I enjoy writing my own monthly financial update as well as reading those over on
Money Saving Mom's website. I also enjoy reading other people's updates that they link, and I usually link mine there was well.
However, for whatever reason, I have a rather difficult time getting past the fact that it's a lot easier to save large amounts of money when your family
earns a large amount of money. Her family's big goal is to pay 100% cash for a house, and they live in a low cost of living area of the midwest. I think that's a great goal, and since her husband is an attorney, probably a fairly easy one for them to accomplish if they are good stewards and don't live the typical attorney family lavish lifestyle that I have noticed in some attorneys (large home, fancy cars, $1k suits).
Lately, their family has been able to save about 6% of the purchase price of a home each
month. Even in a low cost of living area, say that house would be $150k (that's what my house cost 5 years ago). That would mean putting $7500 cash, per month, into some type of savings account or short-term cd.
That is great and all, but most people don't even come close to earning that much in a month, let alone being able to save that much in a month. The comments to the post are quite interesting.
So take my parents. They have never earned more than $45k (total household income) in a year, even though they both work full time. They bought their house in 1985, at a cost of $27,500 and they paid it off about 10 years ago, although they did take out loans for several large remodeling projects (rebuild a condemned garage; new roof/windows/siding/furnace/ add a/c; upstairs addition). They usually have some sort of a car payment, though not at this time.
The reality is, people at my parents' income level are never going to be able to do something like paying cash for a house or a car (unless it's a $500 clunker!). They wouldn't even be able to save $7500k in a
year (which would be 17% of their gross income, or about 20% of their net income), no matter what level of frugality they operate under. However, they have done well with what they have (thanks to my mom, who is thrifty-- not my dad, who is a SPENDER).
Even in a family that earns $100k per year ($8,333 per month), saving $7500 in a month would be next to impossible, given that is 90% of their gross earnings (they wouldn't even be bringing home $7500 in a month-- and this is a six figure a year income we're talking about).
Okay, what about a family earning $200k/year, or roughly $16,500 per month gross. To save $7500/month would be 45% of their income before taxes, and closer to 62% of their net income. Given, they would still have $4500 to "live on" after that. I think most people consider a family that earns $200k/year to be "rich". I know I do. I realize it's a regional thing, and if you don't use your money wisely, you can end up in the hole just as easily as somebody at my parents' level of income.
But in any case, I need to STOP being discouraged by other people's faster progress toward their financial goals than what my family is able to do. We do not earn $200k per year and probably never will, with both of us being civil servants. In fact, if I quit to stay at home after our next baby is born, our income level will be right there with that of my parents. (YIKES).
It can be difficult to get fixated on OTHER PEOPLE (especially if you are Type A and tend toward jealousy like I do).
I need to focus on what works for us. What our needs and goals are. Regardless of how much money other people make and what they do, or do not do with it. Getting stuck on somebody else's life isn't going to do anything to improve my own!
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