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I have to agree with most of these speaking personally. The only thing I don't have to worry about is insurance as my company has a decent plan I partake in.
I've always enjoyed my vacation but can't afford to lately. I can accumulate the vacation hours but just don't have the extra money to take one the way I like to. My idea of vacation is traveling to foreign countries.
Diana Farrell, once Deputy Director of America’s National Economic Council, told The Economist she thinks a middle class income begins at the point where a person (or family) has one-third of their income left over for discretionary purposes after they’ve provided themselves with food and shelter. In other words, someone who earns $3,000 per month would have $1,000 left after they’ve paid their mortgage or rent, utilities, and grocery bills.
Discretionary income is not so easy to find. We’ve ranked a list of eight things the middle class can no longer really afford. We’re not talking about lavish luxuries, like private jets and yachts. The items on this list are a bit more basic, and some are even necessities.
I have to agree with most of these speaking personally. The only thing I don't have to worry about is insurance as my company has a decent plan I partake in.
I've always enjoyed my vacation but can't afford to lately. I can accumulate the vacation hours but just don't have the extra money to take one the way I like to. My idea of vacation is traveling to foreign countries.
T have 8 Things the Middle Class Can
New flash!!! I make a higher income, and I can't afford all these things with out making sacrifices. It's all about choices and priorities. The higher income people who can "afford" everything on this list are the ones who are living paycheck to paycheck, and whose finances are in a mess. Maybe the problem is that we (meaning the media) has created unrealistic expectations surrounding what one can and should be able to afford.
I have to agree with most of these speaking personally. The only thing I don't have to worry about is insurance as my company has a decent plan I partake in.
I've always enjoyed my vacation but can't afford to lately. I can accumulate the vacation hours but just don't have the extra money to take one the way I like to. My idea of vacation is traveling to foreign countries.
It's mostly bs. Why can't you afford a vacation? How many cell phones are in your household? How many of them are smart phones? Do you have any tablets? How many tvs do you have? How many cable channels? How big is your house? Sqft, bedrooms and bathrooms?
I have to agree with most of these speaking personally. The only thing I don't have to worry about is insurance as my company has a decent plan I partake in.
I've always enjoyed my vacation but can't afford to lately. I can accumulate the vacation hours but just don't have the extra money to take one the way I like to. My idea of vacation is traveling to foreign countries.
This is total nonsense. The middle class can afford middle class things.
Vacations: For most boomers as kids, a vacation involved tents, a camper trailer, or extremely modest motels. Food was equally modest. The photo in the article shows a Caribbean Island beach at an exclusive resort. If you move the bar to define a vacation as a 1000+ mile flight and a high end resort, the middle class has never been able to afford that.
New vehicles: You can buy a Hyundia Accent with a 100,000 mile factory warranty for $17,000. You can reasonably expect to drive it for 10 years/150,000 miles without the car imploding on you. Compare that to a 1965 automobile that was unreliable garbage after the 3/36K factory warranty expired. It was worth a bottle of champagne if the car actually did 100,000 miles. In terms of cost per mile, inflation-adjusted, cars are cheaper and more affordable than years ago. Once again, the photo in the article shows a row of shiny new BMWs. Those are luxury cars. The middle class never was able to afford luxury cars.
Student loans: This one is an issue since college costs have radically out-paced the inflation rate. If you look at the reason for this, it's not because college profs make more or because college profs teach less students for their dollars. It's because today's generation demands all the expensive non-teaching stuff that doubles the cost. If we went back to the model that college is about classrooms and not about football teams and non-academic student activities and non-academic student support systems, college would cost what it used to cost.
Emergency savings: This one is covered ad nauseum in personal finance. 5% savings rate instead of 10% to 15% savings rate. It's all about burning discretionary income instead of saving it.
Retirement savings: The rules of the game today are that you need to save steadily for your retirement. People fling the money at discretionary spending instead.
Medical care: This is a national problem. Some of the middle class has excellent corporate health insurance. The rest are caught in the gap where they're too affluent to qualify for Medicaid but they're paying big premiums for not-so-great coverage.
Dental work: If you get fluoride treatment as a young adult and get to the dental hygienist a couple times per year, most people don't have huge dental restoration bills. The same nuts who are anti-vaxxers also walk around telling everyone fluoride is poison. There's no magic to this.
Living paycheck-to-paycheck: Well duh. If you live in too much house, drive too much car, and squander your disposable income instead of saving it, you live paycheck-to-paycheck and it's a dire emergency if you lose your job. Maybe if you lived in a 1,200 square foot house on a small lot instead of a 3,000 square foot house on a large lot; and maybe if you drove a base model economy car instead of a fancier brand; and maybe if you prepared your own food at home instead of spending your cash at Starbucks, going out to lunch at work, and at restaurants and doing takeout or buying processed food, you could save some money. ....like the middle class used to do it.
Living paycheck-to-paycheck: Well duh. If you live in too much house, drive too much car, and squander your disposable income instead of saving it, you live paycheck-to-paycheck and it's a dire emergency if you lose your job. Maybe if you lived in a 1,200 square foot house on a small lot instead of a 3,000 square foot house on a large lot; and maybe if you drove a base model economy car instead of a fancier brand; and maybe if you prepared your own food at home instead of spending your cash at Starbucks, going out to lunch at work, and at restaurants and doing takeout or buying processed food, you could save some money. ....like the middle class used to do it.
Bravo Geoff! You're absolutely right. We have up sized the standard of living for the middle class, then complain that it's unattainable (although there are plenty who are trying). Just look at the lifestyle of the average 20 something compared to the lifestyle of their parents at the same age - and it only continues from there. Case closed!
This is total nonsense. The middle class can afford middle class things.
Vacations: For most boomers as kids, a vacation involved tents, a camper trailer, or extremely modest motels. Food was equally modest. The photo in the article shows a Caribbean Island beach at an exclusive resort. If you move the bar to define a vacation as a 1000+ mile flight and a high end resort, the middle class has never been able to afford that.
New vehicles: You can buy a Hyundia Accent with a 100,000 mile factory warranty for $17,000. You can reasonably expect to drive it for 10 years/150,000 miles without the car imploding on you. Compare that to a 1965 automobile that was unreliable garbage after the 3/36K factory warranty expired. It was worth a bottle of champagne if the car actually did 100,000 miles. In terms of cost per mile, inflation-adjusted, cars are cheaper and more affordable than years ago. Once again, the photo in the article shows a row of shiny new BMWs. Those are luxury cars. The middle class never was able to afford luxury cars.
Student loans: This one is an issue since college costs have radically out-paced the inflation rate. If you look at the reason for this, it's not because college profs make more or because college profs teach less students for their dollars. It's because today's generation demands all the expensive non-teaching stuff that doubles the cost. If we went back to the model that college is about classrooms and not about football teams and non-academic student activities and non-academic student support systems, college would cost what it used to cost.
Emergency savings: This one is covered ad nauseum in personal finance. 5% savings rate instead of 10% to 15% savings rate. It's all about burning discretionary income instead of saving it.
Retirement savings: The rules of the game today are that you need to save steadily for your retirement. People fling the money at discretionary spending instead.
Medical care: This is a national problem. Some of the middle class has excellent corporate health insurance. The rest are caught in the gap where they're too affluent to qualify for Medicaid but they're paying big premiums for not-so-great coverage.
Dental work: If you get fluoride treatment as a young adult and get to the dental hygienist a couple times per year, most people don't have huge dental restoration bills. The same nuts who are anti-vaxxers also walk around telling everyone fluoride is poison. There's no magic to this.
Living paycheck-to-paycheck: Well duh. If you live in too much house, drive too much car, and squander your disposable income instead of saving it, you live paycheck-to-paycheck and it's a dire emergency if you lose your job. Maybe if you lived in a 1,200 square foot house on a small lot instead of a 3,000 square foot house on a large lot; and maybe if you drove a base model economy car instead of a fancier brand; and maybe if you prepared your own food at home instead of spending your cash at Starbucks, going out to lunch at work, and at restaurants and doing takeout or buying processed food, you could save some money. ....like the middle class used to do it.
Bravo Geoff! You're absolutely right. We have up sized the standard of living for the middle class, then complain that it's unattainable (although there are plenty who are trying). Just look at the lifestyle of the average 20 something compared to the lifestyle of their parents at the same age - and it only continues from there. Case closed!
If the middle class really has it bad, I must be exceptionally disconnected from reality in my middle class neighborhood, surrounded by middle class families, living middle class lives.
The luxury and excess to which the majority of people live overall seems to be at an increasingly all time high.
The problem with these kinds of articles is that it's never quite clear what "middle class" means.
Thinking about my parents/grandparents:
Vacations: Only the ones better off than middle class took fancy vacations. For most, they vacationed in-state or in-region. Up to age 18 my parents took me on a total of 2 out-of-state trips. Going to Europe, caribbean cruise, etc... was a once or twice a lifetime thing.
New Vehicles: inflation-adjusted and adjusted for increased quality, we are probably car-rich now compared to my folks who switched out cars/trucks every few years due to major breakdowns or literally rusting out. They have gone up pretty fast in the past 5 years though... I drive a 2010 hyundai and the price for a 2016 same model is more than 20% higher - this is faster than inflation so this is somewhat of a problem. But BMWs were never easily attainable for the average person...actually probably more now because you can get an entry level BMW in the high 30s.
Student loans: this is a serious problem I agree with.
Emergency savings: probably about the same.
Retirement savings: I don't think this is any more attainable than in the past. The difference now is that private pensions have gone the way of the Dodo. You need to have a household at least 15% above median income to put away decently for retirement.
Medical care: this is also a serious problem that I agree with.
Dental work: Actually this is an area of medical care that costs proportionally about the same as it always did.
Skipped paychecks: my grandparents could not have gone that long without paychecks either.
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