I remember reading that the average philosophy major from my university would get a starting salary of $20,000 a year. That sounded impressive.
When I was 16, I figured that $20,000 a year was a lot of money. Up to that point in my life, money was simply a tool that put gas in my car, bought clothes and took me out to dinner. $20 Grand could buy a LOT of dinners.
Of course, I was making the classic error of thinking that my spending needs as a 16-year-old would be representative of my spending needs for the rest of my life.
When I started college, I began paying for things that I never realized people had to pay for – like housing and groceries. Who knew that stuff didn’t come free?
Still, my housing and food costs were small in college, and I thought that I could live the rest of my life spending at the same rate that I did in college. The adults around me said that your expenses increase as you age, but I assumed they were talking about discretionary spending — keeping-up-with-the-Joneses’ type of stuff.
Graduating from college didn’t trigger any new bills. I avoided lifestyle inflation and spent money like a starving student, despite my full-time job, which enabled me to save enough to quit my job and travel for two years.
But I thought I could continue to spend like that forever. I made the error of thinking that my spending needs as a 25-year-old were representative of my spending needs throughout life.
Everything changed after I bought a house. Holy moly, nothing changes your spending needs like maintaining a house. What a money pit!
The mortgage is the least of it. I pay property taxes, homeowner’s insurance, water and trash. I need a lawnmower, a sprinkler system, several ladders, a seed spreader, an aerator, Termidor, a power-washer, weedkiller, lawn fertilizer, tree pruning, rakes, hoes, shovels, and that long tool that helps you clean the gutters. I need a drill, a wrench set, caulk, spray-foam and weatherstripping.
And that’s just routine maintenance … don’t get me started on things that break.
I’m beginning to understand a critical concept: my spending needs today don’t represent my spending needs in the future. Probably not by a long shot.
Eventually I’ll need to buy a crib, diapers, tiny little socks, a stroller, high chair, and pay someone to give me an hour of quiet time. Later I’ll need to pay for soccer uniforms, piano lessons, math tutoring and a much bigger gasoline bill. I’ll have to buy more health insurance, pay for braces and cave when my kid asks for a Playstation / puppy / iPhone.
When I retire, I might need to have my house medically retrofitted, pay several hundred each month for prescriptions or fall prey to scammers.
My sixteen-year-old version of myself had no idea that all these costs would loom on the horizon. Back in high school, it was easy to think that $20,000 a year was a lot of money. These days I don’t even think six figures is that much money anymore, at least not if you have to support a family.
Thanks to Werwin15 for today’s photo.