My relatives make 20k a year, and live better lifestyles than me making 100k

[heavenlyboy34]

the folks above who have touched on finding a better student loan agency are right. I am in the process of paying back my Sallie Mae and Direct Loans loans. The payments are only a little over $100/month for each (~$200 total), and over time the minimum payment has gotten lower. (with DL, my minimum is now 0, but I keep paying because I want it over with) If I had my druthers I'd consolidate with Direct Loans because their service is better-but it seems more hassle than it's worth.

 

[Roy L]

take a guess at what happens to societies that have shrinking incentives to accumulate wealth?

They thrive, because "accumulating" wealth usually means engaging in wasteful rent-seeking behavior, not PRODUCING wealth. Look at the trillions the banksters have accumulated -- i.e., shoveled into their own pockets -- in the last four years, with not a jot of real wealth production among the whole lot of them. How is that workin' out for ya?

 

[onlyrp]

You're account of making $100,000 a year not adding up to much seems pretty accurate. Unless you are rich, the money you make usually only covers the basics. Jobs just give you enough to afford to make it back to work the next day.

he didn't say "just cover the basics" or "not adding up", being able to pay student debt and donate 10% of your income "cheerfully" to charity, is not "just the basics", of course he won't tell us how much he's saving up. So how about you tell us what your situation is now. What do you make now, what are your current expenses, and how much do you save a year? I'm not asking you whether you are motivated to keep working or whether you have more than basics. I'm not letting you get away easy by keep saying "I got just the basics". I expect from the both of you, actual numbers and actual items.

I'm not sure about your account of people making $20,000 year. I don't know anyone making $20,000 a year who can live on their own without assistance. People making $20,000 a year don't afford nice apartments or shop at whole foods. They live with their parents.

He didn't say they have nice apartments, but he did say they get $10k "back" from the government for having kids. I'm not sure if $10K is going to outdo the cost of having kids, so I'd still want to hear how he gets the idea they are better off than him (or even better off than your brother).

You are right that you are being scammed, but the people making $20,000 are being scammed too. People making a good living with a good job should be able to afford more than the basics. People doing hard labor should also be able to at least make a living and afford the basics without government handouts.

This is where the two of you fundamentally disagree, he seems to suggest government handouts make people making $20,000 better off than him who makes $100,000, he has yet to account for the actual details.

 

[onlyrp]

My account is completely accurate. My parents have been frequently sending money to my brother who makes roughly $20,000 a year. And he is stingy too. He doesn't waste money on anything. One thing you should consider though is that this guy apparently lives in Kentucky. My brother lives in L.A.

I understand living in Los Angeles and Connecticut may be higher than many other States in the country (such as Kentucky). I don't doubt your brother actually gets money from his parents, so I'd love to hear more details.

From you, how much do you make, and how much do you save a year (now)?
What are your brother's expenses, and how much assistance does he get from your parents? (I mentioned earlier in the other thread, your brother's income may qualify him for cheap rent apartments, about $600 a month, I know people who live there, they're small, but that's how you "live within your means")
How exactly does this guy's relatives get "better off" by whatever handouts they qualify for?

 

[rockerrockstar]

Wasting 10% percent on charity and church seems to be a big problem. Why are you giving away money to them when you need the money. You should help yourself out before others.

You student loans seem excessive I guess that is for two people. If it is a grand each maybe not so bad. But still seems high to me. Why are you paying more than the minimum payments the interest rates should be super low on school loans and the interest is tax deductable. You should wait tell you have a good pay raise before paying extra on these.

 

[onlyrp]

Wasting 10% percent on charity and church seems to be a big problem. Why are you giving away money to them when you need the money. You should help yourself out before others.

You student loans seem excessive I guess that is for two people. If it is a grand each maybe not so bad. But still seems high to me. Why are you paying more than the minimum payments the interest rates should be super low on school loans and the interest is tax deductable. You should wait tell you have a good pay raise before paying extra on these.

He doesn't need a pay raise, he already is committed to paying it off in 10-15 years, so it sounds like he's paying as much as he can. Many people have already said, he shouldn't donate, not deduct it on taxes, and then complain about it. I don't want to keep speculating, I just want him to show more numbers if he wants any sympathy points.

 

[AceNZ]

You guys keep leaving out state income tax, which is 6% in my state. We're actually looking into moving to a state with no income tax.

One of the few sane things in this thread.

To the guy who suggested getting a house for a mortgage deduction, we hate debt, and want nothing more than student loans. When those are paid off, we are not getting into debt again. Besides, the 1k a month we pay for rent is far cheaper than the mortgages on the 400k+ houses in this part of town. To find cheaper rent or houses requires us to move so far away from work that we can't walk and bike to work anymore. We'd end up paying more in gas, car expenses and stress from traffic.

You pay more, but you also build asset value while reducing the high effective tax rate you're complaining about.

I am intelligent enough to know about itemized deductions. If we went this route it would have saved us a thousand dollars or so. Big deal. Did not want to itemize for $1k in savings because most IRS audits are geared to those who itemize. In short, I do not want to risk the headaches for $1k in savings. If it were significantly more than that, then of course I'd itemize.

You've got to be kidding me. You're bitching about high tax rates and you're giving the gov't $1K more each year than they legally require?

Oh, FWIW, the risk of audit is not necessarily higher just because you itemize. Even if it was, tax audits aren't the end of the world. You're really so afraid that you're willing to throw away $1K a year to hopefully reduce audit risk?

The student loans are well over six figures. In the line of work one of us is in, most students graduate with over 150k in loans, lots of them over 200k or 300k.

I hope your degree wasn't in finance. If it was, man did you get screwed. Truly, based on the comments in this thread, it's no wonder that some people have a hard time getting by on $100K/yr.

 

[AceNZ]

I am not going to stop giving to church and charity so that I can buy a laptop.

OK, I understand.

Let me restate what you're saying: it's more important to you to give money to people who didn't earn it and who you probably don't even know than it is to provide for yourself and your family, and in the process also support people who actually work for a living, doing things like building, selling and shipping computers (and everything that goes into them).

Gotcha.

In case anyone is wondering WHY the gov now takes 28%+ in taxes, it's exactly that same kind of logic.

 

[MadOdorMachine]

I think the OP is right to a certain degree. I have a sister in law who has no job, has 3 kids (and a 4th on the way) by the same man and isn't married. The boyfriend has never had a steady job either - most of the time he's unemployed and running the streets. She and her kids live in the same house which my mother in law owns. Their cupboards are overflowing with food, they have free medicaid and even get perscription drugs prescribed to them on a regular basis. I once asked my sister in law why they don't get married. The answer - because she would lose all the wellfare. We live in a society that encourages this. It's bad for the economy, but even worse, it's creating a generation of father-less children. It's destroying the family.

I don't know what his financial situation is (debt vs. income ratio) of the OP, but he has a much better chance at being successful in the future. Renting right now and paying off your college loans is a great idea imo. I do think you should buy a house/condo eventually though even if it's a cheap one. If you own your house, that's one less bill to pay.

 

[JuicyG]

OK, I understand.

Let me restate what you're saying: it's more important to you to give money to people who didn't earn it and who you probably don't even know than it is to provide for yourself and your family, and in the process also support people who actually work for a living, doing things like building, selling and shipping computers (and everything that goes into them).

Gotcha.

In case anyone is wondering WHY the gov now takes 28%+ in taxes, it's exactly that same kind of logic.

I believe God is pretty self-sufficient. Don`t think he needs money. I also don `t believe he needs money to spread his message since he`s all powerful and all mighty.

Regarding charity, I believe you can really make a difference once you`re self-sufficient yourself. You`re not self-sufficient if you still have credit and loans to pay.

 

[NCGOPer_for_Paul]

I'm reading through the responses here and I'm still very confused as to what the OP's issues are, outside of him making choices which put him in the financial position he's in. I do sympathize with his point about people who make more and strive for more getting bent over by the government to subsidize those who don't try to do better. Yes, I understand that, and it does lead to people becoming lazy and dependent. That's what the left wants. The left also wants EXACTLY (minus the church donations) what the OP is doing. They want you to get overburdened by student loan debt. They want you living in an apartment "close" to your "job", so you can "walk" or "bike". They want you to shop at Whole Foods. They want you paying an effective tax rate of 30%. You are making the perfect argument against "smart growth" and "smart planning", and you don't even realize it.

Ron Paul has said that your are supposed to take all of your deductions. When you itemize, you also get to deduct your Kentucky withholding from your Federal.

I applaud your efforts in trying to get out of debt as fast as you can, but you really have to sit down and figure out where your money is going each month.

No offense to Kentuckians, but I'm finding it very difficult to believe that there's anywhere in Kentucky that the average house price for a 1,500-2,000 sq. ft. home is anywhere near $400k. That's the average price in North Jersey/NYC area and the DC area. It sounds like you don't really "own" anything, so I don't really think you need anything larger, especially if you're currently living in an apartment.

Why are you afraid of an audit? Your return is so simple, they won't even bat an eyelash over it. You could even make up deductions (as long as there is some proof) and they wouldn't look at it. It's when you start doing it for five or six years and really cheating is when they look at it.

I'm evangelical also, but my fear is your church has you believing things that just aren't true.

 

[Paul Fan]

It is interesting that many people are suggesting the OP cut back the tithe, when the better answer is to cut back the taxes - which is exactly what he's trying to do by supporting Dr. Paul.

 

[NCGOPer_for_Paul]

It is interesting that many people are suggesting the OP cut back the tithe, when the better answer is to cut back the taxes - which is exactly what he's trying to do by supporting Dr. Paul.

Nothing wrong with him tithing, but there is something wrong with him for not taking the deduction. I think that's what most people are saying. If he's not going to take the deduction, he shouldn't be giving so much to the church.

And yes, we all want taxes to go down and be eliminated, but that isn't the reality right now.

 

[xFiFtyOnE]

I understand frustrations with welfare abusers but to say someone who is raising a family with $20k a year is doing better than someone that makes 100k a year is simply absurd. If your frustrations are in the fact that you can't "eat out" as much as the people living in poverty you should probably reconsider your life style. Ever hear the phrase "more money, more problems"...most of those problems are self created.

This post kind of reminds me of my former boss(he got promoted...LOL). He came from a wealthy family, got a job here makeing between $100k to 120k, is my estimate. Always complained about his debt and hardships. The guy owned a nice 2 story house, 2 brand new SUVs, a couple jet skies, a boat that was basically a yacht...no telling about the stuff I didn't know about. He was at the office MAYBE 30 hours a week. Most of that time was spent looking at porn or fishing equipment on the internet. Where as I spend 50 or more hours a week at work busting my ass and have yet to see a $40k year. Cry me a river. But as Bill O'Reilly says "poor folks in America have TV and air conditioning", that makes up for it right?

Your starting pay is 100,000. You pay 20,000 in student loans, 20%. You pay 30,000 in taxes, 30%. I'm going to give a generous estimate of 10,000 for healthcare (10%) to offset that free gov'ment healthcare...that as far as I know only covers children, the elderly and disabled. After all that you still take home 40k...double your 20k making relatives. Your wallet must have a leak that you don't know about.

 

[moostraks]

You guys keep leaving out state income tax, which is 6% in my state. We're actually looking into moving to a state with no income tax.

To the guy who suggested getting a house for a mortgage deduction, we hate debt, and want nothing more than student loans. When those are paid off, we are not getting into debt again. Besides, the 1k a month we pay for rent is far cheaper than the mortgages on the 400k+ houses in this part of town. To find cheaper rent or houses requires us to move so far away from work that we can't walk and bike to work anymore. We'd end up paying more in gas, car expenses and stress from traffic.

I am intelligent enough to know about itemized deductions. If we went this route it would have saved us a thousand dollars or so. Big deal. Did not want to itemize for $1k in savings because most IRS audits are geared to those who itemize. In short, I do not want to risk the headaches for $1k in savings. If it were significantly more than that, then of course I'd itemize.

The student loans are well over six figures. In the line of work one of us is in, most students graduate with over 150k in loans, lots of them over 200k or 300k. We personally know coworkers who owe more than 300k. You would be shocked at what kind of debt people are graduating with these days. If you go to a public university, you are fine. However, if you go to a private university as an undergrad, or a choose to go to any graduate school to pursue higher level education, chances are that you are graduating with tons of debt. I made a poll last year here on RPF, asking how much debt people had. Even people on this forum had over 300k in debt.

[edit] to the person who brought up Obama's loan repayment program that is based on income, it is a scam. Those programs do limit the monthly payment, but they are stretched out over 25 years. If we went this route and had remaining debt forgiven at 25 years, we still would have paid almost as much as if we just hurried up and paid the loans off in 10 years or less. Besides, we want to pay back the full amount since the government stole the money from other tax payers; and we want to pay it back ASAP because we don't want to be in debt for 25 years.

At the risk of piling on, I have to say you are making choices and with your choices comes accepting the consequences. As a Christian you need to stop minding your relatives backyard. You are looking at this as an outsider looking in. Walk a mile in their shoes before passing judgement. You have the money to make choices and they are living according to someone else's requirements.

You live in a neighborhood with $400,000 then living expenses could be less. This is a choice. I seriously doubt the $20,000 + children live in that type of neighborhood. You don't want to take on more debt so you will rent? You need to prioritize. So you are okay with paying $1000/month indefinately? Your choice but dumb imo. Move to cheap, yeah dirt cheap housing, get a cheap, yes rust bucket cheap car. Save money and pay for your luxuries ($400,000 house and cadillac organic diet) after you have enough money to afford them. You know being able to run the heat and such! You bought into the status stuff from the sounds of things and are cutting corners to keep the chosen lifestyle.

Might want to look into some books on voluntary simplicity to break the cycle you are in. If you owned your housing outright then you only have annual taxes to pay. Of course you won't live in that $400,000 neighborhood. At least not right away. Many/most cities have foreclosures for cheap. So you might still be pedestrian.

Seems sort of like you are just venting because your choices aren't paying off how you expected. Welcome to life! Try some out of the box thinking to achieve the lifestyle you want rather than thinking just because you make x amount of dollars or chose a career that was sold to you, you should have a certain lifestyle. You sound really bitter from reading your post and life is too short to buy into the class warfare nonsense that you are stewing about. If you don't like where you are at then make some attempt to change it or continue to expect more of the same...

 

[PaulConventionWV]

This country sucks. I get so frustrated at times that I find myself wishing for a collapse in hopes that the welfare freebies go away. I just did my taxes, and had conversations--in one case, a heated argument--with family who did taxes too. Here is modern Amerika for you.

My wife and I are pulling in 85k - 100k a year. Because we "make so much," we do not qualify for government handouts. Between federal, state and local taxes, 30%+ of our income goes to government right off the bat. Then over 20% goes to student loans. We live in a nice two-bedroom apartment and can afford to eat healthy food (Whole Foods, organics, etc). But we are not rich--we have not been on vacation in almost four years; my wife has wanted/needed a new Macbook for a year but we can't afford one; we buy most of our clothes from the thrift store; we have only been out to eat two times since September; we never pay money for entertainment such as concerts, football games, movie theaters, etc.

Two different sets of relatives of mine make around 20k a year. In both families the wife does not work, only the husband. One of them makes like $10 an hour at a big-box store, the other probably makes $12ish at a hospital. One family is expecting a third child, the other the second. This means that both families get enough tax credits so that they get way more money than they pay in--one is getting almost $10k "back" this April. Whereas I have to pay my own medical bills, these guys get Medicaid; and for all I know are on food stamps and who knows what else. Both families seem to eat out as much as they want, pay for entertainment, and in the last 6 months have gone on vacation.

In short, because our government is playing Robbin Hood, we have relatives and families in my church who make a fraction of what we make, but live better lifestyles than we do.

I'm sorry, but I don't believe you're as poor as you're making it sound. If you take out 50% of your income for student loans and taxes, you still make around $50k/year. That's about twice as much as I do and I am a stranger to the things you mentioned. There's no way you are that poor with a 100k income. Those people making $50k a year are considered to make a good living to most people where I live and that is with taxes taken out. Even with taxes taken out, you probably make more than they do because they are paying from a gross income of 50k and you have a NET income of that. Did you fail to mention any other debts you are currently paying? Like one poster said, if you think you are strapped now, try saving one income and living off the other. It's really not that hard unless you live in San FranCisco, but it looks like you live in Nowhere, Kentucky, so I fail to see how it is really that bad for you.

 

[revned]

My post goes in a slightly different direction than previously mentioned.

I've heard of people living off of less than 8k of their own money per year and living in a camper in a Wal Mart parking lot that talk about living happier lives than they ever did making 30K+ living in a standard home. I really think it all boils down to the fact that people who make less money typically have less external stress to deal with. They don't have to rely on others or have others rely on them to get a job done.

I have often thought, which would I rather be? A slave to society where 33% of my paycheck isn't even mine and I have to deal with everyone else's problems. Or would I rather be a slave to myself, having to deal with more straight-forward problems like having to grow my own food and find and treat my own water.

Self sufficiency is where it's all at in my opinion and this is what I'm working towards in my life.

 

[Joshua2585]

Thank you to the OP for stimulating such an interesting discussion. I have about 30-35k in undergrad debt. I am having trouble finding a job. I am 26. Graduated December 2010, got a job in August 2011, layed off in December 2011. Haven't found a job since. I've been unemployed for two months. My family has encouraged me to collect unemployment, but I refuse. I luckily had enough money in my bank account to live for a couple months. Funds are running low, though. I am currently defaulting on all of my student loans. Not much I can really do. I live with my sisters in a house that is paid off, which was a blessing and a curse, as my father had to die of brain cancer for us to receive it. I still drop about 300 a month on bills. Thank God for family.

I have made some poor financial decisions. I plan to remedy them as quickly as possible. I understand your frustration with people that live well beyond their means by collecting from government programs. I don't think it is the fact that they live better than you, but they sure live about on equal footing. The welfare state is truly destroying this country, but not only that, it is ruining this country's biggest asset... human capital.

I live in OK right now. I am planning on re-locating to Denver in the next two weeks in search of greener grass. My plans are similar to yours. Get debt free as soon as possible and stay that way. I plan on living a life of relative luxury, but our ideas of that might be different. I won't ever buy a new car, as the things we own often own us. I want to pay for things in cash. I want to have free time and hopefully the opportunity to travel. I don't want pets or dogs. I just want a travel buddy. I am excited for life. Don't worry about your moocher friends and family.

QUIT GIVING TO CHARITY, as you already do (taxes). This is honestly the only way to feel good about paying taxes and seeing other people feed off the welfare state. Look at them and say, "Aww, that is my charity that makes it possible for them to have a decent life." Obviously, keep the thought to yourself. lol

 

[Joshua2585]

I agree w revned. Great first post!

 

[Sam I am]

No offense, but even without knowing you, I can already state that I live with less than you. I do not own a TV or pay for cable, you probably have both; I do not have Internet service in my house, you probably do; I have eaten out twice since September (this includes fast food, or something as simple as a burrito from a gas station), you surely have eaten out more than that this month alone; we do not use or pay for cell phones, you do; we have not gone to a movie theater, concert or sporting event in over five years, you have; we have not been on vacation (one that we did not even pay for, I might add) since 2008, you have; our $10 bed is from Craigslist and EVERY other piece of furniture was free from friends, family or Freecycle, you surely have some new furniture; this is the first winter we have paid to heat our house above 55 degrees, I know that your house has been warmer.

We want her to be a stay at home mom, but we made the mistake of taking out student loans for college. To pay well over $2k a month in student loans requires us to find good paying jobs; having good paying jobs means that over 30% of our income goes to taxes.

If you believe you live more simply than me, and it saves you money, tell me where so that I can adopt it and save more money myself.

No offense, but even without knowing you, I can already state that I live with less than you. I do not own a TV or pay for cable, you probably have both; I do not have Internet service in my house, you probably do; I have eaten out twice since September (this includes fast food, or something as simple as a burrito from a gas station), you surely have eaten out more than that this month alone; we do not use or pay for cell phones, you do; we have not gone to a movie theater, concert or sporting event in over five years, you have; we have not been on vacation (one that we did not even pay for, I might add) since 2008, you have; our $10 bed is from Craigslist and EVERY other piece of furniture was free from friends, family or Freecycle, you surely have some new furniture; this is the first winter we have paid to heat our house above 55 degrees, I know that your house has been warmer.

We want her to be a stay at home mom, but we made the mistake of taking out student loans for college. To pay well over $2k a month in student loans requires us to find good paying jobs; having good paying jobs means that over 30% of our income goes to taxes.

If you believe you live more simply than me, and it saves you money, tell me where so that I can adopt it and save more money myself.