Skip to main content

A Tale of Two Cities

Well, I survived the annual screwing by Uncle Sam. Bye bye money that could have bought a lot of Lilly. I'm ticked off this year because some of my deductible expenses exceeded the allowable deductible cap so I had more income taxed than I should have if the system was fair, boo! But anyways, my sorority sister SM made a comment on my FB post on also getting screwed on her state income tax. God Bless the great state of TN for our conservative legislature and no income tax. But it got me to thinking, even though I do pay less taxes I also make less than my yankee friends, am I really winning here in the south? Any y'all know how I answered that question, I graphed it. :)
 
Ok, so we have two sweet, nice looking girls in the same sorority and upon graduation they tearfully hug goodbye and go their separate ways. One moved up to NYC and the other back to her hometown of Memphis. By age 30 NYC girl is making $100,000 and Memphis girl is making $55,000 (I just picked 100,000 as the NYC salary to keep it even then looked up the type of job that would pay that and found the Memphis salary). Both are on the company insurance plan and pay the flat single person contribution costs. Both girls are smart and take advantage of their 401K and set aside 6% of their income. Now NYC girl winds up paying 25% of her income in state and federal taxes while Memphis girl is paying 15%. Side note, why is NYC so full of democrats given this horrible tax rate?
 
With their take home pay both girls also set aside 10% in personal savings. Memphis girl is able to keep her total housing costs at 35% of her income while NYC girl needs to go to 40% to live in a safe neighborhood and have more than a closet. NYC girl spends an average of $20 a day on cabs while Memphis girl has a car and buys gas. Both girls buy groceries and have a nice dinner and drinks with friends once a week. Both girls have the same student loan expense and both girls set aside the same portion of their income for fun stuff, i.e. entertainment and looking nice.
 
Now Memphis girl has used up all of her income while NYC girl still has a little left, so she puts that into savings as well. Both girls are living very similar lives, NYC girl gets to dress fancier but we'll get to that in a minute. The real difference isn't affecting these girls today, it's when they go to retire, NYC girl will have twice the retirement account as Memphis girl so if they both go down to Florida to retire they are going to have very different retirement accommodations. The only way Memphis girl can ever hope to match this is if she buys her home while NYC girl rents, then she will have 5 years or no mortgage payment to divert to savings and be able to sell her home for cash. Now one or both of these girls might get married and have kids which would drastically change this model, but the point was to show the long term effects of the income  / tax/ cost of living gap.
 
On a personal level, this really put my love for designer clothes and accessories into perspective. I'm wanting a NYC wardrobe (ok, really a Palm Beach wardrobe) on a Memphis budget. Memphis is not perhaps less fashion sophisticated than bigger cities, it's just that a $300 purse is a bigger purchase here than it is elsewhere. Don't get me wrong, I still love my living situation in Memphis but I'm realizing it might not be the worst thing ever to consider moving one day.
 
Here's the actual numbers for my fellow math nerds if a visual helps.
 
    NYC Memphis
Income   100,000.00 55,000.00
       
Insurance   2,400.00 2,400.00
401K   6,000.00 3,300.00
Taxable   91,600.00 49,300.00
Taxes   24,598.60 8,254.00
NET   67,001.40 41,046.00
Expenses:       
Savings 10% 6,700.14 4,104.60
Housing   26,800.56 14,366.10
Transportation   7,300.00 6,980.00
Food   10,400.00 6,500.00
Student Loan   3,000.00 3,000.00
Entertainment 5% 3,350.07 2,052.30
Clothing and Beauty 10% 6,700.14 4,104.60
       
Additional Disposable   2,750.49 -61.60
       
       
Annual Savings   19,450.63 9,666.20
       
35 year    1,440,000.00 742,220.00
Inflation Adjustment   496,457.00 255,589.00

Comments

  1. Hm. This is an interesting comparison. Even CT to Memphis is an interesting comparison. It's cheaper to live in the South in general, but at the same time, the wages are lower. So it does somewhat even out at that level. Very interesting.

    ReplyDelete

Post a Comment

Amazon

Popular posts from this blog

Custom Hair Care with Formulate

I've had short hair most of my life, but the past few years I have been growing my hair out and one thing has become very clear - long hair is a commitment. And long hair that has been color treated for years is a project, which is why I was so excited when the team at Formulate reached out to have me try their new custom shampoo and conditioner. Even better yet - we have teamed up to give one lucky reader their own custom set for FREE!

Enter GIVEAWAY here! Getting hair care customized for your hair sounds complicated but the process was very simple as a consumer - I took a brief survey about my hair's current condition and what my hair goals were - you can pick up to five. I have a pretty oily scalp so that was my top priority but color protection, heat protection,. frizz and volume are also my concerns. I was then able to select my scent and strength - I like a strong scent in my shampoo that leaves a light linger and selected the green apple - I've been getting complime…

Vi Peel

2018 Update: Hello Internet! Welcome to my most popular blog post - I presume you're here because you're considering getting a facial peel. Please keep in mind this is an old post and my photo quality is not great. Please feel free to read and enjoy but I do want to let you know that as the years have passed I have taken a more proactive approach with my skin care and I do not get frequent peels. If you'd like to see my modern approach to skincare check out some of my other beauty posts and I'd love for you to connect with me on Instagram to keep up with my latest and greatest recommendations.
___________________________________________________________________________________

Hello! So I got my first Vi Peel which I was super excited about. Since the Botox post was popular I figure y'all would like this too. Besides, it's well established I'm beyond any sense of privacy or shame here.
I got my first peel years ago - a mild Glycolic peel added onto my fac…

This is Us

Y’all this year I was so excited for our anniversary activity - the 2nd anniversary traditional gift is cotton and there was a cotton field nearby. The website said “mid October” would be the perfect time for pictures so I booked a session for our anniversary weekend on the 21st. We stop by the field the day before to check it out and it was all gone. Even though no harvest date was listed on the website a week earlier it had since been updated that the cotton was harvested that Friday – seriously, they couldn’t have given one more weekend for photos, grr! All the other cotton fields were too far away so I cried how our anniversary was ruined. We wound up moving photos to the same spot where we took our wedding photos and brought along the dogs to get our family Christmas card photo. This session did not go as well as I would have liked – Because I didn’t plan to originally have the dogs sweetie was not freshly groomed. My brand new sweater got snagged by one of the dogs getting in and…

Wardrobe Wednesday - What I wore to Memphis Fashion Week

I must admit I'm pretty proud of the outfits I put together for Memphis Fashion Week so I figured they deserved a blog post of their own. I definitely feel like spending four day around fashion and really trying to put my most stylish foot forward set me on track to up my fashion game this year, plus the VBxTarget collection released right after so that helped too (I'll have a post on that soon). Overall though these four outfits were a good example of mixing what I already owned with new and restyling some existing pieces in new ways.
Earrings: Kate Spade - these are out but there's always cute ones on sale Necklace: Anthropologie (this is from 2013) Top: Nicole by Nicole Miller
To start of the events I wore my most casual outfit to the kickoff event. I was under the mis-impression that Nicole Miller (the headliner designer for MFW 2017) would be there so I wore a Nicole by Nicole Miller top. It's actually off the shoulders but got pulled up a little from me razing m…

Hostess with the Mostess

One of my favorite things is to entertain. Since moving last summer we have hosted some kind of event at least once a month and while we keep talking about slowing down it doesn't look like we'll stop anytime soon. Party hosting can be a lot of fun but it can also be exhausting, especially if you aren't prepared, so I've pulled together my "best practices" so you can learn from my mistakes and make your next gathering a little less stressful. The first step of course is to determine what kind of gathering you'll be hosting - we've hosted everything from Thanksgiving dinner with all the fancy crystal and china to a casual come on over for burgers on the grill but I think my favorite event that we've hosted so far has been a baby shower for our sweet friends.

Once you know what kind of event you're hosting think about the guest list and how you'll invite everyone - for just a gathering of our friends we use facebook but if you want to be …