There are no 50s-sized cheap houses within walking distance of employment centers in good school districts in my city. Out where the good schools are, they only build McMansions. This is the typical case for cities in the US. I live in a big-ass house in the 'burbs because a big-ass house in the 'burbs is cheaper than a smaller one still capable of (more or less) comfortably housing 2 adults + 3 kids in the city, plus private school for those three kids. It's not because I love McMansions and owning cars and being far from everything.
As for entertainment spending (Netflix, cell phones, et c), it's nothing next to (especially) housing and (even cooked at home) food. Cutting all of that wouldn't get us down to a secure, responsible income level with only one parent working.
You can send your kids to an average or even below-average school, be able to spend more time at home, and more than make up the difference. Education driven by the parents is always going to be better than education driven by a public school board anyway.
Which is better, having your son be the salutatorian of the average school district in a suburb nobody's ever heard of, or having him be 75/350 in an amazing school district in a suburb nobody's ever heard of?
School district quality matters of course but I think it's overblown when everybody thinks they need to live in the best school district within a 50-mile commute from the job they ended up with more or less randomly.
The other problem is utility bills. These anti-big-house people complain how people don't need giant houses, but they completely ignore how horribly inefficient older houses are. It probably costs a lot less to heat and cool your McMansion than it would a 50-year-old house that's half the size.
I really wish it were easy to find nice, well-built, efficient, modestly sized houses in neighborhoods where you don't have ex-cons living next to you, vicious dogs running loose, etc. That just doesn't seem to be the case.
My house was built in 1920 and I spend more on my car payment that I do on all my utilities combined. Even if you buy a house that costs a lot of heat or cool, it's at most a weekend project per room to rip down drywall or plaster, put in new/better/any insulation, and re-drywall.
That depends. In a lot of places, if you expose any wiring (aka, rip out drywall) you need to get a building permit and inspection for the work you're doing.
That seems suspect. How much does it cost to heat and cool a McMansion in dollars? I live in a 2000 square foot 75 year old house and my utilities are very reasonable.
When I lived at my grandmother's house (rented from her), the utility bill was almost as much as rent through the winter (I think the highest I saw was about $500 one month). The house is from like 1890 or whatever and they did add insulation and all but the heater was on a lot.
How many square feet was the house? I don't know if that's compatible to heating a McMansion though.
I just did the math with my past bills and, amortized, I spend about $200 total on utilities a month. That's water, electricity, and oil. I have no special upgrades to my house. It gets fairly cold here. I have the aforementioned 2000 square foot (which I consider big) 75 year old house. I keep the heat on 68 when we are home. It gets hot in the summer and we use window air units.
I just looked up the realty listing and it says it's 2100 sq ft.
In the summer the bill was < 100. We get a lot of snow up here and I am betting that even though they added insulation the roof leaked ridiculous amounts of heat. I don't live there anymore luckily.
In climates with seasons you really have to do a yearly amortization to get a true idea of utility costs. A lot of oil and propane companies around here actually let you sign up for a plan that lets you pay them your amortized costs year-round. A few friends of mine love those plans, I prefer to pay the upfront cost to fill the tank and not bother.
My grandma's house had exactly the same problem, the roof was rotted and actually had a hole in it, you could see the outside from the inside. She didn't have the wherewithal to get it fixed though, unfortunately. She would just put down buckets to catch the water when it rained.
No, you don't need $150 cable packages and $200 cellular packages. I don't have those myself. My cellphone bill with Ting is about $30/month for myself, and I got my 3-year-old phone on Ebay used.
And no, you don't need a 4000sf home. But most people do want a decent home in a decent, low-crime neighborhood. The problem is that it's very hard to afford that on a single income, even after you cut out extravangances like $150 cable packages.
The fundamental problem is that the rent is too damn high.
- 2 paid for cars, one has 200k miles on it and is sitting dead in the driveway.
- a 1200 square foot house outside of town, not in a nice area. It's the cheapest house I could find and the only one I could afford.
- Internet.
- Cell phone.
- No cable, no Netflix, very little dining out (always somewhere cheap) and no other debts other than mortgage.
I have a decent income for the area I'm in, and still barely get by on a single income. I really don't understand how other people are making it. I'm either much worse off than I think or most people are just doing so much better.
Consider that the costs of those vehicles, communications devices, and shelter have increased much faster than wages have. But no, what you choose to take from that reality is "they need to be happy with less stuff"
Well houses have been getting bigger at the same time families have been getting smaller. The living space per person has almost doubled since the 70s.
I honestly can't tell if you are being serous or not. $2,000/month entertainment is included in "bare one expenses to exist?" No. That's pretty extravagant.
Sure, you are probably going to need 2 incomes if that's the kind of lifestyle you want but don't kid yourself its some sort of bare minimum.
Growing up my family of five (three kids, two parents) somehow managed to live in a two bedroom apartment with one car and played in public parks and other public facilities for entertainment. We wore hand-me-downs and had little in terms of "stuff," we didn't have any room to store it anyways.
I am much happier I grew up without excess toys/objects/items as most of our play was centered around imagination. Children are really good at entertaining themselves if left to their own devices. It also made me appreciate what I did have.
Basically, I didn't grew up even remotely in squalor or anything like that. It would have been nice to have my own bedroom but it wasn't a big deal in the grand scheme of things.
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My family now has two incomes/jobs but only one car, we share a car ride to work, one drops the other off in the morning and picks them up in the evening. it's kinda annoying at times. I want to get a second car but every time I run the numbers in my head I can't justify the huge added expense just to alleviate a little bit of annoyance/inconvenience.
So anyways, you can do with a lot less if you actually wanted to. "This is how much I spend" isn't the same thing as "this is how much I am required to spend."
I'm going to disagree with you hear. The list provided is absolutely non-essential. I mean, are you kidding me? To believe otherwise absolutely astonishes me. We think of it as an extravagance if we pay $50/month for our daughter to take a dance class. $200/month maybe, if all the kids are in a single class of some sort, but $2000?! Not happening, even if we could afford it.
Daycare is not entertainment. Daycare is what stops Social Services from taking away your kids. (Which wouldn't happen in the 70s, between multi-generational families, and less moral panic about unattended twelve-year-olds.)
Uh, daycare wasn't on the list. After school care was. Different animal.
And yes, I'm going to be normative here and suggest as a society we do an awful lot of offloading our kids into the care of others. And if we're doing that, why the hell did we have them in the first place?
Since when was the alternative to piano lessons and dance class leaving your kids unsupervised?
If you need bare bones supervision for your school age children you can get that at the Boys and Girls club and similar programs. Their summer program was around $1 a day per kid when I went.
Totally agree. Besides, in many states kids are allowed to supervise younger kids starting somewhere between 9 and 12. I.e., if your oldest is 9 in Utah, you can indeed legally leave them home alone with their siblings.
That should be the baseline for where you think. Not some crazy fantasy land with a $2000 mortgage and $2000 daycare (despite 1 parent being stay at home)
MMM's posts are all from the perspective of someone who: 1) has a paid off house, 2) has a lot of money in the bank, can get a job with benefits easily on short-ish notice and has no-one with chronic illnesses in his household (= incredibly low health insurance costs). He also gains all kinds of savings by not being dependent on a 9-5, like having enormous choice in housing location, lower transportation expenses, and so on. This is the end state of someone who's made it, and spending at that level's not realistic for a family that's still working, because their spending is necessarily much higher due to having fewer options to reduce costs.
I like the general attitude of that blog, but after going on a reading binge of it a couple years ago I came away with the impression that it's subtly misleading and kinda scummy. Stuff like "how I thrive with no job (by already having a ton of money, and actually having 3 part-time jobs, one of which is getting you to click affiliate links on this very blog)", or "Why are you paying so much for health insurance, really guys, it's cheap (if you're in an exactly perfect life situation, what, are you not?)" Clickbaity humblebragging and condescending wankery mixed with good advice about frugality (some of which is actually useful to people who don't already have a ton of money in the bank), in service of making him money via one of his not-jobs.
> Normal employee copays for a famils are in the $200-$400 per month range.
No. Maybe for one person, not a family. Yes, there are companies that deliver great benefits on health care (I'm at one) but they're exceptional. $2000 seems high, but $200-400 is low by at least half.
I agree. MMM is completely unhelpful for someone who is not already in a great position.
If you have great income and you want to retire early by saving on some big expenses, MMM probably has some good advice for you.
If you are relatively poor and you're trying to figure out how to pay off your student loans, fix your beater that you need to get to the office, and afford health insurance, while having essentially zero money left over, MMM's advice is essentially worthless. It's like telling a homeless guy with no jacket, "Why are you cold? Just put a jacket on."
I am a 3rd year dev living on 70k income. Wife works >20 hrs part time. 2 kids. I live in the US between the Rocky and the Appalachian mountains where the cost of living is reasonable. Things are tight, but solid.
$800/mo rent (4 bedroom house, .7 acres)
$800/mo debt, 2 car payments
$200/mo gas
$500/mo savings
$600/mo groceries
$500/mo utilities, phone, internet, streaming
$250/mo car, life insurance
Not even at 50k a year for essential expenses. It's doable. At 100k I'd have pretty much no financial worries, and at 200k, I'd have better problems to worry about. :)
Stop with the standard of living shaming. You're not convincing anyone and you're ignoring the fact that even if you adjust/account for that the issues being discussed here are the same. In other words you're just doing moral finger-wagging, not making a substantive argument.
The substantive argument is that people spend a lot of money on things they don't need, then complain that they don't have the money to cut their hours and earn less money (if that's even an option).
You're the one not making any substantive arguments by just calling it "shaming"
That's how we roll, too. I don't know how dual-earners do it. When the hell do you pick up the house, clean, pay bills, spend time with each other? Seems like it'd be an incredibly hectic way to live life.
