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I'd really like to see numbers run on the BOS-WASH corridor and the Pacific coast. That's where the jobs are and where the people live.
Why do people say the above? There are plenty of jobs outside of these areas and plenty that pay very well. Denver, St. Louis, Phoenix, Kansas City, Dallas, Houston, Minneapolis, Nashville, Memphis, Atlanta, Tampa, Pittsburgh, Cincinatti, etc. There are plenty of jobs that pay very well in these cities and the cost of living is a small fraction of the cities you are referring to.
The people who typically say this grew up in those areas and seem to think that the above statement is true, but it really is not even close. If you want to make 100k for a basic desk job, you are probably right, but at the same time when your house costs 600k you might be better off making 50-60k in an area of the country where that same house costs 150-250k.
However, I do agree that 17k could be around the median in very expensive cities, but then again my thoughts of the American dream maybe were more Leave it to Beaver style with the 1.5k sq ft house, the white picket fence in a suburb. So, that lead me more into the midwest suburbs of KC, STL, Nashville, Denver, etc. Plus, hopefully if you are in a city like Boston, San Fran, NYC, Chicago, etc. you don't need to spend 11k/yr on a car.
Why do people say the above? There are plenty of jobs outside of these areas and plenty that pay very well. Denver, St. Louis, Phoenix, Kansas City, Dallas, Houston, Minneapolis, Nashville, Memphis, Atlanta, Tampa, Pittsburgh, Cincinatti, etc. There are plenty of jobs that pay very well in these cities and the cost of living is a small fraction of the cities you are referring to.
The people who typically say this grew up in those areas and seem to think that the above statement is true, but it really is not even close. If you want to make 100k for a basic desk job, you are probably right, but at the same time when your house costs 600k you might be better off making 50-60k in an area of the country where that same house costs 150-250k.
However, I do agree that 17k could be around the median in very expensive cities, but then again my thoughts of the American dream maybe were more Leave it to Beaver style with the 1.5k sq ft house, the white picket fence in a suburb. So, that lead me more into the midwest suburbs of KC, STL, Nashville, Denver, etc. Plus, hopefully if you are in a city like Boston, San Fran, NYC, Chicago, etc. you don't need to spend 11k/yr on a car.
Those are mostly nice cities with a low COL and I guess there's entry-level to mid-level opportunity there. I wouldn't know from personal experience. For the top paying jobs, mid six figures and above, you usually have to go to expensive cities. But since the discussion is about middle-class people buying middle-priced houses, your suggestion is sensible.
I still think both articles are worthless in part because of the lack of context. However I do agree how articles such as the one under discussion can be harmful in how it frames peoples' perception. Loosely defined terms around loose figures with no context can lead to incorrect conclusions.
It would be nice to see the study focus on a particular specific context (locale and type of family, home, car). From that one can make inferences against different COL areas and family situations. At least then, we know what we are dealing with; high vs low COL, size of family, and expectations.
I still think both articles are worthless in part because of the lack of context. However I do agree how articles such as the one under discussion can be harmful in how it frames peoples' perception. Loosely defined terms around loose figures with no context can lead to incorrect conclusions.
It would be nice to see the study focus on a particular specific context (locale and type of family, home, car). From that one can make inferences against different COL areas and family situations. At least then, we know what we are dealing with; high vs low COL, size of family, and expectations.
How you pay your bills is not the determinant of how you live or plan your financial life.
Mystical's post was referring to how people EVALUATE and PLAN their financial life.
For example, I take all my expenses and annualize them; then I make a 2 or three-year plan as those figures relate to my (expected or needed) income over that time. I can then anticipate and plan for major expenditures and savings more accurately. I calculate monthly expenses as $yearly-costs/12 for ordinary budgeting purposes. I factor major expenses as $$cost/months till funds are needed = monthly savings required.
These are simple examples - there are many ways to slice the baloney.
Obviously if an unexpected cost or windfall happens the number/expectations must be revised as well.
So if you're going to buy a $300,000 house in one year, then it "costs" $25,000/month?
Yes.. this one seems a bit high. My wife is very good about shopping for food. 5 person family including 2 adults, a seven year old, and 2 babies is running us about $7.5k per year (Shop rite and Costco). From my neighbors (they had triplet boys), they said I should only expect that to go higher though. I guess boys eat a lot... lucky me... lol
I too think the American dream died a while back.... :-( Ability to afford a modest home starting on a middle lower income family is eroding many years ago. We are now talking middle-upper as the typical now.. or supplementing with dual incomes. I'm not that old but I recall when families discussed the option of dual income as a way to fund nice things (college for kids, vacations, nicer cars etc) rather than a necessity as it is today. Medical expenses.. yes... should be expensive but it shouldn't bankrupt families or result in extremely high premiums. It shouldn't cause people to abandon or abandon the (often natural want/need) to have children because its so expensive. Its now eroding on the ability for middle class families ability to afford a college education which is imperative for opportunity (for those that seek it). No opportunity... less ability to move up the ladder which IMO is a bigger measure of the American Dream. I'm a firm believer that every year we graduate a number of truly talented people. Rather than start new innovations (and business) they are "forced" to work for someone else because of the student debt. I see talented driven people start businesses but rarely do I see a hugely indebted person start one. No wonder the article didn't include college debt in their idealized picture of a family living the "American Dream"
Cars have grown bigger in the last couple decades, meaning more gas, depreciation, insurance, and maintenance and repair cost.
Houses have grown bigger also and become correspondingly costly - the house itself, property taxes, insurance, maintenance, repairs, and utilities. I think one can easily make the case that the American Dream wouldn't seem so out of reach if the things people want didn't grow bigger every year...
Cars really aren't a necessity. That is most people's first mistake.
For some, its required for commute to work. Its impossible to get to my job without one. 34 miles in each direction. To commute via public transportation would require a Taxi, Bus, Transfer, another Bus and a 20 minute walk. Walking distance range from my office are properties in the 1+ million. If a family can share a single vehicle, I think it is great but it doesn't always work out that way. I certainly can't expect that my wife lug around 2 babies and carry enough groceries for a 5 person family on her own either.
We are also talking about the American Dream in which there is an assumption of some discretionary income coupled with modest amount of retirement/savings. Of course, living a modest lifestyle doesn't necessarily mean driving a BMW or Mercedes either. How "modest" of a lifestyle in this so called "American Dream" is up in the air since the article doesn't provide any context; the root of why the article carries little content... seems to be written for the "shock" factor.
I wouldn't be surprised if the author first came up with a number. Not enough for people to call B.S. Not low enough that the article goes unnoticed. Then simply "looked" for the statistical data to "prove" that number.
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