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$100,000 a Year and Struggling. Lesson: Learn to Budget Early.

Written by Gary North on March 23, 2012

Here is a story that did not evoke my sympathy. A woman laments that $100,000 a year leaves her family struggling. She does not live in New York City. She lives in Tampa.

They bought a new car. I earn a lot more than $100,000 a year. I bought a 1993 minivan for $2,200 in 2003. I bought a 2005 minivan in 2009 for $10,000. I have not bought a new car since 1971 — a small Toyota — when I was young (29) and foolish.

They bought it so that her son could do pizza deliveries. A new car for pizza deliveries? Are they out of their minds?

He may need to borrow money for grad school. Is he out of his mind? There are no jobs!

She asks: “Is six figures the new minimum wage?” Is she trying to look like a fool?

Although I admire people who live on fixed incomes or minimum wage, I have no idea how they do it.

It’s time to learn! I have a free Website that shows you how: www.DeliveranceFromDebt.com. Use it.

What’s up with my net worth?

I always figured my net worth would increase as I earned more income. In fact, I thought that clearing that six figure “hurdle” meant we would be financially set. However, our net wealth plummeted since the housing bubble popped. Our home is on the “liability” side of our net worth chart. Although the stocks have recovered, our retirement accounts do not reflect the balance I would have expected once we earned six figures.

So, they bought a house in a bubble. They will probably never get the money back. They are like millions of others. They did not know how to handle their money.

“Why don’t I have money to burn? My lifestyle isn’t extravagant.” Yes, it is. It is wildly extravagant. Anyone who lives in a low cost of living area, which Tampa is, should be able to live on $100,000 a year — twice the national average.

Housing: We live in the Tampa, Florida area, where we had our 1,800-square-foot home built at the top of the housing bubble.

Do stupid things, and it costs you.

I’d feel a lot richer if I could take the $183,000 we spent seven years ago and buy a home twice the size today in a better neighborhood.

No doubt.

Education: We are spending about $15,000 a year for tuition and books to send our two sons to community college. When they transfer to the university in another year, those expenses will more than double. My older son pays $5,000 or about half of his tuition costs since he has a part-time job, but my younger son hasn’t been able to find employment. I’d feel wealthy if I was struggling to send my sons to an Ivy League College, but this is just community college.

He can use CLEP exams to quiz out of community college. Total cost: $1,800. Why doesn’t he?

We purchased stocks to help fund our sons’ college education, but the stocks took a big dive. We are hoping the value of their stocks will recover to help pay for the last couple years of college. We don’t want them to take out college loans, but they may have no choice.

He can earn an accredited degree online for under $15,000, total. No loans. I am working with a man who graduated with his B.A. at age 18. Total cost: $11,000.Why didn’t her son do this?

If you don’t know how to cut costs, this economy will chew you up. This woman has been chewed up. Don’t imitate her.

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20 thoughts on “$100,000 a Year and Struggling. Lesson: Learn to Budget Early.

  1. SEAN MURRY says:

    stupid is the word for her i have a budget that i fellow.

  2. Jonathan says:

    This doesn't surprise me one bit. My in-laws who make about $140,000 a year are in the same boat. I am 28 and they are in their early fifties. There have been times where they did not have enough money to buy groceries. They have three vehicles (expensive vehicles) that they are still making payments on. They have even refinanced some of these vehicles and traded in vehicles that still had a note on it for a new vehicle. They thought it was a good deal because their payments didn't increase. I told them that now they have 5 years more of payments instead of 2 years if they would have kept the "old" vehicle. It didn't matter, they thought they got a good deal. All of this debt on top of a mortgage payment and at least $10,000 in credit card debt.

  3. We earn $50,000/year and we are living comfortably. My wife drives a 2001 Buick. I drive 1998 Buick. They get us from point A to point B and back. We don't eat cavier but are not starving. Current gas prices are messing with our budget. We haven'i taken an extended vacation in years. We are both over 65 years old and still working. This woman needs to quit B—H–G.

  4. NO sympathy says:

    My family gets by pretty well on quite a bit less than $100,000. We have a 2006 hi-end sedan that we paid off early, a 2008 compact sedan we paid cash for, eat out fairly often albeit at lower priced restaurants, have a mortgage nearly the same as hers and travel internationally at least once every couple of years. I have NO SYMPATHY for this privileged IDIOT!

  5. Why shouldn't people live way beyond their means, spend their money foolishly, and rack up piles of unsustainable debt? After all, it's what our government does.

  6. http://www.petition2congress.c...

    Go to this website and sign the petition to vet Obama and check into his eligibility to be president. The lame stream media never vetted him in 08 and neither did congress.

  7. Bill McCroskey says:

    There are endless ways to save on expenses as I live in Tampa myself and it is less expensive here than rural Iowa where I moved from. The big name grocery stores will run as much as 25% higher for the exact same items as Walmart. I buy my meats and many other food staples at a wholesale open to the public (name brands on many items i.e. Smithfield, Johnsonville, Hormel) at 75% off) it requires effort and planning but for the hundreds of dollars in I save I end up making about $100.00 a hour (income tax free.) I was raised in a frugal household a half a century ago….I make a game out of saving on purchases. I can't criticize the folks in this story….they most likely were never exposed to being frugal.

  8. Daggone….where does this lady live? I would sure like a donation from her to end my struggles and to have enough for groceries that last the entire month. She can't make it on $100k a year? She should try what a lot of us live on….under $20k a year, no car, no frills, and sometimes really hungry.

  9. mary1160 says:

    On the one hand she does make good money, but on the other she sees the freebies the politicians are giving a large percentage of Americans for doing absolutely nothing….abled bodies Americans standing in line for a host of freebies she is stuck paying for. We all see in and we are beginning to feel like the modern day slave…that is the American worker who does not get freebies from the demobrats. So that woman could stay home and afford the private college the freebie kid just walks into (like Obama) so yes, it is very hard to realize you are another man's slave. I've begun to view the American worker as somewhat "stupid" to keep slaving while the others just keep collecting checks from their labor.

  10. 100K Mourner Hater says:

    I make $40K and have a mortgage and car payments, food and gas to pay for. I am making it because I sacrifice things in order to survive. My family grew up with nothing, eventually my dad, a union member, and made a mill. and made it last. When he passed away, the family survivors inherited it and we are making it work for us. So, you making $100K quit your crying and make sacrifices to make it work for you. That goes for the Tea Party, too. Quit the boo-hooing and make this a better world for all. equality for all, not just the elite, rich and their GOP puppets.

  11. The Tea Party is not a bunch of boo-hoo people. We are working hard to save the country we love. We do not want it socialized and turned into a nanny state which is what Obama is planning. We don't believe in redistribution of wealth which is the working people take care of the people who don't want to work. It sounds like you and your family are doing what Americans always do. Work hard, and reap the rewards even if they're not 100k.
    Not everyone gets to amass millions, but those are the ones that develop businesses and provide jobs. That"s what capitalism is all about.
    http://www.petition2congress.c...

    Go to this website and sign the petition to vet Obama and check into his eligibility to be president. The lame stream media never vetted him in 08 and neither did congress. If you haven't signed this yet, please do.

  12. Cliffystones says:

    Since no one else has mentioned it, how about learning to do for yourselves? I'll bet a lot of those folks who can't manage their money can't replace the flapper valve in their toilet. Instead of five bucks and a five-minute fix, they call a plumber in.

    And how about instead of insisting on the I-phone, I-pod, I-pad, and I-turd polisher, these folks consider less costly but just as capable brands? Oh, and a Honda CRV holds it's trade-in value better that a Land Rover!

  13. Did you know that you can still buy a gallon of gasoling for .20 Cents? Take two pre 1964 90% silver dimes worth ($ 2.25 each) and presto a gallon of $4.50 gas. Are you starting to get what has happened to the value of the U.S. $? It's called inflation, its caused by the continued printing of worthless Dollars (backed by nothing but the full FAITH etc) Is this helping your faith any? People have been making the mistake of thinking they can solve their financial problems by simply increasing their income, but all they do is increase their taxes. You are far better off saving what you have already made, why, because saving is tax free. You get to keep 100%.

  14. The quickest way to learn to be conservative with money: figure out how many hours you will have to work to pay for something. When you look at things this way, you realize the real cost of things. If that new outfit I like would cost me 10 hours of work, I will think twice before I buy it, or watch for it on sale. How many hours to work for a new car? Or would I rather find a nice used one for less hours? It's such a no-brainer…and you don't end up buying something on the spur of the moment that gets used a few times and then stored in the garage or attic or the back of the closet….

  15. Citizen Fighter says:

    Then join the service and fight overseas with the military, if the Tea Party has the moxie to do so, which I doubt very much. Quit crying about paying taxes on the money YOU EARNED. Everybody else does.

  16. True Citizen/Patriot says:

    Ladybug: This country will never be socialized by any entity or group, in the US. Obama is not trying to socialize us, but make the tax code fair for everyone. Mitt Romney and his capitalist millionaires (where are all the jobs, lady?) are trying to make this country another Haiti, with the poor and the middle class separate from the upper class (the rich). The GOP candidates are all millionaires, trying to make it easy for themselves to live in luxury, and have the rest of us starve, and/or go from middle class to a lower status. (cont)

  17. True Citizen/Patriot says:

    Cont: During W's years, many $50k-plus earners went from making a lot of money to working at Walmart or other low-paying jobs, while the rich got all the tax breaks, possible. Our founding fathers and the ordinary men who fought , and died fighting, he British, knew that it takes everyone to contribute to defeat tyranny. That is why the tax code was made fair for everyone, the code the rich are trying to tear down. Plus, any program that benefited the true citizens of this country. The ordinary people of this country will not let that happen. I will fight to not let that happen, but you WILL pay your fair share of taxes, or you can leave this country and try your luck, somewhere else.

  18. Why should anyone bother to sign a petition on Obama's eligibility? Petitions have no effect. No legal process will remove him from office, not even if he announced he was born in Kenya and proud of it (after the election, of course). We are living in a post-legal environment. Laws no longer apply to the elites, if they ever did. You and I, yes, but not them. The Ruling Class is above the law.

  19. I exist on $752.00 a month and I live in New Jersey. I don't feel at all sorry for her.

  20. Well I think it’s great that she is in the tank. It’s people like this who helped create the mess that we all have to deal with. The sooner they die out or wise up the sooner we can recover. I quit feeling sorry for idiots as it’s a loosing battle and doesn’t help them.