Back when I was in grad school, I had a gross salary of $11,000 for the entire school year. I made a little more during the summer months but not much more. It didn’t matter, though, because I never felt like I was missing anything. I had enough money to cover all of my needs and most of my wants (credit cards helped out with the rest but we won’t go there). I even had a small savings account and was able to pay for two spring break trips in cash (Cancun and Jamaica). When I reflect on how I was able to have so much on so little, it all comes back to one main point–lower expectations.
When you’re 22, 23, 24, the expectations that you and others place on you are less. You’re expected to live in a crappy apartment outfitted entirely in hand-me-downs. You’re expected to have a roommate. You’re expected to live on Ramen and pasta and beer. You’re expected to drive an not-so-nice car. You’re expected to have a crappy, low paying job.
I did all of these. And I loved every minute of it! I had my own apartment, shared with a roommate, which was supercheap, included most utilities and was on my school’s bus line (however, I either walked or used my car. The bus was utterly unreliable. But it was nice to know that it was available). I spent maybe $35 every two weeks on food. I went out with friends a lot more than I should have but we always found cheap ways to do it. There was not one minute that I thought there was anything wrong with my life. Then I graduated.
Upon graduation, I took a job paying almost 3x what I was making as a grad student. All of sudden, my crappy apartment with used furniture seemed beneath me. My taste in food and bars suddenly went up. So I adjusted my lifestyle and choices to accommodate my new salary for no other reason than now that I was a working adult and not a student. What was expected of me had changed. I was now expected to behave like a grown-up, with all the trappings that go with it (except for the car payment. I was able to avoid that for another 3 years). Reflecting back on it, I don’t know why that piece of paper saying I graduated also came with instructions for how I was expected to spend my money. But it did. And I acquiesced because I didn’t know what else to do.
It never ceases to amaze me how certain milestones imply increased spending and lifestyle adjustments. I would love to know why, as we get older, we feel so much pressure to up our expectation for our lives. What would happen if we didn’t? Would our lives really fall apart? Would our families stop loving us?
Believe me, I understand that as we get older and take on more responsibilities, it’s nice to have more income. And it is nice to have the money to afford “nicer” things. But sometimes, the stress that comes with more income just isn’t worth it. There are some days I truly don’t like the expectations that I own a home (which I do), should have more kids (which I can’t), or have plenty of money for nice furniture or restaurants or vacations or whatever society (and my parents) has decided I should have. I’m not one for making judgments about others; I find it ironic that I let the judgment of others influence the expectations for myself.
Though, I will say, it is nice to sit on my own furniture.
Has increased income changed your expectations for yourself?
I found personal finance blogs about a year before graduating college and I read a post exactly on this issue. I think that forewarning saved me a lot of grief in my first year out making "real person" money. It's a huge temptation to model consumption you see around you when you start getting what seems to be a huge paycheck!
It does not take long to get used to more money. People who win the lottery get used to it in about two weeks. In two weeks they can or have satisfied all their needs and then they are back to square one. Usually losing it all or being hounded out of it by scammers or family.
Increased income (and age) really does increase your expectations. I sure had a lot less to worry about when I didn't was 20-something without a mortgage and stressful job.
Some expenses truly do increase over time, with kids for example. A home that would do for a college student or even new grad with first job will not be ideal for a family. This is legit.
The rest of it – well, it depends. Living on ramen and beer might work at a certain point in time, but as we get more money we logically improve our purchases to improve nutrition. The same can be said for moving from a sketchy area to a safe neighborhood – more income means taking care of ourselves better.
All this said, I think most expense increases are due to wants instead of needs. When others are buying nicer homes, vehicles, vacations, etc – it gets tempting to keep up and live the lifestyle that it seems we "deserve". The thing is, lifestyles aren't "deserved", but are made through intelligent choices.
Good topic!
I agree with Kay. With money seems to come more responsibility. You end up acquiring more stuff to look after. Plus I think you end up spending more because there is more to spend…you aren't as careful about $10 here and there.
So true, so true. While we did buy a house big enough for our family, we did not furnish it with expensive things. Some relatives made snide remarks about our lack of decor, but we were happy having a child-safe house that was comfortable for us. We put our money into education for them rather than the latest & greatest for the house. We still think that was the best choice.
This is definitely true. I remember when I could live on $1,000 a month and somehow had a savings account and no debt! Yet, as I've gotten older and my income has increased, so have my bills. It was a slow but eventual process. I'm not so sure I feel pressured to "keep up with the Joneses" but either way I've ended up with big bills!
I had the same leap into expectations not when I graduated (because I was still making nothing then), but when I got married. It just seemed like married people should be able to "afford" things. And we fell into living that way, even though my husband was in grad school and we were living on one income.