I have a feeling that most people would be shocked that my partner and I make so little. In fact, she's the only one with an actual steady income right now, and we both have student loans this year too. I've become very good at saving money on food and activities, so we're definitely not deprived - we're just getting by pretty much.
They might be surprised how much I make for who I am working for. I am making a modest amount that a family of three or four could live off of and I only just started and live on my own(no family).
i dont think people would be shocked, as we all make around the same amount. but they are baffled as to "what is going on" with me, b/c i dont have all the luxuries they all are starting to acquire.
i just feel that i am blessed to make what i make, live in this country, and have no non-mortgage debt. i feel it is my obligation to take a shot at something, so i dont spend the money, as i am saving it for important things. more important than matching dishes, a new car, etc.
A new neighbor in the new condo development where I live recently shared with me that he was laid off from his job of $80,000 a year just a week after he closed on the condo and is now making half that amount driving a truck and just can't pay all of his bills (mortgage payment, car payment, etc.) without his old paycheck. I told him that I make about $40,000 a year, and I manage to pay my mortgage and car payments without too much pain (and I'm paying for grad school tuition now besides). It seems like people have a lot of expensive expectations about what it takes to be middle class these days, but I'm quite happy.
we were talking to a young couple at church about how she needed to keep working after their first baby was born. They'd only make 30,000 if she didn't, she said. I zipped my lips. But we make 30,000, own our home and car and we're a family of 4. What do they spend their $ on, I wonder. I'd like to have another 2-3 thousand per year. At this point, it is hard to save and live on so little.
Since I'm still in my mid-20s most people assume I still have high student loan debts and a car loan for my recent purchase. However, I'm debt free and choose to live frugally so I can spend my money on more important things. It works out nicely though since they think I'm poor we tend to go to more reasonably priced restaurants or do potlucks.
I like to see how people can think differently and apply frugality to business:
find inexpensive rent
use things for more than one purpose
collaborate with business owners and other creatives
give customers (students) what they want (okay that's not different maybe but a tried and true mechanism of doing something that pays the bills and aids the creative process but isn't purely creative)
While my husband and I live in a nice house, I drive a relatively inexpensive car and I have also turned couponing into an "Extreme Sport". Oh yeah, and I religiously scour Goodwill for furniture or secondhand clothes.
We probably are higher earners than other people think, but as we don't have kids, they figure out we're saving more, which is probably true. A newfound frugality has come over me this year, though. I've seen many friends laid off from their jobs, and the economy has been so thoroughly trashed recently that I simply can't justify paying $29 for a new sweater when I can buy one just as nice for $3.79 at a thrift store. Same for the furniture overhauls I've done. We've wanted a new coffee table for a long time, but inspiration struck and I refinished a $10 coffee table, another Goodwill find.
We're also extremely frugal as of late because our dog has had to have chemotherapy treatments, which while they aren't making us go into debt, have caused us to trim costs wherever we can. Eating out less, bringing our lunches more, etc.
There is a little-known rule with the IRS that if you are insolvent, you won't need to pay taxes on it. The IRS did a mail-in audit for me because their original auditor did not realize we were insolvent, but once I sent in the paperwork, all was good and I did not have to pay taxes on the forgiven debt.
My recommendation is to do the research yourself on it or speak to an tax accountant about the specific.
People are shocked by what my fiance and I can do with our incomes. I'm a grad student, which means I make $27K a year. In the Bay Area. My fiance makes about twice that, which is still not a high salary for this area.
What people are shocked about is that (1) we've saves $50K in the 4 years we've been in the Bay Area, and (2) we're about to buy a single family home in a nice part of Oakland. No one believes that a grad student has any business buying a home, and most of my student friends can't fathom the possibility, but it's because they spend most of their monthly paychecks on food, housing and travel, and we don't. We don't live like misers by any means (if we did, we'd have $100K saved), but we try to get the best value out of everything we do buy.
For us, it's all about delayed rewards. We think carefully about what we want and what we need to save to get it. We also never accrue finance charges on our credit cards, don't overdraw our checking accounts and pay things on time, which saves SO MUCH MONEY.
We constantly are shocked by how much people say they spend, how much debt people have and sometimes how much they make - even though they tell us they don't make enough and are always broke.
On the flipside, we definitely have much smaller incomes, smaller expenses and smaller amounts of debt than most of our friends (and some family members). But we are a frugal family. Even when we made twice what we make now, we spent the same amount and just saved the rest. We don't watch the same movie in the movie theater multiple times, buy a daily cup of coffee, buy random trinkets or do a lot of impulse buying - something we hear our extended family does on occasion. We also don't go out to eat a lot, buy much clothes or have any fancy (or new) cars. Some of those things just don't fit our personalities (or spending habits) and others we think would just be useless drains on our financial resources. What we do have though is have 6-8 months worth of emergency savings, no collectors calling us, a small repayment for school loans and more piece of mind than most people we know.
People would be surprised at what my husband and I make. They probably think my husband makes tons more and I make tons less. I work at home so many people equate that to no income at all. Its fine with me because people don't rush to ask to borrow money. Unfortunately, they ask my husband for money all of the time. They assume people in his position make millions. With 4 kids, a mortgage, some debt, and the cost of insurance they would be surprised.
I am so tweeting (@Tworkathome) this and I think this will make for a great discussion on a few message boards as well.
I've been working on being a more frual person for about 6 months or so. It's been a great experience so far... I have more money, less junk, etc. I started this journey to change my life - not to rip off other people. I would NEVER steal drinks, paint, umbrellas, or books.
Want to read a free book? Then go to the library (and NOT because you're there to rummage through their lost & found!)
Want a free drink - use a water fountain.
The folks I work with (govt employee) would be shocked at how much we make. The folks my husband works (law firm) with would be shocked at how little we make. My co-workers are aware of my frequent trips and my nice, although aging, car. My husband's co-workers all live in WAY more expensive houses, drive new and expensive cars, and spend $20k on stuff that we do ourselves for a 10th of that price.
Since there are so many online passport photo websites with very similar names it is very easy to mistake them. On my note I was referring to http://www.passportpictures.org
I am sure a lot of people are benefiting from your blog. Congratulations!
I earn a decent wage, but I live very frugally. However, I do splurge on things that I really want or need. So I'm not sure how others perceive me. If you pick one item out of my closet, it appears that I'm rolling in dough. But notice that I always pack a lunch, and then I'm pinching pennies.
Some people would be surprised I would think but very little amount of people ask at all. My boyfriend and I make perhaps a combined 18k a year living around the Milwaukee metro. We have a beautiful spacious apartment surrounded by trees but plunked a block away from a busy intersection. We eat out for at least 5 of the meals per week, see a movie at least once if not twice a week (and then rent a few movies from blockbuster too), attend shows (Broadway, plays, dances, operas, festivals) about every other month usually out of town whether it's a train ride to Chicago or side trip to Madison. We fly to places like Boston, Seattle, Washington DC, Toronto just because we can and just for a weekend to sightsee. We celebrated Xmas last year three weekends in a row with different presents each time and spent even more on books from Barnes and Nobles throughout the year.
This is an awesome thing-- leading a full experience lifestyle that is. I still manage to pay off all accumulated charges on my cc every month and even put money towards savings.
Have to agree with the comments that say it's still a good deal!
A factor that may weigh in your favor in regard to taxes is that debt foregiveness often occurs in years when income is minimal--which is one of the reasons a creditor might settle for less in the first place. If you're income was minimal you may only be in the 10 or 15% tax bracket.
$5000 in foregiven debt will only cost $750 in extra taxes if you're in the 15% bracket. That still leaves a net foregivess of $4250 ($5000 less the 750 in taxes). That's a deal no matter how you look at it.
Good post, though. I doubt most people are remotely aware of the tax consequences of debt settlments. It can be a nasty surprise when those 1099s start arriving in the mail.
Because I am an engineer and my fiance is a chef, most of our friends know that we bring in a lot of money, 6 figures between the two of us. All of them are surprised by how "crappy" our stuff is. We rent an apartment for $800 a month and live kind of cramped, our tv is not flat, our cars are not luxury brands, and even though I don't need to, we buy all of my high end clothing and accessories on Ebay to save money on those.
Our passion is traveling and that is where people can tell a difference. We go on week long vacations 2 to 4 times a year. Our friends go on vacation once every couple of years, or they have their parents pay for them.
A lot of our friends envy our self control and make jokes or comments about how cheap we are.
I'm pretty sure that many people would be surprised as to how much I make. Some people would probably think I make a good bit less than I do as I live pretty frugally (very frugally some would say). But there are others who are convinced that engineers are rolling in bucks and would be confused if they heard my actual salary figure.
This is a list of tips from readers of Wise Bread that I have collected since I started writing for the blog. I thought most of you would find this list interesting. I am in no way endorsing these, as you will know if you read the introduction. I'm sorry if anyone finds this offensive, the intent was to let you all into my world for a little while and see what comes across my inbox on a daily basis. If you want to put me on probation, that's fine. But don't punish the other writers, that's unfair and a little knee-jerk.
I have a feeling that most people would be shocked that my partner and I make so little. In fact, she's the only one with an actual steady income right now, and we both have student loans this year too. I've become very good at saving money on food and activities, so we're definitely not deprived - we're just getting by pretty much.
They might be surprised how much I make for who I am working for. I am making a modest amount that a family of three or four could live off of and I only just started and live on my own(no family).
i dont think people would be shocked, as we all make around the same amount. but they are baffled as to "what is going on" with me, b/c i dont have all the luxuries they all are starting to acquire.
i just feel that i am blessed to make what i make, live in this country, and have no non-mortgage debt. i feel it is my obligation to take a shot at something, so i dont spend the money, as i am saving it for important things. more important than matching dishes, a new car, etc.
A new neighbor in the new condo development where I live recently shared with me that he was laid off from his job of $80,000 a year just a week after he closed on the condo and is now making half that amount driving a truck and just can't pay all of his bills (mortgage payment, car payment, etc.) without his old paycheck. I told him that I make about $40,000 a year, and I manage to pay my mortgage and car payments without too much pain (and I'm paying for grad school tuition now besides). It seems like people have a lot of expensive expectations about what it takes to be middle class these days, but I'm quite happy.
This list is hilarious! Gave me a good laugh. :)
I've totally put a brick in my toilet before.
we were talking to a young couple at church about how she needed to keep working after their first baby was born. They'd only make 30,000 if she didn't, she said. I zipped my lips. But we make 30,000, own our home and car and we're a family of 4. What do they spend their $ on, I wonder. I'd like to have another 2-3 thousand per year. At this point, it is hard to save and live on so little.
Since I'm still in my mid-20s most people assume I still have high student loan debts and a car loan for my recent purchase. However, I'm debt free and choose to live frugally so I can spend my money on more important things. It works out nicely though since they think I'm poor we tend to go to more reasonably priced restaurants or do potlucks.
I like to see how people can think differently and apply frugality to business:
While my husband and I live in a nice house, I drive a relatively inexpensive car and I have also turned couponing into an "Extreme Sport". Oh yeah, and I religiously scour Goodwill for furniture or secondhand clothes.
We probably are higher earners than other people think, but as we don't have kids, they figure out we're saving more, which is probably true. A newfound frugality has come over me this year, though. I've seen many friends laid off from their jobs, and the economy has been so thoroughly trashed recently that I simply can't justify paying $29 for a new sweater when I can buy one just as nice for $3.79 at a thrift store. Same for the furniture overhauls I've done. We've wanted a new coffee table for a long time, but inspiration struck and I refinished a $10 coffee table, another Goodwill find.
We're also extremely frugal as of late because our dog has had to have chemotherapy treatments, which while they aren't making us go into debt, have caused us to trim costs wherever we can. Eating out less, bringing our lunches more, etc.
Did it work? If so, what ratio to water did you use?
There is a little-known rule with the IRS that if you are insolvent, you won't need to pay taxes on it. The IRS did a mail-in audit for me because their original auditor did not realize we were insolvent, but once I sent in the paperwork, all was good and I did not have to pay taxes on the forgiven debt.
My recommendation is to do the research yourself on it or speak to an tax accountant about the specific.
I think people would be shocked to know how much I'm worth... not how much I make. It's not a conversation that ever come up though.
People are shocked by what my fiance and I can do with our incomes. I'm a grad student, which means I make $27K a year. In the Bay Area. My fiance makes about twice that, which is still not a high salary for this area.
What people are shocked about is that (1) we've saves $50K in the 4 years we've been in the Bay Area, and (2) we're about to buy a single family home in a nice part of Oakland. No one believes that a grad student has any business buying a home, and most of my student friends can't fathom the possibility, but it's because they spend most of their monthly paychecks on food, housing and travel, and we don't. We don't live like misers by any means (if we did, we'd have $100K saved), but we try to get the best value out of everything we do buy.
For us, it's all about delayed rewards. We think carefully about what we want and what we need to save to get it. We also never accrue finance charges on our credit cards, don't overdraw our checking accounts and pay things on time, which saves SO MUCH MONEY.
We constantly are shocked by how much people say they spend, how much debt people have and sometimes how much they make - even though they tell us they don't make enough and are always broke.
On the flipside, we definitely have much smaller incomes, smaller expenses and smaller amounts of debt than most of our friends (and some family members). But we are a frugal family. Even when we made twice what we make now, we spent the same amount and just saved the rest. We don't watch the same movie in the movie theater multiple times, buy a daily cup of coffee, buy random trinkets or do a lot of impulse buying - something we hear our extended family does on occasion. We also don't go out to eat a lot, buy much clothes or have any fancy (or new) cars. Some of those things just don't fit our personalities (or spending habits) and others we think would just be useless drains on our financial resources. What we do have though is have 6-8 months worth of emergency savings, no collectors calling us, a small repayment for school loans and more piece of mind than most people we know.
People would be surprised at what my husband and I make. They probably think my husband makes tons more and I make tons less. I work at home so many people equate that to no income at all. Its fine with me because people don't rush to ask to borrow money. Unfortunately, they ask my husband for money all of the time. They assume people in his position make millions. With 4 kids, a mortgage, some debt, and the cost of insurance they would be surprised.
I am so tweeting (@Tworkathome) this and I think this will make for a great discussion on a few message boards as well.
I've been working on being a more frual person for about 6 months or so. It's been a great experience so far... I have more money, less junk, etc. I started this journey to change my life - not to rip off other people. I would NEVER steal drinks, paint, umbrellas, or books.
Want to read a free book? Then go to the library (and NOT because you're there to rummage through their lost & found!)
Want a free drink - use a water fountain.
Frugal isn't supposed to equal shady.
The folks I work with (govt employee) would be shocked at how much we make. The folks my husband works (law firm) with would be shocked at how little we make. My co-workers are aware of my frequent trips and my nice, although aging, car. My husband's co-workers all live in WAY more expensive houses, drive new and expensive cars, and spend $20k on stuff that we do ourselves for a 10th of that price.
Nora:
Since there are so many online passport photo websites with very similar names it is very easy to mistake them. On my note I was referring to http://www.passportpictures.org
I am sure a lot of people are benefiting from your blog. Congratulations!
Sharon
I earn a decent wage, but I live very frugally. However, I do splurge on things that I really want or need. So I'm not sure how others perceive me. If you pick one item out of my closet, it appears that I'm rolling in dough. But notice that I always pack a lunch, and then I'm pinching pennies.
Some people would be surprised I would think but very little amount of people ask at all. My boyfriend and I make perhaps a combined 18k a year living around the Milwaukee metro. We have a beautiful spacious apartment surrounded by trees but plunked a block away from a busy intersection. We eat out for at least 5 of the meals per week, see a movie at least once if not twice a week (and then rent a few movies from blockbuster too), attend shows (Broadway, plays, dances, operas, festivals) about every other month usually out of town whether it's a train ride to Chicago or side trip to Madison. We fly to places like Boston, Seattle, Washington DC, Toronto just because we can and just for a weekend to sightsee. We celebrated Xmas last year three weekends in a row with different presents each time and spent even more on books from Barnes and Nobles throughout the year.
This is an awesome thing-- leading a full experience lifestyle that is. I still manage to pay off all accumulated charges on my cc every month and even put money towards savings.
There isn't much on this list that a $79 Samsung Jack from AT&T can't do in comparison to the iPhone.
Nice to try and justify the $300 phone but there are cheaper paths to the same end result in the Windows mobile and even blackberry/palm arena.
Have to agree with the comments that say it's still a good deal!
A factor that may weigh in your favor in regard to taxes is that debt foregiveness often occurs in years when income is minimal--which is one of the reasons a creditor might settle for less in the first place. If you're income was minimal you may only be in the 10 or 15% tax bracket.
$5000 in foregiven debt will only cost $750 in extra taxes if you're in the 15% bracket. That still leaves a net foregivess of $4250 ($5000 less the 750 in taxes). That's a deal no matter how you look at it.
Good post, though. I doubt most people are remotely aware of the tax consequences of debt settlments. It can be a nasty surprise when those 1099s start arriving in the mail.
Because I am an engineer and my fiance is a chef, most of our friends know that we bring in a lot of money, 6 figures between the two of us. All of them are surprised by how "crappy" our stuff is. We rent an apartment for $800 a month and live kind of cramped, our tv is not flat, our cars are not luxury brands, and even though I don't need to, we buy all of my high end clothing and accessories on Ebay to save money on those.
Our passion is traveling and that is where people can tell a difference. We go on week long vacations 2 to 4 times a year. Our friends go on vacation once every couple of years, or they have their parents pay for them.
A lot of our friends envy our self control and make jokes or comments about how cheap we are.
I'm pretty sure that many people would be surprised as to how much I make. Some people would probably think I make a good bit less than I do as I live pretty frugally (very frugally some would say). But there are others who are convinced that engineers are rolling in bucks and would be confused if they heard my actual salary figure.
This is a list of tips from readers of Wise Bread that I have collected since I started writing for the blog. I thought most of you would find this list interesting. I am in no way endorsing these, as you will know if you read the introduction. I'm sorry if anyone finds this offensive, the intent was to let you all into my world for a little while and see what comes across my inbox on a daily basis. If you want to put me on probation, that's fine. But don't punish the other writers, that's unfair and a little knee-jerk.