Budgeting | Get off your high horse

Photo by Thomas Malama on Unsplash.

You know, I am a huge advocate for talking about finances, budgeting and that kind of stuff. I think we can all learn from each other by being more open about something that every adult has to deal with and I am all for smart and savvy financial ideas and advice. It shouldn’t come as a surprise then that I do follow a handful of budgeting blogs and financial resources.

One of these blogs is called ‘The Financial Diet’, which is basically a “Thought Catalog “-type of blog for all things related to finances and money. There are a lot of different contributors. Some articles are worthwhile, others are completely useless. Every now and then, I wanna get into an argument with people because they’re so far up on their high horses that I can’t stand it for even one minute.

There was this article the other week titled “The Smartest Decision We Ever Made To Build Wealth Rapidly” and the article talks about how people spend too much money on housing (30% is considered the maximum amount, if you spend more than that, you’re ‘rent-burdened’) and how they (the author and his girlfriend) started building wealth (think: retirement funds, savings, etc.) by intentionally living below their means. So far, so good.

Now, that was followed up with the fact that according to their calculations, 30% of their income would come out to a maximum rent amount of $40,000/year or $3,300/month, and the decision to rent a smaller space and spend only 15% and put the rest into savings.

I wanted to stop and scream right there.

If you have a (maximum) budget of $3,300 to spend on rent, I can totally see how you can bring down the percentage and spend that money elsewhere. Valid point! But does this person realize that $3,300 is many, many people’s complete monthly budget, not just the allotted maximum amount for rent?

The author didn’t indicate if those $40,000 annually were before or after taxes, but simple math concludes that these people have a six digit annual income to work with. From the standpoint of someone who operates on a median household income, it seems fairly obvious to me that these people should be able to live more ‘frugally’ and spent less than 30% on housing and put that extra money into savings. Just don’t go around bragging about it like it’s the greatest thing since sliced bread, especially to people who have a hard time reducing their housing costs. Because this “smart decision” that they were able to make? Yeah, they were able to make that because there was enough money in the first place. It gets tougher and tougher the less you earn. It’s easy to slash your rent money in half when you’re a high earner, not so much if 30% of your own money can barely afford you a one-bedroom apartment.

One commentator suggested that people with (e.g.)  $2,500 monthly income (I assume, he means take-home) should rent a two-bedroom apartment for $1,000 and then get a roommate to bring the monthly rent down to $500. That would be 20% towards housing expenses. His argument, “this could be temporary until you get on stable financial ground.”

I don’t know what kind of planet these people live on, but a) two-bedroom apartments for $1,000 are not that easy to find (depending on where you live) and b) for people with median household incomes, this is stable financial ground and this income often supports a whole family, not just a single person who can get a ‘temporary roommate’ to occupy the second bedroom.

This kind of thinking angers me. I do appreciate that someone with more financial means lives responsibly and tries to think of ways to save on costs, but sometimes it comes off as pretty arrogant, too. Because how easy is it to suggest to take in a roommate — something that you might do when you’re a young adult, but maybe not as a family? —  when you yourself don’t have to do that? How about making housing more affordable instead?

I read another interesting article that feeds into the narrative: It costs money to save money.

The best deals are usually for people who have extra money to spare (e.g. buying in bulk, not financing, etc.), it’s good to invest into quality products, but you can only do that when you have the extra dollars in the first place.

Money advice is mostly geared only toward people who actually have at least a little bit of financial flexibility in their budgets, so the article that prompted me to write this post just sounds very condescending (even to people with a middle-class income) and really rubbed me the wrong way.

I am all for smart budgeting ideas for every budget, don’t get me wrong, but don’t walk around scolding how people live beyond their means when you’re working with a 6-figure income. Yes, of course, there are also high-earners who just can’t handle money, period, but that is a whole different story.

Do you like to talk about finances? Do you read any finance/budgeting blogs?

  1. I was always taught that it was bad manners to talk about money but if we don’t talk about we can’t learn from each other. It is so true though, it’s easy (ish) to save money when you have some to start with and some flexibility, capitalism just seems to be designed to make sure the truly poor, stay that way (not to get too political).

    1. Oh, you can totally get political with me, Danielle… because you’re absolutely right about it. Thanks for your thoughts!

  2. As we just finally started seriously budgeting this year, we read tons of articles and books and posts too and I agree, some were more approachable than others. If it was something like the one you described here, I’m pretty sure we’d set that one aside and look at something else.

    1. Yeah, some articles are definitely more helpful than others.. this was not one of them!
      If you have any good articles to share, pass them along! :)

  3. YES to all of this. I like reading budgeting articles but usually get frustrated because it’s advice that works for them, not everyone. Buying in bulk, for example, is the worst thing that I could do, as someone who lives alone in a small apartment. I have people who keep telling me that I’ll save so much money with a Costco membership but how?? I can’t eat four pounds of strawberries before they go bad… haha.

    1. J and I have a Costco membership (for two people) and it’s worth it, because we only buy certain items there (obviously nothing fresh because we can’t eat it up before it spoils!) and then take advantage of the cashback rewards that I earn through the Costco credit card (which pays for the membership fee and then some).

      But I totally get what you’re saying… not every advice works for everyone and if that person had written the article a little differently, I might not have been that offended… but it came off as pretty arrogant.

  4. I love talking finances. Since my husband has always had a government job, his salary has always been public knowledge as have most of our friends. That makes talking money much less taboo.

    But, I find I typically hate most personal finance blogs for exactly the reasons you mention here. There’s a certain delight they take in living on nothing and saving the rest…when they’re earning enough to make that choice.

    1. I think it’s important to talk finances (in general terms)… there are so many people who don’t know what they’re doing, don’t know what a credit score is, etc., so it’s important to be educated about all things money and how to make smart decisions.

  5. Yah someone with that income level should not be writing about budgeting… they live in a different world and it’s pretty darn easy to busy when you have as much disposable income as that. And honestly, renting a 2 bedroom apartment for $1,000 sounds completely ridiculous. Maybe in a small city that is possible, but not in any sort of metropolitan area. I own a 680 sq ft 1 bedroom condo in a suburb of Minneapolis. The condo is fine – it’s a nice area but not an area that draws people unless they happen to work in that area of the city. And the rent on that condo is $950. So there is no way in heck you could get 2 bedrooms for that much. That’s just insane.

    My parents did a good job of educating us on how to be responsible with our money and they taught us to not use credit cards and to live below our means. And we knew when we decided where to go to college that we’d be paying for it so they were supportive of us going where we wanted but gently reminded us we’d be paying for it so we had to keep the cost in mind. But they didn’t exactly openly talk about money. I have absolutely no idea how much my parents make, plus they own a business so their income isn’t the same as someone who gets a paycheck since they decide how much to draw from the business each month.

    Now that I work in the financial services industry, I try to talk more openly about money and investing but I hope I never come off as the person in that article did. I totally understand that it is hard to live within your means, especially if you work in a lower paid industry. I try to emphasize the importance of contributing to your 401k and being mindful of the time value of money and saving what you can, but I recognize that for many families, there is not much left after the bills are all paid. I work in a well-compensated industry now (I hope that doesn’t come off as bragging, it’s just the fact of the matter) but that was not always the case. I spent all of my 20s and a good chunk of my 30s working with a small budget. But those years of having to be more frugal have shaped me and my spending habits have not changed with my income. Like I do not dine out very often, I don’t shop much unless I need clothes for work and then I only buy things when they are on sale (although I do buy Banana Republic clothes which are a bit more pricey but last for years).

    I did a first post for a finance series back in March or April and meant to make it monthly but the last couple of months have been so busy. That post was all about how little retirement savings people have and I really hope it didn’t come off like I was on my high horse! :P I want to get the post series back up and running in August. I’ve had some conversations with friends about their retirement savings and I think we are just not well-educated in this country when it comes to planning for retirement. So I think if I can help raise some awareness about it, maybe I’ll help people think a bit more about retirement (even though it’s soooo far off).

    1. Lisa, you have never come off like you were on your high horse… I very much enjoyed your finance posts (and I hope you will continue them), because I think you know a lot about how finances work and many people can learn a ton from you. This is SOUND financial advice, not bragging. You don’t have to be ashamed that you have a well-compensated job…. and you can still give smart budgeting advice, without showing off how you handle your (bigger) salary.

      I think if that article had been written a little differently, I might have not even taken offense, but talking about how their “smart decision” has helped them to build “rapid wealth” comes off as pretty arrogant, when you’re working with such a big budget…. that is just not practical advice for the average person.

  6. I follow TFD and share your sentiment that some articles are good while others are really condescending and rather ridiculous. I think the target audience of the site is 20s, at least that’s the impression I’ve gotten, and most of the authors seem pretty young as well. (I say this as a 39-year-old.)

    $1000 for 2 BR is doable where I am, but I’m in the suburbs of Houston, so location is surely a factor.

    I enjoy talking about finances but don’t do it on my blog or very publicly. My husband and I are both engineers so we our family income is well above average and I don’t want to come across as condescending or as unappreciative about what we have, since I recognize we have a lot more money to “play” with than most people do.

    1. Location is definitely a factor (re: rent and living expenses)…. and I don’t think you have to “hide” the fact that you have an above average income. You can still give smart advice without coming off as condescending or unappreciative, but I understand where you’re coming from.

      I think if this article had been written differently or opened with a statement that said that you can ‘also be smart with your money, if you earn a higher income’, I wouldn’t have been too offended, but the way it was phrased and presented was just not very helpful to the average person!

  7. Oh yeah, I hate when you read those tips on how to save money and it’s always “don’t buy a starbucks coffee every day” and I always think “do you realize I couldn’t afford that even if I wanted to?” Yes, if you have the money, it’s easier to cut back and save, but that’s not the majority of people.

    1. I think you can give smart financial advice for every income level, you just have to make clear who your target audience is…. if you just say “slash your rent in half”, that’s not very helpful. Neither is ” don’t buy Starbucks very day”.

  8. Wow — that does seem like decentish advice shared in a very tone-deaf way! Very frustrating, especially because, as you say, the typical audience for tips like that won’t have that kind of income.

  9. I’ve stopped following financial blogs because their money advice seems to only work for those with a six figure income. I’d love to have $3,300 a month to spend on housing.

  10. Oh God, we could have CONVERSATIONS about TFD and their lack of good advice. Some writers even offer the WRONG advice, which is just mind-boggling to me. I remember reading that article and just rolling my eyes especially when the income was revealed. Please don’t talk to me about financial advice when you make six figures. I’m sorry, but you’re not relatable AT ALL. I read another post on that site where a writer was talking about her budget and she had around $2k of disposable income monthly. Like, just stop. STOP.

    Also, yeah, I got an incredible deal on my apartment, but I was looking at spending around $950-$1,000 for a one-bedroom (at least one where I wouldn’t worry about being murdered!). There’s no freaking way you’d be able to get a two-bedroom apartment for $1,000 in most cities. So ridiculous.

  11. Yikes. I can’t even imagine spending $3,300 / month on rent, but I know that there are some areas of the country where rent is obviously a lot higher. My bf and I share a 1-BR and I work from home so it’s tight but we figured we’d make it work for as long as possible so we can save up a bit to eventually purchase a home and have a bit more square footage. That said, I’ve noticed a LOT of advice on finances is not nearly as smart as it should be. Best advice I ever heard: put a little aside each week or with each paycheck. Out of sight, out of mind :) Thanks for sharing!

  12. I understand where you’re coming from – and I do agree that often times these money saving techniques come with an opportunity cost, that for some is higher than others. A 15% of your income apartment for some will for the rich yield something nicer than my home, a 15% of your income apartment for others may mean there is not running water. In which case, their opportunity cost is much higher, and I would advise against the apartment sans water.

    I don’t have a gripe with the article because I grew up surrounded by rich people who made themselves poor because they thought they could easily spend that 30%, not realizing that their privilege put them into a place to be SMARTER with their money & maybe reach goals like early retirement which aren’t a possibility for everyone.

Comments are closed.