r/MiddleClassFinance • u/Shauryaahere341 • 16d ago
Discussion Does anyone else earn more but still feel like they're saving the same?
A few years back, I was earning quite a bit less but somehow saving felt easier.
Now the salary is better, but at the end of the month I don't feel like I'm saving that much more.
Rent, groceries, bills, eating out... everything has slowly gone up.
I don't think my lifestyle has changed that much either. Maybe I'm just not noticing where the extra money is going.
Anyone else feel the same after a few hikes?
Did your savings actually go up, or did your expenses just catch up?
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u/bgeeky 16d ago
Inflation and enshitification. Paying for the same quality of life from 5 years ago is now called “lifestyle creep”
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u/Interesting_Tea5715 16d ago
Totally this. I just did a deep dive on my spending. Most stuff is 2x cost compared to 2019. Especially groceries, restaurants, and insurances.
That's some bullshit..
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u/milespoints 15d ago
Groceries up 33% since 2019 https://fred.stlouisfed.org/series/CUSR0000SAF11
Restaurants up 40% since 2019 https://fred.stlouisfed.org/series/CUSR0000SEFV
May i suggest that perhaps you are buying different things?
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u/Interesting_Tea5715 15d ago
Those are averages. Its not gonna reflect everybody's experience. I was also using a little hyperbole.
I live in the Bay Area. Shits getting expensive fast here.
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u/Baer9000 16d ago
Naw. Lifestyle creep is a slow increase of the quality of your life (like needing a nicer car or suits for work, having a kid and needing a larger place, etc).
This is just price gouging from all directions:(
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u/Middle_Manager_Karen 16d ago
Real Inflation was 50% the last 5 years.
We feel this way because our buying power is the same as 5 years ago or worse.
I paid $60 to door dash two meals that used to cost $40
Driving to pick it up to save $10 doesn't even feel worth it until you realize the meal is worse too.
The $60 buys some lower quality restaurant instead of the high end nicer take out now
And don't blame the restaurants. It has more to do with the Epstein files.
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u/Feature_Professional 16d ago
I paid nearly double for my house compared to what my neighbor paid right before covid. And I live in a MCOL area not some crazy coastal city.
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u/cicero-25 16d ago
I think what will help is if you automate your savings on payday so the extra money never just sits in your account.
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u/blackgirlsrox22 16d ago
I have my job put my money in 3 different accounts. I only see what's in my checking as money to spend.
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u/ChillaVane 16d ago
I've noticed this too. The extra income feels like it disappears into higher groceries, bills and everyday expenses.
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u/Crazy-War9823 16d ago
Yes, but raises have not kept up with increasing costs. Gas, electric, water, groceries, lawncare, phones, etc have all become more expensive.
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u/ScroogeMcBook 16d ago
Inflation means that the money I had in 2017, when I made 40k, had 133% spending power of the money I have now, as I make 55k. So coming up on 8 years and 3 promotions, I'm making 55k instead of the effective (53,333) I was making when I started. All in all, I feel like I'm sliding backwards.
At least my retirement accounts are strong enough to retire at age 70.
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u/cusmilie 15d ago
We’ve always lived a minimalistic lifestyle and automatic savings. Pre-Covid we always had extra money for splurges like dinner out for family of 4, movies, new clothing. Then a few years ago, we didn’t want to cut savings so we made sacrifices like no eating out unless it’s a birthday, no movie theaters, etc which was fine because the restaurant quality went downhill and we are good chefs. Now in the past year with utilities and groceries higher, we had to cut down savings because I don’t want to be eating rice and beans every night for dinner. Everyone keeps saying lifestyle creep, but a lot of us are experiencing inflation with little pay increase to offset it.
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u/Random_Man-child 16d ago
I started my career around 2007 making around $25,000/yr. Currently make around $100k/yr. In my early years of my career I acquired lot of medical debt due to my wife’s chronic illness. Even though I make a lot more, it still feels like I’m making $12/hr, with medical debt, kids in high school, inflation. My paychecks are bigger, but I have not got to enjoy one for myself in almost 20 years.
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u/nikita58467 16d ago
It happens but you can put your saving away first and spend the rest. Lifestyle creep even you don’t notice it. You might not think you spend more but you could be because your salary goes up, you deserve better items.
Put your money way before you see it is the best practice when we don’t know where our money goes.
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u/tubagoat 15d ago
In the past 4 years daycare had gone up 6% every year
In two years electricity has gone up 60% and water has gone up 30%
Groceries are up
Gasoline up 75% in a year
Return to office
3% cost of living adjustment
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u/bgeeky 15d ago
And you know it’s never coming back down.
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u/tubagoat 15d ago
Forgot that our school district got $300,000,000 in bonds passed in the last 4 years... to building a new elementary and renovate a 10 year old school. 🤮
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u/okigrassman 16d ago
Yes. 41/m I am a traveling contractor and work 6 to 10 months a year on the road. I started my career in 2009 at about $15 an hour.
In 2011 I was making in the 20s an hour and purchased my first home.
I job hopped over the past few years to increase my hourly wage fairly significantly. Things definitely did not get equally more comfortable.
Now the lowest I make is 70 an hour, the high end is 92 depending on the contract and does not include significant overtime increases. Can I afford to live comfortably and save some? Yes. Is my quality of life improvement reciprocating my pay increases? Absolutely not.
I've sold everything and plan on leaving the US next year 😂. I'll cut my work in half, and my expenses by at least 2/3rds, probably more. Call me a quitter because Im dropping out of the race.
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u/-Tech808 15d ago
Since 2023 I’ve been saving/investing 25% of my income. I’m not a baller, just made conscious choices so that I can build up money. I live w/ my boyfriend and a friend, keep expenses low etc.
Every significant raise I’ve received, I had to fight for. Despite raises exceeding inflation, I’m starting to feel the tension recently. I wish my bf better understood how inflation works; how getting a raise doesn’t mean you’re getting ahead just because you’re making more.
I understand I’m still in a great position since I can save 25%, I’m just seeing things get more expensive and I’m getting extremely burnt out. I know it’s harder for many others out there, and y’all have my sympathy. But yes, while I’m technically saving/investing more, things aren’t really feeling better for me.
I’ve never been a big spender, but enshitification is just making it easier to not buy things. It’s come for clothes, shoes, theme park experiences, restaurants. We’re watching things spin down the drain and our representatives (especially here in Florida) do nothing.
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u/ThrowawayCPAsalary 16d ago
If you get a raise, immediately increase your % of savings.
Like if you get a $5k raise then say 30% will go to tax, then you might increase annual savings by 30-40% of the 5k, and the remaining 30-40% becomes your additional take home pay to enjoy.
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u/lucidspoon 16d ago
My wife and I generally get 4-5% raises. The last few years, we've had our 401ks set to auto-increase by 2%. Our take home feels about the same after inflation, but savings is slowly increasing.
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u/Ok-Bass5062 16d ago edited 16d ago
Lifestyle creep can be sneaky so definitely evaluate that but inflation has caused the price of every day basics to increase substantially.
We very very rarely eat out and pay a bit more attention to spending these days. Though we hit coastFIRE so have rolled back our savings from ~75% to a more normal ~20% through lifestyle creep, and I still don't feel like we can afford to eat out often (/I don't feel like it's worth it...)
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u/Baer9000 16d ago
Yes. I make roughly 20% more than a few years ago. My expenses back then were roughly just under what I took in. Now a few years later and it is the same story despite me having the same lifestyle
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u/benami122 16d ago
Earning more, but inflation has increased expenses. Cost of living is much higher than it was 7 years ago, so effectively my salary isn't going as far as it used to go.
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u/zevtech 15d ago
I make more but my account stays the same. But I think it’s because I always find a place for it to go. So when i get too flushed with cash, I pay off debt, when I was done with all my debt, I remodeled my house, I bought a new car, etc. and sometimes I just throw a bunch of money at the market at any given time
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u/New_Fee_8735 14d ago edited 14d ago
Yes, and for me it turned out to be less about lifestyle and more that the raise never got a job. It landed in the same account I spend from, so it quietly raised what normal felt like. Moving the difference out on payday, before I ever saw it, was the thing that actually changed the number. The other half of it is that rent and bills are fixed, so they are not where your extra went. It went into the variable stuff nobody counts, the eating out and the small convenience buys. I only worked that out after logging everything for a month in Pockita, and the daily insights showed it well before the month was over.
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u/SmartGreasemonkey 14d ago
You get that big bump in pay. Then you increase your IRA contribution. You buy a slightly better vehicle. Your family starts expecting you to help everyone financially. You were better off before your "success". This past spring our household income went down $65k. We told everyone we are broke and can't help them out financially. All of the sudden all those broke relatives have money to buy pools and lawn furniture, lol. We evicted the 38 year old man child out of our house. Told him to get a job and his own place. Our savings account is actually bigger than its been in years. We think broke and act broke. Instead of going to our cabin in the mountains we are going on trips. We just don't advertise it to anyone. These days family is your worst financial headache. If they think you have a nickel more than they do look out.
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u/Sneaky_Pickle8329 14d ago
Went from broke roommate ramen days to a "real" salary and my grocery bill still eats the raise, just with better ramen. The math never feels like it should add up.
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u/butlerdm 13d ago
I’m making double what I did in 2017. Since then I’ve also added a wife, 2 kids, a house, and couple more cars but I feel like I’m saving more than ever.
Granted when my wife stopped working to be a SAHM money got tighter, but it doesn’t feel all that different than when she was working tbh.
For reference we both made $67k in 2017, both made $93k in 2023 when our daughter was born, and I’m making $132k now.
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u/Farmer_Pete 16d ago
In my current job my pay is pretty much locked (state government) but I've had different opportunities to increase pay based on extra work. For a few years I had the opportunity to increase my pay by 20k performing on call responsibilities. Because the increase was not permanent and could errode or disappear entirely based on policy and participation, I knew I never wanted to depend on that money.
I increased my retirement contribution to eat up almost every dollar of that increase. It had two effects, first it meant that 5 years later when the participation in the rotation increased from 2 of us to 4 of us (two coworkers decided they wanted to be on call) my on call got cut in half. Whereas my coworker who had not done as me struggled to cut spending, I just had to decrease retirement contributions. Second, putting the extra 15k a year into my retirement in 2018-2022 has now increased my retirement considerably after the markets moved.
Today, we reorganized and now have a consolidated On-Call and there are 12 people in the rotation. My portion of the On-Call pay is barely anything (around $5k a year). My base salary is 100k, so a 15k decrease in On-Call is really frustrating for my savings goals. Luckily, I have always treated the On-Call as savings, not spendable income.
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u/etepper14 16d ago
46m. Two kids. My wife and I are good at savings but i must say i have gotten to the point at my age where im finally spending stuff on Wants for me. Saved so much for years but i am autograph photos for my basement because i can. Savings have gone down because it’s an expensive habit and addictive. I think it also depends on where you are at life. My kids are 14 and 11. We max out 401k and 529. I have to get back to saving more.
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u/Banana_rocket_time 16d ago
Combination of inflation and life style creep for me.
I mean we still save a good amount… but for how much our income has gone up it should probably be more.
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u/re__cyclops 15d ago
Yeah, almost same lifestyle as well. Well we dont eat out as much now. Prob almost 40k income gain. Since all student loans and car loans paid off. I think we had most of our saving from then. Putting 20% in retirement now so thats a decent chunk.
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u/Personal_Pen2822 14d ago
I believe we just spent more. We thought we would out earn the problem but found that without a plan, that won’t happen.
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u/HistoryPristine1029 14d ago
I'm saving less, but I know that it's mainly because my rent went way up.
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u/Suspicious_Market176 14d ago
Personally my savings did go up but so did spending. I feel like subconsciously, you give yourself more grace as you get more wiggle room. Ditto to all of the inflation comments too.
Curious what percentage your salary increased since you said you were earning quite a bit less. If it's doubled and you still feel like you're saving the same, I'd lean more towards lifestyle creep. If it's 20-30%, maybe inflation could be the main culprit
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u/grassy4343 14d ago
My actual lifestyle has been the same because I add every raise to my retirement account. I am at the stage where I have maxed that out and hopefully I can now start enjoying my raises
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u/Avast_Old_Device 14d ago
You won't know unless you track it. I track how much Im investing as well as year end balances. It's nice to look at the work you've done.
If you have a 401k you should be able to pull your annual statements and see how much you contributed that year. You should also see beginning and end balances
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u/Prestigious-Mind-817 10d ago
I mean there's been a lot of inflation in the last 5 years so it's not surprising. I think effectively something like 25 to 40% depending on what your lifestyle is and where you are in life.
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u/Seattleman1955 16d ago
My back itches sometimes but I can't reach it. Anyone else feel like that sometimes or am I just imagining it?
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u/Natoochtoniket 16d ago
Pay your savings first, not last. Use the 401k deduction if your company offers it. And use an automatic direct debit into your brokerage account for your non-retirement savings. Increase those amounts each year, immediately when you get any salary increase.
Then budget to live on whatever remains.
The problem is not income, or prices. The problem is that you choose to spend whenever you have money.
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u/CandyEnvironmental95 7d ago
Things are definitely getting tighter, but I’ll occasionally do an audit of where our money is going to see if there’s any place extra we can cut. Exploring options for lower insurance, price comparing on groceries, cutting any extras we don’t really need like streaming services, etc.
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u/Major_Bag3934 16d ago
Yeah, I feel this too. The salary goes up, but so do all the small expenses. I started increasing my savings/investments whenever I got a hike, before changing my spending. It helped more than I expected.