Anyone making less than $50k annually?

[teen persuasion]

But from one person's perspective, the check going to the IRS was (say) 4k, and now it's 7k.  The annual spending in Mint was 15k, now it's 25k.  I don't think it's unreasonable to say they are spending more on taxes than before, and their expenses are higher.

I think this paragraph illustrates the disconnect, Rebs.  You begin speaking of the individual's perspective, then switch to the plural "they/their".  They (the couple) are NOT spending more in taxes than before.

Unless the individual regularly uses the royal "We" to refer to themselves.

[arebelspy]

I often use they to mean one, as a gender neutral version of he/she.

Sorry if that caused confusion.

[deeshen13]

Rebs,

Each individual's tax contribution does not go up in your example, though, when married. Individual A in married couple does not pay 7k while individual B pays 0k. It stays approximately the same as when they were single for each person (3.5k-4k each).

What people are harping on is that you are acting as if tax consequences are negative, but the shared living expenses compensates as the major positive.

The reality is (in your example) that tax consequences are mostly neutral, and the shared living expenses is the major positive of course (which was your main point).

Hence, there's no reason to keep mentioning the taxes. It's a neutral outcome for the individuals (not worse). Partnering up has economies of scale for expenses.

[kudy]

This tax discussion reminded me of this great visualization that a lot of people probably haven't seen:

Visualizing how much being married saves (or costs) you in federal income tax

[RedmondStash]

I earned less than $50k annually, on and off, for many years, while we were building our stash. So did spouse, though the timing varied because we both did a lot of freelance work. Together, we probably always came in at over $50k, though.

We've had some strokes of luck, like buying a house at an opportune time. We also never fell into the credit-card trap, so we didn't start out with big piles of debt to pay off. However little we earned, we always tried to save some. It wasn't always possible, but we never really "grew" our lifestyle as our income increased.

We did most of our big earning early on and had a financial planner invest the surplus, and then let that money grow while working enough not to touch it, and occasionally to add to it. We no longer use a financial planner; I did the research and took over that role myself.

Having a big standalone freezer has also been a big help. That freezer is just about full, partially with home-cooked meals frozen into serving sizes for work lunches. We rarely eat out, partly because of food sensitivities, and partly because of cost. And we're both kind of homebodies, so not a lot of entertainment expenses for concerts, movies, parties, etc.

Also working in IT helps because neither of us needs an expensive business wardrobe. We do spend on computers, video games, and comic books, but that's another story.

[Cathy]

Rebs,

Each individual's tax contribution does not go up in your example, though, when married. Individual A in married couple does not pay 7k while individual B pays 0k. It stays approximately the same as when they were single for each person (3.5k-4k each). ...

Technically, if a couple files a joint tax return, each individual partner is generally jointly and severally liable for the entire tax, not just half of it. 26 USC § 6013(d)(3). The couple can have some kind of agreement about how tax liability is to be divided up as between the two of them, but such an agreement will not bind the United States Government, which will be free, if it so chooses, to collect the entire liability from either partner alone (subject to certain exceptions which I won't discuss here).

[ender]

Rebs,

Each individual's tax contribution does not go up in your example, though, when married. Individual A in married couple does not pay 7k while individual B pays 0k. It stays approximately the same as when they were single for each person (3.5k-4k each).

What people are harping on is that you are acting as if tax consequences are negative, but the shared living expenses compensates as the major positive.

The reality is (in your example) that tax consequences are mostly neutral, and the shared living expenses is the major positive of course (which was your main point).

Hence, there's no reason to keep mentioning the taxes. It's a neutral outcome for the individuals (not worse). Partnering up has economies of scale for expenses.

+1

[BlueHouse]

I often use they to mean one, as a gender neutral version of he/she.

Sorry if that caused confusion.

I read that "ze" is the gender neutral version of the third person singular, but I haven't actually heard anyone use it yet.  I tried it once, but I felt pretentious. 

What say you?

[FunkyStickman]

*Raises hand*

I lived on $25K for a decade. Now I'm making around $40K, but about to change jobs and go back down.

[tardis]

*Raises hand*

I lived on $25K for a decade. Now I'm making around $40K, but about to change jobs and go back down.

Do you mind if I ask why?

[arebelspy]

Rebs,

Each individual's tax contribution does not go up in your example, though, when married. Individual A in married couple does not pay 7k while individual B pays 0k. It stays approximately the same as when they were single for each person (3.5k-4k each).

What people are harping on is that you are acting as if tax consequences are negative, but the shared living expenses compensates as the major positive.

The reality is (in your example) that tax consequences are mostly neutral, and the shared living expenses is the major positive of course (which was your main point).

Hence, there's no reason to keep mentioning the taxes. It's a neutral outcome for the individuals (not worse). Partnering up has economies of scale for expenses.

Yes, I understand all that.

Our difference of opinion on this is not due to a lack of knowledge, but a difference of perspective.

[golfreak12]

I've spent most of my life making less than $50K/yr.
I started my first real FT time on 2002 at age 32. From that point till 2011, I made from $25K to $54K yearly.
I got married in 2011 and my salary took off.
2012- $64K
2013- $75K
2014 - $100K++
2015- $100K++
2016- $100K++
I was the average Joe for the longest time and even though I make a lot more now, my wife do not work.(she's in school) so I'm still the average Joe.
My NW is over $600K and I have a good 5 yr left in me. By then my wife will be out of school and have a good job and I can semi retire.
The biggest key for me in saving money was that I was able to live on less than $12K yearly by the time I got a real job at age 32. I can honestly say I never upgraded my lifestyle which is why I can save so much money.

[uppy]

I've spent most of my life making less than $50K/yr.
I started my first real FT time on 2002 at age 32. From that point till 2011, I made from $25K to $54K yearly.
I got married in 2011 and my salary took off.
2012- $64K
2013- $75K
2014 - $100K++
2015- $100K++
2016- $100K++
I was the average Joe for the longest time and even though I make a lot more now, my wife do not work.(she's in school) so I'm still the average Joe.
My NW is over $600K and I have a good 5 yr left in me. By then my wife will be out of school and have a good job and I can semi retire.
The biggest key for me in saving money was that I was able to live on less than $12K yearly by the time I got a real job at age 32. I can honestly say I never upgraded my lifestyle which is why I can save so much money.

Can I ask what you do for a living? Those are some pretty spectacular yearly raises! Or perhaps you switched careers/employers or learned to earn higher bonuses?

[ender]

*Raises hand*

I lived on $25K for a decade. Now I'm making around $40K, but about to change jobs and go back down.

Do you mind if I ask why?

From another thread, layoffs.

[Ramblin' Ma'am]

I do. My salary is in the mid-40s (varies a little because of OT), and I live in the Boston area, which is pretty expensive. This past year, I received an inheritance in the low six figures, which obviously improves my financial outlook, but even prior to that I was saving 20% of my income and still managing to do some travel.

I am lucky in not having a lot of expenses besides rent.

--No car; use subway/bus/walking to get around
--Get health insurance through my job and the premiums are pretty low
--No remaining student loans
--Utilities included in rent
--Cell phone is a family plan, so even though I have a smart phone, it costs $25/month

Even so, with the cost of living here, and working in an industry that doesn't pay very high salaries, my retirement will be later than most of the people on this site. I joined the 2035 FIRE page. I will turn 53 in 2035, but hopefully I'll be able to move to part-time work before that.

[ariapluscat]

basically the same as laura 82, complete with income and location

[stasherus-maximus]

My wife and I both have made under 50k (a piece) our entire careers. We're in IT, but work at a notoriously low-paying public university. The trade-off is we have decent health insurance, 403b, 457b, HSA, and a pension. We could have moved to areas with higher-paying jobs but our families are nearby and... did I mention the pension? Not too many of those around anymore. In our very early forties we now have a totally liquid NW of over $500k. We hope to retire in our late forties with ~$1m and slow-travel. (Pension would kick in at 60 - icing on the cake).

We got lucky in several areas.

• I come from a frugal family who made sound financial decisions and casually passed these lessons/habits/advice on to us kids.
• My wife and I are both homebodies and don't spend a lot on entertainment/dining. We truly enjoy cooking good meals at home, and doing free/cheap things like biking, camping, hiking, etc.
• We have owned the same cheap vehicles for 16+ years.
• I am an optimizer and enjoy making spreadsheets and finding ways to save $. I consider it a fun hobby.
• We live in a fairly low-cost of living area and pay under $1000 per month on rent.
• Neither of us feel like we are dying to have kids. So we probably won't at this point.
• We did not go into debt for college degrees.
• I work on the internet and was lucky enough to find MMM and send savings/investing into Turbo-Boost mode.

   

I realize a lot of the things we enjoy would be considered sacrifices, hardships, and boring, to other people. We naturally fit a certain MMM profile perhaps? Plus we are fortunate enough to have good role models, easily-disseminated information on the internet, be born in the USA, etc. I do my share of bitching and moaning, believe me, but I guess writing a post like this makes me realize how lucky I am in general. We count ourselves blessed and try not to poke fun at others for being behind in the "race" to FI.

[TheInsuranceMan]

My base pay is sub 40k a year, plus a bit of commission, but still doesn't get me to 50k.  Wife and I gross under 85k a year (probably under 80k), with two kids, a 2 year old and a 4 month old.

Path to fire?  I live in a very rural area, where living is cheap.  My mortgage is $300 a month for a nice two story house, on a double lot, in town.  I live a block away from our main office, so I walk to work 2-3 times a week (travel the other days).  Do some extra work on the side that nets an extra 3-5k per year depending on hours.  In fact, if I used my farming money, tax return money, and bonus money, i could probably have my student loans and house paid off in 5-7 years.

[deeshen13]

My base pay is sub 40k a year, plus a bit of commission, but still doesn't get me to 50k.  Wife and I gross under 85k a year (probably under 80k), with two kids, a 2 year old and a 4 month old.

Path to fire?  I live in a very rural area, where living is cheap.  My mortgage is $300 a month for a nice two story house, on a double lot, in town.  I live a block away from our main office, so I walk to work 2-3 times a week (travel the other days).  Do some extra work on the side that nets an extra 3-5k per year depending on hours.  In fact, if I used my farming money, tax return money, and bonus money, i could probably have my student loans and house paid off in 5-7 years.

If you have "tax return money" that just means you withheld too much in taxes during the year (i.e. gave the government an interest-free loan during the year). Consider changing your deductions so you keep more of that money in your paychecks.

[golfreak12]

I've spent most of my life making less than $50K/yr.
I started my first real FT time on 2002 at age 32. From that point till 2011, I made from $25K to $54K yearly.
I got married in 2011 and my salary took off.
2012- $64K
2013- $75K
2014 - $100K++
2015- $100K++
2016- $100K++
I was the average Joe for the longest time and even though I make a lot more now, my wife do not work.(she's in school) so I'm still the average Joe.
My NW is over $600K and I have a good 5 yr left in me. By then my wife will be out of school and have a good job and I can semi retire.
The biggest key for me in saving money was that I was able to live on less than $12K yearly by the time I got a real job at age 32. I can honestly say I never upgraded my lifestyle which is why I can save so much money.

Can I ask what you do for a living? Those are some pretty spectacular yearly raises! Or perhaps you switched careers/employers or learned to earn higher bonuses?

I really do not want to reveal what I do until I semi-retire(hopefully 5 yrs from now). I would guess I'm in the top 1% in my occupation. If I tell people or even friends what I do and make no one would believe me. I actually lied to my wife on what I do when I first met her. She even admit now that if I told her the truth from the beginning we would not be married right now. Its not illegal or anything like that.
I don't mind telling you what I did before. After I graduated I did odd stuff to get by making ~$12K/yr until 2001 when 9/11 hit. I was going to get a real job until my buddy told me to work for him at McDonalds.(his parents own 25+ stores). I did that until 2006. The first year I was 2nd assistant and made $25K which was the most I've made in my whole life. I got promoted to GM and made decent money $40K-$50K until I got stressed out and quit. I'm in my current job since 2006.
I did started a journal up until last year.

[uppy]

I've spent most of my life making less than $50K/yr.
I started my first real FT time on 2002 at age 32. From that point till 2011, I made from $25K to $54K yearly.
I got married in 2011 and my salary took off.
2012- $64K
2013- $75K
2014 - $100K++
2015- $100K++
2016- $100K++
I was the average Joe for the longest time and even though I make a lot more now, my wife do not work.(she's in school) so I'm still the average Joe.
My NW is over $600K and I have a good 5 yr left in me. By then my wife will be out of school and have a good job and I can semi retire.
The biggest key for me in saving money was that I was able to live on less than $12K yearly by the time I got a real job at age 32. I can honestly say I never upgraded my lifestyle which is why I can save so much money.

Can I ask what you do for a living? Those are some pretty spectacular yearly raises! Or perhaps you switched careers/employers or learned to earn higher bonuses?

I really do not want to reveal what I do until I semi-retire(hopefully 5 yrs from now). I would guess I'm in the top 1% in my occupation. If I tell people or even friends what I do and make no one would believe me. I actually lied to my wife on what I do when I first met her. She even admit now that if I told her the truth from the beginning we would not be married right now. Its not illegal or anything like that.
I don't mind telling you what I did before. After I graduated I did odd stuff to get by making ~$12K/yr until 2001 when 9/11 hit. I was going to get a real job until my buddy told me to work for him at McDonalds.(his parents own 25+ stores). I did that until 2006. The first year I was 2nd assistant and made $25K which was the most I've made in my whole life. I got promoted to GM and made decent money $40K-$50K until I got stressed out and quit. I'm in my current job since 2006.
I did started a journal up until last year.

Very intriguing and mysterious. :) Sounds lonely though if you can't tell even your friends.

[golfreak12]

I've spent most of my life making less than $50K/yr.
I started my first real FT time on 2002 at age 32. From that point till 2011, I made from $25K to $54K yearly.
I got married in 2011 and my salary took off.
2012- $64K
2013- $75K
2014 - $100K++
2015- $100K++
2016- $100K++
I was the average Joe for the longest time and even though I make a lot more now, my wife do not work.(she's in school) so I'm still the average Joe.
My NW is over $600K and I have a good 5 yr left in me. By then my wife will be out of school and have a good job and I can semi retire.
The biggest key for me in saving money was that I was able to live on less than $12K yearly by the time I got a real job at age 32. I can honestly say I never upgraded my lifestyle which is why I can save so much money.

Can I ask what you do for a living? Those are some pretty spectacular yearly raises! Or perhaps you switched careers/employers or learned to earn higher bonuses?

I really do not want to reveal what I do until I semi-retire(hopefully 5 yrs from now). I would guess I'm in the top 1% in my occupation. If I tell people or even friends what I do and make no one would believe me. I actually lied to my wife on what I do when I first met her. She even admit now that if I told her the truth from the beginning we would not be married right now. Its not illegal or anything like that.
I don't mind telling you what I did before. After I graduated I did odd stuff to get by making ~$12K/yr until 2001 when 9/11 hit. I was going to get a real job until my buddy told me to work for him at McDonalds.(his parents own 25+ stores). I did that until 2006. The first year I was 2nd assistant and made $25K which was the most I've made in my whole life. I got promoted to GM and made decent money $40K-$50K until I got stressed out and quit. I'm in my current job since 2006.
I did started a journal up until last year.

Very intriguing and mysterious. :) Sounds lonely though if you can't tell even your friends.

Its not that I can't tell people what I do for a living. Its telling them that I made $100K++ for what I do for the past 3 years that is not believable. For the longest time, my Mom thought I was just getting by and always offered help until I got married bought a 2nd house that she finally realized I'm doing just fine.

[limeandpepper]

I really do not want to reveal what I do until I semi-retire(hopefully 5 yrs from now). I would guess I'm in the top 1% in my occupation. If I tell people or even friends what I do and make no one would believe me. I actually lied to my wife on what I do when I first met her. She even admit now that if I told her the truth from the beginning we would not be married right now. Its not illegal or anything like that.

Its not that I can't tell people what I do for a living. Its telling them that I made $100K++ for what I do for the past 3 years that is not believable. For the longest time, my Mom thought I was just getting by and always offered help until I got married bought a 2nd house that she finally realized I'm doing just fine.

So curious! My imagination is running wild, haha! My guesses are ranging from anything from stripper to magician to cleaner. Whatever it is, good on you for creating such a great income for yourself. :)

[BTDretire]

So curious! My imagination is running wild, haha! My guesses are ranging from anything from stripper to magician to cleaner. Whatever it is, good on you for creating such a great income for yourself. :)

  I went to manufacturing some type of sex toy.

[hoping2retire35]

So curious! My imagination is running wild, haha! My guesses are ranging from anything from stripper to magician to cleaner. Whatever it is, good on you for creating such a great income for yourself. :)

  I went to manufacturing some type of sex toy.

eh, could be about any kind of blue collar work if he is good at it. He says in his journal stuff about his homeland, so he could do something like translating work manuals for an international company. Wouldn't want to tell friends if they too, are fluent in English and golf's language. those are my guesses.

[uppy]

So curious! My imagination is running wild, haha! My guesses are ranging from anything from stripper to magician to cleaner. Whatever it is, good on you for creating such a great income for yourself. :)

  I went to manufacturing some type of sex toy.

eh, could be about any kind of blue collar work if he is good at it. He says in his journal stuff about his homeland, so he could do something like translating work manuals for an international company. Wouldn't want to tell friends if they too, are fluent in English and golf's language. those are my guesses.

I feel ashamed to say it, but I would do a LOT of weird sh*t for $100K++/year guaranteed. I always wondered what morally iffy people like James Bond would make in real life (not implying you are doing anything morally iffy, golfreak), but just those sorts of "secret" occupations nobody knows exist.

This coming from a person who has never made anywhere near that amount and tried a lot of strange occupations.

[ariapluscat]

Are there any MMM tips that are extra helpful to people early in their career?
Or savings methods that can make big changes?

[scrubbyfish]

Are there any MMM tips that are extra helpful to people early in their career?

1. Keep house and food costs next to nil.
2. Get rid of debt interest.

Those are the biggies.

Or savings methods that can make big changes?

Always put it first and foremost toward matching grants, then invest all of it. e.g., 401(k) with employer's match, RDSP in Canada, etc.
Free money, immediate giant return, then regular return rates ongoing.

Lots more: https://financialtipsforthebroke.com/book/

[I'm a red panda]

Are there any MMM tips that are extra helpful to people early in their career?

1. Keep house and food costs next to nil.
2. Get rid of debt interest.

Those are the biggies.

I'd add 3) don't buy crap you don't need
as a savings strategy even higher than low food costs.

[ketchup]

Are there any MMM tips that are extra helpful to people early in their career?

1. Keep house and food costs next to nil.
2. Get rid of debt interest.

Those are the biggies.

I'd add 3) don't buy crap you don't need
as a savings strategy even higher than low food costs.

Also, once you've got your basic financial house in order, don't buy crappy crap that doesn't pencil out as cost-effective.  And I don't just mean "be willing to pay 20% more for twice as long-lasting/good quality." That $150 kitchen table from Target will look like shit in a year but that $100 solid wood craigslist/thrift store kitchen table will last you ten years.  Spending less doesn't always mean dealing with crappy quality stuff, and if you are, it might not even end up cost-effective.

[jaysg7]

I've never made more than $25k annually. Right now I'm making $12 as a cashier and $10 as an entry level accountant. I finished my associate's degree in accounting 2 years ago and finally decided to start pursuing a career in the field last year. The first job didn't work out but the one I recently joined seems like a good fit. At the start of the year I'm expecting a decent pay raise but $50k a year would be like living in ridiculous luxury for me and for most of the people I know... Maybe it's the area but $50k a year would be a ridiculous boost in knocking out student loan debt (~$25k) and working towards FIRE for me as my spending would not increase.

I already feel as though I live perfectly fine with such a low income and can't understand how people struggle on more. However, I'm not where I'd like to be as far as an emergency fund goes and even though I spend so little I'd definitely benefit from a higher salary of course but mostly just to speed things up and create more of a safety net for myself as well as having more financial security.

Hell, $35k would be nice. Unfortunately I got a late start and am only entry level now, but I'm not sure I'd like to go for a bachelor's and get even more in debt. My goal is to live simply/efficiently with as little waste as possible and of course reach financial freedom as early as possible. MMM has helped greatly in that and hopefully the next few years will include some nice pay raises and opportunities to advance as I plan on working hard and learning as much as I can. Right now I'm basically just a bookkeeper but I'm wanting to learn much more about finance in general.

My main expenses are student loans and my son.

[SaskyStache]

So currently I'm making more, but a few years ago I was under that and there's a good chance I will be shifting to under 50K in the near future.

I'm lucky that I get along with my sibling well enough that we bought a house together, and we bought a place big enough that we could rent it a room without it feeling cramped. In the past 5 years we have rented the room out to cousins, friends, friends of friends, exchange students, one kijjiji (craiglist) folk and most recently my siblings SO has moved in. The average cost over the last 5 years for mortgage, utilities, taxes... has been around $625/month. So that has been a huge help.

Aside from that I looked at my budget weak points and assessed whether I could cut them or more efficiently "deal" with them. There's a lot of badasses on this forum that helped me reassess the value of certain expenditures and how to do the same/more with less. For me it was hosting more and going out less and home brewing a lot rather than buying beer, mead... (I like the drinks).

So even while making 30K -40K CAD I was still able to save a fair amount.

Also, at the start of my working life I did pick up a few jobs through a temp agency. Mostly bartending at weddings/events and things like that. I don't do that anymore, but it helped bring in some extra cash and I had flexibility in what jobs I accepted.

[uppy]

I just realized today (after running some numbers) that I am essentially doing awesome with what I have. I'm making about $37K take-home after taxes etc. and have about a 40% savings rate. So I'm doing almost as good as MMM was for years. However my EARLIEST possible retirement age, even if I managed a 60% savings rate, is 47. Realistically it will be early to mid-50s.

There are 2 reasons:
1) My income is less than half what MMM's was, so even with the higher savings rate it takes 2x as long to become FI, and,
2) It took me 10 years to graduate college and find a full-time job with a decent salary.

Still, mid 50s is better than mid-60s!

[scrubbyfish]

Still, mid 50s is better than mid-60s!

That's it, yes!! :)

[golfreak12]

I've never made more than $25k annually. Right now I'm making $12 as a cashier and $10 as an entry level accountant. I finished my associate's degree in accounting 2 years ago and finally decided to start pursuing a career in the field last year. The first job didn't work out but the one I recently joined seems like a good fit. At the start of the year I'm expecting a decent pay raise but $50k a year would be like living in ridiculous luxury for me and for most of the people I know... Maybe it's the area but $50k a year would be a ridiculous boost in knocking out student loan debt (~$25k) and working towards FIRE for me as my spending would not increase.

I already feel as though I live perfectly fine with such a low income and can't understand how people struggle on more. However, I'm not where I'd like to be as far as an emergency fund goes and even though I spend so little I'd definitely benefit from a higher salary of course but mostly just to speed things up and create more of a safety net for myself as well as having more financial security.

Hell, $35k would be nice. Unfortunately I got a late start and am only entry level now, but I'm not sure I'd like to go for a bachelor's and get even more in debt. My goal is to live simply/efficiently with as little waste as possible and of course reach financial freedom as early as possible. MMM has helped greatly in that and hopefully the next few years will include some nice pay raises and opportunities to advance as I plan on working hard and learning as much as I can. Right now I'm basically just a bookkeeper but I'm wanting to learn much more about finance in general.

My main expenses are student loans and my son.

This is a good start. You know how to live on a low salary. Most everyone will make more money in the future. Just don't upgrade your lifestyle. Its what I always preach.
As I was saying earlier in this thread. I learned how to live with such little money. I make so much more but I'm still scare to spend money. Its funny but when me and the wife go shopping, my wife always ask when will we be able to buy stuff without thinking we're poor.