Lifestyle inflation

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Topic Author
pennylane
Posts: 290
Joined: Thu Apr 12, 2018 10:22 am

Re: Lifestyle inflation

Post by pennylane »

safari wrote: Tue May 09, 2023 11:08 pm I have a hard time believing that their monthly expenses are only $6,000. Mortgage payments with property taxes and insurance are probably half of that. Add the cost of food/groceries, utilities, cell phones, car payments/insurance, gas, restaurants, new clothes & shoes for the kids, gifts, etc. What about daycare for the kids? My daycare costs for two kids are close to $3K/month. Do they ever take vacations?
Yea, it’s hard to believe different folks have different expenses. 🙄

I’ll bite:

Mortgage less than $3000
Food $700/month
Utilities $600
Gas? They drive electric (own outright)
Insurance $300?
They don’t eat out
They hardly take vacations from what I see
No daycare expense

Clothes, can’t speak for them but I know my shoes tend to last me 5+ years and if I spend $50/month on clothes that’s a lot. It’s not difficult to be at less than $6k a month. It’s actually fairly easy.
Strayshot
Posts: 832
Joined: Thu Mar 05, 2015 7:04 am
Location: New Mexico

Re: Lifestyle inflation

Post by Strayshot »

What is the point to making more money if not “lifestyle creep”, “lifestyle inflation”, “improved quality of life” or any other number of other terms that all mean the same thing? Once retirement is planned for, emergency funds/plans are in place, estate plans are in place, appropriate insurance is in place, etc why not expand lifestyle to enjoy the things you have earned in a smart way?

We don’t have a complete picture of all the things above for this case, but if we assume they are I don’t see an issue with inflating housing and say go for it. If renting the old home is cash flow positive and they can afford the mortgage on the new home, no big deal. Lots of eggs in the real estate basket (concentrated risk) but if they manage that vs the rest of the portfolio it should be fine.

Where people get in trouble is not establishing the foundation first and then rapidly changing lifestyle when they encounter new money, income, inheritance, overspending, etc. I think “lifestyle creep” is a good term, because creeping is slow and cautious the way it should be done. The things that cause trouble are “lifestyle explosions” that usually don’t end well.
pizzy
Posts: 4339
Joined: Tue Jun 02, 2020 6:59 pm

Re: Lifestyle inflation

Post by pizzy »

Strayshot wrote: Sun May 28, 2023 12:18 pm What is the point to making more money if not “lifestyle creep”, “lifestyle inflation”, “improved quality of life” or any other number of other terms that all mean the same thing? Once retirement is planned for, emergency funds/plans are in place, estate plans are in place, appropriate insurance is in place, etc why not expand lifestyle to enjoy the things you have earned in a smart way?

We don’t have a complete picture of all the things above for this case, but if we assume they are I don’t see an issue with inflating housing and say go for it. If renting the old home is cash flow positive and they can afford the mortgage on the new home, no big deal. Lots of eggs in the real estate basket (concentrated risk) but if they manage that vs the rest of the portfolio it should be fine.

Where people get in trouble is not establishing the foundation first and then rapidly changing lifestyle when they encounter new money, income, inheritance, overspending, etc. I think “lifestyle creep” is a good term, because creeping is slow and cautious the way it should be done. The things that cause trouble are “lifestyle explosions” that usually don’t end well.
This is bogleheads. We live like we are poor during our younger years to live like kings/queens when we are elderly. :oops:
Vanguard/Fidelity | 76% US Stock | 16% Int'l Stock | 8% Cash
8301
Posts: 942
Joined: Thu Dec 22, 2022 1:52 pm

Re: Lifestyle inflation

Post by 8301 »

pizzy wrote: Sun May 28, 2023 12:21 pm
Strayshot wrote: Sun May 28, 2023 12:18 pm What is the point to making more money if not “lifestyle creep”, “lifestyle inflation”, “improved quality of life” or any other number of other terms that all mean the same thing? Once retirement is planned for, emergency funds/plans are in place, estate plans are in place, appropriate insurance is in place, etc why not expand lifestyle to enjoy the things you have earned in a smart way?

We don’t have a complete picture of all the things above for this case, but if we assume they are I don’t see an issue with inflating housing and say go for it. If renting the old home is cash flow positive and they can afford the mortgage on the new home, no big deal. Lots of eggs in the real estate basket (concentrated risk) but if they manage that vs the rest of the portfolio it should be fine.

Where people get in trouble is not establishing the foundation first and then rapidly changing lifestyle when they encounter new money, income, inheritance, overspending, etc. I think “lifestyle creep” is a good term, because creeping is slow and cautious the way it should be done. The things that cause trouble are “lifestyle explosions” that usually don’t end well.
This is bogleheads. We live like we are poor during our younger years to live like kings/queens when we are elderly. :oops:
Envy Pharoah's afterlife?
gotoparks
Posts: 1121
Joined: Sat Jan 28, 2023 9:19 am

Re: Lifestyle inflation

Post by gotoparks »

If I was comfortable in my current house, I wouldn't move.
YeWill
Posts: 83
Joined: Sat May 20, 2023 1:21 am

Re: Lifestyle inflation

Post by YeWill »

pennylane wrote: Sun May 28, 2023 11:45 am
safari wrote: Tue May 09, 2023 11:08 pm I have a hard time believing that their monthly expenses are only $6,000. Mortgage payments with property taxes and insurance are probably half of that. Add the cost of food/groceries, utilities, cell phones, car payments/insurance, gas, restaurants, new clothes & shoes for the kids, gifts, etc. What about daycare for the kids? My daycare costs for two kids are close to $3K/month. Do they ever take vacations?
Yea, it’s hard to believe different folks have different expenses. 🙄

I’ll bite:

Mortgage less than $3000
Food $700/month
Utilities $600
Gas? They drive electric (own outright)
Insurance $300?
They don’t eat out
They hardly take vacations from what I see
No daycare expense

Clothes, can’t speak for them but I know my shoes tend to last me 5+ years and if I spend $50/month on clothes that’s a lot. It’s not difficult to be at less than $6k a month. It’s actually fairly easy.
I had the same reaction as safari.

So ..

- cars need to be changed and monthly costs need account that.
- home needs to be maintained and monthly costs need account that.
- they have (need to have) disability and life insurance and monthly costs need account that.
- I see the have some costless arrangement for daycare. Not everyone can do that. But they have it, so no expenses on this line item for them.

I see a couple of thousand dollars per month that is unaccounted for in their monthly budget.
Last edited by YeWill on Mon May 29, 2023 8:02 am, edited 1 time in total.
stoptothink
Posts: 15368
Joined: Fri Dec 31, 2010 8:53 am

Re: Lifestyle inflation

Post by stoptothink »

YeWill wrote: Mon May 29, 2023 12:20 am
pennylane wrote: Sun May 28, 2023 11:45 am
safari wrote: Tue May 09, 2023 11:08 pm I have a hard time believing that their monthly expenses are only $6,000. Mortgage payments with property taxes and insurance are probably half of that. Add the cost of food/groceries, utilities, cell phones, car payments/insurance, gas, restaurants, new clothes & shoes for the kids, gifts, etc. What about daycare for the kids? My daycare costs for two kids are close to $3K/month. Do they ever take vacations?
Yea, it’s hard to believe different folks have different expenses. 🙄

I’ll bite:

Mortgage less than $3000
Food $700/month
Utilities $600
Gas? They drive electric (own outright)
Insurance $300?
They don’t eat out
They hardly take vacations from what I see
No daycare expense

Clothes, can’t speak for them but I know my shoes tend to last me 5+ years and if I spend $50/month on clothes that’s a lot. It’s not difficult to be at less than $6k a month. It’s actually fairly easy.
I had the same reaction as safari.

So ..

- cars need to be changed and monthly costs need account that.
- home needs to be maintained and monthly costs need account that.
- they have (need to have) disability and life insurance and monthly costs need account that.
- I see the have some costless arrangement for daycare. Not everyone can do that. But they have it, so no expenses on this line item for them.

I see a couple of thousand dollars per month that is unaccounted for in their monthly budget.
I have a hard time when posters call BS on the budgets of others. $6k/month for a young family of 4 is reasonable, it's above than the national median HHI for a family that size. There doesn't seem to be any details mentioned that would suggest much higher spend (ie. a boat, motorhome, vacation home, expensive car payments, etc.) and we don't know anything about the daycare situation. No way to make a direction comparison, but 5yrs ago we were in a similar situation (two kids in full-time daycare, mortgage, wife was in school full-time) and we never came remotely close to $6k/month in household expenses and we're generally under half that now that the mortgage is gone, kids are in school, and wife is done with school - even though we have an HHI in the $300k/yr range (lifestyle inflation hasn't caught up to us yet). It's impossible to know what others are spending.
vested1
Posts: 3492
Joined: Wed Jan 04, 2012 3:20 pm

Re: Lifestyle inflation

Post by vested1 »

pennylane wrote: Tue May 09, 2023 8:58 am
Being a landlord has worked out well for him for the last 10 years, it’s hard to tell someone they made a mistake renting out homes when they became a millionaire well before 30 years old.
pennylane wrote: Tue May 09, 2023 9:00 am he’s not new into the landlord scene.
So, assuming that "well before 30" means 25-29, but he's an experienced landlord? I would venture to say that so far he's been a lucky landlord. The "friend" should step back and hedge his bets a bit in my opinion, and have less of his net worth in real estate. On the other hand, he's young enough to make mistakes and come back from them. If he's lucky. There's more than one kind of luck however.

Those of us who are a bit longer in the tooth can attest to that.
YeWill
Posts: 83
Joined: Sat May 20, 2023 1:21 am

Re: Lifestyle inflation

Post by YeWill »

stoptothink wrote: Mon May 29, 2023 6:31 am
YeWill wrote: Mon May 29, 2023 12:20 am
pennylane wrote: Sun May 28, 2023 11:45 am
safari wrote: Tue May 09, 2023 11:08 pm I have a hard time believing that their monthly expenses are only $6,000. Mortgage payments with property taxes and insurance are probably half of that. Add the cost of food/groceries, utilities, cell phones, car payments/insurance, gas, restaurants, new clothes & shoes for the kids, gifts, etc. What about daycare for the kids? My daycare costs for two kids are close to $3K/month. Do they ever take vacations?
Yea, it’s hard to believe different folks have different expenses. 🙄

I’ll bite:

Mortgage less than $3000
Food $700/month
Utilities $600
Gas? They drive electric (own outright)
Insurance $300?
They don’t eat out
They hardly take vacations from what I see
No daycare expense

Clothes, can’t speak for them but I know my shoes tend to last me 5+ years and if I spend $50/month on clothes that’s a lot. It’s not difficult to be at less than $6k a month. It’s actually fairly easy.
I had the same reaction as safari.

So ..

- cars need to be changed and monthly costs need account that.
- home needs to be maintained and monthly costs need account that.
- they have (need to have) disability and life insurance and monthly costs need account that.
- I see the have some costless arrangement for daycare. Not everyone can do that. But they have it, so no expenses on this line item for them.

I see a couple of thousand dollars per month that is unaccounted for in their monthly budget.
I have a hard time when posters call BS on the budgets of others. $6k/month for a young family of 4 is reasonable, it's above than the national median HHI for a family that size. There doesn't seem to be any details mentioned that would suggest much higher spend (ie. a boat, motorhome, vacation home, expensive car payments, etc.) and we don't know anything about the daycare situation. No way to make a direction comparison, but 5yrs ago we were in a similar situation (two kids in full-time daycare, mortgage, wife was in school full-time) and we never came remotely close to $6k/month in household expenses and we're generally under half that now that the mortgage is gone, kids are in school, and wife is done with school - even though we have an HHI in the $300k/yr range (lifestyle inflation hasn't caught up to us yet). It's impossible to know what others are spending.
My comment was primarily about highlighted statement. It may be easy for some people but not for others because of, among other factors, the line items I mentioned.
Wanderingwheelz
Posts: 3125
Joined: Mon Mar 04, 2019 8:52 am

Re: Lifestyle inflation

Post by Wanderingwheelz »

pizzy wrote: Tue May 09, 2023 8:21 am If he has 400k equity in current home, why wouldn't he put down at least 20%, if not the entire 400k equity?
Lemme guess…

He’s doesn’t want to sell it. Instead, he prefers to take on even more leverage.

How’d I do?
Being wrong compounds forever.
stoptothink
Posts: 15368
Joined: Fri Dec 31, 2010 8:53 am

Re: Lifestyle inflation

Post by stoptothink »

YeWill wrote: Mon May 29, 2023 8:05 am
stoptothink wrote: Mon May 29, 2023 6:31 am
YeWill wrote: Mon May 29, 2023 12:20 am
pennylane wrote: Sun May 28, 2023 11:45 am
safari wrote: Tue May 09, 2023 11:08 pm I have a hard time believing that their monthly expenses are only $6,000. Mortgage payments with property taxes and insurance are probably half of that. Add the cost of food/groceries, utilities, cell phones, car payments/insurance, gas, restaurants, new clothes & shoes for the kids, gifts, etc. What about daycare for the kids? My daycare costs for two kids are close to $3K/month. Do they ever take vacations?
Yea, it’s hard to believe different folks have different expenses. 🙄

I’ll bite:

Mortgage less than $3000
Food $700/month
Utilities $600
Gas? They drive electric (own outright)
Insurance $300?
They don’t eat out
They hardly take vacations from what I see
No daycare expense

Clothes, can’t speak for them but I know my shoes tend to last me 5+ years and if I spend $50/month on clothes that’s a lot. It’s not difficult to be at less than $6k a month. It’s actually fairly easy.
I had the same reaction as safari.

So ..

- cars need to be changed and monthly costs need account that.
- home needs to be maintained and monthly costs need account that.
- they have (need to have) disability and life insurance and monthly costs need account that.
- I see the have some costless arrangement for daycare. Not everyone can do that. But they have it, so no expenses on this line item for them.

I see a couple of thousand dollars per month that is unaccounted for in their monthly budget.
I have a hard time when posters call BS on the budgets of others. $6k/month for a young family of 4 is reasonable, it's above than the national median HHI for a family that size. There doesn't seem to be any details mentioned that would suggest much higher spend (ie. a boat, motorhome, vacation home, expensive car payments, etc.) and we don't know anything about the daycare situation. No way to make a direction comparison, but 5yrs ago we were in a similar situation (two kids in full-time daycare, mortgage, wife was in school full-time) and we never came remotely close to $6k/month in household expenses and we're generally under half that now that the mortgage is gone, kids are in school, and wife is done with school - even though we have an HHI in the $300k/yr range (lifestyle inflation hasn't caught up to us yet). It's impossible to know what others are spending.
My comment was primarily about highlighted statement. It may be easy for some people but not for others because of, among other factors, the line items I mentioned.
It's quit literally more than the median household income in the U.S.; more than half of households in the country do not make that much - before taxes. We are all in different situations and I respect that some family's do not find spending less than that "easy", but then you aren't the "average" family.
8301
Posts: 942
Joined: Thu Dec 22, 2022 1:52 pm

Re: Lifestyle inflation

Post by 8301 »

stoptothink wrote: Mon May 29, 2023 10:52 am
YeWill wrote: Mon May 29, 2023 8:05 am
stoptothink wrote: Mon May 29, 2023 6:31 am
YeWill wrote: Mon May 29, 2023 12:20 am
pennylane wrote: Sun May 28, 2023 11:45 am

Yea, it’s hard to believe different folks have different expenses. 🙄

I’ll bite:

Mortgage less than $3000
Food $700/month
Utilities $600
Gas? They drive electric (own outright)
Insurance $300?
They don’t eat out
They hardly take vacations from what I see
No daycare expense

Clothes, can’t speak for them but I know my shoes tend to last me 5+ years and if I spend $50/month on clothes that’s a lot. It’s not difficult to be at less than $6k a month. It’s actually fairly easy.
I had the same reaction as safari.

So ..

- cars need to be changed and monthly costs need account that.
- home needs to be maintained and monthly costs need account that.
- they have (need to have) disability and life insurance and monthly costs need account that.
- I see the have some costless arrangement for daycare. Not everyone can do that. But they have it, so no expenses on this line item for them.

I see a couple of thousand dollars per month that is unaccounted for in their monthly budget.
I have a hard time when posters call BS on the budgets of others. $6k/month for a young family of 4 is reasonable, it's above than the national median HHI for a family that size. There doesn't seem to be any details mentioned that would suggest much higher spend (ie. a boat, motorhome, vacation home, expensive car payments, etc.) and we don't know anything about the daycare situation. No way to make a direction comparison, but 5yrs ago we were in a similar situation (two kids in full-time daycare, mortgage, wife was in school full-time) and we never came remotely close to $6k/month in household expenses and we're generally under half that now that the mortgage is gone, kids are in school, and wife is done with school - even though we have an HHI in the $300k/yr range (lifestyle inflation hasn't caught up to us yet). It's impossible to know what others are spending.
My comment was primarily about highlighted statement. It may be easy for some people but not for others because of, among other factors, the line items I mentioned.
It's quit literally more than the median household income in the U.S.; more than half of households in the country do not make that much - before taxes. We are all in different situations and I respect that some family's do not find spending less than that "easy", but then you aren't the "average" family.
The most useless statistical number is "medium." I hope our CEO does not use the "the median US salary" indiscriminately when setting next fiscal year salaries, "Hey guys, shut up. Your salary is 10% higher than US median wages!"
smitcat
Posts: 13227
Joined: Mon Nov 07, 2016 9:51 am

Re: Lifestyle inflation

Post by smitcat »

stoptothink wrote: Mon May 29, 2023 10:52 am
YeWill wrote: Mon May 29, 2023 8:05 am
stoptothink wrote: Mon May 29, 2023 6:31 am
YeWill wrote: Mon May 29, 2023 12:20 am
pennylane wrote: Sun May 28, 2023 11:45 am

Yea, it’s hard to believe different folks have different expenses. 🙄

I’ll bite:

Mortgage less than $3000
Food $700/month
Utilities $600
Gas? They drive electric (own outright)
Insurance $300?
They don’t eat out
They hardly take vacations from what I see
No daycare expense

Clothes, can’t speak for them but I know my shoes tend to last me 5+ years and if I spend $50/month on clothes that’s a lot. It’s not difficult to be at less than $6k a month. It’s actually fairly easy.
I had the same reaction as safari.

So ..

- cars need to be changed and monthly costs need account that.
- home needs to be maintained and monthly costs need account that.
- they have (need to have) disability and life insurance and monthly costs need account that.
- I see the have some costless arrangement for daycare. Not everyone can do that. But they have it, so no expenses on this line item for them.

I see a couple of thousand dollars per month that is unaccounted for in their monthly budget.
I have a hard time when posters call BS on the budgets of others. $6k/month for a young family of 4 is reasonable, it's above than the national median HHI for a family that size. There doesn't seem to be any details mentioned that would suggest much higher spend (ie. a boat, motorhome, vacation home, expensive car payments, etc.) and we don't know anything about the daycare situation. No way to make a direction comparison, but 5yrs ago we were in a similar situation (two kids in full-time daycare, mortgage, wife was in school full-time) and we never came remotely close to $6k/month in household expenses and we're generally under half that now that the mortgage is gone, kids are in school, and wife is done with school - even though we have an HHI in the $300k/yr range (lifestyle inflation hasn't caught up to us yet). It's impossible to know what others are spending.
My comment was primarily about highlighted statement. It may be easy for some people but not for others because of, among other factors, the line items I mentioned.
It's quit literally more than the median household income in the U.S.; more than half of households in the country do not make that much - before taxes. We are all in different situations and I respect that some family's do not find spending less than that "easy", but then you aren't the "average" family.
I believe that the median household incomes for the 35- to 55-year-old ranges is like $7,500 - $8,000.
simas
Posts: 1294
Joined: Wed Apr 04, 2007 5:50 pm

Re: Lifestyle inflation

Post by simas »

pennylane wrote: Tue May 09, 2023 8:19 am A close friend and I were discussing his potential future home purchase and asked for my opinion on if he was suffering from a case of lifestyle inflation.
He and his family doesn’t need this home, they are perfectly comfortable in their current home.
the answer is 'yes', of cause. however people seek advice to validate decisions they already made so YMMV
rockstar
Posts: 6308
Joined: Mon Feb 03, 2020 5:51 pm

Re: Lifestyle inflation

Post by rockstar »

As long as they’re on track, I don’t see a problem with them spending more. A more expensive house is going to cost more to maintain. As long as they’re prepared, I don’t see a big deal here.

The real problem is that it’s expensive to borrow right now. I’d feel much better about this if they were cash buyers.

My thought is save 25% and spend the rest unless you want to FIRE. But then the market can go against you, so there are no guarantees that saving more will lead to an earlier retirement. And I’m sure the inflation shocks over the last couple of years are making some reconsider retirement early.
stoptothink
Posts: 15368
Joined: Fri Dec 31, 2010 8:53 am

Re: Lifestyle inflation

Post by stoptothink »

8301 wrote: Mon May 29, 2023 11:17 am
stoptothink wrote: Mon May 29, 2023 10:52 am
YeWill wrote: Mon May 29, 2023 8:05 am
stoptothink wrote: Mon May 29, 2023 6:31 am
YeWill wrote: Mon May 29, 2023 12:20 am
I had the same reaction as safari.

So ..

- cars need to be changed and monthly costs need account that.
- home needs to be maintained and monthly costs need account that.
- they have (need to have) disability and life insurance and monthly costs need account that.
- I see the have some costless arrangement for daycare. Not everyone can do that. But they have it, so no expenses on this line item for them.

I see a couple of thousand dollars per month that is unaccounted for in their monthly budget.
I have a hard time when posters call BS on the budgets of others. $6k/month for a young family of 4 is reasonable, it's above than the national median HHI for a family that size. There doesn't seem to be any details mentioned that would suggest much higher spend (ie. a boat, motorhome, vacation home, expensive car payments, etc.) and we don't know anything about the daycare situation. No way to make a direction comparison, but 5yrs ago we were in a similar situation (two kids in full-time daycare, mortgage, wife was in school full-time) and we never came remotely close to $6k/month in household expenses and we're generally under half that now that the mortgage is gone, kids are in school, and wife is done with school - even though we have an HHI in the $300k/yr range (lifestyle inflation hasn't caught up to us yet). It's impossible to know what others are spending.
My comment was primarily about highlighted statement. It may be easy for some people but not for others because of, among other factors, the line items I mentioned.
It's quit literally more than the median household income in the U.S.; more than half of households in the country do not make that much - before taxes. We are all in different situations and I respect that some family's do not find spending less than that "easy", but then you aren't the "average" family.
The most useless statistical number is "medium." I hope our CEO does not use the "the median US salary" indiscriminately when setting next fiscal year salaries, "Hey guys, shut up. Your salary is 10% higher than US median wages!"
"Median" :confused

As if we needed another example of how out of touch some of this board is with the general population. At least half of households in the U.S. earn less than that before taxes therefore the original statement was relevant to at least half the population - that's an objective statement of fact. Anecdotally, while we earn several times the median household income, we find it very easy to spend WAY less than $6k/month as a family and the stated figures represent the huge majority of families in my social circle well - they are for the most part "average". If that is not the case for you, fantastic, and congrats for your residence in Lake Wobegon. You are free to your opinion about the terms "median", "middle class", "average family" and the like, but I'm not sure how they are relevant.
marcopolo
Posts: 8411
Joined: Sat Dec 03, 2016 9:22 am

Re: Lifestyle inflation

Post by marcopolo »

I am most surprised by the level of details the OP knows about their "friend's" finances, and their thinking/feelings about such things.
(e.g., income of $310k, not "around $300k", but $310,000, same with rental income of $53,500, not "around" $50k").
Is that typical?

I don't share that kind of detail with any of my friends, and don't have that kind of detailed knowledge of others' finances.
Once in a while you get shown the light, in the strangest of places if you look at it right.
secondopinion
Posts: 6008
Joined: Wed Dec 02, 2020 12:18 pm

Re: Lifestyle inflation

Post by secondopinion »

stoptothink wrote: Tue May 30, 2023 3:55 pm
8301 wrote: Mon May 29, 2023 11:17 am
stoptothink wrote: Mon May 29, 2023 10:52 am
YeWill wrote: Mon May 29, 2023 8:05 am
stoptothink wrote: Mon May 29, 2023 6:31 am

I have a hard time when posters call BS on the budgets of others. $6k/month for a young family of 4 is reasonable, it's above than the national median HHI for a family that size. There doesn't seem to be any details mentioned that would suggest much higher spend (ie. a boat, motorhome, vacation home, expensive car payments, etc.) and we don't know anything about the daycare situation. No way to make a direction comparison, but 5yrs ago we were in a similar situation (two kids in full-time daycare, mortgage, wife was in school full-time) and we never came remotely close to $6k/month in household expenses and we're generally under half that now that the mortgage is gone, kids are in school, and wife is done with school - even though we have an HHI in the $300k/yr range (lifestyle inflation hasn't caught up to us yet). It's impossible to know what others are spending.
My comment was primarily about highlighted statement. It may be easy for some people but not for others because of, among other factors, the line items I mentioned.
It's quit literally more than the median household income in the U.S.; more than half of households in the country do not make that much - before taxes. We are all in different situations and I respect that some family's do not find spending less than that "easy", but then you aren't the "average" family.
The most useless statistical number is "medium." I hope our CEO does not use the "the median US salary" indiscriminately when setting next fiscal year salaries, "Hey guys, shut up. Your salary is 10% higher than US median wages!"
"Median" :confused

As if we needed another example of how out of touch some of this board is with the general population. At least half of households in the U.S. earn less than that before taxes therefore the original statement was relevant to at least half the population - that's an objective statement of fact. Anecdotally, while we earn several times the median household income, we find it very easy to spend WAY less than $6k/month as a family and the stated figures represent the huge majority of families in my social circle well - they are for the most part "average". If that is not the case for you, fantastic, and congrats for your residence in Lake Wobegon. You are free to your opinion about the terms "median", "middle class", "average family" and the like, but I'm not sure how they are relevant.
Right. I grew up being on the poorer side of the median for a good chuck of my childhood; frugality was a trait I learned but never tossed aside. Even being on the richer side of the median, I am not bring in the kind of money that I see suggested here; but I am certainly not spending much. I am not definitely not rich, but I live well enough to make me happy (just a little bit of extra money goes a long way if done right). If I was earning the $300k, I would definitely being stashing almost all of the excess.

Reality check is needed that is for sure. My interest in investing came before I understood someone could strike it rich (or likely go broke); I thought most would earn some money over time with proper wisdom that could compound.
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
stoptothink
Posts: 15368
Joined: Fri Dec 31, 2010 8:53 am

Re: Lifestyle inflation

Post by stoptothink »

marcopolo wrote: Tue May 30, 2023 5:04 pm I am most surprised by the level of details the OP knows about their "friend's" finances, and their thinking/feelings about such things.
(e.g., income of $310k, not "around $300k", but $310,000, same with rental income of $53,500, not "around" $50k").
Is that typical?

I don't share that kind of detail with any of my friends, and don't have that kind of detailed knowledge of others' finances.
Who am I to say what is typical, but I know similar information for a handful of people: my parents, my in-laws, and two of my sisters...I do their taxes every year. Among my circle of closest friends, we discuss finances a lot (my two closest friends are a banker and an owner of a financial planning firm), but I have no clue exactly what they make or how much they spend and they know less about my situation.

It does seem odd to me, but then again, we share details of our financial situation with a whole bunch of random strangers on the internet...
Lastrun
Posts: 1505
Joined: Wed May 03, 2017 6:46 pm

Re: Lifestyle inflation

Post by Lastrun »

8301 wrote: Wed May 10, 2023 9:09 pm
KyleAAA wrote: Tue May 09, 2023 10:26 am Avoiding lifestyle inflation at all costs is dumb. If the new home would improve their lives, they can obviously afford it and should buy it. If not, don't. It has nothing to do with "needing" it.
He and his family make over $400k a year while still under 30. They are big boys now. If the income is reliable, big boys should live like big boys. There are too many on this board frozen in fear of personal economic disaster.
I agree. So long as one is saving a healthy percentage of their income, has a decent emergency fund for job loss, is well-insured, etc. nothing wrong with lifestyle creep. And assuming FIRE is not the goal.
Wanderingwheelz
Posts: 3125
Joined: Mon Mar 04, 2019 8:52 am

Re: Lifestyle inflation

Post by Wanderingwheelz »

Lastrun wrote: Tue May 30, 2023 6:42 pm
8301 wrote: Wed May 10, 2023 9:09 pm
KyleAAA wrote: Tue May 09, 2023 10:26 am Avoiding lifestyle inflation at all costs is dumb. If the new home would improve their lives, they can obviously afford it and should buy it. If not, don't. It has nothing to do with "needing" it.
He and his family make over $400k a year while still under 30. They are big boys now. If the income is reliable, big boys should live like big boys. There are too many on this board frozen in fear of personal economic disaster.
I agree. So long as one is saving a healthy percentage of their income, has a decent emergency fund for job loss, is well-insured, etc. nothing wrong with lifestyle creep. And assuming FIRE is not the goal.
We never lived a basic lifestyle, but we never inflated it too much either. Once you acquire stuff throughout your early adulthood (a solid wardrobe, a Rolex, nice furniture that lasts, tools, etc.) there’s naturally less spending going forward. I always felt like it was a good idea to have the option to FIRE once we reached a point where we were sure we were pretty close to winning the game, and I’m glad I approached it like that. Most people wouldn’t consider 49 to be particularly early, but it was nice to quit work when I no longer got any enjoyment from it. We’re actually saving more than we ever have since my wife’s business has gone to a whole new level.
Being wrong compounds forever.
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