Living on a Millionaire Budget with a Middle-Class Salary

Our culture is obsessed with stuff. In a modern society where our basic survival needs are met, we have the luxury to ponder about all the things we want instead and the things we want are now a reflection of who we are. I mean, it was Forrest Gump himself who said you can tell a lot about a person by their shoes.

Stuff defines our unique style and personalities. Most importantly, stuff has become a status symbol and a way for us to display our wealth.

But we’re not keeping up with the Joneses anymore. We’re trying to keep up with the Kardashians.

I want to be like the rich and famous on my middle-class salary

It use to be that you used the people in your social circle as a benchmark to determine what kind of lifestyle you should live, what you wore, and what kind of car you drove. I remember my parents having a case of this when our neighbor down the street drove home in a new Lexus and suddenly our Toyota Matrix was subpar. It was a capable car but compared to the shiny new Lexus, we might as well be driving around in a go-kart.

But somewhere in the past few decades when we started to idolize the people we saw on TV that we realized that these are the people we want to imitate. These rich and famous celebrities with their seemingly perfect lives and endless wardrobe were the people we wanted to become.

It’s easy to believe that it’s become our new normal when the media supports it. You open up a fashion magazine and they’re breaking down what Beyonce wore while on a milk run: Alexander Wang sweater ($995), Matthew Zinc tights ($290), Louis Vuitton handbag ($4,000), and Tom Ford sandals ($1,800). Turn to page 221 for a list of retailers! Even the “cheaper” outfit alternative is expensive. If you don’t want to splurge $4,000 to get this look, save with this version for only $400! Is $400 the low-end of what I should expect to pay for a new outfit? It doesn’t sound like a steal to me.

Keeping up and looking the part

It’s easy to get sucked into this frame of mind. I know here in Toronto, a lot of people are trying to maintain an upscale lifestyle and some days I feel like I’m walking down a catwalk instead of a sidewalk. Girls my age are carrying Prada bags and wearing Jimmy Choo boots and suddenly I feel like I missed some sort of late-20’s fashion memo. I found out a lot of my friends have bi-weekly maid service where they get someone else to clean their apartment. So what the heck am I doing on my hands and knees scrubbing the toilet bowl?

I got to a point where I felt like maybe I was being a total cheapskate. Maybe these are things you should be spending money on and maybe no one cleans their own toilet bowl anymore. Maybe I wasn’t just living within my means but keeping myself from a standard of life that I deserved.

That’s why they’re broke

I realized comparing yourself to other people is not a good measure of life quality. Those people I saw who looked like a million bucks are probably close to that in debt. Do you ever wonder how a celebrity can ever go bankrupt when it seems they have more money than we’ll ever see in our lifetime? It’s because all of their so-called wealth is tied up in tangible items which do little to nothing for their net worth. Also, being liquid asset poor means one big financial blow would leave you financially crippled.

Remember that Bow Wow rapper guy? He was poppin’ bottles in the club, driving Bentleys and Ferraris, and flying around in private jets. He looked like he was doing well for himself but he later confessed that he had only $1,500 to his name. He eventually had his cars repossessed when he couldn’t keep up with his payments and now owes the IRS close to $100,000. There are probably some 16-year olds working part-time at H&M who are more wealthy than him.

Among your friends, you can usually tell who they are. They wear designer clothes, drive really nice cars, or dine out all the time but they can’t pay for those concert tickets until next pay day. They have multiple credit cards and most of them are maxed out. They ask to borrow money or have unexplained loans outstanding. They have to sell stuff to make rent next month. They look like they’re doing well but in the background they can barely afford to get by.

The need for material gratification

Conspicuous consumption is usually caused by a deeper, inner need for fulfilment, not just a want for a tangible item. What drives someone to live beyond their means?

Low self-esteem. You feel the need to impress people by maintaining an image. The social media version of you and the person that you outwardly display isn’t a true reflection of who you are behind closed doors and you’ll be damned if anyone saw that version.

Struggling with a personal life experience. Maybe you have just lost your job and the idea of giving up your daily Starbucks coffee and dining out every weekend feels like such a hit to your ego. For the sake of your pride you’re going to live and spend like you always have even though you can’t afford it anymore.

Growing up in a low-income family. Your parents were struggling with money and they weren’t able to afford the nicest clothes or the coolest toys. Now that you’re making a good salary and “living the American dream”, you feel like you’ve earned the right to buy anything you want because you never got that chance when you were younger.

Wealth isn’t measured by what you have but what you CAN afford

Being able to afford something doesn’t mean you should buy it. It’s fun to splurge once in a while but when all of your worth is tied up in clothes and shoes, you may be doing something wrong.

If a personal emergency required you to fork up $2,000 right away, do you see yourself going to the bank to withdraw from your account or asking for a loan? If you answer the latter you’re probably liquid asset poor.

Don’t get yourself into financial trouble because you’re comparing your life to someone who is broke or living pay cheque to pay cheque. Without knowing what their story is it’s likely that the “success” you’re seeing is masking the mountain of debt that they’re sitting on. Stop comparing yourself to others and be honest with what you’re able to afford with the salary you make. Your financial health is more important than impressing people!

Have you ever felt you had to maintain an image, especially one you couldn’t afford?

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  • Reply Melissa @ Sunburnt Saver December 8, 2014 at 1:22 pm

    Okay, first of all, you blew my mind about Bow Wow. I had not heard that story!!! Aww, Bow Wow, what happened?! I might have listened to him all the time when I was a teen… :-/ #sorrynotsorry 😉

    Also, I can tell when my friends are way in debt when they start complaining about taxes… yes, everyone complains about taxes, but a couple of my friends start complaining they can’t afford taxes. I’m like… you can afford to pay taxes, everyone has to. What you maybe can’t afford is the maid service/giant house you just bought/designer furniture…

    Then again, I have to remind myself everyone has to choose their own financial path. A lot of my friends -are- financially savvy – they know WHAT to do, they just don’t want to do it. They’d rather the Prada bag. I’m luckily not a purse person, so I just shrug… and keep adding to my 401(k) 😉
    Melissa @ Sunburnt Saver recently posted…Weekly UpdateMy Profile

    • Reply Christine December 8, 2014 at 4:09 pm

      Bahah I know! Poor Bow Wow.

      Unfortunately there are a ton of celebrities out there who owe money to the IRS. It’s really sad! Taxes are a nasty fact of life but to hear people say they can’t afford it? You HAVE to be doing something wrong.
      Christine recently posted…Living on a Millionaire Budget with a Middle-Class SalaryMy Profile

  • Reply Dan @ Our Big Fat Wallet December 8, 2014 at 2:58 pm

    I find a lot of the rappers tend to end up broke at one point or another. I think it’s because they try to project an image of wealth when in reality their income drops quite a bit once their fame slows down. Little Bow Wow is a good example as you mentioned. Too many expensive bottles of champagne 🙂
    Dan @ Our Big Fat Wallet recently posted…How Taxes Work When Using a Vehicle For BusinessMy Profile

  • Reply Connie @ Savvy With Saving December 8, 2014 at 7:34 pm

    I feel like a lot of people get suckered into wanting to live the life of the rich and famous, especially since that kind of lifestyle is promoted on TV and everywhere we look. But that kind of lifestyle gets old really fast and its impossible to maintain. The more you have, the more you want. I much prefer to look poor but have a lot in the bank 🙂
    Connie @ Savvy With Saving recently posted…5 Money Rules Every 20-Something Should FollowMy Profile

  • Reply Brittany @FunonaBudgetBlog December 9, 2014 at 7:57 am

    I’ve gotten so much better about this as I’ve gotten older. I think when I was younger the “realness” of money hadn’t sunk in yet. Now that I have more financial responsibilities (car insurance, rent, groceries, student loans), the brand of my bag is not as important to me.
    Brittany @FunonaBudgetBlog recently posted…Weekend Survival Guide for the Girl on a BudgetMy Profile

    • Reply Christine December 9, 2014 at 9:23 am

      When you don’t have any financial responsibilities it’s hard to understand how much life costs! The things you don’t even think of – toilet paper, light bulbs, dish detergent – are things you need to buy and they really add up. Suddenly every penny counts because you have to spread your money so thinly across many different things.
      Christine recently posted…Living on a Millionaire Budget with a Middle-Class SalaryMy Profile

  • Reply Natalie @ Budget and the Bees December 9, 2014 at 10:51 am

    I think of somewhat regular people falling into that vicious cycle of wanting what they think other people have. I hadn’t given much thought to the famous people. I guess I just assumed that they likely had the money to sustain that lifestyle. I do know that a celebrity may be sponsored and given clothes to wear or cars to drive for promotion, but I hadn’t considered that even they sometimes couldn’t afford it. I’d imagine, then, the pressure on them to fit in with Hollywood is greater than I could ever experience.
    Natalie @ Budget and the Bees recently posted…How to Celebrate Your Day with Free Birthday StuffMy Profile

  • Reply Mel December 9, 2014 at 8:49 pm

    I think I lucked out. In college it was drilled into my mind that if I picked theater, I would always be poor. So I’ve approached life like I would always be poor… and have been lucky enough to actually work steadily since I graduated. On the flip side, I have a cousin who appears really well off, but recently declared bankruptcy and even that didn’t really change the way she approaches spending. It’s crazy!
    Mel recently posted…Why My Wallet Likes Being SingleMy Profile

  • Reply Aleksandra Sagan December 10, 2014 at 5:23 pm

    Great point about wealth being measured by what you can afford and not what you have. I think, many times, we miss this point and try to perpetuate this idea that because we have a lot, we must be well off.

    I have to disagree with you about growing up in a poor family causing people to spend more. While that may be the case sometimes, it’s also often the opposite… I grew up in a very poor immigrant family and that’s instilled a strong work ethic in me and good money management…
    Aleksandra Sagan recently posted…December budgetMy Profile

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