One of the unfortunate aspects of Linked In is the abundance of stupid or bogus memes. When someone gets really bad, I disconnect them. However, a meme that recently caught my eye was this graphic titled “How To Earn $200,000 And Just Get By” with a link to a viral-wannabe ad (that I didn’t watch).
About five minutes of research confirmed that the author of this piece needs a different kind of help.
First, the author needs to hire an accountant. Not only are the wrong base rates being used for taxes (overestimating it by $6k), there is also no evidence they’ve taken allowed deductions (standard deduction, mortgage interest childcare). Net salary is closer to $146k. (Source: IRS Topic 751)
Their cost of childcare is about 2x national average for a center-based childcare. Savings: $12k. Source: The Boston Globe.
The author feels entitled to take two $4k vacations, which is the average cost per week for an affluent family of four. (Source: American Express.) Since things are so tight, perhaps a staycation for one? Savings: $4k with virtually no effort.
Gas is too high. Assuming $4/gallon, 20mpg, 12k miles a year, I come up with $2,400 savings. (Gas is currently under $2.05/gallon Source: AAA).
Mortgage seems a skosh high. If their house is $700k (based on the property tax note), and they have 20% down and a 30-year note, they should be able to get a monthly payment of ~$2650. (Source.) Savings: $4,200.
So with an hour into it, I found ways to shave the “what’s left” to be closer to $48k. With that margin, I would pay off my Consumer Debt (unspecified in this), ditch the BMW for something modest, max out my Roth IRA contributions, and add to a 529 college savings.
In other words, we should not be rallying to the original author’s aid.