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A $2000 watch

May 26, 2008

I always have trouble at the end of the month. Things come up. Budgets get broken. Not badly, but enough to annoy me. I’m over by a few dollars in most categories, and I have a few days left.

A friend from the midwest came to town on a surprise weekend (not specifically to see me, just to come to the beach). We went out to dinner with her and some friends, and she mentioned that she bought her fiance (they are getting married in 2 weeks) a $2,000 Movado watch. Perhaps he gets that as a gift since she got an engagement ring, but I’m not sure. She said her credit card bill was at $4000 this month.

It surprised me, because I always thought that I didn’t know people who spent that kind of money. Of course, she was a college friend and never used to be like that, but now that we are real adults, it seems I do know people that spend a lot of money. I know a lot of people with designer purses and who shop at Banana Republic exclusively (and don’t cower in the sale section like I do). I may not know the super rich, but I know a class of people that spend more money than I am used to.

I don’t think that she is struggling or drowning in debt. I know roughly how much she probably makes (I used to work at the same company), roughly how much her fiance makes. Between the two of them, I’d guess they make around 115k and I bet their house (duplex) payment is less than my current L.A. rent. It is a very cheap place to live, so $115k will go far. Quite some time ago, she mentioned that she had to cut back her 401k from 15% to 8% temporarily (personal issues), so she is saving plenty for retirement too. I doubt she has a $15k e-fund, but she is certainly doing just fine.

So was it jealously that I felt?

I still live somewhat like a college student. It is in part out of necessity–if I want to have my own studio, then I am spending quite a big portion of my salary on rent, so I can’t spend that extra money on say, a LV purse. It is in part self inflicted pain. I fully fund my Roth, I save several hundred each month in short term and long term savings, and I save as much as I can afford to in my 401k. I could inflate my spending quite a bit, but I don’t think it is wise.

It also is more challenging because my boyfriend is still a grad student (and also still just a boyfriend rather than husband). When two of my closest high school friends got $400 purses from their husbands last Christmas, my beautiful opal necklace didn’t seem as extravagant. My friends have people paying half the bills, making real salaries and buying them fancy gifts. I just can’t keep up with that, even though I have a good job.

It is that silly left behind feeling. I’m not left behind, I just need to stop comparing and keep my eyes on my own paper. My goals are different and good, and I’m doing just fine on them.

I guess it still blows my mind to think that someone I’m friends with can afford to drop $2000 on a watch. That isn’t the world I grew up in.

13 Comments leave one →
  1. May 27, 2008 3:56 am

    Boggles my mind that 115K in income is thought of as an average amount! Most of the people I know live on a fourth of that– or even less.

    Definitely two different worlds.

  2. May 27, 2008 4:32 am

    you mean you’re friends with someone who isn’t afraid to put a $2000 watch on a credit card…

    doesn’t neccesarily mean that they can afford it

  3. May 27, 2008 5:54 am

    I really think they can afford it without incurring CC debt. Just because someone buys something on a card doesn’t mean they don’t pay it off.

    Also, i don’t think 115k is average. But i don’t thjnk it is a salary that commands luxury status either.

  4. May 27, 2008 6:34 am

    $2k is a lot for a watch…or for any gift…I don’t know what I would have said!

  5. tom permalink
    May 27, 2008 7:09 am

    As you’ve been in the workforce longer I think you’ll start to see a lot of your single/DINK friends buying expensive things. It is very strange, especially when they have never bought anything of high value before. I just hope that all of our friends are being smart about savings and retirement.

  6. May 27, 2008 7:21 am

    @Tom – That is a good point. I probably should get used to it! I know a few people my age with nice things that are subsidized by parents (particularly in the car area), but it is becoming much much more common to see my friends/peers actually be able to afford nice things all on their own.

    It’s just so weird!

  7. May 27, 2008 8:44 am

    I do feel some jealousy toward my DINK friends because rent/housing payments (and DSL, cable, etc) don’t scale. They can combined have 2X my salary but still only have combined 1.5X my fixed costs. That certainly leaves room for designer handbags, watches, etc. I also agree with tom that I have started to see them buy expensive things when at one point we were all poor students.

  8. Stacey permalink
    May 27, 2008 11:05 am

    There’s nothing wrong with continuing to live like a college student – once you start spending money like an “adult,” it may be very hard to get back to your frugal student ways.

    We plant to continue our lifestyle as “students” for a few more years. Everyone thinks we’re just plain broke, but we’re quietly building a retirement fund for age 55. Which would you rather have, a $2k watch or the best years of your life free to do as you please?

    Keep up the great work!

  9. May 27, 2008 12:07 pm

    I just hope (and I’m sure this won’t be the case) that my future fiance won’t feel like she has to buy me a gift because I get her a ring. Perhaps a nice intention (I’ve often wondered aloud how fair it is that guys have to buy the girl the ring, but don’t get much in return), but I recognize that that is $2k not available once I get married.

  10. Kate permalink
    May 28, 2008 6:28 am

    115k is definitely not average. Most households makes somewhere between 40-50k. The 115k would be the top 20% income level, for Canada at least, I don’t know about you guys (stats released by statsCan a week ago). I know the feeling though, my best friend’s bf buys her Tiffany jewelry on a regular basis. You just have to be grounded, we all have our own financial goals in life. You’re doing great, keep it up!

    I think though that young people nowadays “wants it all” so to speak, a lot of people I know don’t have budgets or a financial plan (I’m in my late 20s).

  11. May 28, 2008 7:38 am

    @Kate – the median income is 45k (wikipedia), but for those with bachelors degrees it is almost 70k (2003 data). I don’t mean to be snobby about separating college grads, but most people I know fall in that category.

    So yeah, 115k is a lot, but it is sort of at the point where I’d imagine (if it were me) maxing out all my retirement accounts and saving up a solid efund then living comfortably. But would a $2k watch fit in? Maybe it would. I guess I’m just not there

  12. Taylor permalink
    May 28, 2008 9:00 am

    Don’t feel bad – my boyfriend and I combined make $300K+ (my $115K plus bonus, plus $80K rental property income and he makes $130K plus big oil company bonuses) and we still sleep on a futon and drive old cars (’94 Honda Accord!! I love it) and don’t have cable. We never go to the mall and buy only a few articles of clothes each year. It is what you choose. We love it – we have freedom to do and see other things now and – more importantly – later when we retire (which we will do at least a decade before our non-thrifty friends).

    Just remember – that watch will be worth a lot less when they have to pawn it to buy groceries. And – if there ever comes a time when they are financially strapped, offer to buy the watch at a discounted rate – everyone wins! (I don’t mean to sound flippant, but I have a friend who bought a $2000 bookcase – and she was still living at home making a third of what I made. A bookcase!).

  13. Looby permalink
    May 28, 2008 10:40 am

    I agree with Stacey, my bf and I still live like students so that we can retire early too. Last Christmas I got a $12 Scrabble game and a thermal vest (to be fair that’s what I asked for), my friend got $500 designer champagne glasses(!).
    It’s hard to explain to people that don’t live the same way that I was perfectly happy with my presents and with my lifestyle. I think the best thing is to just try not to compare.

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