I'm 23. I believe I live a frugal lifestyle. Actually, I could cut out so much more and live on beans and rice but I choose not to. I am a year out of college. No student debt. No credit card debt. And 30k in savings and investments. I rent a room in a really nice house for $450 including everything. I make a very low $2,000/ month($24,000/yr). To most people that would be crazy low. I spend $40/week on food, $30/wk on gas, $100/month on entertainment. That leaves me $1,170 for a month to do whatever with (save, invest, etc.) I plan on doubling my income within a year and not increasing my spending.
I have to admit that I don't have any dependents and that's a big plus. It would be so much harder with a kid.
My friends (of the same age) are deeply in debt. They make fun of me for being "cheap". Sometimes it gets to me and I may buy something, but most of the time I stick to my goal. Today my one friend that is in debt with a new baby is going out to look at a brand new car. I tried to counsel him but they won't listen.
I think people would be surprised more not by how much we make, but by how much we put into our 401(k). I think our friends know we both have good paying jobs, but we also carry student loans/mortgage/and a little bit of credit card debt (of course we're working on paying that down!). We make it pretty obvious that we try to puchase items with cash only - we've lived in our house for three years and our living room furniture is still lacking, but hey, that's okay.
We live in one of the biggest cities in California, and comparatively speaking we make large salaries (well, compared to our families, who live in rural areas of small east coat states), however we also have a large mortgage payment since the housing market is so expensive, and pay more for things like gas. To our families we appear to live the same lifestyle that they do (solid middle class - 1000 square foot house, IKEA and thrift store furnishings, modest holiday gifts, ect...) but in reality if you just look at the numbers on our paychecks without factoring in cost of living expenses we would appear to be rich by their standards. Compared to others in our area we are probably middle class though, considering that I stay at home with the kids and we are only on one income (but I believe that our one income is more than both of my parent's incomes added together). The important things (like others have mentioned) is that we are debt free (except for the mortgage), have a 6-month savings cushion, and that we live below our means.
If you want to be cheap and save money, just cook the same recipes you would buy at the restaurant and you will save a ton of money. Just follow these restaurant recipes and your tip can go to your children if they wash the dishes.
Yes the credit card company can issue the cancellation debt form to you. The problem is that they do it when they cancel the debt off their books. And there is no time limit. Even if your debt was canceled this year, the year they cancel the debt could be next year, or even 5 years from the debt cancel year. It could come in any year, but it will probably come. The tax is due for the year you receive the form, not the year the debt is reduced.
I think my friends might be surprised to know what I make. That might partially be because I'm an admin and there's a definite stigma attached to that job (though I do it because it's easy and affords me time to devote to my artwork--see? enough of a stigma that I felt I needed to explain myself). I make enough money to live on, surely. But I manage money very poorly, something I've been diligently trying to remedy with some success. (Baby steps.)
But Daisy points out that her friends would be more surprised at the amount of her debt--I think that's what would really shock each and every one of us: who owes what. My debt would shock people. (Daisy, I'd trade you in a heartbeat, but karma would kick my ass for saddling you with my debt.) I'm also contributing to my 401(k) pretty heavily, as well as my Flexible Spending account, and my ING savings.
While I don't have much in the way of designer duds, I'm an art and art-supply fanatic. That's probably where a goodly chunk of my debt comes from. (I've implemented a "use everything you have--no more buying until it's all gone--ALL OF IT" policy, which is helping a LOT.) I'm also in Houston (Hi Daisy!) but I got incredibly lucky with an awesome 1,000 sq. foot condo that I've been renting for years. I actually worked a deal with my landlord to lock me in at my current, ridiculously low rent, in exchange for me footing a couple of upgrades on the unit. Okay, so it was my dad's idea. And he wants to make the upgrades for me. I'm along for the ride.
Whoa, I'm rambling. Sorry about that!
Short version: Shock and awe. And another H-town gal representing!
The people close to us know we bring home good paychecks. So, we catch a lot of flack for living so far below our means. Our income increase happened quite suddenly, so we still participate in a socioeconomic class that lives on about 20%-40% what we make. We still have the smallest TV and oldest car of anyone we know, live in the cheapest zip code in the city, pay only in cash, and know where every dollar goes. I think our frugality makes our cohorts feel guilty at times, which causes them to give us a hard time about it.
It's about living incognito. I really enjoy driving my $6,000 beater with 110K miles and 9 years of life already. It's the excitement of showing you have very little, even though you can afford more.
People are almost always shocked when they learn how much my husband and I make.
To start, for an executive assistant, I make a pretty hefty salary, which most people do not expect. Combine that with the fact that we live very modestly despite our 6-figure plus income, the majority of our friends and acquaintances are usually surprised to hear how much we actually make.
I live in a 700-something sq foot bedroom apartment in a ritzy area, about 5 minutes downtown from Houston, Texas.
I am often seen toting around a Coach or Kate Spade bag, Stuart Weitzman shoes, and D&G sunglasses.
I am 26 years old and I make 45k a year.
The merchandise in which I am seen sporting is the reason I am in a $1300 of debt, the reason why I am reading your blog now, the reason I no longer use credit cards, and the reason why I obsessively watch every penny that leaves my checking account.
Seeing that so many people live in a crecit card centered universe, I don't think that people would be surprised that by my income; they would think I just finance everything else. And they used to be right.
But the thing I think they'd be VERY surprised now is the fact that I contribute 18% of my paycheck to 401k, 10% automatically to my high yield savings account, and $200 systematic investment to a fairly aggressive mutual fund.
I think a better question would be to ask, would people be surprised by the amount of debt that you are in? Or would people guess that you are in debt? Because I constantly find myself surprised by the amount of debt people are hiding these days.
We definitely do not live according to our salaries. I work for a drug company and I feel I make good money. We live very frugally. We don't go out to eat, I clip coupons and shop sales - why pay more for something if you don't have to!
My car has over 150,000 miles and hubby's has over 250,000 miles and there's nothing new in the future!
We love our life and would not change a thing about it!
As a school speech therapist, I am paid on the teacher's salary, which is notoriously low. However, many speech therapists in private settings or medical settings are paid significantly more. So, maybe it is a little shocking that I am a speech therapist on a teacher's schedule.
However, I am fairly content with my teacher's salary, but I live in a wealthy county in Virginia with good benefits. So I am shocked that people complain so much about the little money teachers make, at least in my county. (I was just talking with a school aid who makes about 1/3 my salary, and she puts up with A LOT!)
I think paying taxes on the 60% of what is being forgiven is still a great deal. I think having your cake and eating it too is out of the question. If the IRS takes 30% of the windfall, so be it. You are still better off then when you started.
If the point of the article was as a heads-up for tax time, then good job. Another heads-up should be all those people who used the cash-for-clunkers program and don't realize they have to pay taxes on that too.
I think an even better article, would be a revised version, with legal and ethical alternatives to many of those 51 tips. Sure was a good laugh though. Thanks, Paul!
Are most of these supposed to be jokes? Especially No. 3, I think it is, about using statements for toilet paper? I can't help but think that is KILLING the environment, due to the extra processing such paper would mean. Not to mention, you're probably not doing your plumbing any good.
I think about the unplugging of appliances. How much time do you spend in the morning resetting all the clocks involved?
I'm all for saving money and getting out of debt. Lots of other people are, which is why there's a wealth (haha) of advice out there, on web sites such as this one, and lots of books. Check out Financial Purity for great tips on understanding how people get into debt, the best ways out of debt, understanding the basic Biblical principles on money and how to develop your own money vision, etc. etc. Great common sense advice -- and it doesn't include using nasty stuff as toilet paper!
This is great information for anyone who is struggling with credit card debt. It can be overwhelming and finding a way to get back on your feet without completely ruining your credit isn't easy. Thank you for this information.
These are hilarious, they're quite funny. I'm assuming that if one followed all of these tips, they'd be quite the character. I can see where collecting these tips one by one doesn't make the person offering the tip seem unusual, but seeing them all together is quite interesting.
thanks for the collection of oddball tips-
Little House
In a progressive tax system, such as in the US, the tax on forgiven debt will always, always, always, be less than the amount of "income". It's not like the $600 in forgiven debt will cost you $50,000 in taxes.
Regardless, the tax on whatever is forgiven will always be less than the forgiven debt itself. Granted, if you don't have the money to pay the debt means you probably don't have the money to pay the taxes on the forgiven debt but the end dollar amount will be cheaper.
It may be hard to balance in yoru 20s when you aren't making much, but it certainly is easier to do it while you are still childless. Now that I'm in my 40s, I wish I'd done more travelling in my 20s!
I can't believe some of the items on this list! I'm all for saving a buck, but stealing from graves? Or, apparently just about anywhere from the local hardware store to the corner bar. I agree, though. You don't have to pay a lot of money if you're a career thief. But incarceration sure sucks!
I'm 23. I believe I live a frugal lifestyle. Actually, I could cut out so much more and live on beans and rice but I choose not to. I am a year out of college. No student debt. No credit card debt. And 30k in savings and investments. I rent a room in a really nice house for $450 including everything. I make a very low $2,000/ month($24,000/yr). To most people that would be crazy low. I spend $40/week on food, $30/wk on gas, $100/month on entertainment. That leaves me $1,170 for a month to do whatever with (save, invest, etc.) I plan on doubling my income within a year and not increasing my spending.
I have to admit that I don't have any dependents and that's a big plus. It would be so much harder with a kid.
My friends (of the same age) are deeply in debt. They make fun of me for being "cheap". Sometimes it gets to me and I may buy something, but most of the time I stick to my goal. Today my one friend that is in debt with a new baby is going out to look at a brand new car. I tried to counsel him but they won't listen.
I think people would be surprised more not by how much we make, but by how much we put into our 401(k). I think our friends know we both have good paying jobs, but we also carry student loans/mortgage/and a little bit of credit card debt (of course we're working on paying that down!). We make it pretty obvious that we try to puchase items with cash only - we've lived in our house for three years and our living room furniture is still lacking, but hey, that's okay.
We live in one of the biggest cities in California, and comparatively speaking we make large salaries (well, compared to our families, who live in rural areas of small east coat states), however we also have a large mortgage payment since the housing market is so expensive, and pay more for things like gas. To our families we appear to live the same lifestyle that they do (solid middle class - 1000 square foot house, IKEA and thrift store furnishings, modest holiday gifts, ect...) but in reality if you just look at the numbers on our paychecks without factoring in cost of living expenses we would appear to be rich by their standards. Compared to others in our area we are probably middle class though, considering that I stay at home with the kids and we are only on one income (but I believe that our one income is more than both of my parent's incomes added together). The important things (like others have mentioned) is that we are debt free (except for the mortgage), have a 6-month savings cushion, and that we live below our means.
I don't think that they would be shocked by my salary but I am often shocked by other people's salaries.
If you want to be cheap and save money, just cook the same recipes you would buy at the restaurant and you will save a ton of money. Just follow these restaurant recipes and your tip can go to your children if they wash the dishes.
Yes the credit card company can issue the cancellation debt form to you. The problem is that they do it when they cancel the debt off their books. And there is no time limit. Even if your debt was canceled this year, the year they cancel the debt could be next year, or even 5 years from the debt cancel year. It could come in any year, but it will probably come. The tax is due for the year you receive the form, not the year the debt is reduced.
I think my friends might be surprised to know what I make. That might partially be because I'm an admin and there's a definite stigma attached to that job (though I do it because it's easy and affords me time to devote to my artwork--see? enough of a stigma that I felt I needed to explain myself). I make enough money to live on, surely. But I manage money very poorly, something I've been diligently trying to remedy with some success. (Baby steps.)
But Daisy points out that her friends would be more surprised at the amount of her debt--I think that's what would really shock each and every one of us: who owes what. My debt would shock people. (Daisy, I'd trade you in a heartbeat, but karma would kick my ass for saddling you with my debt.) I'm also contributing to my 401(k) pretty heavily, as well as my Flexible Spending account, and my ING savings.
While I don't have much in the way of designer duds, I'm an art and art-supply fanatic. That's probably where a goodly chunk of my debt comes from. (I've implemented a "use everything you have--no more buying until it's all gone--ALL OF IT" policy, which is helping a LOT.) I'm also in Houston (Hi Daisy!) but I got incredibly lucky with an awesome 1,000 sq. foot condo that I've been renting for years. I actually worked a deal with my landlord to lock me in at my current, ridiculously low rent, in exchange for me footing a couple of upgrades on the unit. Okay, so it was my dad's idea. And he wants to make the upgrades for me. I'm along for the ride.
Whoa, I'm rambling. Sorry about that!
Short version: Shock and awe. And another H-town gal representing!
The people close to us know we bring home good paychecks. So, we catch a lot of flack for living so far below our means. Our income increase happened quite suddenly, so we still participate in a socioeconomic class that lives on about 20%-40% what we make. We still have the smallest TV and oldest car of anyone we know, live in the cheapest zip code in the city, pay only in cash, and know where every dollar goes. I think our frugality makes our cohorts feel guilty at times, which causes them to give us a hard time about it.
I think people wouldn't be too surprised. We have a mortgage, car loans and student debt, but all in reasonable proportions to our income.
It's about living incognito. I really enjoy driving my $6,000 beater with 110K miles and 9 years of life already. It's the excitement of showing you have very little, even though you can afford more.
Linsey, I'm glad you're back.
People are almost always shocked when they learn how much my husband and I make.
To start, for an executive assistant, I make a pretty hefty salary, which most people do not expect. Combine that with the fact that we live very modestly despite our 6-figure plus income, the majority of our friends and acquaintances are usually surprised to hear how much we actually make.
I live in a 700-something sq foot bedroom apartment in a ritzy area, about 5 minutes downtown from Houston, Texas.
I am often seen toting around a Coach or Kate Spade bag, Stuart Weitzman shoes, and D&G sunglasses.
I am 26 years old and I make 45k a year.
The merchandise in which I am seen sporting is the reason I am in a $1300 of debt, the reason why I am reading your blog now, the reason I no longer use credit cards, and the reason why I obsessively watch every penny that leaves my checking account.
Seeing that so many people live in a crecit card centered universe, I don't think that people would be surprised that by my income; they would think I just finance everything else. And they used to be right.
But the thing I think they'd be VERY surprised now is the fact that I contribute 18% of my paycheck to 401k, 10% automatically to my high yield savings account, and $200 systematic investment to a fairly aggressive mutual fund.
I think a better question would be to ask, would people be surprised by the amount of debt that you are in? Or would people guess that you are in debt? Because I constantly find myself surprised by the amount of debt people are hiding these days.
We definitely do not live according to our salaries. I work for a drug company and I feel I make good money. We live very frugally. We don't go out to eat, I clip coupons and shop sales - why pay more for something if you don't have to!
My car has over 150,000 miles and hubby's has over 250,000 miles and there's nothing new in the future!
We love our life and would not change a thing about it!
As a school speech therapist, I am paid on the teacher's salary, which is notoriously low. However, many speech therapists in private settings or medical settings are paid significantly more. So, maybe it is a little shocking that I am a speech therapist on a teacher's schedule.
However, I am fairly content with my teacher's salary, but I live in a wealthy county in Virginia with good benefits. So I am shocked that people complain so much about the little money teachers make, at least in my county. (I was just talking with a school aid who makes about 1/3 my salary, and she puts up with A LOT!)
This article seems to defy logic.
I think paying taxes on the 60% of what is being forgiven is still a great deal. I think having your cake and eating it too is out of the question. If the IRS takes 30% of the windfall, so be it. You are still better off then when you started.
If the point of the article was as a heads-up for tax time, then good job. Another heads-up should be all those people who used the cash-for-clunkers program and don't realize they have to pay taxes on that too.
I'm so blatantly middle class it's not even funny.
I think an even better article, would be a revised version, with legal and ethical alternatives to many of those 51 tips. Sure was a good laugh though. Thanks, Paul!
Are most of these supposed to be jokes? Especially No. 3, I think it is, about using statements for toilet paper? I can't help but think that is KILLING the environment, due to the extra processing such paper would mean. Not to mention, you're probably not doing your plumbing any good.
I think about the unplugging of appliances. How much time do you spend in the morning resetting all the clocks involved?
I'm all for saving money and getting out of debt. Lots of other people are, which is why there's a wealth (haha) of advice out there, on web sites such as this one, and lots of books. Check out Financial Purity for great tips on understanding how people get into debt, the best ways out of debt, understanding the basic Biblical principles on money and how to develop your own money vision, etc. etc. Great common sense advice -- and it doesn't include using nasty stuff as toilet paper!
This is great information for anyone who is struggling with credit card debt. It can be overwhelming and finding a way to get back on your feet without completely ruining your credit isn't easy. Thank you for this information.
These are hilarious, they're quite funny. I'm assuming that if one followed all of these tips, they'd be quite the character. I can see where collecting these tips one by one doesn't make the person offering the tip seem unusual, but seeing them all together is quite interesting.
thanks for the collection of oddball tips-
Little House
as everything that's contrevertial this article is interresting. in it'way....:) thanks anyway Paul!
In a progressive tax system, such as in the US, the tax on forgiven debt will always, always, always, be less than the amount of "income". It's not like the $600 in forgiven debt will cost you $50,000 in taxes.
Regardless, the tax on whatever is forgiven will always be less than the forgiven debt itself. Granted, if you don't have the money to pay the debt means you probably don't have the money to pay the taxes on the forgiven debt but the end dollar amount will be cheaper.
It may be hard to balance in yoru 20s when you aren't making much, but it certainly is easier to do it while you are still childless. Now that I'm in my 40s, I wish I'd done more travelling in my 20s!
#38 is by far the only feasible and honest tip. My Well Of wealth
I can't believe some of the items on this list! I'm all for saving a buck, but stealing from graves? Or, apparently just about anywhere from the local hardware store to the corner bar. I agree, though. You don't have to pay a lot of money if you're a career thief. But incarceration sure sucks!