On Wednesday, I visited a fifth-grade class in McMinnville, Oregon to talk with the kids about money. I had a great time, and I’ll share more about the experience on Monday. Today, though, I want to start by sharing a question I received from one of the students.
“How much money do you have?” Hannah asked when I called on her.
“I’m not going to answer that?” I said.
“Nobody answers that,” said a boy named Max.
“Why do you think that is?” I asked.
I was curious about the fifth-grade perspective on this subject, so we talked about it for a little while. Some of the kids thought adults just don’t like to share things about themselves. Others said that if you talked about how much money you had, then other people would be more likely to steal it. I offered my own thoughts.
“I think people don’t talk about how much money they have because nobody wants to feel bad,” I said. “For example, if I have a lot of money and you don’t, then talking about money might make you feel bad. Or if you have a lot of money and I’m poor, then talking about money would probably make me feel bad.”
I believe that, ultimately, people don’t talk about money with strangers out of fear of being judged.
I explained that most people do talk about money, but only with people they know well, such as family and friends. (Not everyone talks about money, I know, but I believe most people are willing to share with those they’re close to.)
The kids didn’t seem to find my argument terribly convincing. In fact, after school was over, Hannah came up pose the same question again. “How much money do you have really?” she asked.
“I’m not going to answer that,” I said.
“Are you a millionaire?” she asked.
“I’m not going to answer that either,” I said.
She gave an exasperated sigh and left to catch the bus.
Yesterday, I told this story to my Spanish teacher, who is from Peru. She and I have discussed cultural attitudes toward money before. She thinks Americans talk about finances far too freely. And apparently she’s not the only one. In one of my favorite Spanish-language podcasts, the hosts have talked about the notion of social class in Spain. Apparently, folks there even avoid talking about what they do for work because that has the potential to make others feel uncomfortable.
On the long drive home from McMinnville, I spent a lot of time thinking about Hannah’s question. Is discomfort the actual reason we don’t talk about money in our society? Do we keep these facts private out of fear of judgment? I’m not sure. I don’t have any hard facts to back up my beliefs. Maybe there are other reasons.
What do you think? Why don’t people talk about money? Is it just to avoid discomfort? Or are there more practical reasons to avoid these sorts of discussions? And, more to the point, in your own life, with whom do you have money discussions? What sorts of things do you talk about? What sorts of implicit (or explicit) boundaries do you set?
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For me, it’s a simple question of privacy. I regard my salary and my net worth as private information, and I refrain from talking about it not because it makes me uncomfortable, but because it’s none of most people’s business. My partner? It’s her business to know both. My boss? It’s his business to know my salary, but not my bank account. A random child in a classroom? Not her business at all.
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I don’t buy that, Russ. There are plenty of other things that are also “none of your business” that you would talk about openly. What’s your wife’s name? Do you have any kids? What do you do for fun? What’s your favorite movie? Were you ever in Boy Scouts as a kid? What kind of car do you drive? All none of my business, but if we met in person, I bet you’d answer all of those questions without a second thought.
I think there’s something else at play here, and JD’s on the right track.
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You’ve only taken one part of my argument. I said it’s something I regard as private *and* none of anyone’s business. The type of car I drive might not be your business, but it’s also not private, so I don’t mind telling you. If I met you randomly on the street and you asked me where I was going to be at 6pm tomorrow or what my favourite sexual position is, I wouldn’t tell you that either.
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So, let’s ask the followup question, which is the one I think J.D. is trying to get at: why is how much money you have “private?” What is it about our salaries that make them our business and no one else’s?
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Russ, I think it all boils down to our relationship with the person asking us about our finances. My wife knows everything about our finances, for example. But, I won’t share anything about my finances with the person I hire to change the oil in my car. By extension, I don’t feel the need to publish my net worth on my blog like some folks do.
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The only people we discuss money with is our financial advisor, each other, and our very close friends who have more money then we do. We do not discuss our money with family memebers, or any other frieds because we do not want to be judged on how much money we do or do not have, but rather, on how we interact with other people. Once money enters the subject it seems to change the approach people have toward you.
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Back in Soviet Union people had no problems talking about money. May be because they had evenly little among them:) The Euro friends I have here also tend to keep with the same trend, easily answering what they are making and what their bills are in general and so forth. May be the discrepancy in US (and these days in other places as well) is such that people with little money are ashamed and want to pretend they have more, and people with a lot are afraid of jealousy and keep their mouth shut too. So, personally, I stick to it since it’s the way it is here: I talk money details with my Euro friends and not talk with Americans (even very close ones, although I had offered to a number of them to help sort things out and give examples).
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I experienced this Olga – when I lived in Russia(early 90s) most people thought Americans were so strange for not talking specifics about money.
As for whom I share things with – yes, I’m pretty closed to the general public. I like to share select information with my kids so they start to get a sense of how much things cost and how we budget.
I never share my financial situation with employers or clients. They don’t need to know, and I don’t want it to affect how much I get paid.
I have shared our financial situation with a few close friends and family. It’s honestly a relief for someone to know your whole “deal.”
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Personally? I don’t because I make substantially less than my friends (by choice, I might add), and I have substantially more in student loans (luck of birth: all of my friends’ parents paid for school), so my budget is much tighter. My friends are busy saving for houses and I’m busy establishing an emergency fund and paying down loans.
I don’t want anyone to look down upon that or feel as though they have to alter their spending habits for me or worse, not alter their habits and then pay for me! This happens a lot, and while I appreciate it, I feel like I have a lot of ground to cover when I get to a point where I have that kind of money to play with.
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Yes, that is what usually makes money conversations awkward–you make more or less than the other person, and then they either get jealous of you or pity you, neither of which feels great.
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Because people equate money to how much someone is worth as a person.
If someone doesn’t make much money, then others might judge that person as not being very smart or being unskilled in life. If they make too much money, they don’t want others to think they are 1%ers or hear about how nice it must be to make as much money as they do. Therefore, some people are not inclined to speak about money as it can be used as a tool to judge against.
TLDR: Judgement.
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“Because people equate money to how much someone is worth as a person.”
+1. This. Absolutely. Can’t “like” this answer enough.
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I agree. Back in our twenties my husband wanted to keep up with the Joneses and make it look like we were wealthy. Only we were in debt up to our eyeballs trying to keep up the status. He didn’t want to be judged negatively. He wanted the illusion.
It didn’t matter to me because I never felt that money made you better than anyone else. I have no problem talking about money or the lack of money because I don’t feel bad. We made our choices and some may have been bad, but it isn’t anyone’s fault but our own.
It wasn’t until he hit 40, did he realize how stupid he was. Being happy with yourself, your family and being content was ok. Retirement became more important. He finally started spending less and not rushing out to get the newest hitech items, and thinking more about what his future rather than his present.
Thank goodness he finally realized what I already knew.
But Americans especially young Americans aren’t taught enough about credit, saving, investing, etc. This should be a required course in high school!
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I feel like this is true, from my own experience. Just look at our pop culture icons, everything the media throws at us, and our cosumerism-based society: to matter, to be interesting, to be desirable, we must be rich.
Not saying everyone is like that, or even the majority of people that I know, but that is the message that we are subtly (and not-so-subtly) being bombarded by mass media.
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This.
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Yes, your entire post is the EXACT reason why people don’t talk about money. You “hit the nail on the head.” Very well-worded.
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People do talk about money in Los Angeles.
Personally I’m always reminded of A Tree Grows in Brooklyn and all the rules employers used to have to keep employees from discussing salary. If a subset of workers (say women) know they’re underpaid, they’ll unionize and demand higher wages.
As for me, my salary is available on the internet for anyone to see.
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My Employer publishes ranges based on job title and level, which I assumes makes things much more comparable between employees, though the do have enough weasel words in there to say there are reasons it’s ok to be paid beneath your range (lack of experience, subpar performance, etc.)
What’s interesting to me is how much people protect salary and income, but how freely they discuss spending. I think I know what all of my lunch colleagues spend on rent and mortgage, groceries, car payments, utilities, etc. Whenever tax season comes around, everyone becomes real cautious describing *that* situation, though.
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I’m a teacher, so my salary is common knowledge. There is even a website that tells what every government employee in Utah makes (www.Utahsright.com). The problem is, they’ve started adding in the amount our employer pays in benefits (health insurance, pension, etc.), so the number looks WAY bigger than any W-2 I’ve ever received.
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that seems sleazy. I mean – I think it would be useful (in general) for employers to share that info with their employees, but since they don’t, and it’s not clear, it makes it seem like they’re paying teachers a lot… not cool.
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I’m in the same situation as Tonya. If someone looks up my state “salary” they see a number far larger than what I actually receive because it includes medical, dental, long-term disability, and life insurance premiums paid by my employer. I’m not saying these benefits are not economic – they certainly are – but the aggregate number skews people’s ideas of what people in public employment are paid.
That perception is particularly bothersome because I know what a cash patient pays for medical and dental care (I was one for years). I’ve never incurred anything close to the $1000+/month that’s paid in my name by my employer for those benefits.
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oh, yes, that’s definitely a problem here. Teachers in our town just got a 5% “raise.” What they don’t mention in the newspaper article is that something like 4.5% of that “raise” is an increase in health care costs being covered by the district. The remaining .5% is a portion of the cost of living increase promised in the contracts.
Folks in our town are livid about this, and they still stayed mad after seeing the explanation above because they think teachers should be having their wages cut.
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i actually think benefits should be included when calculating salaries. if my employer doesn’t contribute to my healthy insurance premiums or my retirement plan, then i’m paying for it with money from my salary. just because you don’t see it on your paycheck doesn’t mean you didn’t receive the benefit. in fact, some people recommend using the total salary including benefits, when negotiating salaries with a potential employer.
for example, the company i work for contributes only a small amount to health insurance premiums. it is far below the standard in our industry. many people who thought they were getting an increase in income by quitting their job and moving our company, actually had a decrease because they had to pay much more for health insurance.
i actually think it’s sleazy not to include benefits when reporting income. it makes some people look much poorer than they really are. it’s just proper accounting.
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I think it’s because once people know exactly what you’re working with, they can make more judgments about what you’ve bought and how much you’ve saved.
I admit I do this when I wonder why low income people buy enormous TV’s, and why supposed wealthy people don’t give more to charity. If I knew the exact amounts, I’m sure I’d be even more critical. I’m not proud of that, but it is nonetheless true.
Of course, more transparency might lead to better empathy too. I was wondering why friends lived in a dinky rental until I figured out they’d paid serious cash for fertility treatments. Their twins seem to be worth every penny!
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Agreed. When you have a friend asking people “please buy my old 36″ HDTV, my 2-yr old son and I can’t afford rent this month!”, but then a short time later is sharing pictures with “look at us enjoying our tax refund, a 55″ HDTV!”, it’s hard to appreciate their difficulties.
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Sarah, your comment resonates the most with me of those I’ve read so far. I know it has to do with judgment for me, but not judgment about someone’s worth as a person. I’m a no frills person. I’m content with basics. When I found out a friend was living basically rent free in her sister’s large house I was judgmental of her choices. For example, they live paycheck to paycheck. She buys designer clothes. They save nothing for retirement. She’d have a bank account fund where she set aside money for their self-employment taxes but if an “emergency” came up they’d spend from that account because they didn’t have an emergency account. I WISH I DIDN’T KNOW ANY OF IT. I THINK SHE’S STUPID BECAUSE SHE MAKES STUPID MONEY CHOICES, IN MY OPINION! This may have lead to me not being her friend anymore. Kind of like yesterday’s post she’s too interested in what people think of her and is living with props. I told her as much because I’m real. She knows I live frugally and so she’d share frugality tips with me then come to find out she’s not frugal. Basically she was lying with me the opposite of props. She was trying to keep up with the Joneses and at the same time keep me happy with what she knew my values were. I just feel sad for her because like Tina’s husband above she just hasn’t figured out who she is yet. She’s living for others, not her own life.
At the same time I don’t tell anyone how much is in our emergency fund. I think most of my friends are like her, they’d judge me for not spending out of my emergency fund to help someone. IMO that money is ONLY for true emergencies. I don’t even spend out of it for car repairs. I might help my family if they had a true emergency. But really, they should have their own emergency fund set up IMO. They make more than double what we make yet have zero in the bank.
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I totally agree. I think a lot of judging goes on related to salary. I’ve been around long enough to know it’s all relative. When my ex finally graduated from law school and was making $120k a year, most people would’ve thought we were in great shape. But with $100k in student loans and two kids (and needing to buy a house and a car to replace our old clunker), we were barely making ends meet.
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Yes, there’s a lot of judging about salary – me included. I doubt it helps, but I judge myself too. I rarely share financial information with anyone, partly because I’m embarrassed because I think we should be in better shape than we are (dang it’s a slow process to fix this debt stuff). But – my older sister has multiple millions in real-estate and I likely can’t even imagine what their actual earnings are, but she complains about lack of money frequently. Drives me nuts.
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I’ve never had a problem talking about money, but over the years I’ve had to realize that people get uncomfortable when you talk about concrete numbers. Sure, I don’t tell people our net worth or what my husband makes every year, but I don’t understand why I can’t mention the exact specifics about our addition project to friends and family. But oftentimes I hold back, because I can tell it makes them uncomfortable.
I don’t know ultimately why this is. It could be a combination of things. Perhaps the reason you state is in play – i.e. people don’t want to make anyone else feel bad. But I find this peculiar in our oversharing culture. We talk about everything else – why not money?
I’m not sure certain places where money is NEVER discussed is something we should emulate. If you’re talking about Latin America where the gap between rich and poor is even more stark, perhaps they don’t need to talk about money, because it is entirely obvious who the haves and have nots are.
I have lived in Europe on several occasions, but I can’t really recall there. I do know that in Germany ostentatious wealth was somewhat frowned upon, at least in the circles I inhabited. And that if you were rich, you probably wouldn’t want to talk about it.
I have always been open about how much our house cost, largely because it is public record anyway. But I do recall when a friend bought a condo in a new city, I asked her in a round about way how much she paid, and she was clearly uncomfortable about it. I then felt terrible for asking and wished I could have taken it back. I was just genuinely interested in real estate in that city, but I guess I could have saved us all the discomfort and looked online.
One more thing – the fear of talking about salaries is largely what allows companies to pay their workers vastly different amounts for the same work. My sister in law accidentally received an e-mail that was about employing another person to do exactly what she was doing. The starting salary was TWICE what she made. Needless to say, this was a wake up call.
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I wish that people would be more willing to discuss actual cost of home projects. I’m still a fairly new homeowner, so when I look at the list of things I need/want to do in my house I have a hard time knowing the order of magnitude of the cost. Getting quotes from companies is a painstakingly long process – sometimes I just want to know whether getting new windows is going to be cheaper or more expensive than getting a new water heater. That sounds silly now that I’ve changed my water heater ($3-500) and gotten an estimate for the cost of new windows ($4-5000), but with major house projects I have no idea whether I’m being totally ripped off or if it’s just expensive to own a house (or both).
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Growing up, we were taught, explicitly, that it is impolite to talk about money outside the family. Even within the family, kids didn’t need to know about family finances. It was “grown-up stuff,” and the kids didn’t have a role in managing the family finances. We were given an allowance and, for a short time, we were paid for grades. Horrible idea, BTW.
In fact, we were taught not to talk about anything that could even infer how much money a person had. Growing up in rural Wyoming, that included talking about how many head of cattle someone had. It was like talking about how much money was in the bank.
I certainly wouldn’t discuss my financial circumstances with someone other than a trusted advisor or my partner. I might talk about my approaches to financial management. One thing that drives me absolutely crazy is when people ask how much something cost. It feels like a boundary violation.
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It’s jealousy. People don’t like to see others doing better than themselves. If you are a multimillionaire, it’s not comfortable to advertise it to friends and families who are not doing well. Some of them will get jealous and the friendship will sour. That’s life.
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Agreed – I had a couple of close buddies who I am not really friends with anymore who took issues with me and I think it was because of “my love for money”. Really? Is it my fault I’m on year 10 of this journey and you’re constantly on day 1? The undisciplined and shortsighted folks generally dislike any form of success in others.
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John in Denver, I don’t totally agree with you. Yet I agree with Joe so…?!
I am lower middle class, frugal but have savings. I judge negatively an ex-friend that was bad with money. She didn’t have more, I just didn’t like how she spent it. Knowing too much about her finances made me feel like I was better than her because I would have spent the money for something “good” like retirement or paying off my mortgage. So, I was jealous of the money but not the “crap” she bought with it.
Hope that makes sense!
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“…contstantly on Day 1…” I really like your wording there. All of us can find ourselves on Day 1 “again” through emergency, cancer, etc. On Day 1 “again” and “again” and “still” means something is wrong.
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I have to disagree with you both and think you’re falling into the trap that a lot of people do: that is, because others don’t have money means that they must not be smart, work hard, or any number of other characteristics that you attribute to wealth. Simply put: BS. A lot of people with limited finances DO work hard, and ARE smart and save where they can. Some of wealth is luck and implying that people who don’t have wealth are lazy or bad planners is simplifying the equation.
That being said, those who have wealth SHOULD enjoy it and SHOULD spend it how they see fit. If your friends are leaving because of your money, perhaps its not your money, but your attitude about your money, or perhaps they weren’t your friends in the first place.
As I stated earlier, I make far less than many of my friends by choice. I know that some of them could pay off my student debt with their savings from 5 years of work savings. Though I save as much as possible, I am nowhere near that and my budget it tight. I still love my friends and see them often. But my money is none of their business just as theirs is really none of mine. It has nothing to do with my “jealousy” of their finances.
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Perhaps I’m misinterpreting what you’re saying, but I feel like Maria (comment 249, I think) nailed it – ANYONE can find themselves in a bad financial situation through no fault of their own, but when someone is *constantly* unable to deal with the regular, everyday issues that life throws you (hello – you’re car WILL need repairs at some point, the rent/mortage is due every month, taxes, insurance, etc. should not be a surprise to anyone), unless there is something very serious and totally beyong their control (something on the order of a serious ongoing illness, etc), then, yes, it is because that person makes poor choices. Both my brother and BIL are this type. Yes, they have both had personal setbacks, and in those instances, it seems perfectly normal that they struggle financially and we as family step in and help. But when you refuse to stick with any job that actually PAYS, mooch off your parents for months/years on end and have no rent payment, can buy all the latest electronic gizmos for your “buisiness” that has never made any money, that is not an issue of life just dealing you a raw deal or having less money because of the school and profession you chose. That is simply being irresponsible and expecting others to carry you through life. To the point that when my husband and I purchased our first rental house, his parents refused to tell his brother and asked us not to mention it to him, because “it might make him feel bad.”
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I will have to agree with you about my changing attitude about money and how it can be a negative for long friendships (15 years and I am 30 yrs. old). My attitude has changed towards personal finance in that I am more comfortable in my resolve about money. We are all process oriented and if we continue to placate our friends or ourselves about negative behaviors (personal finance/ overeating/too much TV)we never evolve positively.
do or do not there is no try
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In Mexico we believe that taking of money is not polite (your parents didn´t teach you good manners if you start asking about money).
As we can be evaluated by what we earn , we rather keep on silence about the subject.
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Honestly, when I know how much someone makes, I judge them. I do. I think about that salary and what I see them spending on and how I would do it differently, etc. So I can see why people don’t like to tell! If I make judgements, I think probably most people do!
What Isela says here and your spanish teacher said is crazy to me! I thought AMericans were weird talking about money, but actually, it sounds like we’re pretty open and free about it!
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Right there with you!
If I hear someone makes $X and buy a new iPhone or brand-new car, I always think “And how can they afford it?” I try not to judge people for how they spend their money (maybe they got an inheritance?), but it’s hard to keep my mouth shut when I know someone makes very little but can seem to afford new toys at every turn.
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Yes, definitely, and it goes the other way too (people who make a lot getting judged for *not* buying toys, etc).
I heard it from my mom all growing up. If she knew somebody had and/or made a lot of money, then any time they opted not to pay for something (dinner out, vacation, school sports trip, anything!) she would go on and on behind their back about how stingy they were.
I now make a very decent salary, but don’t want to tell anybody about it. I choose to put my money into debt repayment and savings instead of buying gifts for my family or treating everyone to dinner out all the time.
I fear that if my family knew how much money I made, they would think I was a stingy person, or they would expect me to always pick up the tab for things I don’t even care to purchase.
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I remember reading about the issues that arose when David Beckham joined the LA Galaxy. He was making $2-3 million a year (not counting endorsements) and some of his teammates were making league minimum (less than $30k at the time). Because the numbers were published, everyone knew the discrepancy, even though they were basically doing the same job.
David didn’t realize the differences and that, culturally, he needed to do things like pick up the tab for a team dinner every now and then to keep things on an even keel.
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When I was in grad school, all of us had the exact same stipends. I definitely wondered how my friends afforded their bar tabs (more substantial than mine by far). Same with vacations. I was jealous at first. I figure, tho, that I can see their spending but their bank account balance. I saved lots of money and was able to do exactly what I wanted (despite low pay) upon graduating. Not all of my classmates had that luxury.
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@Joe comment 99 and Kio
You both touch on this interesting idea of spending other people’s money for them.
*Why* does Beckham have to pay for team dinners? Should he seriously feel bad that he earns significantly more than his team mates? He is *actually* of considerably more value to the club than any other guy. I live in Australia, and had never heard of that soccer club. Many people around the world could name the club David plays for, but could not name a single other player or any other soccer club in the US. That branding and marketing is worth it.
The same on Zio’s mother being angry when others decided not to spend money on certain things. This sort of thing infuriates me. Who is anybody to decide how another spends their income?
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I discuss money in the abstract a lot, but not specifics. In other words, its one thing to say I am paying down debt, and something completely different to discuss exact balances, interest rates, and minimum payments. Also, and I suspect I am not alone, those who think you make more than they do (or think you have liquid assets “just laying around”) somehow want you to give your money to them! Once I made vocal the goal I have to be be completely debt free including the house by age 55, others immediately started eyeing me differently. They would put themselves down and talk about how “not everyone can do what you can do” and some started expecting me to pay for everything in social settings.
That’s grief I don’t need, so my wife and I don’t say anything anymore about any of it. In fact, we now go out of our way to talk about money problems and complain about how hard times are (economy, layoffs, unexpected car repair expenses, etc.) I can’t even talk about vacation plans.
Also, when I do talk about money in the abstract, I have learned to always couch the discussion in terms such as “I was reading a blog on the internet the other day and they were talking about X.” That way I can achieve a degree of separation.
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Because everyone has their own money problems and challenges, which tend to come up when talking about money, and it’s sometimes very uncomfortable to realize how different those are no matter which side you’re on. For instance, I worry that I don’t make enough to save/donate 20% of my income, and I wish I could go on a bit vacation…but I get very frustrated talking to friends who think what I make is not even enough to live on, and I feel ashamed for wanting more next to my friend whose unemployed partner is applying for food stamps because she makes too little to support them both. And we live in a city with a 13.5% unemployment rate, so I don’t want to judge anyone for not earning enough money.
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I talk about money without a problem. But I usually dont, because most people aren’t willing to share the same amount of information about their finances as I am, which kinda pisses me off.
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I don’t talk about it because it can breed resentment.
In my first job out of college a coworker who didn’t like me found out that I earned fifty cents more per hour than she did. She was very angry, and gossipped about it for weeks with other coworkers. Not a pleasant experience.
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I can really identify with that! In my early 20′s, I went to work with a woman I thought was a good friend. She asked me about my starting salary, so I told her, the “close friend.” She began making snarky comments in response to anything I said. After a few weeks, some of our co-workers tipped me off to her back-stabbing and complaining about me to the boss, trying to get me fired! Needless to say, that ended our friendship.
A few months later, she moved on to another job and I learned a valuable lesson. Don’t discuss how much you make with anyone but a spouse or SO.
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“Economists love to talk about transparency. According to theory, if people have more information, then they can make better decisions. That makes for a healthier, more efficient economy. Why should pay be an exception to this rule?”
http://www.theatlantic.com/business/archive/2011/07/the-case-for-making-wages-public-better-pay-better-workers/242238/
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Economists are also acutely aware of what all the other economists are making. So we do put our money talk where our mouths are. That’s why I know that if I went on the job market (currently the only way for me to get a raise), my 9 month salary would go up at least 20K.
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My point is not to trash economists but that keeping your pay secret dos not make sense. When everyone knows what the wage playing field looks like educated decisions can be made(am I getting paid enough) and people can work together to raise the wages for professions that are underpaid(should I look for a new job or career).
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My point is not to trash economists but that keeping your pay secret dos not make sense. When everyone knows what the wage playing field looks like educated decisions can be made(am I getting paid enough) and people can work together to raise the wages for professions that are underpaid(should I look for a new job or career).
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My point is that economists *don’t* keep their pay a secret. I know what most people that I know in my profession make, and people in my field ask and answer and gossip (especially when people move jobs). We also have information on average starting salaries for econ PhDs by profession widely available and updated every year in time for the next year’s job market (112K this year on average, if you’re interested).
We’ve had the highest wage growth of any social science, even during the recession. That may be related. (Though those of us stuck at state schools without raises are feeling the sting of salary compression.)
Ironically, I don’t think we have the slightest illusion that our wage equals our marginal product. But we do use that information to our advantage.
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It shouldn’t be, but I know many employers encourage or demand it. One software firm that I worked at had a clause on our pay raises that said to effect that by signing the form we agreed not to discuss our salary with anyone inside or outside of the firm. And you had to sign the form in order to get your pay raise. If everybody knows what everybody else is getting paid, they can negotiate, and that is the last thing employers want, it seems.
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I freely talk about how much money I (don’t) have. I’m 27 and my social group may be a bit different than most: I grew up in gifted school programs where we were always with the same kids for at least half the school day for 9 years. So we are a relatively large very close group. I think everyone has a pretty good idea of my finances ($27k salary, $62k student loan debt, spending all my money on student loans and healthcare). I publicly celebrate debt milestones like when I got below six figures, when I got below the amount I actually borrowed, and when I had paid off one entire debt. It might be kind of terrible, but I don’t care if people feel guilty for making more than me because I’m still worse off than they are (I kind of like seeing people suffer in little ways because I’ve suffered in such big ways, it has made me kind of bitter and vindictive), and I definitely don’t care if they judge me because I know that I’ve always done the best I could.
My friends are less open about their finances. I’m curious, but I don’t ask because I know it would make me feel bad. I know they all make a lot lot more than me and that I am terribly underpaid. My relative poverty doesn’t shame me, but it is depressing. I didn’t have any help from my parents to pay for college (most of my friends have little or no school debt), my parents even actively disadvantaged me with terrible advice (only take out private loans, don’t worry about the cost), and my depression has had a significant impact on my finances (school took longer, I couldn’t work or do internships, I have a lot of medical bills, I can’t take a job that doesn’t offer insurance, I’m not willing to move away for better prospects because it took me so long to find decent doctors). Knowing how much my friends make would just add another layer of devastation; I know they make more, but I don’t think I could handle knowing specific numbers without creating imaginary budgets for myself based on their income. It would take a relatively very small boost in income to change my life dramatically and I know all my friends make more than that threshold.
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For an interesting test of why people don’t talk about money: What does everyone here make? Give salary and loccation.
$45,000 – PA, USA
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$45,500 – CA, USA
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$43k, TX
I think because it’s quite a median, it makes it easier, as do lower salaries. Try ask folks above $100k. I command the dude who wrote http://nomoreharvarddebt.com/ blog and disclosed his income and debts and bills and assets. But did you see how many haters he got to comment on all those media articles? OMG, he makes 3-figure, what means what, close to a million? The fact that “3-figures” also means $101k, and that’s before tax, doesn’t come to a conversation for some reason.
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Around $57.5K gross.
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$50,378 – Boston area, MA, USA
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$70k, CT
A few years ago my mother asked me what I made and I told her. She was aghast. And then she let me pay for every holiday meal, ordinary dinner, mutual gifts, everything, for close to two years. Granted, I could afford it, but I felt like I was being punished for being honest. Things have shifted since then and I don’t know why, but I probably won’t ever be so honest with her again.
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lol! i was honest with my mom about how much i made, and she bought me dinner and some new clothes (and some new shoes). i protested weakly but i needed a meal and some new clothes and shoes so there you go.
i asked if i could pay her back, she said nah- my mother bought me stuff when i was young and newlywed. if you have kids, just buy them stuff when they’re young and broke.
oh- ~24K, NYC
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$20,500 – New England
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See, I have no problem sharing this information, but I’m always afraid that if I put it online someone from my work will see it and that will in some way lead to me being yelled at. Employers discourage people from sharing this info, presumably because when someone finds out he’s making less than a coworker, he’s likely to be either resentful, which may cause his work quality to suffer, or ask for a raise, which costs the employer money. It’s a lose-lose situation for the employer. This probably means it’d be a benefit to employees, because more of them would ask for, and at least sometimes receive, raises.
But I make *about* $150k/year (just enough vagueness so co-workers in the same general range as me can’t tell if I make more or less than them), plus company stock. This is in Silicon Valley, CA.
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You can post your salary and your company information on websites like glassdoor.com. I recently used that site and a couple of others to research salaries for my job, in my city. I posted mine there, too, because it makes the tool more useful. It’s all anonymous.
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Maybe we don’t talk about it because we don’t actually know???
None of us have included the $$ earned from interest on savings, dividends for stocks or capital gains. That’s how the truly rich make their money, and it’s hard to estimate that on the spot.
My salary is somewhere around $70K. I honestly don’t know–I have a lot taken out pretax for childcare and health costs, so even multiplying my gross by 12 doesn’t really give it to me. My husband makes about the same, though we don’t have the same things taken out of his salary. We live in Indiana, our house is paid off, no debt of any kind.
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$80k with bonus ranging from $20k-$60k depending on year. Chicago, IL
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Just over $100K in 2011 (gross, includes a 5-figure bonus and $15K in rental income). Suburbs of Philadelphia, PA.
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£6240 UK
Full time job.
I just realised how i immediately wanted to justify my low wage and explain that i’m working as an apprentice, but why did i want to do that? To not be judged i suppose… I should just be able to put that, but the risk of somebody looking at my wage and thinking ‘Oh poor you, that’s so little for a full time job’ is one i’m not willing to take.
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“Tears” Eliot put it best:
And I have known the eyes already, known them all—
The eyes that fix you in a formulated phrase,
And when I am formulated, sprawling on a pin,
When I am pinned and wriggling on the wall,
Then how should I begin
To spit out all the butt-ends of my days and ways?
And how should I presume?
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I will make about 82k plus a possible 10% bonus this year, Washington DC area
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$95k-VA
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About $25000 gross. Nova Scotia, Canada
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$24,500 in North Carolina.
My husband makes a tiny bit more so our household income is around $51,000. We’re both PhD students.
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$50K Alberta, Canada
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About $35,500 plus occasional overtime. MA.
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About 59k, plus bonus and paid for working over 40 hours. Husband (now) makes 83k plus bonus. Ah – ages is relevant – both 41. Have two kids under 9. Near Boston, MA.
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$110,000, Washington, D.C. (sole earner in family, support a (wonderful) stay-at-home husband and three children 4 and under)
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80k working 1.5 jobs, Illinois.
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78K, Texas, 27 years old.
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52k – Austin, TX
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Just got a raise, which brings my gross to $40, 273, plus a part-time job with about $4,000 yearly.
Metro Boston, MA
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$70,000 – Los Angeles, CA
I am 46 years old with a master’s degree, have worked in the same field for 22+ years, and pay $2400/mo in rent.
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We live on about $35,000 net. That is one 24 hr per week salary and a one day a week for three mos out of the year seasonal job. $1000 housing expenses monthly. AK 30-35 age bracket.
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$105k plus a bonus of around $10k. I’m in Toronto, and my wife also makes about $90k including commissions. We also usually make about $1,000 or so per month in a little weekend/evenings business (charging 80 bucks an hour). We’re 35 – age is relevant to all this info, I think.
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$33k gross, Alabama
Including spouse’s income, household gross is around $77k (both of us work full time).
Even anonymously, I’m having to resist the urge to further qualify those numbers with our ages, fields, education, future plans, etc.
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$26k as a part-time time teacher (would be 50% more if I were full-time) plus $27k in child support (ex makes solid 6 figures) for two kids, so $53k…which sounds like a lot but doesn’t seem to be stretching very far.
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$91K, Los Angeles area
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$40 000 – Montreal, Canada
BA educated, work as an in-house writer/editor
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$115,000 Washington, DC metro area
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$100k Alberta Canada, age 46
This was quite a psychological exercise for me, because I had a mix of emotions about posting the number. We were poor for a long time and worked damn hard to get where we are, so I’m proud of what we make, but embarrassed that other people reading this might think I’m bragging, and sensitive that other people reading this might make a lot less than that, and on and on. So…good question!
I never judge people for how much or little money they make, but I judge the hell out of them for how they spend it. I assume a lot of people are like that, even if they don’t admit it. (Or maybe it’s just me, forever alone.) That’s probably why people don’t want to talk about it.
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$47,468 (Washington, DC). Clearly I’m in the wrong business, based on what the other DC commenters make!
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110K Montreal Canada. 42 year-old scientist, female.
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$13,500 – TX, USA
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$42,500 – Tampa, FL
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105k- Seattle, WA
235k HHI Seattle, WA
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Currently my husband makes $112,320 in middle TN. Last year we lived in SC and he made $45,000. He got this job in TN (doing the same kind of computer programming), making $93,000. After a few months here, he negotiated a raise to $112,320. He’s been talking with recruiters for positions all over the country, and some of the rates he’s seeing are anywhere from $50-$80 an hour for this work, both permanent and contract.
I think we’re reluctant to talk about this with people we know because our families and friends are not at all wealthy. My sister makes about $22,000 a year working in a doctor’s office and my husband just negotiated a raise for almost that much, at a job that already pays almost 5 times what she makes. :/ My husband’s father is also in the IT field, and while we don’t know his exact salary, we’re pretty sure it’s at least half or below half of my husband’s. For us it’s kind of survivor’s guilt. When we almost passed out ourselves when we saw these big numbers, what can we expect our family and friends to think?
And to make us feel even more guilty, my husband loves his job and his coworkers and works from home, while our family and friends hate their jobs and the people they work with and they don’t get to work from home, having to commute about an hour a day in some cases. We are extremely lucky.
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$83K, 29 years old, Portland OR
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$82,000. Washington, DC. I’m 31 and an attorney. I’m carrying about $30,000 in student loans as my only debt.
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$25K on unemployment in Portland OR (that’s annualized; can’t say how long it’ll continue)
Down from $87K when I was working. Laid off 11 months ago.
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Currently, my combined household income is negative. My husband’s yearly medical school loans are more than my annual salary. Had the college and career advisers at my nationally ranked university been halfway decent at their jobs our situation could be much different. As it is, I will have to wait until my husband is finished with medical school/residency and making enough money to pay for my tuition out of pocket (while also paying back his loans) to go back to school to make a much desired career change.
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You can’t have negative income, your income is what it is as received compensation. You can have have a negative net worth or you debts can exceed your income causing a negative net income. College career advisors are as good as guidance counselors who told me my career was to be a farmer, in the philadelphia suburbs.
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I’m sorry. My household NET income is negative. I’m not bitter about it. My husband was the one that was hesitant about becoming a doctor because of the amount of debt he would need to take on to accomplish his goal. It has now become OUR goal and we joke about living like poor medical students (which we really do) and we are working to pay off a decent chunk of consumer debt before he graduates. We actively applied for scholarships for 2.5 years but they are far in few between while you are in medical school. Usually, you can secure yourself a signing bonus that will help pay off a decent chunk of the loans. We also have a “45 year” plan with the goal of paying off the $250k loans + approximately $100k accrued in interest while he is a resident within 2 to 3 years of his becoming an established doctor, purchasing a house with a price tag well below what we would qualify for (hopefully in cash, at least 50%) and purchasing rental properties for additional income. It’s not all sunshine and roses but we’re both excited about where it will lead.
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Make around 100K as consultant (Phoenix, AZ), husband around the same with 6-12% bonus. So total household around 200K. I am 36 and husband 37. But the previous 5 years i have taken lots of breaks (3-4 months in between) between jobs, to be at home with our kid. But since i am an IT engineer, whenever i come back to work, the pay rate has been good.
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~125k in Alberta, CA
32 YO. Can’t say what I do because there are many days when I don’t know what I do.
If I could do post-secondary school again, I’d get an engineering degree because I’d make 20% to 30% more by now. But I couldn’t make up my mind and switched majors 5 times as an undergrad. It’s amazing that I somehow found a company willing to hire me.
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I work so hard folks, so, with pride: $30,000 in Minnesota, Single Parent (the whole way) with child in private college, homeowner – only owe $20,000 more, no other debt. Contribute small but steady in 401k and HSA accounts. 20% of income goes to gas to get to work. Some days I feel so overwhelmed and wonder how much longer I can keep up.
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You’re almost there!
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100,000 or so combined household income in Oklahoma.
We rent a modest apartment and own our vehicles outright, but never spend any money outside of traveling. We’re working on paying of what was nearly 6 figures of consumer debt she was carrying when we got together. I never discuss money because I know we make more than family members who are always flaunting what they have, and don’t want to cause any resentment. Her family already has a major problem with asking her for money and extravagant gifts, which we have really helped by pretending not to have the money. If they didn’t always expect her to pay their way, she never would have been in this debt in the first place. No more income discussions!
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$58,000 with very good state benefits and defined benefit pension. Texas
I also freely share my salary and other financial info.
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Great idea Mondo! It’s fascinating to see how varied our incomes are. I think that’s one of the things that makes the GRS community so great.
I was earning $50,500 in the Boston, MA area last year, but I am now out on disability. The insurance will pay $30,000 (without tax, thank goodness!) but if I am not able to work before the insurance runs out, social security will only pay $16,836 so I’ll have to move out of Boston. I say this hoping that more people will get disability insurance – it can be a lifesaver!
By the way, I’m in my mid-30s. And if I manage to get my health back, I’m redoubling my efforts to save for FI asap, just in case this happens again!
Great topic J.D.!
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$20,000 – MD, USA
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My gross pay is roughly 52k, & my net pay is roughly 36k. I’m in NJ.
I’m pretty open with my finances, but only with my immediate friends, but not my immediate family (or strangers & the like).
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Just moved from $25,000 to $37,500 (!). Boston.
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I gross about $25,000 for my full time job, and $7500 from my part time job. I’m 46 and live in rural upstate NY
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Household income somewhere around $200k gross. One of us is a lawyer, the other is in tech sales. DC metro area.
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57k about to be 62 w another 5 in bonuses!
Western OK (engineer)
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$150K as a marketing director in Boston, MA. Plus another $20K in bonus typically, and $30K in rental income, although half of that covers costs.
I’m a single mother, and for years I lived frugally in my very small condo, bought more than a decade ago in my very expensive city. I don’t think anyone, including most of my family, had any idea what I made. I recently moved to a bigger place in the same city and kept my condo as a rental, and I’ve seen eyes widen and the mental calculations taking place as people realize I’m more financially stable than they thought.
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36K regular salary plus most years I make 2,500 – 3,500 in OT. Minneapolis, MN
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$150,000 me
$80,000 husband
Age: 47
Cupertino California
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About 22K (this year). I’m an adjunct professor, so it fluctuates with enrollment. As a teacher, I’ve blogged specifics about the long dark of January. (Teachers get paid in December a few days before Christmas and then not again until the end of January. It’s kind of a disaster.)
I talk (and post) freely about my finances for a couple of reasons: 1) It helps my friends understand why I have to say “no” over and over again when they invite our family to do things that cost money. 2) I grew up absolutely without any money skills in a feast-and-famine cycle of moderate poverty and moderate wealth. I want my kids to have a more level life experience, but during periods of extreme economic hardship, that means that I get into more debt trying to keep things “normal.”
My kids still don’t have everything I want them to have, or even most of the things their friends have, and we sometimes spend a week eating rice and beans in order to afford the high-ticket items that I’m sure other people “judge” us for “wasting” our money on.
Overall though, I think it is better to share, to not expect anyone else to solve your money crises (even if they can or want to), and to do the emotional work of understanding that the choices you have made (bad and good) were made for reasons.
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Roughly $6,000/yr, Utah.
Yeah, that’s depressing.
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$197K + Bonus usually
I’m a Black single mom attorney. My mom died in college. No financial assistance from parents. In fact, my parents left me with debt. I’m pretty frugal and live beneath my means. I’m nearly 40 and have just about paid off my student loans. I’m saving for retirement and for my kid’s college ed. We’ve at about $600K in our portfolios (earned by working, saving and investing).
I’m sharing this level of detail because I’m ever cognizant of how blessed I am, and how unique I am in my demographic. I don’t fit the stereotype of Black single moms and I feel a sense of responsibility comes with that. One such responsibility is to be honest about my salary with colleagues because I know that my company underplays others and I want to empower people to advocate for their market value.
I’m grateful for this forum and the candor of others sharing their salary info. I learn from the group. Best!
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$16,800(net) about to drop to $14,500(net), Alabama.
This isn’t with a “real” job; this is my graduate school stipend. I don’t know how I’d exist without my husband’s paycheck. I’m not putting his information up here since I haven’t talked to him about the post.
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$6,000, part-time (all I could get), KY. Spouse, Mil. Disability, Mil. Retirement, Soc. Sec. altogether, $26,000, also KY. We are paying off debt, current on land contract mortgage, living more and more frugally. And STILL people expect us to pick up tabs because they are on assistance of one kind or another. Which we are not unless you count SS, which I don’t as my husband is 68 and paid into that account all his life. Military stuff, he damned well earned.
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I work part time and make about 12K gross. Our gross household income is about 64K. We live in Alabama.
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90k gross
Austin, TX
~30 years old
Engineer
No debt due to parents paying for school. Might buy a house some day.
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me: IT Professional: 77k
partner: Library manager: 56k
both of us are 42 and live in Pittsburgh, PA
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No boundaries here but generally only talk about it in real life with friends or family because that’s the only situation where it comes up. I like helping my friends get paid as much as they can (and most of my friends are in the accounting field so they aren’t missish about numbers either.)
I don’t think anyone judged Mother Theresa on her income level. And Obama makes about double what I do but I’m pretty sure he’s a little more valuable and far harder working.
I look at it without about as much emotion or judgment as I do calories. If you went on a weight loss forum and said “I don’t know why I’m not losing weight, what’s wrong with my plan?” and somebody asked you how many calories you ate and how much exercise you did and you said “I’d tell you but I’d have to kill you” – well, that doesn’t really make sense does it?
But you also wouldn’t be running around telling strangers about the intricacies of your Weight Watchers point system either.
Who knows? Maybe the kid wanted to know if you have the credentials to be worthy of listening to your advice?
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I try to talk openly about my finances with people I trust in my life, including friends. When I was in debt and ashamed of my financial status I was very private about my situation. I think that added to the problem and/or was a result. I didn’t know how much I was in debt and I assumed everyone was in just as much debt after college as I was and that they also weren’t paying attention.
Especially now, I like to say that I am choosing not to spend money on this or that because my savings goals are xxx. People can judge that if they want to, but at least I am clear and open with my friends about why I am turning down an invitation to do something or explaining my reasoning honestly.
I find it very interesting that people who are willing to openly discuss their love lives and even their sex lives are not willing to talk about their financial situations. I think it is often because they don’t know or are ashamed either of debt or wealth.
Last weekend when I was talking to friends about the cost/benefit analysis I make over things like organic foods v. non-organic foods they repeated that “they don’t care about money,” “that money is not important to them,” and that “they will pay whatever they need to for the best food for their family.” While I understand their argument and do not fault them for that, what I felt troubling was that they seemed to be judging me for even thinking of costs/money as if it were a dirty subject. Worse, I felt that they were implying that talking about money at all made me sound greedy.
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I have worked as a Human Resource Manager, Director, V.P., etc. for many years so I have known the salaries and perks of my co-workers and bosses much of my working life.
There have been several comments about huge discrepancies in pay for people with the same duties. I have not seen that in any organization that I have worked for. I have seen differences in offers – say about 10% or less of pay – based on experience, education and what I judge to be the intangible preferences of the hiring manager. The biggest influencer is what the candidate earned in previous jobs. These preferences aren’t unlawful – just things like what companies the candidate worked for previously or what college or university they attended.
I have never seen a set of pay information that matched what I would assess as “fair”, but most of them are “somewhat fair”. Some organizations are pretty transparent about what any given job pays and some are not at all transparent.
As to discussing salary, even in non-union environments employees have protected rights under the National Labor Relations Act, to jointly discuss “terms and conditions of employment.” In the U.S., employers who ban discussing salaries and strictly enforce the policy with discipline are likely behaving in an unlawful manner. (There are some situations, such as where everyone has an individual employment contract, where such a ban can be enforced.)
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Now that is interesting information. I’m pretty sure my employer has the policy that discussing salary with a coworker is grounds for termination. So no, I don’t discuss salary – at work or at play because it might get back…
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Yeah, i’ve worked places with that policy. It seems like a deliberate way of keeping employees unable to negotiate fairly (as well as getting around equal pay laws.)
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I think you hit the nail on the head when you said “nobody wants to be judged.” This goes both for people with a lot of money and those with very little.
If I make very little money, people will judge my spending choices, my lifestyle, my career decisions, and so on. They’ll think I shouldn’t be buying this thing because I don’t have the cash to spare. “Get a better job, do something to improve your situation.”
If I make a lot of money, the same is true, but in reverse. If I research products before I buy to get the best value, people will think it’s a waste of time because I have money to burn. “Why don’t you take a vacation, give more to charity, lend your friends a little?”
It’s also true that we don’t want to feel bad, and we don’t want to make OTHERS feel bad about their money situation. If I make more than my friends, I don’t want to point that out because they may resent me, or be jealous, or be embarrassed about their own situation.
Even with close friends, it’s a little uncomfortable. I do talk about personal finance at times with my family and friends, but we often shy away from specifics.
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Here in the UK it is considered very rude to talk about money. However, I believe in other parts of Europe people are just very plain and factual about it. It’s one of those strange cultural anomalies I guess.
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When I was growing up, my parents taught me it was impolite to ask people their salary or who they with vote for. This was private information.
I will discuss money with family and close friends, but usually do not give specifics. My husband and I are well off (due to both work and luck) and I don’t want to make anyone feel bad, nor do I was to give unwanted advice. We are going to have our first child soon, so I know how annoying it is to constantly be receive unwelcome advice about something so personal.
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I was once told that when you talk about your money situation, it is almost certain to come across as either bragging or whining. It rarely creates a positive impression.
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I think the biggest reason why people don’t talk about money is because they don’t want to be judged. I think another reason may be because certain people feel that they have inadequately handled their financial resources and feel guilty about that ~ I know that I DEFINITELY have and do. That makes me feel very uncomfortable, not just in talking about personal finance with other people but uncomfortable with MYSELF. It’s a constant reminder that I’ve been a careless idiot and thinking/talking about it makes me feel stupid. Another reason may be that it’s better to keep one’s assets to oneself for fear of being targeted for loans or for fear of being used by others.
I do not discuss my money problems with anyone other than the whole world via my anonymous blog LOL. I do not let anyone (not family, friends) directly know anything about my own personal financial assets. I haven’t even posted my true financial picture on my blog. Why? Because I sit in judgment of myself every single day over the way I have mismanaged my personal finances and my working career in general and I am still coming to terms with it myself. At some point, I will have to forgive myself but I’m not there yet.
Everyone who knows me knows that I will not discuss my ‘net worth’ or my financial plans. The only person with whom I talk personal finance and actual figures with is my spouse. As far as my kids go, I try to imbue our financial discussions with general details of my own personal financial missteps and hope that I can head some things off at the pass. I try to advise them the way I wish I had been advised at their age.
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Thanks for your honesty. I’ve made some embarrassingly poor financial decisions over the years too. They still sting.
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Americans DO talk about money in general – alot. We talk about money in terms of the things we bought (it was only X number of bucks, It was a steal!, I got it on sale), the things we want (ooooh – I like that model car – but it’s so expensive! That really costs THAT much? This is an investment to me – so it’s worth the price) and how it seems that the ‘right amount’ of money for us is just around the next corner (If I could just get that raise then I could do/get X,Y,Z).
What the culture doesn’t discuss is the specifics of money. I think the PF blogsphere is very much more open and able to talk specifically about money in terms of making it, growing it and prioritizing it, but the rest of the world seems to be stuck in money no man’s land: You can’t talk specifically about it as you could be making others feel bad. You talk about how much you make and you are bragging. You talk about how little you make and you’re whining. The moment you open your mouth with details you are putting yourself on the scrutiny block for judgement from others.
And perhaps, just perhaps, the PF blogsphere can get away with it’s honesty becuase it lets us talk specifically about our money situations without having to do so face to face. It takes courage to be open to a bunch of people you’ve never met (and perhaps never will….) it takes a completely new set of brass to be open with people that you know, whose reactions you DO really care about, imho.
Perhaps that’s a bit too pessimistic of a view, but that’s what my experience has shown me.
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I was raised that talking about money, health and bodily functions was not polite. I think it is a privacy issue as guidance to keep from being a bore.
Money is personal and I think we have lost the boundaries between our friends and our acquaintances.
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I do think it is related to not feeling bad, especially with the Great Recession. I recently got a job offer, but don’t mention the pay raise to friends because I know a few have gotten laid off. Furthermore, it’s this idea if you have the money, it feels uncomfortable (recently there was an article on MSNBC how many people deliberatly talk about a lesser amount of money they have than in reality). And if I don’t have the money, I feel uncomfortable, especially if they’re asking me to do something.
Yet, that said, money almost never came up in terms of personal wealth when I grew up and lived in New York. We knew, but it often felt that you’d be at a bar or diner and the guy to your left might be a lawyer and the guy on your right would be a store clerk. Now that I’ve moved down south to Texas, it’s different. Having lived in both Houston and Dallas, almost always within the first five minutes of conversation I get: “What do you do? Where do you live? What kind of car do you drive?” Not about wages directly, but they do pin point you on the Social Income scale as soon as they can.
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It’s not just a matter of “Talking about Money” there are many levels of discussion around this topic. I’m always surprised by the reluctance that people have to say “I can’t afford it”. or “It doesn’t fit in my budget.” and move on with the conversation. If people could say this without fear of judgement it would solve so many problems – after all, it doesn’t need to imply anything about your financial status – simply that you don’t choose to spend money on the particular item under discussion.
Raised in the UK I have found the NE US is very similar in terms of discussing money(or not). We were taught that money, religion, and politics were not polite subjects for discussion in a social setting. Even within the family, exact numbers were never discussed – although my parents did give us an allowance and taught us about saving and budgeting.
Fast forward to today and living in the NE of the US – politics and religion seeem like fair game for conversation – at least among friends. Money seems to be the one consistent taboo subject everywhere. It’s OK to talk about what you want to buy – in fact if you are looking for deals on anything people love to share their sources – but exact figures on personal income and expenditure are closely held.
I agree with this in general – I don’t think it is anyone’s business what I make or how I choose to spend it – except for those who might be affected by the consequences. For this reason I share the information with my DH and (almost) adult children. I think it is particularly important for kids to know that if anything happens to you there are plans in place to take care of them. For example: You will live with Aunt E. and there is an insurance policy in place for $xxx that will give you enough to live on and pay your way through college.
I think that part of the problem around talking about money is that there are no guidelines on how to talk about it, to whom you should talk, and at what level of detail. There are enormous cultural and personal variables, so perhaps this group could weigh in with some criteria for sharing?
Here’s a start:
– Is the person with whom you are talking personally affected by your financial decisions?
– If so, which decisions?
– Do you share only the information that relates to those decisions or do you give the person the “complete picture”?
– What level of confidentiallity do you expect from that person once you share your information?
– Do you state this expectation explicitly?
In the end I believe it is a personal decision – or a series of personal decisions, but I also believe that working out your personal approach to what you share and with whom decreases your chances of being placed in an awkward situation.
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Those are good questions. Since I’ve had my son and not worked a lot (didn’t work 2 years, did work 4 years, part time one year, now not working again) I have had a lot of people assume that I’ve always been dependent on my much-better-paid partner. Not so. I did just fine on my own, on variable wages, for a decade. I keep having to point this out because a lot of my friends ask for financial advice and then say there’s no way they can have any savings and I don’t understand because I have a working partner – but I did it, when I was on my own. I had a 401k account before I ever owned a car.
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after 3 years of unemployment i am making 21,000-in central KY. and I am happy happy happy!
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I never talked about money because it was something that was unknown and mysterious. Now, I talk about it whenever I get a chance…. looking for a house loan, talk to friends. investments, talk to friends. budgets, talk to friends.
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I have a number of people that I discuss my finances with. My partner and I are completely open and have finance-related conversations a few times a week, and I also tell my dad everything. Like, how much credit card and student loan debt we have left to pay off, what our bills are, how much spending money we budget for… I like having a sounding board outside our relationship, and my dad is pretty financially savvy. Actually, I also know a lot about his finances – I’m listed on all of his accounts, in case anything happens to him, which means I can see all of his account balances. He is also really open about how his investments are doing, what he thinks his house is worth, and what his rough monthly costs are. I think because he is in such good financial shape, yet experienced what it’s like to start off as a struggling new family, I feel good talking to him because I can discuss my plans and get advice, while seeing a financial position I can aspire to.
We also discuss our finances with my partner’s parents, but not as in-depth. They know we’re trying to get out of debt and believe in frugality, and when we went through an extended period of unemployment, they knew we were having a hard time paying bills. But we don’t really talk specifics with them, and they don’t with us either. If I were to guess, I would say it’s because they’re not in a great financial spot – they’re getting older, owe a lot on their house and cars, and tend to spend a lot on all kinds of different things. I think they’re not as open with us, and as a result, we’re not as open with them. I think as well that it’s harder to talk about wanting to get out of credit card debt with people who don’t see a problem with putting lots on credit… I worry they’ll think we’re judging them (which I guess we kind of are…)
As for our friends, we don’t talk too much with them about our finances. I’m not even all that sure how much we make compared to our friends. I think we’re all relatively in the same income bracket. I do know though that generally most of our friends put a lot on credit cards (vacations, camera equipment, art) and again, it’s hard to talk about focusing on eliminating debt with people who have a different kind of lifestyle.
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I was raised in a family where my parents never discussed money. In fact, my mother in particular was rabid about how private finances were. I had no idea of income, savings, retirement, anything.
Therefore I was shocked when it came out that my parents, in the last several years of their marriage, got into thousands of dollars of consumer debt. On top of that they had their underwater mortgage and parent plus loans. It was a nightmare that was aired for me during their divorce proceedings. I found out that one spouse was responsible for paying all the bills, and the other spouse hadn’t been involved at all. To top it off, they hadn’t communicated at all. Probably spent money to cover their unhappiness. They both had been raised to not talk about money because that was not “good manners.”
Their experiences have colored my monetary perception. My husband and I are VERY open with each other with all sources of income and bills, and have no debt other then his student loans. We have high savings goals, contribute automatically to them every month, and are very mindful in our spending. We talk about it with each other, and while our families don’t know exactly how much we make, they know we are relatively frugal and are not afraid to say “we can’t afford that.”
While I don’t plan on disclosing exact income to my children, I will actively tell them our plans and explain our reasons for our choices. Keeping them in the dark won’t help them at all.
Our current problem is, both our families know we have some substantial savings (had to get some help cashing in bond), and sometimes they seem to judge our choices. We say that we can’t afford something, and we mean “that doesn’t justify withdrawing money from savings” whereas they seem to think that if we have the money, and there’s something we want, we should spend it. Does anyone else have that problem?
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Yes.
Thank god not from our parents, but definitely from siblings (only when they want us to do things with/for them, of course) and also from strangers – I’m pretty strict about sugary foods and random plastic crap, but I’ve had to let up because I live in a working-class neighborhood and other moms would assume I meant I couldn’t afford an ice cream/light up necklace, then kindly buy one for my child. Now I budget a little bit for those kinds of purchases as a social thing for him.
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When I was raising my children, we discussed the differences between needs and wants. We explained that we could afford what we needed, but we chose which wants we would have.
We used the phrase, we do not want to afford something. This meant that we were making the choice to not spend the money.
We have been very open about items that we do not buy for reasons other than the dollar cost and taken the flack. That has included toys that do not last, toys with batteries, or other items that we do not agree with. This has been a good lesson for my children that the dollars you spend on something is the only cost. There is time, disposal, etc.
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We have those discussions privately, but doing it at the park as everyone else runs for the ice cream truck feels pretty passive-aggressively judgey of other people’s parenting.
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Our son’s school had a mother’s day store (fundraiser). We talked to him about it, explained that his mother would prefer something he made such as a picture, but it was up to him if he wanted to spend some of his allowance at this store. He decided to pick some flowers and draw a picture for his mom.
I explained to his teacher why he wouldn’t be buying anything at the mother’s day store…but they decided to just give something to him. Maybe they felt bad for him, I dunno. On the one hand, I’m not too happy about this…as it’s kinda going against what we’re trying to teach him. On the other, we have to be realistic…the world we live in is materialistic, and we can’t pretend it’s not. What to do, what to do.
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That’s a common problem, but I usually just say “that’s more than I am willing to spend” or something like that. Kind of like what Rosa said, I can afford a $5 ice cream cone and there are times where I might buy one, but in general I have better uses for my money, but at the same time I don’t want to give the impression that I don’t even have $5.
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Yes – it’s hard with kids too – I say, we do not have money for that. And I’m pretty sure the kids think we are poor. And compared to my sisters, we really seem impoverished (which is ridiculous) – and compared to my in-laws, we are wealthy beyond imagining.
I try to tell the kids (where have you heard this?) that we can have some of the things we want, but not all the things we want. We bought x,y or z, so right now we don’t have money for a. We chose. And they have to save their money. When we take them shopping, they ask for this or that, and I ask, did you bring your money? Usually the answer is no, and they get nothing. If they did bring their money, they need to make sure they a) truly want that thing and not to save for something else, and b) have enough to pay including tax. I hope this teaches them things I did not learn until I was in my 30s.
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I’ve done the same thing with my son, only I’ve worded it as, “We *could* buy this, but I’m choosing not to and here’s why” with a very brief explanation (e.g., we have ice cream in the freezer at home, you already have a toy car set, I only budgeted $X in that category for the month and I spent it already). He also has a modest allowance and has learned how to save up for pricey things he wants.
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I have the same issue too, how to talk about affordability and money to kids. How do other parents do this talk? I have sort of tried to teach my son about value of money with $1 allowance a week (he is only 6) he had around 25$ saved up till 2 weeks back and spent 10$ on a toy he “really needed” , i clearly explained he has only 15$ left, he seemed fine with that. Should i have stopped him from buying? .
When we recently bought a TV, he told me “Take my money too” so that we can buy the TV. It was funny at that time, but on hindsight i feel i have given off the impression that we cannot afford it. (We make pretty decent money, about 200K household income).
How do other parents handle it? Is it Okay if kids do not know much about how much we have? I want him to have the hunger to succeed in life, and feel giving everything easily will take it away. And we definitely want to pay for his college and not allow him to go into debt for it.
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DR, we’re doing pretty much the same thing, although when ours is 6 he’ll get a 20 cent raise to $1.20/week. His first purchase other than Christmas or Birthday gifts was a $15 lego game, which was a good use of his money. (At his age, I spent my entire allowance on candy every single week.)
He’s at a private school that has had money issues this past year and the teachers only make 23K/year. So at school he’s learning to be worried about money. He came home one day almost in tears because his textbook had been lost and it was *very expensive*. I explained that that’s why I make the big bucks, so that we can replace things like textbooks without worrying about them. (They found the textbook the next day– someone else had put it up on a high shelf.)
At the same time, we have long conversations at the grocery store about value. He knows how to look for what’s the cheapest per unit, just like my father taught me, but he gets an additional explanation when we don’t buy the cheapest item. Why do we like it better, how is it better quality? It’s important to know how to live frugally, because that gives options, but it’s also nice to be able to live an upper-middle-class lifestyle and to understand when trade-offs are worth it when you have enough money. That’s a good reason to make money, I think.
We’re also planning on paying his full college tuition and board.
I think it’ll be ok. We emphasize learning and education and understanding and hard work. He seems to have picked up on those lessons. It’s nice that he can focus on these more extrinsic kinds of things– what he wants to do to make his mark in the world, rather than omg I never want to have to worry about money. That’s a luxury but it seems to be one that hasn’t hurt most of the folks I rub shoulders with who are second or third or more generation upper-middle-class.
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@DR – I think you did the exactly right thing.
This drives my (very very frugal) partner nuts, having kiddo save up ALMOST enough for some large purchase he wants and then blow half of it on pokemon cards or whatever because he just can’t wait. But to me, that’s the point of the allowance – you can tell them all you want about what’s a want vs. need, but blowing their money and not having it later is a much more visceral lesson. And better to learn it now, when the stakes are $25, than when they’re 20 and it’s a $25,000 car instead.
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DR – what Rosa said. IMHO, the major reason for giving an allowance to a young child is to let them learn how to handle money. I say “let them learn” and not “teach”, because making mistakes is how they learn. And I agree, better to screw up over a $20 purchase than a $20K purchase. DS has DEFINITELY learned a lot from his mistakes!
I think you did just right by letting your son purchase the toy – to him, he DID “need” it and he clearly saved for weeks. The rule in our household is that DS can use his allowance any way he wants for anything he wants provided it isn’t illegal, because he’ll learn to make good judgments through trial and error and building experience. After all, my employer doesn’t tell me how I should spend my paycheck.
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This is an interesting question. I have two jobs that are the vast majority of my household income (like 80%) which are required to be disclosed on public reports. So I’m somewhat more willing to talk about what I make since it is public knowledge.
Yet I also choose to disclose my net worth on my blog under my real name. Nuts? Not really, it is just a number. It really doesn’t mean anything for the most part other than the meaning people decide to give the number.
I think we all are too fearful about hurting each other and being judged on our money choices. I just don’t care what other people think so I post it. If nothing else, it does make people more willing to talk about money with me since I’m open and honest about my money.
Good topic,
Tim
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Where I come from, people do not talk about money for mainly two reasons:
1) others may think you are showing, ie if you make more than them;
2) belief that you may be bewitched if you are rich. I do not believe this, but this is so entrenched in our culture that people regularly name their businesses “I am just trying”. Apparently such a name implies that you are not wealthy but are just “trying” to make ends meet so you are not worth bewitching.
As a result of my upbringing and my personal belief that information about my financial life is private, I do not feel comfortable telling people about my finances except with two friends and my immediate family.
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I didn’t mind when we didn’t make much, somehow it was pretty easy to tell people 20,000 a year. No guilt…. Look at us! Aren’t we thrifty, hardworking, and long-suffering!? (definitely not saying everyone thinks like this!)
But now that we make more (more than before and more than average) I don’t give out specifics. There’s the opposite thing as above — we’re out of the “hardworking middle-class club,” and there’s that nagging feeling that other people might think we think we’re better than them. I’m sure a lot of it’s in my head, but there’s no advantage to telling and lots of potential disadvantages.
There’s also the fact that we spend like we make less than we do, and there are some people in our lives who would pressure/expect us to spend more. No thank you.
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“that money is not important to them,”
Not to hijack your post, but I found that interesting as I have a married couple who say similar things. They both wanted their doctorate in theology and one works to support the other, while having three kids. Now I am glad for them and they did say that those jobs are okay, because they enjoy them and the money’s not important. Yet one time, they accidently let slip they’re over 120,000 in debt. The mentality “money is not important to them” alarms me. It shouldn’t be the end all, but money is important to me. For many years, I had a job I absolutely hated. I mean, I’d stay up late because I knew when I went to sleep, I’d have to wake up and go to work again. Yet I did it because of the money and we needed to pay off our student loans. Also, for many years, I got offers of much better working conditions, but poor pay, and held out until I got something with good conditions and good pay. As I told my spouse, we can be miserable at work, but happy at home that we’re leaving our debt behind, our happy at work, but miserable at home, because we’re drowning in debt. Likewise, I’d love organic all the time, but we have to do a cost-benefit analysis.
So, money definitely does matter and I like how you contrasted yourself with the other individual in your post.
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Well we’re all nosy, aren’t we. Just look at the comments on any moneyblog, we’re all experts in what other people should do with their money! If I knew my neighbour was bringing in big bucks I might wonder why she doesn’t repair her porch or something. I don’t want people having those casual presumptive conversations about me without having the total picture to understand my lifestyle. And the worst would be word leaking back to colleagues somehow, as there is so much that’s goes into salary negotiation other than pure role and level of experience.
My husband has no problem talking about money details, and neither do his South Asian/Asian friends. They’ll sit around talking about exactly how much the raise they got last week is, or sighing about how much (to the dollar) they owe on their car or credit card or whatever. They’ll chat away about Person X’s experience with bankruptcy, totally casually and non judgementally. These guys also cheerfully lend money – big amounts and small – to each other all the time for all sort of reasons, and send largish sums home to family with no real worries. It’s a very stress free and carefree attitude which seems a bit weird to this uptight European even having been part of their circle for going on 15 years.
I remember years ago, we were visiting my family back home and my husband casually mentioned my salary at a dinner table with twelve people ’round it. It was one of those funny moments where everyone sort of raised their eyebrows and stopped eating and looked at me, while he happily chewed on. I almost passed out!
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I believe, like one commenter said, that for some people it equates to worth as a person.
Taken as a whole, we live in a world of 3 classes of people: Those with more than me, Those like me, Those with less than me. (the item of measurement can be any number of things including finances)
To be sociable, to fit in, one will tend to focus on the commonalities. If you introduce money, and you make more than me, the 3 class structure has just take effect and you are not like me anymore, you’re different, you can’t possibly understand.
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This was the subject of a Salon.com article yesterday:
http://www.salon.com/2012/05/31/the_case_for_telling_everyone_what_you_make/
I was raised that talking about money was impolite — I remember being chastised for this in high school, when a classmate gave a speech encouraging everyone to have all their clothes dry cleaned as she did, and I asked how much this cost her parents or ate into her allowance. The teacher said this was extremely rude, as it probably was, and made me apologize.
I’m in my mid-30s now, and I’ve noticed that friends and I talk more specifically about money than we used to do. We disclose mortgage payments, childcare costs, grocery costs, and sometimes salaries. It may be a function of the recession and a general interest in spending more carefully, or the fact that we’re at a similar stage of life. Regardless of the reason, this level of honesty is helpful.
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That is a fantastic article. Thanks for the link!
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I’m stuck on the part where your classmate’s family had all their clothes dry cleaned!
I want to know how much it cost them, too. Don’t tell your teacher. :0P
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I disagree with that teacher. How is it rude to ask how much dry cleaning costs? Especially after someone gives a speech on the topic.
If someones going to tell people to buy a product or service then they should be prepared to say how much it costs. The girl already advertized her family spends the money so its not like you’re prying into their personal life any more than she already announced to the whole class.
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I work in a small office so several people already know how much everyone makes, but other people don’t know but have a sense for it. I think it would be a bit freeing to be more open about it rather than talk about it in small groups in a gossip-y manner. Then there would at least be a chance for people to realize that the money isn’t as important as the work someone does, and if some people think they deserve more then they can think about what they do that warrants a raise.
It’s not a competition with others, but with yourself, and when you aren’t distracted by thinking about what other people make and what you should be making, then you can be more productive.
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This is so true. HR at my company gives ridiculous excuses for under compensating people. My friends and I are honest about compensation because if we’re not honest with each other, we won’t have the information to advocate for ourselves.
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People get judged by the amount of money they earn and by their net worth. If your numbers are high, others will think highly of you but then many will think you should pay for everything. None of this is fair but it is what I have experienced. I LOVE to discuss money but am cautious about discussing specifics.
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$23,500, WI–graduate student.
I’ve felt very lucky over the years; as friends and fellow graduate students graduated and got jobs in the “real” world they were very open about giving me a rough idea of what their starting salary was. Coming out of school, it’s hard to tell even what ballpark you’re in, and what sort of offer is reasonable or not.
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That’s way higher than my stipend! (At it’s highest right now) $16,800 about to go to $14,400!
I had a friend looking for employment opportunities and was offered a tenure-track job in a teaching-only school. She turned it down because the salary was too low — $44,000.
I just keep wondering if grad school is really worth all the lost income.
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Not talking about money may be a generational thing? I am 54 years old. While growing up, we were told by our parents that it was rude to ask a person’s income or talk about your family’s financial situation. I actually still feel this way; it is no one’s business what my and my husband’s salaries are. I don’t ask what my adult children make either.
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I’m quite open about how much i earn. I think it’s maybe because i’m very happy where i am right now in terms of prospects and growth that i don’t mind disclosing how skint i am! I think that the saying the reason people are unwilling to disclose financial information about themselves is that other people will judge them is wrong. I personally think that if you’re completely happy with your finances as they are then you don’t care what anybody else thinks. To me, being unwilling to be honest about how much you earn or how much debt you have, represents self judgement more than anything, and maybe shows a negative relationship with money. I’m not a psychologist though, this is just my opinion.
As i mentioned before, i’m happy where i am. I have a low wage (£6240 pa) and at 20 years old, my fair share of debt (around £20,000), and despite all this i’m not ashamed in any way, because right now i’m taking action to rectify this. I’m working my first ‘proper’ full time job as a business and administration apprentice, making a meagre £520 a month, of which most goes to rent and paying off debts, but i know where i am now, i have room to grow and become the financially savvy adult that i never was before.
Most of my debt was incurred during a one year stint at university back in 2010. I’d done everything wrong; i signed up for a student loan, but ticked the wrong box so i got about 20% less than i was entitled to, i spent it all on food and booze, i never paid a penny of my halls fees, i maxed out my overdraft, i didn’t do any work and i basically had a VERY expensive 8 month holiday. Towards the end of my time there, i became very insecure about my finances. I was surviving on a tiny amount per week and still managing to buy alcohol, which i started consuming at an alarming rate. To be honest, looking back at my time there i was teetering on the edge of an addiction and it was all down to being out of control with my finances and putting undue stress on myself. Anyway, my point is i never shared this with anyone. I was 300 miles away from my parents so it was easy to lie to them and my friends never asked. Eventually i told my mum and it felt as if the skies had cleared and the sun began to shine again. From then i’ve been totally honest with her and anybody who asks.
My friends find it helpful because they use me as an example of why you should always be sensible with your money, and i’m happy to help. Saying that, i was ashamed of myself back then, but now i’m proud of myself and how i’ve managed to turn myself round and started to make a living instead of just scraping by.
Phew, my first comment on a post and it’s an entire essay! Sorry!
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Really excellent story – thanks for sharing it and congratulations on all your hard work and lessons learned.
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I have been a Thrift Advocate for a long time. I am always surprised that people have a poor understanding of the elements of Thrift which include: saving a portion of income for an emergency fund, thinking before spending and considering needs prior to wants.
Those living in the USA just don’t seem to talk about money. I agree with some of the children. They may think the right response is “how I spend my money is my business, not yours.”
There are parents that never tell the children about banking, savings accounts, the risks of having credit cards and maxing them out. Why? They don’t talk money, even in the home.
I think those of you who have an interest in frugality should be proud of yourselves. Look what you have achieved. Why not spread the word, particularly to your friends and family. You may help someone who is unaware of strategies that could improve their situation.
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$44,370, postdoc in San Francisco. My husband makes slightly less.
I talk about money a lot. With some people, coworkers who have been in the same situation, I can talk about my debts. Also with close friends. I also have a blog that chronicles my trying to get out of debt, and there I talk freely about what I earn and what I owe, but I don’t give out some details. I don’t mention my name or my husband’s name, I don’t give out specifics on which banks we use, etc.
I don’t talk about it with some people, who are better off than I am, because the debt brings shame. I know they don’t have debts, so I feel foolish that I have some (and I think I should feel foolish; I was). I also don’t talk about money much with my sister who is struggling to stay above poverty level. It depends on the person, I guess. Some people might be inspired or understand where I’m coming from; some people maybe could avoid my mistakes. I know some people would judge me. I’m working to care about that last part less.
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45,000, NC, USA
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The privacy aspect for us is key. I honestly don’t trust certain elements of my family if they find out the information as most of them are terrible with money and spend every last dollar on stuff they don’t need, yet are looking for handouts for things that should be priorities. But I do think as whole we do talk about money, we just don’t talk about how much we have. We discuss what we are buying and how we are spending it and often that we don’t have it to buy the things we want. We also see through forums such as this, how to save it or spend it more wisely, also how to use alternate forms of currency other than money. Most of the media idolizes the rich, famous, lucky and the stupid. The few who make a lot of money, some of which have no talent whatsoever. The coverage, advertising, etc., encourages conspicuous consumption regardless of the ability to actually afford stuff. I have watched people I know buy luxury clothing, cars, watches, etc., but then lose everything because they can’t make the rent/mortgage when laid off. The country as a whole isn’t much better if you look at our yearly deficit and national debt. What we need to encourage is more discussion around our emotional/psychological connections to stuff or experiences and the long term impact on our financial freedom. How to use money as a tool to free you from the yoke of debt slavery.
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This is exactly what we’ve taught our kid, even though his idea about ‘a lot of money’ is about $12.
” if I have a lot of money and you don’t, then talking about money might make you feel bad. Or if you have a lot of money and I’m poor, then talking about money would probably make me feel bad.”
It doesn’t help in the long run, because kids come to our house and compare. But it’s a good rule of politeness.
Among friends and coworkers I think openness is important, though – because if you have no idea how much anyone else makes, how do you negotiate salary? Especially if you don’t come from a family in similar kinds of jobs? And it’s easy for friends to lead each other into spending traps by assuming everyone has the same level of income and can afford the same kinds of clothes/gifts/restaurants/vacations/wedding gifts.
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