I ran across this interesting article about how to tell if you are middle class. Here is the link:
It's an interesting read and I wonder what you think about it.
Here is the run down:
*Middle class = $50,000 to $123,000 a year for family of four
*Home is worth $231,000, and makes$17,600 in mortgage payments
* Spends $12,400 per year on two medium-sized sedans
*Saves $4,100 for college expenses for two kids
*Saves $2,600 per year for retirement
*Spends $14,200 a year on living expenses
*net worth of about $84,00
I thought this was interesting:
"A median-income family that saved 3.2 percent of its income—roughly equivalent to the national saving rate—would sock away nearly $2,600 per year for retirement. Of course many families don't hit even that modest goal, and stock-market losses over the last several years have further shrunk the national nest egg."
I was flabbergasted at the $2,600 a year figure. That is so low.
I will say that we are squarely in the middle class income area, have two kids and seem like the "typical" demographic they are going for.
So here's how we stack up to average:
Our house is 1443 square feet and cost $154,000 (below average),we have no car payment at the moment (way below average), we put aside about $9,000 for college for our two kids (above average), no annual vacation, and we save about $20,000 a year for retirement in 401ks and IRAs. We both work, although I freelance so we don't have to pay for daycare.
How do you stack up?
March 25th, 2010 at 05:15 pm 1269537333
March 25th, 2010 at 05:52 pm 1269539531
March 25th, 2010 at 05:59 pm 1269539968
And that's just it. I would loosely interpret numbers like that to mean people are trying to buy too much relative to what they are bringing in. So, no wonder the saving is so low.
In that context, the net worth does seem rather high. However, I'll bet it's all house equity, and given the recent housing bubble, I really doubt this is a practical number to rely on. Not that it's a good idea to leverage against the house anyways....
Well, I guess the only good news is that I think I stack up fairly well also. Well, as my own person with one income, I don't quite stack up, even though I would be above average in savings and lowering expenses. However, if you were to half those figures (to adjust for dual-income), then I would look substantially better in every way.
Well, either way, I can only do what I can.
March 25th, 2010 at 06:26 pm 1269541589
Home: Worth $240k, but we're not spending that much on a mortgage (large down payments are good things). So . . . better than average
Car: No car payments. Spend $760 for fuel pump . . . so, better than average.
College: $5k for one child, so way better than average
Retirement: Way better than average
Living expenses: average
Net worth: better than average.
How do we stack up: Far better than the average middle class family. No doubt that means we'll be punished more because of our success.
March 25th, 2010 at 07:00 pm 1269543630
No debt except one car payment. Our net worth is much much better than average.
March 25th, 2010 at 07:02 pm 1269543744
March 25th, 2010 at 07:19 pm 1269544741
home---worth about $120,000.00---little over $6000.00 anually in house payments but pay two extra princ. pymts. each month.
no car payments
no college savings as of yet. need to get on that!
retirement---at 5% as we are building our emergency fund.
living expenses---below aveerage
net worth---above average
March 25th, 2010 at 07:56 pm 1269546962
March 25th, 2010 at 10:53 pm 1269557584
Income - higher than median
Housing Expense - lower, but value of homes higher
Housing Size - smaller than average
Medical Expenses - much lower
Cars - much lower
Vacations - much higher
Savings (not college or retirement, though) - higher
Net worth - Higher than average
Spending - Higher
Free time - We're retired!