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Salary Reality Check

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Accepting different levels of wealth among friends & family

Sept 2012

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 toys/shoes/whatever.

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 frustrated. 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. anon


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. good luck. 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 the time.

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. Karen


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 gap. 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 drifted away. 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 people better. Proud granny


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. Heather
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! -good luck
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. anon


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 of them.

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. lisa


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 world...

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). doug


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 think about..... anon
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! EP
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 Albany mom
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. anon
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. good luck!
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. Jennifer


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 values.
- 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 to them. 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. anon
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. anon
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 the teachers....

I think much would be solved by a little awareness at all levels. Practicing gratitude consciously. anon


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

How much money is enough?

June 2011

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.) time-starved


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. anon
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. frugal family
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. Good luck.


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 website: http://www.globalrichlist.com/

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... Anon
Two words. Palo Alto. You can afford it on $300K. BL
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 your balance! Been There
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. mc
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! John
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 enough. anon


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 Luck! cheapskate
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 homes.

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 http://www.financialconnections.com/financial-advisory- 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. Carrie


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 Rockridge area.

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 anon


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 happiness kersti
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 100k.

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. good luck!


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. Anon


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 recharge you.

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 choose. You Choose


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 less. 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. Anon


How do you thrive financially in the Bay Area?

Jan 2011

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 to consider... 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. Thrived
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 thriving.

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 manageable.

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 goals). 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 money. lucky one
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. anon
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 doing it. same boat
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 middle-class life.

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 sacrifices. VW


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. frugal


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 it) 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 location.

- 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... same shoes


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. thriving


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 make comparisons. 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 that position.

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 inadequate.

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, maintenance). Carrie


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 ''only'' $2800/month

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 year). Loving Live in the Bay Area


Hi, 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. frustrated
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. continued below....

-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. Anon


I failed to post this earlier. You seem to save $ just fine. Maybe you just have 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 modest 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 math 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 $500.

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 your kids a good public education. Might have to scale back a little on their college 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. cheapskate mom


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. Thank you. Anon
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. Happily Downsizing
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 your 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! Anonymous


Money Envy

Feb 2009

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. Good luck 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 material wealth.

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 situation: no disposable income, no savings, we own a home, but the only way we were able to swing that was to buy a multi-unit place with my mom, so we have our own unit, but not our very own house (which we'd prefer, much as I love my mom, and great as she is) where we could actually have more than one bedroom (yep, one bedroom is what we've got right now). When I hear about my daughters pre-school friends going on vacations to Hawaii, or taking fun classes with their kids, etc. I feel envious sometimes, too.

Some of what I've done to combat this is to work with my husband to make plans and set goals to improve our financial situation. This helps, because, though change doesn't happen overnight, and we've had setbacks, at least i feel like we're *doing something.*

But, we're not at a place where we are even able to pay our bills on time yet, let alone have any disposable income to speak of, so there are times where I still feel sad and wish we had more money.

When I start to feel really blue, I work to re-direct my attitude and practice gratitude for what I DO have, which, as Anna Quindlen puts it, is ''an embarrassment of riches'' compared to what the vast majority of people in this world have. Really. We have a roof over our heads, my daughter is surrounded by love, has clothes and 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 for FREE (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 lot of 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 grow up 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. Anon.


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. Good luck
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 bill.

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 poorer folks.

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 you are.

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


Hi, I just wanted to respond. I find myself with money envy too. I'm tired of not buying 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 shelter, albeit 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 possible if you look. You could join a babysitting coop to offset the cost of going out.... Lots of luck and happiness. anon


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!


Dear'' Money_Envy''. 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 like ones. Lola


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. anon
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! anonymous.

What is "middle income" in the Bay area?

Feb 2005

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 first.


Here's a link for Berkeley income distributions as of 2000: http://www.ersys.com/usa/06/0606000/income.htm 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.
Berkeley resident

Is everyone making a ton more money than us?

March 2004

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???? strapped also
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 husband.

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.'' squeezed


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. anon
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! anon
We also had the same questions at one point and we were told about this website. check it out http://www.salary.com/salary/layoutscripts/sall_display.asp 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. anon
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. anon


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 buy today.

I think folks are constantly trying to 'keep up with the Joneses' & perhaps are feeling the crunch, too but don't want to show it.

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!! Anon
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! Anon
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 decent. 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.'' Kathleen
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 sherry


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. pgm


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 frugal living.

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 under $30K.

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 payments.

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 for dinner.

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... Kathy


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 at night. Anna
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. Anonymous
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 parent issues.

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. Karen H.


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 end stores
- 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 house.
- 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 savings. 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... Anon


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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