Dean Altman
What really constitutes making ‘average’ money in America? Well, it depends a lot on what your expenses are, and also, whether or not you think something like taking three vacations a year is average.
One anonymous couple based in NYC shared a breakdown of their expenses. They’re each 35 years old, with two young children, and each partner makes $250,000 a year as a lawyer. And somehow they still end up feeling “average,” according to CNBC. Yep, half a milliona year is earned by this household and they still think they’re “average.”
Here’s exactly where their money goes.
CNBC
Wow, they have a home (as you can tell from the mortgage), three cars, and are able to pay for sports and music lessons for the kids. They give $18,000 a year to charity while paying off school loans, but they still manage to put away $36,000 in their 401ks, too.
Given that, according to the U.S. Census Bureau, the median household income as of 2015 was $56,516, you’d think a household making half a mil would probably realize that they’re way above average. Even after settingaside 10 grand each year for miscellaneous expenses, they still end up with over $7,000 to put towards savings each year.
As you can imagine, the internet could not help but mock these people.
https://twitter.com/darth/status/1110571701819965441
anyways
having $7k at the end of the year would probably feel pretty great to a lot of people— darth™ (@darth) March 26, 2019
“something always comes up” lmao *plays violin*
— pony starwars (@tigersgoroooar) March 26, 2019
Average people don’t have the ability to contribute 18k a year to charity either
— ODS (@brendan_schleen) March 26, 2019
Their house is $1.5 million, with $20,000 property tax payment. So average.
— KP (@lightsoutonight) March 26, 2019
$9500 a year in clothes! What planet are these people on!
— Intricate Expanses (@Intricatexpanse) March 26, 2019
Oh man, is there a GoFundMe for these people?? I want to help out however I can
— Connor Wroe Southard (@ConnorSouthard) March 26, 2019
One person pointed out that 401k and charity contributions are not actually “expenses.”
A hill I’m willing to die on is pointing out that 401k contributions are savings, not expenses.
— Morgan Housel (@morganhousel) March 26, 2019
If you fix that then the headline becomes "This couple that makes $500K and spends too much money still saves more than 20% of their after-tax salary, which is what happens when you make a lot of money."
— Morgan Housel (@morganhousel) March 26, 2019
The same goes for the mortgage principal.
You could also argue that mortgage principal is savings rather than an expense too. It doesn’t feel like it when you pay it, but it really is.
— Kate ???????????? (@Equivo_Kate) March 26, 2019
Another person pointed out that this couple will have saved so much money by the age of 66.
“feels average” *will have over 3 million saved in 401k by age 66* pic.twitter.com/T9i5dflvsO
— Michael Benson (@Michael__Benson) March 26, 2019
Did you catch the part about threeeeeee (3!) vacations a year?
“three vacations a year” is really snuck in there
— Dana Schwartz (@DanaSchwartzzz) March 26, 2019
Someone claimed that there are 129 million Americans making less than $35,000 a year, comprising 56 percent of Americans with income.
Exactly… And there are 129mm Americans that make less than $35k per year — 56% of Americans with income. This shows $36k in 401k contributions, $18k to charity, $10k misc with $7k left over. Those figures alone total $71k, more than double what most Americans make.
— Dan Connell (@dpconnell) March 26, 2019
Maybe not so “average” after all?
