How much does it take to have a normal middle class lifestyle.

[GenXguy]

Where can we find the average income for individuals and not household.

Household can mean multiple people.

Median is more useful than average. A small number of very high earners brings up the average a lot.

https://dqydj.com/average-median-top-individual-income-percentiles/

Median individual income: $43,206.00
Average individual income: $62,518.13

 

[F.I.R.E User]

Median is more useful than average. A small number of very high earners brings up the average a lot.

https://dqydj.com/average-median-top-individual-income-percentiles/

Median individual income: $43,206.00
Average individual income: $62,518.13

Isn’t Median same as average?

 

[Out-to-Lunch]

Isn’t Median same as average?

No. To find average, you take all the incomes, add them up, and divide by the number of households.

To find the median, you find the income that has the same number of households above this number and below it.

Said another way: If Elon Musk walked into a bar, the average net worth would skyrocket. But the median net worth would either change by 1, or not change at all.

 

[Closet_Gamer]

Interesting thread.

Toss the more extreme cases to the side (living in downtown SFO or retired, single and living in rural MS).

When I think of middle class, I think of a family of four living in Pittsburgh. Or my wife and I many years of living in the suburb of Denver/Philadelphia.

My definition of "a middle class lifestyle":

- Living in a safe area, with decent schools
- Not worrying about the bills but well aware of the price of chicken breasts vs. thighs
- A vacation that involves leaving at 4a to avoid an extra night in a hotel
- Kids wear Bear Paws, not Uggs
- Smartphones are treasures b/c you're not getting a new one
- You only know where the food bank is if you donate.
- You've traded a longish commute to live in a suburb that gets you the above

(For transparency, I had higher than a middle class income but that was more-or-less our lifestyle for a long time so I have a sense of the costs.)

I think that's doable at around $70k pre-tax. Lower than that and you're dipping into consumer credit to maintain the lifestyle...so welcome to the treadmill from hell.

I think when we talk about the middle class squeeze, two things are reflected:

1) The people above would also like to save for college, retirement, and to cover emergencies. To do that in a sustained way, now the income needs to be $90k+ and you're WAY outside the median income band.

2) My idyllic "Dad+Mom+2, dual income or one highish earner" scenario belies a lot of real world suffering. "Single parent, scraping by" or "re-married w/ child support+attorney fees" scenarios. It also forgoes damage from major medical issues, supporting Mom and Dad, or attempting to recover from the after effects of a sustained job loss.

Between the effects of 1 & 2...I think there is a lot of sorrow and people feeling like they can never win. In scenario 1, they're working like heck but can't see the savings account grow and always feel like they're on the edge. In scenario 2, there are a lot of hidden costs beneath the surface that don't make it into one's view of a "middle class lifestyle."

I grew up lower middle class...so I'm well aware of the choices available to close the gap and create savings capacity even within my $70k scenario (or lower). But now you're not living the middle class lifestyle.

Sorry to hijack the thread...but I think this is actually a very important topic for reasons other than just a personal financial yardstick.

My $0.02.

 

[nobody]

guess that means i'm low class...... Only made 5k last year.

 

[kjpliny]

I grew up in a lower middle class neighborhood in a family where my dad worked a median level white collar job. Once the kids no longer needed (or wanted) supervision, my mom started working in a low wage job. My parents built the house with the help of my grandfather, so there was no mortgage. We were probably solid middle class. We never had new cars and the kid's clothes were mostly hand-me-downs. The house was well maintained and served it's purpose but it was never really updated unless you call throwing down a few boxes of linoleum over the old tile an upgrade. My dad put plastic over the windows in the winter to save on heating fuel. Our needs were met, and once in a while we were able to enjoy a few toys like a computer (when floppy drives were a thing), but that's about it. My parents were decent savers, but never good investors. They're still doing OK, but they're not wealthy.

These days, the middle class would enjoy a lot more gadgets and gizmos and probably has more debt, so I would think the material lifestyle is "better" if one would call having more "things" better, but I kind of miss the old way of life in the 70s and 80s, where neighbors actually talked and gathered, and community was a thing. Imagination played a huge part in growing up and finding interesting things to do.

Financially, we're much better off than when we were growing up, but it's obvious that despite your lifestyle and social class, money can't easily buy happiness. The value of time and quality use of that time in the years remaining has nudged past the value of a dollar in our priority list. Life truly is short...and getting shorter.

 

[GenXguy]

$30K/yr in a mid-sized town in the midwest - single with no kids, would give you a middle class lifestyle once the house is paid off, but you wouldn't be able to save much. It's not about what clothes your kids are wearing or the schools. Some of us don't even have kids. lol

 

[jkern]

Median is more useful than average. A small number of very high earners brings up the average a lot.

https://dqydj.com/average-median-top-individual-income-percentiles/

Median individual income: $43,206.00
Average individual income: $62,518.13

Median income is a little misleading. It's not just full time employees, it includes anybody who works part time too.

 

[SmallCityDave]

I'm a millionaire who is retired so I choose my spending or income to be whatever I want it to be. I chose it(spending) to be $13,200 including taxes last year. I have everything I need or want.

Is it just you? I like to think I'm fairly frugal but with health car $500+, groceries $400 and taxes and insurance (home) $200 that's $13200 (for a family of 4).

 

[Murf2]

Median income is a little misleading. It's not just full time employees, it includes anybody who works part time too.

So are you saying the “average income” in that link only counts full time workers?

Thanks
Murf

 

[GenXguy]

Median income is a little misleading. It's not just full time employees, it includes anybody who works part time too.

I wouldn't say that's misleading to include all workers. They are people, too, and they have incomes. And the same thing would apply to average incomes, but that's less meaningful because of fewer very high incomes disproportionately bringing up the average. At the median point, you're into mostly full time workers, anyway. This might explain it better:

https://dqydj.com/average-median-top-individual-income-percentiles/

• Median individual income means half of all individual workers made more, while half made less money in a full-year.
• Average individual income means we add up every worker's earnings in a full-year then divide by the number of workers.

Median individual income: $43,206.00
Average individual income: $62,518.13

 

[F.I.R.E User]

No. To find average, you take all the incomes, add them up, and divide by the number of households.

To find the median, you find the income that has the same number of households above this number and below it.

Said another way: If Elon Musk walked into a bar, the average net worth would skyrocket. But the median net worth would either change by 1, or not change at all.

Makes sense. Is there a way to find out a city’s average and median?

 

[jurgs01]

Since you can't get a reasonable family place in San Diego where I live for less than $3K/mo, and utilities here are crazy, I would say $150k is middle class for a family (maybe $80k with house and car paid off).

For us, we have refinanced our mortgage down to about $2800/mo, which is very reasonable for our place in Point Loma. Property taxes and insurance are $1k/mo, utilities (including internet/cable/cell) are about $1k/mo, child care about $1k/mo, food/grocery/shopping and Amazon subscriptions about $1.5k/mo, 2x car payments and insurance $1.1k/mo. That is already $8.4k/mo or a little under $100k/yr.

We could certainly slim down, but as a dual working family we make enough and still save invest decently. I guess the question is what is middle class?

 

[Nick12]

Yeah, not in NJ for sure.


I listed the base expenses above of $18,200. Add in our now paid off mortgage and what we currently pay for health insurance and we'd be at nearly $31,000.


That's before food, gas, clothing, entertainment, travel, car registration and maintenance, home repairs, etc. Add in some money for gifts, charity, and savings and you're well over 50K easily.


We currently spend about 80K (less since COVID hit but that's the pre-COVID norm).

One shocking figure is that the starting salary of a police officer in Paterson NJ is $34K A year.

 

[disneysteve]

One shocking figure is that the starting salary of a police officer in Paterson NJ is $34K A year.

Yeah, that's not buying you a middle class existence in NJ unless you have a spouse with an income at least as high or preferably higher than yours. It's also why many police officers work 2nd jobs doing security work or something else.

 

[GenXguy]

Yeah, that's not buying you a middle class existence in NJ unless you have a spouse with an income at least as high or preferably higher than yours. It's also why many police officers work 2nd jobs doing security work or something else.

Normally when talking about incomes for middle class regarding a couple with both working, you would use the combined income, not just one spouse making low wages claiming he/she can live a middle class life on minimum wage when the other spouse is raking in $50K/yr.

 

[jkern]

So are you saying the “average income” in that link only counts full time workers?

Thanks
Murf

No, I think both include part time workers.

 

[aaronc879]

Do you factor in sunk costs? We've paid off our mortgage in High COL southern California and can live quite comfortably on $50-60K. Add in a mortgage and it can go up considerably.

This is my thinking as well. I think you can live a reasonable middle class lifestyle on $30K-60K anywhere in the country with a paid-off house that reflects the middle class(not a million $ home). I live on less than $30K with a mortgage but it's a relatively cheap mortgage and my lifestyle would be considered lower class by most on here. Obviously there are variables such as kids. If you are a dual income household with 2 pre-school kids that have to go to daycare then you're not going to be living on less than $60K/yr most likely. If you are a single or couple who is retired with a paid off house then $40K is very much doable especially with ACA subsidies anywhere in the country.

 

[aaronc879]

One shocking figure is that the starting salary of a police officer in Paterson NJ is $34K A year.

Really? Here in small town Wisconsin where the police just sit in their car 75% of the time they start at almost $30/hr. Average regular street cop here is probably making double what you say they make in NJ.

 

[Vacation4us]

Since you can't get a reasonable family place in San Diego where I live for less than $3K/mo, and utilities here are crazy, I would say $150k is middle class for a family (maybe $80k with house and car paid off).

For us, we have refinanced our mortgage down to about $2800/mo, which is very reasonable for our place in Point Loma. Property taxes and insurance are $1k/mo, utilities (including internet/cable/cell) are about $1k/mo, child care about $1k/mo, food/grocery/shopping and Amazon subscriptions about $1.5k/mo, 2x car payments and insurance $1.1k/mo. That is already $8.4k/mo or a little under $100k/yr.

We could certainly slim down, but as a dual working family we make enough and still save invest decently. I guess the question is what is middle class?

If you can buy a million dollar house your not middle class in my book. ( Your property taxes in prop 13 land suggest you paid a million or bought a 500k house in mello roos land )

When I was making $125k as a single mother saving for retirement my take home pay after taxes and 401k was about 5k a month. 50% of that went to the mortgage and the other 50% paid for everything else including vacations. I felt very middle class in SoCal.

 

[jkern]

If you can buy a million dollar house your not middle class in my book. ( Your property taxes in prop 13 land suggest you paid a million or bought a 500k house in mello roos land )

When I was making $125k as a single mother saving for retirement my take home pay after taxes and 401k was about 5k a month. 50% of that went to the mortgage and the other 50% paid for everything else including vacations. I felt very middle class in SoCal.

Here is the SF Bay Area a $1M house is a starter house. My daughter (29 yrs) just bought her house for a few thousand under $1M. It's a smallish home, smallish lot and somewhat of a fixer. What most people around the country would consider a middle class house would cost about $1.25M here.

 

[disneysteve]

Normally when talking about incomes for middle class regarding a couple with both working, you would use the combined income, not just one spouse making low wages claiming he/she can live a middle class life on minimum wage when the other spouse is raking in $50K/yr.

Definitely.


This also speaks to how things have changed, though. When I was growing up, almost no women I knew (relatives, friends' parents, etc.) worked except for the occasional teacher or nurse. We were solidly middle class, as was everyone we knew, and it was all on one income. How many people in similar jobs are able to swing that today? One of my best friends growing up had a father who was a Philadelphia cop. Mom didn't work. They lived very nicely with all of the usual amenities that the rest of us had. Today that's probably impossible in most cases.

 

[jurgs01]

If you can buy a million dollar house your not middle class in my book. ( Your property taxes in prop 13 land suggest you paid a million or bought a 500k house in mello roos land )



When I was making $125k as a single mother saving for retirement my take home pay after taxes and 401k was about 5k a month. 50% of that went to the mortgage and the other 50% paid for everything else including vacations. I felt very middle class in SoCal.

We paid $695k for a 900sf small home, and liquidated a lot of our taxable accounts to spend $250k in additions and upgrades to give us a middle class size house in an upper class area. Unfortunately, the upgrades reset our property taxes with a new valuation.

My point is our mortgage is equivalent of what you would pay for a 3bd 2ba middle class house in Chula Vista or somewhere inland.

 

[Time2]

I wouldn't say that's misleading to include all workers. They are people, too, and they have incomes. And the same thing would apply to average incomes, but that's less meaningful because of fewer very high incomes disproportionately bringing up the average. At the median point, you're into mostly full time workers, anyway. This might explain it better:

https://dqydj.com/average-median-top-individual-income-percentiles/

• Median individual income means half of all individual workers made more, while half made less money in a full-year.
• Average individual income means we add up every worker's earnings in a full-year then divide by the number of workers.

Median individual income: $43,206.00
Average individual income: $62,518.13

The 2019 Census has different numbers, US Household median income listed as $65,712.

https://www.census.gov/library/visualizations/interactive/2019-median-household-income.html

 

[Ready]

I’m not sure what purpose it serves to talk about how much you need to live middle class on an international forum. Someone living on the coasts will need substantially more than someone living in lower cost parts of the country. It would seem to be more meaningful to have this discussion within your community or county.