Being lower middle class and living well

[Anonymous]

Anonymous wrote:I don't know if more income means you work harder per se. I'm a fed gov attorney and I presumably make a lot more than our building's cleaning people, but every time I see them, they're busy emptying trash, cleaning bathrooms, vacuuming, etc. That seems like much harder work than my somewhat repetitive knowledge job that involves drafting a lot of documents on a computer.

People who make more money often had advantages when they were younger, parents who encouraged educational opportunities, or possibly just even have the drive to seek out career opportunities that pay more. I agree it's disappointing how far a supposedly high income gets you nowadays, but I would never say I work harder than cleaning people, teachers, nonprofit workers, etc. who may make less than me.

Such an Marxian view of what is labor. There are three different concepts here and I am shocked that I have to explain this to someone who is college educated with an advanced degree. First is creation of value, which can take many forms. Physical labor is the most obvious since you are clearly performing some task. However, mental and creative labor also creates value, and often many folds more than physical labor. Just because someone is performing mental/creative labor doesn't make them less "harder working" than someone performing physical labor. Secondly, while there is a direct correlation between someone's well being and the amount of hard work they put in, this correlation is cumulative over the person's life time rather than instantaneous. Someone who took it easy for the last ten years and is working 80 hours a week for the past month is likely less well off than someone who has been consistently working hard for the past ten years but has been on vacation for the past month. This not only applies to work but also effort in school. Therefore you it is ill considered to look at how hard someone is working presently and lament that something is not fair for the poor state of well being that person find him/herself in. Thirdly is the concept of scarcity - that is, the value of someone's work is often directly correlated to the supply and demand of that job function. This means how important a job function is sometimes has little correlation to how well the job pays. This explains why teachers have lower salaries than lawyers even though one would acknowledge that educating the young is a very important, stressful, and demanding job function. The difference between lawyers and teachers is that we place far higher education requirements on lawyers and are highly selective of who we allow to practice law. The bar to become a teacher is set much lower so it is far easier to become a teacher than a lawyer. You want to increase teacher salary, increase the qualifications necessary to become a teacher, the market will take care of the rest.

[Anonymous]

I admire OP's frugality. She seems to be making the best of it, and always looking on the bright side.

Here's my question for OP: Why not try for a higher-paying job, rather than settling for one in which your take-home pay is just $2600 per month? You seem motivated and disciplined. Why sell yourself short? (As a lawyer myself, I know that there are too few legal jobs. My DH and I graduated from law school in 1997 and we've always managed to have good jobs. But I don't see why more recent law school grads don't just leave the legal field rather than staying in these jobs that pay so little! Most nannies in DC make more than $2600 per month take-home. You could make more as a manager in a fast-food restaurant.) How about taking an entry level job in a business (not suggesting nanny jobs or fast food jobs), and then working your way up?

I just hope you're not selling yourself short and settling for working for what you desribe as a "low-paying employer." I have a lot of relatives who grew up with modest means (as did I), and they have gone to college etc and yet settle for low-wage jobs. It's like they think they are destined to make low pay. They seem happy enough in the jobs, but it just seems a shame to not aspire for a bit more.

[Anonymous]

Is your take home $2600 a month or per pay period?

I'm trying to work out how you can also save $1400 a month if your rent is $650.

[Anonymous]

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Anonymous wrote:The OP grossly mis-characterized the complaints voiced in this forum by people with higher HHI. These people are not complaining about lack of money for food, rent, gas, or other essentials. They are saying that even with the higher income, they live a very middle class lifestyle, and certainly not luxurious as one may imagine without first hand experience. Close your eyes and imagine if you had $170k a year, $300k a year, how would you live, where would you vacation, the home you would live in, and etc. The people making these salaries have found out that the answer in all cases is "slightly better than average". When you were young, you might think that a 170k or 300k HHI means "you've made it". I know I did, and so did my wife. The reality is that people making $300k in the DC area have NOT "made it". These people have exerted great effort to improve their financial condition. They are the over-achievers in life, with purpose driven personality, and willing to put in the hard work necessary to achieve their goals. The fact that this level of income doesn't bring absolute financial security is what worries these people.

See the thing is - we wouldn't live that differently at those HHIs. Therefore we would have a lot of savings. Its the people who think they should have bigger and better who end up living paycheck to paycheck at those HHIs. And that is a choice my friend.

PP here. That's not the point. The point is, most people think with 170k or 300k HHI a year, you'll be rich or even wealthy, able to lead lavish life styles without much care for finances - financially secure, independently wealthy, etc. The reality is that 170k/300k a year gets you marginally better quality of life, but still middle class. You really can't afford that much more. This comes as a shock to most people who through hard work arrive at this income level. When one's assumptions turn out wrong, it becomes rather stressful - this is where the stress comes from. Not living paycheck to paycheck, etc.

I don't expect lavish (and frankly you should not have either). But I sure don't buy that I wouldn't be A LOT more comfortable with twice my salary. (Which would be 170k). To say you are only marginally better off is so disingenuous. Try living on my salary for a while and you'll see how well off you are.

We make around 350k and I feel we live very well. We are able to save 7k a month, pay our mortgage, max out 401ks, drive luxury carss, dine out weekly and go on two upscale vacations a year (using miles and points).

This is what I would expect on 350k. Not sure why people complain about that HHI so frequently on DCUM.

If you don't have a large inheritence or windfall, 350K HHI can easily be eaten up by a house payment, childcare and private schools (if you are in a low performing school district).

Well we live on 90k HHI - so if we stayed in our current house and current good public - 350k would be a windfall. It depends on the choices you make.

Please state the size of your home, type, childcare costs and location.

NP here also living on 90K and completely agree that $350k would be a windfall. In fact, I can't even relate to ever earning that much money. We live close-in in DC in a 120 year old row house in a hip part of DC. It's 1800 sq ft. We have a 5 year old in a charter school and a 2 year old in a full time preschool that costs $750 a month. We eat out regularly and vacation with family a couple of times a year. LIfe is good.

[Anonymous]

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Anonymous wrote:The OP grossly mis-characterized the complaints voiced in this forum by people with higher HHI. These people are not complaining about lack of money for food, rent, gas, or other essentials. They are saying that even with the higher income, they live a very middle class lifestyle, and certainly not luxurious as one may imagine without first hand experience. Close your eyes and imagine if you had $170k a year, $300k a year, how would you live, where would you vacation, the home you would live in, and etc. The people making these salaries have found out that the answer in all cases is "slightly better than average". When you were young, you might think that a 170k or 300k HHI means "you've made it". I know I did, and so did my wife. The reality is that people making $300k in the DC area have NOT "made it". These people have exerted great effort to improve their financial condition. They are the over-achievers in life, with purpose driven personality, and willing to put in the hard work necessary to achieve their goals. The fact that this level of income doesn't bring absolute financial security is what worries these people.

See the thing is - we wouldn't live that differently at those HHIs. Therefore we would have a lot of savings. Its the people who think they should have bigger and better who end up living paycheck to paycheck at those HHIs. And that is a choice my friend.

PP here. That's not the point. The point is, most people think with 170k or 300k HHI a year, you'll be rich or even wealthy, able to lead lavish life styles without much care for finances - financially secure, independently wealthy, etc. The reality is that 170k/300k a year gets you marginally better quality of life, but still middle class. You really can't afford that much more. This comes as a shock to most people who through hard work arrive at this income level. When one's assumptions turn out wrong, it becomes rather stressful - this is where the stress comes from. Not living paycheck to paycheck, etc.

I don't expect lavish (and frankly you should not have either). But I sure don't buy that I wouldn't be A LOT more comfortable with twice my salary. (Which would be 170k). To say you are only marginally better off is so disingenuous. Try living on my salary for a while and you'll see how well off you are.

We make around 350k and I feel we live very well. We are able to save 7k a month, pay our mortgage, max out 401ks, drive luxury carss, dine out weekly and go on two upscale vacations a year (using miles and points).

This is what I would expect on 350k. Not sure why people complain about that HHI so frequently on DCUM.

If you don't have a large inheritence or windfall, 350K HHI can easily be eaten up by a house payment, childcare and private schools (if you are in a low performing school district).

Well we live on 90k HHI - so if we stayed in our current house and current good public - 350k would be a windfall. It depends on the choices you make.

Please state the size of your home, type, childcare costs and location.

NP here also living on 90K and completely agree that $350k would be a windfall. In fact, I can't even relate to ever earning that much money. We live close-in in DC in a 120 year old row house in a hip part of DC. It's 1800 sq ft. We have a 5 year old in a charter school and a 2 year old in a full time preschool that costs $750 a month. We eat out regularly and vacation with family a couple of times a year. LIfe is good.

Did you have a lot of money for a down payment? An 1800 sq feet in the city in a hip neighborhood could easily take up half your take home pay, no? I'm all for the downsizing trend, but I don't think I could do 1800 sq feet with two teenagers.

[Anonymous]

1800 sq feet is huge. Most of us grew up with one family bathroom. You are confusing what you think you want with what you need.

[Anonymous]

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Congratulations, OP - I did the same a long time ago.
Now I live with DH and 2 kids in a tiny but cute little dollhouse that still cost a fortune because it's in one of the better school districts. We could afford it on our middle class salary because we had lived frugally like you and had economized and invested successfully in the stock market.

Now we still live very frugally.

Our main expenses are the mortgage and food.
Our disposable income goes to extra-curricular activities for the kids and traveling to see our families overseas.

Keep saving, OP, and make what you can of your career, because kids are expensive.

The voice of experience. It is quite doable!

I'm the PP who lived like you. When DH and I got married and had DC1, we earned 60K total gross income, and all our money went to daycare. One bedroom apartment, which we kept until DC2 was a year old.
Now our gross HHI is 120K, I stay home, and we max out retirement and college savings plus have a little left over for travel to Europe and Asia every few years. But daily, we live a frugal lifestyle which my friends cannot probably imagine. The trick is to never spend spontaneously. Everything is budgeted and planned for, and with that comes a sense of control and satisfaction. Instead of feeling submerged by expenses and jealous of what others earn, I feel empowered by the good financial choices we make and how most of our money is invested.

Pp, could you please share your budget?

[Anonymous]

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Anonymous wrote:The OP grossly mis-characterized the complaints voiced in this forum by people with higher HHI. These people are not complaining about lack of money for food, rent, gas, or other essentials. They are saying that even with the higher income, they live a very middle class lifestyle, and certainly not luxurious as one may imagine without first hand experience. Close your eyes and imagine if you had $170k a year, $300k a year, how would you live, where would you vacation, the home you would live in, and etc. The people making these salaries have found out that the answer in all cases is "slightly better than average". When you were young, you might think that a 170k or 300k HHI means "you've made it". I know I did, and so did my wife. The reality is that people making $300k in the DC area have NOT "made it". These people have exerted great effort to improve their financial condition. They are the over-achievers in life, with purpose driven personality, and willing to put in the hard work necessary to achieve their goals. The fact that this level of income doesn't bring absolute financial security is what worries these people.

See the thing is - we wouldn't live that differently at those HHIs. Therefore we would have a lot of savings. Its the people who think they should have bigger and better who end up living paycheck to paycheck at those HHIs. And that is a choice my friend.

PP here. That's not the point. The point is, most people think with 170k or 300k HHI a year, you'll be rich or even wealthy, able to lead lavish life styles without much care for finances - financially secure, independently wealthy, etc. The reality is that 170k/300k a year gets you marginally better quality of life, but still middle class. You really can't afford that much more. This comes as a shock to most people who through hard work arrive at this income level. When one's assumptions turn out wrong, it becomes rather stressful - this is where the stress comes from. Not living paycheck to paycheck, etc.

I don't expect lavish (and frankly you should not have either). But I sure don't buy that I wouldn't be A LOT more comfortable with twice my salary. (Which would be 170k). To say you are only marginally better off is so disingenuous. Try living on my salary for a while and you'll see how well off you are.

We make around 350k and I feel we live very well. We are able to save 7k a month, pay our mortgage, max out 401ks, drive luxury carss, dine out weekly and go on two upscale vacations a year (using miles and points).

This is what I would expect on 350k. Not sure why people complain about that HHI so frequently on DCUM.

If you don't have a large inheritence or windfall, 350K HHI can easily be eaten up by a house payment, childcare and private schools (if you are in a low performing school district).

Well we live on 90k HHI - so if we stayed in our current house and current good public - 350k would be a windfall. It depends on the choices you make.

Please state the size of your home, type, childcare costs and location.

NP here also living on 90K and completely agree that $350k would be a windfall. In fact, I can't even relate to ever earning that much money. We live close-in in DC in a 120 year old row house in a hip part of DC. It's 1800 sq ft. We have a 5 year old in a charter school and a 2 year old in a full time preschool that costs $750 a month. We eat out regularly and vacation with family a couple of times a year. LIfe is good.

LOLOLOLOL

Hon, I live in a 1000 sq ft house in the burbs. Nice that you had family money to buy that big house and take vacations with them.

Some of us had no family help, so your "life is good" can't be duplicated by us.

[Anonymous]

Anonymous wrote:I don't know if more income means you work harder per se. I'm a fed gov attorney and I presumably make a lot more than our building's cleaning people, but every time I see them, they're busy emptying trash, cleaning bathrooms, vacuuming, etc. That seems like much harder work than my somewhat repetitive knowledge job that involves drafting a lot of documents on a computer.

People who make more money often had advantages when they were younger, parents who encouraged educational opportunities, or possibly just even have the drive to seek out career opportunities that pay more. I agree it's disappointing how far a supposedly high income gets you nowadays, but I would never say I work harder than cleaning people, teachers, nonprofit workers, etc. who may make less than me.

I appreciate this. Thanks.

[Anonymous]

Anonymous wrote:I'm getting a little tired of everyone in this country, and especially this rich-people forum, complaining about how hard it is to be middle class nowadays. Yes, there are some problems - wages haven't risen with cost of living, taxes are higher, etc. But I'm a single, middle class young woman in DC, with a take home of about $2,600 a month, and I not only get by very nicely, but feel like I can live in the DC metro area in comfort and happiness and a feeling of well-being. I'm a lawyer with thankfully no debt (parents paid for my undergraduate education at a small, cheap state university, and then I went to a third tier law school at around 90% scholarship and my grandparents chipping in for the rest + living expenses). I work for a low-paying employer (trying to maintain anonymity). Here is how I cut down on my expenses and live really well:

My health, dental and vision insurance is taken care of by my employer. I live with four roommates in a lower-middle class neighborhood either on the edges of the city or in MD/VA, and my rent is around $650. I pay utilities like gas and electric and Internet splitting it up with roommates, but we do not bother with paying for cable. I instead have Netflix on my laptop, which is $8/month. My roommates and I share the Netflix account and even split that cost, so guess what I'm paying for Netflix per month? $2. And I get to stream anything and have lots of fun.

I do not own a fancy smart phone, just an HTC Evo 4G which I got for $99. My cell phone provider is not Verizon or AT&T or T-Mobile, but a tiny independent carrier called FreedomPop, where I pay a flat fee of $20 a month for unlimited talk, text and data (well until a 1GB limit, then the speed drops).

My car is a very old late-90s model (unwilling to divulge details) with plenty of miles on her but carefully tended to, tweaked and strategically upgraded over the years (new wheels, new brakes, tuning engine to get more power,etc) for less than $4,000. I save on gas by limiting my driving through combining errands, and carpool to work when I can. I also walk a lot and this way I also get my exercise. I do a LOT of walking when I can - to friends' houses, to the library, etc. Walking is also a romantic date activity for my boyfriend, in fact!

My food and medication are all generic brands, and I remain as healthy as a horse. Lots of non-organic veggies are perfectly safe to eat. I almost NEVER eat out at restaurants. That's right, never. Why spend $20 on my food and then being forced to tip on top of that? Or wasting money with to-go deli sandwiches that are overpriced and I can make at home? I take a brown bag to work. I have a coffee flask so I haven't visited a Starbucks since law school. I can buy enough food at my non-fancy grocery store, and I'm an experienced and creative enough cook, that I can make restaurant-worthy meals in my own kitchen. I buy a lot of stuff in bulk. I think the last time I went out to a restaurant was around seven months ago. And I almost never buy alcohol - it's expensive, has empty calories, bad for my health, and not something I need to have fun. However I'm happy to drink if an employer or client is paying. I do drink tons and tons of water though, which has not only changed the texture and tone of my skin but is also completely free! I don't buy soda, I don't drink much juice, and I buy very little coffee because I can get free coffee at work. I also make my own snacks and take them everywhere with me.

How do I socialize when I don't buy drink or food outside? I manage! For date nights with my boyfriend, we usually cook together and then watch a movie, either at my place or his, or we go out and do something relatively cheap or free (concerts in the park, etc). I go to bars with my friends and just drink water (I don't even want to spend $2 on a beer - you'll be shocked how quickly that adds up plus I don't like the taste of beer much). I invite friends home for a potluck dinner and cook a couple really good dishes as the hostess. My friends are misers too, so if we want to eat outside, we can always cook our own food and grab a picnic table at a public park.

There are also tons of free events around town, which I enjoy going to with a friend or a date. Even museums have free admittance days.

I also don't buy books unless I can't find them in the library and I really want them.

I take care of my clothes meticulously, and only shop at thrift stores or on sales and clearance racks at stores like Marshall's or TJ Maxx. I have rewards cards at stores like this. I also find that online stores can sell really cute clothes for very competitive prices, because they have no physical infrastructure to pay for. I buy holiday presents up to eight months in advance sometimes, meticulously searching for dirt cheap deals on items that I know my loved ones really want for birthdays or Christmas or Valentine's Day.

My holidays are always domestic and sometimes even local. I haven't gone abroad in about 5 years and I don't feel I'm missing out. I have a lot of fun with my family members, roommates, friends or co-workers, whether I'm back in my parents' house or out camping in a gorgeous park. Most recently my boyfriend and I drove down to colonial Williamsburg, which isn't far from DC and is a wonderful weekend trip for history nerds like us.

My savings, which is in the range of $1,400 per month, go into a high-interest savings account where compound interest makes sure my net worth doesn't fall behind inflation. In 2016 I'd like to move in with my boyfriend (who earns about the same as I do and is just as thrifty), but currently we're saving aggressively in our cheap living arrangements.

Eighty years ago the culture of eating out, traveling wildly, and having all kinds of unnecessary luxuries at home or in your lifestyle wasn't expected of the middle class. I think we need to change some of the expectations we have regarding what kind of lifestyle is considered "middle-class".

No children, no husband, no mortgage, no debt, no life experience - no opinion.

[Anonymous]

Anonymous wrote:
No children, no husband, no mortgage, no debt, no life experience - no opinion.

Which is okay, if the OP actually realized this. I know there will be people who take the slow lane in life and cruise around without making any net contribution to the productivity of the nation as a whole. But for one of them to turn around and stab a finger at those of us who produce the bulk of the wealth of this nation is irksome.

[Anonymous]

Anonymous wrote:And I don't find my lifestyle boring at all. Fun and happiness does not come from spending money.

Okay really, good night!

I do think it helps that your boyfriend & circle of friends are all thrifty and frugal.

[Anonymous]

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Anonymous wrote:
No children, no husband, no mortgage, no debt, no life experience - no opinion.

Which is okay, if the OP actually realized this. I know there will be people who take the slow lane in life and cruise around without making any net contribution to the productivity of the nation as a whole. But for one of them to turn around and stab a finger at those of us who produce the bulk of the wealth of this nation is irksome.

I don't know where you're getting that from this post. Seems like many are overly defensive.

[Anonymous]

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Anonymous wrote:If you take an income of 100K the take home is 6100
If you take an income of 300K the take home is 14500

6100 X 3 = 18300

This isn't even accounting for deductions that will increase 100k take home even more.

People need to understand that double or triple the income doesn't mean anymore near that in take home

sure we understand. we just don't understand why you bitch about it so much. if its that bad - get a job making less. sound like you'd be better off.

Because we work two or three times as hard as you do, so we feel we should profit that much more.

So by that logic, LeBron James works 240 times as hard as a lawyer earning $300k.

Hunh.

[Anonymous]

Anonymous wrote:I don't think you're taking into account how you'll feel after the fourth sleepless night in a row while working full time, and then coming home to two small children having temper tantrums and a messy house. THAT will be the moment when you want to first start cooking dinner? Sorry, OP, but you'll want to order take-out on those nights.

I agree, and there are so many more scenarios. We live off of my income (46K) and it's tough. I can't really even buy my kids anything for their birthday or Christmas. Then, it's mostly material stuff but when your kid is crying for a toy, it breaks your heart. My wife can't work because her degree is worthless and she couldn't get a job that would pay even pay for childcare. Then you have to think about who's going to pick up the kids from school. There are not a lot of low end jobs that are "flexible". We do okay, even with having to buy diapers still for my Autistic kid and toddler. It's rough, and I have to do all my own automotive work and etc. It's been good for my mind to learn new things, but it's exhausting. When the kids do finally get in school, it'll be another two years before my wife can get out of school with a new degree, something in the medical field or related.

I think you can moderately tack on $300 - $400 dollars a month just in kids stuff, food, and etc. If you don't breast feed, that's formula too. It sucks less now.

As for a tax return, yes is great. However, that all goes to the credit cards you used during the year to buy tires, pay medical bills since Obama care is a joke, and etc. So, you back to square one .. no wait for it .. your in the hole.

No bills, I think we'd be okay or in fact doing well. I also agree with the notion that we shouldn't as a middle or lower middle class try to travel too much or spend too much. It's not in our class to do so, unfortunately. Anyway, it's nice to see some folks who are in the same boat.