Berating High Income Earners

Michelle Singletary writes an interesting column in the Washington Post called The Color of Money. I enjoy her column because she often focuses on the emotional side of financial decisions. Today she wrote an article called Too Rich To Be Poor Mouthing.

During an online discussion on November 8th a gentlemen asked the following question:

My wife and I both have “Good Gub’ment” jobs. We both earn low 6 figures. We have just under half a million in TSP. We have 2 kids in private school and one on the way. Currently 2 Maryland 529’s and will start the next one when our new addition arrives. We have a decent mortgage (bought in ’98 before the ridiculous home prices), no credit card debt and one auto loan (2 years left). BUT, we spend so much money on all of these things (Tithing (non-negotiable), 15% TSP, private school, etc.) that we don’t have a penny saved for a rainy day or life happens. Neither of us appears to be to worried about that, although we know we should start banking some. Something always seems to come up when we try. What do you recommend?

In response to that question Michelle suggested the man cut back on his retirement savings or cut back on discretionary expenses in his budget. Both reasonable suggestions, but readers berated the man for asking his question. Including comments like the ones you see below:

“Those of you ‘struggling’ on $200,000 a year just need to think about how you would make ends meet if you only had $40,000 a year. As far as I’m concerned once you get into the six figures, you’ve lost your right to complain about money unless you’ve suffered a catastrophic emergency.”

“There is no way they can’t find money for savings… Stop eating out. Stop buying stuff. At $200,000plus, you CAN live VERY luxuriously AND save for an unexpected crisis. Come on!”

“That’s $200k before taxes, tithing, retirement savings, college savings, TWO private school tuition bills, etc. : A lot from THAT list is EXTRA, not necessary. Tithing, private schools, are both personal lifestyle luxuries, not necessities. Maybe the 1st poster who is saving more on $42,000 has some advice for the poor little rich family.”

“Expecting a private school [education] for your kids when most families do not have that luxury is self-centered.”

Michelle was surprised that readers thought she was lenient on the man and shocked by the reader’s quick reaction to bash him. She notes that the man was doing the right things with his money including saving for retirement and college. She also recognizes that middle and upper income families have enough money to pay for what they need, but like everyone else they might not have the money to pay for everything they want.

I found the online discussion and subsequent article quite interesting. I’d like to provide my own opinion on the matter, but first I’d like to hold an open discussion. If anyone has comments on the article please post them.

8 thoughts on “Berating High Income Earners”

  1. Perhaps tithing, maintaining 529’s, providing private school education, and saving for retirement are not necessities. As a person who watched their family struggle with debt, I understand how frustrating the ‘poor-me’ people may feel. However, I would not allow my children to have public education (I have no children, but I may adopt) after experiencing the downfalls of the public school system for myself. I also would not neglect to save for retirement. Furthermore, I, too, would like to donate a portion of my income to certain charities. I would do all of this instead of saving money for unnecessary wants. With this said, if I were in the position as the family mentioned, I would want to know how to cut corners without sacrificing what I consider to be important investments.

    CONCLUSION: Get over it, people.

  2. I agree with Jay. People need to get over it. This man and his wife have the jobs they do for a reason. They probably invested the time and money into a worthwhile education that looks like it paid off. Like any other family though, no matter the income, I’m sure they can benefit from adopting some frugal living ways. There’s always room to cut out some “fat” in one’s spending habits.

  3. Earning a lot of income certainly does not mean that one has no financial worries. I feel that the quest to be more responsible with one’s finite resources (Time and Money) is a never-ending journey.

    There are *always* concerns at *every* income level. Obviously, these high income earners are contemplating issues that are dramatically less dire than your basic food, shelter and debt reduction.

    Just because this couple has managed to get decent jobs, and admirably handle the basics of upper-middle class life, does that mean that they should no longer strive to improve financially?

    Even the richest people in the world need to manage their resources to hedge against disaster, and to (hopefully)arrange to give back to society via tithing or charity.

    Learn some frugality. Invest more into an emergency fund. Constantly re-adjust your priorities. Keep healthy so you can keep earning, provide for your family and enjoy your life.

    These are life-long pursuits regardless of your income level.

  4. With good “gov’t” jobs, perhaps the $42k-ers are a bit miffed considering that, technically speaking, a portion of their money pays the 6-figures’ salary via tax money.

  5. Well, there’s a slight bit of, “Um, most people can’t afford what you call necessities” but there’s no reason to be rude–I think the right advice was given in cutting back on some of the good saving he is doing (such as retirement–most people can’t put 15% into retirement, and as he’s got time on his side having saved more money when younger, he can afford to lay off a little bit long enough to put together an emergency fund). I barely have enough money to make it through (once you include my savings plans), and I earn more than the bare minimum. There are things I could cut back on if I needed to.

    I think that’s the point. He and his wife earn a lot, but they need to learn what they can spend to live within their income–sure, they’re not in debt, but if they don’t have money to save, they’re outside their income.

  6. I didn’t read the original article, just the version posted here. But I too am shocked by people’s reaction. It didn’t really sound like the guy was complaining about money, more asking for advice on how to handle his money better. I think it’s a real shame that someone that was looking for improvement got shouted down in this way.

  7. As someone who makes in the top 10-15% of Americans ($150k), my family is technically upper-middle class. But because I live in DC where a house costs double the US average and the median HHI for Fairfax Cty is something like 90k, I feel only slightly above middle class. We also have the same worries as the govt job poster and I don’t think it’s because we’re spoiled, just trying to be smart with our money. After the mortgage, saving for retirement, daycare costs, one small car payment, and student loans at 1.5% (partly why we make “so much”), there’s not much room for 529 savings or comsumer extras, let alone private school. It’s all relative. I don’t think the original poster is off-base.

  8. I have something simple for you that can help you save. 1st
    take a $100. a week an put it in a some type of safe box somewhere in your home. If you don’t like this, open up another account and put the $100. a week there. You can use what ever number you want, but the idea is that the amount should be very easy to save. Remember, the FDIC only insures up to $100,000.
    2nd, Pay some of your bills up front for a year. There is ususally a great discount for doing this. If there is take the money that you would have spent and put it in the safe box or other bank account.
    3rd, I think this is the most important way to save money. For 2 months you and your wife should not buy anything that you absolutely don’t need. This means that extra pair of shoes, that cool cell phone, that new computer and even that expensive bottle of wine and cheese. The idea here is, to be grateful for what you have. I am going to go out on a lim here. I feel that most people that have a lot of money and don’t save are usually not satisfied with what they have. There is always a need to have something better.
    Take this action today. Go home and take a look around your home. Look how beautiful it is. Look at what God has given you.


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