Originally posted on The $76K Project on 7/20/2018
Money talk is too taboo.
As polite members of society, many of us were brought up to not talk about the following:
- Mental health issues
- Politics and religion
- Money - particularly what you owe and what you earn
My friends and I throw some of these taboos out the window without a second thought. I know their religious and political views. We're open with one another about our depression, anxiety, mood disorders, and the like. Sex? Sure, we'll delve into that juicy topic with glee, especially if we're sharing a bottle of wine.
For the most part, we don't go there.
Of all the taboo subjects, money is the one that often feels the most repellant somehow, and I'm just as guilty as anyone of avoiding the issue. I may spill all my debt secrets here on this blog, but in real life, I don't talk about it. And salary? I mean, sure, I'd share it if a friend or acquaintance asked. But the likelihood of anyone I know inquiring about my income is very, very slim because it's a subject most of us have been trained not to broach.
I think we should be doing exactly that: talking money. Discussing our debts. Sharing our salaries. Here's why:
1. Because it helps - it really helps! - to know how others make the magic happen.
If you write a headline like "How I Achieved Financial Independence in Five Years" or "How I Paid Off $100K in Student Loans in 18 Months," there's an excellent chance I'm going to head right on over to your post or article and devour it. I love a good financial independence or debt payoff story, partly because I want to feel inspired, and partly because I want to learn from you. I want to know what you did so that I can apply those same strategies to my own financial journey.
But here's my ask: when you're sharing your tales of success, tell me your salary, or at least a salary range. Otherwise, you're leaving out a crucial part of your story.
It is disingenuous, for example, to attribute your financial independence to the eschewing of Starbucks lattes and avocado toast while failing to mention that you make a six-figure income. Someone making $200K a year and someone making $40K a year could be doing the exact same things in terms of cost-cutting measures and savings rate, but obviously the higher earner is going to achieve financial independence or debt freedom more quickly. It's helpful to know that you're not actually working with the same resources. It's helpful to have context. That doesn't mean that people with different incomes can't learn from one another.
So put it out there. Yes, talk about your frugality - absolutely. Talk about your cost-saving measures. Talk about your high savings rate. Talk about the sacrifices you made to get to where you are, because undoubtedly they played a big role in your success. But don't stop there. Talk about how much you earned while crushing your financial goals, because that matters. I would argue that - assuming you aren't a total spendthrift - it matters more than anything else when it comes to big, rapid financial achievements.
2. Because actual numbers = a common language.
In the past few months I've seen several very successful personal finance bloggers describe their salaries in hazy terms such as "middle class salary" or "upper middle class income." But what do those descriptors actually mean? Out of curiosity, I asked my Twitter friends for their thoughts. I'll just summarize what I learned with this: terms like "middle class income" are meaningless, and they can be misleading.
Case in point: in the past few months, I've read a couple of inspiring stories from individuals who have declared early financial independence after saving an impressive chunk of what they publicly described as a "middle class salary." Their stories sent a message of hope: If we can buckle down and make it work on our average income, so can you!
Later, it emerged that these folks had earned several hundreds of thousands of dollars per year - middle class by their own standards, perhaps, but judging by the backlash that has ensued, not by their audience's standards.
We can simplify and clarify our discussions of salary by ditching the social class-style descriptors and sharing cold, hard numbers, perhaps with some added context: "I make $100K a year and live in Toronto, where rents are sky high" or "I make $45K and live in New York City" or "I make $55K in rural Illinois and support a family of five."
See? Simple. Numbers are just... numbers. They're unambiguous. They offer a common language that we can all understand.
3. Because maybe more transparency can help close the wage gap.
More stats for you: In 2017, women earned just 82% of what their male colleagues brought home. In 2016, many minorities made less than 75% of what their white counterparts earned. As Pew points out, while the wage gap has narrowed over the last few decades, it's remained relatively constant for the past 15 years. That is unacceptable - and we should be talking about it.
A few years ago I landed a position as an assistant professor at a small college. The administration made their offer, and I countered, angling for a few thousand dollars more. The response I received was that the school lacked the wiggle room to go any higher - not a penny more - and besides, with such a low cost of living for that location, the initial offer should be sufficient. There was nothing they could do, they said.
I acquiesced because I was worried that the offer might be rescinded if I pushed too hard. But a few months later, I found myself in a somewhat awkward conversation with a male colleague (who started at the same level, at the same time, and received the exact same initial offer) who shared that when he countered, the school bumped up his salary.
My guess is that my former employer betted on me not finding out - because hey, who sits around and divulges salary? - so they weren't worried about treating us differently. I suspect this happens in a lot of companies and organizations, many of which expect their workers to keep their salaries to themselves.
It's worth pointing out that websites like Glassdoor and Payscale have made it easier for employees to research going rates in their industries and walk into negotiations armed with a clearer idea of what they should be asking for. But as far as I can tell, these salaries aren't broken down by demographics or time spent in the industry.
It would be ideal if we could talk about salaries more candidly not only within our industries but also within our own organizations (if possible) so that gender, racial and ethnic wage inequalities are brought out into the open. Otherwise, companies can continue (intentionally or unintentionally) to perpetuate the wage gap.
(Note: I do realize that some organizations see the sharing of salary information as a fireable offense, and obviously we don't want to go there. But then how about sharing a salary range? Or sharing your total household income?)
4. Because we don't need to feel ashamed of what we earn.
We don't talk about the things we're ashamed of: mental health problems. Sex. Money. We have no reason to be ashamed of any of those things, salary included. Your income does not reflect your worth as a human being. Your income. Does not. Reflect your worth. As a human being. So whether you make $25K a year (or less), or $300K a year (or more), you have no reason to feel chagrined. You don't have to be ashamed for earning less than someone else. And unless you're exploiting the people working for you, I also don't think you need to feel bad if you're a high earner.
I realize that saying, "Just talk about it!" is easier said than done, especially if you feel like you're opening yourself up to criticism or judgment from others. The thing about shame is that it thrives in silence and embarrassment. When it's brought into the light, it tends to wilt. It loses its power. The more that we as a society talk about money, the easier it becomes for all of us as individuals to talk about money, and the less shameful money talk becomes.
Because I believe in transparency and walking the walk, I'm putting it out there: As a household, my family makes about $110K a year before taxes and benefits. We spend approximately 1/3 of our income on rent, 1/3 on fixed and variable monthly expenses (gas, groceries, energy bill, etc.), and 1/3 on debt. Currently, we are able to put $2K a month towards our remaining student loans. That is a significant chunk of cash, and that is the main reason we're able to pay off our debt quickly (well, quickly by my standards: about 2.5 years to go).
Are we frugal? In some ways. Do we make sacrifices? Yes, but we certainly haven't given up all creature comforts. Is it a challenging journey? Definitely, but it also feels completely sustainable. At the end of the day, it is our six-figure income more than our frugality that makes all of this possible.
These are all things I want readers of my blog to know so that they have the whole story. If they can take some inspiration or lessons from our story, fantastic - that's one of the main reasons I'm devoted to this blog. It's also likely that some people don't find us relatable, and that's okay, too, because I can guarantee that there are other bloggers out there who they will connect with.