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Your family income is almost 40k more then the median US household income.
Your family income places you in the highest income quintile in the United States.
Your family consists of not one but TWO incomes that are above the median US income.
Generally speaking, your family is NOT "middle class", your family is in the top 20% of all familes.
Why dont you try living on a "real" middle class family income of about 34-55k, in other words, basically cut your family income in half, and live on that for a while. You tell me about how well you are getting by.
Random, you are absolutely spot on here. My wife and I make a little bit more than this guy and his wife, and like him, I've been walking around with my head up my ass thinking .. hey, we're all doing alright here. Wifey and I are middle class, and we're not in debt, and we're saving, and life's not too bad. Then I saw the stats like these:
"Only 17.8% of all U.S. households make more than $118,200 a year. Only 2.67% make more than $200,000. Only 34% make more than $65,000, which is astounding given how expensive other cost of living items have gotten over the past decade."
I am thinking about quitting my job and doing a career change right now. My wife and I sat down to budget what our lives would look like on her income. We honestly would have an extremely hard time paying for health care on her salary ... and she's a teacher. And we have no debt other than a mortgate on a very modest house .. and only one child... and we don't splurge on extras like eating out often.
No folks, all is not right in America. When a teacher's salary can't feed a family of three and pay for health care, we've got problems, big problems.
Those of us who are making it (with my salary, wifey and I are in the 17.8 percenter club) might not realize how hard it is, but it's hard .. damn hard. Again, when a family with ONE child can't afford HEALTH CARE on the median income ... things need to change.. seriously.
Off the top of my head here are some of the things I describe as indicative of a reduced standards of living, even though some of these are discretionary items they do add to ones standard of living or enjoyment.
Shopping at the Goodwill, Salvation Army or thrift stores for used items of clothing or household items.
Not buying much new stuff of any kind, like new clothes or electronics.
Making the old car last longer, or buying used cars or riding a bike or bus.
Taking fewer, shorter, or no vacations at all.
Can't afford to dine out much or at all.
Foregoing movies, shows, entertainment.
Selling off any of the following as not longer affordable: ATV, RV, JetSki, boat, and any hunting, fishing or camping gear.
Living in sketchier neighborhoods with lower quality schools and higher crime.
Foregoing health care and hoping everyone stays well and nothing happens.
Things like that, and more.
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My husband and I live on $43K. We have no debt. We seldom go out to eat but I try to buy organic food as much as possible. Betwn doctor visits, chiro visits, vet visits (2 dogs), dental visits, property tax, car insurance (one car 2010, one truck 1993)., home owner insurance, utilities, direct tv, cell phone, we have nothing left over. Our house is starting to cry out I need to be fixed, house is 8 years old. We just took one dog to vet for teeth cleaning and removal of turmor $900. We don't struggle but it seems like everything just costs money nowadays.
Off the top of my head here are some of the things I describe as indicative of a reduced standards of living, even though some of these are discretionary items they do add to ones standard of living or enjoyment.
Shopping at the Goodwill, Salvation Army or thrift stores for used items of clothing or household items.
Not buying much new stuff of any kind, like new clothes or electronics.
Making the old car last longer, or buying used cars or riding a bike or bus.
Taking fewer, shorter, or no vacations at all.
Can't afford to dine out much or at all.
Foregoing movies, shows, entertainment.
Selling off any of the following as not longer affordable: ATV, RV, JetSki, boat, and any hunting, fishing or camping gear.
Living in sketchier neighborhoods with lower quality schools and higher crime.
Foregoing health care and hoping everyone stays well and nothing happens.
Things like that, and more.
A lot of these "sacrifices" are pretty big luxuries. I have a hard time feeling bad for anyone who has to sell an RV or a boat as a sacrifice. Even ATV's, jetskis, and hunting gear can be pretty pricey.
I've always bought used cars and taken cheap vacations, and never felt my standard of living was in jeopardy. I even take pleasure in finding the best deal I can on big ticket items like cars and TV's. There are some good prices out there for some pretty nice stuff.
The only things from the list I'd consider as key to quality of life are neighborhood safety and health care. Maybe having to shop at a thrift store, as well...which is why I don't think one should hate too much on Walmart.
"-61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.
-A staggering 43 percent of Americans have less than $10,000 saved up for retirement.
-More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying."
Vinsanity, yes, I consider many of those things to be luxuries, as you do, but they ARE part of what makes up a better standard of living for millions of people and families.
Drive by any storage lot in this country and you'll see hundreds of RV's lined up, most only used a few weeks per year; a huge waste of capital that could be invested in something that grows in value not something that depreciates quickly.
If I wanted to spend $100k for a good RV, I'd invest it and travel on the dividends received. There are stocks paying 4% to 6% dividends, or $4k to $6k per year in dividends per $100k of investment. At $200.00 per night for a fine hotel, that's THIRTY nights per year paid for by dividends without even touching capital. But spend $100k for an RV and in 3 years it might be worth only $50k if one is lucky. I know I'm preaching to the choir, but that's how I decide how to use my money and how more people should consider things. Still, as the middle class shrinks, you'll see RV's sit unused or sold to generate cash.
One more thing that many people will lose are pets, the expense of which was mentioned by smilinpretty. I know people who paid $5000 to have their dog's hips replaced. Me, I'd put that pet down before I pay that for canine hip surgery, but that's "standard of living" to many citizens. During this great recession, animal shelters are doing a booming business taking in the pets that many people can no longer afford to keep, and here in COLO that means horse rescues are full too.
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Government encourages the rv problem by allowing payments on them to be treated as mortgage payments or some such. This allows the salesmen to show a big tax deduction to the potential buyer and act like its a real savings to be paying for one of these things on installments. The companies that make them make their money off financing them.
But yeah if a person thinks having an rv or a jet ski is as important as paying for their health care then its not hard to see why that person might have financial troubles.
"-61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.
-A staggering 43 percent of Americans have less than $10,000 saved up for retirement.
-More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying."
You know, that quote only tells part of the story. It doesn't talk about what kind of a lifestyle they expect. If you look at the living space and discretionary spending of someone in Europe, you'll start to see that the middle class here lives pretty fancy in comparison.
Maybe if they 40k a year guy got an 800 dollar/month apartment, didn't get cable, internet, cell phone...if he wore the same clothes for years...and didn't eat out every five seconds, he could do pretty good with savings, health care, etc.
You've decided luxuries are necessities...you've strayed from what you truly NEED in life and how the rest of the world lives...you've bought into the media hype of what you NEED to be happy...
I lived on 34K (before taxes) working 80 to 100 hours a week, split rent on a $1100/month living space, had a tiny car payment, and managed just fine - piled money into savings, ate well, and even belonged to a gym. Full health care coverage that I paid for, too...
Now that I make over ten times that much, I still find myself questioning every purchase, buying wholesale and generic, not updating phones/appliances/furniture/clothes until they are completely worn out...
Let's not allow people to continually make immature financial decisions and then run around claiming the whole system needs to be overhauled. It can be done - you just don't want to do it.
I do not understand people who are always complaining the middle class dream is dead, it is alive and well.
It's good to know you are both doing well, but don't think that is true for everyone. The dream isn't dead, but Middle Class America is definitely failing. According to Professor G. William Domhoff, of University of California at Santa Cruz:
"average Americans have been hit much harder than wealthy Americans. Edward Wolff, the economist we draw upon the most in this document, concludes that there has been an "astounding" 36.1% drop in the wealth (marketable assets) of the median household since the peak of the housing bubble in 2007. By contrast, the wealth of the top 1% of households dropped by far less: just 11.1%. So as of April 2010, it looks like the wealth distribution is even more unequal than it was in 2007. (See Wolff, 2010 for more details.)"
Don't fall into the trap of thinking that as long as you have it good, all is well. If we do not watch out for each other, when it is we that are in need, the others will be gone.
Maybe if they 40k a year guy got an 800 dollar/month apartment, didn't get cable, internet, cell phone...
Some employers require new hires to have internet and phone access at home, in case they may need to do work from home due to an inability to get to the office (due to weather or whatever else).
Internet access may have been a luxury 15 years ago, but you're at a big disadvantage in the modern economy if you don't have your own continuous, personal, private connection.
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