I guess my life style seems almost the same for many years. We did pay off the house and save money for tuition when we had extra. The taxes increases are bad however. And that even Medicare is high for part B.
We did realize that we COULD buy a new or newer car, but opted instead to just keep driving the cars we have which work fine. We have also never moved from our house that we bought when our kids were little and also never remodeled. We did install solar and photovoltaic.
@garland - that quote was definitely ironic or sarcastic. Of course it is “perceived”
I hope this thread does not turn into a holier-than-thou list of who can be the thriftiest 
@surfcity I am not thrifty. You should see my shed full of mountain bikes, snowboards, surf boards, golf clubs, kayaks, paddle boards etc. 
The only thing I’m thrifty on is I hardly ever go out to eat, don’t buy expensive cars, and don’t take crazy expensive vacations. Not overpaying for our house was the best thrifty decision we made. The bigger the house, the higher the taxes and upkeep fees- and those really add up over 20 years.
We live on about 40% of our income. Still in the starter house that we bought at the bottom of the market in 1998 (mortgage is less than the rent we paid back then), we drive ordinary cars til they die (or are totalled for us by @#$%%^%$#@#$ drivers who aren’t paying attention when they are on the road). Vacations are our splurge, and even then, we don’t go high end.
When I bought life insurance at age 30, I picked the automatic inflation option on my term policy with the idea that if something happened to me, that would be college money for the kids. Inflation option was 7% per year for the first seven years, so we thought that would keep pace with education inflation. The face amount would have paid for four years of COA for each kid, based on the prices when they were attending.
DH’s income went up in dribs and drabs over a number of years, and it’s challenging to stay focused on putting $$ away, esp when so many other things (important and legitimate) call out for funding. In the early years, we had $700/mo in student loans and $1800/mo. in day care. Didn’t buy a house til those were paid off. DH didn’t get into a retirement plan til age 37, so he had a lot of catching up to do. We were determined that we would first and foremost throw money into 401k plans, and would keep monthly debt/mortgage as low as possible so we could pay for college as much as possible without hitting our savings. We didn’t get cars for the kids, one of the tradeoffs they chose to attend a private college vs. the flagship w/scholarships.
We find that direct deposits to savings and 401k are the best way to stash $$ away. If we don’t see it, we don’t spend it. We have a target amount that we need for monthly expenses, and we adjust withholding and savings so that only that amount comes “home.” The rest goes in savings.
Will also add that as income increases, the need for insurance grows. We spend a lot of $$ of umbrella coverage, life insurance, LTC, etc. We could get away with less if it weren’t for my medical issues. The other thing we spent our “raises” on is covering my medical expenses. Thank goodness we have good coverage, but it is still a LOT of money.
We are savers but definitely not thrifty! We increased both saving and spending as income increased over the years. No loans for either D at private colleges. I kept my old SUV for 17 years and just got a new one last year. In a way our income did more than double this past year as H collected his yearly salary when he left his former company and then started working for a new company. We just banked the entire new salary for retirement so we didn’t increase spending at all. I am so focused on retirement right now that I am decreasing spending even though the income has climbed. I think it could all depend on what stage of life you are in
Many of the people in the “donut hole” are there because of the high cost of living where they are. A family that makes 200k in the midwest has a lot more discretionary income than a family that makes $200k in the San Francisco Bay Area. Unfortunately, financial aid treats them both the same in its assumptions about how much tuition they can pay.
When our income increased…we increased contributions to our retirement accounts.
We also did some deferred house maintenance…and replaced a few cars.
@ucbalumnus that tax-rates dot org figure is crazy, because there are literally zero people in the United States with a 300k income (or more) that use the standard deduction. That’s why the Feds had to create the alternative minimum tax.
For the typical family that makes $300k, the actual marginal federal tax rate they pay is closer to 20-22%, after all deductions are taken.
I haven’t read all responses, but what we did was started saving more for kids’ college, started putting a higher percentage in retirement, and went on nicer vacations. We also bought our kids cars in HS, which we may not have done if we couldn’t pay cash. Another thing we did is move to a more expensive area. But we rationalized that by saying in the old area we would have had to pay for private school for 2 through HS. We chose to out money into a mortgage in a better school district instead.
You can play with it to assume whatever level of itemized deductions you want. I used the standard deduction just to keep things simple for comparison.
The answer for me is no, and I am certain of that. I think that has a lot to do with the fact that I grew up in a no-frills family, and I didn’t have money for frills while raising the kids. Once they got out of college and we had disposable income, it has gone into retirement savings. We are used to the way we live & are okay with it.
My best friend and her H have enjoyed a steady and very steep income increase over the years. With them, I have noticed a definite slow-but-steady need for more … I think it has to do with the more affluent crowd the H’s job has thrown them into. Where my crowd is still in regular boring 2000 sq ft 70’s colonials, her crowd has amazing homes, one bigger and fancier than the other. It’s cool for them, but I am happy where I am. I sure don’t need more NOW, when the kids are grown & gone.
May I propose an experiment? Give me the $200,000 and I’ll report back in a year to let you all know how it went.
My parents happen to be comfortably above the $200,000 threshold, but I have done a lot of thinking about this. I could not imagine surviving on $50,000 per year as a family of 4 and yet I feel very middle class. I do happen to live in an upper middle-class area and that’s part of it. Before college, I always went to public school. I’ve never at any point in my life felt rich. My parents don’t drive fancy cars, we don’t have vacation homes, one of my parents works anywhere between 60- 70 hours per week. I don’t know if any of this is exactly relevant, but I’d say excluding people who are very poor and very rich, most people feel middle class.
If you’re self-made, have a family of 4+, and have a household income of <$2,000,000 per year, you probably feel middle class. I know full pay kids at my school who have full pay siblings at other private colleges. Their parents are spending $100,000+ per year on their education out of pocket and they don’t feel rich at all.
I know it seems out of touch, but when you slowly increase income brackets, your cost of living and way of living reflects that. Otherwise, what’s the point? The point of having money is being able to spend it or plan to use it for something in the future.
When we moved overseas years ago, our take-home pay actually did double immediately due to the location incentives offered by the company. Prior to moving we lived on H’s (slightly higher) paycheck and banked all of mine. We were stationed in Africa and used some of the windfall for amazing vacations like top-notch safaris that would be much more difficult to arrange from other continents. The first year overseas we fully funded a state-school-level 529 for S, and earmarked another chunk of after-tax savings to pay the remainder for private or OOS college if needed. We knew the overseas money would be temporary, but that the overseas opportunity would also be temporary, so we did splurge on unique travel while saving almost everything else. I even quit work about a year into our time overseas and we still saved a lot after that. We knew people in the same location, making the same money with one kid just like us, who told us they spent it all and saved nothing. We’ve since returned to the US but with raises H is now making almost as much as the two of us made with overseas premiums in 2007.
We’re not exactly thrifty (buy new cars instead of used, eat out in restaurants a lot) but our tastes are generally not that expensive and we save a lot and are debt-averse. No mortgage, no car loans, no credit card debt, nothing. If our income were to be cut in half tomorrow we would be okay.
I feel like I could just echo what is written above.
We save significantly more. When we took out the mortgage on the current house, DH was making about $60k/year. I went back to work 9 years ago and as two engineers we make a substantial amount.
Our monthly spending money amount has stayed consistent because we are pretty predictable. We don’t have any outstanding debt other than the mortgage. We funnel $ into retirement/savings/investments.
The difference is that we feel more free to do projects or trips that we’ve held off on. (Even more so recently as we’ve determined what we will be paying for youngest ds for college starting next fall.) It may just be the stage we are at- we have hit our highest earning potential, we lose or gain more in the 401k/457 plans than we put in each year (the max, always the max) and we have a great buffer. But… we are engineers so we are risk adverse in general.
I work with folks that have bought homes more recently and earn less than I do. I see the amount of $ they spend each month and shudder. They talk about their debt load and I want to curl up in a ball. Most of these folks are 30-somethings with small kids.
DH and I have the advantage of years of saving/investing in our favor, along with increasing income (that’s maxed at this point pretty much.)
As our income has crept upwards, so has the amount of time that our jobs require. For our family, part of the income increase goes towards hiring people to do some of the household tasks that we used to handle ourselves.
For example: a wrought iron fence needs to be painted. In years past, we would’ve done that ourselves. Now we hire a painter.
Probably 1/3 would go to new spending, 1/3 to new savings, and 1/3 to taxes.
This is ridiculous. If you have a 7 figure household income, you’re comfortably in the top 1% in NYC. If middle class includes the top 1% of earners in one of the most expensive areas of the country, then it’s been redefined to be almost meaningless.