Well if you are high spending and low income then eventually you will run out of money.
I never have really understood high spending. I mean you don’t have to be cheap on all things, but some items the more expensive item is not a better value. Of course when you start talking about value you bring in subjectivity into the discussion. I get that. But I will take my Honda Civic over a BMW any day if I have to pay for the BMW.
These are just about habits. Depends on your consumption level when you are growing up. Maybe you have vanity needs. Any number of reasons why some people spend more money than others. Few people live like a monk. And then there is a spectrum.
Comparatively… In our area with one roommate a nice, newer 3/2 (sometimes 3/2.5) townhouse with garage would run each person about $750 - $900/month. I just looked on Zillow.
Some young people like to experience what HCOL areas have to offer while they single
I agree. I’m not disputing anyone’s living choices - just putting facts out for anyone who is reading.
I appreciate that millions live in cities. If everyone opted to live here, I wouldn’t like it anymore.
Actually my kids have been paying $1300 a month, a 2 bedroom/2bath townhouse for a few years now. This year the kid in LA had an increase for the first time. I forgot what she told me $50 or $100.
My son is paying $1300 per bedroom with master bath in the wealthiest county in the U.S.
But it isn’t just rent. Having spent decades in NYC, I was amazed at how much money I went through just living my life there compared with other places. Meet a friend for a drink or dinner, buy groceries, go to a movie, rent a car to go someplace on the weekend, gym membership etc. And there was no way I wanted to be in the 12x16 space I paid a fortune for all the time! That part of the COL.
Sure, there are ways to pay less - free events, etc., but it is hard to be in a happening place and not pay to be a part of it.
The beaches are close by and free. The parks are free. My kids went hiking for free. I mean there are lots of stuff that are free. When they get together, it’s at a friend’s house.
I personally never lived anywhere rural so both of my kids won’t either. It’s whatever you get used to. But I personally believe there are more opportunities living in a big city.
Btw, I just recently ate at a restaurant near York, ME, not really rural, but I volunteered that was my last day there, the waitress also said they also closed the restaurant after that day. She has a part time job line up.
My DD got her MBB sign on bonus a full 1.5+ years before she started. All depends on the company’s policies.
My recent college grad is living in a HCOL area and I know for a fact that gym memberships, as an example, are 2x+ as much as say your average COL area.
I visited a gym there for daily fee of $30, where normally I might pay a daily of $10-20.
I’ve lived in NYC as a student (very tight budget) and in a first job out of college (equally tight budget, but more room to “scrounge”) and believe me- there’s plenty happening on a budget.
The issue is housing. But if someone can figure that out, you don’t meet friends for a drink or dinner if that means a restaurant- you meet for Shakespeare in the Park and do a pot luck picnic with a bunch of friends. You get ushering gigs at cultural events so it’s a nice evening “at the theater” even though nobody paid for tickets. You have a friend whose company regularly gives away seats at galas (free food, free booze) and another whose company has tickets to sporting events. You learn which credit card company has “free museum weekends” and you get that card, and you learn which part-time jobs have fantastic perks and you moonlight there (many jobs for cultural organizations offer free passes to dozens of museums and performances to their employees). So a four hour shift at the gift shop at a museum once a week gets you a pass for hundreds of dollars worth of admissions.
I did more free stuff living in NYC- broke-- than I did in a medium sized city in the Midwest on a comfortable salary. Why? There was more of it! And people in that Midwest city routinely went out for lunch, avoiding the “subsidized” cafeteria at work. In NYC? “subsidized cafeteria” was huge- and people readily volunteered for overtime to get the free dinner and transportation home as well!
Didn’t join a gym. Without a car you walk EVERYWHERE, including the steps to your apartment.
It depends on the company. Some of them subsidize things like that, or even have them on the campus. If they don’t those are certainly things that add to the pain.
Wish we’d been friends! I heard about some of these things and did what I could, but I was working too many hours to have flexibility for free gigs. But I did walk 60 blocks home at 2AM because I needed to save. And I drank in dive bars. Yes, my theater friends seemed to have more flexibility. Me, with a finance job, not so much. Just sayin that I was living pretty frugally and was pinching pennies on a “decent” salary.
D2 majored in Energy Commerce, but decided to go to law school after graduating. But she had friends in the field who all started at over 6 figures, and this was 6 years ago. One guy who got the six figure offer tested positive for THC and had his offer rescinded. He thought he would abstain for a week and cruise through it, only to find out the company did hair follicle tests. I wonder what ever happened to him.
D2 is a third year attorney and makes well into six figures. The gift we gave her of a post-grad education paid for (so no debt) is something she knows has put her in a very good position. She works hard, but whenever she moans about it, I say “that’s why they pay you the big bucks!”
I needed a friend like you! I was ALWAYS the person who wanted to walk (my apartment was near a very shady subway station so walking was definitely safer) and my better paid friends always wanted to save their feet vs. the money!
There is a potential tax advantage of company stock in a 401k. When you take distributions, gains could be taxed at capital gains rates while the stock basis is taxed at ordinary income rates using the Net Unrealized Appreciation strategy.
It could be quite a substantial difference if you have a large amount of appreciated stock and are in a high tax bracket. Obviously, concentrated stock positions are risky.
At some point, the tax code could be revised to no longer allow NUA.
I was using gym costs as just one example of extra cost of living in a HCOL areas. Subsidizing would be great, but “campus gyms” are typically a joke for serious fitness enthusiasts. IMO, of course.
I’m sure that is why my local gym is filled with 20 and 30 something high-tech workers. One guy who I talk to alot is a Facebook/Instagram employee. Another is a Stanford medical researcher.
It depends where you live. Salary is relative. In California, yes, but it’ll buy you a 2 bedroom apartment if you’re lucky. In Texas, no, but the salary will buy you a 1500 sq foot house with a suburban playground.
Out of undergraduate, you can expect an entry level salary, no more, no less. That amount is determined by the area market. If employers go any higher, they can simply hire an experienced professional.
Experience and brilliance are complimentary but not interchangeable. A brilliant mind, without pollution of experience can think out of the box and strive for unthinkable heights. An experienced mind is a different kind of strength and every company needs both.