Making $300k in San Francisco can still mean living paycheck-to-paycheck | Hacker News Reader

Making $300k in San Francisco can still mean living paycheck-to-paycheck

sfgate.com

44 pointsbcaulfield57 comments

This is absurd. Many of there expenses reflect nothing more than lifestyle inflation. There is nothing suprising about being able to find things to spend your whole paycheck on.

I was going to list my thoughts line by line but there isn't any deep social or philosophical insight to be gained here. Having expensive taste (a monthly budget of $2100 on food, $500 on clothes, etc) will drain a paycheck of almost any size. These are just self imposed taxes and society has no obligation to make these preferences more affordable.

If anything else can be said - and this may mostly just be personal preferences reinforced by learned frugality, but I am very skeptical of expensive tastes having 'real' merit wether practical (durability, construction, etc) or aestetic (pleasing to the eye, makes some social/political/economic commentary, etc). I don't have the philosophical background to frame my issue with this kind of lifestyle, but I have a hard time believing it's compatible with introspection and contemplation on one's self and society as a whole. I have always seen economic prosperity as the means move beyond material desire and focus more on producing something that has personal and/or lasting value.

I don't think this should be surprising.

How much you make has little to do with whether you live paycheck-to-paycheck. You can have a lot of expenses on non-discretionary things.

I don't think it's healthy as a society to be thinking of having kids as "lifestyle inflation." To me, it speaks more to the real crisis of urban centers like SF that have become so inhospitable to raising families due to terrible exclusionary housing policies that have crowded out middle income/upper middle income families.

> Many of there expenses reflect nothing more than lifestyle inflation

If your expenses don't reflect mostly “lifestyle inflation” but only strictly necessity in the modern first world, you’re either underclass or a voluntary ascetic; even the general working class (much less the middle or capitalist class) has that feature.

You can TLDR whole article to a meme tweet https://twitter.com/dril/status/384408932061417472

"Food $200

Data $150

Rent $800

Candles $3,600

Utility $150

someone who is good at the economy please help me budget this. my family is dying"

This is so silly.

New volvo xc90, "coach" instead of GUCCI.....I mean this whole article just makes me feel odd, but if you are living paycheck to paycheck when making over $200k above median wage you simply suck at budgeting. This is clearly the issue here.

No matter your income, if you live this way, one day your life will crumble and you will be left with nothing. Well maybe your 401k contributions but you will burn through those quickly.

Example: A guy I knew had a high position working for a bank before 2008 crash. Luxury cars, expensive home, cook that came to their house to make food, everything over the top. Crash came and with 0 savings, their marriage fell apart, lost cars, lost the house, kids stopped going to private schools. Plus, their rich friends no longer wanted to associate with them. It was quite something to watch.

The example is far from what most would consider paycheck to paycheck.

It includes significant retirement savings (maxed 401k, full life insurance, contributions to college fund).. in addition to owning a home. Not to mention the significant spending on food + clothes, vacations.

The difference is whether or not you're supporting dependents (a spouse or kids).

There are many, many single people making $200k+ and doing just fine. As soon as you add kids into the picture it's not "silly" at all and it shouldn't be dismissed as poor budgeting.

We need to stop blaming individuals and start recognizing that SF and California have created a housing crisis many decades in the making.

Yes housing is super expensive, but owning a house in a SF is not going to be cheap, it is a large city with people making very high wages.

I make half of that $300k, and I am living SUPER COMFORTABLY. Even if we consider the difference in housing cost, the person in the article is simply blowing through cash. It seems like they have zero understanding of what saving is. They are trying to live as someone wealthy.

This article perfectly describes someone "living beyond their means".

The xc90 was removed from the original blog post, presumably before your comment.

https://www.financialsamurai.com/living-a-middle-class-lifes...

5.5K on their living (mortgage + property tax) eats all of their income. not surprised. 800$ a month car payment. 2100$ a month on food...i feel like if they at the very least tried to be somewhat frugal, they can probably save a ton.

this is sort of the epitome of when people tell you that there are different kinds of rich people. the secret rich who do very frugal things and have a ton of money, and drive civics. and then the poor rich who drive volvos, have giant houses and spend every penny.

if one of them lost their job, theyd be completely screwed. this sort of mentality eats at you knowing you cant quickly jump ship if your job sucks, and then ultimately it starts making you depressed knowing youre just...stuck. and then it can start eating at your personal life. i speak from experience (i.e my parents)

This, so much of their budget is discretionary for the lifestyle they want to have vs the lifestyle that would let them save.

Atleast they’re contributing to 401k.

$500 on clothes a month... $120,000 on clothes over the next 20 years :thinking:

wow i didn't even notice the 500 on clothes a month. holy crap

Happens when you have kids. Especially when they are < 5 yrs or > 13

There's no way this is true. I had 2 kids and between yard sales, Old Navy and WalMart there's no way you could spend $500 a month unless you're buying high end, designer clothes and new Air Jordan's every month.

In urban areas, where you can have a decent social network with a minimum amount of effort and everybody's trying to get rid of their kids' old baby stuff because they have no space in their home?

My toddler is set until he's 3, and we didn't pay a cent for clothes; he's in 100% hand-me-downs. Had so much that my wife started a "clothing library" to lend out the stuff he wouldn't need for another 1-2 years. We just gave a bunch of his newborn stuff to another couple that's having their second shortly; they gave him a bunch of their first's when she outgrew them.

I've raised three kids to adulthood. Kids absolutely should not be blamed for such incredible poor impulse control and budgeting.

Hey, but they chose "coach instead of Gucci", so they are doing what they can to be frugal.

So I think you missed the point of the article, this is a very modest "middle class" kind of budget. Yes you could save a little more here and there, but the point is to have even a modest lifestyle in San Francisco you would need to be making 300k a year. Even if you cut back on a few of the discretionary categories ( food, car, 401k, ... ) and lived like a miser you are going to have 20k of disposable income a year. Like you said that still means you need to have two incomes, and two really well paying incomes.

I think the point the author is getting across is that due to the exteremly high fixed costs of living almost anywhere in the country ( but specifically in big coastal cities ), its impossible to have that kind of "middle class" lifestyle that was the majority of the population in these places a few decades ago.

A Volvo XC90 is not "modest middle class." It's a luxury vehicle. And a car payment that high is insane.

300k is usually considered to be upper middle class, if not upper class. The threshold for being in the top 1% of earners is 420k (https://www.cnbc.com/2018/07/19/what-you-have-to-earn-to-be-...).

> 300k is usually considered to be upper middle class, if not upper class. The threshold for being in the top 1% of earners is 420k

If being an “earner” is a major source of your income, you aren't in the upper class (haut bourgeoisie) in a capitalist society.

If being an “earner” is the major source of your income, you aren't in the middle class (petit bourgeoisie) either, just a (potentially highly paid) member of the proletariat—a wage laborer—even if you might happen to be from the proletarian intelligentsia rather than a manual laborer.

You can’t have absolute salary numbers be attached to a lifestyle since 300k/year is like Royalty in Virginia but just “comfortable” in SF or NYC.

Your right, so go ahead and get a more modest car, save 600 a month, or 7200 a year, That will buy you exactly two weeks of living expenses per year you could save. Do the same with food and save another 1300 a month and you can get up to six week of expenses saved per year. Then if you manage to do that for five years straight you will have the six month cushion that you should have in savings, and this is on a salary that would put you in the top five percent of all earners in the country.

Think about that this is the best case scenario for people making more then 95% of all other Americans, and we are having a discussion if they should be able to drive a Volvo, or eat more then beans and rice. The point your missing is that to even have that discussion you need to be in the top 5th percentile. How are the other 95% of people making ends meet?

i understand the point -- that SF is ludicrously expensive. however that point is muddled when you see the budget breakdown. show me a reasonable budget where youre not spending 6K a year on CLOTHES and then i'll be better suited to argue the original point of the article

Just reviewed our family food budget for two adults and two children in the Bay Area.

Over the last six months we have never spent that much on food, and have months where we have spent less than half of that.

I don't have kids but live on the peninsula. My wife cooks everyday and we mostly shops at Sprouts. Our monthly food budget is $400 and I would say I eat better than I would at my companies on campus food. If I has kids I would up that to $800 (though kids would probably eat less than I do per plate). So $2100 seems like a lot of eating out.

Weekly, as noted on that spreadsheet.

Wow, this is truly eye-opening.

Budgeting $7200/yr for entertainment, $8400/yr for a luxury car, $7800/yr for vacation and $25000/yr for food.

Whomever made that budget certainly made the decision to live paycheck-to-paycheck.

Nobody made that budget. It's a reactive thing ("wow, look what I've spent! How did that happen?") instead of planning for it.

I wouldn't be surprised (but feel free to correct me) if the vast majority of people in that income bracket don't have an up-front defined budget. My wife and I definitely never have. The only time we really gave it a look was when we had to decide on an acceptable mortgage payment.

The overall point of income, lifestyle, and cost of living are related is valid.

The home I live in is a good example. I'm just a couple minutes drive away from a huge lake (over 800 miles of shoreline), have a 4 bedroom home on 4 acres of forested land and one acre of lawn, and I'm surrounded by a few thousand acres of public land and millions of acres of public land are within a 1-2 hour drive.

The home and property is probably only worth around 200k. Average income is just under 40k here. But, the quality of life is comparable to Malibu, CA, on the beach or within a 10 minute walk.

I've lived in Malibu, so I have the experience to compare the two places, and in most every way the quality of life here is much better.

I've visited San Francisco. I would not trade what I've got for what's described in the article. It would be a significant downgrade.

Sorry but there's a reason suburbs exist. When you get slightly older and you want more space to raise a family and want a safe area you move to the suburbs. Also I'm not American so I don't know, but 2100 bucks on food sounds like a lot in a month. My wife and I live on probably $600.

Also just from a budgeting perspective when you say

> Entertainment (Netflix shows, sporting events, social functions, w/e getaways)

You need to be more explicit with where your spending comes from, because that budget is $600/month of with 1.6% is going to netflix.

Reading between the lines ("Coach instead of Gucci") this is the budget of a high-income couple keeping up with Joneses who were forced to cut into into their discretionary spending ("Gap instead of Armani") when they had two kids.

Clickbait, contrived nonsense. If housing is taken care of, the real minimum-viable wage for San Francisco is $35k/year. Anything beyond that is either exorbitant discretional living beyond one's means and/or overpaying. Housing is insane in most of SF with rooms approaching $6k/month, which would necessitate an income of around $200k/year. There's no need to live in SF, and it maybe untenable and illogical to do so without commensurate income for the majority of people. Live elsewhere and save money, don't just bid into a bidding war because everyone else is.

Since everyone else tore this apart already, I think it's valuable to note that this is taken from some random guy's personal blog, who has an interest in driving traffic to his website.

Since the picture itself doesn't give any advice on how to actually reduce said costs and the couple is probably entirely hypothetical, I can only deduce that this whole thing was created to generate outrage and direct views of their personal blogspam website.

In other words, this is nothing more than clickbait.

They're saving $4,000 / month. That's not living paycheck to paycheck. That's the average american household income going straight to savings.

$4,000/mo is $48k/yr; median household income is around $60k, mean around $73k in recent years; there is no sense in which $48k is “the average American household income” (it is a sizable chunk to savings annually, but not average household income.)

They are saving what that income would be after taxes. That's not the point.

The point is that this is in no possible way closer to "paycheck to paycheck" than "saving an entire family's worth of money".

Living 'paycheck to paycheck' on anything above the bottom tier of full-time job is solely a matter of budgeting.

It comes down to the choice to simply live as if you earned less. You can do that down to a very low number indeed.

If you earn 1500 pounds per month, and live as if you earn 1200, within five months you're one month ahead.

Does it take discipline to do so? Sure. Fundamentally though, if you were earning 1200, you'd be absolutely forced to do it. So just do it.

I'm well aware that SF is an expensive place. It's not an order of magnitude more than London.

The poster could obviously and trivially live on 100K and stash whatever the other 200K is post tax away.

The minimum figure in London I'd say is about 800 per month. Maybe 900. Below that you're going to struggle to get to work. 10K a year. Above that you could save it all _if you wanted_. Most people don't.

The 401k numbers indicate that this is a two income household. Including the home equity they are saving at a 20% savings rate, which is much higher than most. Good savers are typically in the 10% range

To be more typical, computer with an interest only mortgage, or contributions of less than 12% annual gross to the 401k.

So many folks tearing this article apart. I think the point here is that $300k, which the vast majority of income earners will never achieve and whom many in the middle class would consider “rich”, is not actually true wealth.

If anything this article points out the true problem with society - the vast and growing income disparity between the “rich” and the truly rich. There are plenty of folks who can eat every meal out, buy Ferrari’s and shop at Gucci without batting an eye, and despite outrageous expenses grow their savings tremendously per year.

https://www.salon.com/2016/04/14/the_1_percent_are_the_real_...

>$2,100 on food

No way these guys are going to any reasonable grocery store or even a farmers market, they are probably eating out twice a day at that rate, especially in the US where you can easily feed a family of 4 for a week under $100 in groceries.

4 to 5 times dining out with the family at $25 per head: $400.

A latte for 2 at Starbucks every day + the occasional croissant: $400.

Sponsored lunch at work for 2 during the week at $7 per: $300.

With the remaining $1000, you still need to cover breakfast every day and evening dinner for a family of 4.

You don't need to eat out at a fancy place twice a day to get there at all.

Eating out 5 times a month is a luxury though. Buying coffee out *every day" is also a luxury lifestyle choice. It seems pretty callous to describe that as living paycheck to paycheck; especially given the kind of budgeting some people do.

Sure, but it's not nearly as extravagant as "they are probably eating out twice a day at that rate" (if you don't count lunch at the restaurant at work as "eating out".)

It's a pretty normal behavior for an upper middle class family.

> 1,750-square-foot, three-bedroom

Who the hell thinks having a 1750sqft home inside a city is “being middle class”

> Who the hell thinks having a 1750sqft home inside a city is “being middle class”

Someone who understands the difference between middle class in a capitalist economy and middle income (the latter of which is deep within he working class in most cases, though income and economic class don't perfectly correlate.)

Though, really, the article doesn't seem to be using middle class to mean either middle income or petit bourgeois, but instead “meets a status checklist that was broadly promoted as a suburban ideal in the height of White working class prosperity in the 1950s-1970s.” (A status ideal which included denying being in the working class, which certainly was just a coincidence with no connection to the fear of Communist activity focussing on developing a common class consciousness across the working class.)

Most people who own such houses have mundane occupations and average paychecks. They only got expensive recently.

Most middle class don't have them, so still not average in context.

Middle class is often defined by homeownership; this seems like an argument about definitions.

The definition you're using has heavy suburban connotations though, and ignoring location doesn't make any sense when talking about real estate. Living in the urban core has never been a marker of the middle-class, and the fact that the political entity of the City of San Francisco happens to be mostly urban core doesn't change that at all. These people could easily have dramatically reduced housing costs if they weren't making the consumption decision to live in the suburbs of said urban core.

Typical middle class suburbs come with ~30 minute commute times. From downtown SF, that still puts you well within the urban core. Maybe Oakland's urban core when BART works.

Living in the Bay Area's suburbs is more like living in the next metro area over from your job, i.e. Milwaukee to Chicago.

That's a very good point. I'll have to think about it

No. It can mean you save “only” a few tens of thousands a year, which will never get you anywhere near homeownership, but you can certainly rent a nice luxury apartment, max your 401k, and swipe your credit card freely all at the same time with plenty to spare.

My understanding is that this is a load of . Basically, if you make 300k and live in a modest room (especially if you buy a modest condo with fiends), you can leave SF with over half a million in 5 years.

This article is about someone with a family that needs more than a room or condo with friends. If you are in the situation where you can live in a condo with friends then you will do a lot better. Raising a family and owning a home dramatically raises expenses.

well, if you chose not to have kids and an 800k apartment, it will be totally different.

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