$35k in debt is no reason to stop dropping $100/week in restaurants.

[TheGrimSqueaker]

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.

[Dragonswan]

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]

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]

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]

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]

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]

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:

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]

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]

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]

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]

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!

[Rosesss]

I wonder when cooking became some really difficult skill.  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.
When I was 10 years old I was making my own sandwiches and heating things up in the microwave. I don't get how someone cannot do these things.
In fact, if someone is rushed and busy, it's often easier to eat at home. Going out for food takes more time.

I'm thinking it slowly phased out for everyone currently under 27 or so. Either our parents didn't cook at all, so we had no one to learn from, or cases like your friend where they aren't taught at all.

I leveled up my cooking skill pretty quickly through when I realized we could either spend $1000/mo on food, or $1000/mo on paying off student loans and then $1000/mo on whatever we want.

Not being taught at all to cook is not that strange for my generation (late twenties) in my experience. I (and many of those around me) were also not taught any housework skills or any basic repair/maintenance work around the house or on vehicles. It might be why you see people my age and younger being really into old fashioned way of doing this now. We desperately desire fresh food (LOL) I have personally learned to fix things through Youtube and have taken courses in sewing. I though myself to cook simple meals and learned cleaning tips and tricks from the internet aswell. Obviously it varies per family but based on my surroundings I think many young adults have genuinely never been tought any basic life skills, including financial. (had to figure that one out myself too)

[MrMoneySaver]

I'm Gen X and didn't really learn anything either.

[Imma]

I'm glad my parents did teach me basic life skills (late twenties). I grew up in a dysfunctional family and the most important thing they did was set an example of how not to live, but they definitely taught me cooking, cleaning, canning and sewing. Sadly they didn't teach me DIY, I suppose they didn't think that was necessary for a girl. My fiance grew up without a father present, so we're figuring that thing out through youtube.

I do have a coworker who is always telling stories about his boys and I need to keep reminding myself those are young teenagers, not 6 year olds. Apparantly they can't even stay home alone for more than 15 minutes or they kill each other or set the house on fire. These kids are legally adults in a few years.... I firmly believe you should raise your kids so they could run their own home when they're 18. Of course they're going to mess up a bit at first, and they might not move out at that age at all, but they should be able to clean, do their own laundry, cook a variety of dishes without having to refer to a book (or internet) handle their own bills, unblock a toilet etc. They should be functioning adults by that time. I believe that's your main duty as a parent.

[Hula Hoop]

I also learned to cook early on as the child of a single mother with a much younger sibling.  Had to get dinner on the table when I was 14 and my mother worked late and the 3 year old was hungry and had to go to bed.  Had to remember to do the grocery shopping to make sure that there was food in the house to cook for the 3 year old.  Had to do laundry so that we all had clothes to wear.  Had to make my own lunch for school as no one else was going to do it.

I'm always amazed when I meet people who don't have basic life skills but then I remember that they probably didn't grow up in single parent families with younger siblings like me. 

[Cranky]

I don't know that I really learned to cook from someone teaching me, though (and I'm old and a pretty good cook.)

My mom hated to cook, and we always joked that she bought the first box of Hamburger Helper that came down the assembly line. (She also threw out all my dad's shirts when permapress came on the market!) She did cook, and we didn't eat out much, so I did at least have a pretty good idea of where things were in the kitchen.

But I pretty much learned by sitting down and reading Joy of Cooking, which has long descriptive chapters about techniques and ingredients.

The difference that I see now is that for many people, eating out, even if it's just pizza, is the default option and cooking at home is hard to get started because they don't have basic supplies or even know what to buy.