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Low salaries are simply a stepping stone and should be viewed as a first step to higher wages. Like many I once made minimum wage, had no car, reduced living costs by having a room mate, and pinched every penny. In time I worked my way up and eventually made a decent living. Why do so many now think they should have a high standard of living as a right?
Depends on where you are at. My husband and I each make about $32k, and that is a good wage for our area. Cost of living is pretty low here, too, though, so it averages out. The two of us live on about $23k per year, including our mortgage, so we save about half our take home each year. We could get by on $32k a year in our area, but only just barely.
But to the OP, the short answer is that we live in a 2 income society. You almost can't get by, let alone save for retirement, on one income. So the answer is: get a roommate with a job, get married to someone with a job, or get a second job yourself. If you aren't willing to do any of those, then you'll have to cut expenses to the bare bone.
And don't scoff so much at the mere mention of a wife. The trick is to find someone with the same financial goals as you. I'm more frugal than my husband, I do all the investments, and I keep track of financial goals. I am the reason we have as much saved as we do. And I HATE to shop. There are more women out there like me than you seem to think (pro-tip: you aren't likely to find them at bars and clubs)
By spending my entire life minimizing my lifestyle, the way my depression-era parents taught me to. Over time, I learned to get as much pleasure from economizing, as other people get from splurging. It assured me that I would never need to endure hardship, and would always live in the style to which I had become accustomed. And I never needed to work hard, nor even steadily, to afford it.
I just landed a "good" job finally in which I can apply the skills I've learned in school and contribute to society. This job that is in very much a in-demand position in an area that will be greatly needed in the future is paying a mere 32k/year. What's deceiving is that the statistics that I saw prior to getting into the field was that the average salary for this job was much higher (45k/year to be exact). Thinking that this might be an outlier of sorts, another job in a same area doing the same thing is paying just about the same amount of money.
So I am looking into housing and purchasing a vehicle. INCREDIBLY EXPENSIVE!
My entire PAYCHECK is going to be going to be paying to simply live.
AND I'M A relatively young, SINGLE MAN with no family, animals, medical bills, etc!
I have NO idea how families are doing it. I see all these huge trucks / SUVs (I see at over 30k at the dealerships) on the road (no doubt they are gas hogs as well). I with my great job am looking at some 2001 vehicle so I can pay cash and not dig another $15k or so of debt to my tally. I could get into food, utilities, cable, internet, Iphones, etc.. I have a little used phone I got off Amazon with just about the cheapest plan available (no smart phone). Eating out? forget that.. can barely afford to eat in.
So a little rant. What's kind of funny (got to laugh about it) is that this job is a promotion from a "good pay" of $9.75/hr.. a mere $750 check give or take for a two-week pay period. For those with one of these Dodge Ram's, probably that entire paycheck is paying for the payment and gas.. not including Rent, Food, Taxes, etc..
I am amazed.. I don't know how people are doing it.. I guess the welfare system is keeping this economy a float.
All the hard work finally paid off.. as I push my rusty bucket on wheels down the road hoping to get to work.
Congrats on the new job! Like you, I used to wonder how many people seemed to be able to afford so many luxury items. I soon learned that all that glitters is not gold. I know of people who live like that, but are secretly struggling financially. My late mother used to say, " You can make a lot of money, but if you don't know how to manage it, it won't go very far. Likewise, you can make a little money, but if you know how to manage it, it will go a lot farther." She also said that it is important to live below your means.
You are smart for looking to purchase a reliable used car and a used cell phone. You can save money by renting a room in someone's house rather than an apartment. I did that and was able to pay off credit card debt, save enough money to pay my car off and buy myself a modest little house, which I bought as a short sale two years ago. (the house now has close to $100k in equity). My mortgage is cheaper than renting. I also shop at the large warehouse stores such as Costco and discount stores such as (don't laugh) the .99 cent store. I don't watch much t.v., so I cancelled my cable and download movies on Netflix. When shopping for clothes, I go to the clearance racks, and look for markdown or items that are on sale. For entertainment, I purchase online travel, restaurant, and activity vouchers at a discounted rate from: Groupon.com, LivingSocial.com, Travelzoo.com, Scoutmob, Lifebooker Loot, and HomeRun. Whenever possible, I pay for my purchases in cash in order to avoid credit card debt.
Following my late mother's advice and living below my means, has definitely paid off. I have managed to build a pretty decent savings, and as a result, my overall quality of life is very good.
Keep in mind that as you gain work experience in your field, your salary will go up. You can make it if you are willing to delay short term gratification for long term goals.
How do people afford all of those expensive things? They live on credit (bad idea) or they have worked really hard for a lot of years to get there. Goodness $32 k a year?!! I would love to make that much. I have been living for years on $18k and less and managing okay. Not great but I have managed to meet my basic needs and a little extra. And I have zero debt. And here I am ecstatic because I am starting a new job that will pay $27k/yr.
You need to rethink some of your budget. Save for big ticket items. Maybe pick a less expensive apartment and drive a used car that gets good fuel mileage. New ones... trust me wasted money. Be sensible about spending on materiel things. You don't need nearly as much as you might think. Learn to cook. You don't have to spend a lot to eat well.
You should be able to live pretty comfortably on that $37k and in time your income should only increase if your work ethic and quality are good.
Income is simply one part of the whole equation. Think of it as water pouring from a hose into an above ground pool. If you don't have any holes in the pool, it will eventually fill up, no matter how slow the flow. Punch a few small holes in the bottom of the pool and it won't.
If you think of your first five years in the workforce as slave years, you can get a big step ahead. That means being so penny-pinching that your dimes squeak. ANYTHING that is an ongoing expense wants to be eliminated or reduced to a bare minimum, to keep those holes in your pool as small as possible.
By far, the biggest expenses in American society today are the taxes and insurances. Until you have something to protect, get the minimum auto insurance possible, but bump the liability up on it a notch or two. That means driving older cars with low rates, and trying to live in areas with lower rates. On health insurance, get a catastrophic policy and don't be lured by low cost doctor visits on more expensive polices. Buying a big house and paying property insurance is another hole in your pool.
When we were in south Florida, the combined annual losses to expensive car insurance (even with an old car, $1,500/yr is cheap insurance there), expensive health insurance, expensive property insurance AND windstorm AND flood insurance, high property taxes, high utility costs, and high maintenance costs on a home and car that baked in the heat and sun caused me to realize that I wasn't working for myself anymore, but that my labor was going to pay insurance companies and government that was becoming increasingly intrusive and restrictive. We voted with our feet and moved.
Once you recognize that the U.S. is not as homogenous as it appears on the surface, you can start to make decisions. I make far less now, but our situation is sustainable on a minimal income.
Income is simply one part of the whole equation. Think of it as water pouring from a hose into an above ground pool. If you don't have any holes in the pool, it will eventually fill up, no matter how slow the flow. Punch a few small holes in the bottom of the pool and it won't.
If you think of your first five years in the workforce as slave years, you can get a big step ahead. That means being so penny-pinching that your dimes squeak. ANYTHING that is an ongoing expense wants to be eliminated or reduced to a bare minimum, to keep those holes in your pool as small as possible.
By far, the biggest expenses in American society today are the taxes and insurances. Until you have something to protect, get the minimum auto insurance possible, but bump the liability up on it a notch or two. That means driving older cars with low rates, and trying to live in areas with lower rates. On health insurance, get a catastrophic policy and don't be lured by low cost doctor visits on more expensive polices. Buying a big house and paying property insurance is another hole in your pool.
When we were in south Florida, the combined annual losses to expensive car insurance (even with an old car, $1,500/yr is cheap insurance there), expensive health insurance, expensive property insurance AND windstorm AND flood insurance, high property taxes, high utility costs, and high maintenance costs on a home and car that baked in the heat and sun caused me to realize that I wasn't working for myself anymore, but that my labor was going to pay insurance companies and government that was becoming increasingly intrusive and restrictive. We voted with our feet and moved.
Once you recognize that the U.S. is not as homogenous as it appears on the surface, you can start to make decisions. I make far less now, but our situation is sustainable on a minimal income.
Housing and education are the biggest expenses. Taxes and insurance premiums are pretty low, well maybe not health insurance, but the other insurance products are.
32k is at lower need of lower middle class ;not sold middle class. savings for big ticket items is common when starting out.
That's what I was thinking. It is frustrating that the offer was so low considering the responsibility of the position. I'm hoping that this is just an entry-level salary for the position and things will be eventually more in line with what the statistics show..
I guess we'll get to see if all the hard work is going to pay off and all the time and money spent on education was worth it.
And don't scoff so much at the mere mention of a wife. The trick is to find someone with the same financial goals as you. I'm more frugal than my husband, I do all the investments, and I keep track of financial goals. I am the reason we have as much saved as we do. And I HATE to shop. There are more women out there like me than you seem to think (pro-tip: you aren't likely to find them at bars and clubs)
I was kidding about the wife stereotype. Please don't take offense. I saw the opportunity and couldn't resist. I don't frequent bars or clubs. I don't even drink.
That's what I was thinking. It is frustrating that the offer was so low considering the responsibility of the position. I'm hoping that this is just an entry-level salary for the position and things will be eventually more in line with what the statistics show..
I guess we'll get to see if all the hard work is going to pay off and all the time and money spent on education was worth it.
Hoping and waiting to see are not career-building strategies. What have you done to put yourself on track for a promotion or raise? You need to take charge of your career, set some goals, do some research to see what you will need to do to reach those goals, make a plan, do something positive. Do you know how your work performance will be evaluated? Do you know when evaluations are performed and what the results will mean? If you get a good review, will you get a raise? If this was not explained to you when you became employed, you need to ask about this. Will you get a salary review at specific intervals? If there is no evaluation or salary review program or no opportunities for raises or career progression where you are, you might want to consider doing some more research to find an employer in your field where there is a clear opportunity for salary increases and career progression.
Does your employer offer training opportunities? If they do, take advantage of them. Do they offer tuition support for furthering your education in your field? If they do, take advantage of it. What are your colleagues doing? Do they seek new opportunities, volunteer for projects, take on more responsibility? If your colleagues are doing those things, you need to do that, too, or you will not be competitive for raises and promotions. Who is getting raises and promotions? What are they doing to get them? Raises and promotions generally do not just fall into your lap. You will need to be actively seeking them to get them. When you do get a promotion, start strategizing for the next one.
Waiting to see what happens will ensure that what happens is nothing.
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I don't frequent bars or clubs. I don't even drink.
