At what HHI did you stop feeling middle class?

[Anonymous]

Anonymous wrote:

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Anonymous wrote:

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Anonymous wrote:

Anonymous wrote:The idea of socioeconomic class around here creates confusion as realistically the average HHI is significantly higher than elsewhere in the nation or even abroad. We are among the richest people in the world, here in the DC area. And yet when you look at your life, living in a small townhouse in a regular suburb driving a practical car like Subaru and sending your kids to public school, you feel like you’re just another regular American. The money doesn’t go far. A young couple bringing in 250k feel less than when really that’s top income globally.

At what point do you feel, well, not middle class?

400k

My husband and I make $435 and I feel very middle class (we are in our mid 30s). I’d say closer to $600K.

What makes you feel middle class at your current income? I’m guessing you have (or could have) a nice house in a good school district and/or private school, you have a large grocery / eating out budget, you buy all the things your family needs, you go on regular vacations, you have two cars at least one of them less than 5 years old, you save a lot for retirement (probably max your 401k/tsp/IRA/etc…)

What’s missing from your life?

Genuinely curious because I’m at that level and have the above which feels pretty comfortable.

For me it’s the vacations. Middle of the road hotels feel middle class now.

You could easily spend $10-30K on vacations a year.

This makes sense, our vacation spend has increased a lot over the last 10 years. We stay in nicer hotels, eat at nice restaurants, buy new clothes for the trip, etc… definitely adds up more than it used to.

To me, “buy new clothes for the trip” is not a middle class activity.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Class is a bad term. Middle income is probably more appropriate for most of the posts here. I think a real feeling of financial security comes from net worth. If you make 450k and get fired, your runway is not very long. But if you have 10 million in the bank and take income of $450k, you might feel more secure - not having to work for instance. I guess, I think middle class/income is about financial vulnerability. In my mind, you are economically vulnerable until you have enough wealth built up so that you can withstand losing your job without changing your lifestyle too much.

Isn't that called retirement? One doesn't change class when they retire, or do they?

It's retirement if you retire. Lots and lots of people continue to work after they achieve financial security.

[Anonymous]

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Anonymous wrote:

Anonymous wrote:

Anonymous wrote:125. You all are scary wealthy and not middle class.

I definitely felt middle class when we made $110k.

Expenses:

Taxes: $12k
Insurance: $5k
Retirement: $12k
Rent: $12k
Utilities (including cell phones): $5k
Student loans: $5k
Childcare for 2 kids: $25k
Cars: $6k
Vacation: $2k
Charity: $2k
Food: $8k
Gas: $8k

Total: $104,000

That meant that we had about $500/month for the four of us for everything else we needed to buy from band-aids and baby bottles to car and home repairs to furniture and clothes. I'm not saying that we were dirt poor or anything. We were saving for retirement. Our kids were in a good daycare, and we had everything we needed. We had lived in Appalachia prior to that and had friends who were truly poor.

But we were definitely still middle class.

That's a lot of money on cars for your income.

This budget does not make sense. Why give that much to charity? Cars and gas is excessive too.

We both had Honda Civics. Payments were $250/month for each of us. Gas cost what it cost.
We gave less than 2% of our income.

You are going to have to work harder to tell me that we were wealthy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:125. You all are scary wealthy and not middle class.

I definitely felt middle class when we made $110k.

Expenses:
Taxes: $12k
Insurance: $5k
Retirement: $12k
Rent: $12k
Utilities (including cell phones): $5k
Student loans: $5k
Childcare for 2 kids: $25k
Cars: $6k
Vacation: $2k
Charity: $2k
Food: $8k
Gas: $8k
Total: $104,000

That meant that we had about $500/month for the four of us for everything else we needed to buy from band-aids and baby bottles to car and home repairs to furniture and clothes. I'm not saying that we were dirt poor or anything. We were saving for retirement. Our kids were in a good daycare, and we had everything we needed. We had lived in Appalachia prior to that and had friends who were truly poor.

But we were definitely still middle class.

To show our breakdown at a higher income.

Income: $305k
Expenses:
Taxes: $77k (state, fed, social security, medicare)
Heath (premiums + OOP): $8k
Car/Home Insurance: $6k
Retirement/Savings: $125k
Mortgage/Tax: $27k (3bd, 2bath, 1300 sq ft)
Utilities (including cell,internet): $5k
Student loans: $0k (paid off at age 30)
Childcare for 1 kid: $26k
Cars: $6k is probably average yearly cost, but we bought in cash and share a single car
Vacation: $6k. Usually is more like $10k, but COVID...
Charity: $6k
Food: $12k
Gas: $1.5k (artificially low this year due to covid)
Remaining stuff: $5.5k (house stuff, repairs, clothes/shoes, gifts, etc.)

Key thing is that if we needed to, we could reduce savings to cover increases in spending in areas we wanted, or go down to single income. We have a lot of flexibility that middle class families don't. One example is high food spending, that would be a place I could reduce, but it just isn't worth the mental load to try to do it, so I just make the choice not to for now.

Pp here. Thats kind of a crazy budget. We make about $400k now, and I would blow your $5.5k/year out of the water. One of the first things I did when our income went up was buy furniture for the house. I spent $10k in one trip. I would have blown your whole budget for two years .

[Anonymous]

I’ve always thought I had a funny view on class bc I was born to upper class parents who had lost all the money. So we went through vvv dry periods and could 1000% not keep up with the Jones’s, but the “class” part of it was super influential. Some of it was attitude, some of it was privledge.

Privilege part—we always vacationed for the summer in a house I bring my kids to now on the New England coast. It was my great grandparents place.

My parents only sent us to private schools and jumped through hoops to get us on scholarships. It was a forgone conclusion we would go to private, to the ones they went to.

On the other hand, our cars broke down all the time. We didn’t have a nice house. They worried legitimately about money a lot.

[Anonymous]

Counterpoint to all the people saying 400k is the magic number. We've gone from 250k to 450k since 2015 and I have felt very little change in status or flexibility. Part of this is that we have had three kids in that time. The pressure of 26k/kid childcare, saving for college, the increased cost of vacations, etc. has made the income seem almost no different at all. I definitely do not feel higher than middle class as I probably had a better lifestyle (more exotic vacations, more disposable income) when we were just a couple living in one of the nicest apartments in DC with no kids

[Anonymous]

Anonymous wrote:I’ve always thought I had a funny view on class bc I was born to upper class parents who had lost all the money. So we went through vvv dry periods and could 1000% not keep up with the Jones’s, but the “class” part of it was super influential. Some of it was attitude, some of it was privledge.

Privilege part—we always vacationed for the summer in a house I bring my kids to now on the New England coast. It was my great grandparents place.

My parents only sent us to private schools and jumped through hoops to get us on scholarships. It was a forgone conclusion we would go to private, to the ones they went to.

On the other hand, our cars broke down all the time. We didn’t have a nice house. They worried legitimately about money a lot.

What is your stance on all this as an adult? Will you forego what they did to send kids to private, etc? To me, private is a luxury I would consider once all college and retirement savings are set (which isn’t the case). I wouldn’t want to end up not having enough for college because we spent on private school. I know you said you got scholarships but our incomes aren’t low enough for that. I also don’t want my kids to be the poorest in a rich school.

[Anonymous]

I’m not sure what our income was but when we realized that we could pay our kids college tuitions without taking out loans I knew we had passed some kind of threshold.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It really depends how long you've been making the high income. Often the first few years of "professional pay" are following years in school and coincide with people starting families. So a couple can hit $400k HHI, but have $400k in educational debt and are very behind on retirement, be living in a pricy apartment near work, have two giant daycare bills for downtown centers, extra childcare bills to cover their intense work hours, lots of convenience food costs to support two busy careers with little kids, plus feel a need to save for a house down-payment (and potentially another car to shift to the suburbs), plus then furniture and tools to support the new house, etc. It's an expensive time of life. Ask the same couple 10 years later and they'll be much more comfortable.

They should not have taken so much debt, should have waited to have kids, and made different choices. Something is wrong if you cannot live comfortably on that even with the debt. We'd be very comfortable and we are comfortable making less than half of that.

I think it would be a mistake to wait to have kids at that income level. And if going to med school or Harvard law is enabling those high salaries, that isn't necessarily a mistake either. Remember waiting to have kids can lead to high IVF or adoption costs.

[Anonymous]

I feel like it is multiple years at 500k +. That way you are actually able to save a lot and have less worries in life. That is the part that actually makes us feel out of middle class.

[Anonymous]

Anonymous wrote:I feel like it is multiple years at 500k +. That way you are actually able to save a lot and have less worries in life. That is the part that actually makes us feel out of middle class.

I agree with this. The first year we cracked $500K I remember thinking "Better set aside most of this, it might not last!" since we're both in volatile fields. Which is a middle class mindset--saving for a rainy day, since you have no foundational wealth to fall back on. Now that we're four years into 500K+ we do have that foundation, but it's mostly because we don't live like we're wealthy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I feel like it is multiple years at 500k +. That way you are actually able to save a lot and have less worries in life. That is the part that actually makes us feel out of middle class.

I agree with this. The first year we cracked $500K I remember thinking "Better set aside most of this, it might not last!" since we're both in volatile fields. Which is a middle class mindset--saving for a rainy day, since you have no foundational wealth to fall back on. Now that we're four years into 500K+ we do have that foundation, but it's mostly because we don't live like we're wealthy.

This is us in spades. We always lived well below our means until our kids were fully launched and our retirement was extremely well funded. We are still not big spenders but we definitely have moved past a MC lifestyle but it took many years to get there.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I feel like it is multiple years at 500k +. That way you are actually able to save a lot and have less worries in life. That is the part that actually makes us feel out of middle class.

I agree with this. The first year we cracked $500K I remember thinking "Better set aside most of this, it might not last!" since we're both in volatile fields. Which is a middle class mindset--saving for a rainy day, since you have no foundational wealth to fall back on. Now that we're four years into 500K+ we do have that foundation, but it's mostly because we don't live like we're wealthy.

This is us in spades. We always lived well below our means until our kids were fully launched and our retirement was extremely well funded. We are still not big spenders but we definitely have moved past a MC lifestyle but it took many years to get there.

This will be me when I get there too. We cracked the 500k mark some years back. My worries just switched to "this is not permanent. Save, save, save. The kids will need x, y, z,. I want to retire at x. I want to help my kids with _____ (school, car, house, wedding)." We won't up our lifestyle until the kids launch, and maybe not even then. So yeah, we still feel middle class. It's a mindset.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I’ve always thought I had a funny view on class bc I was born to upper class parents who had lost all the money. So we went through vvv dry periods and could 1000% not keep up with the Jones’s, but the “class” part of it was super influential. Some of it was attitude, some of it was privledge.

Privilege part—we always vacationed for the summer in a house I bring my kids to now on the New England coast. It was my great grandparents place.

My parents only sent us to private schools and jumped through hoops to get us on scholarships. It was a forgone conclusion we would go to private, to the ones they went to.

On the other hand, our cars broke down all the time. We didn’t have a nice house. They worried legitimately about money a lot.

What is your stance on all this as an adult? Will you forego what they did to send kids to private, etc? To me, private is a luxury I would consider once all college and retirement savings are set (which isn’t the case). I wouldn’t want to end up not having enough for college because we spent on private school. I know you said you got scholarships but our incomes aren’t low enough for that. I also don’t want my kids to be the poorest in a rich school.

You actually nailed my exact take away for my kids. Our kids are 1000% public and part of it was that the toll of keeping us in our schools was such a discussion in our house. My parents would yell about money and we’d be told every year that we had to be pulled out…and then randomly it would work last minute somehow. There was so much weird shit about being the first generation w no money that they have such hang ups and I do too, although I’ve done a lot of work digging into them and airing it all out so I don’t get weird about it.

That social chameleon stuff is v relatable, very well mannered and I know the ins and outs of etiquette, I’ve been to a lot of fancy places by proxy invites. Like I can def def hang. But money and it’s implications have taken up an inappropriate level of space in our family over the years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I’ve always thought I had a funny view on class bc I was born to upper class parents who had lost all the money. So we went through vvv dry periods and could 1000% not keep up with the Jones’s, but the “class” part of it was super influential. Some of it was attitude, some of it was privledge.

Privilege part—we always vacationed for the summer in a house I bring my kids to now on the New England coast. It was my great grandparents place.

My parents only sent us to private schools and jumped through hoops to get us on scholarships. It was a forgone conclusion we would go to private, to the ones they went to.

On the other hand, our cars broke down all the time. We didn’t have a nice house. They worried legitimately about money a lot.

What is your stance on all this as an adult? Will you forego what they did to send kids to private, etc? To me, private is a luxury I would consider once all college and retirement savings are set (which isn’t the case). I wouldn’t want to end up not having enough for college because we spent on private school. I know you said you got scholarships but our incomes aren’t low enough for that. I also don’t want my kids to be the poorest in a rich school.

to afford private school boomers would just have the stay at home wife work nights, now days us millennials and genz have to work 4 jobs to make anywhere near that. boomers caused the demise of the middle class.