For sure, but like…I’m a middle-aged software engineer in a low cost-of-living area. My parents always had enough on one income, but we’re struggling on two.
I’m similar, but probably a bit younger. I make a good salary now (I’m in a leadership position), but the people on my team are a bit more “average.” Software engineering will have a higher than average salary, but I’m talking $80-120k for the people who work for me in an area where the median income is $70-80k ($80-120k), and most are single or single-income.
There’s a pretty stark difference between those who are financially stable and those who… aren’t. I don’t have everyone’s salary, but here’s what I see:
financially stable - drive older car, own house, wardrobe is simple, hobbies are inexpensive, no extravagent trips
financially unstable - drive late model car, rent, nicer clothes, more expensive hobbies, yearly international trips
Notice I didn’t say anything about income. Some of the financially unstable people have a much higher income (probably double the range above), and some of the financially stable people have a much lower income (e.g. one of my employees is single and just bought a house in a pricier area, while being at the bottom of the income range).
I obviously don’t know your income or situation, but I think most people can do much better than they are without changing their income. And the more financially stable you can be, the more “quiet” confidence you get (i.e. you’re not distracted by when payday is), and the more likely you are to get that promotion or better paying job. Success tends to breed success.
Check out The Millionaire Next Door, which gives lots of examples about how wealthy people tend to be frugal and careful with money. There’s not really any secret sauce here, just delayed gratification and discipline. Obviously a $100k salary will go a bit further than a $50k salary, but even a median income can rocket you to an upper-middle class/lower-upper class retirement if you manage it carefully. I’m happy to walk through a scenario if you like, but that’s a bit off-topic for this community and is probably better for one of the PF communities.
That makes a ton of sense. To add some numbers to it:
$1k in the bank - should be enough for any one emergency
1 month e-fund - no longer impacted by payday being late
3 month e-fund
Getting to step 1 can be very difficult, especially for the lower class, but $10 or $20 at a time can get there. But it needs to be intentional, and that’s really hard when working two (or three) jobs, so many just don’t put in the consistent effort needed to get there. But once that first buffer is there, the rest becomes a lot easier since you’re no longer getting pushed backwards.
I think age / location / profession have a lot to do with what socioeconomic circles people run in.
Not to mention luck of the draw.
For sure, but like…I’m a middle-aged software engineer in a low cost-of-living area. My parents always had enough on one income, but we’re struggling on two.
I’m similar, but probably a bit younger. I make a good salary now (I’m in a leadership position), but the people on my team are a bit more “average.” Software engineering will have a higher than average salary, but I’m talking $80-120k for the people who work for me in an area where the median income is $70-80k ($80-120k), and most are single or single-income.
There’s a pretty stark difference between those who are financially stable and those who… aren’t. I don’t have everyone’s salary, but here’s what I see:
Notice I didn’t say anything about income. Some of the financially unstable people have a much higher income (probably double the range above), and some of the financially stable people have a much lower income (e.g. one of my employees is single and just bought a house in a pricier area, while being at the bottom of the income range).
I obviously don’t know your income or situation, but I think most people can do much better than they are without changing their income. And the more financially stable you can be, the more “quiet” confidence you get (i.e. you’re not distracted by when payday is), and the more likely you are to get that promotion or better paying job. Success tends to breed success.
Check out The Millionaire Next Door, which gives lots of examples about how wealthy people tend to be frugal and careful with money. There’s not really any secret sauce here, just delayed gratification and discipline. Obviously a $100k salary will go a bit further than a $50k salary, but even a median income can rocket you to an upper-middle class/lower-upper class retirement if you manage it carefully. I’m happy to walk through a scenario if you like, but that’s a bit off-topic for this community and is probably better for one of the PF communities.
I have a rule of thumb for financial stability.
Level 1 - just buy groceries and pay for them without stressing
Level 2 - don’t worry about when payday hits
Level 3 - don’t worry about getting laid off
That makes a ton of sense. To add some numbers to it:
Getting to step 1 can be very difficult, especially for the lower class, but $10 or $20 at a time can get there. But it needs to be intentional, and that’s really hard when working two (or three) jobs, so many just don’t put in the consistent effort needed to get there. But once that first buffer is there, the rest becomes a lot easier since you’re no longer getting pushed backwards.