$100,000 No longer Buys A Middle Class Lifestyle

Why $100,000 May No Longer Buy A Middle Class Lifestyle:

00:00 Intro
01:13 Median Income
03:16 Child Care
04:14 Housing
05:57 Transportation
07:11 Savings & Investments
08:08 Income Needed For Middle Class
10:03 Family Dynamics

Disclaimer: Please note that this video is made for entertainment purposes only and not to be taken as financial advice. Always make sure to do your own research.

Thanks for watching, I appreciate you!

[expensivefreedom]

Ha! My wife and I live quite well on about $75k/year in upstate South Carolina. We drive older vehicles that are both reliable and paid off, our 3 bed 2 bath house cost $155k in fine condition, and we don’t have cable or any other major subscription services. Amazon Prime plus the occasional added subscription on there so we can watch a specific show is quite enough.

[misterskippyu]

Lifestyle creep. When we make more money, we spend more money, and we're VERY good at coming up with non-essentials on which we waste our money. 
Don't buy the house that the mortgage company says you can afford. Look for a house that is HALF that amount. "I've been approved for $350, 000!" That's great! Now, look for a house in the $175, 000 range. Smaller, more affordable housing needs to make a comeback. Builders only make houses that will sell, and those houses are driven by what the banks allow people to borrow. Not a lot of people are interested in a new house under 1500 sq/ft these days, so builders don't construct smaller houses.
Don't go into debt spending money you don't have to buy stuff you don't need to impress people you don't like.

[williamandersen]

It is a matter of lifestyle. A lot of people make under 100K and live quite well.

[fedguy]

My wife and I are empty nesters about 5 years from retirement. Our combined annual income is $210k about evenly split between the two of us. We live in a Midwest suburb and have 3 years left on the house mortgage. No other debt. We have a 6 month emergency fund and put 20% toward retirement. We live comfortably but not extravagantly. We own modest vehicles and keep them till the wheels fall off. We lived very frugally when the kids were young and money was tight with much higher expenses. My advice is to develop a detailed budget and control where your money goes. If you are married combine your income and regularly agree on your budget priorities and goals. We have monthly budget meetings to plan for upcoming expenses such as lawn care, vacations, Medical procedures, etc. Don’t carry credit card balances and buy newer used vehicles. We buy most of our clothes at thrift stores such as savers. I regularly find new shirts and pants that were overstocks at prices 70% below retail. Eat at home. We make up meals in advance and limit eating out to 3 or 4 times a month. When we eat out we usually split an entree and add an extra side. Have a plan and stick to it.

[Ethan-buzy]

How much you need largely depends on where you live. $100k/year in the rural Southeast goes a lot further than the same amount in many major metropolitan areas.

[randytaylor]

I'm 57, divorced, kids gone, live alone, and make 170k/year in Nebraska. I'm not rich, but I know I'm in a good position financially. It's hard out there for a lot of people and I feel blessed to not have to struggle with having enough money. I do miss the days when I was broke raising a family though! lol

[MostlyHarmlessNebr-gbdi]

It so, so widely depends. My wife and I spend ~$100k a year (honestly, quite a bit less on any given month, but accounting for major house repairs/car purchases/large medical hits) FIRE-retired. But, $100k living in the midwest with a paid-off house, structured so income tax is like $1500 a year (state and fed combined!) is all entirely unlike the lifestyle of someone *making* $100k W-2 income, paying 1/3 to their mortgage, 7.65% to FICA payroll, ~15% to income taxes, etc. We're probably closer to the spending power of someone making a nominal $200k if not more.

[leveragedpromise]

I retired last year at age 64 on a pension and IRAs to tap if I run short. I do NOT yet draw SS. I am waiting till 67 to make sure my also retired wife has the best benefits if I pass on. We have a paid for house but seven insurances take a toll. Considering canceling term life insurance as we have no kids and it is $580 per quarter for a $200k payout. We bring in maybe $60k a year as a couple and so far are making it till SS kicks in. We already took two major road trips and the credit cards are at zero till we load them up again with hotel stays and gasoline. It's a routine to run up $2, 500 a month on the card then pay it to zero when the monthly pension comes in. If only to avoid loading up the card again :( We feel middle class even with only $60k and hopefully getting a break on taxes this year as we make less.

[RichardTouchfaith]

Depends on where and how you live. Our family of four spends $27-$30k a year on basic living in our low cost state. Everything else is invested.

[brandonblahnik]

I consider the ability to go on a family vacation domestically for around a week every year or two without going into debt as a marker of middle class status. The classic American middle class family vacation is going to Disneyland or Disney World. The cost to do this has gone up dramatically over the years so that fits with the increased income requirement to be in the middle class shown by the calculators in the video. I consider the ability to go on similar family vacations internationally (excluding neighboring countries like Canada or Mexico) as a marker of upper middle class status.

[Playingwithproxies]

I make 110k definitely comfortably fit into the middle class on a single income with 3 kids. You do have to live in the right location but it’s not this hard to get by.

[ronyon]

Great Video! Thanks for putting it out there. What you said about vehicles is spot on and I wish that more people would realize that this is what keeps you poor. I was speaking with a co-worker of mine a few weeks ago and we started talking about retirement plans. We have both been with the same company for almost 25 years now. I asked her if she had been taking advantage of the company offered 401K plan and she stated that she does not contribute at all and really never has. I asked why and she said that she just cannot afford it. However, I did point out to her that she can afford to "purchase" a new vehicle every 3 years, which she has done since I have known her.

[fredswartley]

My family afforded a middle class lifestyle in only my dad's income. But they lived simply and didn't send us children to daycare. But that was also 20 to 30 years ago and prices weren't as inflated back then

[hockeyhalod]

Middle class is just the area where you worry every day if you are going to move to the upper level or fail miserably and fall into the lower.

[whorhaydelfuego]

Living in a cheap area is a huge boon. I've been feeling like we're well into the middle class since we hit about $80K a year, up to about $110K a year now. We got really lucky with the interest rates when we bought our most recent home, at less than 3%.

[raybod]

$100, 000 a year doesn’t buy what used to be an upper middle class lifestyle. People simply don’t want to bother with simple chores like cooking, cleaning, fixing up small personal items and things in the house. People want lavish vacations, always new clothes, expensive top end items and new cars. People don’t really budget well and don’t save for purchases to avoid paying interest.

[alwolfen]

I just ran the EPI calculator for my area and $119, 000/yr is what came up as middle class for a family of four. I have 5 children and make around $55, 000/yr. I don’t pay for housing or health insurance because I’m military. The EPI said that housing in my area should be just under $1300/mo. That is completely inaccurate for what I would need for my family. A 4-bedroom (3 or 4 kids sharing a room) house with a VA loan would still cost me $2, 400/mo! I’m glad I’m military because my wife chooses to stay at home due to child care costs. I can afford it because we are frugal, save our money, and have no debts (we own both of our vehicles). I unfortunately see many other service-members who have not been so disciplined and who make far less than I struggle to put food on the table.

[luiken]

My daughter is in daycare, now we live in a fairly low cost area and she still costs us $200 a week or over $10k a year.

Its absolutely wild.

[lifeastheonlygirl]

We're sending 2 kids to college this Fall. One expected, but more expensive than expected, and one 2 years early. It's made budgeting quite the adventure.

[claven]

As budget increased and is not as tight i have switched mostly to pay mysef first model

31% is cuurent target with additional 10% sinking for larger annual purchases.

After taxes/donations leaves about 30% for monthly expenses. If i go over sinking fund Absorbs and vacation and christmas gifts shrink which gives whole family some skin in game to stay on target.

If we want more things we have to earn more or live without.