Author Topic: $35k in debt is no reason to stop dropping $100/week in restaurants.  (Read 4835 times)

MgoSam

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Re: $35k in debt is no reason to stop dropping $100/week in restaurants.
« Reply #50 on: October 12, 2017, 11:54:45 AM »
These ladies, most of them wouldn't tip, either. It was embarrassing. One of them would only tip one dollar, no matter how much the food or service cost.  She'd spend $30 on lunch and tipped one dollar. This makes no sense. The person decides it's okay to spend $30 on lunch, but then decides they can't afford to tip more than $1.00?  It does not make sense.
I have seen that with people. Mostly acquaintances or co-workers. I end up adding more to the tip to make it 15-20%. Then I make a note never to go out with that person again. Small price to pay for an insight into someone.

Agreed! I've never worked for tips but that doesn't mean I can't appreciate how difficult a job it is and tip them well. People that don't are people that I try to avoid associating with. I had one guy tell me that he "doesn't believe in tipping," and I responded with, "Then I believe you should stick to fast food." He later wondered why I stopped inviting him out to things and I told him. It isn't just about the money, it's the respect that you are showing other people.

TheGrimSqueaker

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Re: $35k in debt is no reason to stop dropping $100/week in restaurants.
« Reply #51 on: October 12, 2017, 11:59:45 AM »
These ladies, most of them wouldn't tip, either. It was embarrassing. One of them would only tip one dollar, no matter how much the food or service cost.  She'd spend $30 on lunch and tipped one dollar. This makes no sense. The person decides it's okay to spend $30 on lunch, but then decides they can't afford to tip more than $1.00?  It does not make sense.
I have seen that with people. Mostly acquaintances or co-workers. I end up adding more to the tip to make it 15-20%. Then I make a note never to go out with that person again. Small price to pay for an insight into someone.

Agreed! I've never worked for tips but that doesn't mean I can't appreciate how difficult a job it is and tip them well. People that don't are people that I try to avoid associating with. I had one guy tell me that he "doesn't believe in tipping," and I responded with, "Then I believe you should stick to fast food." He later wondered why I stopped inviting him out to things and I told him. It isn't just about the money, it's the respect that you are showing other people.

I like your approach. I think it's the only one that stands a chance of influencing the guy's behavior. If he doesn't want to participate in tipping culture he's entirely within his rights, but he needs to *completely* not participate in it by avoiding the kind of services for which tips are customary.
I squeak softly, but carry a big schtick.

Dragonswan

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Re: $35k in debt is no reason to stop dropping $100/week in restaurants.
« Reply #52 on: October 12, 2017, 12:03:40 PM »
His salary: $500/week * 52 week/year = $26,000
Her salary: $70,000, hopefully $100,000 in less than 1 year

So calculating for right now: $70,000 + 26,000 = $96,000

Lets take off 35% for taxes (I'm assuming high city taxes here, just to be conservative) = $62,400

$3k/mo in living expenses = $36,000

$62,400 - $36,000 = $26,400 net per year

Something tells me restaurants are not the problem here. It's spending on spendypants level. But somehow they need more income?! Can someone tell me when we lost our minds and decided almost $100k/year is not enough?!

Something also tells me I should apply to be a mint column advisor, because she should have given more facepunches in her assessment of their financial picture.

 Let's see:
Fed tax 25%
NYS tax 6.45%
NYC tax 3.648%
FICA  7.65 %
That's 42.7% off the top for taxes (32.748 if the effective Fed rate is 15%)
That leaves 55008 for living expenses
And 19008 after rent or 1583/month
Then you have to subtract some funds for servicing their 35K debt - let's call it 1.5% or 525 a month.
That leaves them 1058 for food, clothing and other.  So yeah, 400 a month in restaurants, is a good chunk of the after tax and housing problem.
 

MrMoogle

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Re: $35k in debt is no reason to stop dropping $100/week in restaurants.
« Reply #53 on: October 12, 2017, 12:25:47 PM »
His salary: $500/week * 52 week/year = $26,000
Her salary: $70,000, hopefully $100,000 in less than 1 year

So calculating for right now: $70,000 + 26,000 = $96,000

Lets take off 35% for taxes (I'm assuming high city taxes here, just to be conservative) = $62,400

$3k/mo in living expenses = $36,000

$62,400 - $36,000 = $26,400 net per year

Something tells me restaurants are not the problem here. It's spending on spendypants level. But somehow they need more income?! Can someone tell me when we lost our minds and decided almost $100k/year is not enough?!

Something also tells me I should apply to be a mint column advisor, because she should have given more facepunches in her assessment of their financial picture.

 Let's see:
Fed tax 25%
NYS tax 6.45%
NYC tax 3.648%
FICA  7.65 %
That's 42.7% off the top for taxes (32.748 if the effective Fed rate is 15%)
That leaves 55008 for living expenses
And 19008 after rent or 1583/month
Then you have to subtract some funds for servicing their 35K debt - let's call it 1.5% or 525 a month.
That leaves them 1058 for food, clothing and other.  So yeah, 400 a month in restaurants, is a good chunk of the after tax and housing problem.
 
If they both take the standard deductions and exemptions, Federally, that's $10.5k or about 11% net.
Then add insurance costs that get taken out.  They didn't mention groceries either.  Or gas for their car in NYC.  Or parking for that car. 

aasdfadsf

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Re: $35k in debt is no reason to stop dropping $100/week in restaurants.
« Reply #54 on: October 12, 2017, 12:47:29 PM »
Their effective federal tax rate should be roughly 10.8%. After a $12,700 standard deduction and $4050 personal exemption for each, their taxable income is $75,200. Their marginal rate is 15% on income over $18,650. Tables are here:

https://www.forbes.com/sites/kellyphillipserb/2016/10/25/irs-announces-2017-tax-rates-standard-deductions-exemption-amounts-and-more/#17f2e60c5701

I don't know how NY does things, but I assume they use AGI for calculating taxes, so that's 8% effective. Total effective tax rate should be 26.5% after FICA. That leaves them roughly $1300 a month more vs. the assumption of a 42.7% effective rate.

I agree that they are almost certainly being spendypants. This is pretty much always true in these cases with people making close to six figures (and sometimes way above) who are still somehow in financial dire straights. I have never seen a case where there isn't a giant wad of money unaccounted for.

Dragonswan

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Re: $35k in debt is no reason to stop dropping $100/week in restaurants.
« Reply #55 on: October 12, 2017, 02:02:59 PM »
Fair enough.  But the taxes are brutal and they might not have their with holding set properly.  But I agree, there's a good chunk of unaccounted for money.

penguintroopers

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Re: $35k in debt is no reason to stop dropping $100/week in restaurants.
« Reply #56 on: October 12, 2017, 03:04:48 PM »
His salary: $500/week * 52 week/year = $26,000
Her salary: $70,000, hopefully $100,000 in less than 1 year

So calculating for right now: $70,000 + 26,000 = $96,000

Lets take off 35% for taxes (I'm assuming high city taxes here, just to be conservative) = $62,400

$3k/mo in living expenses = $36,000

$62,400 - $36,000 = $26,400 net per year

Something tells me restaurants are not the problem here. It's spending on spendypants level. But somehow they need more income?! Can someone tell me when we lost our minds and decided almost $100k/year is not enough?!

Something also tells me I should apply to be a mint column advisor, because she should have given more facepunches in her assessment of their financial picture.

 Let's see:
Fed tax 25%
NYS tax 6.45%
NYC tax 3.648%
FICA  7.65 %
That's 42.7% off the top for taxes (32.748 if the effective Fed rate is 15%)
That leaves 55008 for living expenses
And 19008 after rent or 1583/month
Then you have to subtract some funds for servicing their 35K debt - let's call it 1.5% or 525 a month.
That leaves them 1058 for food, clothing and other.  So yeah, 400 a month in restaurants, is a good chunk of the after tax and housing problem.
 
If they both take the standard deductions and exemptions, Federally, that's $10.5k or about 11% net.
Then add insurance costs that get taken out.  They didn't mention groceries either.  Or gas for their car in NYC.  Or parking for that car.

I was figuring those items were in the "$3k/mo living expenses" but could see how they weren't included.

MrMoogle

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Re: $35k in debt is no reason to stop dropping $100/week in restaurants.
« Reply #57 on: October 12, 2017, 03:09:22 PM »
Then add insurance costs that get taken out.  They didn't mention groceries either.  Or gas for their car in NYC.  Or parking for that car.

I was figuring those items were in the "$3k/mo living expenses" but could see how they weren't included.
From the article:
Quote
Their monthly expenses are also not crazy high. Altogether they spend about $3,000 a month on items including rent, utilities, cable and car payments
Yeah, it's a little ambiguous.  Including those 4 items, but does it include other things too?  When I first read it, I thought it was just those 4 items, but I can see how you could read it to include others.

slugline

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Re: $35k in debt is no reason to stop dropping $100/week in restaurants.
« Reply #58 on: October 12, 2017, 04:01:04 PM »
Ah, Farnoosh Torabi wrote this. I'm not surprised. I read her "You're So Money" and came away unimpressed. I'll probably have Eric Tyson as my number one PF author, but if I had to recommend someone Millennials might find more relatable it would be Ramit Sethi.

Just Joe

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Re: $35k in debt is no reason to stop dropping $100/week in restaurants.
« Reply #59 on: October 13, 2017, 02:17:07 PM »
Apparently that was not a part of life for him. So he ate out for literally every meal.

I keep stumbling across these people IRL or in stories like this. Still just as amazing to me as the first one.

Poundwise

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Re: $35k in debt is no reason to stop dropping $100/week in restaurants.
« Reply #60 on: October 18, 2017, 09:01:02 AM »
His salary: $500/week * 52 week/year = $26,000
Her salary: $70,000, hopefully $100,000 in less than 1 year

So calculating for right now: $70,000 + 26,000 = $96,000

Lets take off 35% for taxes (I'm assuming high city taxes here, just to be conservative) = $62,400

$3k/mo in living expenses = $36,000

$62,400 - $36,000 = $26,400 net per year

Something tells me restaurants are not the problem here. It's spending on spendypants level. But somehow they need more income?! Can someone tell me when we lost our minds and decided almost $100k/year is not enough?!

Something also tells me I should apply to be a mint column advisor, because she should have given more facepunches in her assessment of their financial picture.

 Let's see:
Fed tax 25%
NYS tax 6.45%
NYC tax 3.648%
FICA  7.65 %
That's 42.7% off the top for taxes (32.748 if the effective Fed rate is 15%)
That leaves 55008 for living expenses
And 19008 after rent or 1583/month
Then you have to subtract some funds for servicing their 35K debt - let's call it 1.5% or 525 a month.
That leaves them 1058 for food, clothing and other.  So yeah, 400 a month in restaurants, is a good chunk of the after tax and housing problem.
 
If they both take the standard deductions and exemptions, Federally, that's $10.5k or about 11% net.
Then add insurance costs that get taken out.  They didn't mention groceries either.  Or gas for their car in NYC.  Or parking for that car.
I agree, from my experience living in an outer borough of NYC, their numbers seem off.  $3K/month that includes rent and car payments seems very low, as does $100/week for eating out.  Owning a car in NYC is expensive and unnecessary, unless they have a special deal such as free parking.  My guess is that they have no clue at all how much they spend on any of these things, which is why they are in so much debt.

talltexan

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Re: $35k in debt is no reason to stop dropping $100/week in restaurants.
« Reply #61 on: October 18, 2017, 12:27:48 PM »
A friend of mine still makes all her son's food and he's 18. She insists he can't do it himself. She even left early one time when we were out, because she had to go home and fix his dinner.

Wow. She is really screwing over his future spouse. That's why women should look for sons of single mothers to date--the guy who had to do his own laundry and make lunch at 10 is going to be a better partner for the rest of his life.

What makes you think his future spouse knows anything about cooking? They can bond together watching "Iron Chef" and finally master it as a dating couple!