Gen-Z Says $74,000 Per Year Is No Longer Middle Class

The YouTube Creator Academy:

Original TikTok Video From Freddie Smith:

-A $74,000 income is reduced to $4300 per month after taxes, 401k contributions, and health insurance.
-$500 Per Month is going towards student loans.
- $1400 to SPLIT a 2-bedroom apartment in a medium-sized city like Orlando, Florida - with utilities.
- $600 per month on food and groceries.
-$400 for a car payment
-$200 for insurance
-$150 for gas
-$100 for a cell phone
-$300 for fun expenses

That leaves you with just $650 left over. Is this middle class?

My Thoughts:
First: Very few people can qualify to buy a home, at 25 years old, with a $74,000 salary. Even if you’re disciplined and live frugally, it’s going to take you 3-10 years to pay off debts and / or save up an amount that would even be considered as a down payment, depending on your area.

Second: This doesn’t take into account the combined incomes of couples.
Just consider that 2021 Census data showed that “46% of people buying a home were married couples, compared to just 22 percent of single men and 30 percent of single women. That’s because lenders COMBINE the income of both people to determine how much money they’ll lend.

Third: It also REALLY depends on where you live.
For example, the median income in Newton Massachusetts is $122,000…while the median income in Flint, Michigan, is $24,900. This means that there will be a LOT of variance in terms of average income and values, and what “middle class” means for your location.

Fourth: Even a savings rate of $500 per month could lead to a SUBSTANTIAL amount of money later in life - especially if you start by age 25.

The way I see it - housing is INSANELY EXPENSIVE. To make matters worse, according to the Bureau of Labor Statistics, “you’d have to earn about $129,000 today to have the same purchasing power that a salary of $100,000 had just a decade ago.”

However, I tend to believe that the person earning $74,000 per year at 25 years old is going to have the upward mobility to eventually make $110,000 per year by the age of 33 - at which point, qualifying for the median house is going to be much more achievable - ESPECIALLY if they keep their expenses the exact same, during a time where their income is increasing.

No, it’s not going to happen as as soon as you land a job - and, life IS expensive - especially when you’re just starting out - but, I DO believe it’s entirely possible, and you will be able to buy a home after getting established in your career - if you budget for it .

My ENTIRE Camera and Recording Equipment:

*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. This is not investment advice.

[yutuberculosis]

If you can't afford all your bills, savings for retirement, and a dinner out now and again, it's not middle class.

[dealforbet]

Middle class is supposed to mean I don’t have to stress over everything to pay my bills and save money.

[zachcarmichael]

I make $56k as an IT systems admin in a suburban area in the south in the US. After taxes, required pension contribution, and benefits, I'm left with $1500 per paycheck (so $3k a month). Here are my monthly expenses:

$1200 rent
$30 water
$30 trash/sewer
$140 electric
$40 internet
$40 phone
$200 groceries
$120 gas
$140 student loans
$290 car payment
$110 car insurance

That's $2340 of necessary expenses, leaving me $660 a month. So after any personal expenses, entertainment/streaming services, gym membership (a must for physical/mental health) and miscellaneous expenses that come up, there's really not much cushion for savings. It's sad.

[giajeep-yfnz]

Most people do not Make 74k

More like 40-60k

[tonyl]

74000 is a good salary for someone single, but lord have mercy if you're trying to provide for a family with that.

[cyberviking]

One HUGE issue is that those “starter homes” don’t really exist anymore. All the older homes with “good bones” were flipped 10 years ago thanks to chip and Joanna making it popular.

And now, with construction costs going up, builders just aren’t building $300k homes anymore. It only costs them a little more in materials to make a “luxury” home and charge 20-30% more to make profit.

I could afford a $280k-$320k house, but those don’t exist unless you want to buy a home needing repairs. Buying a home and owning a home are not the same thing.

[IamERAMOS]

That's if you have a 74k salary. Average annual income is 60k as of 2024 in the US.

[BryanBagehi]

My household income is solidly over $150k, yet we are less financially secure now than we were when our household income was under $100k a decade ago. The price of every, especially insurance, has skyrocketed. Homeowner's insurance is more than 6x what it was a decade ago. Healthcare insurance went from something an employer would give you because it only cost them less than $200 a month to something that I have to pay over $1, 000 a month for and I'm only paying for 25% of it. I pay more per month for car insurance than I paid every six month a decade ago. Insurance went from a side thought on the family budget to a large chunk of it.

[austinmaiden]

As a 25 year old software engineer with a bachelor's degree making just under $74k per year, I can confirm that I definitely don't feel like the middle class. The only reason I feel comfortable is because my rent is only $600 a month.

I will say though, his estimate of 4300 a month is actually high. I make $1850 bi-weekly after 401k contribution and I'm on my dad's health insurance. That's about $4000 flat a month

[ronjohnson]

Imagine charging 14 grand for a car thats more than 20 years old and only cost 24 grand brand new in 2002.

[Lane_online]

I'm here to say that Gen-Z is right depending on where they live. Inflation is real and it's awful. Where I live, rent alone (not including utilities, renter's insurance, etc.) is $2500 a month for a small two bedroom apartment. That's $30k a year.

You can't even be approved to rent such an apartment on $74k a year.

Options:
- Live in a studio that's slightly cheaper
- Live in a dangerous area
- Move across the country
- Live with parents

[SyscoVids]

I live single comfortably at $75k but there is no way I could do that with a family.

[traineewaden]

If you can't buy a house you're not middle class, if you can't support your partner/family on a single income you're not middle class. These things used to be considered normal/the standard.

[sidehustlevikki]

I personally don’t like the idea that you still need a roommate or partner to make it. This was not my vision of being an adult. No sense of accomplishment

[Chrislewislive]

You’re high as a kite if you think a bank will give a five year loan for a 13 year old car with over 100k miles lmao

[bills]

This is so accurate. Im a college student who was struggling to pay my bills because of my high tuition rates even after all the scholarships I got. So do you know what I did? I did what any sensible person would do and got a second part-time job to make more money. Got a call saying that I was no longer eligible for medicaid. Got bombarded with telemarketers asking me to sign up for health insurance but all of them had deductibles of at least 1K with monthly payments starting at a minimum of $250. So now I'm uninsured. The American middle class has been broken

[happylittletree]

As an individual it's great. For a family it's poverty. And families are the lifeblood of civilization.

[jonfe.darontos]

"...leaves you with 900 bucks, this is no savings, no investments...", except "The take home after taxes, 401k, health insurance is $4, 300". Is a 401k not considered savings or investments anymore?

[shopece]

I am at an almost 87k salary, 36 y/o and barely feel middle class. I barely go out (I have fun it's just usually INSIDE), 90% of the time cook my own food (including being my own barista 90% of the time too) etc etc etc but I live in a high COL city/area. I don't think i'll feel comfortably middle until at least about 120k and again I do NOT live extravagantly at all.

[AmericanWears]

74k may be middle class in some areas. In mine it’s more like 130k+ to afford a home and raise a family.