and like every other year

Exactly.

I can point to plenty of extreme examples of rich people losing everything because of poor financial planning, such as lottery winners, sports stars, and trust fund kids. You can’t outearn a spending problem, and you can often outsave an income problem. Most millionaires are also frugal, and that is extremely interesting to me.

For example, my brother retired super early because he was extremely frugal, and now he lives on a pretty typical average income in terms of regular spending (though his house certainly isn’t typical). He’s a millionaire, but he lives on someone like $60k/year. Why? He doesn’t see value in spending more money, so he stopped working as soon as his savings growth outpaced his spending needs. He had a great job (actuary, eventually became VP), and he decided to retire at 40 after living in $50-60k/year or so and earning more than double that.

On the flip side, my cousin lives in a higher cost area than me and they’re in a single income household making a mediocre salary (social worker, so something like $70k in a higher cost area). They own a house and are on their way with retirement savings, and they do this while having four kids. Part of their plan is to live near family so they have free baby sitters, inexpensive vacation options, and someone to help with household projects. I’m guessing they spend about $50-60k/year just like my brother. They’ll probably work until normal retirement age and have a healthy retirement.

So I look at these examples and can’t help but think that money problems are often symptom of poor financial education or mismatched priorities, or both. Occasionally there’s a legitimate income problem, but if you’re making around an average income, it’s usually a budgeting problem.

In my area, the average is right around $450k, so I think we’re pretty representative of the rest of the US. I did a quick search, and I saw a dozen or so listings for townhouse around $300-350k. If we look at the top end, with a 20% down payment ($70k), the mortgage+HOA is ~$2500/month. If we look at the bottom end, it’s ~$2300. I even see one as low as $2k/month. Note, this doesn’t include utilities or maintenance. So for an average household income of $6275, we’re looking at 30-37% of your income for the mortgage + HOA.

Rent for a similar place (2-3 bed, 2 bath) is $1500-2000. So it is currently cheaper to rent in terms of cash flow, but buying keeps your payment constant (inflation will be on your side) and builds equity, so longer term it should still be cheaper to own vs rent.

left with $300/month

Are you assuming a massive $800/month transportation budget or something?

Let’s assume $6275/month income, here’s a budget that I think makes sense:

• mortgage + HOA - $2500/month (could save $200 or more buying a cheaper place)
• food - assuming 4 person household with young kids (two under 5, which should be the target for these houses) - ~$900 (if you don’t have kids, it’s ~$550); this is the low cost food plan, not the “thrifty” food plan
• transportation - ~$700/month; insurance ($50-100 in my area for two cars), gas ($100-150), maintenance/repairs (~$50/month), yearly registration ($100-150 in my area, so <$15/month); purchase price (assuming buying used and keeping for 10 years, a 2017 Corolla is ~$17k and a 2007 is ~$5k, so $1.2k/year or $100/month; add taxes and fees and assume ~$150/month on the high side)
• utilities - ~$300/month; we spend a little more, but our house is larger than the ones i referenced (2400sq ft)
• taxes without any retirement savings - ~$8000/year, or ~$670/month (my state is ~5%, federal is ~11% at this income, so 16% of $75k)

So, the major expenses come out to ~$5100/month. Add in another $500 or so for other stuff, and $5600 is a decent spending estimate. That leaves $600-700/month for savings, or 10-11%. Typical retirement savings goal is 10-15%, and that could be met by trimming some of these expenses by $200-250/monthn (a lot of that is taxes if going for pretax investments).

So yes, mortgage rates and property values certainly make things difficult, but I hope I’ve showed that it’s not as hopeless and many people assume. I think the average household could own a house and still save 10-15% of their pretax income. They’d need to drive older cars, but nothing unreasonable (5-15 years old; both of my cars are 15+ years old and have minimal maintenance costs).

Unfortunately, the average person seems to suck at budgeting, which is why I say it’s more often a budgeting problem instead of an income problem. The important thing is to establish good budgeting habits early, and then the focus should be on increasing income. Ideally, as your income rises, your spending doesn’t rise as quickly, so you end up with more cash flow as you get to the point where you want to invest in a house.

I’m in a cheap rent city with abundant housing and am still paying more at about $1850 months now

That’s not a cheap rent city. You’re in a higher priced area. My area is a lower cost of living area. Rent is under $1,000/mo unless you want to live in a luxury high rise by the water.

another $180 for phone and Internet

I pay $80/mo for Internet on one of the higher plans and $45/mo for a cell phone plan. Total $125/mo. How is yours so much higher?

definitely feel like I should be saving more per month than I am but actually don’t know where it goes.

This is where tracking your income and making a budget comes in.

That rent hike is insane, I’m sorry that hit you. Not sure if you’re looking for suggestions, if not ignore my message.

All those numbers seem right, except maybe the internet/phone adding up to $180 - I use mint mobile, which has you pre-pay, but can be as cheap as $15/month. Also make sure you’re calling into your ISP and asking for promotions - unless you’re under special conditions, internet shouldn’t be more than $75/month.

This part I’m less sure about without knowing deets like what rate your student loans/cc are at, but I think you have the right idea with not paying into your 401k when you have outstanding debt, which is an inverse 401k. If the interest rates are manageable I’d first ensure you have an emergency fund of a few months cost of living, then put that towards paying off debt faster.

$50 for credit card debt cause I’m trying to raise my credit score

Paying credit card interest doesn’t increase your score whatsoever, paying your bill on time does. Just pay whatever is due (statement balance, not minimum payment) and you’ll get positive payment history. Don’t waste money on interest.

actually don’t know where it goes

It sounds like you need a budget. Track every penny so you know where everything goes. Worst case scenario, you don’t find any waste, but you do know where your money is going.

I do that and make corrections every so often. I’ll realize I’m spending more than I expected at restaurants, or my car insurance went up, or whatever.

work tech… 401k… not matched either

Perhaps it’s time to look around for a new job. I don’t know what you mean by “work tech,” but surely you’re worth more than whatever they’re paying you (you can at least get better benefits). I also don’t know if you’re Indian or American, but I do know plenty of companies can handle immigration paperwork (e.g. mine does, we have plenty of people who used to work at InfoSys at my org).

Right now is a rough time to look, but there are opportunities everywhere.

Good luck! I hope you can get into a more comfortable financial situation.

where are you?

I’m in Utah, and we’re in the same situation (our house doubled since we bought, which was ~9 years ago). The numbers I cited are national though, so obviously it’ll lose a bit of nuance that’s more relevant to specific states, and numbers can vary wildly from city to city. Also, other expenses can vary wildly as well, such as auto insurance being much more expensive in Florida (from what I hear) vs Utah, despite both being no-fault states.

But even in my area, there are still affordable houses. Mine may have doubled, but houses just 15 miles or so away haven’t increased nearly as much.

Agreed. For now, you can check out the BLS data here. The categories leave a lot to be desired, but I think it’s still interesting. Specifically, the amount people spend on transportation is terrifying, and that’s definitely on the “predatory lending” end of the spectrum.

I don’t think it’s that unusual in my area. I’ve never paid more than $450 or so for 6-months of coverage on two cars, and I’ve been with multiple insurers. Granted, I get liability only, but comprehensive coverage isn’t that much more expensive (esp. on the older cars I drive). Something different is happening in Florida that isn’t happening here.

And I don’t live that close to work, my commute is ~25 miles each way. I live in the suburbs and work in the city.

Last time I checked, you could try to make changes to society and save money at the same time. How much has posting on the internet blaming average people for their problems improved your life? Which do you think will improve your life more, arguing with someone over the internet or getting a second job with your extra time?

That’s generally pretty true and also irrelevant to my point of it being worth it to go into debt to invest in education.

Additionally degrees in things like philosophy and art history can be valuable if you go in with a clear headed career path from them.

Trades absolutely shouldn’t be discarded. But the toll on the body should be weighed alongside it. You can make great money as a plumber while you’re still physically able. But if your knees hurt as an 18 year old, don’t try.

They were nasty 50 years ago and they’re nasty today.