Would you feel average making $500,000 a year?  How would you feel about your financial standing? Could you pay your expenses and still have a fair amount leftover for savings? When it comes to saving money, Americans in virtually every income bracket are falling short, so the answer might not be quite that simple.  Or is it?

According to a CNBC report, a couple making $500,000 annually may end up with very little left, aside from 401(k) contributions.  In the report, “Financial Samurai’s” Sam Dogen explores the budget of a couple living in New York City. Both 35, each is a lawyer earning $250,000 and they have two children.

“This one couple shared their story and I decided to anonymously highlight their reported expenses.”

To start, each makes an $18,000 401(k) contribution and they pay a 40 percent effective tax rate, leaving them $278,000 net salary.

Their expenses then are tallied. They include child care, ($42,000); food for four (includes date nights every two weeks), $23,000; mortgage (P&I), $60,000; home maintenance, $5,000; Property taxes on a $1.5 million home, $20,000; Property insurance, $2,500; three vacations a year, $18,000; car payment (BMW 5 series, Toyota Land Cruiser), $9,600; gas, $5,000; car insurance, $2,000; life insurance, ($3 million term) $2,500; cloths for four people (no fancy bags, shoes or threads), $9,500; children’s lessons (sports, piano, violin, academics), $12,000; charity, (Feed the Children, college alumni), $18,000; undergrad and graduate student loan debt, $32,000; and miscellaneous (something always comes up), $10,000.

The total is $271,100. The couple is left with $7,300.

The couple also present a classic case of “lifestyle creep.” The term was coined by financial planner Michael Kitces.

The basic idea of lifestyle creep is that as your discretionary income increases, your standard of living also increases. Rather than driving a nice upscale American car, the couple in question here has opted for pricey, trendy European vehicles.  Moreover, lifestyle creep can lead to problems as you increasingly begin to live outside your means, regardless of your income.

As their story broke, outrage on Twitter ensued as mostly negative comments, pondered how this couple could think they were ‘average?’  After all, three vacations a year? Two car payments?  $10,000 a year in clothing? Financial Guru Dave Ramsey and his followers could easily identify several places this couple could trim to bolster their bottom line!

When it comes to life in the big city, it can get expensive. In the long run, spending a little more conservatively is a great habit to get into. One couple’s story can serve as an example. Intuit money expert Kimmie Greene summed it up for CNBC.

“Whether you’re making $50,000 a year or $200,000 a year, we all have challenges saving.”

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