parts, have two used cars that we don't have to use
too often (we can generally walk to work), and enjoy
vacations when we need them. We also have health care and
always enough to eat. And we wouldn't want a fancier house
or a private school education even if we could afford it.
So yes, it's entirely possible to do it on less. Just
decide what's really important to you, pay for that, and let
the rest go. As far as I've seen, the race to the top
doesn't really make most people happy -- and once you have
enough money for the real essentials, whatever you need for
the rest of your happiness generally can't be bought.
It helps if you surround yourself with friends who feel the
same way, because community is a great factor in balancing
out those rough spots that sometimes come from living on
set priorities and enjoy!
Boy oh boy, I guessed correctly that there would be a heap lot of indignation
and self-righteousness, a firestorm, really, of answers to this question.
First of all, if one makes 400k, one is paying 50% of that in taxes. So, really,
the starting pointing would be 200k in terms of available income. If the
original poster were I, she would be shoveling out 3 tuitions (one college, one
high school, and one middle school) to the tune of over 100k. So, let's say
that leaves 90k for what? A mortgage/rental (which is going to be more
expensive in the better school districts), health insurance (our Blue X PPO is
running us 18,000k/yearly), my spouse's student loans (albeit at low interest
but no longer deductible--a whole 'nother thread), food, clothing, shelter, car
payments, and supporting a mother-in-law who was unimaginably prodigal
with her windfall, but what are we going to do, let her live on the street??
So, before the poster asks (your expenses matter and inform what 400k really
means) and before everybody gets into their ''rage'' mode, understand that you
don't know the first thing about the expenses that beset this poster.
Really, she/he was asking for help in assessing something about which
she/he was concerned or anxious.
Misericordia, BPNers, e.g. compassion.
I am looking for practical advice about how people manage to
''get ahead'' financially in the Bay Area. I look around and I
wonder how people do it, because I see SAHMs, people owning
$1M houses etc. and I am really curious how people thrive
financially and plan for their financial futures in the Bay
Area. Are lots of families really making $400k-500k a year
to be able to afford to live in great school districts, buy
homes and cars, go on holiday, AND save significant amounts
for retirement and college? I see tons of people seeming to
live better than we do in SF, Berkeley, Piedmont, Burlingame
etc. And yet we are a two-income family making good
corporate salaries and we feel we cannot afford a house in a
good school district and still manage to save adequately for
the future. We do manage to save 25% of our income for
retirement and $20k a year for college, but we wouldn't be
able to save like this if we had a big mortgage - and we'd
have a pretty big one for a house in a good school district,
even be after putting down the large down payment we've
saved over 20 years of scrimping. So I guess I'd just like
to know how do you do it?! Did everyone buy houses when they
were really cheap? How much do you need to make to get ahead
financially in the Bay Area, because we feel like we're
still treading water at 40.
-Need financial advice
I totally understand your position. We were also two
fully employed adults, wtih 2 kids. We also were just
treading water. So we moved. To the midwest. And I'm
hear to tell you, it's great here. So many people make
such a big deal about the Bay Area and make it sound like
there is no quality of life anywhere else. It's not
true. We moved into a big house on a cul-de-sac. There
are 15 kids in 6 houses and my kids LOVE IT! We have met
many, many very wonderful people - even a thriving music
scene - and the cost of living is about 40% lower than the
Bay Area. So now we are saving WAY more money for our
future and our kids future. We can still visit our
wonderful friends out there from time to time, but on a
day to day basis, this was absolutley the best move for
us. It's been my impression that a lot of people in the
Bay Area have some kind of family money that helps them
out, or they got into the real estate market at the right
time, and that's how they make it work. I suspect a lot
of people also have a lot of credit card debt. The whole
rat-race of it all was just too much for us, and we are
MUCH happier with the pace of life here. Just something
Been there and left
Congratulations on having the discipline to save so much! I
read an entertaining and enlightening book- The Millionaire
Next Door- a few years ago that talks to your question.
Personally, our family saved like yours does, drove modest
cars, and moved to Fremont where schools are OK and housing
is cheaper. And it all worked out with education for the
kids and secure retirement for the parents.
First off, you may get a lot of people who will have a hard
time sympathizing with your plight - especially the poster
who was trying to figure out how to live within their means.
It sounds like you are ''thriving'' and doing pretty well
indeed - saving 25% of your income for retirement AND saving
$20K/year for college? We consider ourselves to be
''thriving'' here and we did it by having realistic
expectations. We actually consider ourselves to be better
off because we chose to make less money in order to have
more time for our family. Are we living the Lifestyles of
the Rich and Famous? No. We DO live very well, travel,
save, aren't in debt, eat out, pay private school tuition,
and have a good life. Perhaps it might make sense to stop
evaluating how well off you are by comparing yourself to
others. Yes, doing well is highly subjective but if you
aren't in debt beyond your mortgage and are saving a large
amount of money, then many would say that you are doing very
well. There will always be others who make more than you do
and many that make a LOT less than you. Often times
appearances are deceiving: people who are flashy can also be
in tons of debt. We have friends who have amazing new cars
and a multimillion dollar home but have several hundred
thousand in debt on top of a multimillion dollar mortgage
and have to borrow from their parents to pay tuition. It's
all relative. I'd say you guys were better off. If you want
your kid to go to the best schools, pay for private school.
It is a LOT cheaper than buying into a better school
district. Sounds like you could afford a million dollar home
but we all make choices. It doesn't mean that you aren't
Let's look at the
numbers for a bit: assuming, conservatively that you and
your husband earn $150,000 together. After tax, let's say
that you take home $100,000. That would mean that you are
actually saving (with 25% for savings and $20,000 for
college savings) 45% of your take home. That would leave
you with $4,583 per month to pay mortgage, property taxes,
insurance, clothing, food, etc. No wonder you feel the
pinch. Many financial advisers would suggest saving for your
own retirement first and allowing your children to do what
we did when going through college - borrow, get financial
aid, etc. There is no shame in that. That would free up
another $1,667 per month in disposable income. But really it
comes down to priorities and values which are highly
personal and how you want to live. I wouldn't suggest saving
nothing but if you don't enjoy a little of what you earn,
what happens if you get hit by a bus tomorrow? A little
perspective is all.
Thriving in the Bay Area
The people I know who bought their first home in the Bay
Area during the past 10 years either 1) had money from their
parents, or 2) from an inheritance, or 3) from working at a
start-up that became successful. As for us, we bought our
house in Berkeley 15 years ago when houses were cheaper. We
used a very tiny down payment that we had scraped together
from savings and work bonuses. But we found that our income
has steadily increased after age 40, and childcare costs
decreased, and our house payment stays the same, so it is
By contrast, my sister in Nevada bought a house in the last
year with no family money, and just on her income from U.
Nevada as an admin. assistant. She bought a short sale that
was affordable, and she had first-time buyer loans for the
downpayment from the City of Reno, the state of Nevada, HUD,
plus last year's rebate. The loans do not have to be paid
back if she stays in the house for 15 yrs. Other cities have
similar programs. Her monthly payment is manageable.
When I see people who seem to have it all, I often wonder
the same thing, but then I try to remember that you never
know the reality behind anyone else's finances. Maybe the
folks who appear to have it all are not saving, living on
credit cards, or foregoing expenses (like pricey
insurance) that you consider essential. Maybe they search
long and hard for really good deals and are not spending
as much as it appears on clothes, vacations, etc. Maybe
they have wealthy parents that help out.
I have also learned that people have their priorities and
spend money on what's important to them. So while it may
not be obvious where someone is cutting corners, I tend to
think that most people do.
Personally, my family is fortunate to have 2 good incomes
(no SAHM), a good school district, and low mortgage (we
bought 10 years ago and had saved for years to be able to
put a lot of money down). Yet I still shop for clothes on
sale at Old Navy and Marshall's, drive a car with more
than 100,000 miles, stock up when items are on sale at the
grocery, and don't eat out or hire babysitters often. We
save what we can each month, but it's never as much as I'd
like. We do fine, but in the end, it's all a matter of
priorities. . .
Watch every dollar
It is a bit of a mystery how there appear to be so many people who can afford
$1M+ houses, vacations, etc. There are many potential reasons (like they
bought their house 15 years ago for $250k like we did) or they inherited money
or are living in debt. But speculating doesn't really help...what I have recently
found VERY helpful was a book called ''If I am so smart, where did all my money
go?''. I read it and am starting to work through it for our family (and am trying
to get my husband to read it so we can talk about some long and short term
Good luck (and budgeting) to you
It's my impression that A LOT of people thriving in the Bay Area receive
significant help from parents like with buying a house, school tuitions, etc. And
then there are people (like me) who were lucky enough to buy in before home
prices climbed sky high. And lastly there are people who do make tons of
Here's what you are doing that others aren't: Saving 25%
of your income for retirement and saving $20k for college!
Most people are not saving anywhere near what you are.
I think we are doing really well saving and we only save
13% of our income and only $4k for college per child. We
have a small house in a good school district, with a small
mortgage. If we wanted something bigger, we'd have to
reduce the amount we save for retirement, college, and
then travel less, eat out less, etc.
You want a house in a good school district? Save less.
I often see this question pop up on BPN and there are people
will say you can live here on less, but I just don't see it
happening for our family of four. I also think A lot of
people live on credit. Here is our deal, we both are full
time employed (making teachers pay)renting a house in an OK
part of Oakland, sending our kids to a moderately price day
care and we almost never go out and even though our family
lives back on the east coast we only can afford to see them
1X a year. All the money we have saved was prior to our
moving here in 2005 and before our children were born. I
really find it hard to believe that EVERYONE here can afford
500K housing no less 1M and up to live in Rockridge or the
other side of the tunnel. Because of all the factors we are
considering moving, especially if they change of the tax
rebates for holding a mortgage we really will have no
incentive to own anything here. That just our thoughts, so
you are not alone in wondering how are all these people
I think the overwhelming majority of people who thrive
financially in the Bay Area and are of the generation that
has young children now have one of three things going on:
1) either husband or wife has extensive financial support
from family or inherited wealth, 2) either husband or wife
makes or at some point has made money that is well above
the sort of $100-500,000 salaries that professionals
generally earn---generally either through cashing out of a
technology company or through working in the financial
services industry in boomtime, 3) both parents work, often
quite hard, and they save significantly less than it
sounds like you do (or all savings is through the house
payment), or 4) they live in El Sobrante, Concord, or
Walnut Creek. Often it's a combination of those factors.
Otherwise, people are either going into debt or going
without things that we think of as the accoutrements of
I enjoyed living in the Bay but knew we could never stay
there because we don't have #1 or #2 going on and didn't
wnat to do #3 or #4. I think a big part of the growing
inequality in America is going to be reflected
geographically. Joel Kotkin is an excellent demographer
who is one of the few voices in urban planning pointing
out that, as much as we like to idealize the urban
planning model of places like SF and New York, those
cities are not affordable to the vast majority of
Americans, many of whom move to what he
calls ''aspirational'' cities (e.g., Houston) where it's
still possible to be middle class without getting
significant financial support from the last (our parents')
generation. Sorry to be cynical; it honestly sounds like
you're doing pretty darned well financially. But the Bay
Area is unworkable for many people without major
wow. I think you are totally under-estimating yourself. You
are thriving in the bay area! Your savings are HUGE compared
to most Americans. You clearly just have different
priorities to a lot of people. That said $20K a year sounds
a lot for college education - if you scaled this back you
probably could afford a pretty decent mortgage. In
comparison we save $40K a year for retirement but very
little else (only a few K for college - we'll be old enough
to tap into our 401Ks if we need to for our kids college and
I think they are a way better savings plans - 529's are SO
limited in what you can invest in). We bought our house
fairly recently so yes it was expensive but remember that
buying a house is also a savings plan. Almost $1000 of our
monthly mortgage payment is going towards principal and
while I wouldn't be so dumb as it suggest my house is
appreciating in the short term - at the end of the mortgage
we will own the house and have saved the value of the house
in that time.
That said I think most of the people I know are not very
good with their money. I see friends considering private
school that do not have the financial resources to do it -
we make a lot more money than most of them and I know we
couldn't afford it if we want to save for retirement - I
think lots of people in the bay area forgo saving for the
future to support the cost of living in the bay area.
My last comment is to question your definition of ''good
school district''. I personally think test scores are mostly
an indication of the socio-economic make up of the students.
As long as your kids are not in a bad school - they'll
probably do well in most schools.
The key word in your posting is 'thriving' in the Bay Area.
The Bay Area is expensive!!! There was a thread on this a
few months ago, which got a LOT of responses, as people in
general are pretty stressed out by the cost of living here.
I think it's all about choices. It sounds like you made a
very sensible choice to save a lot of $ for retirement,
college & for a downpayment. Good for you. Other people in
your financial category, like my spouse & me, made a
different choice. I own a lovely house in a nice area, that
is REALLY expensive. I have a crazy big mortgage and my
property taxes are $1500/month (what you save for college).
Prop 13 is RUTHLESS on young couples with children. It's
bankrupted our state and makes the entry to homeownership
nearly impossible (hopefully at some point California
taxpayers will repeal it, so everyone pays their fair
share!). That aside, the other thing that drove housing
prices up was the dot com boom, and subsequent sucess of
Google, Facebook, etc., which unfortunately, my family did
not benefit from!
As a result, we do NOT have $$ to put into savings that you
do, and our college fund is paltry. The only $ we are
saving is in our house. Ideal? No, obviously not. But you
have to decide if you want to stay or go, and if you want to
stay, how important it is to own a home, etc. Again, choices.
Good luck, I look forward to the other comments on this one
In terms of the house, I think a lot of first-time home buyers these days, even
people in their 30s and 40s, get help from their parents. I know that we could
not have bought a house where we did without one of us having inherited a
parent's home, which was subsequently sold for a down payment on our (small,
2 bdrm) home. Other than that, we've lived within our means and kept down
expenses (very little eating out, only 1 car, low-budget vacations, etc.) and had
realistic expectations about what size house/location we could afford.
The other thing to consider is that a lot of people that you see with $1M homes
and expensive vacations are NOT living within their means. They can't afford
their lifestyle either.
not rich, not poor
I'm curious what other people have to say about this too.
We are also HENRY's: High Earners, Not Rich Yet. (far from
Also 2 business salaries, also not in the $400-500k golden
range you mention.
** saving 25% is great and more could be saved except that
there is 45+% tax.
I'm not sure this would fix things though, Since other
people would also have more income: more money would
fight over the same limited resource - housing in good
school districts, prices would rise again and you're back
to the same place.
Here's what I think it breaks down to:
1 - There are some who were lucky and bought early.
2 - I think there are many who have been living beyond
their means. Then there are the people who bought homes
they could just barely afford and are now struggling.
3 - And there seem to be just enough people who do have
the $400+ salaries and can afford that extra to soak up
all the available housing stock.
So that's the commiseration. On ideas:
- My husband and I (about same age as you) are renting
right now - the ground level of someone elses very large
house. It's a bit embarassing sometimes, not having a
place to entertain, but I hold fast to living within
means. We decided to only have 1 child, to reduce the
college req. (but also a better fit for my temperment -
probably more the driver).
- we're helping to start a charter school (Yu Ming
Mandarin immersion) so that we're more flexible on house
- help ''create'' more good school districts. There's so
much demand and yet there are these ''off-limits'' zones.
Our peers aren't there so we're not there and therefore
they don't improve. This takes a village and of course
there's only so much time after 2 full time jobs.
- the others are political long shots.
* Change/eliminate Prop13: would get more people to
potentially downsize from their homes. As a side note,
it's silly that the state uses sales tax as opposed to
property tax to fund operations. (property tax is
deductible at the federal level while sales tax is not) It
ends up being a transfer to teh Feds & other states
* reduce state payroll tax
We'll see what the new governor comes up with...
I think the people you are talking about make between 200k
and 300k. In our case, we bought our first house in the
late 90's so we have a lot of equity in our current ($1m+)
house. Also, we don't save 25% of our incomes for
retirement because that would be over 50k and I don't know
how to tax shelter that much money. As for college, we
save 2k per child per year. I know that sounds like too
little, but at our income level, we will just muddle
through the college years paying out of our incomes and
borrowing the rest. Also, by then we might have some
inherited money. By the way, it is not unusual for people
to get financial help from family when buying a house, but
I think you probably know that.
Given that I have an incomplete picture of your financial
situation, and assuming you make over 200k, this is my
advice: Take the down payment you've saved plus any
untaxshelted retirement / college money and buy yourself a
modest house while the interest rates are low and the
bidding wars are manageable.
It sounds like you are doing a great job with your finances, even thriving!
Owning a home is not all that. If you aren't getting killed by income taxes,
don't sweat not owning. I own, and it provides some measure of security.
But you have your savings, which serves the same function. It sounds like
you feel bad about living paycheck to paycheck. That used to get me
down, but I have come to terms with it. Of course, it is easier if you really
like your job, which I do. Overall, I'd say cut yourself break and try not to
Home ownership is not all that...
I have wondered much the same thing--how can other people
afford houses in such nice neighborhoods? We make good
money, I consider us comfortably well off (that double
corporate salary thing you mentioned), but we can't pull
off a mortgage on an $800,000+ home.
My theory is that many other people don't save enough (for
retirement, college, or anything else) and that they are
probably living too close to the edge. I was very
concerned, when we bought our house, about what would
happen if one of us lost our job. That was 2004, and of
course the recent recession put many families into exactly
We bought a $400,000 duplex in a not-great school zone in
Oakland. We used Oakland Unified School
District's ''Options'' process to get our daughted into a
good, but not super-coveted (i.e. hills), school. Even so,
our ability to save for retirement and college has taken a
hit. In addition to the mortgage, there are taxes,
insurance, and maintenance. I used to save 25% of my
income; it is now at 15% (after taking even more of a hit
and then working back up). Our college savings are really
There are occassional flurries of controversy on this
listserve when someone asks something along the lines
of ''How do you make ends meet on $100,000 per year?'' and
all the people who are getting along on less get all het up
about, I don't know, how it is that people can't get by on
$100,000 a year. In some sense, it seems absurd, but I
really think we live in an area where housing can eat up
almost arbitrary amounts of money. I would love to live in
Rockridge or Elmwood. Make more money, move to a better
neighborhood, but have the same amount of money to pay for
all your other stuff (or less), but your life is more
financially precarious because of your mortgage obligation.
Bottom line: My advice is not to let your reach exceed your
grasp in where you want to live. The Bay Area is snobby
about schools, but there are many more good schools that
make the exclusive lists. Choose a smaller home or one with
income potential (duplex or cottage). And do the math
before you commit, on meeting all your obligations
(retirement, college, mortgage, taxes, insurance,
I think we ''appear'' to be making it: we have a not fancy, but fairly nice 3
bedroom, 2 bathroom home in Lafayette, right next to one of the top scoring
schools in the state. I was a SAHM for ten years when our three children were
very young. We belonged to the Claremont and now our local pool club. We
drive a volvo. I shop at J.Crew and Whole Foods. Our kids play soccer and
baseball. They also are learning to play the piano. We have a housecleaning
come once a week and a babysitter whenever we need it. We also have quite
a bit of savings. In general I don't really worry or think about money.
I'm never quite sure how we do it, since I don't even think we have a very high
income for the bay area. My husband's base salary is $140k. There have been
two years when he made around $350k but there were also several years
when he only made $110k and we still maintained our same living standard.
In the last two months I have gone back to work which has added another
$75k to our income.
I guess we wouldn't be able to live like this if we had to enter the housing
market right now. We bought our first house in Rockridge ten years ago for
$500k (which a the time was a lot!) and then we sold it 5 years later for
$950k and then bought our present house in Lafayette for only $750k even
though it was bigger and had better schools. So our mortgage payment is
But even so, I look around at the real estate ads, and there are multiple
houses now in excellent locations that are listed for under $600k, so I don't
know how people say they can't buy into a good school district.
So anyway. There it is from someone in the bay area who actually feels like
she is ''making it'' even though I dont' think our incomes are extraordinarily
high (many, many people I know are making more like $350k-$700k per
Loving Live in the Bay Area
I'm interested to see the replies you get as I've
frequently wondered the same thing. I don't have much
advice just wanted to commiserate and say we're in the
same boat. My husband and I are on two incomes (1
corporate, 1 academic) and we're not meeting all of our
savings goals. A large portion of our income is eaten up
by mortgage & property taxes & another chunk with
childcare expenses (still too young for public school). We
try and put away 15% of our income for retirement savings
but that means we have saved almost nothing for our kids'
education. And to save as much as we do, we buy second-
hand stuff for ourselves and our kids, and live on a tight
budget. In any other part of the country, I'm sure we'd be
rich and meeting all our goals and then some but the Bay
area is so expensive.
Seems like a lot of people bought homes early, have
parents who have helped out or jobs that pay really well.
The financial advice we were given was to save for a down
payment first, then buy a house and then to start putting
as much away for retirement as we could. There are
loans/scholarships for kids but none for retirement.
In the same financial boat
You save more than I make. Count your blessings.
Not sure what the original poster said, but I feel I need to
add my 2 cents. This won't fit into one message so it'll
span 3 messages if the moderator approves of it.
Many of the responders to the post suggested one of the ways
people can afford to have a house in the Bay Area is by
inheriting money, inheriting a house, or receiving a
sizeable amount of money from the parents. I can't help but
to feel insulted by the comment. While some people may have
afforded their house this way, personally, we (husband and
wife) have WORKED HARD since graduating from college (and
worked during college) and have not received one penny from
either sets of parents for our houses.
Here are specifics on how we did it and are doing it:
-We work for large non-profits (20 years and 15 years) and
have stable employment (knock on wood). While the pay is
not comparable to private companies, at least our company is
fairly reliable and there has been continuous employment.
Yes, we are lucky. Combined, our income might be about
$200K before taxes.
-While one buys a house for a certain sum, in general,
salaries increase over time, so you actually grow into your
mortgage and it becomes easier to afford the mortgage.
-In some cases, if one can swing it, having a 15 year home
mortgage makes sense. In the end you pay less money, but it
might take a bit of struggling at first. But, once you
start seeing on your mortgage statement the amount of
principle you are paying off, you might be encouraged!
-We started small with a condo ($120K). Then sold it and
bought a small house ($320K). Then worked our way up to a
larger house ($535K). A lot of this is LUCK with regards to
the economy. We bought at the right time. We are happy
with our house and don't need a $1M house to be happy.
-We purchased in an area not exactly convenient to our jobs,
but the houses are cheaper and you get more for your money.
The neighborhood is nice and safe. While the commute is a
burden, that's just the trade off we were willing to take.
We still bought in a good public school district.
-We make home improvements ourselves. While the houses we
purchased were not fixer uppers, we still had to do some
renovations like replace the wallpaper, tile the floors,
replace the sprinkler system, replace the faucet fixtures,
sew curtains, and install the shower door. We also maintain
the garden ourselves. We did this over a period of years
and learned as we went. Yeah, it takes a lot of TIME and
struggle, but this saves tons money. That's the trade off.
But, we are PROUD to say we've done so many home
improvements ourselves, on our very own. Both of us did
them together. It's a wonderful accomplishment.
-We started having children at an older age, so we had
already built a small nest egg. Grandma watches the kids
during the time I am part-time at work.
-We bought/drove Honda Civics and had them for about 10-12
years. They were still going strong when we sold them.
They were not fancy cars and not expensive, yet reliable.
We sold them to have the latest security features (air bags)
in our new car.
-We look for deals. For example, our next larger car was
purchased used but again, a reliable brand. Our cars are
not fancy. Our vacations are planned with last-minute deals.
-We stay at cheaper hotels/motels. Yeah, it's not the
Bellagio, but the more affordable Monte Carlo hotel, Tuscany
hotel (not even on the strip), or Best Western for us. Once
in a while we might splurge, but not often. We'd rather
save the money for the excursion itself. And for cruises,
while the tours might be expensive and well planned, we look
at the tour brochures the cruises offer, then do the tour on
our own or find another organized tour group at the
destination. You can save tons this way.
-We don't buy knick knacks. Those add up and take up space.
They make it more difficult to move later, too. We do buy
things that we need and might splurge once in a while on
something we really want that will make us happy.
-We don't subscribe to cable or satellite TV. Honestly, we
just don't have the time to watch television. We use the TV
antenna, rent movies/stream from Netflix, or use Hulu.com to
watch TV shows. So many TV episodes are online now so we're
able to still watch our favorite shows.
All this together makes it so we are able to save each month
to our tax deferred plans and afford our house. I hope this
gives you some ideas. Best wishes to you.
I failed to post this earlier. You seem to save $ just fine. Maybe you just
to spend it differently? Buying a house in this market might not make a lot of
sense as we haven't hit bottom yet. We rented out our very well appointed
huge home(huge PG&E, EBMUD) in suburbia with good schools and rent a
home half the size in the wilds of Piedmont for about $300 more than we
receive in rent. All of our utilities are halved, at least. It's incredibly
and small. My kids attend great schools, they can walk everywhere and it's
safe. We eat out maybe twice a month. Pasta Pomodoro for about $60 is our
cap. We don't have cable but watch limited TV on our computers. I drive a
2006 Honda, my husband drives a beater car as he works in a unsafe
neighborhood. We save aggressively for retirement. We save about 6K a year
for college for my one son(he's 8). My other was lucky enough to get a bit of
a boost from my grandmother's estate. We spend our money on experiences,
not things. We take one vacation a year, 7 days is maximum and a few three
day weekends. My husband earns great wages, no benefits and we pay a lot in
taxes but we certainly don't live any sort of ''flashy'' lifestyle. I did the
about 5 years ago. We had two German luxury cars which cost us about 10K
in maintenance annually (brakes,tires, oil changes etc) a year because
EVERYTHING from the $1800 tires to the $1500 tune up was expensive. My
husband came home from work one day and noticed my new Honda-I sold
the others at the buggy bank, paid cash for my car and had some change. My
car runs me about $800 a year if I get new tires annually otherwise less then
I think a lot of people lease their fancy cars, live WAAAY past their means
and have a 40 year mortgage and carry a lot of consumer debt. Don't buy into
the hype, it's as real as Hollywood. Maybe find a place to live that offers
kids a good public education. Might have to scale back a little on their
fund but the trade off will be worth it because as soon as they fly the coop
you can move into a cheaper neighborhood and send them a little cash every
month for school, that's our plan.
Please be mindful about posting your income on this forum
and talking about your ''struggles''. There are people
living with 3 or more kids in 2 b-room aptmts and living
on one income and/or looking for work. We don't want to
hear about ''there are times when we ONLY made $180K a
year'' or other such rambling. It is not only insensitive
to people who are actually struggling to make the rent or
buy groceries but it is pointless and benefits no one.
To the original poster: I think you are very lucky with
the amount of $$ that you are able to save. I wouldn't
worry about it, if I were you. You've already heard from a
lot of people, but i wanted to add one more thing. This
week, a parent from lafayette chimed in about how she
can't believe that people can't afford houses that cost a
little under $600k!!! I am sure that this did not help the
original poster at all, and i wanted to commiserate about
the cost of living in the Bay Area. Most people in the
country cannot afford a house that costs that much! Yes,
some people do work really hard and save money for their
homes. My husband works in real estate, and I can tell you
with absolute certainty that a whole LOT of people who buy
homes in the East Bay have help from their parents. A lot
of the rest have 2 working spouses who both make a lot of
money. That's why the nanny industry is booming around
here. My husband makes $120k per year, and we bought our
home by ourselves, with very little money down. We were
never able to recover from that purchase, got into a
mountain of debt, and finally sold the house a few months
ago. We had no savings and no retirement. We never took
vacations. All of our things were from garage sales and
thrift stores. We still couldn't make it as homeowners.
Deciding to be renters again was the best thing we ever
did. With the income we have, we could live quite well in
many other parts of the country, but we like it here, so
we gave up the house and started saving our money.
To the person insulted by the comment that many people inherited or are given
money by parents in the bay area: Count your free part-time child care for
children as a $20-30k 'gift' per year.
No free childcare
Alright, the last message reporting an income of $140K and
not knowing how it all works out fine, sparked me to
respond. Our annual income is about $52,000 combined and
we own a house in Northwest Berkeley, we bought 15 years
ago for $137,000 (its highest value was $360,000 and now
it's more like $240,000). How can this be done, since we
never had much money?
1. At 10% down, we used some savings, some money paid from
an accident caused by another party, and a sweet one-time
gift of $5,000 from my parents overseas.
2. We always maintained superb credit (830 points), only
spending what we can pay in full by the end of the month,
making sure we don't have too many credit cards - just one
for back-up in case the other one gets compromised.
3. No subscriptions, no cable TV - we don't actually want
it. Netflix is great and our converter box gives us 5
channels. We talk, we don't have time for TV.
4. I love thriftshopping. What a waste of money it is to
pay regular prices for clothes! I own about 6 cashmere
sweaters in different colors that I bought over the years
for about $5.99 each (in exc. condition, of course).
Recently, I purchased 6 unique tops for dancing (Bebe,
Express etc) plus a pair of brown half boots and paid $22
total at a thriftstore where everything was 30% off. My
teenage daughter got herself a bunch of cool seatshirts
for $1.50 each. Regular stores limit you by current
fashion styles and colors and price.
5. Keep your family small! Don't go by emotion but what
you are worth in income and do your math. Kids need
daycare, food & clothes, braces, etc. Budget your family
size within your means and based on relatives around you.
We don't have any relatives in this area.
6. We love to travel and to see the most for the least we
go camping and invested in comfortable camping equipment
over time. For winterbreak, it's a motel. Travel is about
exploring during the day, not where I am while I sleep.
7. A couple of refinances brought us extra cash for the
purchase of 3 year old truck and the replacement of
windows. I happily drive a 1991 Honda in great shape,
which I paid off after 5 years (before we had a child). I
also lowered mortgage rate and interest.
8. Select an employer with great benefits. I'm still with
mine for more than 20 years. Eat healthy (I only buy
organic) and stay healthy. I feel well off!
I never thought I'd feel this way, but here I am. My husband's
business is ending, and we're in thousands of dollars of debt.
I have a decent job but it just scrapes our family by. We have
a small son who wears hand me downs, and lives in a house of
love but little else. Our furniture is wobbly, we've got a roof
that leaks, and absolutely no money for vacations, new clothes,
movies, dinners out, or extras.
I'm tired of having to make excuses when I can't go to movies
or out to dinner with friends. I was never a big shopper, but
it'd be nice to buy new jeans. And the hardest part for me, as
a mom, is hearing about other kids' vacations, piano lessons,
classes, etc. when I can barely buy gas to get to work.
I know money doesn't buy love, yet it feels like our financial
boat is sinking. I guess I'm looking for some suggestions to
deal with my own envy of parents whose disposable income might
comprise my entire month's salary. I'm jealous, and I'm not
happy about that. How do you deal?
Melancholy, but not mad.
I really feel for you. I know how terrible it is to feel jealousy
and cursed by circumstance. There isn't an easy answer. When we
compare our lives with others, someone is always doing better,
while others (often unnoticed) are doing worse. And it is never
helpful to compare. I wish there was a way of saying that so much
of the world suffers incredible poverty, illness, and
annihilation (so feel grateful) without sounding preachy, but it
is no use. The third-world can never steal our attention away
from our bruised egos and faltering dreams.
For me, when I worry about the $11,751 in debt I am, I try to
remember that 1 1/2 years ago I was $60,000 in debt. When I feel
unkempt in my ill-fitting jeans, and it sinks in that I don't
have the money to go out and buy new ones, I try to distract
myself with how adorable my child looks in her self-constructed
ensembles. They are quite daring and splashy (hand-me-downs). My
husband tells me every day how beautiful I am. This helps. Though
I have not had a haircut since last Mother's Day, and we live in
a rental house that I hate, I have my kids. I remember having
money in the bank and a clean condo with a great view in San
Francisco once. My shabby life with kids now is incredibly better.
Changing my Perspective
I would suggest that you start volunteering with families less
fortunate than your own. There are soup kitchens, food banks,
etc... where you could volunteer, perhaps even as a family. I
also ocassionaly need some perspective and a reminder of where
the priorities lay (having a family that loves each other,
health, food on the table, roof over our heads, even if it be
leaky) can be good for the soul. And you can help out, too.
broke but blessed
I know exactly how you feel. We rented a very small house (900
square feet) to get my daughter in Joaquin Miller Elementary.
Nearly all of the families own their homes, the majority have
one (at least part time) stay at home parent. The lot is full of
new Volvos, SUVs, even a Hummer or two. Kids go to all kinds of
Summer Camps, take a variety of lessons and the vacations - well
that's another story.
We often shop second hand for our daughter. We do not eat out or
go to the movies except when we get a gift certificate as a
gift. I wear clothes that are several years old and we drive
cars from the 80s and early 90s.
Here's also what we do. We get annual passes for the zoo and
Lawrence Hall of Science. We also get scholarships for summer
camps (apply early and often). We visit the public library
often. We go to events at the Oakland Museum when it's free
(once per month) and the San Francisco Museums (once per month
free or very low cost) and we ride the bus and BART. I want to
let you know that you can have really great, smart kids. You can
have happy kids and you can be okay with less. And, it's really
easy to compare yourself and come up short if you look at
Recently, I overheard a parent who is a high level professional
who said she would love to go back to being a cashier. She loved
the job and was happy when talking to the customers that came
in - she cashiered in high school and college. But she now had
too many obligations.
There is envy on both sides of the fence. AND, I really
understand how you feel.
Occasional Envy mixed with mostly Graditude
Well, I can understand completely how you feel. We're in a very similar
disposable income, no savings, we own a home, but the only way we were
swing that was to buy a multi-unit place with my mom, so we have our own
but not our very own house (which we'd prefer, much as I love my mom, and
as she is) where we could actually have more than one bedroom (yep, one
is what we've got right now). When I hear about my daughters pre-school
going on vacations to Hawaii, or taking fun classes with their kids, etc.
I feel envious
Some of what I've done to combat this is to work with my husband to make
and set goals to improve our financial situation. This helps, because,
doesn't happen overnight, and we've had setbacks, at least i feel like
But, we're not at a place where we are even able to pay our bills on time
alone have any disposable income to speak of, so there are times where I
sad and wish we had more money.
When I start to feel really blue, I work to re-direct my attitude and
for what I DO have, which, as Anna Quindlen puts it, is ''an embarrassment
riches'' compared to what the vast majority of people in this world have.
have a roof over our heads, my daughter is surrounded by love, has clothes
shoes and plenty of toys. I have clothes a running car and food to eat. I
live in a
beautiful part of the world where there are many wonderful things to do
(some of my favorite things to do cost nothing!).
Also, my daughter gets to live with her grandma and grandpa right
upstairs. I get
lots of support from them when I need it, and my daughter knows she has a
people who love her.
Most importantly of all: I do not have to watch my child die of
starvation, or disease,
or grow up in a war-zone-- living with the fear that she might not get to
at all, and, even she does, she will likely be damaged and terrorized.
Reminding oneself of that last part can really help to put things in
perspective, I find
that's true for me, anyway.
I wish I had advice to offer but I can only sympathize with you.
My husband's salary is very small, his hours long, and I haven't
been able to find work in a while. I think the Bay Area is a
hotbed for Money Envy -- it costs a lot to live here and some
people seem to do it with so much ease. I thought by my middle
forties I'd live the way my parents did, but I live in a shabby
rental, have a tight grocery budget, and am surrounded by friends
who go out to eat four or five nights a week. The one thing that
helps me is to remember our one-time nanny, who earned a small
wage from us, lived in a tiny rental apartment with six family
members, and still managed to buy little presents for our child
and always seemed happy. The other alternative is to just leave
the Bay Area. . . .
Feel your pain
Believe-you-me, people in all economic classes suffer from money
envy. I do, as do the wealthiest of the wealthiest. However,
your situation sounds tough. Needing new jeans and a roof that
doesn't leak sounds like you are wanting for just the very
basics. Might either you or your husband opt to return to
school (right now is a tought time to get a new job) with a
higher income as your ultimate goal? That seems like it may be
a sacrifice short term, but beneficial in the long run.
I hear you! Our kids go to expensive schools and their friends
are much wealthier than we are and do stuff we can't afford -
European vacations, ski weekends at their Tahoe homes, lavish
parties, even stuff like going out to lunch or the movies. Our
house has a lot of deferred maintenance - leaking ceiling,
flooring coming up exposing bare concrete, and we need to
replace our sagging 12-year old bed. Can't afford any of this
as we prioritize our budget on our kids - tuition (on financial
aid but still very expensive) and extracurricular lessons and
camps. We don't take vacations, rarely eat out or go to the
movies and keep the house uncomfortably cold to lower the PG&E
I sometimes start to get depressed when I see others spending
without a second thought when I have to count every dollar. But
a few thoughts keep me from going down that bitter road very
far. First, I don't resent rich people I know. they are usually
very hard working and have made some sacrifices for their
lifestyle. And because of them financial aid is available to us
Second, I've lived poor in third world countries. I realize our
family has wealth beyond measure compared to most people in the
world! I don't have to walk miles to fetch water and firewood.
I don't have to sell my children as domestic servants. I don't
have to prostitute to stay alive. I have a house with heat,
water, furniture, appliances and 2 cars. We have extras like
computers, cameras, and cell phones. I know that money anxiety
is terrible, but one's absolute amount of money doesn't have
much to do with one's happiness. Your RELATIVE wealth
determines how satisfied you are. If everyone around you has
about your same level of wealth or poverty you are a lot
happier, regardless of how much that amount is. It's comparing
unfavorably to others in your community that brings resentment.
If you expand your concept of what is your community to the
whole world, you will realize just how amazingly priviledged
Third, I know dissatisfied rich people and happy poor poeple.
Fourth, I take comfort in that my enforced decreased
consumption is leaving a smaller footprint on this world -
America consumes about 25% of the world's resources with our
lifestyle. And finally, bitterness is not good for the heart. I
hope your finances improve, along with your outlook.
Relatively poor, relatively rich
I just wanted to respond. I find myself with money envy too. I'm tired of
anything while good friends have a lot less financial constraints than I
do. Most of
our stuff is pretty wonky.
I don't have any real advice, except that I listen to myself when I'm in
that state, and
try to be compassionate. I know that when I've traveled in the past to
other parts of
the world, I felt I had much too much stuff. So it's really a state of
mind based on
what seems normal. It's transient. Love is great. It's good to have
leaky. And it sucks that ''everyone'' has all this stuff that we can't.
Ah. It is what it is.
AND I know folks who find a lot of free stuff to do around here, which is
you look. You could join a babysitting coop to offset the cost of going
Lots of luck and happiness.
I can't tell you what to do, but I'll tell you you're not
alone!!! There's a whole lot of financial hurt going on right now
and none of it's easy. I catch myself getting downright jealous
on a regular basis and I hate that. And you're right, having to
explain to friends that we can't go out to eat, vacation, etc is
tough and annoying. I wish I had some advice but I don't. All I
can say is that this will certainly make me appreciate those
things even more when they're back (hopefully) one day.
Not a penny to spare!
Oh boy do I understand how you feel! We are down to one (not
very large) income, not by choice. Things are very, very tight.
All of our clothes are wearing out and I don't really feel like
we can afford new ones right now. There are always expenses- car
repairs, new glasses, etc., and there is just a little more going
out each month than is coming in.
Families we know at school assume that we can afford to send our
child to the enrichment classes that their children go to, but
the fact is that we just can't. We don't go on vacations and
rarely eat out. There is virtually no disposable income, and I
feel guilty about almost everything I buy.
Here is how I try to deal with it- I just give the impression
that living the simple life is a conscious, virtuous choice. We
don't have cable because we don't want our son to be exposed to
commercials! We are trying to reduce our carbon footprint! We
are not interested in consumer culture! All of these things are
true for us, it's just that they are not always voluntary.
As for dealing with jealousy, I wish I had a good answer for
that. Sometimes I feel jealousy too, especially when I visit
homes that look like pages from a design magazine, or I see my
son's school friends getting into a nice new car. I make an
effort not to seem impressed. I just try to look at it this way-
there are always people who have more than you and there are
always people who have less. The families you feel jealous of
also have someone to be jealous of I'm sure! It's human nature.
You Are Not Alone!
I do feel really sorry for your situation, but remember a lot
of us now are in same boat with the current economy/lack of
jobs/money issues. And there will be always people who have
more but there are a lot of people who have less, a lot less
than any of us here.
It feels like your problem is not really permanent, so donC",b"t
look for permanent solutions now. Your husbandC",b"s business is
ending sure he will find something else eventually. And there
will be time for vacation, piano lesson, and ski trips.
Meanwhile try to get creative: for example my sister teaches
piano lessons to a couple of kids in exchange of Mandarin
lessons from these kids mom. YMCA offers a lot of classes and
scholarships, so are a bunch of other programs. There are a lot
of Berkeley students on Craiglist who will teach piano, tennis
etc for not very much.
And yes you need, really need to keep some disposal income for
yourself, just go ahead and buy these new jeans. Whether its
gloom and doom all around, we are still women and need to feel
I wanted to add more to this money envy thing. I was feeling that
for a long time as well. Mostly I couldn't get why on paper we
seem to make good money yet we were struggling. The recent
downturn really hurt us. However, I am involved at my church
where a few people have taken voluntary vows of poverty and some
not so voluntary and I realized how fortunate we are. I live in
Alameda but volunteer along international blvd and it is amazing
the difference in crossing that bridge. Spend time with
prostitutes, homeless, and other marginalized folks and you'll
really see the light. I feel very rich many times over. I also
think that meeting friends who are very poor and some who are
undocumented has helped me see that money does not equal
happiness and vice versa. Life is a struggle for all. Recognize
your blessings. It's the only way.
You got a lot of great empathetic responses, but not much
concrete advice about what to say to people who ask you to do
things (movies, summer camp, etc) that you can't afford. I would
just be upfront. ''Going out to the movies isn't in our budget
right now, do you want to come over to watch a dvd?'', or have a
potluck dinner, or go for a walk, or have a picnic... ''I can't
afford that camp, but maybe I'll check if they have scholarships.
anyway, I hope the kids will have lots of playdates this summer.''
Just saying no will give people the impression that you don't
want to be with them. You're in very good company right now in
being on a tight budget. Also, you may have some friends who want
to treat you sometimes to dinner or a movie, and I would
encourage you to accept it once in a while!
been on both sides
Rebuilding Oakland Together might be able to help you with the
roof repair. Good luck!
Does anyone know how to get an idea of what constitutes different income levels for
the Bay Area (Berkeley, in particular)?
We're trying to set up a budget, but it seems that our combined incomes don't cover
the basics that they should. If I knew what was considered standard, or ''middle,'' or
even ''middle-upper,'' etc., I'd have some context for what we're trying to do. We'll
eventually look for a financial planner, but I need to do do some initial research
Here's a link for Berkeley income distributions as of 2000:
The median household income is $44,485, which means half are
higher and half are lower. More than one-quarter of Berkeley
households have income under $20,000.
Am I being totally ridiculous? I used to think my husband made
a decent amount of money (about $80K, which I don't normally
blab, but feel this is pretty anonymous). We (husband, baby,
me) are well fed, clothed, and sheltered (tiny place, but
cozy). Recently, I've been questioning whether or not he
actually is doing well, in terms of salary. Friends and
relatives (our age, late 20s) are buying $500K houses, nice
cars, vacations. Houses in our not so nice neighbor are now
selling for over $400K (we bought our house for half that a
couple of years ago). How are people doing it? Is everyone
just making a ton more money than us?? Please advise- am I
being silly? Or do we need a reality check??
Perplexed- Where are you getting all this money??
You're not alone... we make a combined income of about $55K,
and are BARELY making it - and thinking about giving up the few
amenities we have (2nd car, the Chronicle, etc.). Enough to
make me think about moving somewhere else! I have no idea how
people do it. Any good money-saving tips????
My husband used to make about what your husband makes, and on
that salary he could not support our family and a mortgage in
the bay area. I have continued to work outside the home. My own
salary is higher than $80K (husband's is far less now due to the
dot-bomb) & we still feel pressed. I used to think when we
crossed the six-figure mark, we'd be on easy street. HA! The
problem with static ideals like ''six figures'' is that they do
not adjust for inflation, and particularly when you are talking
about Bay Area real estate, inflation is just insane. To answer
your question directly, I do think $80K is low, but not
atypical. You really have to hope there are career advancements
or raises other than cost-of-living increases available to your
I empathize with your comment about ''how do they do it?'' We are
constantly running into fellow Berkeleyans who seem far more
committed to their principles than we are - they would never
work for a soulless corporation as I do, they would never send
their kids to daycare, they would never send their kids to
public school when private schools are so much better, etc! We,
too, wonder how they do it. But most often, when we get to know
these people a little better, we realize that they have lots of
money from other sources, primarily well-off parents, which
neither of us have. So we take it all with a grain of salt.
It IS financially difficult for a middle-class couple to make it
in the bay area, and especially to achieve the dream of
homeownership. You could do it, probably, but you'd have to make
those sacrifices - a long commute, living in a neighborhood you
find less than ideal, & possibly working outside the home - that
some of our silver spoon friends would never understand. As with
the rest of life, it's ''this or that, but not both.''
Hi. You sound like you are doing very well. We are early-mid
thirties. I make less than $40,000 (as a specialist in a private
school), with a CA teaching credential and lots of grad school
under my belt. My husband, b.a. from Cal and MA from UOP,
although self-employed with inconsistent income right now, was
working as a tech instructor making around $40,000. We have two
kids, and hence two tuitions to pay (pre-school and private
school), and debt accrued from my three years as a stay-at-home-
mom, medical costs, and time unemployed (dot-com crash).
Luckily, we bought our house 5 years ago, and get some tuition
help from my inlaws. It's a bummer, but it seems like well-
paying jobs are hard to come by nowadays. I keep telling myself
that things will get better, and that lots of people are
operating ''in the red''. If I were you, I'd be rather satisfied.
hello. who CARES what other families earn and how they are
doing? it sounds like you have all of the riches in the world
anyone could ever want. a baby, a cozy home, the ability to
stay home with your baby and a loving husband. enjoy!
We also had the same questions at one point and we were told
about this website. check it out
you answer a few questions and they give you a range of saleries
in you area for your job/experiance. It was a real eye opener
for us. Good luck.
You are doing well - don't worry.
As to how they are doing it, well, it's impossible to know about
other people's individual circumstances but consider that given
today low's interest rates and the fact that mortagage interest
is deductible, today it costs about the same to buy a house than
to rent (for example, that $450K house may mean a $1700 monthly
payment after taxes). The same can be said about nice cars -
given today's low interest rates and extended payment periods,
the monthly payments can be affordable to many. Also remember
that people often overspend and go in debt for things like vacations.
honey, I feel you!
first of all, I think lots of folks use credit cards for those
vacations, cars, fancy clothes, etc. and putting off savings.
as far as homes, banks will lend you so much more than you can
afford & I know many people whose parents help them with a down
payment (the standard 20% down on a $500K house is $100K!).
I stay at home with our bambina & my husband makes a little over
$100K. We bought our house 4 years ago in an OK El Cerrito
neighborhood, when they were still on the $300K's- we would
DEFINITELY be priced out of our own neighborhood if we wanted to
I think folks are constantly trying to 'keep up with the
Joneses' & perhaps are feeling the crunch, too but don't want to
PS- $80K is a very respectable salary!
six figure salary & still struggling!
Your husband makes a more than decent salary. I suspect that
most of the people you're talking about who are buying $500K
homes and new cars and going on vacations differ from you in the
following ways: (1) Most importantly, their households have
*two* adult members earning salaries. It sounds like you're not
working in a paying job, so your family is being supported (and
pretty well!) by only one ''breadwinner''. And are you comparing
yourselves to friends who don't have children? (Maybe it's
obvious, or maybe it's not, but of course someone who isn't
housing, feeding and clothing a child has a little more ''play''
money than someone who is.) (2) Their debt load is higher,
and/or their savings accounts smaller. My husband and I,
combined, earn more than your husband does, but we have little
left for long-term savings after paying our mortgage and
childcare bills. Unlike many couples in roughly the same
socioeconomic bracket, we do NOT have car loans or credit card
debt. (And we drive older cars and take cheap vacations.) (3)
Their mortgages may have a lower interest rate than yours, if
you haven't refinanced since you bought. So although they
bought their homes for a higher price, their monthly housing
payments may be about the same.
Wish *mine* made that much (or that I did)
Our similar income is not high enough to support the lifestyle
we'd like (private school, nanny, twice weekly piano lessons,
vacations away), but we did remodel the kitchen and have 2 new
cars. How? Home equity loan.
living beyond our means
Hi. Here's what I think - I think there are alot of people who
are way in over their head with regards to debt. Be it their
mortgage, car, credit cards, etc...it all looks good, but in the
end there is a lot of stress in their lives you don't see. And
in an instance it actually could all be gone. I think your
husband is doing very well especially if you already have
purchased a home and are happy and content. I also think that
living in the bay area where you do have highly skilled and
educated folks the 'intensity' of 'having the most and the best'
is magnified. I'm not sure how you approach your finances, but
I've always prescibed to living below your means. And
personally, you come out better because of it in the long run.
Don't worry about what others are doing. You probably are
destined to be the 'millionaire next door' if you aren't already
and nobody knows it because you lead a simple and uncomplicated
life. So when it does come time to change careers or drop
everything to live abroad for a bit, or something so life
altering you can't pass it up, you will not have any heavy
burdens to stop you!!
I know, I wonder about this too. Our household makes about $75K, and we
never go on vacations (other than family-related ones), have old used cars, etc.,
and it feels like we never have enough money. Here's one possible answer:
family help. I have two friends whose parents give them a significant amount
of money each year ($10-40K), which can go a long way to stretch an income,
esp. since it's tax free!
First of I think you should feel lucky that you own a house and
feel comfortable with your financial situation. Second of all,
I think, especially in this area that it is important to realize
that everyone has such different means and if you play the
comparison game you will always lose to many many people (I know
because sometimes I do this too!)
And lastly, I have a friend whose husband has family money and
that is how they do all the vacations/home/etc. that you
probably see around you. I would guess that at least some
people that you are seeing have savings or money that is not
related to their jobs and is contributing to an enviable
lifestyle. It's hard to compare to that. I know the temptation
is very real though.
I know how you feel sometimes.
Good question! Let me just say that I *wish* my husband was making
that much. Consider yourself lucky that he's making that much and that
you didn't have to pay over $400k like those starting out now to buy a
home). The people who are affording these $400k+ homes are either
those with two income households (like us, but just barely getting by
even still), those getting financial help (from family or somewhere), or
those who don't mind having a *huge* amount of debt. Maybe I'm way
off, but that's the impression I'm getting. I'm looking forward to hearing
others' opinions about this because I think an $80k salary is quite
Wishing I could stay at home with baby, but have to work to help pay the mortgage.
Debt (house), debt (car), debt (vacation).... Please read
the book ''The Millionaire Next Door: The Surprising Secrets of
America's Wealthy'' by Thomas J. Stanley, PhD and William D.
Danko, PhD. This is the first paragraph of the introduction to
the book: ''Twenty years ago we began studying how people
become wealthy. Intially, we did it just as you might imagine,
by surveying people in so-called upscale neighborhoods across
the country. In time, we discovered something odd. Many people
who live in expensive homes and drive luxury cars do not
actually have much wealth. Then, we discovered something even
odder: Many people who have a great deal of wealth do not even
live in upscale neighborhoods.'' Keep reading. It will impact
how you and your husband view your financial choices and his
income. ''Wealth is what you accumulate, no what you spend.''
Pleaaaze....Don't be in the rat race. Your husband makes good
money. abd you look like you live a comfortable life.
Dont worry about what others are doing. They are probably deep
in debt, or they won a lottery.
There are fammilies with big problems, single parents, no
house.....trying to meet ends meet and stil doesnt happen.
You are so young and doing so good....Look at other ppl, ppl who
are intelligent hardworking, with good education, but things
just didnt go right for them.....and are struggling...they are
happy if they are able to put food on the table for thier kids.
Forget about houses and cars............
I think instead of wondering why and how ppl are getting cars
and vacations....Reach out to the communty, try to have
compasion for ppl who are making effort and need a little boost
from the fortunate ones. Be a friend to someone, Thier are a lo
more things you can do rather than wonder how come...they have
this and that ...and i dont.........This is greed.keep away from
it.....Take care and enjoy your blessings
I read in the paper recently that the minimum a family of four needs in
the bay area for rent, food, daycare and healthcare is 60K a year. And
that's no savings, no extra anything.
You own a house (and therefore have to pay taxes, insurance, etc.) so
things probably feel a little tight.
I just read ''The Two-Income Trap: Why Middle Class Mothers and
Fathers are Going Broke'' and it really paints a stark picture of how the
government considers us to be ''affluent'' but really, every penny goes to
keeping the family afloat.
As to why people can afford to spend $500,000 on a house, lenders
have lowered their standards. There are more no money down loans,
more 80/10 loans. It used to be the rule was you should spend no more
than 2-3 times your annual salary on a house. Now people spend 3 to 5
times their annual salary.
I wonder where people are getting their money, too. I think a lot of
people are up to their eyeballs in debt, car loans, home equity loans,
credit card debt. Some people are probably good with money, and some
people just earn a lot.
I try not to compare our family with others, but its hard. We really would
like a newer, bigger car (I drive a '89 Jeep and my husband drives a '98
Honda Accord) and a three bedroom house. (We have a boy and a girl
and a two-bedroom house). But for us, its more important not to be in
debt, have a low mortgage and to have a cash cushion.
BTW, if you want to borrow my copy of the book, email me and I will
leave it out for you.
Interesting question, and one I have had myself many, many
times. The way EVERYONE I know is ''doing it'' (nice cars,
expensive houses, vacations, ''best'' schools, etc.) is with
money from their parents or grandparents. Seriously. Those
down payments come from grandma and grandpa, and so
does private school for the kids. Once I realized that
(because friends let it ''slip'') it all started to make more
sense to me.
I'm sure there are people out there who are earning every
cent they spend, but a lot of people living the good life in the
Bay Area are doing it with a little (or a lot) of help!
Tax the rich!
You posted a great topic for discussion. I have no answers but
as a family of four that owns a home and has two kids under
five and lives on 70K, it hit a nerve. I think it is a huge Bay
Area issue now with housing the way it is. A house next door
sold for $600,000 and we wonder how we will be able to be
friends with the couple :). All of us on the street want to
know how they did it (in this area) and how will they pay the
over $6,000 a year in property taxes? It is creating a class
difference for many of us who are middle class, educated etc..
but cannot afford the home improvements, the vacations, and the
local swim club. We are struggling just to keep what we have
and worry if we should stay here. I just think it is more
common than you might think that many here in the Bay Area live
on the lighter side (after all the bills). My East coast
relatives would actually be shocked about our annual income if
I ever told them because to them it would seem high. I guess we
just need to weigh out the benefits or take our money and run.
would love a new roof
I didn't see the original posting, but here's my advice for
We are a family of six (2 adults, 9yoB, 7yoB, 4yoG, 2yoG) and if
I remember correctly, we made $28K last year. I know it was
I buy all the kids clothes at Thriftown, wait, I buy EVERYTHING
at Thriftown! :) Books, kitchen stuff, clothes, bedding (not
blankets - we usually use sleeping bags instead of blankets),
shoes, organizing stuff, dressers, bookcases, art (well, one
piece i fell in love with) and do most of my clothes buying when
they have their 1/2 off all clothing days. I have memorized
(pretty much) the prices of all the food staples I buy and shop
at Williams Natural Grocery, Trader Joes, Berkeley Bowl, Raleys,
Safeway (mostly just for WIC stuff) and Costco to get the best
buys. If your memory isn't that reliable (mine ONLY works for
food prices :)), get a book and track the prices of all the
staples you get until you *know* where they are the cheapest.
I never (well, hardly ever :)) buy processed food. I try to make
my own bread, we buy little paper goods (only toliet paper which
is used to supplement the cloth wipes we normally use). I make
our own soap (this is REALLY simple - just melt and pour, but
cheaper and cleaner than anything I've found). I water down all
our liquid soaps (detergent also) and find great results watering
down 1/3 soap to 2/3 water. I recycle all plastic bags and don't
need to buy any as I simply use the ones I get at BB or in
packaging. We have free dialup and just got cable TV (but get
the $25/month one and I'm not sure if we'll keep it. Basic cable
is only about $14/mo). We have 2 cars and do the maintenance
ourselves - but they are easy - 1985 VW Vans.
We were incredibly lucky to buy our house before the boom (we
actually bought in a buyer's market - can you believe such a
thing? :)) and have recently refinanced to take $200/mo off our
We have high deductibles on our cars and the house. We rarely
use the heat in the winter and have no A/C. We hang our clothes
to dry. We do not make toll or long distance calls - our phone
bill is about $8 a month.
We do not go out for movies (I think we went to a theatre in
1996, but that would be the last time :)) and very rarely go out
I buy all dairy, high fat, meat, selected fruits and veggies
organic. We have oatmeal a lot for breakfast.
IMO, and being able to own our home makes a HUGE difference, you
can live really cheaply here in the bay area - as long as you're
already in a home. The biggest thing that has helped me is to
ask myself before I purchase something if it is a need or a want.
If it is a need, we save up for it.
Oh, and the biggest saver is probably homeschooling. Nah, the
biggest saver is having bought our home in 1995. We were so
incredibly lucky. I hope some of this might have helped.
Oh, I make my own tinctures (herbal remedies) and never go to the
doctor, but then again, we have MediCal, so that's not too much
of a help...
THANK GOD this discussion is going on. I'm in an even worse (or better?) situation.
My husband makes $80K and so do I. He has child support payments, so it's not
really $160K combined, but it's still a lot more money than I ever expected to have.
I bought a tiny, little, house years ago when the market was low, and feel damned
lucky to have it. We drive old cars (that get good mileage), and he keeps them
tuned up. We cook and clean for ourselves. I would not say that we are living on the
edge, but I don't feel comfortable considering private school, and I find summer day
camp to be very pricey (and who are these families who can send their school aged
children to day camp between 10 and 3 every day, when I am at work and
commuting?). I feel like I am always
scrimping and saving. On the other hand, I am surrounded by friends who buy new
expensive cars and have huge beautiful houses. They manage private school, and
have the nice vacations. I have suspected that some of them have family money,
but have never considered their debt load (aside from my mortgage, I have none).
This discussion makes me feel far more normal.
Doesn't have rich relatives, either
To the responder wanting to cancel her Chronicle to save money:
try switching to a Wed-Sun subscription for $24.99 per year or
Fri-Sun for $19.99 for six months.
--Doing OK on under 40K
You are not alone. My husband and I both work, and if you just
look at the numbers, it appears we have a very good joint
income. However, we have to live very frugally to make ends
meet. I'd say we have a ''lower middle class'' lifestyle.
However, we feel very lucky to live here. None of our neighbors
could afford to buy their houses today either, so we feel right
at home. :-)
I think the best way to look at it is to imagine that ''Bay Area
dollars'' are a foreign currency. Say the exchange rate is about
2 Bay Area dollars to one ''Other U.S. dollar''. So, if you're
earning $80K here, your standard of living will probably be
about the same as someone earning $40K in, say, the Midwest.
There are advantages and disadvantages to being paid in ''Bay
Area dollars''. For one thing, salaries are higher here, so if
you do happen to have any money left over after paying the
bills ;-) , you can probably afford more luxury items like
vacations or other items which are sold on a nationwide basis.
Of course, there are also disadvantages, like being taxed as
though you were ''upper middle class'' when you're really ''lower
middle class.'' ;-/
Every now and then I think of moving... but then I ask myself,
where in the world could I find another place that has such good
weather, great neighbors and friends, great politics and an
atmosphere of tolerance? Where could I find a better place to
raise my children? So we don't have a big house with a big yard
or an SUV... who cares? My children are learning to be good
people. They're learning tolerance and appreciating diversity.
And, they're learning the value of a dollar (Bay Area or other)
and the importance of hard work.
loves this ''country''
We recently had a salary reality check. 2 years ago, my husband
had a cushy job with a huge corporation, which allowed us to buy
a house in Berkeley. Still, we had to do 100% financing (gulp).
Three weeks after we moved in, he was laid off. Since then, it
has been pretty scary --- three jobs, one after another... enough
to pay the mortgage but we're putting groceries on the credit
cards. We recently cashed in his last 401(k) to pay the property
taxes. Things are looking up because he got a (yet another) new
job, but this one pays our bills (hurray!!!) and we're hoping to
get out of credit card debt by next year. We really dug ourselves
into a hole and made some bad financial choices. The worst thing
was not saving enough money when we could have. As my husband put
it, ''We didn't realize we were rich, when we were.'' It has
definitely been a learning experience for us.
I think people who live in this area, own a house, go on nice
vacations, etc. must have some sort of savings or family money
they can fall back on. Or, they didn't start their adult lives
with debt (school loans, car, credit card) that they're trying to
pay off at the same time.
Learning all the time
Remember: The grass is always greener. While there may be some
with more money, bigger houses, grander vacations, etc... than
you, be grateful for what you have as there are many others who
would LOVE to be in your position (you ARE a home owner and you
get to stay home with your child). In terms of the housing
thing, remember that those who were lucky enough to buy 5 - 10
years ago, have now made enough equity when they sell to put a
huge ($250,000+) downpayment on those $500K - $800K+ houses in
Berkeley, Albany, Kensington, El Cerrito,etc. We don't, by any
stretch of the imagination, consider ourselves wealthy (combined
my husband and I make around $120K) and if we hadn't purchased a
home 6 years ago, it would be a stretch for us to afford to live
in our neighborhood now. A recent article in the SF Chronicle
said that to afford a median priced house in the Bay Area, a
household income of around $138,000 was required. It's sad,
really, that neighborhood dynamics are changing because of this
ridiculous housing market and many people are now looking at
their new neighbors moving in and wondering ''How did they afford
that house?!'' instead of ''I want to get to know my new
neighbors.'' Also lets not forget relatives. Mom/ Dad/
Grandparents who are well off provide their kids/grandkids with
a downpayment for a house and/or ''gifted'' money every year. I
know a couple who, in addition to both working, get $100K
annually from a trust her wealthy grandmother set up for her
before she was born. This pays for their pricey cars, tennis
club memberships, annual cruise and private schools. I don't
begrudge them this though - she was really lucky. Am I jealous
at times, hell yes. Couldn't we all live a little easier with
that kind of additional income? But I also try to put it into
perspective. Your life is what you make of it regardless of what
you earn, what kind of car you drive or where you rest your head
Our family lives on $3,200 per month and that includes
everything. We have one child, one house in Berkeley we bought
8 years ago and 2 vehicles we own. I have never dipped into our
savings - I make about $40,000 and my husband has been
unemployed for a year. I was raised in a country where credit
cards are not used for personal items and where you only spend
what you've got. That's the main principle. It also helps to
not be competitive and not compare yourself to others (major
cause of unnecessary unhappiness). In addition, it helps if you
have several friends who are in the same economic situation -
you will emotionally suport each other. The expenses for
private school do not end with the tuition, they extend into
clothing, type of toys, birthday party entertainment and other
lifestyle issues. There are some good public schools and we got
into one. We refinanced until we got down to a $800 mortgage. I
totaled up regular monthly bills and call them fixed costs. I
totaled up infrequent bills (Homeowner's, Earthquake insurance,
property taxes, car insurance, DMV...) and divided the amount
by 12 month. This amount ($550) I have transfered monthly from
my checking account into a savings account, which simply serves
as a holding station whenever one of these bills are due. It
works well, none of these bills ever surprise me - it was not
my money to spend anyway - these are also fixed expenses.
Then you subtract fixed expenses from your salary and see what
you got left. That money is for variable expenses such as
groceries, clothing, entertainment, vacation, Christmas, and
gifts. Make your money stretch - know your stores! You can get
basic cleaning supplies at the Dollar Store. I get most of
groceries at Trader Joe's. If I have the urge to buy almost new
designer clothes, I get them at the Goodwill, the Salvation
Army or at yard sales. There is no need to spend more than $7
per piece. New women's clothing will skyrocket your budget.
Target is good for kid's clothes. I use only one credit card
for everything, which I pay off every month. (No balance, and
never a finance charge). I earn Sears rewards dollars for using
their card and end up with an average of $180 per year that I
get to spend for free at Sears. I use a part of that for buying
my child new clothes in the fall and spring. I have tea and
granola bars at my desk. There is no going out for coffee and a
muffin - a savings of $80 per month. These are just examples of
why these expenses are variable. One reliable car is 10 years
old with only $65,000 miles. Helps to have your job location
close by. (Regular car maintenance & repairs are part of the
fixed expenses). The other (end of the year) vehicle was
purchased new as part of a refinance. I know we have quite some
equity available to us, but I feel this is all on paper. One
major earthquake.... and the dream is gone. Then what? We
invested in good camping supplies and have short vacations
several times per year. If I don't have the cash to go to
Hawaii for a week, I will not go there. It's very simple and I
don't feel deprived at all. I just turn around and contact the
remaining families during Berkeley spring break to arrange
playdates, so we don't have to enroll our child in a full-time
spring program. I take advantage of library rentals and free
entertainment at festivals. We never paid a babysitter, we
trade playdates with friends. We are not interested in cable TV
and we often wait until movies come out as rentals. Our savings
cover over a year of living expenses at this level. I feel
sheltered and good about our quality of life. In summary, I
think it is probably not so much about the amount of money you
make, it is how you successfully manage what you've got.
The cost of living in the Bay Area is unreal - especially
housing prices, so ''average'' salaries here would be upper middle
class in most of the U.S. So, the trick is to live below your
means here - and yes, for those of us that were lucky enough to
buy houses before surreal estate happened its alot easier (we
bought a house 10 years ago that was affordable for us on one
income if necessary - of course that's probably impossible now).
I buy clothes at thrift stores, consignment shops, outlets, and
during the July/January sales ONLY (and that way I can indulge
my shopaholic tendencies). Our cars are 13 and 7 years old (and
are moderately priced). We are staunch supporters of Berkeley
public schools. We only use credit cards for some vacation
expenses(and agree how much to spend and by when the credit card
will be paid off). We buy large appliances, etc. when stores are
offering ''free interest'' and pay them off within the ''free'' time
frame. We have a monthly budget and include savings as a ''bill''
to be paid up front - we also put aside every month for
irregular expenses such as summer day camp, property tax, etc.
Only THEN, do we have expendable cash for eating out, etc.
Some of our friends drive expensive SUV's, only buy at
Nordstrom's and laugh at our ''cheapness''. But, we believe
living ''below our means'' will prepare us to weather layoffs,
illnesses, college tuition, and hopefully retirement. It has
also been the ONLY way we have been able to deal with aging
Being ''average'' in the Bay Area means making trade offs about
what is important to you - if you are a SAHM, that is a choice
that you and your husband made. To blame your husband for not
making more, isn't fair in my opinion. I'm sure that he's
stressed out being the sole bread winner as it is. After all,
$80,000 in a GOOD salary that most would envy, its certainly a
professional salary (more than TWO starting teacher salaries!) -
unfortunately in the Bay Area $80,00 for a family of 4 is lower
middle class. If that's not the level you are prepared to live
within - you and your husband may have to consider relocating OR
rethinking how important being a SAHM is to your family.
I wanted to offer the opposite point of view to
this question --- it seems most people have been
talking about how they have to scrimp and save to
live here but I actually feel the opposite. I don't
feel like we have an exceedingly high income and yet
I feel we live pretty well. My husband makes around
$125k per year (though we used to make twice that
when I worked and the economy was better) and I stay
home with our three very young children. The things
we are able to afford on this income include:
- a nice house in the hills (bought 5 years ago
for $500k, now worth around $900k)
- housekeeper every two weeks
- gardener once a month
- babysitting about once a week
- country club membership
- I splurge on shopping about once a month at high
- I buy the kid's clothes at Target, Old Navy and Gap
- We eat out at least 3-4 times a week (not fancy but
things like burritos, salads, pasta etc.)
- We pay for preschool & classes
- About once every six months we buy an expensive item
like a camcorder, jewelery, or something for the
- Probably once every few months my husband and I have
an expensive date night.
- In general I don't feel I need to scrimp and save, I
pretty much buy whatever we want or need for the house,
food, clothes, etc.
Things we DON'T have or buy:
- fancy cars
- expensive vacations
- we have no debt other than our mortgage
- we've also decided we can't do private school
- we also get no outside help and when we got married
we had absolutely no debt and about $60K combined in
I don't know how we do it -- like I said, I don't think
our income is that high for this area, but I feel we
live really well. Though when I look at what kind of
house we could buy in another part of the country
I do dream of moving...
I've been reading all the postings with interest, and just wanted to add
another take on the situation. I'm currently in grad school, and my
huband works full time and goes to grad school at night, while my baby
is in nearly full time day care. We are lucky in that we don't have any
student loans and our parents help us out with trips and baby clothes,
etc., but given that we're living in the bay area, things are pretty tight.
Obviously, given the response to your posting, this is not an unusual
situation, but I think we're much more okay with it than we might be
otherwise because we rationalize it as a stage. That is to say, we're not
in our ''real'' jobs yet, i.e. the ones we will have after we finish grad
school, and so it's okay that we're not living a ''real'' life, i.e. owning a
home, etc. To some extent this is not constructive behavior, since it
means we're constantly sitting around waiting around for our lives to
begin when by most standards they began a while ago. But it also helps
handle the issues that come up when we don't have the things that
others in our age group have. I just bring this up to say that so much of
the anxieties we're talking about have to do with matching our
expectations of what we've been told we need to have to live well, (and I
am completely involved in those fantasies) rather than taking our lives
for what they are at each moment. If where we are in our career can be
designated ''temporary,'' not ''for real,'' then disappointments don't have
to be for real either.
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