Anonymous wrote:We are paycheck to paycheck (or paycheck-less) for about four to five months out of the year. A two teacher household. Five advanced degrees between us (none in education) as we are both career changers. Two kids in college (my DD, my fiancé's stepson). Decade old non-luxury cars. No extravagances beyond cable, smart phones, and my covering the small gap between my younger DD's private school tuition and her generous FA package. From July to mid-November, we either have no income or it's paycheck to paycheck. Yesterday was the first paycheck that I've received since last May that wasn't already spoken for (June paychecks pay August expenses). I know someone will chime in to let me know how well compensated teachers are (snort) and how my fiancé & I can both get part-time jobs after school (When would we grade or have family time with the ES age kid?) I'm not asking for sympathy. I'm answering OP's question. Many teachers I know live paycheck to paycheck. Some sacrifice family time and get second or even third jobs. I did that for years and ruined my health. We're poorer, but happier.

You reduce your expenses, get a second job (even tutoring a few kids), work summers or take a year round pay check...and youngest does not need to go to private school if you cannot afford the small gap. Or, you both are divorced, what about child support?

Anonymous wrote:We are paycheck to paycheck (or paycheck-less) for about four to five months out of the year. A two teacher household. Five advanced degrees between us (none in education) as we are both career changers. Two kids in college (my DD, my fiancé's stepson). Decade old non-luxury cars. No extravagances beyond cable, smart phones, and my covering the small gap between my younger DD's private school tuition and her generous FA package. From July to mid-November, we either have no income or it's paycheck to paycheck. Yesterday was the first paycheck that I've received since last May that wasn't already spoken for (June paychecks pay August expenses). I know someone will chime in to let me know how well compensated teachers are (snort) and how my fiancé & I can both get part-time jobs after school (When would we grade or have family time with the ES age kid?) I'm not asking for sympathy. I'm answering OP's question. Many teachers I know live paycheck to paycheck. Some sacrifice family time and get second or even third jobs. I did that for years and ruined my health. We're poorer, but happier.

So you're spending all of your money on education and repeating the same mistake with your own children. Not very smart.

I'd say 1/3 to 1/2. DCUM is lala land. It's real offline lol

Anonymous wrote:I'm not sure how so many of you know the financial details of your friend's lives. I don't know about the financial lives of any of my friends intimately, except for one friend who's very open about that.

A bunch of fantasies people have in a pathetic grasp at feeling self righteous. People don't talk about shit like this with each other.

I'm not sure how so many of you know the financial details of your friend's lives. I don't know about the financial lives of any of my friends intimately, except for one friend who's very open about that.

We are paycheck to paycheck (or paycheck-less) for about four to five months out of the year. A two teacher household. Five advanced degrees between us (none in education) as we are both career changers. Two kids in college (my DD, my fiancé's stepson). Decade old non-luxury cars. No extravagances beyond cable, smart phones, and my covering the small gap between my younger DD's private school tuition and her generous FA package. From July to mid-November, we either have no income or it's paycheck to paycheck. Yesterday was the first paycheck that I've received since last May that wasn't already spoken for (June paychecks pay August expenses). I know someone will chime in to let me know how well compensated teachers are (snort) and how my fiancé & I can both get part-time jobs after school (When would we grade or have family time with the ES age kid?) I'm not asking for sympathy. I'm answering OP's question. Many teachers I know live paycheck to paycheck. Some sacrifice family time and get second or even third jobs. I did that for years and ruined my health. We're poorer, but happier.

Anonymous wrote:50/50 but no one will admit it.

Then how do you know? I don't know my friends' and relatives' financial position and they don't know ours. I also know that some people get to write off their auto leases as a business expense.

Anonymous wrote:

Anonymous wrote: I actually think A LOT of people lease cars, have home equity lines, credit card debt, etc. to live the lives they lead.

A net worth of $1M puts you in the top 10% of Americans in terms of wealth. An income of just $160k puts you in the top 10% of earners. So, very few Americans have the financial ability to buy a $800k house, own a BMW and a Range Rover, and send their child to a $60k/year college or $40k/year elite private school. Too much personal debt is a real financial problem for most Americans.

However, debt can also be a smart way to manage your money. There is a difference between consumption and capital expenditures and living beyond your means. I have a margin account with my brokerage and I use it a lot to juice equity returns and preserve balance with the hedges in my portfolio. My house is 100 years old and it will last another 100 years. There's no reason not to have a mortgage and spread out the cost of the house over its useful life. A mortgage provides a tax shield and financial leverage in an up market to increase my ROI. The six figure home equity line of credit we have is solely to manage our quarterly tax payments and the balance hits zero on April 15th every year. I use a charge card for about $15k in expenses every month. I get the convenience of not writing checks, a bunch of reward points, plus a $15k float without paying any interest. Our nicer car is leased - we run the expense through my spouse's firm, so it is paid by pre-tax rather than after tax dollars. None of these uses of debt are frivolous. They cut my taxes and don't reduce my net worth. And they all increase my liquidity with minimal additional cost or risk.

That's called tax fraud.

Life is about choices. We live in a small home and drive older cars. We have reasonable savings, a college fund started, and can pay cash for most crisis that come up. We could do more, but we choose not to. Our only debt is our mortgage. Our cars are paid for (right now) and we pay our credit cards off monthly. I know several people who live like we do.

My friend just took out a 5k loan to buy a 3k motorcycle and to have another 2k left over for Christmas shopping. Insane if you ask me.

I used to be in 50K of credit card debt. We clamped down and paid it off in a matter of 4.5 months. Now we net about ~20k per month after maxing out BOTH our 401Ks and save 8k cash per month. We'll ease up when we hit 150K in cash savings and start adding in a few luxuries.

We might have racked up some idiotic cc debt and spend money like drunken sailors, but were at least smart enough to only take on a mortgage that costs us $2,500/mo, which is our only debt and a luxury car at 750/mo (which is also almost paid off).

I have absolutely no idea what people's personal situation is, as I don't ask.

50/50 but no one will admit it.

Anonymous wrote:

Anonymous wrote:I get what you are asking OP, but I don't think having a car payment (or student loan payment as another PP mentioned) is really comparable to living paycheck to paycheck and needing to put home repairs on a credit card.

DH and I have student loans (not all of us are fortunate enough to start out the gate with school paid for) and we have a car payment, but drove our last cars for a decade. We have zero credit card debt and savings for home repairs/money for the occasional vacation, etc.

There is a huge gap out there between being DCUM rich and living paycheck to paycheck. I imagine the vast majority of people fall somewhere here.

OP here. To be clear, I think there is a huge difference between a car payment on a sensible car (and then driving a paid off car for a while) and leasing a luxury car every 2-3 years, which MANY MANY people in my neighborhood seem to do. It seems they really only care about what they can afford on a monthly basis rather than looking at a larger financial picture. Sometimes my friends seem baffled that DH and I don't spend they way they do - our cars and house are sensible not showy, and we save A LOT toward kids college and retirement. Its not exciting.

As we have grown older some of our friendships have dwindled. We are no longer into blowing 100 on booze and dinner on a wed night.

Anonymous wrote: I actually think A LOT of people lease cars, have home equity lines, credit card debt, etc. to live the lives they lead.

A net worth of $1M puts you in the top 10% of Americans in terms of wealth. An income of just $160k puts you in the top 10% of earners. So, very few Americans have the financial ability to buy a $800k house, own a BMW and a Range Rover, and send their child to a $60k/year college or $40k/year elite private school. Too much personal debt is a real financial problem for most Americans.

However, debt can also be a smart way to manage your money. There is a difference between consumption and capital expenditures and living beyond your means. I have a margin account with my brokerage and I use it a lot to juice equity returns and preserve balance with the hedges in my portfolio. My house is 100 years old and it will last another 100 years. There's no reason not to have a mortgage and spread out the cost of the house over its useful life. A mortgage provides a tax shield and financial leverage in an up market to increase my ROI. The six figure home equity line of credit we have is solely to manage our quarterly tax payments and the balance hits zero on April 15th every year. I use a charge card for about $15k in expenses every month. I get the convenience of not writing checks, a bunch of reward points, plus a $15k float without paying any interest. Our nicer car is leased - we run the expense through my spouse's firm, so it is paid by pre-tax rather than after tax dollars. None of these uses of debt are frivolous. They cut my taxes and don't reduce my net worth. And they all increase my liquidity with minimal additional cost or risk.

Anonymous wrote:If you define going in debt to mean having a net worth below 0 then hardly anyone I know meets that definition. If you mean at times they don't have emergency funds to cover an unexpected major expense and need to borrow money to cover it, then I'd say about half the people I know meet that definition.

I define it as making non-required purchases (such as leasing a luxury car when your previous car was 2 years old and running great, or replacing all of your kitchen appliances that were not old and worked great simply b/c you didn't like what the previous owner picked) on CREDIT with no immediate plans to payback the debt. Any influx of cash (such as tax refunds or bonuses) is NOT used to pay down this debt but rather spent on more discretionary crap.