What is middle class? (Orange, Rancho Santa Margarita: rent, health insurance, condo)

[k374]

Not statistically but your own definition of what it takes to be "middle class" in Orange County per the American dream. To get more specific here is the deifnition:

- average family size of 4
- couple of family vacations a year including perhaps 1 international vacation
- decently sized house in the suburbs with good schools
- 2 decent cars
- having the option for your kids to pursue extra-curricular activities
- able to pursue a hobby or two considered reasonable
- able to save comfortably for retirement and have a good stash of emergency savings to tide through a downturn

Edit: 3rd poll option should read $250,000-300,000

[nmguy]

[quote=k374;36392127]Not statistically but your own definition of what it takes to be "middle class" in Orange County per the American dream. To get more specific here is the deifnition:

- average family size of 4
- couple of family vacations a year including perhaps 1 international vacation
- decently sized house in the suburbs with good schools
- 2 decent cars
- having the option for your kids to pursue extra-curricular activities
- able to pursue a hobby or two considered reasonable
- able to save comfortably for retirement and have a good stash of emergency savings to tide through a downturn


The components you list are all valid. What about adding the cost of college? Could a middle class family afford to put two kids through college in addition to what you have listed?

[saibot]

I am never clear on these types of posts if they are referring to someone who "already lives" in the location (and perhaps bought a home during a market downturn) or someone who is "moving in" and needs to find a place to live. My family of 5 is in the first situation, so we could get by with an income of much less than a family who is new to OC. We could do all those things listed with $150-200k. To move in to my area of south OC, I think $250k would be the minimum.

[LuvSouthOC]

Does this assume ramen noodles and pork n' beans (not putting down baked beans, love English breakfast)?

It is possible to live here, thrive here and make less than 200K. It is called a budget, people!

[k374]

nope, the assumption is that they are not homeowners and are starting out. Add the following in as well:

- college tuition for kids
- some college debt to be repaid

and no, being middle class in the richest country on earth does not mean eating ramen noodles everyday

[SoCal25]

I have to think people are doing ok on less, overall less than 20% of OC households have incomes >150k. I'm pretty sure more than 20% of households would say they're living a middle class life style. Granted most people don't consider an annual international vacation a minimum requirement for a middle class life style.

[LuvSouthOC]

Originally Posted by saibot

I am never clear on these types of posts if they are referring to someone who "already lives" in the location (and perhaps bought a home during a market downturn) or someone who is "moving in" and needs to find a place to live. My family of 5 is in the first situation, so we could get by with an income of much less than a family who is new to OC. We could do all those things listed with $150-200k. To move in to my area of south OC, I think $250k would be the minimum.

Wait...You live in Rancho Santa Margarita and you reckon it would it take 250,000 for a family to live there, as a minimum? If so, we are due for a crash.

[saibot]

Originally Posted by LuvSouthOC

Wait...You live in Rancho Santa Margarita and you reckon it would it take 250,000 for a family to live there, as a minimum? If so, we are due for a crash.

Look at the criteria. To move in, right now, to a "decently sized house" (not townhouse or condo), raise two kids with the expectation that you'll be paying for their college education, take a couple of vacations (including an international vacation!) per year, and all the rest of it, and still have plenty to save for retirement and put away for emergencies, yep.

Just the house alone... We bought our small, low-end house (1300 sq feet) for $160k back in the day. Now it's estimated at over $500k. I wouldn't want to be moving into this area, looking for a house to buy, having all the other expenses listed, with an income under $250k. And, frankly, I wouldn't want this slightly crummy house for $500k. I would want a better house. Property taxes are high out here, too, which is one of the main reasons we haven't moved. To get into a house with even one more bedroom would triple our property tax.

Maybe my idea of "saving comfortably for retirement" and having "a good stash of emergency savings" is more than others! I don't like living paycheck to paycheck. And let's face it, if you make $250k, the government is taking a huge cut in taxes right off the top, so there is that to consider too.

[saibot]

I will throw out a few actual numbers and correct me if any of my observations seem unreasonable.

We are self-employed, but our monthly income is basically fixed at $15,000 ($180,000/year). According to the poll, most people would consider us solidly in the “middle class" category.

Of that $15,000, $7000/mo. goes for federal & state taxes. We pay estimated taxes quarterly.
$1580 for our mortgage + property tax
$2770 payment to the person we purchased our business from (may be comparable to someone else’s college loan / credit card debt / car payments etc.--we don't have those)

That leaves $3650/mo. for food, gas, utilities, house & car maintenance, children’s schools and activities, and everything else life throws at us. Health insurance is paid by the business, but counts as income and increases our tax rate although we never see the money. We have such a huge deductible ($8000) that we wind up paying for all medical expenses out of pocket anyway.

Consider a family with an income of $180K that just moved into our area. They rent a house comparable to ours, but they are paying at least $2500, or $1000 per month more than we are, in rent. Very likely they would have a car payment, credit card debt, college loans, or all three. If they need to pay for health insurance, that’s another $1000/mo and at this income level there are no subsidies. Doesn't take long to be down to $2000/mo after the bills are paid. $500 a week for a family of four, and from that they’re supposed to save for retirement and college for the kids and take international vacations?

[k374]

Originally Posted by SoCal25

Granted most people don't consider an annual international vacation a minimum requirement for a middle class life style.

I am on a dating site (OKCupid) and go through many profiles of women...virtually 90% of them have traveled extensively to many many countries. So I know people are traveling a ton...way more than 1 international vacation a year. And these are very middle class 27-37 year old women. Granted these are single women but are you saying that people don't take international vacations once they have families? Simply and unaffordable option?