First Person: How to Earn $100,000 and Still Feel Poor

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Our family income recently topped $100,000, but we aren't spending as though we make six figures. We don't sip Mai Tai cocktails at resorts or buy pricey tech toys.

According to recent data, incomes are rising and consumers have more money to spend. They are also taking on more debt for the first time in three years. Financial experts say the increase in borrowing can be attributed to buying cars and paying for college . We bought a new car this past year so our son could earn money for college delivering pizzas. He may need to borrow money for grad school.

Is six figures the new minimum wage?

Although I admire people who live on fixed incomes or minimum wage, I have no idea how they do it. When I was younger, I got by on a salary of just $19,000 a year. At that time, I did not have a mortgage or two sons attending college. Back then, the high cost of childcare took a big chunk out of my pitiful paycheck . Still, I never thought we would have trouble living on $100,000.

What's up with my net worth?

I always figured my net worth would increase as I earned more income. In fact, I thought that clearing that six figure "hurdle" meant we would be financially set. However, our net wealth plummeted since the housing bubble popped. Our home is on the "liability" side of our net worth chart. Although the stocks have recovered, our retirement accounts do not reflect the balance I would have expected once we earned six figures.

Why don't I have money to burn?

My lifestyle isn't extravagant. We are spending less money on clothing, entertainment and anything that is not a necessity. We don't have money to burn because of the high cost of gasoline, car insurance, groceries and college tuition. We also have a high tax bill every year.

Housing: We live in the Tampa, Florida area, where we hadour 1,800-square-foot home built at the top of the housing bubble. I’d feel alot richer if I could take the $183,000 we spent seven years ago and buy a hometwice the size today in a better neighborhood. Some of the homes in mysubdivision have been vandalized. I never thought I’d see broken sliding glassdoors and graffiti on the walls of homes that people had to get on a waitinglist to buy. Houses were in such high demand we put a $3,000 deposit on our lotat the builder’s model home center before even seeing the subdivision. To try to stay above water on our mortgage, wepay an extra $250 a month to the mortgage company. That way, we will at leasthave the option to move if we need to in the future without ruining our credit.

Expenses: Our fixed expenses include $350 a month forutilities, $300 for car insurance, $175 for Internet, cable and phone. We owe$1,222.02 a month on our mortgage and $300 on a car loan. We have no otherdebt. We save 10 percent of our income for retirement. We spend at least $500 amonth on gasoline and an astounding $1,000 a month on food. I’d feel rich if Iwas eating at upscale restaurants or buying gourmet foods, but our food budgetjust provides the basics for four people.

Education: We are spending about $15,000 a year for tuitionand books to send our two sons to community college. When they transfer to theuniversity in another year, those expenses will more than double. My older sonpays $5,000 or about half of his tuition costs since he has a part-time job,but my younger son hasn’t been able to find employment. I’d feel wealthy if Iwas struggling to send my sons to an Ivy League College, but this is justcommunity college.

We purchased stocks to help fund our sons'college education, but the stocks took a big dive. We are hoping the value oftheir stocks will recover to help pay for the last couple years of college. Wedon't want them to take out college loans, but they may have no choice.

But it's not all bad

Although we have a lot of expenses, we have managed to stay out of debt. I am sure if we did not make six figures, we would fall into the debt trap. Experts say people tend to take out more debt when they have more equity in their homes. Even if the value of our home begins to increase one day, I won't feel comfortable taking on more debt. Instead, we plan to be free of our mortgage debt within the next 10 years.

I may never have money to burn, but I hope to have a chance to enjoy something before the tax man takes his cut.

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