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I live in an inexpensive area of the Midwest. While it is possible to buy a house with three bedrooms that is not a shack or in a slum for 75K, I agree that it would be very difficult to have two kids and 2 cars on that income. If your wife worked part time, and earned another 10k things would still be very tight and you would absolutely need an extra car, insurance, work clothes, gas and child care.
Yes, it certainly would be a "hand to mouth" existence. But better than on the coasts. At least they could own a home, go to a lake or an amusement park in the summer. Some semblance of middle class.
The only "bootstraps" that could be pulled would be through education. If mom or dad went to a community college to get a job in an allied health care field (IT is glutted and you have to have a connection, they can pick who they want and when they do, it will be the guy with a BS) - because that is what is needed in our area. Health care workers.
We need service workers - retail workers, for example. But no one can live on $10 an hour.
Not even here.
And those are the jobs that have been "created" in the last decade. 10.00 per hour. That's 20,000 bucks per year if you work full time. Can't be done for a family. Or even an adult not living at home.
I think it would have been helpful to control for cost of living when determining what is middle income.
Do you live in a cheap area? I do. Here is what my monthly expenses would look like for me if I were single.
Assuming that is gross your take home would be about $20,500/yr Or $1,708/month
Rent: $500
Food: $250
Health Insurance: $45
Car: $150
Car Insurance: $65
Gas: $50
Utilities: $150
Cell Phone: $50
Total: $1,260
Left: $448
Seems middle income to me if you are able to take care of basic expenses and still have 25-30% of your take home left at the end of each month. Definitely not hand to mouth.
Edit: That's honestly what my expenses look like right now if you considered my wife and I roommates and we split all of our costs right down the middle.
I used to live in Texas which is one of the cheaper states to live in.
Your transportation expense is not realistic. You *can* find housing in the $500 a month range WAY outside the cities which is where all the jobs are.
Ie: You could pay $500ish (probably closer to $600) to live in La Vernia, TX, and commute to San Antonio. It's 29 miles / 38 minutes on a no-traffic day. On a traffic day more realistically 55 minutes.
I used to live like what you're saying and transportation expense was more realistically in the $300 a month range, not counting the actual car payment. As you said, a reliable entry level used car would cost you around $150 a month. Don't forget that at that level of commute (60-80 miles a day) you'll need more oil changes, tire rotations, replacements, etc... to keep that car rolling. My experience is that a car will cost you between 100-150 a month no matter what. I have a 1988 truck that I paid $1200 for, but averaging out its maintenance and repair costs over the year, it comes out to about $110 a month to keep it rolling. New or late model you have payments. Used & cheap you'll have repairs.
Cell-phone is more realistically $70 a month. Food is probably closer to $300 a month unless you're eating poorly. I used to live on about $150 a month for food but that was literally eating a lot of cheap carbs every day - rice, pasta, etc.. which wasn't very healthy. My wife no longer allows me to eat like that.
That leaves you pretty much nothing left over to handle anything else. In my experience an individual HAS to make around $30,000 to have anything left over. Over 30K you start to have some breathing room, although "middle class" needs to be around $45-50K. Below that, home ownership, etc... is still out of the question.
Yes, if the alternative was a useless college degree. That worked for me. I realized after 2 years that the Fine Arts Degree I was pursuing would be virtually worthless, so I found a trade school. Still work in that trade, and make a fine living.
Fine Arts has never paid well enough on average as a degree. Yes, you have outstanding examples in music, arts, architecture and so forth who do well to very but 99.9% of that is talent. The rest is luck and you don't need a degree for either.
Suppose it does sound impressive for an architect to have a degree from a top school. But there are also many with said BFA who are barely earning a living in their chosen field.
I used to live in Texas which is one of the cheaper states to live in.
Your transportation expense is not realistic. You *can* find housing in the $500 a month range WAY outside the cities which is where all the jobs are.
Ie: You could pay $500ish (probably closer to $600) to live in La Vernia, TX, and commute to San Antonio. It's 29 miles / 38 minutes on a no-traffic day. On a traffic day more realistically 55 minutes.
I used to live like what you're saying and transportation expense was more realistically in the $300 a month range, not counting the actual car payment. As you said, a reliable entry level used car would cost you around $150 a month. Don't forget that at that level of commute (60-80 miles a day) you'll need more oil changes, tire rotations, replacements, etc... to keep that car rolling. My experience is that a car will cost you between 100-150 a month no matter what. I have a 1988 truck that I paid $1200 for, but averaging out its maintenance and repair costs over the year, it comes out to about $110 a month to keep it rolling. New or late model you have payments. Used & cheap you'll have repairs.
Cell-phone is more realistically $70 a month. Food is probably closer to $300 a month unless you're eating poorly. I used to live on about $150 a month for food but that was literally eating a lot of cheap carbs every day - rice, pasta, etc.. which wasn't very healthy. My wife no longer allows me to eat like that.
That leaves you pretty much nothing left over to handle anything else. In my experience an individual HAS to make around $30,000 to have anything left over. Over 30K you start to have some breathing room, although "middle class" needs to be around $45-50K. Below that, home ownership, etc... is still out of the question.
I find it hilarious how people are arguing with me. Where I live I can find a 1 bedroom apartment 20 miles from where I work. I currently pay $58/month for 2 cell phones with unlimited minutes and 10gbs a month. I wasn't talking about where you live I was talking about where I live. I currently pay about $350-400 for 2 people to eat and we eat very well.
My original response was to the person that said it was not possible to live anything but hand to mouth anywhere on that income. I simply provided an example of a place you can.
On a side this has made me feel so much better, it appears a lot of you are getting screwed on health insurance, car insurance, rent, cell phones, food, etc.
Like I said If you split my costs in half right now (my wife and I) this is what I currently live on with another $100/person for entertainment, so about $3k/month/2 or $1.5k/person.
This is a cute, well-maintained little home in a Rust Belt about half an hour from the far northside of the Indianapolis city limits. There are several towns like Anderson (Kokomo, Muncie) that are somewhat commutable to Indy for jobs.
With that said, that budget left out things like renters insurance. It also didn't include any money for recreation at all. People making $10-$12/hr are more likely to run into unexpected big expenses they can't cover than people making higher incomes.
$10-$12/hr is, at best, working class. With kids or in many areas, it's poor.
That is a cute little house, and that is exactly the the kind we have around here. (Ohio) But I totally agree, this whole scenario would be tight. That was the type of house I was referring to that are in nice safe areas, near cities with work. One the coasts to could add $200,000 or more to the price.
I don't know how you feel about this, but I think people in service occupations should be paid a living wage. Someone has to work in a discount store, as a janitor, or a receptionist.
I think the minimum wage should be a living wage.
On the other hand, people need to live where they can afford. Can't afford Connecticut or California? Check out the Midwest.
Fine Arts has never paid well enough on average as a degree. Yes, you have outstanding examples in music, arts, architecture and so forth who do well to very but 99.9% of that is talent. The rest is luck and you don't need a degree for either.
Suppose it does sound impressive for an architect to have a degree from a top school. But there are also many with said BFA who are barely earning a living in their chosen field.
Fine arts isn't always "worthless". One of my kids has a BFA and an MFA and a tenured position at a large Midwestern university. He an his wife also run a small gallery.
It's a bad major if you are a bad artist. But then accounting is a bad major for anyone who is not interested in, or does not do well with numbers.
There are different types of intelligence.
I'm also no fan of ACA, but when were you in high school? I was paying $1,300 a month for health coverage for a family of 4 while self employed. It was also the worst plan I ever had. It's steadily getting worse over the last few years. I know many people who's company's have dropped there health plans, and have been ACA for a far worse product. So as usual they screwed it up just like everyone new they would. We couldn't agree more on that.
I was working full time at Ace is the Place right around '95. They offered a pretty comparable policy through Kaiser as I was covered under by my parents since i was still only 17.
Fast forward to 2013 i think, (or was it 2012?) just before the crazy ACA went into effect. I had a pretty good plan through Kaiser that was not bad for someone in my position. It was $158/mo, $2700 deductable. This was at the end of the year. The most comparable policy that I was going to be forced into temporarily was ~$470/mo, ~ $4500 deductable. I let it lapse. I refuse to pay that kind of cash for a crappier policy.
I could continue with examples of how ObummerCare is an absolute trainwreck of a "tax", but i guess this thread isnt about that.
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