Too Rich To Be Poor-Mouthing?

By Michelle Singletary
Sunday, November 11, 2007

This week in my online chat there was a throw-down between the classes.

The fight -- er, discussion -- started when a participant with a household income of just over $200,000 had some budgeting concerns.

He wrote: "My wife and I both have 'good gub'ment' jobs. We both earn low six figures. We have just under half a million in TSP [Thrift Savings Plan, the retirement program for federal employees]. We have two kids in private school and one on the way."

The reader went on to say that the couple are putting money in two 529 plans and will set up a third account when the baby arrives. They have a reasonable mortgage because they bought their house before the hike in home prices in the area. They have no credit card debt and one auto loan, with two years left to pay on it.

"But we spend so much money on all of these things -- tithing (non-negotiable), 15 percent TSP, private school, etc., that we don't have a penny saved for a rainy day or life happens [fund]. Neither of us appears to be too worried about that, although we know we should start banking some. Something always seems to come up when we try. What do you recommend?"

By the way, the "life happens fund" is a term I coined to encourage people to save for when things happen in life -- the car breaks down, your kid busts the washing machine, etc. If you don't save for these expenses, you end up depleting your emergency fund, which should be reserved for dire straits situations such as a job loss.

Anyway, I saw the question as a simple budget problem. A couple earning great salaries and doing many things right financially needed advice on how to do better.

But soon comments began to flood in accusing this man of whining about his economic status.

No question, if you are earning six figures, you are in the elite. Median household income in the United States was $48,200 in 2006, according to the latest data from the Census Bureau.

One participant sarcastically referred to the couple as "the poor little rich family." Here are some comments I didn't post:

¿ "Those of you 'struggling' on $200,000 a year just need to think about how you would make ends meet if you only had $40,000 a year. As far as I'm concerned once you get into the six figures, you've lost your right to complain about money unless you've suffered a catastrophic emergency."

¿ "Expecting a private school [education] for your kids when most families do not have that luxury is self-centered."

¿ "There was a sense of entitlement to a lot of the extras, that's what's a little off-putting to us regular folks."

¿ "Any finance 101 class will classify tithing as a personal choice, not necessary for survival (like rent, food) or advancement (education)."

¿ "I don't think they're trying at all and you were very easy on them!"

Not trying? Are you kidding me?

Let's recap.

They tithe, meaning they give 10 percent of their income to their church or a charity. They are saving for their retirement. They are saving for college. They don't have any credit card debt. They have a reasonable mortgage.

What they are struggling with is putting money aside for an emergency so they don't have to raid the retirement and college funds should they fall on hard times. I suggested they reevaluate their spending. I was sure they could find places to cut to save more.

People thought I was too lenient on the man. It was as if they wanted me to curse him out.

Now, I have been known for taking people to task for wasteful spending. But I saw no need in this case. They are doing most things right. If you can pay for private school and still put money in a college fund, you're doing something right with your money.

I was concerned at how quickly people rushed to bash this couple. There wasn't anything in what that man posted that smacked of entitlement.

Do you have the right to complain about not having enough money if you are making a six-figure salary? Probably not, especially when there are people who aren't making enough to adequately feed and house their families.

I assume what caused the indignation is the fact that many high-earning people are living above their means.

They are making financial choices with their bigger incomes -- rotating in and out of cars, cable, cellphones (for themselves and for the kids), eating out, taking vacations -- that divert funds that could or should be used to save or invest more.

For many middle- and upper-income families, it isn't accurate to say they don't have enough money. They do. They just don't have enough to pay for what they want and what they need.

I like what Donna from Maryland wrote to me after the chat. She said this about her six-figure income: "After donating money to charities, saving for retirement, saving for college, purchasing insurance, buying and maintaining a home, and having reasonable living expenses, it does not make you filthy rich."

However, she added, you can't say you're having trouble making ends meet, either. "You do have to be financially wiser 'cause folks who make less wonder what the heck is wrong with you, especially college financial aid counselors."

¿ On the air: Michelle Singletary discusses personal finance Tuesdays on NPR's "Day to Day" program and online athttp://www.npr.org.She also has a new personal finance call-in show that airs Sundays on XM Satellite Radio, Channel 169 "The Power," at 8 to 10 p.m.

¿ By mail: Readers can write to her at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071.

¿ By e-mail:singletarym@washpost.com.

Comments and questions are welcome, but because of the volume of mail, personal responses are not always possible. Please note that comments or questions may be used in a future column, with the writer's name, unless a specific request to do otherwise is indicated.