Middle Class

[PrincessSuzanne]

I have heard so much about the "Middle Class" so much lately and found out yesterday that I am not a part of it as previously thought. Dh and I combined make about $40,000 give or take, we own my grandparents modest home, we have 2 vehicles, no children, and very little debt and are still able to take several vacations or short trips each year. I guess the standards have changed over the years and I guess I fall in the "Lower Class" now. When did that happen. I work with people who have NOTHING, I thought that was "Lower Class".

Where do you feel you fit in the scenario? I feel like I am very rich, guess money really doesn't make the man, or woman in my case

SUzanne

 

[Christine]

I find it hard how, in this country, anyone can define "middle class." The cost of living in each different section of the countries varies so wildly, it is incredible.

You will probably NOT believe me, but I live right outside Washington DC. Combined, my husband and I make closer to $200,000 per year. We live in a modest home for this area, 2 cars that we pay for, one that is paid, 2 children, and yet we cannot afford vacations every year. Let me tell you, YOU are living better than me right now!!!

So, how can we really define middle class in this country based on income levels alone. You just can't. Because of that, I also feel that some of the tax rates are not fair (are they ever??). I mean, why should people who live in areas, such as NY, DC, LA, pay higher taxes because the *have* to make higher wages just to live. Should cost of living be factored in some way.

But, I would have to say that your combined income living in the DC area would probably land you on the street. I don't know how you would even survive.

 

[DawnM]

I really feel it can have little to do with how much you make.

If you make $100,000/year, but 60% of it goes towards debt per year, not including taxes you have to pay, then you add in the cost of living expenses and vacations, etc....are you really better off than someone who makes $40,000 and owns a house outright and has paid for cars? I really don't think so.

The problem isn't income, it is living within or below your means, most people don't.

Dawn

 

[Christine]

I really feel it can have little to do with how much you make.

If you make $100,000/year, but 60% of it goes towards debt per year, not including taxes you have to pay, then you add in the cost of living expenses and vacations, etc....are you really better off than someone who makes $40,000 and owns a house outright and has paid for cars? I really don't think so.

The problem isn't income, it is living within or below your means, most people don't.

Dawn

Hmmm....I don't know if I agree with that. If someone has 60% of their pay going towards "debt", that means that they have *something* for that money--be it cars, a swimming pool, clothes from Saks, etc. They have spent that money. Because they now have to pay that money back, does not put them in a lower class. I think you can be below middle class and still live within or below your means. No matter how well you manage your money, it can't make you middle class or upper middle class, etc. Now, I still can't define middle class, but I'm not sure it's about how well you manage your money.

 

[PrincessSuzanne]

Sometimes, I live beyond my means, and I have been up to my eyeballs in debt, but I learned from my mistakes and fixed them and live differently. DH and I only had 1 auto until Aug, when my mom passed away, we didn't need 2 because she drove me to work. I inherited her mini van, which is paid for. When I had to buy a car last year, I got a modest car and worked out a great deal, I will never buy brand new, and I decided to pay it of when I got mom life insurance. We bought my grandparents house at a great price, but definitely within the price of comps in the area and because of the sentimentality for me. We live in an area that has seen some growth within the last couple of years with the addition of the auto plants going up

I am a Medical Assistant and I make more than the normal Medical Assistant in my area, because of the type of work I do and probably because our home office is in another state. If we would move, DH could make more money, but with his rocky job history, I am not willing to take that chance. I make more than twice what he does, so we are staying put.

I always thought that you were classified by the amount of money you made for your area. I really don't think you can for my area, because I live in an older neighborhood, nice older houses, that are backed by some of the most expensive homes in the area. If you got down the street that was cut horizontally to ours, there is a real mansion that I am sure cost several million to build, but you can go a mile down the street and see houses that are falling in.

Christine, I have to agree with you, because I can go 1 hour north to Atlanta and not even be able to afford a one bedroom apartment in a decent neighborhood. I have an aunt that lives in Fayetteville, GA and she and her husband live with their oldest son, their daughter, her husband and their 2 children in a mobile home, and I understand they still struggle. There is no need for it, but they hae done it to themselves by the way they have chosen to live. They both retired after more than 30 years on their job, because it was being done away with, her husband got another job and they both draw their retirement and their son has a great job and they almost live like bums. I just don't understand it.


I really don't know how this is figured, personally, but as I said I feel wealthy and I guess most of it isn't monetary wealth.

Suzanne

 

[kirbsam]

owning your home and not having kids, wipes out two of the biggest expenses known to mankind.

 

[disney1990]

I find it hard how, in this country, anyone can define "middle class." The cost of living in each different section of the countries varies so wildly, it is incredible.

You will probably NOT believe me, but I live right outside Washington DC. Combined, my husband and I make closer to $200,000 per year. We live in a modest home for this area, 2 cars that we pay for, one that is paid, 2 children, and yet we cannot afford vacations every year. Let me tell you, YOU are living better than me right now!!!

So, how can we really define middle class in this country based on income levels alone. You just can't. Because of that, I also feel that some of the tax rates are not fair (are they ever??). I mean, why should people who live in areas, such as NY, DC, LA, pay higher taxes because the *have* to make higher wages just to live. Should cost of living be factored in some way.

But, I would have to say that your combined income living in the DC area would probably land you on the street. I don't know how you would even survive.

My DH and I also live in the DC area. We have 1 grown daughter and one in college. We have a combined income of about $50,000. We don't go out to eat, we only charge what we can afford to pay off at the end of the month, we bought a house that we could afford to pay on only 1 salary and we take at least 2 vacations every year. We are very fugal so that we can afford to do the things we want to do.

 

[PrincessSuzanne]

owning your home and not having kids, wipes out two of the biggest expenses known to mankind.

Well, we still have 29 years to pay on that house (just bought it a year ago)and I also help one cousin with her 3 children and am currently raising my 17 year old cousin(sister to the other one). I also have 10 pets.

Suzanne

 

[PrincessSuzanne]

My DH and I also live in the DC area. We have 1 grown daughter and one in college. We have a combined income of about $50,000. We don't go out to eat, we only charge what we can afford to pay off at the end of the month, we bought a house that we could afford to pay on only 1 salary and we take at least 2 vacations every year. We are very fugal so that we can afford to do the things we want to do.

I think we sorta fit that category. We try to spend wisely, watch every dime and would rather spend our money on a vacation than stupid nick nacks/stuff that collect dust or would other wise just get thrown out or ignored. We do have some CC debt, but not much, not beyond our means.


Suzanne

 

[Forevryoung]

I really think that it depends on where you live. Around here, it's not uncommon for property taxes to be $18,000+ (not a mansion, acre of property). Where you are living that is 1/2 your salary!

I'm making around $45,000 a year and I'm wondering how I'm going to be able to move out of my parent's home and into an apartment ($1,000 plus utilities for a 1 bedroom). However, it's my first year of work and I'm not licensed till the end of the summer, which will bump up my income.

Police officers can make $100,000 around here by the time they retire. A first year teacher with a masters degree will make around $50,000.

It is amazing to me how different the cost of living and salaries are around the country. Even living in PA I could buy $25 and feed myself well for a week. Around here, the same food costs $45 or more, even buying on sale/with coupons.

 

[Christine]

My DH and I also live in the DC area. We have 1 grown daughter and one in college. We have a combined income of about $50,000. We don't go out to eat, we only charge what we can afford to pay off at the end of the month, we bought a house that we could afford to pay on only 1 salary and we take at least 2 vacations every year. We are very fugal so that we can afford to do the things we want to do.

That is amazing!!! What year did you purchase your house that you can do so on that salary if I might ask?

My house was purchased in 1994 and the mortgage is cheaper on it than most 2 bedroom apartments in my town. I honestly cannot imagine how you can do it but, admittedly, I would NOT call myself a frugal person. However, I have no credit card debt whatsoever, I do have a savings, and until a month ago, a very healthy 401K. I stash away a lot of money. But in doing so, I cannot travel to Disney every year, nor can I even pay for a week at the beach. It's every other year for us.

 

[Colleen27]

I have heard so much about the "Middle Class" so much lately and found out yesterday that I am not a part of it as previously thought. Dh and I combined make about $40,000 give or take, we own my grandparents modest home, we have 2 vehicles, no children, and very little debt and are still able to take several vacations or short trips each year. I guess the standards have changed over the years and I guess I fall in the "Lower Class" now. When did that happen. I work with people who have NOTHING, I thought that was "Lower Class".

Where do you feel you fit in the scenario? I feel like I am very rich, guess money really doesn't make the man, or woman in my case

We're in about the same place as you. We have a decidedly average income, but because of the choices we made when we were preparing to cut our income in half so that I could be home with the kids, we are able to enjoy a better lifestyle than our income alone would suggest. Our month-to-month expenses only take up half our income, and we're free to save or spend the other half as we see fit. I wouldn't say we feel rich because there are still trade-offs to be made (no Disney trip this year so we can buy a bigger home without a mortgage), but we do have more discretionary income than a typical family in our income bracket. We don't do debt, though, and that's a big part of why we're in such good shape. And I suspect that next year, without a mortgage payment, it will feel like we're somewhat rich.

We're also very blessed not to have one of the biggest stresses of being middle class with kids, because a very generous relative gave my children each pre-paid tuition contracts so we don't have to save for the full costs of their college on our own. We still save to cover room & board and in case they want to attend a private school that costs more than the plan pays out, but that's a far cry from trying to save the total cost of putting 3 kids through school.

 

[MUFFYCAT]

Christine, I believe your situation. We have 2 kids, live in NY. My DH & I both work. The income, real estate taxes, mortgage and high cost of living
makes it feel our "high salary" is a joke.
We have a DD going to college next year and only looking at city or state universities because the private are too expensive and won't get much aid.

Our house is a very modest small house yet the taxes are still $9500 and cost over $400,000.00.
This is why so many people are moving south.

 

[Christine]

Christine, I believe your situation. We have 2 kids, live in NY. My DH & I both work. The income, real estate taxes, mortgage and high cost of living
makes it feel our "high salary" is a joke.
We have a DD going to college next year and only looking at city or state universities because the private are too expensive and won't get much aid.

I also have a DD going to college next year and she would really like to go to one particular college out of state, but I cannot swing it. Also, to be fair, the county public schools and my children didn't mix well. Total chaos after 5th grade. I had to put both kids in private schools. My son's K-8 isn't too bad ($5,000 per year) but my DD's high school runs me $13,000 per year. I know, I know, I didn't *have* to do this. I actually should have spent the $$$$ a few years ago and bought "up" in the next county for better schools. Anyway, the private schools were something I never budgeted for in my early "grand planning" years and they do cost me a chunk. I like to nickname my daughter "Mercedes" and my son "BMW." They are my luxury vehicles!!!

I was lucky that I bought my house in the 90s, and my mortgage with insurance and taxes is only $1300 per month. Had I stayed in my townhouse in Maryland that I bought in 1988, it would have only been $700 a month but the minute I saw the boy next door pull out a gun while walking down the street---well, it was time to move on out.

It's almost embarrassing when I think of our combined income. I feel like I should be rolling in dough but I'm consider myself merely comfortable.

 

[PrincessSuzanne]

We Paid $75,000 for our house (my grandparents) and our taxes less than $400 for the year and our homeowners just went up to about $500/year. But living in Alabama, you do have some of the lowest property taxes in the US.

I don't know you do it and I commend you.


Suzanne

 

[MUFFYCAT]

I also have a DD going to college next year and she would really like to go to one particular college out of state, but I cannot swing it. Also, to be fair, the county public schools and my children didn't mix well. Total chaos after 5th grade. I had to put both kids in private schools. My son's K-8 isn't too bad ($5,000 per year) but my DD's high school runs me $13,000 per year. I know, I know, I didn't *have* to do this. I actually should have spent the $$$$ a few years ago and bought "up" in the next county for better schools. Anyway, the private schools were something I never budgeted for in my early "grand planning" years and they do cost me a chunk. I like to nickname my daughter "Mercedes" and my son "BMW." They are my luxury vehicles!!!

I was lucky that I bought my house in the 90s, and my mortgage with insurance and taxes is only $1300 per month. Had I stayed in my townhouse in Maryland that I bought in 1988, it would have only been $700 a month but the minute I saw the boy next door pull out a gun while walking down the street---well, it was time to move on out.

It's almost embarrassing when I think of our combined income. I feel like I should be rolling in dough but I'm consider myself merely comfortable.

You can never know how the early grand planning will turn out. I know in some circumstances private elementary and high schools are better for the children.
Maybe if you did move to the neighborhood with the better schools the cost of living there would have been much more there then where you are now.

We were thinking of trading up 8 years also. But the commute to Manhatten was longer and cost more. I'm glad we stayed. With the cost of everything I know we would be hurting more.

 

[Colleen27]

I really think that it depends on where you live. Around here, it's not uncommon for property taxes to be $18,000+ (not a mansion, acre of property). Where you are living that is 1/2 your salary!

Granted, we live in a modest home (3bedroom ranch on a 1/4 acre), but our property taxes aren't even $1800! I know salaries are higher in high cost of living areas, but it doesn't seem like they could possibly be enough higher to make up for that sort of difference.

 

[disney1990]

That is amazing!!! What year did you purchase your house that you can do so on that salary if I might ask?

My house was purchased in 1994 and the mortgage is cheaper on it than most 2 bedroom apartments in my town. I honestly cannot imagine how you can do it but, admittedly, I would NOT call myself a frugal person. However, I have no credit card debt whatsoever, I do have a savings, and until a month ago, a very healthy 401K. I stash away a lot of money. But in doing so, I cannot travel to Disney every year, nor can I even pay for a week at the beach. It's every other year for us.

We purchased our house in 1987 and paid it off in 15 years -- that's why we can do it. Our goal was to be debt free. I cannot imagine how anybody out there today can ever retire with the cost of a mortgage today. We had a fantastic investments, but they have lost so much value over the last year that I'm sick about it.

 

[disney1990]

I also have a DD going to college next year and she would really like to go to one particular college out of state, but I cannot swing it. Also, to be fair, the county public schools and my children didn't mix well. Total chaos after 5th grade. I had to put both kids in private schools. My son's K-8 isn't too bad ($5,000 per year) but my DD's high school runs me $13,000 per year. I know, I know, I didn't *have* to do this. I actually should have spent the $$$$ a few years ago and bought "up" in the next county for better schools. Anyway, the private schools were something I never budgeted for in my early "grand planning" years and they do cost me a chunk. I like to nickname my daughter "Mercedes" and my son "BMW." They are my luxury vehicles!!!

I was lucky that I bought my house in the 90s, and my mortgage with insurance and taxes is only $1300 per month. Had I stayed in my townhouse in Maryland that I bought in 1988, it would have only been $700 a month but the minute I saw the boy next door pull out a gun while walking down the street---well, it was time to move on out.

It's almost embarrassing when I think of our combined income. I feel like I should be rolling in dough but I'm consider myself merely comfortable.

I knew that we could never afford the college that our daughter wanted. So she moved out , got an apartment, went to community college and worked. She became independent of us so that she could apply for loans and grants on her own. It has worked out very well for her, but I know it's not possible for all kids to do this.

 

[Christine]

Granted, we live in a modest home (3bedroom ranch on a 1/4 acre), but our property taxes aren't even $1800! I know salaries are higher in high cost of living areas, but it doesn't seem like they could possibly be enough higher to make up for that sort of difference.

Here in Northern VA (about 30 miles outside of DC where I am) my property taxes are *only* about $4,000. Much cheaper than New York/New Jersey areas. Of course, our property values have decreased so much that this is probably lower than they have been historically, but I've always felt that our taxes in the DC area weren't too, too bad. But, you are correct in that the higher salaries don't always cover it. That's why I always think that there should be a "cost of living adjustment" on the 1040 form.