Maybe everyone is just bad with money? Or I'm not so hot with the maths?

"Dr. Zoidberg - RIP Oppo" (thetomselleck) 10/14/2019 at 19:49 • Filed to: costs of living

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You !!!error: Indecipherable SUB-paragraph formatting!!! , as it appears to have zero explanation for it’s findings, and is just a click-grab slideshow format. However, it was picked up by the local news.

Premise is: if we plucked you from your life, stuck you to rent somewhere in Seattle, all alone , and paid you $100,000 a year to sit on the West Seattle Bridge, you’d be short of what you needed to make to live in Seattle by $24,062.60 (it’s the sixty cents that adds legitimacy).

First, I was sad to think to myself, “$2,238 for rent in Seattle alone? That’s kind of cheap!” I once worked in a high-rise in Madison (and not the nice part) where new studios started at $3,000 a month... in 2015 .

Secondly, I immediately thought that $100,000 as a renter is probably more than sufficient. Am I wrong? Probably. Let’s explore.

Income: $100,000
Disposable income: let’s say $70,000
Minus annual rent: $43,144
Minus food for one person: $100/week (learn to cook!) -> $37,944
Minus water/refuse/internet/power: like... $400/month? -> $33,144

Two big wild cards are: transportation and student loans.

New high rises in downtown? Many of those people don’t even own a car. That removes a car payment, gas, parking, registration, insurance, repairs, etc. Though cycling/buses/cabs are not cheap but I don’t know how to quantify that. And who uses what will vary greatly.

And student loans... I know people who owe zero dollars; I know people who own over $50,000. Whether someone footed the bill for their higher education or not is a mystery on a person-by-person basis.

So let’s say most people have at least one of either a car payment or a fat student loan payment (let’s be honest: there must be some with both). Let’s call it... $400 a month.

I’m not even going to speculate on credit card debt.

Minus misc. debt mentioned above: $28,344

So... you have $28,344 of disposable income leftover annually, before you buy a $7 dollar mocha every morning, go out drinking or use recreational drugs . That’s $2,362.00 in hand, each month , after overhead (maybe) to do with what you will, with no dependents. That doesn’t sound... terrible? That’s some serious YOLO money.

Am I crazy? Help me out here.

MM54 > Dr. Zoidberg - RIP Oppo 10/14/2019 at 19:57

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You forgot the $45,000 uncle sam wants from that 100k

For Sweden > Dr. Zoidberg - RIP Oppo 10/14/2019 at 19:57

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If you live in Seattle, you have to budget in a berth , maintenance , and fuel for your float plane .

CB > Dr. Zoidberg - RIP Oppo 10/14/2019 at 19:59

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I’m pretty sure everybody is bad with money. Financing isn’t taught in school afterall. I guess everyone is blowing their money on... I don’t even know.

If someone would like to give me $100k to live in Seattle for a year to find out, I’m onboard.

jimz > Dr. Zoidberg - RIP Oppo 10/14/2019 at 20:00

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Help me out he re.

sure. don’t live in a place where frickin’ rent is $2400/month. And if you insist on living there, don’t bitch about it. Where I live my rent is just a bit more than a third of that and it’s a fairly big place.

Dr. Zoidberg - RIP Oppo > MM54 10/14/2019 at 20:01

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Uh, but I went from 100k to 70k in the first move based on typical income taxes, deductions for employer benefits

Dr. Zoidberg - RIP Oppo > jimz 10/14/2019 at 20:03

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Based on your reply, I will assume you read only the first and last sentence of my post.

just-a-scratch > Dr. Zoidberg - RIP Oppo 10/14/2019 at 20:07

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You are not crazy, though your description of disposable income doesn’t seem right to me. Perhaps that was meant to be income after taxes, though 30% income tax is pretty high now. M aybe just use 24% ?

Dr. Zoidberg - RIP Oppo > CB 10/14/2019 at 20:09

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I’ll take the $100,000 and they don’t even have to let me in the city. Win-win

VajazzleMcDildertits - read carefully, respond politely > Dr. Zoidberg - RIP Oppo 10/14/2019 at 20:10

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Oh that makes more sense, I couldn’t figure out how disposable income was working. I don’t want to click on a slideshow, but I might have to just for more info. 

facw > Dr. Zoidberg - RIP Oppo 10/14/2019 at 20:12

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You can definitely live on $100,000 with $2,200 rent, especially if you don’t have bad outstanding debts, so I agree with your analysis. Even on with way more rent it should still be doable.

One big thing you are missing is health insurance (and possibly health care costs, though those will vary much like student debt).

FWIW, I lived in a $3,200/month apartment on a salary that wasn’t much over $100k, without any financial difficulties, though I probably wasn’t saving quite as much as I should. I certainly wasn’t living paycheck to paycheck though.

Dr. Zoidberg - RIP Oppo > just-a-scratch 10/14/2019 at 20:13

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You’re right, disposable should strictly mean income minus taxes/SS/etc, and not “leftover after all taxes and bills and some food.”

You think it’s as low as 24%? I’m pretty sure my paystub shows...

[furiously types on calculator]

... well I’ll be dipped, almost exactly 23%. But I have other deductions, like my share of healthcare, IRA, HSA...

Highlander-Datsuns are Forever > Dr. Zoidberg - RIP Oppo 10/14/2019 at 20:15

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I think your math is solid but most folks spend north of $ 500-1000/ month on entertainment, clothing, and out to eat.

RPM esq. > Dr. Zoidberg - RIP Oppo 10/14/2019 at 20:16

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No, you’re right, that estimate is insane. $100k and $2.2k in rent would be a perfectly comfortable living in Seattle. Source: I live in Seattle and must be a financial genius since I haven’t gone broke yet. Come to think of it, neither has anyone I know, even on substantially less than $100k.

Your math is even too kind, I think. The effective tax rate on $100k is like 15%. This person starts with $85k after income tax, and then has the other stuff, so, conservatively, $75k. Also, non-car transportation is easy to quantify: an unlimited non-subsidized ORCA card is $90 per month, and most larger employers subsidize them. So the maximum possible yearly public transportation cost is $1080, and most people making $100k don’t even pay that much. Conservatively, after the basic monthly expenses, this person has over $30k annually to spend on non-grocery essentials (clothes, basic personal care, etc.) and non-essentials (gifts, entertainment, travel, their vices of choice), a car, and/or to service debts or save.

ETA: fixed some math. Point still stands.

Dr. Zoidberg - RIP Oppo > Highlander-Datsuns are Forever 10/14/2019 at 20:16

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Dang, I need to be friends with these folks, so they can spend of that on me

dtg11 - is probably on an adventure with Clifford > Dr. Zoidberg - RIP Oppo 10/14/2019 at 20:20

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I think the differences in rent across the country is wild. Here in Missouri, I’ll be renting a 3-bedroom, 2 bath, 1200 SQ FT apartment for $615/month, water and trash included. How much would something like that be in Seattle? Or do I even want to know?

Dr. Zoidberg - RIP Oppo > RPM esq. 10/14/2019 at 20:21

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I mean, shit: you can meet another young working single who makes even half as much, next thing you know you’ve got $150,000 combined income, split all the bills and rent, eat a little more food, and suddenly you’ve gone from “comfortable” to downright “cozy.”

RPM esq. > Highlander-Datsuns are Forever 10/14/2019 at 20:22

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A person who spends $1000 per month on entertainment, clothing, and going out to eat would still have another $1 000+ per month to spend on...other stuff in this scenario.

Dr. Zoidberg - RIP Oppo > dtg11 - is probably on an adventure with Clifford 10/14/2019 at 20:22

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It would be about 1-billion times more expensive.

RPM esq. > jimz 10/14/2019 at 20:22

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So you didn’t read the post at all, then?

RPM esq. > MM54 10/14/2019 at 20:23

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Not even close. Uncle Sam takes, like, 25% at most.

Dr. Zoidberg - RIP Oppo > facw 10/14/2019 at 20:25

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I kind of “attempted” to build that in. I keep less than 70% percent of my paycheck because my healthcare burden is deducted on top of my taxes, SS, etc. I also have an IRA and HSA, so that get’s the number down more. In other words, I feel that 30k out of 100k generally covers federal income taxes, SS taxes, medicare, and deductions due to employee benefits. Maybe.

RPM esq. > Dr. Zoidberg - RIP Oppo 10/14/2019 at 20:26

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I highly recommend this course of action. Hell, at that point you could move into one of those fancy $3k units, have a kid, and think seriously about private school.

Dr. Zoidberg - RIP Oppo > RPM esq. 10/14/2019 at 20:27

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Great, but first I need to divorce my wife and lose most of my money before I meet that young working single. Or, I guess after. The end result will be the same.

RPM esq. > dtg11 - is probably on an adventure with Clifford 10/14/2019 at 20:30

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Depends on how nice a view you want, but if you’re actually in the city and in a desirable neighborhood, Zillow tells me easily $2500-3200. More like $2000 in the close-in suburbs.

dtg11 - is probably on an adventure with Clifford > Dr. Zoidberg - RIP Oppo 10/14/2019 at 20:30

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From everything I’ve seen about the PNW, I believe it. I’d never want to live there

RPM esq. > For Sweden 10/14/2019 at 20:32

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That’s about what it would take to make the math in the article work. That, or one mother of a gambling addiction .

dtg11 - is probably on an adventure with Clifford > RPM esq. 10/14/2019 at 20:33

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that’s absolutely insane, I can’t imagine ever being able to afford that

Dr. Zoidberg - RIP Oppo > dtg11 - is probably on an adventure with Clifford 10/14/2019 at 20:35

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Here’s a meaningless anecdote: there’s a house six blocks from me, 3 beds 1 bath, unupdated, but water view... Asking rent? $2,495.00

Needless to say, it remains vacant.

RallyWrench > Dr. Zoidberg - RIP Oppo 10/14/2019 at 20:37

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The only thing I don’t see on your list of overhead that may cost a fair chunk of money is health insurance , but even so, their math seems suspect . I would kill to have $2,300 left over every month . It’s more like $23.00, if I’m lucky. 

RallyWrench > facw 10/14/2019 at 20:42

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Health insurance was also my first thought on additional expenses , because t hat robs me of $650 every month. N ot small change.

gmporschenut also a fan of hondas > Dr. Zoidberg - RIP Oppo 10/14/2019 at 20:43

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This is like that dumb article of the manhatten couple “scraping by) on 500k and then you see they spend 20k a year on vacations, 18k on food,17k for 2 cars in manhatten etc.

After college I worked in the suburb of a large city. Most of my young coworkers lived in the city. I had lived in it and did the reverse commute and kept thinking, of returning. B ut what deterred me the most wastn’t so much the cost of housing +20-30%. It was the cost to commute (tolls, gas, wear and tear, depreciation ) + in many areas parking costs. I still recal all the folks going on how broke they were and thinking “we all make the same amount”. Then i hear how they go out to dinner 5 nights a week etc. (kinda why I wanted to move back, but remembered how much that can add up)  

RallyWrench > dtg11 - is probably on an adventure with Clifford 10/14/2019 at 20:44

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Amazing. Anything 3/2 would be a bare minimum of $2,000 here (CA) .  

glemon > Dr. Zoidberg - RIP Oppo 10/14/2019 at 20:44

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I think they probably take home less than that if they have health insurance and a match they put in on a 401k, but still probably somewhere between $60,000 and $70,000 take home, but still, I   would think a single apartment dweller could swing it

RallyWrench > CB 10/14/2019 at 20:45

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Cars. We’re blowing it on cars. 

wkiernan > MM54 10/14/2019 at 21:02

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The state of Washington does not have a state income tax. I n t h e worst case, a t l a s t y e a r ’ s Federal income tax rates, if you earne d $100,000 and e v e r y l a s t c e n t o f i t w e r e fully taxable - not only do you c l a i m no dependents but you don’t even take the personal deduction for yourself! - you’d pay $1 8, 2 8 9 . 5 0 in income tax ($9,5 2 5 at 10% plus $29 , 1 75 at 12 % plus $4 3 . 8 00 at 22 % plus $1 7 , 5 0 0 at 24 %). Y ou must a l s o pay t a x e s f o r So c i a l Se c u r i t y a n d Medicare. If you worked in a regular job, you’d pay 7.65% o f y o u r “ i n c o m e ” ( l i n es 3 and 5 on your W-2) and your employer would pay 7.65%. But if you are self-employed (an odd contractor with zero deductible business expenses) you’d pay the full 12.4% SS plus 2.9% Medicare over the whole $100K making $15,300, which added to $1 8 , 2 8 9 . 5 0 totals t o $33 , 5 8 9 . 5 0 , which I, as an arithmetic crank, feel obliged to point out is a bit shy of $45K. A n d, of course, no one claims zero dependents and zero deductions, a n d m o s t p e o p l e o n l y p a y t h e e m p l o y e e ’ s half of the SS/Medic are t a x , so a n y b o d y ’ s a c t u a l t a x b i l l w i l l b e l e s s .

J u s t f o r l a u g h s (y e a h this is my idea of “ l a u g h s ” ) I g o g g l e d u p “ i n f l a t i o n c a l c u l a t o r ” a n d g o t t o  

www.usinflationcalculator.com

w h i c h s a y s t h e i n f l a t i o n - a d j u s t e d e q u i v a l e n t o f $ 1 0 0 , 0 0 0 today w a s $ 5 9 , 4 0 0 i n 1 9 9 5 . Using the same a b s u r d w o r s t - c a s e ( i . e . z e r o - d e d u c t i o n) m o d e l f o r i n c o m e t a x l i a b i l i t y and the 1 9 9 5 F e d e r a l rates I c a m e u p w i t h a i n c o m e t a x b i l l o f $ 1 3 , 6 8 2 p l u s 1 5 . 3 % S S / M e d i c a r e o n $ 5 9 , 4 0 0 = $9088.20 f o r a g r a n d t o t a l o f $ 2 2 , 7 7 0 . 2 0 , o r 3 8 . 3 3 %.

CTSenVy > Dr. Zoidberg - RIP Oppo 10/14/2019 at 21:05

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Either I live in the complete boondocks or I live way below the poverty line and don't know it.  

VajazzleMcDildertits - read carefully, respond politely > Dr. Zoidberg - RIP Oppo 10/14/2019 at 21:07

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The average tends to hide outliers. I’d rather see the median rent, which statesticly tends to reflect a commonality a little better than the mean.

This shows median rent in June to be $2259, so I’ll split the difference and say 2250 for easy maths. I’m also using this a bit. https://smartasset.com/mortgage/what-is-the-cost-of-living-in-seattle

I’m using this calculator for take home pay . At 100k a year, you should be saving for retirement in the 401k at employ, but substitute your IRA if that’s what you’re using instead. Pre-tax, obviously. If you make 100k a year and you don’t save for retirement, you’re being extremely foolish no matter how old you are.

I punched in 100 per paycheck for medical, 10% 401k withholding (people who have extra money should be doing 15%), 20 for dental and 20 for vision. A lot of big companies will comp you if you have no family members, so you could fiddle with it and say medical insurance costs nothing, but I can’t guarantee that.

Your take home is 2746 per semi-monthly paycheck. 2 paychecks a month, 12 months a year. That’s 65,904 annually, 5492 a month. Should be a piece of cake. Speaking of cake, I would expect food costs to be double what it is outside of town. Everything costs more in the city, and also, when you make 100k you don’t always wind up eating Ramen noodles or cheap groceries. Your friends probably make similar amounts considering where you live. I’ve seen food bills per month that would probably make you shit your pants.

Median student debt in the US is between 10k and 25k per Wikipedia (average is 38k!), so let’s say it’s 15k. I got charged just shy of 5% for mine, over 10 years, which is a $159 monthly payment. Other loans will probably be way worse than this. I also expect Utilities to be more than $400 but I can see that that’s probably reasonable if you’re frugal.

If you do own a car (i bet this example of theirs does) the fees are ridiculous for in city living. You typically pay for parking, which is variable, but let’s say it’s $200 a month. The car payment. Assuming it’s a recent used car, let’s say $200 a month. Insurance will probably be shit especially if you are under 25. Let’s say $200 a month. Maintenance and fuel will be at least another $200 a month, since there is probably nowhere in your apartment to work on your own car without getting into trouble.

I note from one of the links above that an Orca card (their bus pass or w/e) is around $100, so you could swap that out.

I find that misc expenses (random things that need replacing, bad news, etc) will probably need about $200/month.

Don’t forget, the sales tax in Seattle is 10.10%. Only offset is that Washington doesn’t seem to have a state income tax?

Rent (I find this low price implausible tbh): 5492 - 2250 = 3242 / month
Food (2.5x your estimate 1000 / month): 1 992 / month
Utilities 400 = 1 992 - 400 = 1 592 / month
Student Loans = 1 592 - 159 = 1 433 / month
Car = 1 433 - 800 = 633/month
misc = 633 - 200 = 433/month

About $108.25  a week to handle random shit or to spend money on. Stocking away all that on a rainy day is probably good for you, which is why single people tend to be richer. Keep in mind if you have a wife to needs your benefits or if you have a couple of kids in tow, all these costs start spiking significantly. I’d say budget AT LEAST $1000/mo for just about anyone else who depends on you in the least. 2-3 kids and you’re easily in the red, Child tax deduction or no.

Also, that slideshow is fucking useless.

Dr. Zoidberg - RIP Oppo > VajazzleMcDildertits - read carefully, respond politely 10/14/2019 at 21:11

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My food estimate was actually 100/week or 400/month

All that said, even with you adding in student loans and a car, you still don’t even up with negative 24k annua lly as the article suggests. No one’s even gotten close.

VajazzleMcDildertits - read carefully, respond politely > Dr. Zoidberg - RIP Oppo 10/14/2019 at 21:14

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Sorry, first edition, I hit enter too early and pasted in half of it. I can edit it for the grocery bills.

However, the slideshow doesn’t indicate whether there’s a family or not. But I bet he’s using a pessimistic scale either way. Let me fix what I got.

Edit: My conjecture is that he is probably factoring significantly higher rent, like $4000 or something. I know that pulling in all the extra insurance benefits I can leverage (term life, extra AD&D, weird other rand om stuff) can pull in another $150 a paycheck, Gas is at least $3.60 a gallon it seems and with the bad traffic you’ll be burning an extra 2-3 gallons a trip just idling. And mortgages, once you factor in taxes and insurance are higher than just the principal + interest payment, and probably food costs are higher than we think.

Leave the car in and you’d probably at a net loss of about a grand a month , since I used averages and medians where I could. I wouldn’t be surprised if some early mid- level IT tech bro who makes around that salary to have running costs of 5K a month unless he didn’t want a car.

There are a lot of alcoholics in that industry. 

Svend > Dr. Zoidberg - RIP Oppo 10/14/2019 at 21:16

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Oh my God. You’ve made my week.

With you as an American saying maths and not just math, you’ve made my week.

Thank you.

It’s one of those American things that really bug me like,

‘I need to speak to you real quick’, no speak to me at a regular tempo so I can understand.

Or

‘I reached out for a comment', no you didn't, you used a contact number/address/e-mail/etc... and contacted them. 

NKato > Dr. Zoidberg - RIP Oppo 10/14/2019 at 21:18

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 The problem is that landlords don't try to get renters ASAP. If it's still vacant after a quarter, it's likely owned by foreigners. 

VajazzleMcDildertits - read carefully, respond politely > VajazzleMcDildertits - read carefully, respond politely 10/14/2019 at 21:27

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I would like to point out I seem to have invisibly subrac ted $250 too much to the food deduction but it won’t let me edit any longer. Sorry about that.

AestheticsInMotion > RPM esq. 10/14/2019 at 22:06

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Have you looked at Redmond lately? It’s eclipsed Kirkland and B ellevue, significantly too. We’re at the 1 bedroom/1 bath for $2.5-3k point, at least downtown. Craziness 

Dr. Zoidberg - RIP Oppo > CTSenVy 10/14/2019 at 22:40

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You’re doing just fine. Just don’t move here.

subexpression > Dr. Zoidberg - RIP Oppo 10/14/2019 at 22:41

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Lots of people are bad with money. L ots of other people in recent years have been finding ways to cash in by telling them it’s not their fault that they’re broke . It’s a lot easier to sell that idea than it is to help people get/stay out of trouble .

Highlander-Datsuns are Forever > RPM esq. 10/14/2019 at 22:51

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Then they need to factor in about seven subscriptions for streaming video.

wafflesnfalafel > Dr. Zoidberg - RIP Oppo 10/14/2019 at 23:36

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yes, but I spend $78 00 on hipster beard oil annually

farscythe - makin da cawfee! > Dr. Zoidberg - RIP Oppo 10/14/2019 at 23:49

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70 grand disposable?

O.o

thats twice what i make a year.......that said... my rent is 650 a month for a 3 bedroom house

i takes a ridiculous amount of money to be poor over there

LastFirstMI is my name > Dr. Zoidberg - RIP Oppo 10/15/2019 at 01:07

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Probably written by some dude who is trying to convince his parents to give him more money. Or explain to his girlfriend why they can’t get married. Maybe both. 

RPM esq. > dtg11 - is probably on an adventure with Clifford 10/15/2019 at 13:21

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Well, depending on your industry you might make 40% more to do the same job here, if that makes it easier to imagine. Not true of every industry of course, but salaries are generally higher here than in places where rent is 50 cents per square foot.

Snuze: Needs another Swede > Dr. Zoidberg - RIP Oppo 10/15/2019 at 13:42

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At one point Mrs. Snuze and I were living on well under $100k. We had a 1 bedroom apartment in one of the wealthiest areas of Northern VA - it’s not Seattle but I bet it’s not significantly cheaper either . We had health insurance, both had cars and associated expenses (I was still paying off the Snuze, too ), she was putting money into retirement savings, and all the other normal living expenses . W e had smart phones, cable internet, ate out at decent resturaunts a couple times a week and were still able to do s tuff we wanted to, go shopping , etc. I mean we weren’t lighting our cigars with $100 bills either, but it wasn’t bad. The only thing I can think of significantly different than most peoples situations was we have zero student loan debt.