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I work for my parents and always have. One day I plan to take over the small family business which is a plus. According to government statistics the median household income in my city, in NW Missouri, is around 41K. My income is about 40K a year and my wife's is another 22K a year.
So according to this our household income is above the median. I wanted to get some other people opinions though because it seems like money is pretty tight even though we have our small house paid for.
Well your household income is 50% above average for your area, so I would think that is pretty good. If your having a hard time getting by without a house payment I would look at all of your expenses.
Like what Long101 said:
The income end of the budget is less than half of the story.
For comparison though, $40,000 is about median for a new college grad's 1st job now...
and about the minimum to even pretend to have a middle class lifestyle.
If you add a spouse, kids, mortgages, saving/retirement plan, saving for kids education ito the mix?
Well, it'll get real tough real fast.
Your wife's income should be going into savings/investment - 100% of her net.
Do the rest with your income alone.
Where we live now, $40K would qualify you for food stamps, other places we have lived, it is a very comfortable income-apartments rented for $450/month, a nice house could be bought for under $100,00, etc. Hard to answer without more details.
Like others said, the income is just half the story. The expenses is the other half. You could be making 100k a year and still be struggling if you have a lot of college loans, high cost of living, car loan etc.
You've already got a leg up on a lot of folks by having your house paid off. There's not many that can say that
I work for my parents and always have. One day I plan to take over the small family business which is a plus. According to government statistics the median household income in my city, in NW Missouri, is around 41K. My income is about 40K a year and my wife's is another 22K a year.
So according to this our household income is above the median. I wanted to get some other people opinions though because it seems like money is pretty tight even though we have our small house paid for.
I am 37 too.
There is no magic income level where your money doesn't feel tight. We typically don't even notice how quickly our expectations go up as our income goes up.
So according to this our household income is above the median.
Median is a very misleading word. Median is the average of all the people with no income living on government assistance, the wealthy with mansions private jets and everyone else. If your state has more people living below the poverty line and fewer millionaires, the median income amount could be lower. That doesn't have anything to do with the amount of money required to be considered middle class let alone doing well. This is why you often hear people complaining that they make 120k or more a year but are always short money, yes they are way above median, but are they really middle class?
Median is a very misleading word. Median is the average of all the people with no income living on government assistance, the wealthy with mansions private jets and everyone else. If your state has more people living below the poverty line and fewer millionaires, the median income amount could be lower. That doesn't have anything to do with the amount of money required to be considered middle class let alone doing well. This is why you often hear people complaining that they make 120k or more a year but are always short money, yes they are way above median, but are they really middle class?
Your math and definitions are way off. Please check what you are talking about..
Median is not average. It is ironic that the problem that you described is, in fact,the limitations of using an average statistics and median may be the right way to look at the data.
Median is calculated by simply sorting the income of the people and picking the middle value (if poulation size is odd, then you just pick the value in the middle, or if population size is even you take the average of the two values in the middle). It does what it is supposed to do: tell you half of the people (by number) makes more or less than that amount.
If the median income of a region is 60K or even 90K and somebody earning 120K is short then the problem of figuring out, is theirs. For one they are earning more than the majority of the people in their place. So, why are they in that spot? This is the question that should be answered by them. Is the data that the median is calculated from flawed? Possible, but I doubt that is the case for every city.
Median income just give you the perspective of how other people stack up compared to you. And we know from several social researches that people tend to be happy not by the actual dollar number they earn but rather by how much above their surrounding they are able to earn. Given that fact, median is a pretty good statistics to use
Median is a very misleading word. Median is the average of all the people with no income living on government assistance, the wealthy with mansions private jets and everyone else.?
That is NOT the definition of median. Mean is the average. Median is the exact mid-point value.
For example, a group of people have the following incomes:
$10k
$18k
$32k
$46k
$70k
$120k
$700k
The median is $46k, but the average/ mean is $142k even though only one of the 7 people make over the average. Median is a pretty good gauge of how one person stacks up in a group because the outlying numbers (government assistance/ food stamp folks as well as gazillionaires) only count once instead of being able to distort an entire group's statistics.
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