Show me the money
During lunch, my buddies (coworkers) and I talk about lots of random things and we argue about the most trivial stuff as well.
Today we had a debate on the following subject: Is $120,000 salary from a sole breadwinner enough for a family of 4 in NOVA area?
Of course, I said it is not sustainable. Although 120,000 is a lot of money, after tax and all the living expenses it just simply is not enough to afford the standard of living that we have as a single (not married) individual.
My friends were saying it is definitely doable saying that it's a lot of money and that if you "save" you can do it. I don't disagree with that though, but you'd have to let go of a lot of things/convenience if you were to pull that off.
Here's the financial that I had come up with.
The assumptions were
- Live in a single family home
- 2 cars, Honda Accord/Civic like (so the number is actually conservative
- Grocery from Costco cause we are all frugal
- Utility including electricity, heat, water, on average
- Phone for 2 people, TV and Internet (Triple Play)
- Baby stuff could cost a lot more, but let's say we are spending some from Grocery
- Other cost would catch tiny things I've missed like baby classes/sports, but these can add up really quickly
Even with this detailed enough model, my friends weren't agreeing, so we ended up talking to three other employees who all have family. They all agreed that this would be very tight, and you have to always watch your budget. In fact, 2 out of three people were dual earner family. Another one was a sole breadwinner and he told us it's going to be fxxxing tight.
I'm not here to paint a gloomy picture of my future when I start. But this makes me think some things.
- I need to make a lot more money upon my MBA + I'm going to have a shit ton of debt as well
- My wife better make a lot of money as well
- Life in U.S is a perpetual cycle of paying bills after bills
- How can I pay for my kids college if I'm not making much? Also, pretty amazing how my dad was able to pay for my and my sister's tuition
- America is too expensive
- Would I be able to live in Manhattan? With $2500, I get a 4 sqft cardboard box
- I really need to make a lot of money
- I really really need to make a lot of money
- And I can not get sick. Health is the most important asset
It was also interesting how people told me that they weren't thinking about this when they were our age. So it was relieving that we are ahead in terms of planning, but was also scary that the future isn't going to be all that rosy and easy.