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Households Need to Earn $300,000 a Year to Live a Middle Class Lifestyle
- ohiovr 8y agoI’m not middle class but if you are thrifty and can prioritize freedom over needless expenses ie $5 cup of coffee it isn’t hard to live very comfortably in many parts of the usa. I understand owning property at all can be much more challenging in europe than it is in much of the usa mainland. Coastland and island living is going to be more expensive for various reasons.
- kristianc 8y ago> I’m not middle class but if you are thrifty and can prioritize freedom over needless expenses ie $5 cup of coffee I'm not sure how the $5 cup of coffee became the symbol of financial irresponsibility. An apartment in Midtown NYC runs about $4k a month. LIC is $2.2k. Yet for some reason we blame the coffee.
- germinalphrase 8y agoProbably a carryover from the time where upscale coffee was relatively new to the urban cores and developed some social status, but before you could buy decent coffee almost anywhere in the country (90's to early 2000's?) It was a clearly frivolous pleasure. Neee caffeine? Folgers is cheap.
- vlan0 8y ago$5 is definitely a lot of cash for a cup of actual coffee. I can purchase local freshly roasted single origin coffee at $17 for 12oz and still come out way ahead of $5 per cup. Of course you need coffee gear, but that's paid for itself over the last five years.
- sokoloff 8y agoIt started from the "Latte Factor": https://davidbach.com/latte-factor/ https://davidbach.com/latte-factor/ I do find it absurd to pay $5+ for a few ounces of hot water poured over ground beans or chopped leaves and placed into a cup with a mermaid on it, so I don't do it. I also don't think it's the root of people's money problems. However it, combined with 19 other small frivolities, is one branch of their problem in a lot of cases. (The branch being "unexamined, frequent, persistent leaks in the bucket".)
- kristianc 8y agoSure - but you're confusing what people are actually paying for when they buy a Starbucks. When people buy Starbucks, they're buying 15 minutes of time to sit in a warm cafe with friends, free WiFi, a space to work, and the labour involved in having to make the coffee for themselves. I'm still not sure it amounts to an argument why the $150 a month people would save on coffee are the root of people's money problems, or why they should give up that 19 other small frivolities just so they can afford somewhere to live.
- maxxxxx 8y ago"When people buy Starbucks, they're buying 15 minutes of time to sit in a warm cafe with friends, free WiFi, a space to work, and the labour involved in having to make the coffee for themselves." I see a lot of people do drive through. There are no friends involved and they probably can't even enjoy their drink while stuck in traffic.
- kristianc 8y ago> I see a lot of people do drive through. There are no friends involved and they probably can't even enjoy their drink while stuck in traffic. My model doesn't require me prove that every single person makes a perfectly rational economic decision when buying a Starbucks - merely that people derive more than the value of the beans and the water from consuming a Starbucks.
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- mlevental 8y agowhy are people still trying to live in manhattan? yes the trains are starting to really suck i guess but a couple of years ago (when people were still saying this) it took me 30 minutes to get door to door from brooklyn.
- kristianc 8y agoParts of Queens and Brooklyn (c.f the parts where it is easy to get the E into Manhattan) are now approaching what rents were in Manhattan a couple of years ago.
- mlevental 8y agobasically everything south of williamsburgh and east of parkslope is like 1/4-1/3 of manhattan costs. as i wrote in response to the person living in UWS: the only difference is the average skin tone.
- RhysU 8y agoBecause it's great. Source: UWS
- mlevental 8y agowhat exactly is great about UWS? i dated a woman who lived in morningside heights. it's just generic nyc things (like everywhere else). only difference between my neighborhood in brooklyn and morningside heights was the average skintone.
- qntty 8y agoPeople need to find a way to blame financial problems on the individuals involved without thinking too hard
- c22 8y agoI don't think anyone "blames the coffee", but rather identifies the coffee as something that could easily be downsized (by simply not drinking it, making it at home, or switching to a cheaper preparation). When you add in tips for the baristas a year not drinking coffee could be worth a month's rent, which is not insignificant.
- ohiovr 8y agoWell you don't need to pay 90 dollars for a cell phone service or 120 for cable, or spend as redonculous 2100 for food either. Do you really have to eat prime beef tenderloin steak every day?
- jeffdavis 8y agoIn different places different frivilous things make sense. In high-rent, high-income cities, $5 coffee isn't going to have a financial impact but a walk-in closet is ridiculous. In other areas, the opposite is true.
- cimmanom 8y agoBecause this article completely misdefines "middle class"? Being middle class doesn't mean you can afford absolutely everything you want. It just means you're financially secure enough not to have to choose between food, clothing, shelter, and healthcare with every paycheck, and to be able to save up a buffer in case of emergency. Example: $2100/mo to feed 3 people is ridiculous. Instead of buying prepared foods, cook meals. You can feed 3 people on $750/mo. If you're spending $300/wk on date night dinner, find something less expensive to do for date night. Similarly for some of the other budgets. Drive a used Honda instead of a new Volvo. Find less expensive ways to entertain yourselves. If you insist on living in an expensive housing market, accept that middle class family living in a dense city means (and has always meant) a (cramped to midwestern suburban sensibilities but quite livable) 2BR without outdoor space, not a house with a lawn; and consider renting instead of buying. Middle class living means making compromises. If you're not making compromises, that's upper class living. And yeah, that can cost $300k/yr easily.
- arcanus 8y agoAgreed. Also, start with: don't live in one of the most expensive cities in the world and expect luxuries not typically associated with urban living, such as two cars, a spacious home, etc.
- tsunamifury 8y agoI think we should come up for a new term for working high income households, something like a "City class". They make between 250-699k. They have mostly what they need but work very hard and aren't the leisure or power class that is associated with the upper. They don't have or really identify with the same money problems as the true middle class but they certainly don't have enough to spend frivioisly. They give up some things compared to the middle class in low cost cities though like yards and larger homes. They also have to pay expenses that other single income lcol dwellers don't like nannies. This seems to draw a real.line between the nonworking rich and the working well off.
- qntty 8y ago"Upper middle class"?
- ajmurmann 8y agoI think the real issue for it national debate is that the economy in different places has drifted apart so much. On one hand we have people in big cities making $300k+ and just living a normal life and we have parts of the South apparently being in a comparable living situation to the third world according to the UN. Yet we talk about it as if it's all the same. It's especially problematic for things like federal taxes.
- taneq 8y ago"Rich" vs. "wealthy"?
- truculation 8y agoMy idea of middle-class existence is a thrifty but relatively happy family life with an emphasis on education. The budget could vary enormously depending on how this is implemented.
- tonyedgecombe 8y agoMiddle-class is such a meaningless term now. US median household income is about $60K, that is the middle of the income distribution.
- ajmurmann 8y agoI think taking about financials in general terms for a place as large and as diverse as the US is a mood exercise. As the article describes the same amount of money means very different things in different parts of the US. Defining middle class by looking at the median household income is entirely meaningless for all the reasons the article describes. Many people here also have the instinct to immediately suggest to move to a place that's meant to be flown over because cost of living is lower there. The issue is that both cost and income scale to a large degree proportionally to each other. This article likely could have been titled "why middle class life now cost $40k" and be about personal finance in Baton Rouge. The real news is that $300k on one place are the equivalent of $40k in another.
- black6 8y agoMiddle-class is a function of outlook, not of income, occupation, or status. Future preference, self-discipline, social conformity, infinitely expandable material demand, and a general emphasis on externalized impersonal values are the attributes of someone in the middle class (from Carroll Quigley's 'Tragedy and Hope' from which an excerpt on the middle class can be found here: https://pastebin.com/raw/6iFPbQdp https://pastebin.com/raw/6iFPbQdp)
- sethammons 8y agoI think the key here was costal living in economic hubs. I was looking a little while back to see if I should move closer to work to reduce my super commute. For the same price as a stucco 1000sqft house with near zero yard, bars on the windows, graffiti on the building with a homeless person sleeping on the sidewalk, and being right next to the freeway, you can pick up a house literally 3 to 6x larger on 10 acres in Montana that looks like it is out of a story book. It costs much, much more to live close to the economic-hub costal cities.
- chomp 8y agoYes but I live in Houston which is coastal, and I guarantee you can live like a king on much less than this. I have a 3k SQ ft home that I'm paying $1500/mo on, and that includes interest and escrowed taxes.
- geggam 8y agobut can you make that in houston ?
- URSpider94 8y agoHouston is on a coast, but it’s not “coastal”. In this context, coastal means being on the Atlantic or Pacific Seaboard,
- harryh 8y agoThis post has a bad title. HN should change it to reflect that OP is specifically talking about living in SF or NYC. (I still have criticisms of the piece, but it's at least kiiinda understandable when talking about those two cities.)
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- gshakir 8y agoI found it surprising that the budget does not include emergency fund, gifts to charity. It does say at the end it is missing those things like that.
- RhysU 8y ago> Yes, their total tax bill is ~$17,000 more a year than today’s median household income... Glad to see the author pointed this out. Regardless of what you think of his budget, this basic taxation fact remains true.
- scarface74 8y agoHow can anyone pay any attention to yet another west coaster who lives in a bubble? https://dqydj.com/income-percentile-calculator/ https://dqydj.com/income-percentile-calculator/ If you make $300,000 a year in household income, you are making more than 98.9% of households in the US. Our household income is a little more than half that, we live in a major metropolitan city, have a 5 bedroom 3-1/2 bath house in one of the affluent counties in the country that was brand new build in 2016 that costs $320k. Our mortgage is around $2000 a month. We aren't able to max out both of our 401Ks right now, but I do max out mine and my wife works in the education system with a pension. We are a family of 3 and our grocery build is around $800 a month. We explicitly decided not to save for college. We are in a state that has practically free tuition to any public college as long as you maintain a 3.2(?) GPA. If our child can't keep that GPA in high school, why would we pay a lot of money for him to go to an expensive college? We can afford to pay tuition for four years out of pocket for him to go to a public two year college his first two years and then transfer.
- arbie 8y ago> If you make $300,000 a year in household income, you are making more than 98.9% of households in the US. A national percentile calculation does not meaningfully apply when the source county is on either extreme end of the income spectrum. In 94129, for example, 40% of households make over $200k and the average household income is $250k: https://www.incomebyzipcode.com/california/94129 https://www.incomebyzipcode.com/california/94129
- scarface74 8y agoAnd there are plenty of places in the US where the salary/cost of living makes more sense.
- arbie 8y agoNot denying that, but _some_ people must live in cost-of-living bubbles (otherwise how can such bubbles exist?) and comparisons for such bubbles must be made _within_ the bubbles.
- purplezooey 8y agoAh yes. Starts off with BART salaries. Just revealed his right-wing intentions.