Why Many Doctors Live Paycheck to Paycheck

Happy Saturday! Have you finished your Christmas shopping yet? This tends to be an expensive time of year, but I pray you’re not living paycheck to paycheck. A high-income professional should be able to do better, but sadly, some have locked in lifestyles that make the situation all but inevitable.

How is it possible to burn through a quarter million dollar salary? Passive Income MD, living in a high cost of living area, sees it firsthand. In today’s Saturday Selection, he’ll demonstrate just how easy it can be. As always, this post originally appeared on Passive Income MD.


Why Many Doctors Live Paycheck to Paycheck

 

I was having a discussion with a colleague recently, and the conversation eventually  turned toward finances. He informed me that if his home refinance didn’t go through, he would have difficulty in making his house payment next month. Needless to say, this was weighing heavily on his mind, and he was visibly stressed.

I sympathized with him.

I decided to break it down on a spreadsheet, and made a couple of safe assumptions for a physician working and living in Southern California. Here’s a quick key to what you’ll see:
It bothered me deeply that even after finishing his training and “making it” as an attending, he was still essentially living paycheck to paycheck. I thought about it for a good while, and realized I had to dig a little deeper.

 

Doctor Surfing

waves are free. surf gear is not.

 

After all, how is it possible that a physician making over $250,000 a year is barely scraping by, and living in fear of missing his next mortgage payment?

●      Our example is a family of four with one working parent (the doctor)
●      Income Tax – I’ve assumed a 35% effective tax rate, but I’ll show what it would look like as a 30% or 40% effective tax rate

●      Student loans – I used the current average loan of the typical graduating medical student ($183,000), consolidated at a 10 year term, at 2.95%.
●      Mortgage – I assumed a purchase price of 1.5 million, which, unfortunately, is pretty average here in Southern California. I also assumed a 20% down payment and a standard interest rate of 4%.
●      Private school average tuition is $22,000 per year or $1833.33 per month, 2nd child is in preschool.
●      Food – According to the USDA, the average cost to feed a family of four is $1200/month. Living in California, the cost is easily almost double that.

I didn’t even include extra miscellaneous items such as home maintenance and upgrades, clothing, entertainment, etc.

The Breakdown of Living Paycheck to Paycheck on $250,000

 

Here is the spreadsheet I designed to shed a little light on this predicament.

 

When it’s been broken down like this, it’s easy to see why the average doctor might be struggling to keep up, especially living in a place like Southern California. And how do most physicians make up the difference? They work harder and longer. Perhaps they pick up extra shifts. Unfortunately, this equates to simply working more just to support your current lifestyle, leaving precious little to be able to save or invest.

 

Surely, there must be a better way.

 

Well, I’ll come right out and say that a perfect solution doesn’t exist. However, it is my opinion that working harder or working more is not sustainable. This will only worsen the physician burnout epidemic.

I’ll never pretend to have all the answers. I just know that I am taking steps to avoid ending up in the same situation. Yes, one of the obvious answers is to reduce your expenses. That’s easy to suggest.

However, I want to focus just as much (if not more) on creating additional sources of passive income. The harsh reality is that we can only work so hard. Our time is both limited and precious, and it shouldn’t be spent working more, just to make ends meet.

If my colleague’s situation resonates with you for whatever reason, I encourage you to follow my journey here. There’s always a better way. Let’s find it together.

As always, let me know if you have any thoughts.

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44 comments

  • To improve his cashflow situation, he either needs to work more or spend less. Once you’re on the hedonic treadmill / hamster wheel, its hard to get off and reduce the mortgage or cut the private school, but increasing hours may not be feasible depending on the specialty. It’s a tough situation, but cutting costs is probably the better way to go in this doc’s situation.

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  • Jacq

    If both children are in school, the spouse could work part or full time as well.

    I know some of that is my own bias. While I’m aiming for FI, I can’t imagine being a stay at home parent / spouse only. Some of that idea too is when my mom was home with us, she was a girl scout leader, volunteering with the school etc, and eventually having her career as a teacher when my siblings and I were older.

    In my career I have not yet gotten near making as much money as is listed in this post. My experience from retail jobs (in college) was that a little overtime was worth it, or a lot. For the most part there was an ‘unsweet’ spot where the excess earnings went mostly to taxes and not my check. Does that also happen for high earners?

    Very insightful post!

  • This is one of the big reasons why it is important to wait to buy the house until your debt is paid off. There is nothing wrong with renting or with living in an apartment until the med school debt is gone. Same thing for having the car payments. Car payments are fine if you are living moderately frugal, but if you aren’t saving money and are burning away cash on cars, private school payments, and a big house…it should be no surprise why it is tough to make ends meet.

    Lifestyle inflation has to wait until you can afford it. This doc needs to make some lifestyle deflation or earn more through a side hustle as suggested by PIMD.

    As a young attending, thank you for the reminder to avoid the lifestyle creep! That’s why my 180,000 is going to be paid off two years after training so that I can buy the house at that point.

    TPP

  • Jk

    Very little sympathy for someone who chooses to live in California or any hcol area and then complains about living paycheck to paycheck. The solution is fairly obvious…move to one of the other 49 states, buy a normal person house and pay cash for cars. Cut the mortgage from 6k to 3k and get rid of the 800/month car payments and voila..almost 4k leftover at the end of the month.

  • Jason

    It’s that mortgage payment and property taxes that are killing him. He also shouldn’t be sending his kids to private school. And I agree that working more is not a sustainable solution. Burn out is real and very prevalent.
    But I can’t imaging having a mortgage payment like that and we make more than he does. As much as I would love to live in Southern California, I couldn’t stomach that kind of burden. Our mortgage here in the good old midwest is only 1900/month including property taxes and insurance. All of that money he’s blowing on his mortgage, taxes, and sending his kids to private school I’m able to save or throw at student loans each month. Once I’m done paying off my debt I’ll have the choice to either save a lot or cut back and work a lot less than I am now. It’s a much better situation to be in. I’ve lived paycheck to paycheck in the past and I’ll never put myself in that situation again (if I can help it).

  • What a stressful situation to find yourself in. I can’t help but think… why do so many choose to live in such an expensive area? With all of the ideas and suggestions surrounding the goals of moderation and frugality to reach FI, that is the real question that more people should be asking. Move to a midwestern state and that 250k jumps to 500k without batting an eyelash, while the expenses drop by more than half. That 1.5M house costs 300k here with acreage as well. Fill out that spreadsheet with those numbers and FI is simple, you just wait for it to happen to you… Don’t get me wrong, I LOVE CA, and visit annually, but just like all of the discussions regarding delayed gratification that we have on this site, I’ll be living in the 78 deg sunshine when my bank account doesn’t matter anymore;)

  • Renard

    Spouse doesn’t work why do you need a cleaner/preschool killing those two obviates the need for a gym or yoga. House too big to clean? Move to a smaller one or rent. Phone $120? Come on….Ting and Republic Wireless smoke that. There is a lot of room in this budget to play. Is the car an absolute? If you want to live in Cali you have to realize you can’t have the same stuff you would if you lived in Texas. Be realistic and accept the reality that life is full of compromise (and by becoming a doc you are 10+ years in the hole financially and emotionally). Enjoy the simple life and cut the BS.

    • Or simply move to Texas! It’s a great way to cut the effective tax rate, lower mortgage, etc… But for some, it’s not that easy.

      Regarding the spouse working (from comments above, not yours), when you have a marginal tax rate of 40% to 50%, if the spouse has a job with a salary in a more normal range, say $40,000 to $80,000 nets your family maybe $20,000 to $48,000 at the most. Enough to offset the cost of daycare, maybe.

      We sent both our boys to preschool starting as soon as they turned three years old. It was good socialization for the kids, a nice break for Mom who many days wouldn’t see Dad (me) until after the kids were in bed. I can see the argument against daycare as valid in a one-income household, but preschool was a good choice for our family.

      Best,
      -PoF

      • When we were at FinCon in Dallas, all I kept hearing about was how all the Californians were moving into town, causing inflated home prices. They also brought with them vegan and gluten-free restaurants and fancy yoga studios. Couldn’t help but smile at comments like that. Sounds like the migration is happening to a degree.

    • Natalia

      I was wondering about his spouse … I am a full time female Dr, earning about the same – 250 a year give or take. Between my husband and I we cook every night and clean our house ourselves. Our grocery bill is about a 200 AU$ a week including alcohol ( we have 1 child – in private school )
      I have no idea what his spouse is doing ? If kids are at school/preschool, they have a housekeeper , are they eating out a lot ?

      I think they need to have a good chat about fairness and responsibilities .
      Shoot me local feminists ( I am one myself ) but this sounds like he has a rough end of the stick

      Female Doc

  • hatton1

    I wonder how this fictional doc was able to save a 20% down payment for the house. I wonder who would loan the money for the mortgage with that income.

    • Their parents probably paid the down payment. 🙂

      Good point on the mortgage. Maybe they took it out in 2005 or 2006 when banks were handing out mortgages like Oprah was handing out cars.

      “You get a mortgage! and You get a mortgage! and You get a mortgage!”

      Cheers!
      -PoF

    • Holly

      The physician group that I work for has a credit union associated with it, and recently they’ve started offering $1 mil mortgages to the doctors as a recruitment tool. I’m not in on all the details, but our group assumes some of the risk.

  • 1.5 million is dead on, especially in a decent neighborhood. I live in a very “normal” looking tree-lined street house than if plopped in the midwest the average home might be 250-350k, depending on size and other features. But a 3-bedroom 1950’s craftsman house around the block from me was valued in Zillow for 1.2 million. And property taxes are INSANE! I make a good salary and live in a no-frills one-bedroom apartment. It’s still expensive compared to the rest of the nation, but good for around here. I also think around here there is a huge amount of pressure (I don’t feel it or care) to live up to your peer’s standards, like private school and paying a lot extra for club sports and other kid’s activities. I have friends tell me stuff that leave me with my mouth hanging wide open. From the professional side, there is probably pressure to keep up with your peers as far as adult social activities. Golf, boating, parties, etc. It takes that special person to rise above that pressure…especially if you have a family you’re supporting!


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  • Ann

    This budget is not realistic, because in real life this family would also have a $4000+ monthly credit card bill on assorted crap. Nobody making 250k has any business buying a 1.5 million dollar house, and there are still plenty of houses in southern CA for under a million. It might not look like one’s mental picture of a “doctor house” (I hate that term btw, I think it’s designed to keep doctors poor) or have an ocean view but that’s ok. Agree with all the comments above–cut out private school (you are going to be spending $ on extracurriculars anyway), get cheaper cars, no housekeeper, spouse gets at the very least a part time or work from home job, etc. IMO spending less is easier than earning more, unless illegal activities are involved. Pretty much all of my passive income streams started with some sort of savings, of which this doc has no chance of accruing without significant changes to his spending. You can start a side hustle without too much $ but that’s still more work. Add to this that the family budget above looks like a great setup for divorce, which will make the budget much much worse.

  • Dr Goodwell

    A stay at home mom AND a housekeeper? Someone is not pulling their weight!
    Which goes to the point oft mentioned in these blogs… marry well. I guess it’d be tough to do something about that at this point though.

    Stay at home mom, housekeeper, kids in private school?? All of this adds up to some sort of fantasy lifestyle that cannot be bought at current wages.

    Also, as many have said, the house is killing them. Why not rent? They could still live in a nice house, but it’d cost them a lot less, without having to move.

  • Sam

    I live paycheck to paycheck because I automatically put 20% away and consider that money unusable.

    I foolishly thought this article would be about that. Good grief this guy has some dumb financial habits.

  • Gasem

    Why live in CA? It’s a desert, burns down every 5 years, and you need more than 2 x his resource to save 50% beside getting your clock cleaned with taxes and the politics are whacked. The advantage of being a physician is portability and ease of employment and high-income. This story is the story of obstinate choices and living beyond your means. The guy deserves to fail.

    My wife was a pediatric OT and had her own practice. She practiced at schools and clinics and made pretty good money which was all banked in retirement accounts and joint investment accounts. It was a nice boost to our investments. When we had our children she quit and we home schooled. Our kids were far too advanced by the time school rolled around to send them to the school and she had first hand knowledge of the state of the schools, sexual acting out as young as age 5. I don’t mean that from a position of arrogance but it’s just what happens to kids when you give them exposure. It’s similar to investing. The hours you put in early pay the most dividends. It was the best choice ever. We used a great books socratic program called the Angelicum Academy. The program was online but the students tended to be the same each year so life long friendships were formed. Daughter. #1 entered college with 1 year under her belt at age 17 and daughter #2 decided she wanted to give HS a try so she spent her senior year at HS. I’m not political about this Home School choice and HS is certainly legit so we said yes and she graduated with a 105/100 average. Cracked me up. We avoided all the Jr High girl drama and self esteem destruction and goofy teacher nonsense.

    Just yesterday my wife was telling me how satisfied she is with our life and how its turned out. That’s the bottom line.

  • Kenny Proops

    I’m beginning to see a trend of millennials starting to wake up and realize that these HCOL areas (SoCal, DC, NYC, Bay, etc) are becoming too expensive and are moving back to where they grew up. Maybe it’s just my own personal sample size but I wonder if this will start on a larger scale soon.

    • I grew up in a fairly low cost of living place (MN) and ended up back where I started. I can’t say I was ever enamored with the high cost of living places. I’ve visited all that you mentioned, and they’re great to visit, but I have no interest in living there long-term.

      Best,
      -PoF

      • .weston.pecos.

        If you are a physician, this works. You can pretty much move anywhere and be a doctor. If you are a bright, young adult with a good college education, the jobs are not in small towns or 60+ miles outside the ex-burbs. The jobs for non-physicians these days are in the larger cities (more large corporations and the start-ups are moving back down town to the big cities) and the immediate large city-metro areas (although even that is to a lesser extent than in recent past). The Wall Street Journal has been running a series of articles recently about the large-urban and rural divide. The small towns are better, obviously, than the truly rural areas, but the well-paying career jobs are more and more in the big cities. Again, a physician can live anywhere, but don’t mistakenly believe that millennials are moving away from large cities and back to where they grew up. The true trend is the opposite.

  • Arkad

    There are so many limiting assumptions to this whole story (which although assumed probably are real).

    I would never dream of living in such a HCOL area while making 250k or even double or triple that. Does this doc really need to live there? Is it worth living in Southern Cal vs somewhere else and having plenty of money to travel there or elsewhere when you want? I would suggest a real hard look as to why they are there and do they really need to be.

    It just seems too easy to say that a 1.5 million dollar house is the norm. It may be…for those living above their lifestyle. Are there really no people living in that region of the USA that live in cheaper homes? Be one of them. If you take it on face value that 1.5m is what you need to pay to live in a house, then you lose an opportunity to change that.

    I assume the same assumptions are being made about the cars and private school. You can drive cars for less and go to schools that are “free”.

    Yoga, a gym, cleaners? Get yourself a video tape, run outside and do the cleaning yourself.

    Basically much of this comes down to accepting what is “normal” or average. If he does not start questioning this, he is going to be working a real long time just to keep his head above water and it will get worse and harder to do.

    • .weston.pecos.

      The yoga, gym, and cleaning the house, and the two cars at $400 each (presumably) are not what is sinking this budget. As WCI says, it is the big rocks that sink you. You have to have a car. With two kids, I am not surprised if the parents want cars that have the latest safety features. I want that just to drive my dog around. If I actually had kids, I’d be a nervous wreck every time we headed out somewhere! Driving the $2000 beater used car to get to and from work can be done, as long as the spouse has a reliable car and the kids only ever go in the reliable, safer car. That way, when you have two patients already waiting for you and you are stuck on the freeway shoulder with a rusted out engine that fell out, or whatever, your spouse can put the kids into the safe, reliable car and drive over and pick your butt up off the side of the road and get you to work,

  • Ricky

    Wow, $2,400 a month for food. I bet most Californians wish they had that kind of budget for that. Having lived there, unless you are eating out daily, there is no reason a family of 4 should be spending that much on food. But I guess the same can be said about private school and most other things on the budget.

  • sedge

    Highest states by taxes: You guessed it CA

    https://turbotax.intuit.com/tax-tips/fun-facts/states-with-the-highest-and-lowest-taxes/L6HPAVqSF

    Best public education by state: CA is 42nd K thru 12 and 3rd for colleges.

    https://www.usnews.com/news/best-states/rankings/education

    It would seem you are not getting a good deal for the monies spent on public education in the state of CA. Solution to this physician’s issues is he needs to do what you did – make a budget. Start by cutting. Thanks for sharing.

  • Eschwets

    I’m having a hard time understanding why doctors insist on living in such high cost areas at such relatively poor salaries when there are so many more fulfilling and enriching options.

    Pride? Short sightedness? Insistence on Broadway musicals? Can’t live without daily surfing? Lack of a winter coat?

    That math is just brutal.

    Signed,

    An Ohio doctor…

  • TMat

    I live in San Diego and disagree with some of the assumptions about the cost of living here. Southern California is no doubt more expensive than many other areas, but the assumptions used here and in the comments are exaggerated.

    We live in a nice neighborhood 4 miles from downtown San Diego and two miles to the beach in a 2300sf 4BR/2.5BA house that is probably worth $1.1M now, and there are many other nice neighborhoods where one could buy a similarly sized house for $1M or much less. I realize that is still much more expensive than the midwest but it is also much less expensive than the $1.5M average that everyone seems to assume. Last I heard, I think the median home price in San Diego county was around $600K.

    I don’t understand the assumption that food costs twice as much here, let alone that a family of 4 with two young kids would have to spend $1800-2400 per month on food. My family of 3 spends approximately $600/month on groceries and we make all but 1-2 meals a week at home. Our typical grocery/restaurant/alcohol bill is around $1000-1200/month. Maybe grocery costs are marginally more expensive here, though maybe not considering that we probably get more fresh food at lower costs because lower transport costs, but any difference between here and the midwest would be inconsequential to someone making this much money.

    Someone commented that California has the highest income taxes. That is somewhat misleading. California has the highest marginal income tax rate, but I don’t think that kicks in until around $1M. California’s tax rates are more progressive than many states so I would bet its effective income tax rate is comparable to many other states, particularly at lower income levels.

    On a related note, I think even the 30% total effective income tax rate assumed for this doctor is too high. We have similar income to this doctor and probably fewer total deductions and our effective tax rate is much lower. While our total gross income is slightly less than $250K, the amount we bring home each month in our paychecks, after taking out taxes and maximum contributions to two 401Ks, one HSA, and our share of health insurance, is only slightly lower than the estimate for this doctor at the 30% rate, and we usually get a small refund each year on our tax returns. Heck, with that home size and mortgage and his income, this doctor probably has over $60K in deductions for state and local taxes and mortgage interest (at least for 2017), bringing his taxable income to well under $200K assuming no other deductions. Probably something in the range of a 22-24% effective tax rate would probably be more accurate.

    Ultimately, there is no reason why anyone making $250K could not live very comfortably here while also saving aggressively for retirement. It may take a couple extra years compared to someplace in the midwest but many (including myself) are willing to make that tradeoff because we enjoy living here. Someone figuring out whether it is worth it to pay the premium to live in California should make sure the estimates they use are accurate though.

    • Bob

      Nice post TMat. I’ve always assumed California was like most other places – some people blowing through cash and whining about how tough it is, and others using their heads and living sensibly. Sounds like you did the math and decided the sunshine tax is worth it for your family.

  • I agree with most of the comments here that California isn’t worth working that hard for that long. Of course, I live in the upper upper midwest a so I’m clearly not looking for my location alone to make me happy : )

    The only way for this doc to make it other than working harder and forever is to accept a more average lifestyle. The 1.5 million house argument is hard for me to understand. One can commute….

    People tend to quote HCOL areas when giving examples of docs living outside of means, but I see it in Upper MidWest and I’ve seen it in the deep South and east coast. It’s not a phenomenon unique to HCOL areas. I know a new grad with 400K in debt who just bought an 800K house in one of the lowest COL areas in the nation. Wife not working, 3 kids private school. He knows the risk. I gave him 4 pillars and send him links.

    Its like many of us say, we need better education in school and training, including high school. That’s why so many of us give lectures to out colleagues and students. It is all of our best interest to educate each other. Personally, I would rather work with a financially savvy doc, less chance of being unscrupulous.

  • Leaving Southern California seems to be the automatic response. It’s about making the right choices in Southern California. I live in San Diego and there are zip codes with top rated public schools and less expensive homes. Living in coastal Carlsbad ($800K average) or inland Poway ($700K average) would cut the mortgage and property taxes in half. I was able to achieve FI four years ago in San Diego at age 49, with a lowly military salary. I put my savings into investment properties in addition to TSP/mutual funds/stocks/index funds/bonds etc. Presently my pension and passive income is $240K annually, mostly from rental properties without having to withdraw from TSP and market funds. This was achieved by following what is prescribed by the WCI and FIRE, years ago; paying cash for vehicles, sending kids to quality public schools and maintaining a savings rate of 30-50%.

    • John

      Ted,

      240 K in passive income is very impressive. I’m assuming that your military pension is in the 50 – 70K range at most so that means you would have to generate 170 to 190K in investment income. I don’t know a lot about rental properties, but I would think it would take a large capital investment to acquire enough real estate to generate that kind of return. As a military member living in San Diego how did you get enough money together to control that much Real Estate?

      • Five years after graduating in 1990 and entering the military, I plowed savings and bonuses into acquiring single family homes, especially where I was stationed. Typical homes in Southern California were in the $250-300K range (twenty percent down, fixed rate notes for 15 years). It’s harder to duplicate in SoCal now, but doable in less expensive areas of the country. I acquired eight homes along the way with current average rent in the $2000-3500 range. All mortgages are paid off now and average net income per house is $1600. Military pension is $100K/year. The key is to acquire properties in good school districts and price just below market. My vacancies rarely exceeded one to two months. Also, you need to factor in all expenses.

        Reposting my comments on WCI:
        Real Estate is an excellent vehicle to develop personal and generational wealth. The new tax bill still enables landlords to deduct property taxes and mortgages as business expenses. The 20 percent pass-through deduction piles on an additional advantage. With depreciation, it’s conceivable that landlords pay very little to no taxes on passive income earned. If your children inherit the properties, they pay no taxes due to the estate tax exclusion and benefit from a step up of the value, keeping the existing property tax rate. I agree with WCI, don’t over leverage, especially with variable loans. The key is to secure fixed rate loans, factor in 6 month vacancies, maintenance, management and repairs. It’s essential to transition from active income to passive income when you approach retirement. The IRS rewards passive income. I’ve been able to retire early using income earned from rentals without having to withdraw from stocks, bonds and mutual funds.

        • BTW the military pension involved 26 years of service, multiple moves and two deployments to combat zones where our camps came under rocket and motor fire.

          • John

            Ted,

            Are you still working after retiring from the military? (other than your real estate business)

            I grew up in North County San Diego and my parents and brothers are still there. We have considered going back, but it’s hard to justify the increased cost of living for me.

            I will retire from the military this year after 26 years. I think I will have enough passive income with pension and investments to cover expenses. My focus now is whether I should do some part time work at least for a few years. It’s hard to let go of the job.

            Seems like you are doing very well, congratulations! I never got into real estate except for owning a single-family home for a few years. I was more comfortable investing in the stock market.

            Would you do anything different if you could go back 4 years?

            Any advice for me?

            • Four years back I would have loaded up on Bitcoin! Kidding of course, cryptocurrency is not my style. I had an opportunity to work for VA Health Care, but transitioned into teaching. I’m a clinical instructor and work six hours a week. My goal was to transition from active income to passive income. If I pursued an active income, I would be paying an effective tax rate of 30-35%. I won’t say what my effective tax rate is, but let’s just say it’s in the single digits. As Passive Income MD stated, “Wealth is measured in time, not dollars.” I’ve hit singles and doubles as an angel investor of companies I know very well, but no home runs yet. I don’t think I would do anything differently. My current burn rate is $8K month (50% of net income), no mortgage and minimal debt. I would just continue taking the advice of WCI, FIRE and Passive MD. If these websites were around in the 90s, who knows where I would be now.

              • Oh, one more thing, get the maximum amount of umbrella insurance. Standby, the new tax bill will soften the market for properties above $750K in SoCal.

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  • I actually heard someone speak of this phenomenon of doctors living check to check. It’s ridiculous and sad. I discuss managing money and finances on my blog greenbacksmagnet.com. I figure the only way to get out of this is to cut expenses and save and invest the difference.

  • Meghan

    I find the comments about the stay at home spouse very interesting and a little out of touch. A twice a month house cleaner isn’t breaking anyone’s budget and takes care of a lot of household conflict (too good to clean toilets Dr.) I have been the stay at home spouse and also the part time working spouse (seriously, the high tax rate on a normal job salary makes it not worth it). I’m the money manager, frugal conscience and ultra saver who calculates everything and reports back to the other spouse. I manage all the meals, interact with school (wouldn’t you love to have someone else fill out your t-ball application, get the updated physical and manage the practice game schedule?) , keep and put on a good face when the high earner isn’t there to see Jonny play? When my 16 year old came down with mono, I know we were all happy that he didn’t have to stay home alone all day for two weeks. With the type of comments that some are making about the spouse, I would worry that one of the main building blocks of building wealth will break for them- STAY MARRIED. I do not live in California, but a middle of the road range cost of living location, so I can’t comment on that. I completely agree about the house and cars being a problem. Millionaire next door is more my style to stay on track. I’ve never owned a car that I paid more that $20,000 for and always cash.

    45, non-working spouse, family net worth $4.3M, 3 kids

    • Your household sounds a lot like ours. My wife has been the head of our household as long as we’ve had one. I just live there and earn a good living. I’m the money manager, but we both have financial habits that have made us successful as a team, including purchasing used cars for cash, and the most we spent was $20,000 for a low mileage minivan when we had our second child.

      Best,
      -PoF

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