On being rich (high income) again after a stint of unemployment

Prior to DH’s last unemployment spell, I was feeling uncomfortable about having so much income.  I felt guilt because I was one of the “haves” (I probably still feel this, and it’s probably a good thing for me!  So don’t talk me out of it with conservative talking points), but also I had this odd sense that I should be looking for things to spend money on.  Money felt meaningless and valueless and there was no reason NOT to just order that $80 bottle of olive oil, or two even, no reason not to put money on the nicest AirBNB available for the trip we never ended up taking etc.  The only thing keeping me from buying all the pens (and I did buy a lot) was the knowledge that they might dry up before getting used!

Then DH got unemployed for several months and we were living on just my income.  We lived comfortably, but mainly because we didn’t have any big expenditures due to luck (being between appliance breakdowns) and the pandemic returning all our travel moneys and preventing us from spending on any new travel or fancy camps or expensive daytrips to the city or even eating out much.  (I still bought pens.)  It sort of felt like we were back to normal, but with more masks, hand sanitizer, and stationery.

Now we’re back to making more money than we’ve ever made and more than I ever dreamed of and somehow money has meaning and I’m not just buying all the things. But also I’m not freaking out when our water heaters end up costing almost twice as much as they were supposed to.  It’s just money and we have money.  But also, when it cost $1K+ for DH and the kids to see family from the closest city airport this summer, we decided it was worth the extra 30 min drive to the closest airport to save $500.  Was that a good decision?  I don’t know!  I refuse to feel either guilty or superior about it.  It seemed like a reasonable tradeoff at the time– 30 min plus a small amount of gas and car depreciation to save $500.

Several of the extremely wealthy and high income (white male) economists I know are also pretty frugal.  They spend money when it’s worthwhile but they also take advantage of sales and bargain down in situations where you can bargain.  I’m not sure it’s rational to do that when your consulting rate is $500/hr, but, they seem to think it is.

I’m not sure what caused the change in me.  Maybe it was just time.  But also I think having experienced via his last unemployment spell the knowledge that this high income really isn’t forever.  DH’s current job is a start-up and it may end if it runs out of runway.  Maybe it’s the knowledge that DC1 will be starting college soon and we’ll have to cash flow some of it if zie ends up at one of hir top choices.  (If zie ends up at the state flagship I don’t know what will happen to all those savings– $228K as of this writing, down from a high of $275K(!)– but I’m sure we will figure something out.)

So what am I doing while we wait for another shoe to drop?  Mostly I’ve been putting regular money into the stock market– a little bit more than my take-home pay each month most (but not all) months in order to get down our precautionary savings to what we actually need as precautionary savings should DH suddenly lose his job at the beginning of an unpaid summer (or, alternatively, I rage quit).  We’re down to that number now, so there will be less funneling money into the markets next year.  Having that money put away also helps the feeling of being artificially middle-class.

We’re still living well, and we’re still in a situation where rising grocery costs just means we shift to buying more luxury goods (that suddenly cost the same as non-luxury products that used to be much less expensive) and we’re still able to not sweat unexpected costs or even stupid money mistakes.  But our money situation no longer feels quite so surreal or consumerist.

How are you feeling about your income vs. spending with rising prices and loosened pandemic restrictions?


22 Responses to “On being rich (high income) again after a stint of unemployment”

  1. Coree Says:

    Oof, I don’t think we ever adjusted our spending and are now feeling a bit pinched – a combination of factors. (1) My working in another city. Flights aren’t super expensive, but they do add up, and I pay rent in work city. (2) Increased nursery costs – which will drop down again in August, thank goodness (3) Doing a bit more, coupled with increased cost of everything. Our electricity prices have gone up 40%, gas up 40p a litre etc.

    We’ve been cutting back on things but trying not to feel like things are sad and depressing. I feel it more than my husband, and was feeling vaguely guilty about my fancy cupcake when I realised he has 1-2 coffees at work everyday, and lunch 2x a week…

  2. First Gen American Says:

    Hmmm…it’s interesting. I feel like we are similar in income but my savings rate has gone way up since the pandemic for 3 main reasons. 1) our annual expenses will roughly double soon as college for #1 is only a year away. That’s 8 years of high spending ahead of us and our 529s aren’t fully funded. 2) all but one of our really big ticket house fixing projects is behind us 3) my spouse is retiring full time work at the end of the year.

    I figure I will have to dial way back on retirement savings next year so this is my last chance at saving a lot before my income has to cover everything including college. We are also looking at cutting other expenses. For example, we kept my home phone line active for my mom but she has forgotten how to use it now.

    For increases in spending, not much. I lost some weight so I’m trying to refresh my wardrobe. Our food cost hasn’t increased that much. A family pack of chicken is still $1.99/#. I’m so thankful for my company car as gas is covered. I have starting tipping service workers more generously and am leaving tips for housemaids when I travel for work. I figure that is a way to supplement my charitable giving in a way that directly impacts the working poor. For example, if every room they cleaned left $5, that would be a good day for someone. I remember when my aunt used to get excited when people would leave a lot of empty cans in a room so she could make some money off of it.

    I did notice recently that people treat us differently now than when we first moved into expensive town. It’s a little different being the family that moved into in the big falling apart flophouse and former brothel. The 13 year old car parked in the driveway was the icing on the “you can barely afford to live here cake”. Now that the house is nicer, people assume things. There is no more hiding of wealth, especially now that we are going down to one income. I feel we inadvertently outed ourselves to the other parents with the retirement announcement. People assumed that we did a lot ourselves for financial reasons. I also had a second job for years at the local resort on the weekends. Lastly, I am the high earner of the family which most people assumed the opposite. It was a big shocker for people.

    The catholic in me does feel shame about the wealth. We moved here for the schools, not the status and I liked hiding behind the middle class facade.

    Ps. Sorry for the long comment. I really need to start blogging again.

    • nicoleandmaggie Says:

      Our savings rate has also gone up, I think. Congratulations to your spouse!

      Personally, I would fund retirement and take loans out for college later if necessary. With the spouse retiring, you may end up becoming eligible for financial aid sometime during those 8 years but only if you spend down, and retirement savings doesn’t count for financial aid. Also, loans can be temporary, but lost retirement savings space is forever (and it won’t be so long in the grand scheme of things before it is time for you to tap into retirement, plus any IRA roth principal can be tapped into in an emergency).

      Also enjoy giving big tips.

  3. yetanotherpfblog Says:

    My RSU’s are worth a quarter of what they were last year, and our investments are obviously struggling at the moment, so I don’t feel as “rich” as last year, but we’re still able to cash flow everything and have a high savings rate. With the pregnancy stuff, I refuse to stress about money right now— I simply don’t have to and don’t want to.

    I realize we’re really lucky that we have so much buffer to handle the inflation shocks though. I checked our nat gas bill recently and we’re getting charged 50% more than a year ago per therm, which explains why I saw so many people on Nextdoor shocked by $500/month gas bills this past winter.

  4. Steph Says:

    I’m having weird money feelings too, though in this case it’s because my 9-month salary is pro-rated over 12 months, but I *also* have summer pay this summer which feels like a windfall. My goal was to put all my summer money towards retirement and saving for a down payment.

    But my emergency fund still hasn’t recovered from vet bills last fall, and it turns out my remaining cat needs surgery again this week. So it sounds like that’s where most of June’s paycheck is going. I’ve also been doing some restocking of things I need that are easier to buy in bulk, and some needed household purchases.

    I almost wish I could tell my college “hey I will be taking summer salary, please don’t pro-rate my academic-year pay this year”, but that’s not an option. The pro-rated pay never feels like enough money for the month, so I end up relying on the fact that my summer pay will cover savings etc. But sometimes, like this year, it’s covering for expenses I had to pay out of my savings because the pro-rated pay is so low. Blah.

    • nicoleandmaggie Says:

      Woo congrats on the summer salary!

      That sounds like a tough situation to be in. I got used to being paid 2-3x/ year in graduate school (scholarship) so I much prefer not prorated. Which seems counterintuitive but that was how I began budgeting as an adult.

  5. FF Says:

    I am not feeling great. I have some clients who are way behind on paying their invoices, so I am watching my bank balance go down, down, down while waiting not-so-patiently. I have a hybrid car and don’t drive that much, so while the gas prices do make me cringe, they really don’t have that much effect on my overall expenditures compared with the rising costs of other things, like groceries. I just bravely glanced at my retirement accounts, which I’ve been avoiding, and they have plummeted as well.

  6. Alice Says:

    In don’t know how we really are right now.
    *I’m about 1/2 of my pre-pandemic normal, with fewer clients. It’s still a decent income, but I feel uneasy
    *My husband’s income is down by about 1/3. He took a more-satisfying job at his company at the very beginning of the pandemic, but it came with a pay cut. Still: day-to-day happiness is more important than income

    In terms of expenses:
    *No extra kid care expenses: kid aged out of daycare, didn’t put her in her elementary’s aftercare
    *The kid keeps having growth spurts, which are bringing the usual clothing/shoe costs
    *Almost no travel expenses (one driving-distance funeral, a few months ago)
    *Food and utilities are both up, but I’m doing things to keep a bit of a lid on both
    *Gas is up. I’m uneasy about bicycling, but am thinking of biting the bullet on trying anyway. (My uneasiness about bicycling mostly centers around getting hit by a car on the roads we’d have to use. My husband got hit by one– a motorist took a right turn without checking the bike lane. He was okay, but the bike was totaled. It could easily have been much worse.)

  7. Debbie M Says:

    Favorite quote: “I still bought pens.” Because, of course!

    ‘Several of the extremely wealthy and high income (white male) economists I know are also pretty frugal.’ This is partly how you get wealthy (even high income doesn’t necessarily lead to wealth). And this helps the bad times not feel so horrible because you still have skills and your standard of living doesn’t have to drop so far. And also, waste is hardly fabulous.

    On rising prices – They actually don’t affect me much. I mean, my property taxes go up 10% every year regardless due to gentrification and tax caps. Food is a small percentage of my income, and I don’t spend much on gas due to the pandemic and to half my friends moving out of state. Utilities are up both due to price increases and having August weather already in June, but again, this is not a huge percentage of my budget. Dental costs are (probably) going down because I’m dropping my dental insurance which has decided they hate my dentist, but this is also not a big percentage of my income.

    I do feel like like prices, covid, other news, and people moving are making me want to recoil from society and sit in my safe little world with books and video games and exercise videos. That’s probably not good.

    On loosened pandemic restrictions – As my state is in the middle of the latest pandemic spike and yet no one is wearing masks anymore except me (and, except at work, my boyfriend), I am not loosening my pandemic restrictions. I haven’t heard news of another new variant, so I’m hoping after this spike I can go back to “normal” like everyone else.

    For me, three other factors are much bigger:

    1) Income – My boyfriend/roommate finally got a real full-time job. It does pay only $18.25/hour and there is no chance for a raise for at least 90 days, during which time he better not screw up or he is gone again. I’m really looking forward to not having to pay all the rent (= property taxes + utilities) myself. I’m looking forward to buying silly things just for fun like fancy notebooks and Lego sets. I have bought some silly things, but I’d like more. I’m looking forward to adding to savings again.

    2) Friends – Here’s what’s going on with my favorite people:
    A – boyfriend – still with me–yay!
    B – sister – still lives in Indiana, loves it there, is never moving back
    C – couple from grad school – still here–yay!
    D – another gal – works in a hospital, I never see her since there are no parties anymore.
    E – another couple – moved to California a few years ago, they love it and are never moving back.

    My one social activity, craft night, has these people:
    F – gal from C above – checks in briefly at online meetings
    G – gal from E above – comes regularly to online meetings–yay!
    H – gal who hosts – moving to Santa Fe, which feels like home to her; she finally got a job and just needs to sell her house and find a new one
    I – gal who I carpool with – still here!
    J – watercolor artist – moved to Seattle, loves it, will never move back
    K – hot weather lover – island nations feel like home, but she’s settling for Savannah, Georgia because it’s also warm, the politics is better than Texas’, and her aging black mother feels more comfortable there; she gets to keep her remote job and has made an offer on a house
    L – author – also moved to Seattle forever
    M – and my least favorite is still here, sort of–she moved beyond all the suburbs but still expects us to visit and complains so much and the loneliness out there is not good for her social skills

    3) Other news – Amnesty International put out a warning to travelers to the US in 2019 that we should beware in crowds, and it’s not like the shootings have let up since then. One of my extremist Senators (Cornyn) is actually working toward a few common sense rules like red flag laws, and he’s getting the Kill-Mike-Pence treatment from the GOP. I mean he’s still a horror, but that’s not good enough.

    I am super lucky to be white, not gay looking, postmenopausal, etc., so I’m probably safe here. Except for months of 100-degree weather if the electric grid goes out, I guess. (Even still, I have shade, and water (in a tank water heater).) Every time I think of another state to move to, they pass some anti-abortion law or anti-trans law or refuse to certify their election for no actual reason or something. Even the blue states have huge red rural sections, plus they’re mostly cold and/or expensive. Same with other countries. I mean, all the places are filled with humans and a bunch of them like violence and being angry and self-righteous. And so many people literally do not care about truth/reality. And you can’t really escape the US anyway. At the very least, it’s fueling climate change as fast as it can which of course affects the entire world. So I should stay here and work to make change from within but how do I even do that? Mostly I just fear I’m in a post-apocalyptic novel where the young people will never get to have the things that I’ve had.

    In conclusion, my income is big enough that I still don’t have to work, which I love. If my boyfriend can hang on to this job, and covid stops spiking for a while, I have lots of places to visit people, which will be fun, though not helpful for climate change. I can get to Indianapolis on Amtrak in 2 days; other places would take longer.

    I told my favorite couple to tell me if they plan to move away because I might go with them. (That’s what I should have done in grad school. The first year in the dorm was the best year of my life, so I stayed but everyone else moved out and boring people moved in. I should have been figuring out which people to move out with!)

    First Gen American, clearly I should start blogging again, too!

    • nicoleandmaggie Says:

      I endorse more blogging from both of you!

    • nicoleandmaggie Says:

      I guess you can call Cornyn and thank him for helping to save Texas children? Because it’s a great start and you hope he does more in the future?

      I did call my senators about the gun control bill but I forgot to put that under activism this past week!

      • Debbie M Says:

        I did already write to him, but just wrote to him again thanking him for his work and condoling him on his treatment by other GOP members. I almost never get to write him straight thank-yous without complaining so I took the opportunity this time.

      • nicoleandmaggie Says:

        Yay writing!

        I left an emotional message today thanking my senator for his vote to let this be voted on.

      • Debbie M Says:

        Thank you!

  8. Bev Says:

    On money we’re all over the place. You inspired me to check the balance in my retirement account, which I’ve been avoiding because it’s depressing. I’ve recently increased my retirement contributions but my employer has stopped matching contributions, so it feels like I’m constantly falling behind. My husband’s income decreased for the first six months of the year but we also cut down on living expenses by combining two households, so that came out about even. His income will increase starting next month and I’m also receiving an inheritance that will allow me to pay off our last bit of higher-interest debt (hurrah!) plus do some deferred maintenance on the house and also put some money aside to boost both savings and retirement. We’re bringing in more income than ever and we have more set aside than ever before but I still feel the need to watch my spending and limit excess driving, because you never know when the next disaster might hit. It’s those tiny Puritans living in my brain. They just won’t give me a break.

    • nicoleandmaggie Says:

      Income increases are awesome. Also: Yay getting rid of high interest rate debt! And yay maintenance and increased savings/retirement.

      I’ve found the tiny Puritans let up a bit when all of my obligations were being met and then some.

  9. Revanche @ A Gai Shan Life Says:

    I’m not sure how I feel. A mix of big picture worried, and small picture confident probably.

    We stay in the “aggressively saving” mode, and I tried to crank it up a bit when the pandemic hit, but we didn’t reallocate our former spending to savings, we just redeployed it as other spending and I always feel a little guilty about that. Constant reminders that we’re just trying to survive are good. We are focusing intensely on our retirement saving rather than the 529, as you advised years ago(!)

    I know it’s good for us in the accumulation period to have the market go low but it is a strange feeling to look at the price per share knowing what it used to be. It’s a temporary feeling, I know, I don’t let the day to day market rates really bother me. But it is slightly unsettling on that big picture scale.

    I don’t *think* I feel any shame about the wealth we have achieved so far. I know how hard we work for it, I know how hard we work to help people with what we have, I know how much effort I put into making good money decisions to ensure our stability and, I hope, our children’s futures (as much as is possible in THIS world).

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